Financial literacy: income and decisions (lesson 1)  (Page 9/9)

VISUAL 5.

To start thinking about the basic skills for managing a small business ask you these questions:

• What do you think are the most important skills for a small business owner to have?

• Think of a successful small business owner in your neighborhood. In your opinion, what are the business skills that make them successful?

• Think of a small business that has gone out of business. What do you think went wrong?

VISUAL 6.

Key attributes of successful entrepreneurs

1. Takes initiative. A self-starter. Makes things happen rather than waiting and reacting. Self-directed. Independent. Doesn’t need a boss.
2. Driven to achieve. Has desire and passion to succeed. Enjoys competition. Has energy and stamina. Willing to work more than forty hours a week. Willing to sacrifice to achieve goals and dreams.
3. Positive mental attitude. Self-confident. Believes in self. Trusts own ideas, instincts, and abilities.
4. Sets goals. Creates a vision of success. Works with focus and intention.
5. Plans ahead. Creates plans and follows them. Updates plans periodically. Good at anticipating new developments.
6. Resourceful. Creative problem-solver. Imaginative and innovative. Sees better ways of doing things. Uncovers new resources and opportunities. Finds a way.
7. A leader. Takes responsibility and accepts accountability. Like to make decisions. Shows an attitude of respect for others. Motivates and inspires others. Gives other the opportunity to be great. Shares the credit for success. Gains the respect of peers.
8. Good communicator. Likes people. Has great people skills. Good listener. Effective negotiator.
9. Always learning. Open to new ideas. Learns from others.
10. Leverages exceptional skills. Makes the most of personal strengths, but doesn’t try to be and do everything.
11. Has technical knowledge. Understands both general business practices and the processes used to deliver goods and services.
12. Organized. Able to prioritize. Good time manager. Gets things done on time.
13. Objective. Able to evaluate risk. Willing to take calculated risks. Can make good decisions under pressure.
14. Uses money well. Good money manager. Sees money as a tool for business success rather than an end it itself.
15. Realistic. Accepts the ups and downs of business. Willing to face facts and change strategy or direction when needed.
16. Persistent. Has determination and self-discipline. Follows through. Meets commitments. Will dedicate however much time it takes. Never gives up.
17. Bounces back. Accepts rejection and failure without being defeated. Flexible. Adapts to changing conditions. Learns from experience and mistakes, creates new plans, and moves ahead.

VISUAL 7.

No matter what kind of business you have, there are six basic skills you’re probably going to use every day:

(1) Planning

(2) Buying

(3) Producing

(4) Selling

(5) Tracking

(6) Managing

INFORMATIVE SHEET

Here is a sample checklist for starting your own small business. Use this as a starting-point for creating your own list.

Legal affairs

1. Create a name for the business.
2. Register your business name. Check the Web sites of your secretary of state, county clerk’s office, or municipal government. Or, ask at your local Chamber of Commerce.
3. Obtain necessary licenses/permits from federal, state, and local governments.
4. File for taxes to be paid at a federal, state, and local level.
5. Talk to legal or accounting experts. Decide whether to trademark your business name and whether to incorporate your company for tax purposes.

Finance affairs

1. Consider hiring a bookkeeper or accountant to set up your company books.
2. Visit the bank. Set up business bank accounts separate from personal accounts. Set up a merchant service account to accept credit and debit card payments from customers.
3. Visit local small business development agencies and contact the Small Business Administration to explore loans and financing from SBA-approved lenders.
4. Discuss business insurance needs with several agencies and get price quotes to compare.

Management affairs

1. Develop a business plan, including vision, goals, action steps, timeline, and budget.
2. Visit a local business development center for advice.
3. Consider joining your local Chamber of Commerce.
4. Hire independent contractors or employees if extra help is needed.

Marketing affairs

1. Create a brand identity for the business, including logo, business cards, and letterhead.
2. Get listed in local phone book and consider placing an ad.
3. Create a Web site.

Technology affairs

1. Research equipment to buy.
2. Set up telephone service.
3. Set up your computer with needed software.

ASSESSMENT WORKSHEET 2.

NAME: _____________________________________________________________

1. Create real-life business scenarios. If a retail store owner pays $5.00 for an item from a wholesaler, what would be a reasonable price for the store to sell the item for? What combination of factors might a store owner consider in order to make that decision?
2. Have students’ research two companies whose products they like and/or whose potential for earnings and profits looks promising. Have students record the following information on paper:

1. What are the principal products or services of the company?
2. How long has the company been in operation?
3. Are there any new products or services planned?
4. What is the 52-week stock price range?
5. Are there any dividends that have been issued? If yes, what is the yield?
6. What is the one-year target estimate for earnings?
7. What do the analysts predict about this company?

ASSESSMENT WORKSHEET 2.

(ANSWERS)

1. Possible answers to exercise #1 might include: researching how much competitors are charging for the same or similar items; establishing a guideline for profit margin in order to insure covering the store’s overhead; taking into account costs that might be involved in stocking or selling the item, considering how much the item is worth to customers; etc.
2. Answers to exercise #2 varied depending on the companies chosen by students.

Resources / downloads

Civis module decisions and income (slides)