*The process of creating and managing a business to achieve a desired objective
*Any independently owned and operated business that is not dominant in its
competitive area and employs fewer than 500 people
10 Reasons to Start a Business
*Be your own boss.
*Get to do what you are interested in.
*Your firm = Your deadlines.
*You can be creative.
*It can be very profitable.
*You can have a second career.
*The big dream really can be a reality.
What Is a Small Business?
*Any independently owned and operated business
>Not dominant in its
>Does not employ more than 500 people
Industries That Attract Small Business
*Retailing and Wholesaling
Advantages of Owning a Small Business
>Freedom of choice
>The option of working at home
>Requires less money to start &maintain
>The ability to focus on a few key customers
>The chance to develop a reputation for quality and service
Disadvantages of Small Business Ownership
*High stress level
*High failure rate
*Managerial inexperience or incompetence
*Inability to cope with growth
Traits Needed to Succeed in Entrepreneurship
>Helps entrepreneurs focus on details
>Facilitates network building
*Openness to new ideas
Common Mistakes Made by Start-up Businesses
1.Failing to spend enough time researching the business idea to see if it’s viable
2.Miscalculating market size, timing, ease of entry, and potential market share
3.Underestimating financial requirements and timing
4.Bringing in unnecessary partners
5.Overprotecting sales volume and timing
6.Making cost projections that are too low
7.Hiring too many people and spending too much on offices and facilities
8.Lacking a contingency plan for a shortfall in expectations
9.Bringing in unnecessary partners
10.Focusing too much on sales volume and company size rather than profit
11.Hiring for convenience rather than skill requirements.
12.Neglecting to manage the entire company as a whole.
13.Accepting that it’s “not possible” too easily rather than finding a way.
14.Seeking confirmation of actions rather than seeking the truth.
15.Lacking simplicity in vision
16.Lacking clarity of your long-term aim and business purpose.
17.Lacking focus and identity.
18.Lacking an exit strategy.
The Keys to Starting a Small Business Success
*A comprehensive business plan
*The right form of ownership
>Loans & collateral
>Lines of credit
Types of Small Businesses
*The purchaser of a franchise
Advantages of Franchises
*Management training and support
*Standardized quality of goods and services
*National advertising programs
*Proven products and business formats
*Centralized buying power
*Site selection and territorial protection
*Greater chance for success
Disadvantages of Franchises
*Limited product line
*Possible market saturation
*Less freedom in business decisions
*Franchise fees and profit sharing with the franchiser
*Strict adherence to standardized operations
*Restrictions on purchasing
Developing Trends Impacting Small Business
>Baby boomers & Echo boomers
>Increase in Internet usage
>Major breakthroughs in technology
>Economic turbulence creates economic threats and new opportunities