Chapter Outline

To develop the understanding necessary to design, start, and manage a small business, we have organized the material into 14 chapters. These chapters are in turn organized into five major sections. The first section sets out the groundwork needed prior to developing a new business idea:

Many individuals have considered starting a new business when an opportunity was presented to them or they were frustrated by their current positions. However, prior to this step there are several areas that demand examination. The potential entrepreneur(s) should carefully examine their personal propensities or willingness to take on risk. Chapter 2 develops the constructs necessary to evaluate individual needs/desires, as well as the group dynamics so common in the start-up of a new venture. Chapter 3 focuses on how to generate ideas for a small business.

The next section of the text is entitled “Due Diligence.” Due Diligence is a process/terminology that arises out of mergers & acquisitions (M&A). In the process of an acquisition, each firm examines the other business’s books, strategies, people, environment, etc., in order to determine a fair price. Chapter 4 launches the first step in the due diligence process by establishing a set of methods for examining the environment in which the new business might operate. Chapter 5 develops the crucial steps necessary for the development of a strategy, including the firm’s mission. Chapter 6 is a detailed examination of the tools to help the small business person conduct the initial financial evaluation of the small business the individual is planning.

Section 3 is designed to put some action to all the analysis completed thus far. The difference between people with good ideas and those that are entrepreneurs is the actio of establishing and running a business. Chapter 7 reviews the legal frameworks for a new small business, regulations that impact the operation of any business, and the basics of developing and executing contracts. Chapter 8 begins the examination of the actual business operations of the small business. Finally, establishing the accounting and financial framework crucial for a business is discussed in Chapter 9.

The fourth section examines operational issues as the firm begins to expand. The topics included are the establishment of the human resources (Chapter 10), marketing (Chapter 11), and tracking/monitoring (Chapter 12), which includes obtaining financing for the firm. Each of these topics is uniquely important in the early growth of a new small business.

The last section examines two other issues critical to a small business. Chapter 13 examines a wide variety of ways for exiting a business. Chapter 14 looks at two means to buy into a business rather than starting it from scratch. They are buying an existing business and franchising.

Key Text Features

Each chapter includes key features that help illuminate important ideas in interesting and applied ways.

Chapter Opening Vignettes: Every chapter begins with a profile of a real small business. These realistic portraits provide an overview of both the everyday successes and the failures associated with small business ownership.

Philo Asian Grille: This running case looks at chapter topics within the context of a small business. Each chapter provides a new aspect of small business to consider, ultimately giving you a fully realized look at a small business.

Rodriquez Family Auto Repair: This running case examines many of the same elements as the Philo Asian Grille Case, but adds the secondary considerations involved with running a family business.

Ethical Challenges Boxes: These dilemma-based questions look at ethical realities within the successful creation of a small business and challenge students to examine the moral complexities of small businesses.

End-of-Chapter Cases: These longer cases look at real businesses within the context of chapter subjects. They examine a real entrepreneur and how that owner approached the small business and the struggles associated with success. They offer practical, real-world examples of core concepts within the chapter.