Use the internet to learn more about careers in consulting. Choose one of the job titles listed and answer the following questions.1. Identify the minimum

educational requirements for the job. Explain other training or education that might be needed for advancement.

2. Does this career interest you?

Business analyst

Management consultant

Performance consultant

Quality control consultant

Security consultant

Training consultant

Use the Occupational Outlook Handbook at www.bls.gov

CAREER OPPORTUNITIES IN…CONSULTING

Bell Ringer 1

Chapter 6

ENTREPRENEURSHIP & SMALL BUSINESS

MANAGEMENT

6-1BECOMING AN ENTREPRENEUR

Identify characteristics of successful entrepreneurs

Recognize the importance of entrepreneurship in the economy

Describe opportunities and risks of entrepreneurship

TODAY’S GOALS

Someone who takes a risk in starting a business to earn a profit

Characteristics: Desire to be own boss Develop good initial plan Special skills and abilities Innovative ideas

ENTREPRENEUR

the process of starting, organizing, managing, and assuming the responsibility for a business

ENTREPRENEURSHIP

WHAT ARE SOME ADVANTAGES AND DISADVANTAGES OF TURNING A HOBBY INTO A BUSINESS?

A:KNOWLEDGE AND EXPERTISE

D: MIGHT NOT BE ENJOYABLE IF IT BECOMES YOUR JOB

SUCCESSFUL ENTREPRENEURS ARE…

Entrepreneurs Are They Have

• Persistent • Problem-solving skills

• Inquisitive • Tolerance for ambiguity

• Energetic • Strong integrity

• Goal oriented • Personal initiative

• Independent • Ability to secure resources

• Self-confident • Capability to learn from failure

• Creative • Willingness to work hard

• Reliable • Ability to partner

• Competitive • Ability to spot opportunity

Which characteristics of successful entrepreneurs do you possess?

Which ones would you like to develop?

CHARACTERISTICS OF SUCCESSFUL ENTREPRENEURS

ActivityUsing Microsoft Publisher, create an advertisement or brochure that showcases four characteristics of effective entrepreneurs. Also, include ways that people can develop those characteristics if they don't currently possess them. Use the internet to research ways to develop characteristics.

*Print and turn in with rubric when finished!*

1 in 10 of all Americans 18-64 years old is involved in entrepreneurship

Over 625,000 new businesses are created every year

The same number of small businesses close as begin each year

ENTREPRENEURSHIP & THE ECONOMY

24.9

20.1

18.7

36.3

Employment Growth by Business Size 1990-2005

1-19 Employees20-99 Employees100-499 Employees500 or more em-ployees

EMPLOYMENT

Over 60% of new jobs were created by businesses with fewer than 500 employees

Financing friends, family, work colleagues, loans, credit

Venture capital-money provided by large investors to finance new products and new businesses that have a good chance to be very profitable

Productivity Small businesses account for > half of the U.S. GDP

ENTREPRENEURSHIP & THE ECONOMY

Innovation – invention or creation that is brand new

may sell to another company

Ex: Apple computer – Steve

Jobs & Stephen Wozniak Post-It Notes – Arthur Fry

& Spencer Silver

OPPORTUNITIES OF ENTREPRENEURSHIP

Improvement – design change that increases the usefulness of a product, service, or process

Can be… Improved design More effective procedures Greater attention to

quality

OPPORTUNITIES OF ENTREPRENEURSHIP

33%

33%

33%

New Businesses

ProfitableDo Not Make A Profit But Continue To OperateLose Money

RISKS OF ENTREPRENEURSHIP

Reasons Businesses Started By Entrepreneurs Close

• Lack of adequate capital

• Low sales

• Higher than expected expenses

• Competitive pressure

• An owner unprepared to manage a growing business

• Operations requiring more time than the owner is willing to commit

RISKS OF ENTREPRENEURSHIP

• Over a 10-year- period, more than 50 percent of all new businesses are discontinued

Where do entrepreneurship opportunities begin?

Innovations (ideas about new products and services)

Improvements (ideas for changes to existing products, services, or processes)

GOAL 3

HomeworkPage 131 #5

If you could start your own business what would it be

and why?

BELL RINGER 2

6-2SMALL BUSINESS

BASICS

Identify important characteristics of small businesses

Recognize the competitive advantages of small businesses

Identify problems faced by many small businesses

TODAY’S GOALS

An independent business with fewer than 500 employees

Details… Owner = manager One or fewer locations Serves a small market Not dominant in its field

99.9% of the 26 million U.S. businesses are small businesses

SMALL BUSINESSES

Create 60-80% of all new jobs

Largest number in services and retailing

Pg133 Fig. 6-3

SMALL BUSINESS EMPLOYMENT

Educational services

Arts, entertainment, and recreation

Information

Transportation and warehousing

Manufacturing

Real estate and rental and leasing

Waste management

Wholesale trade

Finance and Insurance

Accomodation and food services

Health care and social assistance

Construction

Professional and technical services

Retail trade

1.1%

1.6%

1.9%

2.8%

4.3%

4.9%

5.0%

5.6%

6.6%

8.2%

10.2%

10.6%

11.3%

14.6%

COMMON TYPES OF SMALL BUSINESSES AS A PERCENT OF ALL SMALL

BUSINESSES

Services and retailing are 2 categories in which small businesses can get a start and provide customer service and value that large businesses may not be able to match.

WHY ARE SO MANY SMALL BUSINESSES IN SERVICES

AND RETAILING?

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

25%17%

86%

14%

95%

64%

50%

Ownership Diversity

INITIAL CAPITAL

Part-time or service businesses=$5000 or less

Full-time with buildings, equipment, and employees=$100,000 or more

Meet unique needs of customers…Have more customer contactLocated close to customersGet direct information from customers on likes and dislikes

SMALL BUSINESS ADVANTAGES

Provide unique services…

Take a special interest in the customer

Spend time determining needs and alternatives

SMALL BUSINESS ADVANTAGES

Most Common Reasons for Small Business Failure

1. Not keeping adequate records

2. Not having enough start-up money

3. Lack of management experience

4. Lack of experience with the type of business

5. Not controlling operating expenses

6. Poor location for the business

7. Failure to manage credit offered to customers

COMMON PROBLEMS

WHAT DO YOU THINK WOULD BE THE

HARDEST PART OF MANAGING A SMALL

BUSINESS?

Universities & Colleges

Chambers of Commerce

Small Business Administration (SBA)

Service Corps of Retired Executives (SCORE)

SMALL BUSINESS ASSISTANCE

ActivityPage 136 # 4

eBay has become the home of many small businesses. Thousands of small business owners earn an excellent income by selling their products using the online auction services provided by eBay. Visit the eBay website and identify three ways a small business can use the website to support its operations.

*Turn in when finished!*

How do small businesses provide unique services that

large businesses cannot?

BELL RINGER 3

6-3STARTING A SMALL BUSINESS

Recognize important factors to be considered when starting a business

TODAY’S GOALS

Hobbies

Interests

Business Experiences

THE BUSINESS DECISION

High Customer Traffic

Easily AccessibleCustomersManufacturersDistributers

LOCATION, LOCATION, LOCATION!!!

Start when demand is high

TIMING

Team work!!EmployeesBankersLawyersAccountants

TEAM APPROACH

Many entrepreneurs are independent and not always good team players.

How can this result in problems for the business?

Information

CustomersCompetitorsOperationsGovernment

Regulations

Resources

LibrariesCollegesUniversitiesSmall Business

Assistance Centers

THE MOST IMPORTANT STEP IS PREPARATION!

ActivityPretend your best friend is thinking about starting a small business. Write a letter to him/her offering advice on the things they should consider carefully before making a final decision. Be sure to include the key elements from pages 138-139 of your book, along with the video we watched in class. The letter should be typed, double spaced and 12pt. font.

*Turn in when finished!*

Where can small businesses find assistance?

BELL RINGER 4

Describe the elements of a business plan

Identify types and sources of financing for small business

TODAY’S GOALS

Business plan – written description of the business idea and how it will be carried out, including all major business activities

Elements: Company description Owner credentials Product or service description Market analysis (demand, customers, competition) Financial plan

See pg. 140 Figure 6-4

MUST HAVE A PLAN!!

Helps the owner for see… Important activities Problems Time they will take Cost Persuade lenders and investors

BUSINESS PLAN

1. Gather and review information Other BPs Activities and financial performance of competitors

2. Develop strategic alternatives Production Marketing Staffi ng Financing

3. Write it! Legal form Products or services Competition Customers Operations Marketing Finances

STEPS TO A BP

BP

Financing is a key step in starting and running a new business!!!

SHOW ME THE MONEY!!!

Start-up financing – money needed to open the business Includes costs of…

Buildings Equipment Inventory (products or raw materials on hand) Supplies Licenses

TYPES OF FINANCING

Short-term financing – money needed to pay for the current operating activities of a business

Obtained for a period of less than a year and often for one or two months

TYPES OF FINANCING

Long-term financing – money needed for the main resources of a business that will last for many years

Land Buildings Equipment Large amounts of money paid over many years

TYPES OF FINANCING

Owner-Supplied Money Proprietorship

One person Partnership

Each partner contributes Corporation

Shareholders

Borrowed funds Bank loans Family or friends Credit

SOURCES OF $$$

Start-Up

Short-Term

Long-Term

WHAT ARE 3 TYPES OF FINANCING?

Owner-Supplied Money

Borrowed Money

WHAT ARE 2 SOURCES OF FINANCING?

Work as a Team Activity

Parts of your presentation…LocationPictureRent/Lease AmountPositivesNegativesFinal ChoiceWhy

End of Chapter 6!!!

Test Thursday!!!