Paul Burns

Small business and entrepreneurship

Preface - The Significance of Small Firms P.Burns - Start-Up S.Birley - Growth P.Burns & J.Harrison - Uncertainty, Innovation and Management D.Storey & N.Sykes - The Entrepreneur J.Dewhurst - Financing Small Firms M.Binks & C.Ennew - Venture Capital G.Murray - Franchising C.Barrow - The Business Plan P.Burns - Small Firms Policy in Europe J.Dewhurst - Cases: - The McArdle Syringe - Claridges Restaurant - John Jedderman - Hightech Components - Consetec Ltd - Rollerdoors Ltd - Rough Rider Seating Plc - Franchising: Evaluating the Profit Potential of a Franchise Opportunity - Short Engineering

Small business management

Preface - Introduction - SETTING UP - The Genesis of a Business - Business and the Law - Business Taxation - BUSINESS BASICS - Marketing - Understanding Accounts - Contribution and Breakeven Analysis - PLANNING - The Business Plan - Financial Planning and Budgeting - FINANCE - Bank Finance - Financial and other Services for SMEs - Risk Capital - CONTROL - Accounting Systems - Costing Products - Using Budgets - Analysing Accounts - The Management of Money - Inventory Management - Decision Making - Capital Investment Appraisal - THE GROWING BUSINESS - Managing Growth - The European Dimension - Relative Performance of SMEs - The Future foe SMEs - Select Bibliography

Small business in Europe

The book has looked at the small business environment in seven diverse European countries. All, except Switzerland, are members of the European Economic Community (EEC) — a community whose objective is the harmonisation of the general legal and economic environment facing businesses. However, until relatively recently, it was thought that this harmonisation would in the main benefit large businesses. In the days of the Bolton Report it was argued that the decline in the small business sector could be attributed in large part to advances in transport and communication and, looked at in this way, the development of the EEC would just hasten the process of business concentration.

Setting up a Business

Nothing, in the over-regulated world of today, is ever simple. Before you launch your new business you should give some thought to the legal problems you will have to deal with. The first is deciding what is to be the legal form of the business you wish to launch. Technically there are three major forms of business organisation: the sole trader, the partnership, and the limited liability registered company. About 56 per cent of businesses are operated as sole traders and the balance are fairly equally divided between partnerships and companies.

Financial Planning and Budgeting

Budgets are only part of the overall ‘business plan’. They are result of a careful look at the business and its future and summarise the planned activities of selling, producing, distributing and financing. Budgets co-ordinate these activities, ensuring consistency in the plans for different segments of the business: for example, that productive capacity is sufficient to meet sales estimates and, if it is not, that suitable plant and machinery is purchased at the appropriate time, if this proves a sound financial investment. Budgets therefore co-ordinate many of the decision-making aspects of financial management. They quantify expectations about the future in three major documents: 1. BUDGETED INCOME STATEMENT. 2. BUDGETED CASH-FLOW STATEMENT. 3. BUDGETED BALANCE-SHEET (which highlights estimates of capital expenditure and sources of finance).

Profit and Loss and Balance Sheet

This chapter focuses on the concept of profit and loss and balance sheet. The working capital cycle gives a simplified view of what goes on in the real business of running a company. The profit and loss statement tells the way the money has performed through trading over a period. Profit simply describes the way the assets of the business grew through trading. Profit is not cash. One can make a profit and still have no cash. By speeding up the working capital cycle—minimizing stocks, getting debtors to pay up quickly, and by taking maximum credit—a person needs less money to invest in the business. A balance sheet always balances. A change on one side is always accompanied by a change (or changes) of the same amount on the other. If it does not, then either some assets are missing or there is some mistake in the accountancy. The cost of fixed assets is written off over their life using depreciation.

Understanding Financial Information

In many of the earlier chapters (particularly Chapters 10 and 15) we have been concerned to show the types of financial accounts that a small business will keep, and how these accounts should be prepared. When the term ‘the financial accounts’, or more simply ‘the accounts’, is used it is usual to assume that it refers to the balance-sheet and the profit-and-loss account for the year, and we shall continue to use it in this sense. The technique most frequently employed in understanding these accounts is ratio analysis and in the main part of this chapter we shall be concerned in applying this approach to the historical balance-sheet and profit-and-loss account of a business. We shall build on the example given in Chapter 10 (Tables 10.4 and 10.5.

Great Britain and Northern Ireland (UK)

The United Kingdom of Great Britain and Northern Ireland (UK) covers some 94,000 square miles (244,754 square kilometres).

Innovation and entrepreneurship

ENTP 6102 Professional Development (1 semester credit hour) This course is designed to enhance the students experience such as building networking skills, verbal and written communication skills, business etiquette, and learning how to increase their human capital. Students will learn how to build a personal career portfolio (an approved resume, a LinkedIn profile, etc.), how to market themselves, how to prepare for internship and job placement interviews, and how to utilize professional networking. The goal is to make students more marketable and valuable professionals to the global economy. Pass/Fail only. Credit cannot be received for more than one of the following: BUAN 6102, ENGY 6102, ENTP 6102, FIN 6102, HM GT 6102, IMS 6102, MAS 6102, MIS 6102, MKT 6102, OPRE 6102, or SYSM 6102. (1-0) S ENTP 6304 (IMS 6304) International Business Management (3 semester credit hours) The course analyzes global business environments, discusses international business operations in various markets of the world, and examines various theories that explain how the international trade and direct investment practices evolve. The course utilizes various cases to help students gain knowledge and learn necessary skills to evaluate and manage the challenges and opportunities businesses face in diverse global markets. Credit cannot be received for more than one of the following: ENTP 6304 or IMS 6204 or IMS 6304. Prerequisite: Non-MBA major. (3-0) S ENTP 6310 (BPS 6310) Strategic Management (3 semester credit hours) Strategic management consists of the analysis, decisions, and actions that organizations take to create sustainable competitive advantages. The course examines a variety of issues including environmental, competitor, and stakeholder analysis; strategy formulation; and strategy implementation and control. The central role of ethics and corporate governance as well as global issues will be addressed. Credit cannot be received for both BPS 6310 and ENTP 6310. Prerequisites: (ACCT 6 301 and ACCT 6202) or (ACCT 6305 and FIN 6301 and MKT 6301 and OB 6301). (3-0) S ENTP 6315 (FIN 6315) Entrepreneurial Finance (3 semester credit hours) The objective of this course is to build skills and knowledge in the financing of entrepreneurial ventures. Entrepreneurial Finance concerns not only the process of financing and investing in start-up companies, but also the changes to the initial financing mix that may be required as start-up companies mature and grow. Topics include: valuation, capital structure, forecasting, the markets for venture capital and private equity, the decision to go public or remain private, alternative financing arrangements, and the differential marketability and liquidity of the securities used to finance non-public firms. Credit cannot be received for both courses, ENTP 6 315 and FIN 6315. Prerequisite: FIN 6301. (3-0) Y ENTP 6316 (FIN 6316) Private Equity Finance (3 semester credit hours) This course will cover the investment of capital in the equity of private companies to fund growth or in public companies to take them private. This course includes the study of a broad spectrum of private equity investments, investing in established private firms, buyouts, financial restructuring of distressed firms, and private equity financing by public firms. Prerequisite: FIN 6301. (3-0) Y ENTP 6317 Entrepreneurial Finance for Nonbusiness (3 semester credit hours) The objective of this course is to build skills and knowledge in the financing of entrepreneurial ventures for students enrolled in engineering and other technical disciplines. Topics include how engineering and technical decisions impact cash flows, an introduction to financial statements and cash flow management, valuation basics, forecasting techniques, sources of capital (crowdfunding, angel investment, venture capital investment, etc.), term sheet terms, exit planning, stock option vesting, and licensing and negotiation. This course cannot be used by

Controlling Cash Flow

This chapter discusses the way to control cash flow. Profit is not the same as cash. A business can be profitable and still running out of cash. When a person starts-up or expands the business, he can use far more cash than expected or have available. It takes time to sell stocks and time for debtors to pay up; so it is required to manage the working capital. The collection of debts can be boosted by: (1) choosing customers carefully, (2) setting appropriate credit limits, (3) taking the right measures to speed up payments, (4) handle creditors carefully. If an arrangement is made, it is better to stick to it. It is also advisable to agree good terms, try for part payment on large orders, not paying early, keeping the bank informed, and paying the taxes regularly. The stock holding can be minimized by: (1) buying only what is actually needed, (2) buying at the beginning of the month, (3) buying small quantities, (4) not interrupting production runs, and (5) only making to order, if possible.