Business Quiz #2 - half of chapter 3

Small Business

one that is independent (not part of a larger business) and that has relatively little influence in its market

Small Business Administration (SBA)

government agency charged with assisting small businesses

The importance of small businesses in the US

Job Creation

Innovation

Contributions to big businesses

Entrepreneur

businessperson who accepts both the risks and the opportunities involved in creating and operating a new business venture

Entrepreneurship

the process of seeking business opportunities under conditions of risk

Entrepreneurial Characteristics

Resourcefulness

Concern for goods, personal customer relations

Strong desire to be their own bosses

Deal with uncertainty and risk

Understanding Distinctive Competencies

Established Market

Niche

First-mover advantage

Established Market

one in which many firms compete according to relatively well-defined criteria

Niche

a segment of a market that is not currently being exploited

First-mover advantage

any advantage that comes to a firm because it exploits an opportunity before any other firm does

Business Plan

document in which the entrepreneur describes her or his business strategy for the new venture and demonstrates how it will be implemented

Crafting a Business Plan

setting goals and objectives

sales forecasting

financial planning

Starting the Small Business triangle

Buying an existing business (small)

Franchising (medium)

Starting from Scratch (large)

Starting from Scratch questions

Who and where are my customers?

How much will those customers pay for my products?

How much of my product can I expect to sell?

Who are my competitors?

Why will customers buy my products rather than the product of my competitors?

Financing a Small Business

Personal resources

Loans from family and friends

Bank loans

Venture capital companies

Minority Enterprise Small-Business Investment Companies (MESBICs)

SBA financial programs

Small-Business Investment Companies (SBICs)

Popular areas of small business enterprise

Services - service industry

Retailing - sells products made from other firms directly to consumers

Construction - construction industry

Wholesaling - buy products in bulk from manufacturers or other producers and store them fro selling to retailers.

Finance and Insurance - small businesses usually affiliated with larger national firms

Manufacturing - works for bigger company

Transportation - transportation industry

Other - different start-ups such as newspaper company

What is the new rising are of small businesses?

manufacturing to services