1 / 18

Appendix A

Appendix A. Managing Small Business Start Ups. Entrepreneurship. Process of initiating a business venture organizing necessary resources assuming risks and rewards With downsizing and frustration with corporate lifestyles, many persons are electing to become entrepreneurs.

dena
Download Presentation

Appendix A

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Appendix A Managing Small Business Start Ups

  2. Entrepreneurship • Process of initiating a business venture • organizing necessary resources • assuming risks and rewards • With downsizing and frustration with corporate lifestyles, many persons are electing to become entrepreneurs.

  3. Small Businesses • Generally fewer than 500 employees • Create jobs (1987-1992: small, fast-growing firms added more high-paying jobs than large companies eliminated) • Create new products and services • Provide opportunities for persons who may have careers blocked in established corporations. (Female entrepreneurs in 33% of new ventures in 1994 vs. 24% in 1975)

  4. Small Businesses • About 97% of all businesses • Include about 90% of corporations • Contribute almost half the GDP • Provide majority of employment

  5. Small Businesses • Typically viewed as having high failure rates • 40-50% within 3 years • 60-80% within 5 years • However, 20% within 5 years may be more accurate. • 10% for female owned

  6. Personality Characteristics of Entrepreneurs • Independence • Internal Locus of Control (feel they control their own destinies) • Need to achieve • High self-confidence • High tolerance for ambiguity • High energy level

  7. Starting an Entrepreneurial Firm Develop a BUSINESS PLAN: • Product/Service? • Customers? • Which Legal Form to Use? • How to Finance? • Tactics to Establish? • How to Operate?

  8. Product/Service • Most ideas come from one’s profession or products/services used. Customers • Wholesale vs. Retail • Geography • Demographics • Competition for those customers

  9. Legal Form of the Business • Proprietorship = unincorporated business owned by an individual • Partnership = unincorporated business owned by two or more people • Corporation = artificial entity existing apart from its owners.

  10. How to Finance? • Obtaining Financial Resources • Personal Equity • Debt financing • Equity financing from Others • including Partners, Stockholders, and Venture Capital firms • they are investing in exchange for share of ownership in the company • Managing Financial Resources • Budgeting is critical, including allowances for initial losses

  11. How to Establish? • Start-up • Buy-out • Franchise • Spin-off • Incubator participation

  12. How to Operate? • Decisions to be made with respect to: • Production methods • Suppliers • Marketing techniques • Leadership styles • Human Resource policies, etc.

  13. Stages of Growth – Key Issues • Existence = Begins to produce product/service and get customers. • Survival = Has begun to generate sufficient cash flow. • Success = Now profitable. May consider using professional managers. • Takeoff = Delegation critical to manage and finance growth. • Resource maturity = Can begin acting like a large mature company, balancing stability and entrepreneurship with planning and controls.

  14. Getting Help • Accountants • Attorneys • A board of directors • Small Business Administration • Small Business Development Centers • SCORE (Service Corps of Retired Executives) • Trade Associations • Books • Internet

  15. Intrapreneurship • Intrapreneur= Someone who promotes innovation within an existing organization. • Requires: • Vision • Persistence • Ability to Build and Lead Teams

  16. Advice for Intrapreneurs • Come to work each day willing to be fired. • Do any job needed to make your project work, regardless of your job description. • Remember that it is easier to ask for forgiveness than for permission.

  17. Facilitating Intrapreneurship • Flexible organizational design • Non-Bureaucratic controls • Autonomous Venture Teams • Selection, training, and mentoring for intrapreneurship • Reward risk-taking • Tolerate failures

More Related