Deck 1: Small Business: an Overview

Question 1

Name a company that seems large but might be classified as small because it has relatively little impact on its industry.

Answer 1

Small business:
Small business can be defined as a unit where the business activities are measured to be small in size, if it is owned, financed and operated independently. Generally, small businesses consist of less than 100 employees depending upon the service rendered.
Small businesses are common in most countries which are relatively dependant on the economic system of operation.
The criteria for determining small and large businesses are based on the number of employees in the business. The other criteria are sales value, value of assets, and the value of owner's equity.
Large industry which is termed to be a small business:
T Motors which had annual revenue of $200 million in the year 2009 is known to be a small business in the industry. Though, it had an impressive revenue in the year, it is still considered to be small because it had little influence on the big giants like G.M motors which had sales revenue of $149billion and T.O motors which had sales revenue of $211 billion in the year 2009.

Question 2

Large businesses depend on small businesses. Why?

Answer 2

Small business:
Small business can be defined as a unit where business activities are measured to be small in size, if it is owned, financed and operated independently. Generally, small businesses consist of less than 100 employees depending upon the service rendered.
Small businesses are common in most countries which are relatively dependant on the economic system of operation.
Statement:
"Large businesses depend on small businesses."
Justification:
There is a situation where a large business is dependent on the small business. For instance, Company J.D which produces farm equipment relies on hundreds of small scale vendors to produce quality components. This company has an extensive network of over 3,000 independent dealers comprising of small businesses that provide sales and services for the equipment manufactured.
The relationship with small businesses enables Company J.D to be recognized as the largest farm equipment manufacturer in the world. By using the service of small businesses, it also creates an economic opportunity for many individual entrepreneurs.

Question 3

Define outsourcing, and describe its impact on small business.

Answer 3

Outsourcing:
Outsourcing is known as contracting a business process to a third party. Outsourcing involves both foreign and domestic outsourcing. Low international labor tariff and financial savings are the biggest motivational factors for outsourcing a business process.
Small business outsources the job to save money, gain knowledge and specialized skills, or to take benefits of the opportunities when they do not have the required employees to perform the work.
Following are some impacts small businesses have through outsourcing:
Cost:
When a process is outsourced to an independent vendor, businesses save the money which would have been spent on insurances, taxes, and other benefits that a full-time employee receives.
Misunderstandings:
When the work is processed by third party employees, who do not have an idea regarding the work culture of the onsite employees, there are chances of misunderstandings.
Streamlined production:
When a business is outsourced to a qualified consultant or employees, the quality of work mostly improves. Businesses sometimes have chances to fail, as they might experiment too much for the improvement, which will not be required for the business.
Lack of control:
One of the major disadvantages of outsourcing is a lack of control over the quality of work performed or produced. The quality control strategies and improvement processes will not be done by the consultant to whom the job is outsourced. Control over the product or service is lost by the home company.

Question 4

How would you show that small business is becoming a more important part of the economy?

Question 5

Is workforce diversity as important to small businesses as it is to big businesses? Why or why not?

Question 6

From strictly a small business perspective (not social or emotional perspectives), why is diversity important?

Question 7

Why are small businesses more likely than large businesses to be innovative?

Question 8

Explain the term creative destruction.

Question 9

How can being close to your customers give you a competitive advantage?

Question 10

Is creative destruction just another economic theory for the foundation of capitalism? Build a case supporting your answer.

Question 11

This chapter discussed the evolution of small business in the U.S. economy. On the heels of the rapid growth in the popularity of Internet businesses in the late 1990s and the ensuing bust in 2000, what will be the next stage in small business's evolution? Is the Internet just another business tool, or will it re-create the way business is done?

Question 12

Small Business Lessons from the Movies
Movies are magical. They take us to new places, they spark our imagination, and they entertain us. Lessons from movies are open to interpretation that may differ from what the filmmaker ever intended. Spielberg and Lucas may have never intended to teach people how to run businesses, but let's step back, open our minds, and consider what we have seen that may solve problems in business. With some thought, we can come up with stories of communication, branding, ethics, customer service, and leadership applicable to starting and running a small business.
Here's some examples to get you started. Popcorn please…
It's a Wonderful Life (1946) OK, so we equate this one with Christmas, but consider the lesson of leading by example that Capra shows. It comes down to a confrontation between two businesspeople-Mr. Potter (Lionel Barrymore) wants to turn Bedford Falls into Pottersville, while George Bailey (James Stewart) puts his customers, employees, and family interest first by taking personal responsibility.
The Godfather I and II (1972, 1974) Not the most savory of mission statements, but these movies are about family business. There are lessons about loyalty and consequences.
Many quotes are still used often in the business world-"go to the mattresses…," "I'm gonna make him an offer he can't refuse," "My father taught me many things…keep your friends close, but your enemies closer."
Jerry Maquire (1996) After being jettisoned from a large firm, the title character (Tom Cruise) becomes a reluctant entrepreneur that brilliantly captures the manicdepressive roller-coaster ride of starting a business. With one employee and one client, Maquire literally has all his eggs in one basket to show that fewer clients and more personal attention are a good business strategy.
Wall Street (1987) This study of values compares and contrasts the differences between a father and a son. The small business lesson can be that "there are no short cuts" in life or business. Just because you can visualize where you want to be does not mean that you can get there without paying dues.
A League of Their Own (1992) Just the tagline for the movie sets it up with a small business lesson: "To achieve the incredible you have to attempt the impossible." Memorable quotes include "There's no crying in baseball," and "Of course this is hard." No matter how it appears-every business is hard. Don't complain.
Hustle Flow (2005) Once again, the viewer needs to look past some seedy images on screen to see that you can be successful no matter where you come from. Small business lessons abound including the following: (1) You are in charge of your business, (2) relationships are powerful, and (3) marketing pays.
Tucker: The Man and His Dream (1988) I, your author, admit personal bias on this one-I believe this is the best business movie ever! The best part is that the whole story is true. It's about an inventor who sets out to revolutionize the auto industry during WWII. It's got it all-business started in a barn, naysayers, faithful followers, time crunched prototypes, creative technology advances, giant corporate adversaries, and failure. If you are in a class on small business/entrepreneurship-watch this one.
You get the idea by now and yes, some of these were made before most students were born, but they are available as rentals. Some other contenders to consider include:
What are your personal screen inspirations? What lessons do these or other movies provide in running a small business?

Question 13

How would the computer industry be different today if there were no businesses with fewer than 500 employees? Would personal computers exist?

Question 14

Small Business Lessons from the Movies
Movies are magical. They take us to new places, they spark our imagination, and they entertain us. Lessons from movies are open to interpretation that may differ from what the filmmaker ever intended. Spielberg and Lucas may have never intended to teach people how to run businesses, but let's step back, open our minds, and consider what we have seen that may solve problems in business. With some thought, we can come up with stories of communication, branding, ethics, customer service, and leadership applicable to starting and running a small business.
Here's some examples to get you started. Popcorn please…
It's a Wonderful Life (1946) OK, so we equate this one with Christmas, but consider the lesson of leading by example that Capra shows. It comes down to a confrontation between two businesspeople-Mr. Potter (Lionel Barrymore) wants to turn Bedford Falls into Pottersville, while George Bailey (James Stewart) puts his customers, employees, and family interest first by taking personal responsibility.
The Godfather I and II (1972, 1974) Not the most savory of mission statements, but these movies are about family business. There are lessons about loyalty and consequences.
Many quotes are still used often in the business world-"go to the mattresses…," "I'm gonna make him an offer he can't refuse," "My father taught me many things…keep your friends close, but your enemies closer."
Jerry Maquire (1996) After being jettisoned from a large firm, the title character (Tom Cruise) becomes a reluctant entrepreneur that brilliantly captures the manicdepressive roller-coaster ride of starting a business. With one employee and one client, Maquire literally has all his eggs in one basket to show that fewer clients and more personal attention are a good business strategy.
Wall Street (1987) This study of values compares and contrasts the differences between a father and a son. The small business lesson can be that "there are no short cuts" in life or business. Just because you can visualize where you want to be does not mean that you can get there without paying dues.
A League of Their Own (1992) Just the tagline for the movie sets it up with a small business lesson: "To achieve the incredible you have to attempt the impossible." Memorable quotes include "There's no crying in baseball," and "Of course this is hard." No matter how it appears-every business is hard. Don't complain.
Hustle Flow (2005) Once again, the viewer needs to look past some seedy images on screen to see that you can be successful no matter where you come from. Small business lessons abound including the following: (1) You are in charge of your business, (2) relationships are powerful, and (3) marketing pays.
Tucker: The Man and His Dream (1988) I, your author, admit personal bias on this one-I believe this is the best business movie ever! The best part is that the whole story is true. It's about an inventor who sets out to revolutionize the auto industry during WWII. It's got it all-business started in a barn, naysayers, faithful followers, time crunched prototypes, creative technology advances, giant corporate adversaries, and failure. If you are in a class on small business/entrepreneurship-watch this one.
You get the idea by now and yes, some of these were made before most students were born, but they are available as rentals. Some other contenders to consider include:
In addition to the movies cited in this case, think of other titles for business lessons such as Risky Business, Pirates of Silicon Valley, and Office Space. What lessons do they provide?

Question 15

The text compares the failure rate for small businesses with the divorce rate in marriage and the student failure rate in college. Are these fair comparisons?

Question 16

Small Business Lessons from the Movies
Movies are magical. They take us to new places, they spark our imagination, and they entertain us. Lessons from movies are open to interpretation that may differ from what the filmmaker ever intended. Spielberg and Lucas may have never intended to teach people how to run businesses, but let's step back, open our minds, and consider what we have seen that may solve problems in business. With some thought, we can come up with stories of communication, branding, ethics, customer service, and leadership applicable to starting and running a small business.
Here's some examples to get you started. Popcorn please…
It's a Wonderful Life (1946) OK, so we equate this one with Christmas, but consider the lesson of leading by example that Capra shows. It comes down to a confrontation between two businesspeople-Mr. Potter (Lionel Barrymore) wants to turn Bedford Falls into Pottersville, while George Bailey (James Stewart) puts his customers, employees, and family interest first by taking personal responsibility.
The Godfather I and II (1972, 1974) Not the most savory of mission statements, but these movies are about family business. There are lessons about loyalty and consequences.
Many quotes are still used often in the business world-"go to the mattresses…," "I'm gonna make him an offer he can't refuse," "My father taught me many things…keep your friends close, but your enemies closer."
Jerry Maquire (1996) After being jettisoned from a large firm, the title character (Tom Cruise) becomes a reluctant entrepreneur that brilliantly captures the manicdepressive roller-coaster ride of starting a business. With one employee and one client, Maquire literally has all his eggs in one basket to show that fewer clients and more personal attention are a good business strategy.
Wall Street (1987) This study of values compares and contrasts the differences between a father and a son. The small business lesson can be that "there are no short cuts" in life or business. Just because you can visualize where you want to be does not mean that you can get there without paying dues.
A League of Their Own (1992) Just the tagline for the movie sets it up with a small business lesson: "To achieve the incredible you have to attempt the impossible." Memorable quotes include "There's no crying in baseball," and "Of course this is hard." No matter how it appears-every business is hard. Don't complain.
Hustle Flow (2005) Once again, the viewer needs to look past some seedy images on screen to see that you can be successful no matter where you come from. Small business lessons abound including the following: (1) You are in charge of your business, (2) relationships are powerful, and (3) marketing pays.
Tucker: The Man and His Dream (1988) I, your author, admit personal bias on this one-I believe this is the best business movie ever! The best part is that the whole story is true. It's about an inventor who sets out to revolutionize the auto industry during WWII. It's got it all-business started in a barn, naysayers, faithful followers, time crunched prototypes, creative technology advances, giant corporate adversaries, and failure. If you are in a class on small business/entrepreneurship-watch this one.
You get the idea by now and yes, some of these were made before most students were born, but they are available as rentals. Some other contenders to consider include:
What movies portray leaders who think creatively, who keep their heads, who manage communication, and, as for failure, well, that's just not an option (a line from Apollo 13)?

Question 17

Describe four causes of small business failure. How does the quality of management relate to each of these causes?

Question 18

Small Business Lessons from the Movies
Movies are magical. They take us to new places, they spark our imagination, and they entertain us. Lessons from movies are open to interpretation that may differ from what the filmmaker ever intended. Spielberg and Lucas may have never intended to teach people how to run businesses, but let's step back, open our minds, and consider what we have seen that may solve problems in business. With some thought, we can come up with stories of communication, branding, ethics, customer service, and leadership applicable to starting and running a small business.
Here's some examples to get you started. Popcorn please…
It's a Wonderful Life (1946) OK, so we equate this one with Christmas, but consider the lesson of leading by example that Capra shows. It comes down to a confrontation between two businesspeople-Mr. Potter (Lionel Barrymore) wants to turn Bedford Falls into Pottersville, while George Bailey (James Stewart) puts his customers, employees, and family interest first by taking personal responsibility.
The Godfather I and II (1972, 1974) Not the most savory of mission statements, but these movies are about family business. There are lessons about loyalty and consequences.
Many quotes are still used often in the business world-"go to the mattresses…," "I'm gonna make him an offer he can't refuse," "My father taught me many things…keep your friends close, but your enemies closer."
Jerry Maquire (1996) After being jettisoned from a large firm, the title character (Tom Cruise) becomes a reluctant entrepreneur that brilliantly captures the manicdepressive roller-coaster ride of starting a business. With one employee and one client, Maquire literally has all his eggs in one basket to show that fewer clients and more personal attention are a good business strategy.
Wall Street (1987) This study of values compares and contrasts the differences between a father and a son. The small business lesson can be that "there are no short cuts" in life or business. Just because you can visualize where you want to be does not mean that you can get there without paying dues.
A League of Their Own (1992) Just the tagline for the movie sets it up with a small business lesson: "To achieve the incredible you have to attempt the impossible." Memorable quotes include "There's no crying in baseball," and "Of course this is hard." No matter how it appears-every business is hard. Don't complain.
Hustle Flow (2005) Once again, the viewer needs to look past some seedy images on screen to see that you can be successful no matter where you come from. Small business lessons abound including the following: (1) You are in charge of your business, (2) relationships are powerful, and (3) marketing pays.
Tucker: The Man and His Dream (1988) I, your author, admit personal bias on this one-I believe this is the best business movie ever! The best part is that the whole story is true. It's about an inventor who sets out to revolutionize the auto industry during WWII. It's got it all-business started in a barn, naysayers, faithful followers, time crunched prototypes, creative technology advances, giant corporate adversaries, and failure. If you are in a class on small business/entrepreneurship-watch this one.
You get the idea by now and yes, some of these were made before most students were born, but they are available as rentals. Some other contenders to consider include:
Bearing in mind that the intent of movies is artistic, rather than educational, what movie lessons do you think illustrate the opposite of what a manager should do or say?

Question 19

Describe the techniques that a business with which you are familiar has used to prevent its failure.

Question 20

How would you define small business?

Question 21

Predict the future of small business. In what industries will it be most involved? What trends do you foresee? Will the failure rate go up or down? Will the importance of small business increase or decrease by the year 2020?