Know that the opportunity cost of starting a business isn't just financial, but of time and lost earnings during the time the business runs at a loss, when you could be doing other things.
Discuss how small business has added to economic growth.
There are roughly "twenty-five and a half million small businesses in the United States, driving the longest period of economic growth in our nation's history" noted Aida Alvarez in 2000, when she was the administrator of the Small Business Administration (Alvarez, 2000, CNN.com). On a very basic level, every large, multimillion dollar corporation was once a small business. Bill Gates began Microsoft out of his garage, as did Apple's founder Steven Jobs. But even small businesses that do not expand on such a monumental scale are a creative source of new ideas and talent that nurture their surrounding communities, and create opportunities for new economic growth. They employ individuals in the local community, and inspire individuals in the local community. Also, they are able to tailor their needs to the neighborhood's demographic, and match their inventory and structure to the demand of a particular and unique demographic.
Because small business owners live within the community, the revenue they generate in the area is, more often than not, funneled back into the local economy, as they buy supplies or simply personal goods to support their family.
Define a family business and describe the business pattern, governance pattern, and the family pattern a family business will encounter.
As opposed to a publicly-traded company, which is technically owned by shareholders, or a single proprietorship, a family business is owned and controlled by a family, however large or however small. It might have begun on a very small scale, led by a few family members who wished to use the family's unique resources or skills, like bread baking, or selling pizza in an inherited restaurant space, but typically all members of the family become involved, from running the counter, to assisting in delivery, even though some outsiders may be hired. Staring the business may have realized the dream of one or all of the founders.
However, there are some unique problems that family businesses may face. Most obviously, personal conflicts can arise between family members and impede the business from running smoothly. Children may experience a conflict between furthering their education and exploring their own interests and working at the business. Also, the second generation may not have the business acumen of the elder generation, and once the founder dies, the person who assumes control of the enterprise may not prove as capable. True, the other members can always find someone from outside the family to run the business, but the culture of the family business may be such that outsiders have difficulty adjusting to the temperament and philosophy of the founder. The mission statement of a family business often reflects the needs, interests, and personal dynamic of the family, rather than an organizational philosophy that is meant to be more broad and generic, and is meant to encompass individuals from a wide variety of backgrounds, who relate to one another in a more impersonal and work-related fashion.
Family Business Magazine recently conducted a survey of the longest-surviving family enterprises in America, and returned this advice:
1. Stay small. Half of the companies employed fewer than 15 people, reducing the amount of benefits and wages demanded by more disinterested employees ("America's Oldest Family Companies," 2003, Family Business Magazine).
2. Don't go public. "It's a temptation for takeover artists," who want to take away the family character of the business ("America's Oldest Family Companies," 2003, Family Business Magazine).
3. Avoid big cities. Only 27 out of 102 were based in cities ("America's Oldest Family Companies," 2003, Family Business Magazine).
4. Keep it in the family. Family firms that remain family firms outlast non-family firms ("America's Oldest Family Companies," 2003, Family Business Magazine).
Alvarez, Aida. (2000). "Prospering in the new economy." Interview with CNN.com. Retrieved 21 Oct 2007 at http://edition.cnn.com/SPECIALS/2000/new.economy/stories/alvarez.qa/
America's Oldest Family Companies." (2003). Family Business Magazine. Retrieved 21 Oct 2007 at http://www.familybusinessmagazine.com/oldestcos.html
What is an entrepreneur?" (2007). Zero Million: The Entrepreneur's Resource Online. Retrieved 21 Oct 2007…