Today’s Schedule (7/5/05)Today’s Schedule (7/5/05)1. What’s going on in the world of business?1. What’s going on in the world of business?2. Supply & Demand2. Supply & Demand3. Ways to Start a Business3. Ways to Start a Business4. Legal Forms of Ownership4. Legal Forms of Ownership5. Find a Niche and Developing a USP 5. Find a Niche and Developing a USP (unique selling proposition)(unique selling proposition)

Business News Today!Business News Today!WalMartWalMart

Stocks HigherStocks HigherConsumers ConfidentConsumers ConfidentHousing Market HotHousing Market Hot

The Business Cycle, InflationThe Business Cycle, InflationAnd the Actions of “The Fed”And the Actions of “The Fed”

Fed Lowers rates to “energize” sluggish economy. Inventories at their lowest.

Production in full swing. Workers making high incomes. Inventories of finished goods

still lag demand.

TOO MANY DOLLARS CHASING TOO FEW GOODS.

UNEMPLOYMENT LOW. INFLATION HIGH.

TOO FEW DOLLARS CHASING TOO MANY GOODS. UNEMPLOYMENT HIGH, INFLATION LOW.

Layoffs and fears of an economic slowdown cause workers to spend less. Inventories still high.

Fed raises rates to “cool” overheating economy.

Companies cease expansion and borrowing. Layoffs of workers begin.

Inventories reach highest levels.

Companies borrow,hire more workers,expand operations.

Inventories at their lowest.

Supply & DemandSupply & Demand

Demand & Supply CurvesDemand & Supply Curves

Price

Quantity

DemandDemand

SupplySupply

Equilibrium PointEquilibrium Point

Demand & Supply CurvesDemand & Supply Curves

Price

Quantity

As demand increases, price goes up.As demand increases, price goes up.

Demand & Supply CurvesDemand & Supply Curves

Price

Quantity

As supply increases, price goes down.As supply increases, price goes down.

Rent ControlRent Control

Price

Quantity

ShortageShortage

Rent ControlRent Control

Price

Quantity

Demand & Supply CurvesDemand & Supply Curves

Price

Quantity

DemandDemand

SupplySupply

Equilibrium PointEquilibrium Point

Demand & Supply CurvesDemand & Supply Curves

Price

Quantity

DemandDemand

SupplySupply

Equilibrium PointEquilibrium Point

How can we How can we increase or increase or decrease decrease demand?demand?

Ways to Start a BusinessWays to Start a Business

Ways to Start a BusinessWays to Start a Business

1. Start from Scratch1. Start from Scratch

AdvantagesAdvantagesDo it your wayDo it your wayEasiestEasiestCheapestCheapest

DisadvantagesDisadvantagesMay be a bad ideaMay be a bad ideaNo plan in placeNo plan in place

Ways to Start a BusinessWays to Start a Business

2. Buy Existing Business2. Buy Existing Business

AdvantagesAdvantagesPlan in placePlan in placeCustomersCustomersTrack RecordTrack RecordLocation existsLocation exists

DisadvantagesDisadvantagesMay be a bad ideaMay be a bad ideaMay no longer be May no longer be a good ideaa good ideaBad plan in placeBad plan in placePoor reputationPoor reputationPurchase pricePurchase price

Ways to Start a BusinessWays to Start a Business

3. Buy A Franchise3. Buy A Franchise

AdvantagesAdvantagesPlan in placePlan in placeCustomersCustomersTrack RecordTrack RecordLocation existsLocation existsTraining &Training &SupportSupport

DisadvantagesDisadvantagesCan’t do it your Can’t do it your waywayPurchase pricePurchase priceMonthly FeesMonthly FeesNo ProtectionNo Protection

Legal Forms of OwnershipLegal Forms of Ownership

Legal Forms of OwnershipLegal Forms of Ownership

1. Sole Proprietorship1. Sole Proprietorship

AdvantagesAdvantagesDo it your wayDo it your wayEasiest to set upEasiest to set upCheapestCheapestYou keep profitsYou keep profitsTax benefitsTax benefits

DisadvantagesDisadvantagesMay be a bad ideaMay be a bad ideaNo plan in placeNo plan in placePersonal LiabilityPersonal LiabilityMay be hard to borrowMay be hard to borrowCan’t pass on to kidsCan’t pass on to kids

Legal Forms of OwnershipLegal Forms of Ownership

2. Partnership2. Partnership

AdvantagesAdvantagesTwo headsTwo headsEasy to set upEasy to set upSources of capitalSources of capitalYou keep profitsYou keep profitsTax benefitsTax benefits

DisadvantagesDisadvantagesPersonal LiabilityPersonal LiabilityCan’t sell easilyCan’t sell easilyIncompatibleIncompatible

Legal Forms of OwnershipLegal Forms of Ownership

3. Corporation3. Corporation

AdvantagesAdvantagesLimited LiabilityLimited LiabilityCan go public to Can go public to raise fundsraise funds

DisadvantagesDisadvantagesHard to set upHard to set up

Personal LiabilityPersonal LiabilityDouble TaxationDouble Taxation

Legal Forms of OwnershipLegal Forms of Ownership

4. Limited Liability Company 4. Limited Liability Company

AdvantagesAdvantagesLimited LiabilityLimited LiabilityEasier to maintainEasier to maintainthan corporation.than corporation.

DisadvantagesDisadvantagesPersonal LiabilityPersonal LiabilityExpense to set upExpense to set up

Legal Forms of OwnershipLegal Forms of Ownership

More information More information

Finding a NicheFinding a Nicheandand

Developing aDeveloping aUnique Selling PropositionUnique Selling Proposition

Murray was Murray was beginning to wonder beginning to wonder if if Frozen Asparagus Frozen Asparagus Desserts!Desserts! really was really was the next big thing.the next big thing.

““Most small-business owners dive into Most small-business owners dive into their niches because they love the their niches because they love the

product or service they provide. The product or service they provide. The annals of small business are filled with annals of small business are filled with

the tales of founders who cared so the tales of founders who cared so deeply about their product or service deeply about their product or service

that they subsequently decided to that they subsequently decided to make it their life’s work so they could make it their life’s work so they could

enjoy getting up in the morning again.”enjoy getting up in the morning again.”- - Small Business for DummiesSmall Business for Dummies

What is a Niche?What is a Niche?

In biological terms, a “niche” is defined as a small ecological In biological terms, a “niche” is defined as a small ecological space in which an animal can find ample resources to space in which an animal can find ample resources to survive, with few predators or competitors. survive, with few predators or competitors.

A niche can also be a place that has not seen a kind of animal A niche can also be a place that has not seen a kind of animal before. The island of Mauritius, for thousands of years, saw before. The island of Mauritius, for thousands of years, saw no humans, rats, or other kinds of ground-dwelling predators. no humans, rats, or other kinds of ground-dwelling predators. A breed of flightless bird evolved to take advantage of the A breed of flightless bird evolved to take advantage of the safe, food-rich niche on the ground that other birds had safe, food-rich niche on the ground that other birds had neglected. neglected.

This bird was the dodo.This bird was the dodo.

A Niche can be based on:A Niche can be based on:

• A new product or service.A new product or service.• A new product or service in a particular area.A new product or service in a particular area.• A change in a particular product or service to A change in a particular product or service to focus on a sub-group of customers.focus on a sub-group of customers.• An existing product or service, but in a new An existing product or service, but in a new area.area.

Niche examples:Niche examples:

• Heatless soldering.Heatless soldering.• Chem-dry carpet cleaning.Chem-dry carpet cleaning.•

• A new product or service. A new product or service. Heatless solderingHeatless soldering• A new product or service in a particular area. A new product or service in a particular area. Chem-dry carpet cleaningChem-dry carpet cleaning• A change in a particular product or service to A change in a particular product or service to focus on a sub-group of customers. focus on a sub-group of customers. Kalani CoffeKalani Coffee • An existing product or service, but in a new An existing product or service, but in a new area. area. Espresso Stand in HoustonEspresso Stand in Houston

Finding a NicheFinding a NicheValue Chain AnalysisValue Chain Analysis

Value Chains are a visual depiction of an industry from Value Chains are a visual depiction of an industry from producer to consumer. Coffee business:producer to consumer. Coffee business:

Farmer > Wholesaler > Roaster > Retailer > CustomerFarmer > Wholesaler > Roaster > Retailer > Customer

So what are some possible places where we could So what are some possible places where we could enter the value chain?enter the value chain?

Life of a ChairLife of a Chair

What is aWhat is aUnique Selling PropositionUnique Selling Proposition??

It’s what makes us stand out from competitors It’s what makes us stand out from competitors within our niche.within our niche.

The search for a niche is connected to the The search for a niche is connected to the “unique Selling Proposition” because often it is “unique Selling Proposition” because often it is the USP that provides the feature that makes us the USP that provides the feature that makes us different or unique; that lets us slip into an different or unique; that lets us slip into an existing niche easier, or that helps create a existing niche easier, or that helps create a whole new niche.whole new niche.

Examples of the Examples of the Unique Selling PropositionUnique Selling Proposition

• 30 minutes or less30 minutes or less• Pay me now, or pay me laterPay me now, or pay me later• Oil change in 20 minutes.Oil change in 20 minutes.• 60 minute tune up.60 minute tune up.• 7 – 117 – 11• 24 hour fitness24 hour fitness• 90 days same as cash90 days same as cash• Rent to ownRent to own• OrganicOrganic• Unfinished furniture.Unfinished furniture.

Spanish Language Qwest SiteSpanish Language Qwest Site  

Second hand StoresSecond hand Stores

StartUp Journal IdeasStartUp Journal Ideas

Entrepreneur.comEntrepreneur.com

Join A Group!Join A Group!

How to Create A USPHow to Create A USP

What is A USP?What is A USP?

Without speakingWithout speaking, organize yourselves, organize yourselvesaround the room in order of birthday.around the room in order of birthday.

Group in fours based on the above, and find Group in fours based on the above, and find seating for your group.seating for your group.

Discuss possible business ideasDiscuss possible business ideasfor 25 minutes.for 25 minutes.

List your top three ideas, and be ready to List your top three ideas, and be ready to report to the class (choose a spokesperson).report to the class (choose a spokesperson).

Group Work on IdeasGroup Work on Ideas