100 Famous Entrepreneurs - DOC

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100 Famous Entrepreneurs - DOC Powered By Docstoc
					The Network For Teaching Entrepreneurship (NFTE)

     Small business and planning

NFTE helps to tell young people about the world of business. It helps them to start their own businesses. It is an
international body.

These are people who have ideas and are willing to take risks in return for profit. Often they will run their own
business. Many famous names have started small in this way and grown to be large firms. Many started as sole
traders. This means a one person business.

Sole traders are often in business because it offers them independence. They are their own boss. They also get
all the profits from the business. On the down side, they have to take all the decisions. They also carry all the
responsibility for the business.

Other small businesses may be partners. This is where two or more people share the running of the business and
the profits. Some small businesses may decide to be private companies. This means that they will have
shareholders. On the plus side, this makes it easier to raise money. On the minus side, they have to share profits
and control.

Why small?
Britain relies on small businesses. Two thirds of UK businesses are one person businesses. Over 2.5 million
people are self employed. Nine out of ten businesses employ fewer than six people. Why are there so many?
There are a number of reasons for them to be small. Small businesses can:
 offer personal services (like hair cutting)
 respond quickly to change and new ideas
 run with few costs or overheads
 supply products to small or niche markets.

Business plans
Starting and running a business is hard work. As a rule, the owner carries all the risk. To help make sure that the
business is a success, it is vital to plan. A business plan should be based on good knowledge of the market. This
can be found through good market research.
A good plan will help the entrepreneur to raise money for the business. This could be through:
 using their own funds. This is called ‘owners funds’
 a bank loan, or a loan from a backer
 a bank overdraft
 a long term loan on a property. This is called a mortgage
 trade credit. This is where a supplier allows time to pay for goods. This gives time to sell them.

Profit is the reward for taking the risk. It is what is left when all costs have been taken off from all the money
earned. It is what drives enterprising people, people who are increasingly vital to a modern economy.

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