Joe Chappel Thailand | Entrepreneurship and the Economy

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Entrepreneurship and the Economy
Joe Chappel Thailand
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Becoming an Entrepreneur

• Goals
• Identify characteristics of successful
  entrepreneurs
• Recognize the importance of entrepreneurship in
  the economy
• Describes opportunities and risks

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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

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What Does it Take?

• Not all business owners and managers are
  entrepreneurs.
• Entrepreneurs have unique skills and personal
  characteristics.

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Entrepreneurs Are

• Persistent
• Inquisitive
• Energetic
• Goal-oriented
• Independent

• Self-confident
• Creative
• Reliable
• Competitive

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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

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Checkpoint 1

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

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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.

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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.

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Employment Growth by Business Size, 19902005
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Checkpoint 2

• What are the sources of financing that
  entrepreneurs use for their new businesses?
• Personal savings
• Friends and family
• Venture capital
• Bank loans

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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

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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

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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).

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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

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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

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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

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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)

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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

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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.

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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.

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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

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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.
  

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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

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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

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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.

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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

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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.

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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

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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

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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

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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

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Elements of a Business Plan

• Financial Plans
• Start-up costs
• Short- and long-term financial needs
• Sources of financing
• Budgets and financial statements

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Steps in Developing the Business Plan

• Gather and review information
• Develop the strategic alternatives
• Write the plan
• Ask an expert to review the plan

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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.

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Financing The Small Business

• Types of financing
• Start-up financing
• Short-term financing
• Long-term financing
• Sources of financing
• Owner-supplied funds
• Borrowed funds

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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.

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Thank you