Joe Chappel Thailand | Entrepreneurship and the Economy - PowerPoint PPT Presentation

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Joe Chappel Thailand | Entrepreneurship and the Economy

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Title: Joe Chappel Thailand | Entrepreneurship and the Economy


1
Entrepreneurship and the Economy
Joe Chappel Thailand
2
Becoming an Entrepreneur
  • Goals
  • Identify characteristics of successful
    entrepreneurs
  • Recognize the importance of entrepreneurship in
    the economy
  • Describes opportunities and risks

3
Characteristics of Entrepreneurs
  • Entrepreneur someone who takes a risk in
    starting a business to earn a profit
  • Being your own boss
  • Developing a good initial plan
  • Special skills and abilities and coming up with
    innovative ideas
  • Entrepreneurship the process of starting,
    organizing, managing, and assuming the
    responsibility for a business

4
What Does it Take?
  • Not all business owners and managers are
    entrepreneurs.
  • Entrepreneurs have unique skills and personal
    characteristics.

5
Entrepreneurs Are
  • Persistent
  • Inquisitive
  • Energetic
  • Goal-oriented
  • Independent
  • Self-confident
  • Creative
  • Reliable
  • Competitive

6
Entrepreneurs Have
  • Problem-solving skills
  • Tolerance for ambiguity
  • Strong integrity
  • Personal initiative
  • Ability to secure resources
  • Capability to learn from failure
  • Willingness to work hard

7
Checkpoint 1
  • What personal characteristic are common to most
    successful entrepreneurs?
  • persistence, inquisitiveness, self-confidence,
    creativity, and so forth.

8
Entrepreneurship and the Economy
  • Employment
  • Small businesses are responsible for most new
    employment.
  • Financing
  • Most new businesses start on 10,000 or less.
  • 75 of startup capital comes from owner savings,
    bank loans, credit card debt.
  • Venture Capital money provided by large
    investors to finance new products and new
    businesses that have a goods chance to be very
    profitable.

9
Entrepreneurship and the Economy
  • Productivity
  • New and small businesses produce a large volume
    of goods and services fro the economy.
  • Businesses with just a single owner and no staff
    account for more than 770 billion in sales
    annually
  • Responsible for more than half of the U.S. GDP
    each year.

10
Employment Growth by Business Size, 19902005
11
Checkpoint 2
  • What are the sources of financing that
    entrepreneurs use for their new businesses?
  • Personal savings
  • Friends and family
  • Venture capital
  • Bank loans

12
Opportunities and Risks
  • Before deciding to start a business, you need to
    think about the opportunities and risks.
  • New Business Opportunities
  • Innovation an invention or creation that is
    brand new
  • Improvement a designed change that increases
    the usefulness of a product, service, or process

13
Opportunities and Risks
  • Recognizing Risks
  • The primary reasons that businesses started by
    entrepreneurs close are
  • Lack of adequate capital
  • Low sales
  • Higher than expected expenses
  • Competitive pressure
  • An owner unprepared to manage a growing business
  • Operations requiring more time than the owner is
    willing to commit

14
Checkpoint 3
  • Where do entrepreneurship opportunities begin?
  • Opportunities begin with innovations (ideas about
    new products and services) or improvements (ideas
    for changes to existing products, services, or
    processes).

15
Small Business Basics
  • Goals
  • Identify important characteristics of a small
    business
  • Recognize the competitive advantages of small
    businesses
  • Identify problems faced by many small busineses

16
Small Business Ownership
  • Small Business an independent business with
    fewer than 500 employees.
  • 99.9 of roughly 26 million U.S. Businesses are
    small businesses
  • Description of a Small Business
  • The owner is usually the manager
  • It operates in one or very few locations
  • It typically serves a small market
  • It is not dominant in its field

17
Small Business Ownership
  • Small Business Employment
  • Responsible for 60-80 of all new jobs
  • Large number of small businesses
  • Professional and Technical (Construction
    Companies)
  • Ownership Diversity
  • Women own more than 1/4th of all small businesses
  • More than 17 have African-American,
    Asian-American, or Hispanic ownership
  • 14 of owners are under 35 years-old

18
Small Business Ownership
  • Ownership Diversity
  • 64 have finished some college work
  • Half are home based businesses
  • Average 5,000 or less to start up the business
    (Part-Time)

19
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20
Checkpoint 4
  • Beyond the formal definition of a small business,
    what four points can be used to describe a small
    business?
  • The owner is usually the manager
  • It operates in one or very few locations
  • It typically serves a small market
  • It is not dominant in its field

21
Small Business Advantages
  • Meeting customer needs
  • Serve customers where the number of products and
    services needed is small or the requirements are
    too specialized for large businesses
  • Get direct information from their customers
  • Providing Unique Services
  • Spend time determining needs and discussing
    alternatives
  • Unique needs, more individual attention, and
    willing to pay more.

22
Checkpoint 5
  • How can small businesses compete successfully
    with larger businesses?
  • Smaller businesses are able to provide more
    personalized products and services to their
    customers.
  • They are able to provide products and services
    where smaller orders and projects are required
    and tend to fill unique customer needs, which
    larger companies do not provide.

23
Common Small Business Problems
  • Reasons for failure
  • Not keeping adequate records
  • Not having enough start-up money
  • Lack of management experience
  • Lack of experience with the type of business
  • Not controlling operating expenses
  • Poor location for the business
  • Failure to manage credit offered to customers

24
Common Small Business Problems
  • Small Business Assistance
  • Small businesses can get help from a number of
    sources
  • Universities and colleges
  • Local Group of business people
  • Small Business Administration
  • A government agency that helps small business
    owners develop a business plans and obtain
    financing and other support for their companies.

25
Checkpoint 6
  • List common reasons for small business failure.
  • Not keeping adequate records
  • Insufficient start-up money
  • Lack of management experience
  • Lack of experience with the type of business
  • Not controlling operating expenses
  • Poor location
  • Failure to manage credit

26
Starting a Small Business
  • Goals
  • Recognize important factors to be considered when
    starting a business
  • Describe elements of a business plan
  • Identify types and sources of financing a small
    business

27
The Business Decision
  • An Idea Plus Experience
  • Business ideas come from many sources
  • Hobbies, interests, business experiences, books,
    Magazines
  • Several years of training in a range of business
    operations will prepare you for the role of
    owner.
  • Right place right time
  • If the business is not easy to find or requires a
    great deal of travel time, many potential
    customers will stay away.

28
The Business Decision
  • Team Approach
  • Even small businesses need a few full or part
    time employees to grow or cover extended hours.
  • Choosing the team members become one of the most
    important initial business decisions.
  • Preparation and Research
  • Includes having enough information to make good
    decisions about the business.
  • Information is needed on customers, competitors,
    important operations, government regulations, and
    many more

29
Checkpoint 7
  • Why is it important to use a team approach when
    starting a new business?
  • A team approach allows employees to feel valued
    and motivated to take personal responsibility for
    the benefit of the business.
  • Owners cannot expect to be able to do everything
    alone. Building a team will allow the business to
    increase productivity and, ultimately, profits.

30
Developing a Business Plan
  • What is a business plan?
  • A written description of the business idea and
    how it will be carried out, including all major
    business activities.
  • Key Features
  • General description of the company
  • The credentials of the owners
  • Description of the product or service
  • Analysis of the market
  • Financial plan

31
Elements of a Business Plan
  • Description of the Business
  • The business idea
  • Major products and services
  • Ownership structure
  • Strengths/weaknesses
  • Long- and short-term goals

32
Elements of a Business Plan
  • Description of Competition
  • Characteristics of the industry
  • Condition of the economy
  • Strengths and weaknesses of major competitors
  • Customer Analysis
  • Description of customers
  • Location, number, and resources of customers
  • Sales forecasts

33
Elements of a Business Plan
  • Operations Plan
  • Organization of the company
  • Description of major operations
  • Analysis of resources needed
  • Human resource plans
  • Marketing Plan
  • Description of major marketing activities
  • Description of resources needed
  • Schedule of marketing activities

34
Elements of a Business Plan
  • Financial Plans
  • Start-up costs
  • Short- and long-term financial needs
  • Sources of financing
  • Budgets and financial statements

35
Steps in Developing the Business Plan
  • Gather and review information
  • Develop the strategic alternatives
  • Write the plan
  • Ask an expert to review the plan

36
Checkpoint 8
  • What are the strategic alternatives in a
    business plan?
  • Strategic alternatives are alternative plans for
    production, staffing, financing, and so on.
  • Even the best business plan cannot predict every
    possible circumstance.
  • An alternate plan allows a business to be
    prepared for the unforeseeable.

37
Financing The Small Business
  • Types of financing
  • Start-up financing
  • Short-term financing
  • Long-term financing
  • Sources of financing
  • Owner-supplied funds
  • Borrowed funds

38
Checkpoint 9
  • In addition to owner-supplied capital, what are
    several other sources of financing for a small
    business?
  • Borrowed money may come from banks, finance
    companies, or other individuals, such as friends
    and family.
  • Some suppliers may also be willing to extend
    credit.

39
Thank you
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