Business Essentials, 7th Edition EbertGriffin

1、Business Essentials, 7th EditionEbert/Griffin 2021 Pearson Education, Inc.Entrepreneurship, New Ventures, and Business OwnershipInstructor Lecture PowerPointsPowerPoint Presentation prepared by Carol Vollmer Pope Alverno CollegeAll rights reserved. No part of this publication may be reproduced, stor

2、ed in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America. 2021 Pearson Education, Inc.2After reading this chapter, you should be

3、 able to:Define small business, discuss its importance to the U.S. economy, and explain popular areas of small business.Explain entrepreneurship and describe some key characteristics of entrepreneurial personalities and activities.Describe the business plan and the start-up decisions made by small b

4、usinesses and identify sources of financial aid available to such enterprises.Discuss the trends in small business start-ups and identify the main reasons for success and failure among small businesses. 2021 Pearson Education, Inc.L E A R N I N G O B J E C T I V E SAfter reading this chapter, you sh

5、ould be able to:Explain sole proprietorships, partnerships, and cooperatives and discuss the advantages and disadvantages of each.Describe corporations, discuss their advantages and disadvantages, and identify different kinds of corporations.Explain the basic issues involved in managing a corporatio

6、n and discuss special issues related to corporate ownership.L E A R N I N G O B J E C T I V E S (contd) 2021 Pearson Education, Inc.Whats in It for Me?By understanding the material discussed in this chapter, youll be better prepared to:Understand the keys to entrepreneurial success, including busine

7、ss planningDiscuss the reasons for success or failureEvaluate the advantages and disadvantages of different kinds of ownership 2021 Pearson Education, Inc.What Is a “Small Business?Small Business DefinedA business that is independent (not part of a larger business) and that has relatively little inf

8、luence in its market.The Importance of Small Business in the U.S. EconomyJob creationInnovationContributions to big businessSuppliers of specialized services and raw materialsSellers of larger firms products 2021 Pearson Education, Inc.FIGURE 3.2: Small Business by Industry 2021 Pearson Education, I

9、nc.EntrepreneurshipEntrepreneurshipThe process of seeking business opportunities under conditions of riskEntrepreneurOne who accepts the risks and opportunities of creating, operating and growing a new businessSmall Business OwnerA person who independently owns a business that has relatively little

10、impact in its market 2021 Pearson Education, Inc.Entrepreneurial CharacteristicsSuccessful Entrepreneurs:Are resourceful.Are concerned about good customer relations.Desire to be their own boss.Can deal with uncertainty and risk.Are open-minded.Rely on networks, business plans, and consensus.Have dif

11、ferent views on how to succeed, to automate a business, and when to rely on experience or business acumen. 2021 Pearson Education, Inc.Starting and Operating a New BusinessCrafting a Business PlanConveys a description of the business strategy for the new venture and how it will be implementedA busin

12、ess plan should address:The entrepreneurs goals and objectivesThe strategies that will be used to obtain themThe implementation of the chosen strategiesPreparing a Business PlanSetting goals and objectivesSales forecastingFinancial planning 2021 Pearson Education, Inc.Starting the Small BusinessBuyi

13、ng an Existing BusinessLess risk in purchasing ongoing, viable businessFranchisingAdvantagesProven business opportunity for franchiseeAccess to management expertise of franchisorDisadvantagesStart-up costs for franchise purchaseOngoing payments to the franchisorManagement rules and restrictions on t

14、he franchisee 2021 Pearson Education, Inc.Starting the Small Business (contd)Starting from ScratchDisadvantage: Higher risk of business failureAdvantage: Avoids problems of an existing businessQuestions to Be Answered:Who and where are my customers?How much will those customers pay for my product?Ho

15、w much of my product can I expect to sell?Who are my competitors?Why will customers buy my product rather than the product of my competitors? 2021 Pearson Education, Inc.Financing the Small BusinessPersonal ResourcesLoans from Family and FriendsBank LoansVenture Capital CompaniesSmall-Business Inves

16、tment Companies (SBICs)Minority Enterprise Small-Business Investment Companies (MESBICs) SBA Financial ProgramsGuaranteed loans and immediate loan programsManagement advice (SCORE and SBDCs) 2021 Pearson Education, Inc.Trends in Small-Business StartupsEmergence of E-commerceCrossovers fromBig Busine

17、ssOpportunities for Minorities & WomenGlobalOpportunitiesBetterSurvival Rates 2021 Pearson Education, Inc.Reasons for Failure and SuccessFailurePoor managementNeglectWeak control systemsInsufficient capitalSuccessHard work, drive, and dedicationMarket demandManagerial competenceLuck! 2021 Pearson Ed

18、ucation, Inc.Business OwnershipForms of Legal OwnershipSole proprietorship: Owned and operated by one personPartnership: Sole proprietorship multiplied by the number of partner-ownersCorporationChoice of Ownership FormBased on the entrepreneurs needs/desires for control, ownership participation, fin

19、ancing sources, and appropriateness of the chosen form for the industry in which the firm will compete 2021 Pearson Education, Inc.Sole ProprietorshipsAdvantages:FreedomSimple to formLow start-up costsTax benefitsFormation of cooperativesDisadvantages:Unlimited liability: Owners are responsible for

20、all debts of a businessLimited resourcesLimited fundraising capabilityLack of continuity 2021 Pearson Education, Inc.PartnershipsAdvantages:More talent and moneyMore fundraising capabilityRelatively easy to formLimited liability for limited partnersTax benefitsDisadvantages:Unlimited liability for g

21、eneral partnerDisagreements among partnersLack of continuity 2021 Pearson Education, Inc.Alternatives to General PartnershipsLimited PartnershipAllows for limited partners who invest money but are liable for debts only to the extent of their investmentsMust have at least one general (or active) part

22、ner, who is usually the person who runs the business and is responsible for its survival and growthMaster Limited PartnershipOrganization sells shares (partnership interests) to investors on public exchange. Investors are paid back from profitsThe master partner retains at least 50 percent ownership

23、 and runs the business, while minority partners have no management voice 2021 Pearson Education, Inc.CooperativesCombine the freedom of sole proprietorships with the financial power of corporationsGroups of sole proprietorships or partnerships agree to work together for their common benefit 2021 Pea

24、rson Education, Inc.CorporationsCorporationFirms that have filed papers of incorporationCorporations may:Be small or largeSue and be suedBuy, hold, and sell propertyMake and sell productsCommit crimes and be tried and punished for themHave limited liability for individuals who form them 2021 Pearson

25、 Education, Inc.CorporationsAdvantages:Limited liability: The owners responsibility for the debts of a business is limited to their investment in a businessContinuityStronger fundraising capabilityDisadvantages:Double taxation of dividendsFluid controlComplicated and expensive to form 2021 Pearson E

26、ducation, Inc.Types of CorporationsClosely Held (Private) CorporationPublicly Held (Public) CorporationSubchapter SCorporationLimited Liability Corporation (LLC)Professional CorporationMultinational (Transnational) Corporation 2021 Pearson Education, Inc.Managing a CorporationCorporate GovernanceThe

27、 roles of shareholders, directors, and other managers in corporate decision making and accountabilityCorporate governance is established by the firms bylaws and involves three bodies:Stockholders (shareholders): Investors who buy ownership shares in the form of stockThe board of directors: Group ele

28、cted by stockholders to oversee corporate managementCorporate officers: Top managers hired by the board to run the corporation 2021 Pearson Education, Inc.Stockholders: Owners of CorporationsStock: A share of ownership in a corporationDividends: Profits distributed among stockholders 2021 Pearson Ed

29、ucation, Inc.Special Issues in Corporate OwnershipJoint Ventures and Strategic Alliances:Strategic alliance: Two or more organizations collaborate on a project for mutual gainJoint venture: Partners share ownership of a new enterpriseEmployee Stock Ownership PlansAllows employees to own a share of t

30、he corporation through trusts established on their behalfInstitutional InvestorsControl enormous resources and can buy huge blocks of stock 2021 Pearson Education, Inc.Special Issues in Corporate Ownership (contd)Mergers, Acquisitions, Divestitures, and Spin-Offs:Merger: Two firms combine to create a new companyAcquisition: One firm buys another outrightDivestiture: Strategy whereby a firm sells one or more of its business unitsSpin-off: A firm