Business Ethics and Entrepreneurship
When thinking of starting a small business there are multiple things that must be considered. Is a business plan needed, and if so why? How will one finance this business and what are the legal issue's that could come up? If this is to be a family run business what problems could the married couple face? In this paper I will explore each of these questions and provide detailed answers.
A business plan defines your business, identifies your goals, and serves as your company's resume. (http://www.sba.gov/starting_business/planning/basic.html) A business plan is crucial to any new business and will help with management of operation and finances, promotion and marketing of the business and achievement of goals and objectives. (http://www.sba.gov/starting_business/planning/basic.html) Without a well written business plan it will be difficult to get financing for a startup business.
Depending on the type of business, there are many finance options for small businesses.
Although Venture capital financers prefer to put their money into high technology firms that are already established, they do put a small amount of their funds into small start-up businesses. Private market angel financing on the other hand provide money for start-up companies that are too small to qualify for bank loans, venture capital, or public offerings but also prefer high technology firms. (http://sbir.gsfc.nasa.gov/SBIR/Financing.htm#alternate) If the company is not a high technology firm it will be hard to receive venture capital or private market angel financing. The least expensive way for a small business to receive financing is through a commercial bank. Many community banks will give loans at only one to two points above the prime for small business loans. (http://sbir.gsfc.nasa.gov/SBIR/Financing.htm#alternate) The disadvantage of a commercial bank loan is the bank usually holds the owners personal property for security.
Small business owners face many legal issues.