Entrepreneurship: Chapter 11

CHAPTER 11: SMALL BUSINESS MARKETING: STRATEGY AND RESEARCH

• Explain the importance of marketing to small businesses
• Marketing involves all the points of contact between your small business and your customers.
• Marketing is how you find out what they want and need. it is how they are treated by you and everyone in your business. it is how you communicate with them through selling and advertising.

• Describe the process of developing a small business marketing strategy
• Market segmentation is needed because no business can possibly be everything to everyone. Segmenting involves breaking down a population into target markets that have a common want ot need that the business can satisfy. Target markets are the focus of a company's marketing efforts.

• Discuss the purpose of the market research process and the steps involved in putting it into practice
• Market research provides information about the poeple who are buying the productsof a business. Conditions change, and the owner of a business must know about those changes to be proactive and maintain a competitive advantage.
• The steps of the market research process include problem identification, development of a plan, data collection, data analysis, and drawing conclusions. Market research can provide valuable information regarding people's current taste, preferences, and expectations.
• It is useful in fine-tuning products that already exist for markets that are already known.

Question:  What would happen to a business without a marketing strategy? Why?

Answer: A business without a marketing strategy is like a traveler without an itinerary. They may arrive somewhere, but whether that destination will represent the best value for them is questionable. Businesses without marketing strategies may find that their efforts are focused on the wrong audiences. They might not interested in their products, or failing to focus on those that might be. In addition, businesses without marketing strategies may be using the wrong communication tools and conveying the wrong messages. Ultimately, their results will be caused by lack of focus and direction.      

My View: A marketing strategy is something that every business needs. I believe it does not matter whether it is a small or big business that they must have at least a draft in place. Otherwise, a business with no marketing strategy is like an owner prays for good luck daily hope its business turns out to be profitable.

Entrepreneurship: Chapter 10

CHAPTER 10: THE LEGAL ENVIRONMENT

• Name the laws and regulations that affect small business
• Laws and regulations exist to protect competition, consumers, people in the workplace, and intellectual property; to allow bankruptcy; and to establish contracts.
• Specific laws that owners of small businesses should know include the Fair Labor Standards Act, the Civil Rights Act of 1964 and 1991, the Immigration Reform and Control Act, the Americans with Disabilities Act, workers' and unemployment compensation, and Occupational Safety and Health Act.

• List and explain the types of bankruptcy
• The U.S. brankruptcy code is made up of nine chapters, only three of which apply to most small businesses (chapter 7, 11, 13).
• Chapter 7 use liquidation meaning that the business ceases to exist in an effort to provide the debtor with a fresh start. Liquidation involves selling all of the business assets and nonexempt personal assets and then distributing the proceeds among creditors.
• Chapter 11 and 13 allow the business owner to file a reorganization plan with the court that offers protection from creditors until the debt is satisfied.

• Descibe the elements of a contract
• For a contract to be legally binding. It must have a legal purpose.  Both parties must come to an agreement including a legitimate offer and a legitimate acceptance of that offer. Consideration, or something of value, must be exchanged. Finally, all parties must have the capacity to enter into a binding contract, meaning that they must not be underage, intoxicated or of diminished mental ability.

• Discuss how to protect intellectual property
• Patents, copyrights, and trademarks are legal ways to protect intellectual property.
• A patent grants an inventors the exclusive right to make, use, and sell an invention for a period of 17 years.
• A copyright provides legal protection against infringement of an author's literary, musical, or artistic works.  Copyrights usually last for the author's life plus 50 years.
• A trademark is a legally protected name, term, symbol, design, or combination of these elements used to identify products or components. Trademarks last for as long as they are in use.

• My View: I am glad to learn more about the differences between copyright versus trademarks.  Trademarks protects any symbol that indicates the source or origi of the goods or services. For example, Starbucks protects its trademark logo by suing another China local franchise to misled consumer with almost identical logo. Consumers may make purchasing decision based on the logo reputation.Copyrights protects the specific creative expression of an idea. For example, painting, photographs, sculpture, writings, software, etc.

Entrepreneurship: Chapter 9

CHAPTER 9: SMALL BUSINESS FINANCE

• Determine the financing needs of your business
• List the assets required for your business to operate effectively
• Determine the market value or cost of each asset
• Identify how much capital you are able to provide
• substract the total of the owner-provided funds from the total of the assets required.
• This figure represents the minimum amount of financing required

• Define basic financing terminology
• to procure financing, you must understand the basic financing vocabulary. Each major form of capital (debt and equity) has unique terminology that defines the details underlying financing agreements.
• Each form of capital has pros and cons that make it more or less desirable to the entrepreneur under given circumstances.

• Explain where to look for source of funding
• The search for capital and the application process can be unsettling as you sort through the various sources of funds.
• Major sources of debt financing include commercial banks, finance companies, government lenders, and insurance companies. Sources of equity include partners, venture capital firms, angels, and stock offerings.
• Finding capital is one of the most important tasks you face in starting and managing a business
• A thorough understandingog the issues involved will enhance your chances of finding the best source for your business.

My View:  Cash is King!  Cash flow and funding are extremely critical for small business. Small business financing can be complicated and risky if the owner did not plan it well. The owner needs to do his/her homework and understand the business nature. When it comes to funding, he/she has to ask for the right amount from the right source at the right time.

Entrepreneurship: Chapter 8

CHAPTER 8:  ACCOUNTING RECORDS AND FINANCIAL STATEMENTS

Discuss the importance and uses of financial records in a small business

You need financial records so you can make managerial decisions on topics concerning how much money is owed to your business, how much money you owe and how to identify financial problems before they become serious dilemmas. Financial records are also needed to prepare your tax returns and to inform your banker and investors about your business’s financial status. Without accurate financial records, you cannot exercise the kind of clear sighted management control needed to survive in a competitive marketplace.

Itemize the accounting records needed for a small business

The accounting records of your small business need to follow the standards of generally accepted accounting principles (GAAP). From your source documents such as sales slips, purchase invoices, and check stub, you should record all the transactions in journals. Information from your journals should then be posted in (transferred into) a general ledger.  Financial statements like your balance sheet, income statement, and statement of cash flow are produced from the transactions in our general ledger.

Explain the ratios used to analyze financial statements

Ration analysis enales you to compare the financial condition of your business to its performance in previous time periods or to the performance of similarly sized businesses within your industry. Foru important types of financial ratios discussed in this chapter are:-

• liquidity (current and quick, or acid-test, ratios)
• activity (inventory, turnover, average collection period, fixed asset turnover, total asset turnover)
• leverage (debt and times interest earned)
• profitability ratios (net profit margin, return on assets, return on equity)

Illustrate the importance of and procedures for managing cash flow

Cash flow is the different between the amount of cash actually brought into your business and the amount paid out in a given period of time. cash flow represents the lifeblood of your business because if you do not have enough moeny to pay for your operating expenses, your are out of busienss.

•  My View:  When a small business well-funded by investors, it is important to hire a qualify accountant to keep the book clean & up-to-date. Investors rely heavily on the objectivity and integrity of those who prepare financial statements. When that fiduciary bond is broken, and the reliability of financial statements is called into question. In that case, any confidence that may have been invested in the reporting system is destroyed. In the eyes of the investor, it they cannot trust your financial statements, how can they trust you to continue leading the company.