Chapter 6- Entrepreneurship & Starting a Small Business

What are the reasons for becoming an entrepreneur? (OPIC)

Opportunity Profit Independence Challenge

What are the advantages of global trading in small businesses versus larger businesses?

Enjoy dealing with individuals Shipping much faster Variety of supplies Personal attention

Why do so many small businesses avoid doing business globally? (Do not FB)

Financing is more difficult to obtain Don't know how to get started Don't understand cultural differences between markets Bureaucratic paperwork

What are the major functions of a business? (MR. PFK)

Manage employees Keep records Planning Financing Knowing customers

There are many advantages small business have when engaging in international trade. Which of the following are examples of such advantages?

Oversea buyers often enjoy dealing with individuals rather than with large corporation bureaucracies Small companies can give customers personal service and undivided attentions

After working for a large auto company for over 20 years, Silvia decided to start her own auto accessory store. While facing new challenges every day, Silvia is free to manage her company as she desires. This example illustrates

Why people take the risks of entrepreneurship

What is a business plan?

a document that outlines a proposed firm's goals, the strategy for achieving them, and the standards for measuring success

What is an entrepreneur?

an individual who starts a new business or introduces a new product AND is willing to take the risk in running a business

What does it take to start a business and it become successful?

business with high potential profits are difficult to start i.e. high tech companies business that are easy to start- higher failures i.e. restaurants Successful business must: use credit wisely manage credit paying customers well fill the market's needs offer quality & great customer services at a fair price Advantage-SB's have ability to know market & quickly adapt to the needs

What is an incubator?

centers of resources at low cost for entrepreneurs that states provides to support to new small businesses

Many_____use their time, money, and energy to turn their passions into sustainable businesses. They are comfortable being their own bosses and are not afraid of failure

entrepreneurs

Explain Small Development Center (SBDC)

funded by states and government evaluate business ideas to see if feasible develop business plan & complete funding application

What is a venture capitalist?

individuals or companies that invest in new businesses in exchange for partial ownership

A necessary and invaluable aid to entrepreneurs is a competent, experienced ______ who knows and understands small business. This person can help, leases, contracts, partnership agreements, and protection against liabilities

lawyer

The best way to define ____ is all consumers with unsatisfied wants and needs who have both the resources and the willingness to buy

market

Within the comprehensive business plan, the ______ plan outlines sales, advertising, promotion, and public relations programs. This section also compares prices to competitors and forecasts sales in dollars and units.

marketing

A small business is define as

one that is not dominant in its field one that meets certain standards of size in terms of employees or receipts one that is independently owed and operated

Explain Business Investment Companies (SBIC)

private investor-program will lend $ to small business investor must have $5 mill in capitol small can borrow $2 mill for each $ mill of capitol it has identify trouble spots of small business give advise and reschedule loan payments

How is business size measured in relation to other firms in the industry?

solely owned an operated not dominated in its field compare to large co meets certain size criteria according to SBA $28 million small business in USA accounts for 50% GDP 1/2 private sectors of EE's are employed by small business

What is an enterprise zone?

the government targets a particular area to encourage entrepreneurs to start business by providing incentives such as lower taxes and other support.

Phil invests in a new business in exchange for partial ownership in those businesses. Phil is an (n)

venture capitalist

What is an intrapreneur?

Entrepreneurship within a company creative people works within a company uses existing resources to launch products for the company

What are the types of SBA Financial Assistance programs? (GME 5CCP's)

Guarantee loans Microloans Export Express 504 certified develop co (CDC loans) Community Adjustment & Investment Program (CAIP) CAPline loans Pollution & Control loans

What does it take to be a successful entrepreneur?(HATS)

Hard working Action- oriented leaders Team up w/ others have experience from different areas Self-motivated

What is a micropreneur?

Home-based entrepreneurship people willing to accept the risk of starting and managing the type of business that remains small, lets them do the kind of work they want to do, and offers them a balanced lifestyle

Which of the following characteristics are needed to become a successful entrepreneur?

Initiative Action-oriented Tolerant of uncertainty

Which of the following is true regarding business with low failure rate, such as veterinary services, dental practices, and medical practices

They do not tend to produce much growth They often require advanced training to start

Jason has prepared a comprehensive ___ ______ which includes a cover letter, executive summary, company background, management team, financial plan, capital required, marketing plan, location analysis, manufacturing plan, and an appendix

business plan

Explain Small Business Administration (SBA)

government agency advises and assist small businesses started MICROLOAN in 1991 based on integrity & stability of business ideas

It is possible to get started in business by working in a successful one to learn about it and then:

offering to buy the owner over time buying out the current owner all at once suggesting the owner take a partial retirement so that you can gradually take over

What is market?

people or organizations with needs or wants and the ability and willingness to buy

What is the importance of small businesses?

personal customer service ability to respond quickly to opportunities

Explain Community Development Financial Institution (CDF)

play a big role in the economy recovery provides financial services to low income communities provides counseling for business provides loans

What is a angel investor?

private individuals who invest their own money small business before they go public

What are the different money sources

savings family/friends business associates banks/financial institutions government agencies angel investors venture captialist

What are some common causes of small business failures

under pricing or over pricing goods or services staring with too little capital no experience in that business or industry