BUS305: Small Business Management

This chapter explains the concept of entrepreneurship and the evolution of its meaning.

In this video, Kavita Ramdas, President and CEO of the Global Village for Women, defines entrepreneurship by looking to the word's roots in the French language.

Complete this survey for a personal assessment of your preparedness for becoming an entrepreneur. The key for interpreting your results can be found at the bottom of the assessment.

In this article, a former editor for The Wall Street Journal explains how small businesses have built the economy and bolstered democracy throughout history.

This article includes a good glossary of terms that can be used to describe successful entrepreneurs.

The scholarly understanding of entrepreneurship is partially due to the work of economist Joseph Schumpeter. He defined an entrepreneur as a person with the ability to convert an idea into a successful innovation or business venture. Additionally, he coined the term creative destruction and credited entrepreneurs for the dynamism of the industries' long-term economic growth.

This article outlines the function of entrepreneurs and describes the different kinds of entrepreneurs.

This article explains the difference between entrepreneurs and intrapreneurs.

This article outlines the parts of a business plan and the importance of having one before launching a small business.

This article identifies some of the common qualities of successful entrepreneurs.

This article outlines some useful guidelines for determining whether one should pursue entrepreneurship as a choice.

Entrepreneurship is an attractive career choice. But many decisions have to be made before launching and managing a new business, no matter its size. Among the questions that need to be answered are:

• Does the individual truly want to be responsible for a business?
• What product or service should be the basis of the business?
• What is the market, and where should it be located?
• Is the potential of the business enough to provide a living wage for its employees and the owner?
• How can a person raise the capital to get started?
• Should an individual work full- or part-time to start a new business? Should the person start alone or with partners?

Answers to these questions are not empirically right or wrong. Rather, the answers will be based on each entrepreneur's judgment. An entrepreneur gathers as much information and advice as possible before making these and other crucial decisions.

Watch this lecture to learn about different frameworks for entrepreneurship.

As you read this article, think about the definition of an entrepreneur and whether or not this definition is in line with your personality and professional goals. Consider the commitment required to create an idea, write a business plan, and obtain financing to see a product or service through to the marketplace. Do you have that commitment? If so, what steps would you take to begin the process?

This section outlines a checklist for investors, family members, business partners, and employees to evaluate an entrepreneur's business plan.

This article introduces the various forms of business ownership. Pay attention to the advantages and disadvantages of each form of ownership. This will help you understand the foundational elements of legal business structures.

Read this article.

Read this chapter, which covers ethics and social responsibility.

Read this section. You will want to reference the entrepreneur survey assessment you did in subunit 1.1.

Listen to the podcast. Mark Juliano discusses how to build a management team, which is perhaps the most important thing an entrepreneur can do.

By the end of this chapter, you should be able to describe the different types of managers and understand the nature of management work.

This chapter explores the roles and importance of leadership, entrepreneurship, and management strategy and how these qualities are related.

Read this chapter to learn about leadership styles, effective leadership behavior and characteristics, and how to use leadership skills.

Read this section to learn about how emotions affect workers' behaviors. You will also learn about Affective Events Theory, emotional labor, and emotional intelligence.

Read this section, paying attention to succession planning. Try to answer question 4 in the Exercises section.

This lecture describes how to create a winning culture among executives, board of directors, and partners.

Hiring your first employee is a huge step for a small business. If your small business has reached the point where you need help because the assistance of family and friends no longer covers the gaps, you may have reached the point where you need to bring paid staff on board.

Watch this video.

Read this section.

Read this chapter.

Read this chapter to better understand group dynamics an what influences teams as well as to learn how to develop and manage effective teams.

In this chapter, you will learn about different types of conflict, what causes conflict, the consequences of conflict, how to manage conflict, and the process of negotiation.

Pay close attention to this chapter. Writing a business plan is an essential skill for entrepreneurs.

This lecture discusses writing a business plan. You can find the entire Yale Entrepreneurial Institute lecture series here.

Read this article. What audiences use business plans to gather valuable information about the business? Does every business, large or small, need a business plan? If so, why? How can the five dos and five don'ts outlined in this essay benefit the author of a business plan?

This essay imparts some valuable advice for building a template to create a business plan. Do all business plans contain the same topics and level of detail? Why, or why not? What type of information should you include in the eight information sections most commonly covered in a business plan? What guidelines should you follow to ensure you are successful in writing a business plan?

Pay close attention to this section, which we will expand upon later.

Keep this template handy as you write the first couple of drafts of your business plan as an entrepreneur.

Read this article.

This article explains the importance of the mission statement and how to create a simple mission statement.

Watch these videos.

Watch this video on how to create the product or services section of a business plan.

Study this slideshow on how to create the marketing strategy section of a business plan.

Read this chapter, which covers human resource management and its potential for creating and sustaining competitive advantage.

Read this chapter, which covers operations decisions and considerations when starting a business. 

This section outlines the key components of a business plan's management plan section.

Watch this video.

Read this section.

As you read, consider the following questions:

• How difficult or easy is it to calculate startup costs for a business?
  
• Is it important to accurately calculate the startup costs for a business? Why, or why not?
  
• How important is it to conduct research when calculating the startup costs for a business?
  
• What would be the outcome if you did not conduct any research during this process?
  

Study this slideshow on how entrepreneurs can create a simple and effective financial plan for their business.

Read this chapter.

Download and complete the template financial model Excel spreadsheet based on data from a real or fictitious company you are interested in starting.

Franchising is the practice of licensing another firm's business model as an operator. By the end of this article, you will be able to explain the franchiser-franchisee relationship.

A franchise agreement can also have disadvantages for both the franchisor and the franchisee. By the end of this article, you will be able to discuss the disadvantages of participating in a franchise.

A franchise agreement can have many benefits for both the franchisor and the franchisee. By the end of this article, you will be able to discuss the advantages of participating in a franchise.

Read this article on the pros and cons of franchising. This article outlines examples of good, profitable franchising opportunities.

Read this chapter.

Read this chapter for a definition and discussion of the role of marketing and international marketing.

This article explains the importance of gathering information about your market.

Listen to this webinar on the importance of primary market research.

Take note of the four main uses of secondary data under Key Takeaways as a way to differentiate primary and secondary research.

This chapter will introduce you to the marketing research process. This chapter may take you a number of hours to read, so do not feel like you have to finish it all in one sitting!

Marketers must be aware of the business cycle and react appropriately according to which stage of the cycle the economy was in. By the end of this article, you will be able to illustrate how fluctuations in the economy influence consumers' willingness to and ability to buy products and services and list the four stages of the business cycle.

The CPI and CCI are measures of the strength of the economy, and perceptions of businesses and individuals toward the economic future. This article illustrates the relationship between consumer and purchasing power, pricing, and the economy, and distinguishes between the consumer price index (CPI) and consumer confidence index (CCI).

Companies doing business outside of the US should be aware that the political environment can differ greatly. By the end of this article, you will be able to give examples of how government policies can influence marketing programs.

Companies must abide by existing laws and regulations when doing business in a country; these laws may influence marketing activities. By the end of this article, you will be able to discuss the various legal issues that impact marketing decisions.

Whether doing business abroad or locally, marketers must understand the cultures that govern customers' buying habits and ethical norms. By the end of this article, you should be able to describe how cultural beliefs, values, and customs influence marketing campaigns.

Marketers must understand the different demographic groupings that exist and the demographic changes that are constantly occurring. By the end of this article, you will be able to discuss the demographic changes affecting the current marketing environment and identify common demographic traits used by marketers.

Read this section, which discusses the product life cycle and the stages of growth potential.

This section discusses the importance of identifying external market factors to anticipate trends and be prepared to adapt to market changes. By the end of this article, you will be able to explain the different types of external factors or trends used in creating marketing strategies and discuss how technological advancements can impact marketing trends.

This section discusses marketing trends and potential barriers. This chapter also covers niche marketing, which you will learn more about later.

Listen to this podcast on identifying the target market. It will help you figure out the target market for products and services, and it includes information on segmentation and sizing your market.

This chapter will help you learn about innovating, evaluating new products, and assessing new product failure.

Read this section to learn about the criteria that companies use when choosing a market segment and the many ways in which businesses may segment markets. A market segmentation is developed based on one of two strategies and several consumer identifying characteristics like demographics and behavior.

Read this section to learn about the importance of a proper competitive analysis. By the end of this section, you will be able to classify the use of competitive data from an internal and external viewpoint.

This section discusses how marketers can understand how consumers feel about their particular product relative to the competition. By the end of this section, you will be able to evaluate the concept of perceptual mapping as part of competitive perceptual positioning.

This article explains how companies choose their markets and the types of approaches companies use to communicate their marketing messages to those consumers. You should be able to explain the types and psychology of target market selection.

This section discusses some of the tools that are at marketers' disposal. By the end of this section, you will be able to describe promotion as one type of marketing tool, name the five subcategories of promotion, and describe how promotional tools work together to educate consumers and generate sales.

Promotional tactics are frequently used by companies to persuade consumers to choose their products over competing brands. By the end of this section, you will be able to describe the techniques used to persuade consumers to purchase products over competing brands.

These slides explain how pricing for goods and services is determined and its effects on consumer behavior.

By the end of this article, you will be able to describe the factors that affect a firm's channel decisions; explain how intensive, exclusive, and selective distribution differ from one another; and explain why some products are better suited to some distribution strategies than others.

Read this entire chapter. It may take up to three hours to read this material, so don't feel like you have to finish it all within one study session.

A marketing plan's elements may vary based on the organization and its industry, but readers still expect to see certain common elements. By the end of this article, you will be able to review the elements of a marketing plan and its relationship to the company operations.

A formal marketing plan provides a clear reference point for activities throughout the planning period. By the end of this article, you will be able to identify the purpose and use of creating marketing plans.

Read the Executive Summary section. The executive summary is the opening section of a marketing plan whereby the contents of the plan are outlined.

Managers can use various methods of analysis to understand the firm's own capabilities, customers, and business environment. By the end of this article, you will be able to outline the process and types of situational analysis methods.

There are five steps you can follow to define your target market and become positioned to reach your potential customers. By the end of this article, you will be able to compile the information that is necessary in order to define a target market.

Value-based marketing allows organizations to create and sustain differentiating values that enable them to compete within their markets. By the end of this article, you will be able to state what is important when shifting to a competition based on value marketing perspective.

By the end of this section, you should be able to understand the types of selling relationships that firms seek and select the selling strategy needed to achieve the desired customer relationship.

Environmental scanning is one technique used by organizations to monitor the environment. By the end of this article, you will be able to give examples of the six environmental factors used within the PESTEL analysis approach.

Read this chapter, which discusses market segment components, how to approach different market segments, and how products are positioned to reach their target markets.

Read Chapter 2 to learn about the steps in the marketing planning process, the elements of a marketing strategy, and the external factors that impact strategic decisions.

Listen to this podcast, which discusses where to spend your marketing dollars and the costs associated with different types of marketing vehicles. 

These sections focus on the importance of communicating a unified and coordinated message throughout all marketing messages. Attempt the review questions that appear on slides 13 through 22.

Listen to this podcast, which discusses trade shows, events, seminar selling, and more.

By the end of this section, you will be able to describe the activities performed in channels and explain which organizations perform which functions.

Complete the discussion questions and activities in this section. You will write a simple marketing plan by picking a product with which you are very familiar. Focus on one market segment. If you would like to share your responses to the discussion questions with other students or elicit feedback on your marketing plan, check out the discussion forum.

This chapter will provide you with a proper foundation in the financial and accounting aspects of operating a business.

This section discusses how to identify various business start-up costs and how to calculate the capital that is needed to start a business.

Read this section for information on the financial statements needed for business operations.

Read these lecture slides. You should be able to describe the different methods used for presenting data in a company's income statement. Attempt the review questions on slides 9 through 16.

Listen to this podcast, which discusses the basics of finance and forecasting, revenue projections, costs, and so on. 

The break-even point is the point at which costs and revenues are equal. By the end of this section, you should be able to analyze break-even points relative to pricing decisions.

Listen to this podcast, which discusses how much money a venture requires and how to raise that capital before comparing different funding sources.

Read this article to find out about the several financial options entrepreneurs have to start up a business.

A company can be self-financed or financed through the solicitation and participation of outside investors. By the end of this article, you will be able to differentiate among different financing options for small businesses.

Attempt these review questions.

Read this article to review small business financing.

This article discusses the pros and cons of business loans and how to determine if this is right path for your business.

Read through these lecture slides. Attempt the review questions on slides 11 through 16.

Read this page and explore the application forms. The small business administration clarifies the federal government's approach to grant financing. All grants have a great deal of reporting and compliance requirements. What does this mean to someone seeking a grant? There will be a great deal of paperwork associated with obtaining the grant. This also means there will be follow-up paperwork, providing insight on the use of the grant money. These requirements are in place because taxpayer dollars fund government grants. The federal government provides resources for individual states to provide more specialized assistance to individuals within their respective states. Each state has its own small business division, and the title of the division will vary by state.

Read these three articles:

1. How to Barter, Give, and Get Stuff
   
2. How to (Legally) Open a Gift (Economy)
3. The Barter System Legal Guide
   

As you read, consider the risks and rewards of financing a business using this strategy. Should this strategy be considered up-front, or should a business only make use of this strategy as a last resort? Which type of customer financing do you feel has the greatest risk? Which has the greatest reward? How would you react if, as a customer, you were approached by a business and asked to invest

As you read this article, consider the risks to a business by taking this route for seeking financing. What about the goals of those who are investing? Is this something you would consider for yourself? Also, review the variety of industries that are making use of crowdfunding. What other industries might also benefit from this strategy?

Read this article on the government's role in small business innovation research.

Asset-based loans are a business financing option that can be valuable to businesses that require short-term working capital.

Read this article for tips on how to locate angel investors and how to know which angel investor is the right investor for your business.

Read these two chapters on managing growth.

• How to Organize and Lead an Entrepreneurial Venture: Organizational Stages of Growth
  
• Growth Strategies for Startups
  

These chapters discuss how companies can make a mistake by growing too quickly, how businesses can evaluate which growth strategy is the most effective one for them, and which organizational structure is the optimal choice for a business' specific decision-making processes.

This article discusses how venture capitalists evaluate the attractiveness of an investment possibility and how they determine when they will exit the company in which they have invested.

This section covers the importance of developing a business' exit strategy at the launch of the business and explains the pros and cons of various exit strategy options.

Read this article, which discusses various methods for evaluating the worth of a small company. This article also includes resources for determining a company's value.

For a discussion of the concept of getting out of the business, read all seven articles: "Plan Your Exit", "Steps to Closing a Business", "Selling Your Business", "Transfer Ownership", "Legal Resources for Exiting", "Liquidating Assets", and "Filing for Bankruptcy Protection".