Summary Chapter 5 - Business Management 114

Chapter 5 –Small Business, Entrepreneurship and
Franchises

Small business – independently owned and operated to
make a profit and is not dominant in its field

Industries that attract small businesses
 Distribution industries – retailing, wholesaling,
transportation and communications (movement of
goods from producers to consumers)
 Service Industries – medical and dental care, watch +
shoe repairs, restaurant
 Production Industries – Construction, mining and
manufacturing

Characteristics of an entrepreneur
 Independence
 Desire to determine own destiny
 Willingness to accept and fight a challenge
 Business family background
 Age (24-44)

Importance of small businesses
1. Providing technical innovation
2. Provide employment
3. Provide competition
4. Satisfy society’s needs

Advantages of small business
 Personal customer employee relationship
 Ability to adapt to change ( no permission needed as
you are your own boss)
 Simplified record keeping
 Independence

Disadvantages of small business
 Risk of failure
 Limited potential
 Limited ability to raise capital



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