Chapter 6 Flashcards
Review of Chapter 6
entrepreneurs
entrepreneurs
People who risk their time, money, and other resources to start and manage a business.
internal locus of control
internal locus of control
A deep-seated sense that the individual is personally responsible for what happens in his or her life.
external locus of control
external locus of control
A deep- seated sense that
forces other than the individual are responsible for what happens in his or her life.
angel investors
angel investors
Individuals who invest in start-up companies with high growth potential in exchange for a share of ownership.
venture capital firms
venture capital firms Companies that invest in start-up businesses with high growth potential in exchange for a share of ownership.
market niche
market niche
Small segment of a market with fewer competitors than the market as a whole. Market niches tend to be quite attractive to small firms.
Canada Business Network
Canada Business Network
A federal government service designed to maintain and strengthen the nation’s economy by aiding, counselling, assisting,and protecting the interests of small businesses.
business plan
A formal document that describes a business concept, outlines core business objectives, and details strategies and timelines for achieving those objectives.
Analyze the opportunities that small businesses face.
Opportunities:
● Market niches: Many small firms are uniquely positioned to exploit small but profitable market niches.
● Personal customer service: With a smaller customer base, small firms can develop much more personal relationships with individual customers.
● Lower overhead costs: Many small firms can hold down overhead costs by hiring fewer managers and fewer specialized employees.
● Technology: The Web has played a powerful role in opening new opportunities for small business in both local and global markets.
Analyze the threats that small businesses face.
Threats:
● High risk of failure: Starting a new business involves a lot of risk, but the odds improve significantly after the five-year mark.
● Lack of knowledge and experience: Entrepreneurs often have expertise in a particular area but lack the background to run a successful business.
● Too little money: 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.
● Bigger regulatory burden: Small firms spend more as a percentage of revenue than big firms, simply complying with federal information-reporting requirements.
BUSINESS LAUNCH OPTIONS
- Starting from scratch
- Buying an established business
- Buying a franchise
Strategies for business success
- Gain experience
- Learn from others
- Educate yourself
- Access Canada Business resources
- Develop a plan
Entrepreneurial Characteristics
Vision Energy Tolerance of Uncertainty Self-Reliance Confidence Tolerance of Failure
