Instructor Manual: LongeneckerPettyPalichHoy, Small Business Management, 20th Edition, 2023, 9780357718872;

Instructor Manual: Longenecker/Petty/Palich/Hoy, Small Business Management, 20th Edition, ©2023, 9780357718872;

Chapter 1: The Entrepreneurial Life

© 2023 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

1 Instructor Manual Longenecker/Petty/Palich/Hoy, Small Business Management, 20 th Edition, ©2023,

Chapter 1: The Entrepreneurial Life

Table of Contents Purpose and Perspective of the Chapter ..................................................................................... 2 Supplements .................................................................................................................. 2 Chapter Objectives ........................................................................................................................ 2 Complete List of Chapter Activities and Assessments ............................................................... 2 What's New in This Chapter .......................................................................................................... 3 Chapter Outline ............................................................................................................................. 3 Discussion Questions .................................................................................................................. 11 Suggested Answers to You Make the Call ................................................................................. 13 Suggested Solution to Case 1: The Lip Bar ................................................................................ 15 Appendix ...................................................................................................................................... 16 Generic Rubrics ....................................................................................................................................... 16 Standard Writing Rubric .......................................................................................................................... 16 Standard Discussion Rubric ..................................................................................................................... 17

(For Complete File, Download link at the end of this File) 1 / 4

Instructor Manual: Longenecker/Petty/Palich/Hoy, Small Business Management, 20th Edition, ©2023, 9780357718872;

Chapter 1: The Entrepreneurial Life

© 2023 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

2 Purpose and Perspective of the Chapter The purpose of this chapter is to provide an overall view of owning a small business and thinking like an entrepreneur.Supplements The following product-level supplements provide additional information that may help you in preparing your course. They are available in the Instructor Resource Center.• Instructor’s Manual • PowerPoint Slides • Test Bank • Transition Guide that illustrates changes between the previous and current editions Chapter Objectives

The following objectives are addressed in this chapter:

1-1 Explain the importance of small businesses and entrepreneurship in our society.1-2 Describe what it means to be a small entrepreneurial firm.1-3 Identify how small businesses can compete against the giants.1-4 Outline what might motivate you to be a small business owner with all its risks and uncertainties.1-5 Describe ways to build a successful business as a part of your life legacy.Complete List of Chapter Activities and Assessments For additional guidance refer to the Teaching Online Guide.Chapter Objective PPT slide Activity/Assessment Duration

• Icebreaker

1-1 6–7 Knowledge Check < 5 min.1-2 17–18 Discussion Activity 1 5–10 min.1-3 26–27 Discussion Activity 2 5–10 min.1-4 38 Polling Activity 1 < 5 min.1-4 39 Polling Activity 2 < 5 min.1-5 42–43 Discussion Activity 3 5–10 min.

[return to top] 2 / 4

Instructor Manual: Longenecker/Petty/Palich/Hoy, Small Business Management, 20th Edition, ©2023, 9780357718872;

Chapter 1: The Entrepreneurial Life

© 2023 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

3 What's New in This Chapter The following elements are improvements in this chapter from the previous edition: • Revised content to help students better understand their motivations for starting a business and to avoid distorted concepts about what is required for them to be effective business owners.• Updated the Living the Dream features, which capture entrepreneurs in action as they face small business and entrepreneurship challenges. Chapter 1 includes four of these feature profiles.• Incorporated a “Spotlight on Small Business” vignette at the start of the chapter to showcase an entrepreneur’s unique insights into how to start, run, and grow a business. Chapter 1’s spotlight is Energy Solutions of Texas.• Replaced the previous edition case with a new case, The Lip Bar, as an example of an entrepreneur pursuing an opportunity around them and being adaptable.• Added discussion questions to the end-of-chapter content.• Added a You Make the Call feature to the end of chapter that presents various situations and thought-provoking questions.• Added Experiential Exercises to the end of chapter.[return to top] Chapter Outline In the outline below, each element includes references (in parentheses) to related content.“CH.##” refers to the chapter objective; “PPT Slide #” refers to the slide number in the PowerPoint deck for this chapter (provided in the PowerPoints section of the Instructor Resource Center). Introduce the chapter and use the Ice Breaker in the PPT if desired, and if one is provided for this chapter. Review learning objectives for Chapter 1. (PPT Slides 1–3).

• 1-1 Small Size, Big Significance (LO 1-1, PPT Slides 4–7)
• Owning a business is a noble profession—especially if it’s done well.
• The richest rewards of owning a small business come from offering goods or

services that improve the lives of others and developing an organizational culture that supports employees.

c. U.S. Small Business Administration reports the following:

• There are 30.2 million businesses in the United States with fewer than

500 employees. Small companies account for 99.7% of all businesses; 89% have fewer than 20 employees.ii. 11.7 million women-owned businesses represent 36% of all small businesses.iii. 9.2 million minority-owned small businesses account for 29% of all small businesses. 3 / 4

Instructor Manual: Longenecker/Petty/Palich/Hoy, Small Business Management, 20th Edition, ©2023, 9780357718872;

Chapter 1: The Entrepreneurial Life

© 2023 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

4 iv. 59 million people work in small businesses, representing 47% of all employees and 42% of all salaries paid to employees.

• Many small companies have gone global, representing 97% of all

exporters.vi. Two-thirds of all small businesses survive for at least two years, while around 33% survive over 10 years. 50% percent of the failures are due to cash flow problems, with 14% being the result of poor marketing strategies.vii. 64% of small businesses begin with only $10,000 in capital; however, 27% of small businesses are not able to get the financing they need.

• Small businesses foster local economies, keeping money close to home and

supporting neighborhoods and communities.

• The number of college students enrolling in small business management and

entrepreneurship classes has increased.

f. Knowledge Check: <5 minutes total.

Which of the following statements best describes entrepreneurship?• It involves a process that begins with identifying an opportunity and ends with harvesting the value of the company.• The average level of entrepreneurial activity has increased over the past 19 years. Entrepreneurship and the small businesses it creates make a significant contribution to the economy. Of the 30.2 million small businesses in the United States, 89% of them have fewer than 20 employees.

II. 1-2 Small Business and Entrepreneurship (LO 1-2, PPT Slides 8–18)

• 1-2a What Is a Small Business?
• Small business – A business with growth potential that is small

compared to large companies in an industry, has geographically localized operations, is financed by only a few individuals, and has a small management team ii. To distinguish between small and large businesses, we naturally consider their relative sizes, but it is also helpful to think about a small firm’s potential to grow.(a) Size – Can be determined based on such criteria as the number of employees, sales volume, amount of profit, and the size of the company’s assets, but size standards are arbitrary and frequently adopted to serve a purpose (b) Growth Potential

• Microbusiness – A small firm that provides minimal profits to

its owner

• / 4