Business Principals Chapter 6

Personal Resources

Often the primary source of funding for small businesses.

Loans from Family and Friends

A common support network for small businesses.

Bank Loans

Traditional financing option.

Venture Capital Companies

Invest for partial ownership, not just loans.

Significance of Small Businesses in Employment

Small businesses employ many U.S. workers and provide lots of jobs.

Challenges That Motivate People to Start Businesses

Unemployment or money problems can push people to start a business.

Small Businesses & Job Creation

Small businesses create many jobs in the U.S.

Flexibility

Allows owners to choose their hours and have more control over their work.

Threats to Small Businesses

Business failure, lack of knowledge, low cash flow, regulations, and high costs.

Pros of Starting From Scratch

You have full control and can make your own decisions.

Financial Success

Starting a business can help people make money and become financially stable.

Entrepreneurial Mindset

focused on success, opportunity, and creating something new.

Characteristics of an Entrepreneurial Mindset

Vision, confidence, energy, independence, and handling failure.

Entrepreneurship & Economic Environment

Entrepreneurship is often higher when people need more income or jobs.

Cons of Starting From Scratch

It takes a lot of time, money, and effort and can be stressful.

10-Year Business Survival Rate

About 34% of new businesses survive 10 years.

Energy & Confidence

They help entrepreneurs keep going through challenges and reach their goals.

What is the role of the Small Business Administration (SBA)?

supports and helps small businesses succeed.

Disadvantages of Buying an Established Business

You may inherit old problems, mistakes, or have less freedom to change things.

Definition of a small business?

is independently owned and usually has fewer than 500 employees.

How do small businesses drive innovation?

They create new ideas, products, and solutions.

How does vision contribute to an entrepreneurial mindset?

The ability to see opportunities and ideas for the future.

Opportunities for Small Businesses

Niche markets, personal service, lower costs, and technology.

What does independence mean in the context of starting a small business?

Having control over your work and being your own boss.

Advantages of buying an established business

It already has customers, a reputation, and a proven way of making money.

SBA Support

Helps small businesses with advice, resources, and support to help them succeed.

Main Drivers for Starting a Small Business

Money, independence, flexibility, personal goals, and survival.

Small Businesses & Communities

Small businesses create jobs, grow the economy, and improve local communities.