Traditional Small Businesses
Lifestyle/Part-time Businesses
Answer
| Growth rates | Sales | % of small businesses | |
| High-growth Ventures | 25% + per year | $1,000,000+ | 5% |
| High-Performing Small Businesses | 5 – 15% per year | $100,000 – 1,000,000 | 20% |
| Traditional Small Businesses | No growth after sales meet owner’s need | $25,000 - 100,000 | 22% |
| Lifestyle/Part-time Businesses | No growth after a low level | < $25,000 | 53% |
Learning Objective 3: Dispel key myths about small businesses.
< >Brian continued, “Where the heck do you think you are going to get the money? It’ll cost a bundle and there’s just no money out there to borrow for anything that risky. And besides, you aren’t really doing anything. I mean you aren’t making anything to sell or anything. You tried that pizza business a few years ago and really blew it; what makes you think that you could try again? Gosh, the economy is really rotten, too. Are you nuts?”
Brian touched on four of the most common myths about new businesses. Give Andy the information he needs to rebut these. Brian decided that he was fighting a losing battle. “So tell me what you’ve done so far.”
Andy responded, “I’ve got a pretty good set of supplies and tools already as the wife and kids give me them for Christmas and birthdays. I’ve recently purchased a cabinet with all sorts of drawers and dividers to organize myself and a workbench and work stool that ought to help my posture while working. There’s an empty store front on Main that has pretty reasonable rent.
”I also signed up for a small business class at the local university. We haven’t covered much yet, but I’m already thinking about business plans and marketing plans and such. This course will help me do this and there’s a local SCORE chapter with all these retired business people who will help me if I run into problems.”
Use the BRIE Model to critique what Andy has done so far and make suggestions for what he should do.Select two or three small businesses in your area and make a list of probable benefits they bring to your community.Eavesdropping at Ray’s Coffee Shop on the conversations:What do you think are the advantages and disadvantages of the corporate, social, and independent entrepreneurial approaches outlined in the case?
The advantages of working as a corporate entrepreneur and working for the already established St. Louis Metro Market would be less cost in both time and money, and the fact that Jolene would still be meeting her goal of fending off food insecurity. The disadvantage would be that she would be following another’s goal and restricted if she decides to follow a different route. A social venture could either be financially self-sufficient or for-profit but either way, the focus will still be on feeding people. Advantages may be tax breaks from the government and charitable funding from local or national organizations. Disadvantage could include restrictions on the use of funding obtained by others. An independent entrepreneur has the most flexibility and the advantage of having sole control over the decisions of the business. Disadvantages could be funding or even lack of business knowledge to keep the business profitable while still keeping prices as low as possible.