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CHAPTE
Entrepreneurship and

R
starting a small
Business
6
Nickels
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McHugh
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McHugh

1-1
1-1
ENTREPRENEURSHIP

🞆Accepting the risk of starting and running a business.

⚫ Entrepreneurs prefer to have more control over their
destiny.
REASONS FOR TAKING
ENTREPRENEURIAL RISKS
🞆Opportunity

🞆Profit

🞆Independence

🞆Challenge
WHAT YOU NEED TO BE AN
ENTREPRENEUR
🞆Self-directed
🞆Self-nurturing
🞆Action-oriented
🞆Highly energetic
🞆Tolerant of uncertainty
IMPORTANT TERMS TO KNOW
🞆Entrepreneurial Teams -- A 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 starting and managing a
business that remains small, lets them do the
work they want to do, and offers a balanced
lifestyle.
REASONS FOR HOME BASED BUSINESS
GROWTH
🞆Computer technology

🞆Corporate downsizing

🞆Change in social attitudes

🞆Tax benefits
CHALLENGES FOR HOME BASED BUSINESS
• Getting new customers

• Managing your time

• Separating work and family tasks

• Government ordinances

• Managing risk
WEB-BASED BUSINESS
🞆Affiliate Marketing -- An Internet-based
marketing strategy in which a business rewards
individuals or other businesses for each visitor or
customer the affiliate sends to its website.
INTRAPRENEUR

• A creative person who works as an

entrepreneur within a corporation.
• Intrapreneurs use a company’s existing
resources to launch new products for
the company.
SMALL BUSINESSES
• Independently owned and operated, not dominant in
its field of operation and meets certain standards of
size.
• Businesses are “small” in relation to other
businesses in their industries.
SMALL-BUSINESS SUCCESS AND
FAILURE
🞆Figure 6.3 (from Text Book)

🞆Figure 6.4 (From Text Book)

LEARNING ABOUT SMALL-BUSINESS
OPERATIONS
• Learn from Others – Investigate your local colleges for classes
on small business and entrepreneurship; talk to and work for
successful local entrepreneurs.

• Get Some Experience – Gain three years experience in the

field; then start a part-time small business.

• Take Over a Successful Firm – Serve as an apprentice and

eventually take over once the owner steps down.
MANAGING A SMALL BUSINESS
🞆Begin with planning
🞆Writing business plan
🞆Getting money to fund the business
🞆Knowing your customers
🞆Managing employees
🞆Keeping records
🞆Looking for help
BUSINESS PLAN
• A detailed written statement that describes the nature
of the business, the target market, the advantages the
business will have over competition, and the resources
and owners’ qualifications.

• A business plan forces potential owners to be

specific about what they will offer.

• A business plan is mandatory for talking with

bankers or investors.
SOURCES OF FUND/CAPITAL
• Personal savings
• Relatives
• Former employers
• Banks & finance companies
• Government agencies
• Angel investors
• Venture capitalists
KNOWING YOUR CUSTOMERS
• Market -- Consumers with unsatisfied wants and
needs who have both resources and willingness to
buy.

• Set out to fill the market’s needs by offering top

quality and great service at a fair price.

• One of the great advantages of small businesses

is the ability to know the market and quickly
adapt to market needs.