Chapter 1 Flashcards
What is an entrepreneur?
a person who recognizes an opportunity and organizes and manages a business while knowing the potential risk
What is the free enterprise system?
economic system where businesses are privately owned and operated free of government interference
What is voluntary exchange?
a transaction between two parties to trade money for a product or service
What are the benefits of a free enterprise?
encourages entrepreneurs to use resources to satisfy consumer needs
Trade voluntarily to as large of a market as possible
Access to the internet
Free enterprise encourages competition
What are the Challenges?
if it fails, employees are out of work
Loss of money
Failed others who depend on the company
What is a small business?
Having fewer than 500 employees and selling less than $5 million worth of products and services annually
What are the benefits of entrepreneurship?
Control over time, fulfillment, independence, creation/ownership, financial reward, self-esteem, contribution to society
Potential costs of entrepreneurship?
Failure,obstacles, isolation, financial insecurity, long hours, strain on personal relationships
What is the cost and benefit analysis?
when the costs of taking an action is compared to the benefits
What is opportunity cost?
the value of what must be given up in order to obtain something else
What are the two best resources for keeping on track?
Mentors and advisors
What is a mentor?
a trusted advisor with whom someone forms a relationship with to promote personal and or professional growth
What is social entrepreneurship?
a for-profit enterprise with the dual goals of achieving profit ability and attaining social returns
What is social business?
a company created to achieve social objective while generating modest profit to expand its reach, improve product or service, and subsidize the social mission
What is venture philanthropy?
when financial and human capitol is invested in non-profit by individuals and for-profit enterprises with he intention of generating social rather than financial returns
What is green entrepreneurship?
enterprise activities that avoid harm to the environment or help to protect it in some way
How do entrepreneurs find opportunities to start new businesses?
using new or existing technology to produce product
finding a new supply of resources
develop a new market for an existing product
For a business to be considered entrepreneurial it should?
exploit changes in the world
Where others see problems entrepreneurs…..
see opportunity
How do entrepreneurs create business ideas?
listen, observe, analyze
An idea is not necessarily an….
opportunity
Why is an opportunity situational?
because it is dependent on variable circumstances
What are the five roots of opportunity in the market place?
problems changes inventions competitive advantages technological advances
What is internal opportunity?
one that comes from inside you or your organization
What is an external opportunity?
generated by an outside circumstance
What is a strategy?
a plan for how an organization or individual plans to proceed with business operations and outperform competitors
What are the paths to small business ownership?
securing franchise rights
buying an existing business
licensing technology
What is franchising?
a business that markets a product or service developed by a franchisor
What is acquisition?
a business purchase
What is due diligence?
the exercise of reasonable care in the evaluation of business opportunity
How does one license technology?
you enter into a contract saying that you can use the technology without purchasing the rights to own it
What is gazelle?
a company that achieves an annual growth rate of 20% or greater and is measured by the increase of sales revenue
What is a Microenterprise?
a firm with 5 or fewer employees, initial capitalization requirements of under$50,000, the regular operational involvement of the owner (FIT REPUBLIC)
What is a lifestyle business?
a microenterprise that permits its owners to follow desired patterns of living, such as supporting college costs and vacations
What is a trade-off?
the act of giving up one thing for another
What are the 7 rules for building a successful business?
recognize an opportunity evaluate it with critical thinking build a team write gather resources decide ownership create wealth
