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Part 1: The Dynamic
Role of Small Business
1. Starting Your Small Business
2. Family-Owned Businesses
3. Forms of Ownership of Small
Business
4. Maintaining Good Government
Relations and Business Ethics
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Chapter 1
Starting Your
Small
Business
SW Productions/Getty Images
McGraw-Hill/Irwin
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Copyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved.
Business v. Small Business
Trends, Challenges,
Opportunities, &
Concerns of Small
Business
Characteristics of
Entrepreneurs
Ryan McVay/Getty Images
Chapter
Starting Your
Small Business
1
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Rapid Small
Business Growth
23 Million
Employment
o75% Of New Jobs
o50% Of Private
Employment
o99% Of Employers
97% Of Exporters
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Entrepreneurship Today
Male- 1.9 Men Per Woman
Ethnically Diverse
25-34
Specialty Expertise
$100 B For 3.5 M
Startup/Small Businesses
Rim Light/PhotoLink/Getty Images
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Public Favors
Small Business
Black Enterprisehttp://www.blackenterprise.com
Entrepreneur
Inc.
Hispanic Businesshttp://www.hispanicbusiness.com
Family Business
Entrepreneurial Woman
Your Company
Etc.
Royalty-Free/CORBIS
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Interest At Schools
Courses
o 20 Years Ago- None
o Now- Hundreds
Ages 13-18 = Positive
Potential
Business Career
o Males = 13%
o Females = 10%
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Entrepreneurial
Student Organizations
Association of College
Entrepreneurs
University Entrepreneurial
Association
Students in Free
Enterprise http://www.sife.org
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Self-Employment Trend
Increased Investor
Interest
Executives Taking
Early Retirement
55% Want To Be Own
Boss
Technological
Advances
Photodisc Collection/Getty Images
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Attractive To All Ages
More Than ½ Of Independent
Workers In NYC
o College-Educated
o 25- 40 Years Old
84% Of Entrepreneurs “Not
Worried About Future”
40% Have Management
Experience
¼ Managed/Owned Business
Before
Doug Menuez/Getty Images
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Small Business?
Independent
Management
Capital/Ownership =
Few Individuals
Operations Are Local
Business = Small But
Competitors = Large
Hisham F. Ibrahim/Getty Images
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SBA Definition
“…a small business is
one that is
independently owned
and operated and is not
dominant in its field of
operation.”
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Classification By Size
<20 Employees Very Small
20 - 99
Small
100 – 499
Medium
500 Or More
Large
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Objectives
Venture
1. Profit
2. Growth
3. Quick
Sellout
Small/Micro
1. No New Or
Innovative
Activities
2. Provide
Owner
Living
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Most Common
Home-Based Businesses
Sales &
Distribution
10%
Arts/Design
Creative
13%
Personal
Svcs.
14%
Source: Independent Insurance Agents of America
Financial &
Real Estate
5%
Bldg. Trades
31%
Bus.
Services
27%
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Unique to Small Business
Encourage Innovation &
Flexibility
Close Relationship With
Customers/Community
Force Large Firms To Be
Competitive
Provide Employees
Learning Experience
Develop Risk Takers
New Employment
Greater Employee Job
Satisfaction
Royalty-Free/CORBIS
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Problems For
Small Business
Recession/Current Economy
Retirement/Transition
Capital/Financing
Unexpected Growth
Succession
Inadequate Financing
Inadequate Management
Government
Regulations/Paperwork
Royalty-Free/CORBIS
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Challenges To
Small Business
Exploding Technology
Occupational/Industry
Shifts
oReinvention
oReengineered
oDownsizing/Rightsizing
Global
Chad Baker/Ryan McVay/Getty Images
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Declining Job Types
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Why Start A
Small Business?
8%
10%
Independence
Control
10%
Satisfaction
72%
Other
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Why To Not Start
A Small Business?
12%
23%
Long Hours
Taxes
17%
Risk
Responsibility
22%
17%
Other
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Job Satisfaction
70%
60%
Great
Britain
50%
40%
U.S.
30%
20%
10%
0%
Self-Employed
Working For Others
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Objectives Of
Small Business Owners
Achieve Independence
Additional Income
Help Families
Ryan McVay/Getty Images
Products Not Available
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Checklist For
Aspiring Entrepreneurs
Passion Not
Money
Something
You Know
Patience
Mentor
Funding
Cash Manager
Build Sales
Don’t Rush
Wary Of Bad
Advice/Suppliers
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Business Objectives
Service
Profit
Social
Growth
Mesh Objectives
Nick Rowe/Getty Images
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Characteristics Of
Successful Owners
+ Able To React
+ Desire
Independence
Quickly
+ Strong Sense Of + Dedicated To
Initiative
Business
+ Personal/Family
+
Enter
Business
Motivation
By Chance
+ Quick/Concrete
And/Or Design
Results
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Successful Small
Business Management
Adequate Market
Sufficient Capital
Recruit Effectively
Timely Information
Cope With Government
Regulations
Expertise
Flexible
Ryan McVay/Getty Images
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Personal Analysis
Values
Mental Abilities
Attitudes
Mel Curtis/Getty Images
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Where Are
the New Jobs?
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Factors Affecting
Industry/Business
1)
2)
3)
4)
5)
Economics
Technology
Lifestyle
Political/Legal
Demographics
Royalty-Free/CORBIS
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Ideas For
Small Business
 Career
Counseling
 Catering
 Computer &
Office Machine
Repair
 Day Care
 Education
 Financial
Planning
 Home Health
 Marketing
 Senior Fitness &
Recreation
 Specialized
Delivery
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Small
Business Concerns
Poorly Planned Growth
Loss Of Independence
Threat Of Failure
oDiscontinuance
oTypes
• Formal
• Personal/Informal
Jim Arbogast/Getty Images
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