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Transcript of © 2011 South-Western | Cengage Learning Global Entrepreneurship and Small Business Management 9-1...
© 2011 South-Western | Cengage Learning
Global Entrepreneurship and Small Business
Management
9-19-1 Entrepreneurial Enterprises
9-29-2 The Business Plan and Self-Employment
9-39-3 Operating an Entrepreneurial Enterprise
CHAPTER 9
INTERNATIONAL BUSINESS, 4e CHAPTER
SLIDE 2© 2011 South-Western | Cengage Learning
9LESSON 9-1
Entrepreneurial Enterprises
GOALSGOALSExplain the importance of
entrepreneurs in the development of an economy.
Differentiate between the types of entrepreneurial businesses.
Describe telecommuting and the effect of technology on home-based businesses.
INTERNATIONAL BUSINESS, 4e CHAPTER
SLIDE 3© 2011 South-Western | Cengage Learning
9The Economic Importance of Entrepreneurs
Innovation and the entrepreneurial spiritEconomic and social benefits of small
businessMajor creators of new productsMajor source of jobsOften provide personal service
Entrepreneurs and exporting
INTERNATIONAL BUSINESS, 4e CHAPTER
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9Types of Entrepreneurial Businesses
Agricultural, mining, and extracting companies
Manufacturing companiesWholesalersRetailersService companies
INTERNATIONAL BUSINESS, 4e CHAPTER
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9
Future Growth for Small Business
Health-care servicesRetailing and food service companiesEnvironmental businessesTraining and education enterprisesPersonal servicesCommercial services
INTERNATIONAL BUSINESS, 4e CHAPTER
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9
Home-Based Businesses
Traditional home-based businessesInternet businessesTelecommuting
INTERNATIONAL BUSINESS, 4e CHAPTER
SLIDE 7© 2011 South-Western | Cengage Learning
9LESSON 9-2
The Business Plan and Self-Employment
GOALSGOALSEvaluate self-employment as a
career option.Describe the first three sections of
a business plan.
INTERNATIONAL BUSINESS, 4e CHAPTER
SLIDE 8© 2011 South-Western | Cengage Learning
9
Self-Employment as a Career
Advantages of self-employmentDisadvantages of self-employmentQualities of successful entrepreneurs
INTERNATIONAL BUSINESS, 4e CHAPTER
SLIDE 9© 2011 South-Western | Cengage Learning
9
Creating a Business Plan
A business plan is a guide used to start and operate a business.
Two main uses:Attract new investors or convince a bank to
lend money to the company.Provide a blueprint for company activities.
INTERNATIONAL BUSINESS, 4e CHAPTER
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9
Business PlanParts of a Business Plan
Part 1:Part 1: Business description
Part 2:Part 2: Organizational structure
Part 3:Part 3: Marketing activities
Part 4:Part 4: Financial planning
Part 5:Part 5: Production activities
Part 6:Part 6: Human resource activities
Part 7:Part 7: Information needs
The first three sections are all related to setting up a business.
The first three sections are all related to setting up a business.
INTERNATIONAL BUSINESS, 4e CHAPTER
SLIDE 11© 2011 South-Western | Cengage Learning
9BUSINESS PLAN
Part 1: Business Description
Legal name and locationBackground and experience of owners
and main employeesOverview of product or service, potential
customers, and competition
INTERNATIONAL BUSINESS, 4e CHAPTER
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9BUSINESS PLAN
Part 2: Organizational Structure
Form of ownershipForeign business partnersExplanation of any of the following:
Joint venturesLicensing agreementsDistributor contractsSupplier relationships
INTERNATIONAL BUSINESS, 4e CHAPTER
SLIDE 13© 2011 South-Western | Cengage Learning
9BUSINESS PLAN
Part 3: Marketing Activities
Marketing includes the business activities necessary to move goods and services from the producer to the consumer.
A marketing plan is a document that details the marketing activities of an organization.
INTERNATIONAL BUSINESS, 4e CHAPTER
SLIDE 14© 2011 South-Western | Cengage Learning
9LESSON 9-3
Operating an Entrepreneurial Enterprise
GOALSGOALSOutline the process of financing a
small business.Identify the major business
activities of a small business manager.
INTERNATIONAL BUSINESS, 4e CHAPTER
SLIDE 15© 2011 South-Western | Cengage Learning
9
Business PlanParts of a Business Plan
Part 1:Part 1: Business description
Part 2:Part 2: Organizational structure
Part 3:Part 3: Marketing activities
Part 4:Part 4: Financial planning
Part 5:Part 5: Production activities
Part 6:Part 6: Human resource activities
Part 7:Part 7: Information needs
The fourth section of the business plan focuses on financial planning.
The fourth section of the business plan focuses on financial planning.
INTERNATIONAL BUSINESS, 4e CHAPTER
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9
Financing a Small Business
Money is needed for many purposes when starting and running a business.
A budget is a financial tool that estimates a company’s funds and its plan for spending those funds.
The process of financing a business starts with calculating operating costs and determining how to acquire the funds to pay those costs.
INTERNATIONAL BUSINESS, 4e CHAPTER
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9
Analyzing Costs
Start-up costsContinuing expenses
Variable costs are business expenses that change in proportion to the level of production.
Fixed costs are expenses that do not change as the level of production changes.
INTERNATIONAL BUSINESS, 4e CHAPTER
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9
Breakeven Point
The breakeven point is the number of units a business must sell to make a profit of zero. Sales below the breakeven point will result in
a loss for a business. Sales above the breakeven point will result in
a profit for a business.
INTERNATIONAL BUSINESS, 4e CHAPTER
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9
Calculating Breakeven Point
Find the gross profitThe gross profit, or gross margin, is the
difference between the cost of an item for a business and the price for which the business can sell that item.
Cost − Selling price = Gross profit per unit
Calculate breakevenTotal fixed costs ÷ Profit per unit = Breakeven units
INTERNATIONAL BUSINESS, 4e CHAPTER
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Sources of Funds
Equity funds are business funds obtained from the owners of the business.
Debt funds are business funds obtained by borrowing.
INTERNATIONAL BUSINESS, 4e CHAPTER
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9Financial Records of Small Businesses
Balance sheetIncome statementCash flow statement
INTERNATIONAL BUSINESS, 4e CHAPTER
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9
Balance Sheet
A balance sheet is the document that reports a company’s assets (items of value), liabilities (amounts owed to others), and owner’s equity (net worth).
The relationship among the items on a balance sheet can be expressed as an equation.
Assets – Liabilities = Owner’s equity
INTERNATIONAL BUSINESS, 4e CHAPTER
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Income Statement
An income statement is a document that summarizes a company’s revenue from sales and its expenses over a period of time, usually one year.On the income statement, a business will total
all of the revenues it brings in as well as all of its expenses.
It will then subtract the expenses from the revenues to find its profit or loss.
INTERNATIONAL BUSINESS, 4e CHAPTER
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Cash Flow Statement
Cash flow is the inflow and outflow of cash. The major sources of cash inflows are cash sales and
money collected from customers that is owed on account.
The main cash outflows of a business are for current operating expenses, new equipment, debt payments, and taxes.
A cash flow statement reports the current sources and amounts of cash inflows and outflows.
INTERNATIONAL BUSINESS, 4e CHAPTER
SLIDE 25© 2011 South-Western | Cengage Learning
9
Business PlanParts of a Business Plan
Part 1:Part 1: Business description
Part 2:Part 2: Organizational structure
Part 3:Part 3: Marketing activities
Part 4:Part 4: Financial planning
Part 5:Part 5: Production activities
Part 6:Part 6: Human resource activities
Part 7:Part 7: Information needs
The final sections of a business plan relate to managing a business.
The final sections of a business plan relate to managing a business.
INTERNATIONAL BUSINESS, 4e CHAPTER
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9
Managing the Small Business
Production managementHuman resources managementInformation management