Intro to bus test 3

The Small Business Administration

-A US government agency that advises and assists small businesses -Provides management training -Provides financial advice -Provides loans -Also may want to consider requesting funds from Small Business Investment Company (SBIC) Program --Private investment companies licensed by the SBA to lend money to small businesses

Knowing the market

-Consists of consumers with unsatisfied wants and needs -They have the resources and willingness to buy

Business plan

-Detailed written statement describes the nature of the business -The target market -The advantages the business will have over competition -Resources and qualifications of the owner -Forces potential small business owners to be specific about the products or services they want to offer -Mandatory for talking to bankers or other investors -Executive summary

Small-Business Success and Failure

-Half of new businesses don't last five years -Choosing the right type of business is important

Managing Employees

-Hiring, training and motivating employees is critical

Keeping Records

-Most important assistance you receive is accounting -Many business failures are caused by poor accounting

Micropreneurs

-People interested in maintaining a balanced lifestyle while doing work -They are happy even if they dont appear on a list of top ranked businesses -Many are home based -Run from owners homes -Nearly 60% ARE MEN -Working at home can have challenges --Getting new customers (getting the word out can be hard without a retail storefront) --Managing time --Keeping work and family tasking separate --Abiding by city ordinances --Managing risk

Sources of capital

-Personal savings -Family and business associates -Bank and finance institutions -Angels --Private individuals --Invest their own money in new companies before they go public -Venture capitalists --May finance your project for a price --May ask for a hefty stake in your company -Most common source of funding after personal savings is friends and family -You can borrow from a potential supplier -Smaller community banks were more likely to grant loans unlike bigger banks

Looking for help

-Small business owners have learned that they need outside consulting early on -Especially true of legal, tax, accounting, marketing, finance -A lawyer is important --They know small businesses and understand them --Can help with leases, contracts, partnership agreements, and protection against liabilities --No need to be expensive -SCORE is important source of information for small businesses

Learn from others

-Talk to people and investigate local community college for classes on small business -Hire a good accountant and lawyer before you start -Free advice is invaluable

Web-Based Businesses

-These businesses have to offer more than the same merchandise customers can buy at the store

Affiliate marketing

-an online marketing strategy in which a business rewards people or other businesses for each visitor or customer the affiliate sends to its website -Can get commission when people click on your discount link -This kind of business can fail you too

Intrapreneurs

-creative people who work as entrepreneurs within corporations -To use the company's existing resources -Human, financial, physical to launch new products and generate new profits

Small business

-one that is independently owned and operated -Not dominant in its field of operation -Meets certain standards of size in terms of employees -There are 28 million small businesses in the USA -60-80% of the nation's new jobs are in small businesses

Why entrepreneurship?

Profit, Opportunity, Independence, Challenge

What does it take to be an entrepreneur?

Self-directed, Self-nurturing, Action-oriented, Highly energetic, Tolerant of uncertainty