INTRODUCTION AND FACTS ABOUT SMALL BUSINESSES ENTREPRENEURSHIP

INTRODUCTION AND FACTS ABOUT SMALL BUSINESSES ENTREPRENEURSHIP.

WHAT IS SMALL BUSINESS?
Small business is usually defined as one that has some of the following characteristics:
1. Independent Management - not part of smaller/larger company. Most of time, decision making lies on one person
2. Small Capital from individual or small group -Capital includes $,assets, equipment
3. Located in small area-Does not require large space. It can be set up in ones backyard
4. Small in operational capacity.
5. Renders personalized/direct services.
6. Setting up time /period is short when compared to that of big business.

Some Reasons for Starting a Small Business
To achieve a sense of accomplishment.
To becomes ones boss.
To have element of variety and adventure.
To make better use of ones skills and trainings.
To be challenged with new opportunities.
To render some specialized services to big companies.
To diversify ones source of income/accumulate wealth.
To build up big business organization from it. etc
WHAT IS AN ENTREPRENEURSHIP?
• difficult to define; entrepreneurs are often identified in retrospect; after they have made some innovation or started something new
• simple definition of entrepreneur: someone who perceives an opportunity and creates an organization to pursue it
• many say it is a state of mind; a single-mindedness ,a wish to achieve, confident and rational, able to think and plan tactically and strategically; attitude for action, comfortable when information is lacking
• entrepreneurship is not the same as management; management has a set of resources and asked to make it perform
What can entrepreneurs do?
• create new products/services
• bring creative and innovative methods to developing or producing new products/services
• provide employment, create jobs
• contribute to regional growth
• encourage efficiency/productivity to enhance competitiveness
THE ENTREPRENEURIAL PROCESS -Elements Essential to Business Plan
1. Available business idea or opportunity with a receptive market
2. An organizational structure for the business
3. Access to financial and other resources
4. A Distinctive strategy which will set the business apart from competition and enable establishment if effectively implemented
WHAT ARE THE REQUIREMENTS FOR SMALL BUSINESS MANAGEMENT?
I PERSONAL
• Skills: organizational skills; administrative skills; good communications skills; leadership skills
• Qualities: initiative-DRIVE; willingness to take risks; energy; good judgment; restraint; patience; SELF-CONFIDENCE; PASSION-LOVE
• Experience/Knowledge: technical competence; experience
II GOOD CUSTOMER RELATIONS AND KNOWLEDGE OF CONSUMERISM
• Attitude that puts customer first -example- Walt Disney
BUSINESS ETHICS AND SOCIAL RESPONSIBILITY
• business exists on trust-credit-verbal order/agreement
• compliance with legal requirements/regulations
• social responsibility-being responsible to others-safe workplace
Other Conditions that Improve Chance of Success
• Do you have a family that would be supportive?
• Can you work without worry of others?
• Do you have a spouse who works and makes money?
• Do you have family/friends you can recruit to help?
WHAT DO YOU NEED TO START A SMALL BUSINESS?
1. Product/service or idea for one
(retail,manufacturing,wholesale,import, service
2. Knowledge of Business
Is there a demand or market/growing market?
3. Business Plan
-covering all operations from time of consideration-- time started usually at least one year
4. Two Parts to a Business Plan
A. Marketing --4P's
* PRODUCT * PRICE * PLACE *PROMOTION
What? How Much? Where? How?
B. Accounting
-projected income statements
-balance sheets, cash flows
5. MONEY--how much? statement of changes in cash flow
-cash flow statements show the uses and sources of cash
-advice from public accountant in small business
6. Knowledge of Yourself
-desire to do it--enthusiasm
-ability to run a business
-Partner/no partner
MYTHS AND REALITIES OF ENTREPRENEURSHIP
MYTH 1: Entrepreneurs are born, not made
• some are born with a flair for innovation, energy, attributes; but need more: work experience, know-how, contacts, business skills; other attributes can be acquired
MYTH 2: Anyone can start a business; it is luck and guts
• need to see difference between idea and opportunity; need to act not like bureaucrat, but entrepreneur.
MYTH 3: Entrepreneurs are gamblers
• successful people take carefully calculated risks; they try to influence the odds by getting others to share risks; won't shy away from necessary risk
MYTH 4: Entrepreneurs want to run the whole show
• doing everything yourself limits growth
MYTH 5: Entrepreneurs are their own bosses and completely independent
• often they rely or refer to many: partners, investors, customers, employers, suppliers, community
MYTH 6: Entrepreneurs work longer and harder than corporate managers
• some do some don't; both are demanding
MYTH 7: Entrepreneurs have greater stress, pressure, and pay a higher personal price
• no evidence that it is more stressful than others; there could be sense of accomplishment, fun, flexibility
MYTH 8: Starting a Business is risky and often ends in failure
• true in many cases; good percentage fail in first 5 years; but success is higher for higher-potential ventures with experienced talented people who attract right people and finances
MYTH 9: Money is the most important part of success
• if the other important parts are there money tends to follow
MYTH 10: New Business startup is for young and energetic
• these may help, but age is no barrier; age brings experience; financial stability or obligations
MYTH 11: Entrepreneurs are motivated for quest for money
• growth minded and more motivated by challenge to build rather than instant money; money can be viewed as tool to keep score
MYTH 12: Entrepreneurs seek power, control over others to feel in charge
• Successful strive for responsibility, achievement, results rather than power; thrive on accomplishment, outperforming competition; control comes from results they achieve. www.eaglesfortunelink.com

In my next post, I will introduce you to various possible small businesses to go into and how to go about them.