Intro to business chapter 5

debt

A form of business financing consisting of borrowing funds that must be repaid with interest over a stated time period

Equity

A form of business financing consisting of funds raised through the sale of stock example ownership in a business

small business

A business with under 500 employees that is independently manage, is owned by an individual or a small group of investors, is based locally, and it's not a dominant company and it's industry

business plan

A formal written statement that describes in detail the idea for a new business and how it will be carried out; includes a general description of the company, the qualifications of the owner, a description of the product or service, an Analysis of the market, and a financial plan.

Small Business Administration (SBA)

A government agency that speaks on behalf of small businesses; specifically it helps people start and manage small businesses, advises them in the areas of finance and management, and helps them win federal contracts

What are the first steps to take if you were starting your own business?

After finding an idea that satisfies a Market need, the small business owner should choose a form of business organization. Preparing a formal business plan helps the business owner analyze the Feasibility of his or her idea. The written plan describes in detail the idea for the business and how it will be implemented and operated the plan also helps the owner obtain both debt and equity financing for the new business.

Why does managing a small business present special challenges for the owner?

At first, small business owners are involved in all aspects of the firms operations. Hiring and retaining key employees and the wise use of outside consultants can free up an owners time to focus on planning, strategizing, and monitoring market conditions, in addition to overseeing day-to-day operations. Expanding into global markets can be a profitable growth strategy for a small business.

What are the advantages and disadvantages facing owners of small businesses?

Because if they're streamline staffing and structure, small businesses can be efficiently operated. They have the flexibility to respond to changing market conditions. Small firms conserve specialized markets more profitably than large firms, and they provide a higher level of personal service. Disadvantages include limited managerial skills, difficulty in raising capital needed for start up or expansion, the burden of complying with increasing levels of government regulation, and the major personal commitment that is required by the owner

What trends are shaping entrepreneurship and small business ownership?

Changes In demographics, society, and technology are shaping the future of entrepreneurial and small businesses in America. More than ever, opportunities exist for entrepreneurs of all ages and backgrounds. The number of women and minority business owners continue to rise, and older entrepreneurs are changing the small business landscape. Catering to the needs of an older population and a search in the web-based companies fuel continues technology growth. Entrepreneurs typically follow the money and set up shop in places where there is venture-capital money easily available.

Intrapreneur

Entrepreneur who apply their creativity, vision, and risk-taking within a large corporation, rather than starting a company of their own

Why do people become entrepreneurs, and what are the different types of entrepreneurs?

Entrepreneurs are innovators who take the risk of starting in managing a business to make a profit. Most want to develop a company that will grow into a major corporation. People become entrepreneurs for four main reasons: the opportunity for profit, independence, personal satisfaction, and lifestyle. Classic entrepreneurs maybe micropreneurs who plan to keep their businesses small, or growth oriented entrepreneurs. Multipreneurs start multiple companies while intrapreneurs work with large corporations

venture capital

Financing obtained from venture capitalists, investment firms that specialize in financing small, high growth companies and receive an ownership interest and voice in management in return for their money in

Angel Investors

Individual investors are groups of experienced investors who provide financing for start up businesses by investing their own funds

Entrepreneur

People with vision, drive, and creativity who are willing to take the risk of starting and managing a business to make a profit, or greatly changing the scope and direction of an existing firm

Small business investment company SBIC

Privately owned and managed investment companies that are licensed by the small business administration and provide long-term financing for small businesses.

How do you small businesses contribute to the US economy?

Small businesses play an important role in the economy. They account for over 99% of all employer firms and produce about half of US economic output. Most new private sector jobs created in the United States over the past decade were in small firms the small business administration defines a small business as independently owned and operated, with a local base of operations, and not dominant in its field. It also defines small business by size, according to its industry. Small businesses are found in every field, but they dominate the service, construction, Wholesale, and retail categories.

What characteristics to successful entrepreneurs share?

Successful entrepreneurs are ambitious, independent, self-confident, creative, energetic, passionate, and committed. They have a high need for achievement and a willingness to take moderate risks. Good managerial, interpersonal, and communication skills, as well as technical knowledge are important for entrepreneurial success.

What is the small business administration parentheses ( SBA )

The SBA his mission is to speak on behalf of small businesses, and through it's national network of local offices it helps people start and manage small businesses, advises them in the areas of finance in management, and helps them when federal contracts

How does the small business administration help small businesses?

The small business administration is the main federal agency serving small businesses. It provides guarantees of private lender loans for small businesses. The SBA also offers a wide range of management Assistance services, including courses, publications, and consulting. It has special programs for women, minorities, and

Describe the financial and management assistant programs offered by the SBA.

They offer financial assistance to qualified small businesses that cannot obtain financing on reasonable terms through normal lending channels. they have been responsible for a significant amount of small business financing in the United States. Other programs include new markets venture-capital program, which promotes economic development and job opportunities in low income geographic areas, while other programs offer export financing and assist to firms that suffer economic harm after natural or other disasters.