Entrepreneurship and Small Business Ownership

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Entrepreneurship and Small Business Ownership by Mind Map: Entrepreneurship and Small Business Ownership

1. Usually very limited,most leaders and many investors want evidence that the business can generate revenue before they'll offer funds

2. •leadership issues •marketing and sales issues •systems and facilities issues

3. Importance planning a new business and outline the key elements in a business plan

3.1. Start-up strategy

3.1.1. Buy an existing independent business

3.1.2. Create a new, independent business

3.1.3. Buy into a franchise system

3.2. Financial outlay at start-up

3.2.1. Some business can be started with very little cash, others, particular in manufacturing,may require a lot of capital

3.2.2. Can be considerable,some companies sell for multiples of their annual revenue

3.2.3. Varies widely from a few thousand to several hundred thousand dollars

3.3. Possibilities for borrowing start-up capital or getting investors

3.3.1. Banks are more willing to lend to "going concerns" and investors are more likely to invest in them

3.3.2. Varies but many franchisors do not allow franchisees to buy a franchise with borrowed funds,so they must have their own capital

4. Identify the major causes of business failures, sources of advice and support for struggling business owners

4.1. Advisory board-a team of people with subject-area expertise or vital contacts who help a business owner review plans and decisions

5. Discuss the principal sources of small-business private financing

5.1. Seed money :capital used to get a business started

5.2. Micro lenders :lend smallest amounts of money to business owners who not quality for conventional bank loans

5.3. Venture capitalists (VCs) : investors provide money to small businesses or turnarounds in exchange for a portion of ownership,the objective is to get a profit

5.4. Angel investors :private individuals who invest money in start-up in smaller amounts than VCs

5.5. Initial public offering (IPO) : a corporation's first offering of share to the public

5.6. Crowd funding : soliciting project funds, business investment or business loans from members of the public

6. The advantages and disadvantages of franchising

6.1. Advantages -combines at least some oglf the freedom of working for yourself with many of advantages of being part of a larger, established organization -name recognition, national advertising programs, standardized quality of good and services and a proven formula for success.

6.2. disadvantages -typically agree to follow the business format -little control over desicions the franchisor makes that affect the entire system - don't have the opinion of independently changing your business in response to market changes.