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Starting Your Small Business

1. Chapter. Starting Your Small Business. Defining Small Business Trends, Challenges, Opportunities, & Concerns of Small Business Characteristics of Successful Owners of Small Business. Rapid Small Business Growth. 23 Million Employment 75% Of New Jobs

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Starting Your Small Business

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  1. 1 Chapter Starting YourSmall Business Defining Small Business Trends, Challenges, Opportunities, & Concerns of Small Business Characteristics of Successful Owners of Small Business

  2. Rapid SmallBusiness Growth • 23 Million • Employment • 75% Of New Jobs • 50% Of Private Employment • 99% Of Employers • 97% Of Exporters

  3. Small Business? • Independent Management • Capital/Ownership = Few Individuals • Operations Are Local • Business = Small But Competitors = Large

  4. SBA Definition “…a small business is one that is independently owned and operated and is not dominant in its field of operation.”

  5. Classification By Size

  6. Venture Profit Growth Quick Sellout Small/Micro No New Or Innovative Activities Provide Owner Living Entrepreneurial Ventures VS. Small Business

  7. Unique Contributions Of Small Business • Encourage Innovation & Flexibility • are often sources of new ideas, materials, process, and services that larger firm may be unable or reluctant to provide. • Close Relationship With Customers/Community • Tend to be in close touch with communities and customers. • Attracting customers on the basis of specialty products, quality, and personal services rather than solely on the basis of price.

  8. (cont…) • Force Large Firms To Be Competitive • Encourage competition of new products and services in terms of design and efficiency. • Provide Employees Learning Experience • Small business employees have more freedom to make decisions, which can lend passion and interest to their work experience. • Develop Risk Takers • Risk taking, with its consequent rewards and punishments.

  9. (cont…) • New Employment • Generate employment by creating job opportunities. • Serve as a training ground for employees by giving more comprehensive learning experience and emphasis on risk taking. • Greater Employee Job Satisfaction

  10. Major Problems For Small Business • Inadequate Financing • is the primary cause of new business failure. • Unable to acquire and maintain facilities, hire and reward capable employees, produce and market a product, or do the other things necessary to run a successful business. • Inadequate Management • In the forms of limited business knowledge, poor management, inadequate planning, and inexperience.

  11. Major Problems For Small Business (cont…) • Government Regulations/Paperwork • Small firms are subject to many of the same regulations as their larger competitors. • The regulations are often complex and contradictory; why small business managers find it so difficult to comply with governmental requirements.

  12. Challenges To Small Business • Exploding Technology • Occupational/Industry Shifts • Reinvention • Reengineered • Downsizing/Rightsizing • Global

  13. Objectives OfSmall Business Owners – Personal Objective • Achieve Independence • Freedom from interference or control by superiors. • Want autonomy to exercise their initiative and ambition. • Additional Income • To obtained needed income. • Can provide opportunity to make greater deal of money and to take advantage of certain tax benefits.

  14. (cont….) • Help Families • E.g: Students may return home to operate the family business so their parents can retire or take life easier. • Products Not Available • To provide products that not available elsewhere.

  15. Objectives OfSmall Business Owners - Business Objectives • Service • The objective is to serve customers by producing and selling goods or services at a cost that will ensure a fair price to the consumer and adequate profits for the owners. • Profit • Entering a business to make a profit, which is the reward for taking risks.

  16. (cont…) • Social • Are goals regarding assisting groups in the community and protecting the environment. • Growth • Should select a growth objective, which will depend on answers to questions such as “will I be satisfied for my business to remain small?” and “do I want it grow and challenge larger firms?” • Mesh Objectives • Combine the personal and business objectives in a small business.

  17. Desire Independence Strong Sense Of Initiative Personal/Family Motivation Quick/Concrete Results Able To React Quickly Dedicated To Business Enter Business By Chance And/Or Design Characteristics OfSuccessful Owners

  18. Career Counseling Catering Computer & Office Machine Repair Day Care Education Financial Planning Home Health Marketing Senior Fitness & Recreation Specialized Delivery Ideas For Small Business

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