SMALL BUSINESS MANAGEMENT

Chapter 2The Small Business Decision

CHAPTER OBJECTIVES

1. To discuss the ___________ and disadvantages of small business ownership as a starting point in making the small business decision.

2. To review the personal and organizational attributes of a successful small business owner.

3. To explain the reasons some ___________ succeed and others fail.

4. To discuss entrepreneurial development in large business.

5. To identify the differences between an ___________ and a manager.

The Small Business Decision

Personal Evaluation Self evaluation exercise

Advantages of Small Business Ownership

More personal ___________ with people

Independence Skill ___________ Potential ___________ Rewards Challenge ___________

Disadvantages of Small Business Ownership

Risk ___________ Need for Many Abilities Limited Financial Rewards People ___________ Time Demands

Entrepreneur Defined

A person who ___________ and/or operates a business.

All active owner-managers and second generation ___________ of family owned firms and owner-managers which buy out founders of existing firms.

Also includes ___________ managers of larger corporations who have a flair for innovation and risk.

Demographic Characteristics of Entrepreneurs

Parents ___________ business Foreign parents High school degree or less ___________ or more Age 31 and under ___________ 40 or more

Personality Characteristics Required by Successful Entrepreneurs

Achievement Orientation Risk Taking Independence, Self ___________, Self

Assurance Innovativeness Strong Verbal and ___________ Skills Selling Skills

Personality Characteristics Required by Successful Entrepreneurs (cont)

Problem ___________ Abilities Strategic Planning___________

The Small Business Decision

Organizational Evaluation

Small Business Successes

Alertness to ___________ Ability to ___________ and Hold

Competent Employees Staying ___________ to the

Consumer

Small Business Successes

Thoroughness with Operating Details

Ability to Obtain Needed Capital Effective Handling of Laws, Rules,

and Regulations

Small Business Successes

Entrepreneurial Success in a Large Business Ten Commandments for Intrapreneur

Success

Small Business Failures

Bankruptcies

Entrepreneurialship and Small Business Management

Entrepreneurial Skills Characteristics

creativity, ___________, independence, risk-taking, idea oriented

Situations generating ideas and solutions to

problems, starting a new business, expanding or opening new products

Characteristics ofArtisan EntrepreneursCharacteristics ofArtisan Entrepreneurs

Technical ______________________ approachReluctance to delegateNarrow view of strategyPersonal sales effortShort ___________ horizonSimple record keeping

Characteristics ofOpportunistic ( Promoter) EntrepreneursCharacteristics ofOpportunistic ( Promoter) Entrepreneurs

Broad-based educationScientific approach to problemsWilling to ___________Broad view of strategyDiversified ___________ approachLonger planning horizonSophisticated accounting

and financial control

Entrepreneurialship and Small Business Management

Managerial Skills Characteristics

develops ___________ and goal setting, prefers to know outcomes of actions or activities, team player, works through others, skills in finance, marketing, personnel, operations

Situations reaching ___________ objectives, maintaining control of operations

Bright Lights, Deep Waters

Discuss the difference between an entrepreneur and a manager using David Green and Carmanah Lights as examples.

What dangers of obtaining equity financing are illustrated in this example?

Concept Checks

1. List the advantages of owning a small business.

2. List the disadvantages of owning a small business.

3. What are the characteristics of successful small business owners?

Concept Checks

4. What are the major cases of business failure?

5. What is the difference between an entrepreneur and a manager?