11 14 13 Chapter 6 Notes Entrepreneurship and Starting a Small Business Entrepreneurship accepting the risk of starting and running a business o Common story entrepreneur has a good idea borrows money from family and friends and starts a business Reasons for taking the risk opportunity profit independence challenge What does it take o Self directed o Self nurturing o Action oriented o Highly energetic o Tolerant of uncertainty Good opportunity if it o Fill customers needs o Must have the skills and resources to start a business o Can sell the produce or service at a price customers are willing to pay and still o Can get your product or service to customers before your window of opportunity make a profit closes o Can keep the business going Entrepreneurial team group of experienced people from different areas of business who join to form a managerial team with the skills to develop make and market a new product Micropreneurs entrepreneurs willing to accept the risk of stating and managing the type of business that remains small lets them do what they want to do and offers them balanced lifestyle Affiliate marketing an internet based marketing strategy in which a business rewards individuals or other businesses affiliates for each visitor or customer the affiliate sends to its website Intrapreneurs creative people who work as entrepreneurs within corporations Enterprising zones specific geographic areas to which governments try to attract private business investment by offering lower taxes and other government support o To encourage entrepreneurs Incubators centers that offer new businesses low cost offices with basic business services Small Businesses Small business a business that is independently owned and operated is not dominant in its field of operation and meets certain standards of size in terms of employees or annual receipts 18 percent failure rate Major cause of failure is poor management Business plan a detailed written statement that describes the nature of the business the nature of the business the target market the advantages the business will have in relation to competition and the resources and qualifications of the owners o Forces potential small business owners to be quite specific about the products or services they intend to offer o Mandatory for talking to bankers or other investors o Executive summary convince people not to throw it away o Most common source of funding after personal savings is friends and family o Angel investors private individuals who invest their own money in potentially hot new companies before they go public Venture capitalists individuals or companies that invest in new businesses in exchange for partial ownership of those businesses Small Business Administration a US government agency that advises and assists small businesses by providing management training and financial advice and loans o Program judges worthiness on belief of the borrowers integrity and the soundness of their business ideas no collateral or credit history Small Business Investment Company Program a program through which private investment companies licensed by the Small Business Administration lend money to small businesses Market people with unsatisfied wants and needs who have both the resources and the willingness to pay Service Corps of Retired Executives an SBA office with volunteers from industry trade associations and education who counsel small businesses at nor cost except for expenses Advantages in international trade o Overseas buyers often enjoy dealing with individuals rather than with large corporate bureaucracies o Small companies can usually begin shipping much faster o Small companies can provide a wide variety of suppliers o Small companies can give customers personal service and undivided attention because each overseas account is a major source of business to them
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