Chap 6

small business statistics

27.8 million in U.S. over 50% of GDP 60-80% of new jobs about 80% of first jobs

Small business administration (SBA)

A U.S. government agency that advises and assists small businesses by providing management training and financial advice. SBA started a microloan program in 1991 that provides very small loans to small business owners. Program judges worthiness based on the borrowers' integrity and soundness of their business ideas.

Intrapreneur

A creative person who works as an entrepreneur within a corporation

Business plan

A detailed written statement that describes the nature of the business, the target market, the advantages the business will have over competition, and the resources and owners' qualifications. A business plan forces potential owners to be specific about what they will offer. A business plan is mandatory for talking with bankers or investors.

Entrepreneurial teams

A group of experienced people from different areas of business who join to form a managerial team with the skills to develop, make and market a new product

Small business investment company (SBIC)

A program through which private investment companies licensed by the SBA lend money to small businesses. A SBIC must have a minimum of $5 million in capital and can borrow up to $2 from the SBA for each $1 of capital it has. SBICs are able to identify a business's trouble spots early, giving entrepreneurs advice, and in some cases rescheduling loan payments

affiliate marketing

An Internet-based marketing strategy in which a business rewards individuals or other businesses for each visitor or customer the affiliate sends to its website.

enterprise zones

Areas in which the government tries to attract companies with incentives as low taxes and government support

home based business growth why

Attitudes have changed. New tax laws have loosened restrictions on deducting expenses for home offices IT has leveled the playing field. Downsizing has led many to venture on their own

community development financial institutions

CDFIs are playing a big role in the economic recovery. First formed in the early 1980s; by 2009, over $1 billion flowed into CDFIs from investment companies. Only 1% of loans were not paid back in the last 30 years!

incubators

Center that offers low cost offices and services

accounting assistance

Computers simplify the process by helping with inventory control, customer records and payroll. A good accountant can help in: Deciding whether to buy or lease equipment. Deciding whether to own or rent a building. Tax planning. Financial forecasting. Choosing sources of financing. Writing requests for funds.

Micropreneurs

Entrepreneurs willing to accept the risk of starting and managing a business that remains small, lets them do the work they want to do, and offers a balanced lifestyle About half of U.S. micropreneurs are home-based business owners - writers, consultants, video producers, architects, bookkeepers, etc

home based business isn't easy, why?

Getting new customers is difficult. Managing your time requires self-discipline. Work and family tasks are tough to separate. Government may restrict your business. Homeowner's insurance may not be enough

writing a business plan

Getting the plan into the right hands is almost as important as getting the right information in it. a good plan takes a long time to prepare. A good executive summary catches interest and tempts potential investors to read on.

managing employees

Hiring, training and motivating employees is critical. Employees of small companies are often more satisfied with their jobs - they feel challenged and respected. Entrepreneurs best serve themselves and the business if they recruit and groom employees for management positions.

government and entrepreneurship

Immigration Act passed in 1990 created a category of "investor visas" that encourage entrepreneurs to come to the U.S.

small businesses

Independently owned and operated, not dominant in its field of operation and meets certain standards of size Businesses are "small" in relation to other businesses in their industries.

an idea is good opportunity if...

It fills customers' needs. You have the skills & resources to pull it off You can sell the product or service at a reasonable price and still profit. You can get your product or service to customers before the window of opportunity closes. You can keep the business going.

marketing research

Marketing decisions need to be made long before introducing a product or opening a store. A marketing research study can help you: Determine where to locate. Whom to select as your target market. What is an effective strategy for reaching the market.

business failures are lower than the reports because...

Owner closing a business to start another is reported as a "failure." Changing forms of ownership is reported as a "failure." Retirement is reported as a "failure."

what legal help does for business owners

Owners need outside consulting advice early in the process. Small and medium-sized firms cannot afford to hire experts as employees. A competent lawyer can help with: Leases Contracts Partnership agreements Protection against liabilities

Major business functions

Planning Financing Knowing customers Managing employees Keeping records

small business prospects abroad

Small- and medium-sized businesses accounted for 99% of recent export growth. Advantages of global trade for small businesses: Overseas buyers enjoy dealing with individuals. Small companies can usually begin shipping much faster. They provide a wide variety of suppliers. They can give more personal service and attention.

five reasons to start your business right away

You don't have a mortgage or kids to take care of. You can survive on little funds and work long hours. No disruption to your career path. It hasn't started yet! Use of your alma mater for resources.

Entrepreneurship

accepting the risk of starting and running a business

Small business development center (SBDC)

are funded jointly by the federal government and individual states. SBDCs are able to evaluate the feasibility of your idea, develop your business plan and complete your funding application - for no charge.

why take the risk of being entrepreneur?

opportunity profit independence challenge

what does it take to be an entrepreneur

self-directed self-nurturing action-oriented highly energetic tolerant of uncertainty

o Advantages of small over big business globally

• Shipping overseas easily • Personal service • Customer relationships • Ability to navigate legal stuff