Bài giảng Understanding Business - Chapter 6 Entrepreneurship and Starting a Small Business

Entrepreneurship and Starting a Small BusinessChapter 06McGraw-Hill/Irwin Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved.Explain why people take the risks of entrepreneurship; list the attributes of successful entrepreneurs; and describe entrepreneurial teams, intrapreneurs, and home- and web-based businesses.Discuss the importance of small business to the American economy and summarize the major causes of small-business failure.Summarize the ways to learn about how small businesses operate.Analyze what it takes to start and run a small business.Outline the advantages and disadvantages small businesses have in entering global markets.LEARNING GOALSChapter Six6-2Founded Roc-A-Fella Records before entering into a joint venture with Def Jam.Maintains control over the Jay-Z brand - including his clothing line and nightclub chain.Regarded as a business leader, he has met with Bill Gates, Warren Buffett and former President Bill Clinton. ProfileJAY-ZRoc Nation6-3The Age of the EntrepreneurEntrepreneurship -- Accepting the risk of starting and running a business.OpportunityProfitIndependenceChallengeWHAT is ENTREPRENEURSHIP?6-4Self-directedSelf-nurturingAction-orientedHighly energeticTolerant of uncertaintyWHAT DOES IT TAKE to be an ENTREPRENEUR?LG1Why People Take the Entrepreneurial Challenge6-5Derek Johnson – Launched mass-texting business, Tatango, as an undergrad.Peter Findley – Started Giant Campus, summer camps for middle- and high school age kids on college campuses.Sam Hogg – Started GiftZip.com, an electronic gift card aggregator site.John Goscha – Created IdeaPaint after many nights of brainstorming led to enormous sheets of paper plastered all over his dorm walls.Paula Dean – American cook; opened her first restaurant after the age of 50+SUCCESS KNOWS NO AGE(Spotlight on Small Business)6-6Source: Entrepreneurship, April 2010.YOU’RE NEVER TOO YOUNG to be an ENTREPRENEURFive 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.6-7Source: Entrepreneur, May 2010.FIVE STEPS to STARTING YOUR BUSINESS in SCHOOLFind a problem or need.Zero in on specifics.Do research on campus, test products with students.Move forward with your ideas. Don’t wait!Sacrifice.Why People Take the Entrepreneurial ChallengeLG16-8Entrepreneurial TeamsEntrepreneurial team -- 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.An entrepreneurial team (Steve Jobs, Steve Wozniak and Mike Markkula) was key to Apple’s success.ENTREPRENEURIAL TEAMSLG16-9Micropreneursand Home-Based Businesses 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. Nearly 60% of home-based micropreneurs are men.MICROPRENEURSLG16-10Computer technology has leveled the playing field.Corporate downsizing has led many to venture on their own.HOME-BASED BUSINESS GROWTHLG1Micropreneursand Home-Based Businesses Social attitudes have changed.New tax laws have loosened restrictions on deducting expenses for home offices.Comes with challengesand benefits6-11Web-Based BusinessesONLINE BUSINESSOnline sales reached $172.9 billion in 2010, 7% of all retail sales.All retail sales were up 2.5% in 2010. However, online retail sales grew 11%.Excellent opportunity for entrepreneur business growth.LG16-12Web-Based BusinessesAffiliate 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.AFFILIATE MARKETINGLG16-13Entrepreneurship Within FirmsIntrapreneur -- A creative person who works as an entrepreneur within a corporation.Intrapreneurs use a company’s existing resources to launch new products for the company.Art Fry of 3M developed Post-Its when he was trying to mark pages of his hymnal without damage.INTRAPRENEURSLG16-14Encouraging Entrepreneurship: What Government Can DoImmigration Act passed in 1990 created a category of “investor visas” that encourage entrepreneurs to come to the U.S.Enterprise Zones -- Specific geographic areas to which governments attract private business investment by offering lower taxes and other government support.Incubators -- Offer new businesses low-cost offices with basic services.GOVERNMENT and ENTREPRENEURSHIPLG16-15Small Versus Big BusinessSmall Business -- 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.Statistically – small business add economic stability and wealthSMALL BUSINESSESLG26-16Importance of Small BusinessMore personal customer service.The ability to respond quickly to opportunities.Business failures are less – failures are used as new opportunitiesADVANTAGES of SMALL OVER BIG BUSINESSLG2Photo Courtesy of: Elliot Brown6-17Source: World Features Syndicate.Tommy Hilfiger – First store went bankruptMilton Hershey – First confectionery failedH.J. Heinz – Company went bankrupt six years after startTHEY DID WHAT?Famous Business FailuresWalt Disney – First film company went bankruptHenry Ford – First two car companies failedL.L. Bean – Almost went bankrupt in first yearLG2Small Business Success & Failure6-18Learning About Small Business OperationsLearn from Others – Investigate your local colleges for classes on small business and entrepreneurship; talk to and work for successful local entrepreneurs.Get Some Experience – Gain three years experience in the field; then start a part-time small business.Take Over a Successful Firm – Serve as an apprentice and eventually take over once the owner steps down.LEARNING ABOUT SMALL BUSINESSLG36-19Suppose you worked in a company for two years and you see signs of it faltering. You and a coworker have ideas about how to succeed and are considering quitting to start your own company.Should you approach other coworkers about working for your new venture?Will you try to lure your old boss’s customers?What are the alternatives?What are the consequences? What is the most ethical choice?GOING DOWN with the SHIP(Making Ethical Decisions)6-20Managing a Small BusinessPlanningFinancingKnowing customersManaging employeesKeeping recordsSMALL BUSINESS AND MAJOR BUSINESS FUNCTIONSLG46-21Begin with PlanningBusiness 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.BUSINESS PLANSLG46-22Writing a Business PlanA good plan takes a long time to prepare.A good executive summary catches interest and tempts potential investors to read on.WRITING a BUSINESS PLANGetting the plan into the right hands is almost as important as getting the right information in it.LG46-23Source: Bloomberg Businessweek, www.businessweek.com, accessed June 2011.Clarify Expectations – What will each person contribute?Discuss Work/Family Boundaries – What is the line that separates work from personal relationships?Develop Good Communication – Agree about types of decisions you’ll make jointly and on your own.Clarify Long-Term Intentions – Discuss how long everyone will work full time and goals for the business.Have an Escape Hatch – Have a Plan B.A FAMILY AFFAIRWhat to Consider Before Starting a Family BusinessLG4Writing a Business Plan6-24Getting Money to Fund a Small BusinessPersonal savingsRelativesFormer employersBanks & finance companiesGovernment agenciesAngel investorsVenture capitalists -- Individuals or companies that invest in new businesses in exchange for partial ownership.Community Development Financial InstitutionsSocial LendingCommunity Advantage and Small Loan Advantage ProgramSOURCES of CAPITALLG46-25Small 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.The SMALL BUSINESS ADMINISTRATIONLG4The Small Business Administration6-26The Small Business AdministrationSmall Business Investment Company (SBIC) -- A program through which private investment companies licensed by the SBA lend money to small businesses.Small Business Development Centers (SBDC) -- evaluate the feasibility of your idea, develop your business plan and complete your funding application – for no charge.The SMALL BUSINESS INVESTMENT COMPANYLG46-27Knowing Your CustomersMarket -- Consumers with unsatisfied wants and needs who have both resources and willingness to buy.Set out to fill the market’s needs by offering top quality and great service at a fair price.One of the great advantages of small businesses is the ability to know the market and quickly adapt to market needs.The MARKETLG46-28Managing 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.MANAGING EMPLOYEESLG46-29Keeping RecordsComputers 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.ACCOUNTING ASSISTANCELG46-30Looking for HelpOwners 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:LeasesContractsPartnership agreementsProtection against liabilitiesLEGAL HELPLG46-31Marketing 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.MARKETING RESEARCHLG4Looking for Help6-32A commercial loan officer can help:Design an acceptable business plan.Give financial advice.Lend money.An insurance agent can help you:Know the risks associated with the business.How to cover risks with insurance.How to prevent risks with safety devices.Service Corps of Retired ExecutivesMore than 10,500 volunteers from industry, trade associations, and education who counsel small business at no cost.OTHER FORMS OF HELPLG4Looking for Help6-33Small Business prospects abroadIn emerging markets, entire industries and services are wide open for innovation.Many entrepreneurs in the developing world hold degrees and have worked at high-level companies.Entrepreneurs must often expand into different areas of business in order for their venture to grow.EMERGING MARKETS, EMERGING ENTREPRENEURSHIP(Reaching Beyond Our Borders)6-34