Chapter 06 - * * * Guess Which Company? • He was selling...

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Unformatted text preview: * * * Guess Which Company? • He was selling baking soda & decided to entice customers by putting in two packages of chewing gum with each sale. The excitement over the gum started him thinking. Two Seattle teenagers pooled their money & came up with $100. They started delivering messages & parcels for local merchants. Though he didn’t graduate from college, he found out college students eat a lot of pizza. He started his first pizzeria with $900 near a campus with a promise of 3-minute delivery. 6-1 • • * * * Entrepreneurship • Definition Why • Why take the entrepreneurial challenge? challenge? • Opportunity Profit • Profit • Independence • Challenge 6-2 * * * Who Starts New Businesses? New AGE AT START­UP 18 - 24 25 - 34 35 - 44 45 - 54 55+ 8% 71% 13% 6% 2% 6-3 * * * Entrepreneurial Attributes • • • • • Self-Directed & SelfDisciplined Self-Nurturing Action-Oriented Highly Energetic Tolerant of Tolerant Uncertainty Uncertainty 6-4 * * * Entrepreneurship • Entrepreneurial Teams Micropreneurs • Micropreneurs and Home-Based Businesses Businesses • Web-Based Businesses • Intrapreneurs 6-5 * * * Reasons for Growth of Home-Based Businesses Home-Based Technology • Technology Downsizing • Downsizing Attitudes • Attitudes Tax • Tax Advantages 6-6 * * * Home-Based Business Challenges Focus • • • • • New Customers Time Management Work vs. Family City Ordinances Risk • • • • • Find Opportunity Results vs. Routine Profit vs. Paycheck New Ideas Long Term vs. Short Long Term Term 6-7 * * * Most Common Types of Home-Based Businesses Sales & Distribution 10% Arts/ Design Creative 13% Personal Svcs. 14% Source: Independent Insurance Agents of America Financial & Real Estate 5% Bldg. Trades 31% Bus. Services 27% 6-8 * * * Government & Entrepreneurship mmigration • IImmigration Act of 1990Investor Visa Investor • • Enterprise Zones Enterprise Incubators Incubators 6-9 * * * 1. 1. 1. 1. 1. Top Ten States Where Top Businesses Have Started Businesses 1. Washington D.C. Utah 1. Maryland Nevada 1. Georgia Washington 1. Tennessee Florida 1. Alaska Colorado Source: Investor Business Daily, June 24, 2004 6-10 * * * 1. 1. 1. 1. 1. Top Ten States Where Top Businesses Have Closed Businesses Utah 1. Missouri Washington 1. Arizona New Mexico 1. Vermont Nevada 1. Georgia Idaho 1. California Source: Investor Business Daily, June 24, 2004 6-11 * * * What is Small Business? • Independently Owned • Not Dominant in Its Field Meet • Meet Certain Standards of Size (Employees, Annual Receipts) Annual 6-12 * * * U.S. Small Businesses • 20 Million Full/Part-time Businesses Account • Account for More Than 50% of Gross Domestic Product (GDP) Domestic • Jobs • • 80% of Americans 1st job is in small business • 75% of new jobs are created by small businesses Minority-owned Businesses Growing Minority-owned Rapidly Rapidly 6-13 * * * Business Ownership by Gender Source: USA Today 6-14 * * * Female Owners’ Female Top Industries Top Services Retail Others 0% 10% 20% 30% 40% 50% SOURCE: USA Today 6-15 * * * Small Business – Small Major Causes of Failure Major • • • • • • • Plunging in without first Plunging testing testing Under/over pricing Too little capital Little/no experience Borrowing money Borrowing without planning without Trying to do too much Trying with too little with Buying too much on Buying credit credit • • • • • Expanding credit too Expanding freely and rapidly freely Incomplete and/or Incomplete inaccurate records inaccurate Not understanding Not business cycles business Forgetting about taxes, Forgetting insurances, etc. insurances, Owner working or not, Owner according to whim according 6-16 * * * Small Business – Small Situations for Success Situations Unattractive • Personal attention • Unattractive neighborhood neighborhood Products • Products not easily made by mass • Franchising production production Paying • Paying attention to new competitors Sales new • Sales are not large enough for a large The • The business is in a firm firm growth industry growth 6-17 * * * Learning about Small Business Operations Operations • Learn from Others • Get Experience Take • Take Over a Successful Firm Firm 6-18 * * * Where Did They Start? Hallmark YMCA room Williams-Sonoma Abandoned Hardware Store Estee Lauder Walt Disney Vacant Former Restaurant Created Mickey in a Garage Source: World Features Syndicate 6-19 * * * Early Sales of Early Well-Known Companies Well-Known Johnson & Johnson $3,000 Worth of Band-Aids 1st Year Cyrus McCormick Sold No Reapers 1st 10 Years Subway Burton’s Snowboards Bose Source: World Features Syndicate 312 Sandwiches 1st Day Sold One 1st Year Sold 40 Speakers 1st Year (today #1 in market) 6-20 * * * Managing a Small Business • • • Business Plan Adequate Funding Professional Advice/Help • • • • • • • Lenders/Investors “Angels” Venture Capitalists SBA and SBIC Program Lawyers, Loan Officers, Insurance Agents SCORE Local College/universities • • • Know Your Customer Manage Human Resources Keep Good Records Keep Good 6-21 * * * don’t • I don’t know Reasons for a Banker To Say “No” Your • Your numbers don’t support the loan request. loan lacking. lacking. enough about you or your business. business. clearly stated why you need the money. money. You • You haven’t Your • Your collateral is Your • Your business does not support the loan on its own merits. own 6-22 * * * Small Business Collaborators Small • Small Business Administration (SBA) (SBA) • Microloan program • SBICs • SBDCs Executives (SCORE) Executives Service • Service Corps of Retired 6-23 * * * Small Business Strategies • • • • • Examine Marketing & ID Areas for Growth Profile Best Customers & Market to Similar Profile Prospects Prospects Invest in Sales Training & Technology Refresh Business Perspective With Refresh Outside Views Outside Streamline Business & Eliminate Waste 6-24 * * * Saving a Business In Trouble React/Not • React/Not • • • Overreact Overreact Understand Understand Financial Situation Financial Find Professional Find Help Help Develop Develop “Recovery Plan” “Recovery Be • Be a Visible, • • Confident Leader Confident Remind Remind Employees of Stake in Business Stake Don’t Get Stung Don’t By Killer “Bankruptcy” 6-25 * * * Small Business & International Prospects Prospects 1. World Market 2. Absorb Excess Absorb Positives 1. Financing Financing Negatives Inventory Inventory 3. Soften U.S. Soften Downturns Downturns 4. Extend Product Extend Life Life Difficult Difficult 2. How to Get How Started? Started? 3. Lack of Cultural Lack Understanding Understanding 4. Paperwork 6-26 * * * International International Small Business Small Advantages • • • • Deal With Deal Individuals Individuals Begin Shipping Begin Orders Faster Orders Variety of Suppliers Professional Service Professional with Undivided Attention Attention 6-27 Information • • Dept. of CommerceDept. www.bxa.doc.gov www.bxa.doc.gov SBA- InternationalSBAwww.sba.gov/hotlist/int www.sba.gov/hotlist/int ...
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This note was uploaded on 02/05/2009 for the course BUS 20 taught by Professor Warne during the Fall '08 term at UC Riverside.

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