Chapter 5: The Challenges of Starting a Business
5.1 What Is an Entrepreneur?
Three characteristics of entrepreneurial activity:
1. Innovation - Creative problem solving
- Check out this list of innovative companies, choose a company and describe how they are innovative using the collaborative page
2. Running a business - Combine goods/services to make a profit
3. Risk taking - Operating under the 'unknown' outcome of success & trusting in the innovation of a product/service
Why Start a Business?
Why would you start a business? Take this quick survey.
Do you have the right personality to start a business? Take this personal assessment to find out.
What would stop you from starting a business? (money, security, competition, lack of ideas)
Small 'lifestyle business' vs entrepreneurs
Choose an entrepreneur. Research that person to find information about their background (childhood, education, family, etc.), personality, business ventures, and other interesting information. Use Adobe Spark Video to tell the story of your entrepreneur. Use this rubric to self assess your project.
Here is an example of a spark video. Here is an example of the type of information you would want to include about your entrepreneur. Your mission is to take this type of information and turn it into story form, enhanced with visuals, using Adobe Spark Video.
5.2 The Importance of Small Business to the U.S. Economy
Your book defines a small business as, "... is one that is independently owned and operated, exerts little influence in its industry, and (with a few exceptions) has fewer than five hundred employees."
Why are Small Businesses Important?
- They generate a large part of our GDP
- Create Jobs
- Spark Innovation
- Provide opportunities for many people, including women and minorities, to achieve financial success and independence
What are reasons can you find?
This video talk about the importance of small businesses and shopping locally.
5.3 What Industries Are Small Businesses In?
There are certain industries that a small business should avoid because they take too much of an investment to start.
How do you define the word industry? Look for an image.
Good Producing Sector (tangible) vs Service Producing Sector (larger sector, intangible)
- Find an example for each and add it to the collaborative page
The largest areas of the goods-producing sector are construction and manufacturing. These businesses tend to focus on local projects.
EcoScraps is one innovative good producing small business used as an example in your book. Here is a quick video about their company, which earns about half a million dollars in sales.
This group is made up of retailers, internet entrepreneurs (eg. Mark Zuckerberg), wholesalers, and professional/personal services (eg. doctors, lawyers, insurance agents, hairdressing). Geese Police is an innovate example of s service producing business from your book. Here is a video about their company.
5.4 Advantages and Disadvantages of Business Ownership
Without using your book, you will try to add as many advantages/disadvantages of small business ownership as you can to the collaborative page. After we do some research, we'll compare with our book.
5.5 Starting a Business
What does it take to start a business?
- Define - Business idea and addressing these important questions from this section
- Business plan
Does it meet a need or satisfy a want?
Here is a video on finding a business idea based on experience:
In class we'll talk about the positives and negatives of the ownership options below:
- Starting a new business
- Buying an existing business
- Buying a franchise - Example cost?
With your partners, use this collaborative workspace to list positives and negatives of the three ownership options above. We'll discuss these and fill in any gaps using our book.
Read Ch 5.5 and complete the two exercise questions at the end.
5.6 The Business Plan
The AssignmentRead Ch 5.6 and complete the exercise question at the end.
5.7 How to Succeed in Managing a Business
Why Do Businesses Succeed?
Your chapter lists several ways to be successful in business. I will give you one of the strategies to look up. Find some related information to the strategy you were given or other advice on running a successful small business. You might try to search for 'small business attitude' as an example. Add what you find to the collaborative page.
Why Do Businesses Fail?
We'll look at the statistics in your book. Some business fail because they start out in a risky industry. What reasons can you find for business failure? Add what you find to the collaborative page & we'll compare with your book. Here are four common reasons small business fail.
- Small Business Administration (SBA)
- Small Business Development Center (SBDC)
- Service Corps of Retired Executives (SCORE)
The links above are all resources for small business owners. Find two ways the SBA can help your business and one way the SBDC & SCORE can help. Add these to the collaborative page.
5.8 Cases and Problems
Complete the Learning on the Web case from Ch 5.8.