SMALL BUSINESS MANAGEMENT

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SMALL BUSINESS MANAGEMENT

• Chapter 2
• The Small Business Decision

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The Small Business Decision

• Personal Evaluation

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Advantages of Small Business Ownership

• More personal contacts with people
• Independence
• Skill Development
• Potential Financial Rewards
• Challenge
• Enjoyment

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Disadvantages of Small Business Ownership

• Risk
• Stress
• Need for Many Abilities
• Limited Financial Rewards
• People Conflicts
• Time Demands

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Demographic Characteristics of Entrepreneurs

• Parents owned business
• Foreign parents
• High school degree or less
• College or more
• Age 31 and under
• Age 40 or more

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Personality Characteristics Required by
Successful Entrepreneurs

• Achievement Orientation
• Risk Taking
• Independence, Self Confidence, Self Assurance
• Innovativeness
• Strong Verbal and Numerical Skills
• Selling Skills

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Personality Characteristics Required by
Successful Entrepreneurs

• Selling Skills
• Problem Solving Abilities
• Strategic Planning
• Perseverance

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The Small Business Decision

• Organizational Evaluation

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Small Business Successes

• Alertness to Change
• Ability to Attract and Hold Competent Employees
• Staying Close to the Consumer

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Small Business Successes

• Thoroughness with Operating Details
• Ability to Obtain Needed Capital
• Effective Handling of Laws, Rules, and Regulations

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Small Business Successes

• Environments Conducive to Small Business Success
• Personal Attention to Daily Operation
• Owner Contact with Employees
• Small or Local Demand

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Small Business Successes

• Industries that Require Flexibility
• high growth rates, erratic demands,
• perishable products
• More Labor and Less Capital Intensive
• Considerable Government Encouragement

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Small Business Failures

• Bankruptcies

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Entrepreneurialship and Small Business Management

• Entrepreneurial Skills
• Characteristics
• creativity, innovativeness, independence,
  risk-taking, idea-oriented
• Situations
• generating ideas and solutions to problems,
  starting a new business, expanding or opening new
  products, reaching performance objectives,
  maintaining control of operations

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Entrepreneurialship and Small Business Management

• Managerial Skills
• characteristics
• develops strategy and goal setting, prefers to
  know outcomes of actions or activities, team
  player, works through others, skills in finance,
  marketing, personnel, operations
• situations
• generating ideas and solutions to problems,
  starting a new business, expanding or opening new
  products, reaching performance objectives,
  maintaining control of operations

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Concept Checks

• 1. What are the major causes of business failure?
• 2. What are the characteristics of a successful
  business?
• 3. List the advantages of owning a small business.

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Concept Checks

• 4. List the disadvantages of owning a small
  business.
• 5. What are the characteristics of successful
  small business owners?
• 6. What is the difference between an entrepreneur
  and a manager?

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Concept Checks