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Transcript of C OURSE INTRODUCTION SMALL BUSINESS MANAGEMENT BUSG-2309.
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COURSE INTRODUCTION
SMALL BUSINESS MANAGEMENTBUSG-2309
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Course description• Theory and practical application of the small business
principles necessary for the operation of a successful small business.
• Designed for students who want to evaluate going into business for themselves or working for a small business.
• Sales, finance, personnel and the concepts and current practices of managing a small business.
• Start up and effective operation, includes essential ‐management skills, how to prepare a business plan, accounting, financial needs, staffing, marketing strategies, and legal issues.
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Textbook
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Course goalsThe goal of this course is: to inspire entrepreneurship to students, to provide them with an overview of the
concepts and processes involved in business and business operations, and
to equip them with some basic tools and techniques necessary for the establishment and management of small business.
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Pedagogical method PowerPoint presentations throughout the course. Extensive discussion Working in teams Chapter quiz online and submit their result via
email after each class. http://wps.prenhall.com/bp_scarborough_esbm_9/
Students shall be asked to discuss case studies in small groups and present their findings to other groups in the class.
Coaching on building financial models for the business plan using Excel.
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Course policies Attendance Academic honesty Students with disabilities Cell phones Calculator, laptop, tablet Student ID Books, tools, and supplies Dress code Classroom & Lab conduct Course withdrawal Late submission
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Course activities Chapter quiz
http://wps.prenhall.com/bp_scarborough_esbm_9/
Business plan project Mid-term exam (multiple choice and
essay) Final exam (multiple choice and
essay)
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GradingNo. Activities Weights
1 Chapter quiz 10%
2 Class activities, participation, attendance, group discussion, and case study
15%
3 Business Plan Project 20%
4 Mid-term exam 25%
5 Final exam 30%
Grade Final scores
A 90 – 100
B 80 – 89
C 70 – 79
D 60 – 69
F 0 – 59
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Plagiarism & cheating policy Cheating Plagiarism
Time table
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Exam format sampleExam Exam Type
Number of
Questions
Duration (minutes)
Grade Sheet Review
(minutes)
Possible points Proctor
Online-Multiple Choice
(on Computer)
Open book 30 45 50 60 Instructor & technical supporter
Essay (on Paper)
Open book 2 60 No 40 Instructor
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SO YOU WANT TO BECOME AN
ENTREPRENUER?Toan NguyenJan 22, 2011
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Who are they?
Bill GatesMichael Dell
Mark Zuckerberg
Robert Kiyosaki
Tom Szaky
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Who are they?
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Contents• What is an entrepreneur?• How to spot an entrepreneurial opportunities • The rewards of owning a small business• The risks• Why the boom? • The cultural diversity of Entrepreneurship • The contributions of small businesses • Putting failure into perspective • How to avoid the pitfalls • Conclusions
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What is an entrepreneur?
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The World of the Entrepreneur• In the U.S., entrepreneurs start more than 6
million businesses a year!• Global Entrepreneurship Monitor (GEM)
– Approximately 10% of U.S. population is actively involved in trying to start a new business
– Approximately 9.5% of people in 42 GEM countries studied are involved in starting a new business
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What Is an Entrepreneur?
One who creates a new business in the face of risk and uncertainty for the purpose of achieving profit and growth by identifying opportunities and assembling the necessary resources to capitalize on them
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What Is an Entrepreneur?
An entrepreneur is someone who is willing to work 16 hours a day to keep from working 8 hours a day for someone else!
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Characteristics of Entrepreneurs
Survey: 72% of adults in the U.S. have considered starting their own businesses
• Willingness to take initiative• Preference for moderate risk• Confidence in their ability to succeed• Self-reliance• Perseverance• Desire for immediate feedback
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Characteristics of Entrepreneurs
• High level of energy• Competitiveness• Future orientation
– Serial entrepreneurs• Skilled at organizing• Value achievement over money
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Entrepreneurship• One characteristic of entrepreneurs stands out:
Diversity!• Anyone – regardless of age, race, gender, color,
national origin, or any other characteristic – can become an entrepreneur (although not everyone should)
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How to spot an entrepreneurial opportunity
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How to Spot Entrepreneurial Opportunities
• Creativity vs. Innovation – Creativity – the ability to develop new
ideas and to discover new ways of looking at problems and opportunities
– Innovation – the ability to apply creative solutions to problems and opportunities to enhance or to enrich people’s lives
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How to Spot Entrepreneurial Opportunities
• Monitor trends and exploit them early on– Starwich
• Take a different approach to an existing market– Goodwin Heart Pine
• Put a new twist on an old idea– PODS
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How to Spot Entrepreneurial Opportunities
• Look for creative ways to use existing resources– Alaska Glacial Mud Company
• Realize that others have the same problem that you do– Stroller Strides
• Notice what is missing– Dogs on Wheels
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The rewards
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Benefits of Small Business Ownership
The opportunity to:• Control your own destiny• Make a difference
– Social entrepreneurs• Reach your full potential• Reap impressive profits• Contribute to society and to be recognized for your
efforts• Do what you enjoy and to have fun at it
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The risks
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Drawbacks of Small Business Ownership
• Uncertainty of income• Risk of losing your entire investment• Long hours and hard work
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Source: MasterCard Global Small Business Survey, 2007.
1 to 39 hours10%
40 to 49 hours29%
50 to 59 hours22%
60 to 69 hours19%
More than 70 hours20%
Small Business Owners' Work WeekNumber of Hours Worked per Week
Average workweek = 54 hours
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32Copyright ©2009 Pearson Education, Inc. Publishing as Prentice Hall
Drawbacks of Small Business Ownership
• Uncertainty of income• Risk of losing your entire investment• Long hours and hard work Lower quality of life until the business gets
established
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Source: National Federation of Independent Businesses and Wells Fargo Bank, 2002.
Under 25 25-34 35-44 45-54 55-64 65+0.0%5.0%
10.0%15.0%20.0%25.0%30.0%35.0%
9.8%
33.5%31.1%
17.8%
6.1%
1.7%
Owner Age at Business Formation
Age
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Drawbacks of Small Business Ownership
• Uncertainty of income• Risk of losing your entire investment• Long hours and hard work• Lower quality of life until the business gets established
High levels of stress Complete responsibility Discouragement
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Why the boom?
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Feeding the Entrepreneurial Fire
• Entrepreneurs as heroes• Entrepreneurial education• Demographic and economic factors• Shift to a service economy• Technological advancements• Independent lifestyles• E-Commerce and the World Wide
Web• International opportunities
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Cultural diversity of entrepreneurship
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The Cultural Diversity of Entrepreneurship
• Young entrepreneurs
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Asian/Pacific Is-lander
African-American Hispanic-Amer-ican
White0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
89%86%
79%
69%
Aspiring Teenage EntrepreneursPercent Interested in Starting a Business
Source: Milken Institute, 2003.
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40Copyright ©2009 Pearson Education, Inc. Publishing as Prentice Hall
The Cultural Diversity of Entrepreneurship
• Young entrepreneurs
Women entrepreneurs
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Source: National Federation of Women Business Owners, 2003.
Number of firms Number of em-ployees
Sales0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
40.0%
45.0% 42.3%
0.4%
4.4%
23.3%
12.3%
15.6%
Growth of Women-Owned Companies1997 to 2006
Women-owned firms All firmsCategory
Gro
wth
Rat
e
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The Cultural Diversity of Entrepreneurship
• Young entrepreneurs• Women entrepreneurs
Minority-owned enterprises Immigrant entrepreneurs Part-time entrepreneurs
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43
The Cultural Diversity of Entrepreneurship
• Home-based business owners• Family business owners• Copreneurs• Corporate castoffs• Corporate dropouts• Retired baby Boomers
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Source: Kauffman Foundation, Kauffman Index of Entrepreneurial Activity, 2006.
20-34 35-44 45-54 55-64 65 and older0.00%
0.05%
0.10%
0.15%
0.20%
0.25%
0.30%
0.35%
0.26%
0.30% 0.29%
0.34%
0.21%
Entrepreneurial Activity by Age Group
Age Group
Pe
rce
nta
ge
of
Ag
e G
rou
p S
tart
ing
a C
om
pa
ny
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Source: Small Business Administration, 2006.
Construction; 12.81%
Manufacturing; 4.74%Wholesale; 5.63%
Retail; 12.47%
Finance & Real Estate; 9.05%
Services; 49.77%
Other; 5.53%
Small Businesses by Industry
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Contributions of small business
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Small Businesses...
• Make up 99.7% of all the 29.3 million businesses in the U.S.
• Employ 52% of the nation’s private sector workforce
• Pay 45% of total private payroll• Create more jobs than big businesses
– 1996 to 2006: Between 60% and 80% of all net new jobs in the U.S.
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• Are leaders in offering training and advancement opportunities to workers– Provide 67% of workers with their first jobs
• Produce 51% of the nation’s private GDP• Account for 47% of business sales• Key role in innovation:
– Produce 13X to 14X more patents per employees than large companies
Small Businesses...
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New 1 2 3 4 5 6 7 8 9 100%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
100%
81%
65%
54%46%
40%36%
32% 29% 27% 25%
Small Business Survival Rate
# of Years in Business
% o
f S
mal
l F
irm
s S
urv
ivin
g
Source: National Federation of Independent Businesses Business Policy Guide, 2003.
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Putting failtures into perspective
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51Copyright ©2009 Pearson Education, Inc. Publishing as Prentice Hall
Putting Failure into Perspective
• Median age of U.S. companies = 12 years • Entrepreneurs are not paralyzed by the prospect of
failure• Failure – a natural part of the creative process • Successful entrepreneurs learn to fail intelligently
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How to avoid the pitfalls
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53Copyright ©2009 Pearson Education, Inc. Publishing as Prentice Hall
Avoiding the Pitfalls of Small Business Failure
• Know your business in depth• Prepare a business plan• Manage financial resources• Understand financial statements
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54Copyright ©2009 Pearson Education, Inc. Publishing as Prentice Hall
Avoiding the Pitfalls of Small Business Failure
• Learn to manage people effectively• Set your business apart from the
competition• Maintain a positive attitude