Chapter 7 online mini-lecture

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Chapter 7 - Small Business and Entrepreneurship: Economic Rocket Fuel:

Copyright ©2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 7 - Small Business and Entrepreneurship: Economic Rocket Fuel

Which way should you go?:

Which way should you go? Passion for an activity Vs Need in the community

Entrepreneurs::

Entrepreneurs: People who risk their time, money and other resources to start and manage a business

Slide6:

An entrepreneur is a person who seeks a profitable opportunity and takes the necessary risks to set up and operate a business. Differ from many small-business owners in their strong desire to make their business grow . Willing to take risks. What is Entrepreneurship? Mark Zuckerberg Bill Gates Michael Dell Sara Blakely Jay-Z

Quote from Phil Romanus, business owner:

Quote from Phil Romanus , business owner Make sure they really know the issues of cash flow. Be sure there is a realistic demand for the product or service. And separate yourself from the competition.”

Entrepreneur:

Entrepreneur What can I do today that didn’t exist yesterday? “Entrepreneurs start businesses all the time but you have to have purpose. “ – Jeff Hoffman, CEO Priceline                 Make money                 Solve Problem                 Change the world                 Be independent                 Give back

Entrepreneurial Characteristics:

Entrepreneurial Characteristics 10

Lots of them:

Lots of them There are about 28 million small businesses in the US More than 11% of Americans run their own businesses. In an average month, Americans start approximately 465,000 new businesses.

Threats for Small Businesses:

Threats for Small Businesses High risk of failure Lack of knowledge and experience Insufficient funds Bigger regulatory burden Higher health insurance costs 12

Success:

Success

Funding Options for Small Businesses:

Funding Options for Small Businesses Personal resources Loans Crowdfunding : The process of funding ventures by raising money from a large number of investors via the internet

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Debt Financing – borrow and repay Credit Cards Family and Friends Bank Loans (SBA backed) Equity Financing – money for ownership Commercial loans SBA loans Peer to peer loans Plus….. Finding Financing

Funding Options for Small Businesses:

Funding Options for Small Businesses Angel investors : Individuals who invest in start-up companies with high growth potential in exchange for a share of ownership Venture capital firms : Organizations that invest in start-up businesses with high growth potential in exchange for a share of ownership Crowdsourcing: http://www.kiva.org/start http://www.kickstarter.com/

Slide17:

Green Business Incubators are a key way government supports new ventures Enterprise Zones Encourage entrepreneurship in specific geographic areas – Look at EP http://cityofeastpeoria.com/index.cfm?pageID=125 Government Support for New Ventures

Startup peoria:

Startup peoria Visit startuppeoria.com for more information.

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Advantages: Established customers Deal with familiar suppliers Good/service known in marketplace Necessary permits and licenses are already secured Financing may be easier Seller financing Buying an Existing Business

Small Business Administration (SBA):

Small Business Administration (SBA) Agency of the federal government designed to maintain and strengthen the nation’s economy by: Aiding Counseling Assisting Protecting the interests of small businesses

Tools for Business Success:

Tools for Business Success SCORE ( Service Corps of Retired Executives ) Organization that provides free, comprehensive business counseling for small business owners from qualified volunteers Business plan : Formal document that: Describes a business concept Outlines core business objectives Details strategies and timelines for achieving objectives

How Many Hats Will You Wear? :

How Many Hats Will You Wear?

Encore Entrepreneurs:

Encore Entrepreneurs People over 50 – the fastest growing segment of entrepreneurs.

Micropreneur / Home business:

Micropreneur / Home business Entrepreneurs willing to accept the risk of starting and managing the type of business that remains small, lets them do the kind of work they want to do, and offers them a balanced lifestyle. Also Computer technology has leveled the competitive playing field Corporate downsizing has led many to venture out on their own Social attitudes have changed – no more asking about getting a “real job” New tax laws have loosened restrictions for deducting expenses for home office

Getting started as micropreneur:

Getting started as micropreneur Etsy – Etsy is a social commerce website for handmade items. TaskRabbit – Allows people to perform personal errands for a fee. The errands can range from picking something up from a market, to help packing or moving, or event planning. And, of course, Uber

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Promoting innovation within organizational structures 1925 - 3M engineer Richard Drew develops a new type of masking tape that does not pull off paint 3M engineer Art Fry creates Post-It Notes 15% rule – inventors can use up to 15% of their time to do initially unfunded research that might lead to marketable 3M products. Intrapreneurship

Core Questions for a Business Plan:

Core Questions for a Business Plan Who are the potential customers for the product or service, and why will they purchase it from you? How will the potential customers be reached? Where will the funding to start your business be obtained? When can profitability be achieved? 27

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