BUSN Ch. 6 Entrepreneurship Flashcards
Chapter 6: Small Business and Entrepreneurship: Economic Rocket Fuel
List four key reasons to launch a small business.
Financial Success
Independence
Flexibility
Challenge
What is an entrepreneur?
People who risk their time, money, and other resources to start and manage a business.
Discuss funding options for small businesses.
Majority of new firms are funded by the personal resources of the founder, including personal accounts, family, and friends.
Other key funding sources are bank loans, angel investors, and venture capital firms.
What are some opportunities small businesses face?
Market niches
Personal customer service
Lower overhead costs
Technology
What are some threats small businesses face?
High risk of failure
Lack of knowledge and experience
Too little money
Bigger regulatory burden
What are “Market Niches” in the context of a small business opportunity?
Many small firms are uniquely positioned to exploit small but profitable market niches. Something a monolithic firm may not deem valuable time spent for a smaller market.
What is “Personal Customer Service” in the context of a small business opportunity?
With a smaller customer base, small firms can develop much more personal relationships with individual customers.
What are “Lower Overhead Costs” in the context of a small business opportunity?
Many small firms can hold down overhead costs by hiring fewer managers and fewer specialized employees.
What is “Technology” in the context of a small business opportunity?
The web has played a powerful role in opening new opportunities for small business in both local and global markets.
What is “High Risk Of Failure” in the context of a small business threat?
Starting a new business involves a lot of risk, but the odds improve significantly after the five-year mark.
What is “Lack Of Knowledge And Experience” in the context of a small business threat?
Entrepreneurs often have expertise in a particular area but lack the background to run a successful business.
What is “Too Little Money” in the context of a small business threat?
Lack of start-up money is a major issue for most new firms because ongoing profits don’t usually begin for months or even years.
What is “Bigger Regulatory Burden” in the context of a small business threat?
Small firms spend more as a percentage of revenue than big firms, simply complying with federal information-reporting requirements.
List different ways to become a new business owner.
Starting from scratch
Buying an established business
Buying a franchise
What is the role of small businesses in the economy?
25 to 41 percent of Canada’s GDP
70 percent of private sector employees are employed by a small business
More than 1.1 million small businesses in Canada
