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Career and Financial Management

Career and Financial Management. Becoming an Entrepreneur. Objectives. Define entrepreneur and identify key traits of successful entrepreneurs List the four ways to become a business owner Identify forms of business ownership and factors that can affect business success. Small Businesses.

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Career and Financial Management

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  1. Career and Financial Management Becoming an Entrepreneur

  2. Objectives • Define entrepreneur and identify key traits of successful entrepreneurs • List the four ways to become a business owner • Identify forms of business ownership and factors that can affect business success

  3. Small Businesses • The person who organizes and runs a business is an entrepreneur • 99% of American companies are small businesses • Around 500 employees or less • Begin with a few employees

  4. Being an Entrepreneur • An entrepreneur’s life is challenging Traits of an Entrepreneur Sight and Foresight Decision-making Motivation

  5. Advantages & Disadvantages

  6. Do You Have What it Takes? • Do you make good decisions quickly? • Can you supervise people well? • Can you motivate people to do their work well? • Do you have a good knowledge of the service or product you want to provide? • Are you comfortable around strangers? • Do you have unlimited ambition and drive?

  7. The Bottom Line Being an Entrepreneur • Requires specific traits • Has advantages and disadvantages • Not everyone has what it takes

  8. Becoming a Business Owner Four ways to go into business • Start a new business • Buy an existing business • Buy a franchise • Join a family business

  9. Ideas for Starting a New Business • Hobby Business • Product Services • Personal Services • Business Services

  10. Starting a New Business • ADVANTAGES • Develop your own reputation • Build business your own way • Personal satisfaction knowing you built the business • DIADVANTAGES • Requires more time and effort than buying an existing business • Start-up costs are high • Can be difficult to borrow money • No guarantee of success

  11. Buying an Existing Business • Successful businesses for sale • Owner is retiring • Owner is starting a new business • Unsuccessful businesses for sale • Losing too much money • Determine if problems can be fixed before purchasing

  12. Buying an Existing Business • ADVANTAGES • Puts you several steps ahead • Take advantage of previous owner’s agreements • Build on the goodwill of existing customers • Positive reputation • Trained staff • DIADVANTAGES • Poor location • Strong competition taking away business • Poor market outlook • Building or equipment may need expensive repairs or replacement • Poor reputation

  13. Buying a Franchise • Franchise: the legal right to sell a company’s goods and services in a particular area • Many restaurants and real estate offices • Pay a percentage of your profits to the parent company

  14. Buying a Franchise • ADVANTAGES • Recognizable product name • Established procedures and management systems • Established business reputation and customer goodwill • Training, advertising, financing, and support services • DIADVANTAGES • May be less profitable • Must follow established guidelines of parent company • Less personal satisfaction

  15. Joining a Family Business • ADVANTAGES • Financing can be split amongst relatives • Trust and loyalty between family members • Working as a team can achieve more than as an individual • Same goodwill and trust of customers • DIADVANTAGES • Additional issues on top of typical business ownership stress • Not all families work well together • Difficulties can affect family relationships

  16. The Bottom Line Start a Business Buy a Business BUSINESS OWNER Family Business Franchise

  17. Forms of Business Ownership • Three basic ownership types • Sole proprietorship: business is completely owned by one person • Partnership: legal arrangement where two or more people share ownership of a business • Corporation: business chartered by a state that legally operates apart from the owner(s)

  18. Financing Your Business • Starting a business requires money • Financing sources: • Personal savings • Loan from friends/family • Loan from commercial lenders • Develop a business plan and a financial plan before applying for loans

  19. Business and Financial Plans • BUSINESS PLAN • Describes product • Business location • Number of employees • Salaries • Describes competition • Marketing plan • Timetable for starting • FINANCIAL PLAN • Start-up costs • Operating expenses • Cost of manufacturing product • Cost of selling product • Additional cost in the first few months

  20. Succeeding in Business Financing Location Business Success Competition Management

  21. The Bottom Line Ownership Financing Success Starting a business Sole Proprietorship Personal Savings Financing Partnership Loans from Friends/Family Management Corporation • Commercial Lenders • Business Plan • Financial Plan Competition Location

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