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Chap 7 understanding entrepreneurship
1. Chapter 7
Understanding Entrepreneurship
and Small Business
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2. Sr. Chapter Chapter Heading
No.No.
1. 3 Understanding the Global context of business (031012)
2. 4 Conducting Business Ethically and Responsibly (250212)
3. 6 Organizing the Business Enterprise (030312)
4. 7 Understanding Entrepreneurship and Small Business (100312)
5. 8 Managing Human Resources
6. 9 Understanding Employee Motivating, Satisfying and Leadership
7. 11 Understanding Marketing Processes and Consumer Behavior
8. 16 Managing Quality and Productivity
9. 17 Managing Information Systems and Communication Technology
10. 19 Understanding Money and Banking
11. 20 Intermediate Term and Lease Financing
3. Next class Quiz
Two groups
1. established entrepreneurs
What they did
Why did they stall
How could they improve
2. emerging entrepreneurs
story
What to do next
3
5. Marks Distribution
50 Terminal Examination
20 Mid Term Examination
15 Quizzes
15 Final Assignment
5
6. 1. WHAT IS SMALL BUSINESS
2. ENTREPRENEURSHIP
3. SUCCESS AND FAILURE IN SMALL
BUSINESS
4. STARTING AND OPERATING THE SMALL
BUSINESS
5. FRANCHISING
7. 1. WHAT IS SMALL BUSINESS
• The importance of small business in the economy
• Popular forms of small business enterprise
2. ENTREPRENEURSHIP
• The distinction between entrepreneurship and small
business
• Entrepreneurial characteristics
3. SUCCESS AND FAILURE IN SMALL BUSINESS
• Trends in small business start-Ups
• Reasons for failures
• Reasons for success
4. STARTING AND OPERATING THE SMALL BUSINESS
• Financing the small business
• Sources of management advice
5. FRANCHISING
• Advantages and Disadvantages of Franchising
8. What Is “Small Business”?
Independently owned and
managed business that
does not dominate its
market
9. The importance of Small business
in Economy
Job Creation
Innovation
Importance to Big Businesses
10. Popular Forms of Small-Business
Enterprise
Services
Manufacturing
5%
Finance &
Retailing Insurance Other
Construction 10% 1.7%
Financial Wholesale
8%
Insurance
Wholesaling
Transportation
Manufacturing
Construction Services
Retailing 37.6%
10%
22.7%
Transportation
5%
11. 2. ENTREPRENEURSHIP
Entrepreneurship is the act of being an
entrepreneur
An entrepreneur can be defined as a
businessperson who accepts the risks and
opportunities of creating, operating and
growing a new business
Small Business Owner does not have plans
for growth
11
12. Entrepreneurial Characteristics
Entrepreneurs are …
Founders of businesses that become large-scale
enterprises.
People who:
Buy a local franchise outlet
Open a small retail shop
Operate a self-employed service business
People who introduce a new product or
operational change in an existing organization
12
13. Entrepreneurial Characteristics
Small Business Founder True Entrepreneur
HE: HE:
Boss Leader
Lone Ranger Networker
Secretive Open
Self-reliant Inquisitive
Seat-of-the-pants Letter of the business plan
Snap decisions Consensus decision
Male ownership Mixed Ownership
Knows the Trade Knows the business
Automation: Technology lets Innovation: Technology lets people
business automate the work that do things that they’ve never done
people had always done before
13
15. Trends in Small Business Start-ups
Emergence of
E-commerce
Entrepreneurs who
crossover from
Big Business
Increased opportunities for
Minorities & Women
Global
Opportunities
Increased
Survival Rates
16. Reasons for Success and
Failure
Reasons for Failure
Poor management
Neglect
Weak control systems Reasons for Success
Insufficient capital Hard work, drive,
dedication
Market demand
Strong management
Luck!!!
18. Starting the Small Business
First: The entrepreneurs commitment
towards business
Second:Choosing the goods and services,
evaluating the chosen industry and market
Third: Assessment of one’s own skills
18
19. How to start the small
business
1. Buying an existing business
2. Starting from Scratch
19
21. Financing the Small Business
Personal resources
Loans
Venture capital companies
Small-business investment companies
Small Business Association (SBA)
Financial aid and management advice
Advisory boards, management consultatnts,
the SBA, and networking
22. DEFINITIONS:
Business plan:
document that tells potential lenders why money is needed,
how it will be used, and when it will be repaid
Venture Capital company:
Group of small investors that invest money in companies with
rapid growth potential
Management consultant:
Independent outside specialist hired to help managers to solve
business problems
Networking:
Interconnections among business people for the purpose of
discussing mutual problems and opportunities and perhaps
pooling resources
23. 5. FRANCHISING
Franchise is an arrangement in which a
buyer (franchisee) purchases the right
to sell the good or service of the seller
(Franchiser)
23
24. FRANCHISING
An Ownership Opportunity
Advantages Disadvantages
Proven business Start-up costs
opportunity On-going
Access to payments
management Management
expertise rules and
restrictions