Chapter 6 Starting A Small Business Flashcards
(38 cards)
Entrepreneurial Risk Includes:
Opportunity, Profit, Independence, Challenge
List of Entrepreneurial Attributes:
Self Directed, Self Nurturing, Action-Oriented, Highly Energetic, Tolerant of Uncertainty
Reasons for Growth of Home-Based Businesses:
Technology Advancements, Corporate Downsizing, Social Attitudes Have Changed, New Laws Allow Expenses of Deductions for Home Offices
Home-Based Business Challenges:
Getting New Customers, Managing Time, Keeping Work/Family Tasks Separate, Abiding By City Ordianances (Licensing, etc)
Affiliate Marketing:
Internet-marketing strategy where business rewards its customers or other business affiliates for each visitor/customer they send to the business website
Intrapreneurs
Creative people who work as Entrepreneurs within larger corporations
What Do Intrapreneurs Use For Resources?
They use the corporations resources (human/financial/physical) to launch new products & generate new profits (ex: 3M & Sticky Notes)
What Do Investor Visas Allow?
- Allows 10,000 people to come to the US each year if the invest $1million in an enterprise that creates or preserves 10 jobs (Arcadia Housing Boom)* Part of the Immigration Act in 1990 to encourage entrepreneurs to come to the US
What Are Enterprise Zones?
Specific geographic areas to which governments attract private business investment by offering lower taxes & other govt support to encourage entrepreneurship
What Do Small Biz & Global Firms Have In Common?
They both have similar principles of management
What Defines a Small Business According to the SBA?
A business that is:1. Independently Owned/Operated2. Not dominant in its Field of Operation3. Meets Certain Standards of Size in terms of Employees or Annual Receipts (Set by SBA)
Small Business Advantages Are:
- Offer other advantages over large companies2. More personal customer service3. Ability to respond quickly to opportunities
What Does a Business Plan Do?
It’s a writte/detailed statement that describes:1. The nature of business2. The Target market3. The advantages in relation to competition4. Lists resources/qualifications of the owner
What’s a Major Cause of Business Failures?
Poor Management
What Is Poor Management?
- Poor Planning2. Poor Record Keeping3. Poor Inventory Control4. Poor Promotion/Marketing5. Poor Employee Relations
What Do You Need for Small Business Success?
- Planning2. Financing3. Knowing You Customers (marketing)4. Managing Your Employees (HR Dept)5. Keeping Good Records (Accounting)
Two Primary Concerns Starting Your Small Business:
- Planning2 FinancingAll functions are important, but these are the top two.
Business Plan Explanation: Executive Summary:
5 Minutes to ImpressMajor goals/objectivesBusiness Summary
What are an Entrepreneur’s Sources of Capital?
- Personal Savings2. Relatives3. Former Employers4. Banks5. Finance Companies6. Venture Capitalists7. Govt Agencies (SBA)8. A Future Supplier (McDonalds Model)
Business Plan Explanation: Company Background
- Company Operations to Date2. Any legal issues3. Risks/Opportunities4. Financial Health5. Balance Sheets/Cash Flow6. Insurance coverage
Business Plan Explanation: Management Team
- List positions/job descriptions/resumes2. Organization Chart3. Outside Consultants & Their Qualifications (If used)
Business Plan Explanation: Financial Plan
- Five year projections for income/expenses/financial2. Assumptions Based on Industry/Historcial Trends3. Offer Scenarios: Best Case & Worst Case
Business Plan Explanation: Capital Required
- amount of capital needed to commence & continue
Business Plan Explanation: Location Plan
- Most important: Location2. Demographic of consumers3. Traffic Patterns4. Vehicle/Pedestrian Counts
