5: The Challenges of Starting a Business
- Page ID
- 3959
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\(\newcommand{\avec}{\mathbf a}\) \(\newcommand{\bvec}{\mathbf b}\) \(\newcommand{\cvec}{\mathbf c}\) \(\newcommand{\dvec}{\mathbf d}\) \(\newcommand{\dtil}{\widetilde{\mathbf d}}\) \(\newcommand{\evec}{\mathbf e}\) \(\newcommand{\fvec}{\mathbf f}\) \(\newcommand{\nvec}{\mathbf n}\) \(\newcommand{\pvec}{\mathbf p}\) \(\newcommand{\qvec}{\mathbf q}\) \(\newcommand{\svec}{\mathbf s}\) \(\newcommand{\tvec}{\mathbf t}\) \(\newcommand{\uvec}{\mathbf u}\) \(\newcommand{\vvec}{\mathbf v}\) \(\newcommand{\wvec}{\mathbf w}\) \(\newcommand{\xvec}{\mathbf x}\) \(\newcommand{\yvec}{\mathbf y}\) \(\newcommand{\zvec}{\mathbf z}\) \(\newcommand{\rvec}{\mathbf r}\) \(\newcommand{\mvec}{\mathbf m}\) \(\newcommand{\zerovec}{\mathbf 0}\) \(\newcommand{\onevec}{\mathbf 1}\) \(\newcommand{\real}{\mathbb R}\) \(\newcommand{\twovec}[2]{\left[\begin{array}{r}#1 \\ #2 \end{array}\right]}\) \(\newcommand{\ctwovec}[2]{\left[\begin{array}{c}#1 \\ #2 \end{array}\right]}\) \(\newcommand{\threevec}[3]{\left[\begin{array}{r}#1 \\ #2 \\ #3 \end{array}\right]}\) \(\newcommand{\cthreevec}[3]{\left[\begin{array}{c}#1 \\ #2 \\ #3 \end{array}\right]}\) \(\newcommand{\fourvec}[4]{\left[\begin{array}{r}#1 \\ #2 \\ #3 \\ #4 \end{array}\right]}\) \(\newcommand{\cfourvec}[4]{\left[\begin{array}{c}#1 \\ #2 \\ #3 \\ #4 \end{array}\right]}\) \(\newcommand{\fivevec}[5]{\left[\begin{array}{r}#1 \\ #2 \\ #3 \\ #4 \\ #5 \\ \end{array}\right]}\) \(\newcommand{\cfivevec}[5]{\left[\begin{array}{c}#1 \\ #2 \\ #3 \\ #4 \\ #5 \\ \end{array}\right]}\) \(\newcommand{\mattwo}[4]{\left[\begin{array}{rr}#1 \amp #2 \\ #3 \amp #4 \\ \end{array}\right]}\) \(\newcommand{\laspan}[1]{\text{Span}\{#1\}}\) \(\newcommand{\bcal}{\cal B}\) \(\newcommand{\ccal}{\cal C}\) \(\newcommand{\scal}{\cal S}\) \(\newcommand{\wcal}{\cal W}\) \(\newcommand{\ecal}{\cal E}\) \(\newcommand{\coords}[2]{\left\{#1\right\}_{#2}}\) \(\newcommand{\gray}[1]{\color{gray}{#1}}\) \(\newcommand{\lgray}[1]{\color{lightgray}{#1}}\) \(\newcommand{\rank}{\operatorname{rank}}\) \(\newcommand{\row}{\text{Row}}\) \(\newcommand{\col}{\text{Col}}\) \(\renewcommand{\row}{\text{Row}}\) \(\newcommand{\nul}{\text{Nul}}\) \(\newcommand{\var}{\text{Var}}\) \(\newcommand{\corr}{\text{corr}}\) \(\newcommand{\len}[1]{\left|#1\right|}\) \(\newcommand{\bbar}{\overline{\bvec}}\) \(\newcommand{\bhat}{\widehat{\bvec}}\) \(\newcommand{\bperp}{\bvec^\perp}\) \(\newcommand{\xhat}{\widehat{\xvec}}\) \(\newcommand{\vhat}{\widehat{\vvec}}\) \(\newcommand{\uhat}{\widehat{\uvec}}\) \(\newcommand{\what}{\widehat{\wvec}}\) \(\newcommand{\Sighat}{\widehat{\Sigma}}\) \(\newcommand{\lt}{<}\) \(\newcommand{\gt}{>}\) \(\newcommand{\amp}{&}\) \(\definecolor{fillinmathshade}{gray}{0.9}\)- 5.1: What Is an Entrepreneur?
- This page discusses the essence of entrepreneurship, focusing on the need for risk-taking, stress management, and financial preparedness. It outlines essential qualities and challenges for aspiring entrepreneurs, such as decision-making and planning, while contrasting them with small business owners. Common fears like financial insecurity are addressed, along with practical solutions for overcoming them.
- 5.2: The Importance of Small Business to the U.S. Economy
- This page highlights the significance of small businesses in the U.S. economy, emphasizing their contribution to GDP, job creation, and innovation. They support economic opportunities for diverse demographics and outperform larger firms in patent production. Small businesses also serve as vital suppliers and sales agents for larger companies.
- 5.3: What Industries Are Small Businesses In?
- This page outlines the economy's two primary sectors: goods-producing, which includes manufacturing, construction, and agriculture, and service-producing, encompassing industries like retail and finance. It notes that around 80% of small businesses operate in the service sector, which has seen substantial growth recently. The text provides examples from both sectors, demonstrating entrepreneurial opportunities that require reasonable investments.
- 5.4: Advantages and Disadvantages of Business Ownership
- This page discusses the pros and cons of small business ownership, highlighting benefits like independence, flexibility, potential financial rewards, learning opportunities, and creative freedom. It also addresses disadvantages such as financial risk, stress, time commitment, and undesirable tasks. Despite these challenges, small business owners often report higher satisfaction than corporate executives, indicating a preference for the rewards of ownership.
- 5.5: Starting a Business
- This page discusses the essential elements to start a business, emphasizing the importance of talent, determination, and planning. Key considerations include evaluating business feasibility, choosing ownership options—such as starting from scratch, buying an existing business, or franchising—each having distinct advantages and disadvantages. Franchising provides brand recognition and support but requires high investments and compliance with strict rules.
- 5.6: The Business Plan
- This page highlights the importance of a business plan, which details the business concept, strategy, and objectives. Key sections include an executive summary, mission statement, management and marketing plans, and a financial plan that outlines projected revenues and expenses. A solid financial plan is essential for attracting investment and guiding decisions.
- 5.7: How to Succeed in Managing a Business
- This page highlights essential factors for successful business management, such as industry knowledge, management skills, and customer satisfaction. It notes common reasons for business failure, including poor ideas and cash flow issues. The Small Business Administration (SBA) offers resources like loan guarantees and support programs, including the Small Business Development Center (SBDC) for training and advice, and SCORE, which connects owners with experienced mentors.
- 5.8: Cases and Problems
- This page explores owning a SUBWAY franchise, weighing its pros and cons against independent business ventures, and shares entrepreneurial insights. It raises ethical concerns about selling term papers online, addressing competition and morality. The text highlights the significance of teamwork, advocating for self-assessment and group rules.