Chapter 7 Flashcards
What is entrepreneurship?
Entrepreneurship is accepting the challenge of starting and running a business. The word entrepreneur originates from the French word, entreprendre, which means “to undertake.” In a business context, it means to start a business.
How do entrepreneurial ventures differ from small businesses?
Higher risk, requires substantial innovation, creates substantial wealth (if successful), and wealth creation is often rapid (if successful).
What are reasons for people who are willing to become an entrepreneur?
Opportunity; new idea, process, or product; profit; challenge; and family pattern.
What does it take to become an entrepreneur?
Must be self directed, self nurturing, action oriented, highly energetic, tolerant of uncertainty, and able to learn quickly.
What is an entrepreneurial team?
An entrepreneurial team is a group of experienced people from different areas of business who join together to form a managerial team with the skills needed to develop, make, and market a new product. A team may be better than an individual entrepreneur because team members can combine creative skills with production and marketing skills right from the start.
What are intrapreneurs?
Intrapreneurs are creative people who work as entrepreneurs within corporations. The idea is to use a company’s existing resources—human, financial, and physical—to launch new products and generate new profits.
What are micro-preneurs and how do they differ from entrepreneurs?
The smallest of small businesses are called micro-enterprises, most often defined as having one to four employees. While other entrepreneurs are committed to the quest for growth, micro-preneurs (owners of micro-enterprises) know they can be happy even if their companies never appear on a list of top-ranked businesses.
What are some ways to get into your first business venture?
- Learn from others
- Get some experience
- Buy an existing business
- Buy a franchise
- Inherit/take over a family business
How can you learn from others about running your own business?
Investigate your local school for classes on small business and entrepreneurship. There are entrepreneurship programs in post-secondary schools throughout Canada. Some entrepreneurs have started businesses as students. One of the best things about such courses is that they bring together entrepreneurs from diverse backgrounds who form helpful support networks. Talk to others who have already done it. They will tell you that location is critical and caution you not to be under-capitalized; that is, to start with enough money.
How can you get experience for running your own business?
There is no better way to learn small-business management than by becoming an apprentice or working for a successful entrepreneur. Many small-business owners got the idea for their businesses from their prior jobs. An industry standard is to have three years’ experience in a comparable business.
How can you buy an existing business effectively?
Find a successful business person who owns a small business. Tell him or her that you are eager to learn the business and would like to serve an apprenticeship. State that at the end of the training period (one year or so), you would like to help the owner or manager by becoming assistant manager. As assistant manager, you would free the owner to take off weekends and holidays, and to take a long vacation—a good deal for him or her. For another year or so, work very hard to learn all about the business—suppliers, inventory, bookkeeping, customers, promotion, and so on. At the end of two years, make the owner this offer: the owner can retire or work only part-time and you will take over the business.
How can you inherit/take over an existing family business?
There are a number of factors that make family businesses unique. One is ownership. Public companies are typically owned by a large number of shareholders whose primary interest in ownership is generating the best return on investment. However, family businesses are often owned by a much smaller group whose ownership often has elements of personal identity, family legacy, and community responsibility entwined with its economic interests. This “emotional ownership” often results in family businesses having a longer-term view. Another factor that tends to separate successful family firms from their public counterparts is the concept of stewardship. Many family businesses have a clear understanding that the business is something to be preserved and grown for future generations.
What does it take to start and run a small business?
To help you succeed as a business owner, you need a business plan, proper financing, know your target market, effectively managing your employees, and always keep records.
What is a business plan?
A detailed written statement that describes the nature of the business, the target market, the advantages the business will have in relation to competition, and the resources and qualifications of the owner(s).
What are the nine functions of a business plan?
Executive summary, company background, management team, financial plan, capital required, marketing plan, location analysis, manufacturing plan, and the appendix (research & reports).
