MANAGING SMALL BUSINESS

START UP

UNIT 7
 OUTLINE
Entrepreneurship Definition
Small business
Impact of Entreprenuerial Companies
Who are Entrepreneurs?
Diversity of Entrepreneurs
Personality Traits
Social Entreprenuership
 OUTLINE
Launching an Entrepreneurial Start-Up
Starting an Idea
Writing a business plan
Choosing a legal structure
Arranging financing
Tactics for Becoming a Business owner
Starting an Online Business
 OUTLINE
Managing a Growing Business
Stages of Growth
Planning
Organizing
Leading
Controlling
 ENTREPRENEURSHIP
• ENTREPRENEURSHIP is the process of:
– Initiating a business venture
– Organizing the necessary resources
– Assuming the associated risks and rewards

ENTREPRENEUR
someone who engages in
entrepreneurship
 5 TYPES OF SMALL BUSINESS
OWNERS
Thrive on
Rewarded by challenge of Enjoys chance
chance to work building a larger, to balance
on something more profitable work and
new and creative business personal life
HARD
IDEALISTS OPTIMIZERS JUGGLERS SUSTAINER
WORKERS
24% 21% 20% S 15%
20%
Get personal High energy
satisfaction Enjoys
from being a handling every
business owner detail of the
business

Source: Yankelovich Partners for Pitney Bowes in Mark Henricks “Type-Cast”

Entrepreneur ( march 200); 14-16
 ENTREPRENEURSHIP TODAY
• Entrepreneurship and small business are:
– Vital, dynamic increasing important parts of US
economy
– Booming in other countries
• In the US:
– Small business represents 99.7% of all firms
– Generated 64% of new jobs annually for the past
15 years
 SMALL BUSINESS
• US SBA (Small Business Administration)
defines small business as :
– Independently owned and operated,
– organized for profit
– not dominant in its field of operation
 IMPACT OF ENTREPRENEURIAL
COMPANIES
Job Creation Innovation
• Large % of new jobs • New and smaller
in the US come from firms are responsible
small business for 55% of
innovations in 362
different industries
• 95% of all
radical
innovations.
WHO ARE ENTREPRENEURS?
WHO ARE ENTREPRENEURS?
WHO ARE ENTREPRENEURS?
WHO ARE ENTREPRENEURS?
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PERSONALITY TRAITS
 PERSONALITY TRAITS

Awareness
Need to of passing
time
achieve
High
Self-
Energy
confidence
Level

Internal Tolerance
Entrepreneurial
locus for
personality
of Ambiguity
control
 PERSONALITY TRAITS
INTERNAL LOCUS HIGH ENERGY NEED TO
OF CONTROL LEVEL
ACHIEVE
• Belief that you • Unwaverin • Motivated to
can make g belief in a excel and pick
things come dream situations
out the way • Intense where success
you want focus is likely
• Belief that their • Unconventiona • Like to set their
future is within l risk taking own goals
their control • High level of which are
• External forces passion
moderately
have little difficult
influence
 PERSONALITY TRAITS
SELF AWARENESS OF TOLERANCE FOR
CONFIDENCE PASSING TIME AMBIGUITY
• Must act • Impatient • Psychological
decisively • Feels a sense characteristic
• Deal with of urgency that allow a
anything in the • They want to person to be
future, seize the untroubled by
complex, moment disorder and
unanticipated uncertainty
problems
 PERSONALITY TRAITS
• No one should be discouraged from starting a
business because he or she doesn’t fit a
specific profile.
• One review of SB suggest that the 3 most
important traits of successful entrepreneurs
particularly in a turbulent environment are:

Realism Flexibility Passion

 DIVERSITY OF ENTREPRENEURS

Entrepreneu
First born Immigrants
r parents

Women Young
 SOCIAL ENTREPRENEURSHIP
• Committed to good business and social
change.
• Combines creativity, business smarts, passion,
hard work + mission to change the world for
the better
• Creates new business models that meet
– Critical human needs
– Resolve important problems unsolved by
current economic and social institutions
 Social businesses for a better Philippines
PILIPINAS: NOW IS OUR TIME By Joey Concepcion (The Philippine Star) | Updated
September 30, 2013 - 12:00am

It is amazing to see the idealistic and passionate youth of

today engrossed in this growing phenomenon called social
entrepreneurship. For the past eight years, as Go Negosyo
pursues its passion of building a country of enterprising
Filipinos, we have adopted along the way the beauty of
social entrepreneurship, since we see that it is not only an
enterprise for profit, but an enterprise that also helps solve
a social issue, or benefits a particular underprivileged
sector or community. In a way, we have treated Go Negosyo
as a social enterprise that provides competency-building
and mindset change for those who want to beat poverty or
become successful.
 Water Lily
• Sen. Cynthia Villar has also
developed several social
enterprises, like the famous
products from water lilies that
used to clog the Las Piñas river,
or the coco coir that comes
from a huge pile of buko waste
in Las Piñas. She then trains
several communities to make
the coco coir, which she markets
initially to the Vista Land
projects and other property
developers.
 HUMAN NATURE
• The Gandang Kalikasan Inc.
(Human Nature) of Anna
Meloto-Wilk, with the support
and help of her husband
Dylan
and sister Camille, proves that in
having a business, entrepreneurs
can be pro-poor, pro-
environment, and pro-
Philippines all at the same time.
Their personal care products are
made from Philippine raw
materials being planted in
GAWAD KALINGA communities.
 RAGS2RICHES
Uplifting the lives of families at
Payatas garbage dump.
Fernandez-Ruiz and her partners,
including fashion icons like Rajo
Laurel and Amina Alunan-Aranaz,
started Rags2Riches to support
the Payatas women and upcycle
tons of scrap cloth to produce
fashionable and marketable bags,
wallets and wine containers that
command competitive prices.
 LAUNCHING AN
ENTREPRENEURIAL START-UP
Starting an idea

Writing the Business plan

Choosing a legal structure

Arranging financing
 Starting an Idea
Reasons for Starting a Business Source of New Business Ideas
37% In-Depth Understanding of
41% Joined Family business
Industry or Profession
36% To control my future 36% Market Niche Spotted

27% To be my own boss 7% Brainstorming

25% To fulfill a dream 4% Copying someone else

5% Lay off 4% Hobby

11%
Other
 Writing the Business Plan
• Business Plan- document of the
business details before opening the
business
• Forces careful thinking through issues and
problems
• Critical for persuading lenders and
investors
• Keep plan crisp and compelling
 BUSINESS PLAN DETAILS
• Clear, compelling vision that creates an air of
excitement
• Clear and realistic financial projection
• Profile potential customers and target
market
• Detailed info about the industry and
competitors
• Good formatting and clear writing
• Short- no more than 50 pages
• Spells out the sources and uses of start-up funds and
operating funds
 LEGAL STRUCTURE
Sole Proprietorship Partnership Corporation
• Unincorporated • Unincorporated • Artificial entity
• Owned by • Owned by 2 or created by state
indivudual for more people • Exist apart from
profit • Sign agreement owner
• Has own legal
• Owner has • Unlimited liability life
unlimited liability of the partners • Continues to exist
• Personal and and regardless of
business assets disagreements whether owner
are at risk • Often dissolve dies
• Financing within 5 • Expensive and
harder years complex
to obtain
 FINANCING
Debt Financing Equity Venture Capital
Financing firm
• Borrowing • Funds that are • Group of
money that has invested in companies or
to be paid at a exchange for individuals that
later date stocks/ invests money
• Angel ownership of in new or
financing- the company expanding
• Wealthy business for
individuals ownership or
potential
• Provide
profits
advice and
assistance
 TACTICS FOR BECOMING A
BUSINESS OWNER
Start a New Business Buy an Existing Business

• From scratch • Shorter time to get

• Develop design own started
way • With existing track
record
• Takes a long time to
make profitable • Ill will toward the
• Uphill battle business
• Bad habits, procedures,
outdated technology
 TACTICS FOR BECOMING A
BUSINESS OWNER
Buy a Franchise Business Incubator

• Most rapidly growing • Provides shared office

• Invest money and owns space, management
the business but does support services and
not have to develop a legal advice
new product, create a • Chance to network and
company or test the learn from one
market another
• Lack of control
• Expensive, high start-
up
 ONLINE BUSINESS
• Expand business
• Launch a new venture
Find a market niche

Create a professional Web site

Choose domain name

Build online relationships

MANAGING A GROWING BUSINESS

START
Self-confidence
Internal locus of
control CONTINUED GROWTH
Creativity Shift in management style
Owners loves to Need to adjust
perfect every POLC
detail
STAGES OF GROWTH
 STAGES OF GROWTH
11.START UP
Problems : produce products/ services
and obtaining customers
22.SURVIVAL
• Workable business entity
• Produces products and service
• Has sufficient customers
• Finances should generate enough to maintain
operation
• Grow in size and profitability
 STAGES OF GROWTH
33.SUCCESS
• Solidly based and profitable
• Allows of owner to slow down if desired
• Owner can stay involved or turn over to
professional managers
44.TAKE-OFF
• Problem is how to grow rapidly and finance
growth
• Delegate
• Sufficient capital to invest
 STAGES OF GROWTH
55.RESOURCE MATURITY
• Substantial financial gain
• Staff and resources to act as mature company
• Detailed planning and control systems
• Lose small size advantages, flexibility and
entrepreneurial spirit
 PLANNING
• Start-up Stage
– Non-existent
– Primary goal
is to remain
alive
• Success stage
– Formal
planning
– Define goals
– Decide on
 ORGANIZING
• Start-up and Survival
– Informal
– Employees report to owner
• Success
– Hire functional managers to take charge of
finance, manufacturing and marketing
– Outsourcing
– Delegate and decentralize authority
– Create teams or divisions
 LEADING
• Early Stage
– Driving force is leader’s vision
– Leader’s personality shapes corporate
culture
• Success
– Owner must motivate employees or bring in
managers who can
• Take-off
– Employee cooperation
 CONTROLLING
• Early Stage
– Simple accounting and personal supervision
• Success
– Operational budgets in place
– More structured control systems
• Take-off
– Sophisticated control techniques
THANK YOU FOR BEING SO
SERIOUS...