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Entrepreneurial spirit and starting your own business

Questions:
1. Warren Buffett's Berkshire Hathaway owns three other furniture retailers in addition to Jordan's. Why do you think the conglomerate left the Tatelman family in charge of Jordan's after the merger?

2. What do you think Berkshire Hathaway and Jordan's have each gained from the merger?

3. How much influence are Berkshire Hathaway's stockholders likely to have (Or want) over Jordan's management? Explain your answer.

4. Based on your assessment of the information you have, do you think the merger is a good idea or not for the firms involved, the employees, the investors, the industry, and society as a whole? Explain your reasoning.

2. BUILDING TEAM SKILLS
Suppose that you have decided to quit your job as an insurance adjuster and open a bakery. Your business is now growing, and you have decided to add a full line of catering services. This means more work and responsibility. You will need someone to help you, but you are undecided about what to do. Should you hire an employee or find a partner? If you add a partner, what type of decisions should be made to create a partnership agreement?

Assignment
1. discuss the following questions:
a. What are the advantages and disadvantages of adding a partner versus hiring an employee?
b. Assume that you have decided to form a partnership. What articles should be included in a partnership
agreement?
c. How would you go about finding a partner?

Briefly redefine the key terms listed:
- Sole proprietorship
- Unlimited liability
- Partnership
- General partner
- Limited partner
- Master limited partnership
- Corporation
- Stock
- Stockholder
- Closed corporation
- Open corporation
- Domestic corporation
- Foreign corporation
- Alien corporation
- Common stock
- Preferred stock
- Dividend
- Proxy
- Board of directors
- Corporate officers
- Limited liability
- S-corporation
- Limited-liability company
- Not-for-profit corporation
- Cooperative
- Joint venture
- Syndicate
- Merger
- Hostile takeover
- Tender offer
- Proxy fight
- Leveraged buyout

Briefly Redefine the key terms in your own words
- Small business
- Business plan
- Small Business
- Administration
- Service Corps of Retired
- Executives (SCORE)
- Small-business institutes
- Small-business development centers
- Venture capital
- Small-business investment companies
- Franchise
- Franchising
- Franchisor
- Franchisee

Discussion questions listed at the end of chapter 5:

1 . Most people who start small businesses are aware of the high failure rate and the reasons for it. Why, then, do some take no steps to protect their firms from failure? What steps should they take?

2. Are the so-called advantages of small business really advantages? Wouldn't every small-business owner like his or her business to grow into a large firm?

3. Do average citizens benefit from the activities of the SBA, or is the SBA just another way to spend our tax money?

4. Would you rather own your own business independently or become a franchisee? Why?

Building Skills for Career Success: Exploring the Internet & 3: Researching Different Careers

1 . EXPLORING THE INTERNET
Perhaps the most challenging difficulty for small businesses is operating with scarce resources, especially people and money. To provide information and point small-business operators in the right direction, many Internet sites offer helpful products and services. Although most are sponsored by advertising and may be free of charge, some charge a fee, and others are a combination of both. The SBA within the U.S. Department of Commerce provides a wide array of free information and resources. You can find your way to the SBA through www.sbaonline.sba.gov or www.sba.gov. Visit the text website for updates to this exercise.

Assignment
1 . Describe the various services provided by the SBA site.
2. What sources of funding are there?
3. What service would you like to see improved? How?

2. BUILDING TEAM SKILLS
A business plan is a written statement that documents the nature of a business and how that business intends to achieve its goals. Although entrepreneurs should prepare a business plan before starting a business, the plan also serves as an effective guide later on. The plan should concisely describe the business's mission, the amount of capital it requires, its target market, competition, resources, production plan, marketing plan, organizational plan, assessment of risk, and financial plan.

Assignment
1. Identify a company in your community that would benefit from using a business plan, or create a scenario in which a hypothetical entrepreneur wants to start a business.

2. Using the resources of the library or the Internet and/or interviews with business owners, write a business plan incorporating the information.

3. Present your business plan to the class.

RESEARCHING DIFFERENT CAREERS
Many people dream of opening and operating their own businesses. Are you one of them? To be successful, entrepreneurs must have certain characteristics; their profiles generally differ from those of people who work for someone else. Do you know which personal characteristics make some entrepreneurs succeed and others fail? Do you fit the successful entrepreneur's profile?

What is your potential for opening and operating a successful small business?
Assignment
1. Use the resources of the library or the Internet to establish what a successful entrepreneur's profile is and to determine whether your personal characteristics fit that profile. Internet addresses that can help you are
www.smartbiz.com/sbs/ arts/ieb1
html and www.sba.gov (see "Start your Business" and "FAQ")

2. Using your findings, write a brief report that includes the following:
a. A profile of a successful small-business owner
b. A comparison of your personal characteristics with the profile of the successful entrepreneur
c. A discussion of your potential as a successful small-business owner

Solution Preview

Questions
1 . Warren Buffett's Berkshire Hathaway owns three other furniture retailers in addition to Jordan's.
Why do you think the conglomerate left the Tatelman family in charge of Jordan's after the merger?
The family seems to know how to reach customer and bring in revenue. They are creative and know their market. They have grown and made the company successful in terms of sales. As importantly, the owners know how to motivate employees and reward them. This keeps employees happy and loyal and leads to productivity. Productivity leads to excellent sales and more growth. Having the management that is trusted and creative remain in place, Berkshire Hathaway, keeps intact.
2. What do you think Berkshire Hathaway and Jordan's have each gained from the merger?
Jordan's gains financial backing and name in case of further expansion. They can tap into capital and knowledge not available to them as a singular entity. There are more talented people, more information, more knowledge in the overall Berkshire Hathaway organization along with different approaches, previously unavailable to the Jordan's management.
BH gets a company that continues to do well in a weak economy, providing jobs and furniture. They get a solid proven management team and one that can provide a model of business that might help other companies under their umbrella. Additionally, the creative approaches, the talents, and the ideas of the Tatelman family are phenomenal and bring not only profits, but also excitement into the BH organization.
3. How much influence are Berkshire Hathaway's stockholders likely to have (or want) over Jordan's management? Explain your answer.
As long as the company continues to produce profits, the influence will be low. However, any change in this could bring in a lot more control. People always have a "better" idea or "improvements" and as stockholders, they can force changes if there are enough like minded people. Since Warren Buffett is BH, as long as he approves of the business model and the business profits, there is likely to be little change.
4. Based on your assessment of the information ...

Solution Summary

The expert examines entrepreneurial spirit and stating your own business.

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