Unit 1
Introduction to Small
Business Operations
The School Based Enterprise (SBE)
• DECA’s House
of Grounds is a
School Based
Enterprise
(SBE).
• This specialty
coffee shop
opened for
business in
January 2009.
Frameworks 1.2
Before and After
What is a School Based Enterprise?
“School-based enterprises are effective
educational tools in helping to prepare
students for the transition from school to
work or college. For many students, they
provide the first work experience; for
others, they provide an opportunity to build
management, supervision and leadership
skills.”
Source: www.schoolbasedenterprises.org
Frameworks 1.2
Gold Level Certification
www.schoolbasedenterprises.org
The SBE Funds Scholarships
• Students who operate the
SBE receive the profits in
the form of scholarship
payments.
• Scholarship payments are
NOT distributed evenly.
• The scholarship amounts
are based on quality of
work, amount of work time,
attitude, and initiative.
DECA
• DECA prepares emerging leaders and
entrepreneurs in marketing, finance, hospitality
and management in high schools and colleges
around the globe.
• DECA enhances the preparation for college and
careers by providing co-curricular programs that
integrate into classroom instruction.
• DECA is a co-curricular student organization.
• Co-curricular means that DECA activities are
directly related to classroom instruction.
Source: www.deca.org
Frameworks 1.3
DECA’s Guiding Principles
DECA prepares the next generation to be:
• Academically Prepared
– DECA members are ambitious,
high-achieving leaders equipped
to conquer the challenges of their
aspirations.
Source: www.deca.org
Frameworks 1.3
DECA’s Guiding Principles
DECA prepares the next generation to be:
• Community Oriented
– Recognizing the benefit of service
and responsibility to the community,
DECA members continually impact
and improve their local and broader
communities.
Source: www.deca.org
Frameworks 1.3
DECA’s Guiding Principles
DECA prepares the next generation to be:
• Professionally Responsible
– DECA members are poised
professionals with ethics, integrity
and high standards.
Source: www.deca.org
Frameworks 1.3
DECA’s Guiding Principles
DECA prepares the next generation to be:
• Experienced Leaders
– DECA members are empowered
through experience to provide
effective leadership through goal
setting, consensus building and
project implementation.
Source: www.deca.org
Frameworks 1.3
History and Growth of DECA
• DECA was officially founded in 1946 at the National
level.
This photograph is from one of the early National DECA meetings.
History and Growth of DECA
• The Harrison DECA Chapter was officially chartered in 1957.
– Dwight Eisenhower was President of the United States.
– The Soviets launched the first artificial satellite – Sputnik.
– The Brooklyn Dodgers moved to Los Angeles.
Harrison’s
Original Charter
from 1957
DECA
• There are over 185,000 high school DECA
students in 5,000 chapters, located in the
U.S., Canada, Germany, Mexico, Puerto Rico
and Guam.
• DECA helps students to develop skills for
successful business careers, build self–
esteem, experience leadership and practice
community service.
Source: www.deca.org
Frameworks 1.3
DECA Facts and Information
The DECA Theme Changes Each Year
Our Theme for 2011-12
“DECA: Aspire Higher”
DECA Facts and Information
• Arkansas DECA
– The State DECA
Advisor is Mr. Jim
Brock.
– There are 35 DECA
chapters in Arkansas.
– The State DECA
Publication is called
the Arkansas DECA
Chronicle.
Mr. Jim Brock also serves as the
President of the National DECA
Board of Directors this year.
DECA Facts and Information
International Career
Development Conference
April 28 – May 1, 2012
Salt Lake City, Utah
DECA Facts and Information
State DECA Competition
Arkansas State Career Development Conference
Holiday Inn Convention Center
Springdale, Arkansas
February 21 & 22, 2012
2012 State DECA Competition
The Holiday
Inn
Springdale
2012 State
DECA
Competition
In order to participate in any DECA
activities you must pay your dues!
$18 due Friday
September 2
The Entrepreneur
 An entrepreneur is
someone who takes
the risk to start a new
business.
 Entrepreneurship is
the process of
planning, creating,
and managing a new
business.
Source: Marketing, 3e, page 587
Fred Smith, founder of FedEx, wrote a
business plan as a student at Yale
University outlining his business idea for
transporting packages overnight throughout
the United States.
Frameworks 1.4
Benefits of an Entrepreneurial Career
 Entrepreneurs often start their businesses
while working for another company, this
allows them to add to their income while
still employed with another company.
 Personal satisfaction from developing an
idea into a business, providing jobs for
people in the community, completing work
that is interesting, and being able to control
the profits of the company.
Source: Marketing, 3e, page 587
Frameworks 1.4
Entrepreneurs Develop Small Businesses
 Over 600,000 small businesses (with 20 or fewer
employees) are started each year.
 Over 10% of the working population of the US is selfemployed.
 Small businesses make up 97% of all businesses.
 Small businesses employ 52% of all non-government
workers and 38% of workers in high-tech
occupations.
 Small businesses are responsible for over half of all
goods and services produced.
 Over 95% of all companies involved in exporting are
small businesses.
Source: Marketing, 3e, page 590 – Figure 21-1
Frameworks 1.4
Characteristics of Entrepreneurs
 Focused and goal oriented.
 Risk-taking – a willingness to risk the
chance of failure in order to be successful.
 Driven to achieve.
 Independent minded.
 Self-confident – believe in themselves and
their abilities and expect to be successful.
 Creativity – the ability to use imaginative
skills to find unique ways to solve problems.
Source: Marketing, 3e, page 593
Frameworks 1.6
Forms of Business Ownership
 Proprietorship – a business owned and managed by one
person. A proprietor is a person who has sole ownership
of a business.
 Partnership – a business that is owned and operated by
two or more people who share in the decision making and
profitability of the company. A partnership agreement is
a legal document that specifies the responsibilities and
financial relationships of the partners.
 Corporation – a business owned by people who
purchase stock in the company. Corporations are granted
a charter by the state in which they are formed.
Source: Marketing, 3e, page 603
Frameworks 1.7
Corporation
A charter is a legal
document allowing
the corporation to
operate as if it were
a person.
Source: Marketing, 3e, pages 605-606
Proprietorship: Advantages
 The proprietorship is the most common
form of small business ownership.
 The owner is the boss and makes all
decisions.
 The proprietor receives all profits from the
operation of the business.
 This is the most flexible form of ownership.
 This is the easiest form of ownership to
create.
Source: Marketing, 3e, page 604
Frameworks 1.7.1
Proprietorship: Disadvantages
 The proprietor may not have all the skills
needed to run the business.
 Most new businesses require a lot of money
to start, this could be more than one owner
can provide.
 The risk can be great and must be carried by
the proprietor, includes personal liability.
 The business will not be able to continue if
the owner becomes ill or dies.
Source: Marketing, 3e, page 604
Frameworks 1.7.1
Proprietorship
Little Bell Wedding Chapel
Proprietorship
The Queen Anne House Bed & Breakfast
Proprietorship
Shelby's, a family owned and operated
business, is a 25-year tradition in the
Ozark area. Pictured left to right:
Shirley, Heidi, Erin, Shelby (owner),
Susan, Ada and Genie.
Partnership: Advantages
 Partners are able to combine their
knowledge, skills, and abilities.
 Partners usually will have greater financial
resources to bring to the business.
 If one partner decides to leave the business,
the business does not have to close.
Source: Marketing, 3e, page 605
Frameworks 1.7.1
Partnership: Disadvantages
 Disagreements on important decisions can
occur among partners.
 All partners are responsible for any actions
and decisions made by another partner.
 Profits, as well as losses, are shared by the
partners.
Source: Marketing, 3e, page 605
Frameworks 1.7.1
Partnerships
Neighbor's Mill Bakery &
Café is owned by Mike and
Karin Nabors. The
business specializes in
handcrafted, all-natural
breads, grilled and cold
sandwiches, soups, salads,
pizzas, desserts and
espresso coffees.
Corporation: Advantages
 Offers the owners limited liability.
 The business can exist indefinitely, beyond
the life of the owners.
 Ownership is easy to transfer by the selling
of stock.
Source: Marketing, 3e, page 606
Frameworks 1.7.1
Corporation: Disadvantages
 Corporations face more government rules
and regulations than other forms of business
ownership.
 Stockholders tend to be focused only profits.
 Individuals tend to avoid responsibility for the
actions of the corporation.
 Corporations are usually taxed at a higher
rate than other forms of ownership.
Source: Marketing, 3e, page 606
Frameworks 1.7.1
Corporation
The world’s largest retailer and private employer.
Corporation
FedEx Express was founded in 1971 by Fred Smith. The corporation was created in
1998 as FDX Corp. and became FedEx Corp. in January 2000. The company handles
more than 6 million shipments daily. FedEx has more than 250,000 employees.
Corporation
Pace Industries, Inc., is a 635,000 square foot facility located in Harrison,
Arkansas that specializes in commercial and consumer castings.
Developing a Business Plan
 A business plan is a written document prepared
to guide the development and operation of a new
business.
– The sections of a business plan usually include:
• An executive summary – which provides an overview of
the business concept and the important points covered in
the business plan.
• Description of the proposed business, product/service,
community, potential target market, organizational
structure, and owners.
• Description of the proposed marketing activities.
• Description of the proposed financial plans.
Source: Marketing, 3e, page 609
Frameworks 1.8
End of Unit 1
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