Enterprise Flashcards
Defintion
The application of innovative attitudes, skills and behaviour to either:
1) start a business
2) grow an existing business
3) explore a new venture
What kind of animal is the entrepreneur
Lifestyle entrepreneurs: seek independence (e.g. Home based craft businesses or professional consulting services)
Growth/serios/habitual entrepreneurs:
Seek wealth and power through the creation and aggressive growth of business (capital incentive , retail property and commodities )
Innovative entrepreneurs:
Seek to create or change something (tech)
Social entrepreneurs: seek to create change for the common good
Types of entrepreneurs
Intermediary : alert to opportunities (kirzner)
Originator : beyond being alert to imagining opportunities (shackle)
Innovator : relies on aptitude to develop new tech (schumpeter)
Risk taker : takes calculated risks to create profitable opportunities (knight)
Coordinator: links resources (capital : fincial, social, technological etc) (casson)
Small businesses
The increase in the number of enterprise creation can be attributed to technological advances in the following areas;
E commerce, social media and proliferation of information technology
Growing diversity in entrepreneurship
Downsizing and outsourcing
Push and pull factors of small business
Push factors No qualifications Unemployment Discrimination Family pressure
Pull Identified gap Bureaucracy Family tradition Independence Entrepreneurial
Entrepreneurial v small business
Miller 1983- defines entrepreneurship as a multidimensional concept encompassing the firms actions relating to product market and technological innovation, risk taking and proactive ness
Entrepreneurial firm engages in product market innovation , undertakes somewhat risky ventures, and is the first to come up with proactive innovations , beating the competitor to the punch
(Miller 1983)
The fundamental differences between entrepreneurial and a small firm are growth orientation , commitment to innovation and competitive aggressiveness
SME owners are sustainability oriented and entrepreneurs are growth oriented
Small v large
Small firms can gain advantage when
Industries without econ of scale (specialisation)
Opportunities that favour entrepreneurial behaviour (tech )
Acceptance of lower returns (subcontracting)
Regulatory framework (incentivised enterprise creation )
How can 4 ps determine success v failure in small firms
Products - fail if consumers don’t need what they have to offer - realistic market potential requires getting a clear picture of what target segments want
Small business PRICING errors usually result from a failure to estimate start up costs and operating expenses accurately
Place- or distribution determines the ability to attract customers because of locational convenience
Promotion- can be expensive and is essential for small business to develop small scale, entry level competencies in a local market through various channels ranging from local newspaper ads to social media
Operations for launching a busjness
Buying an existing business - can involve less work,easier to finance (no sunk costs) , however new owner will inherit original problems e.g. Costs and unhappy customers etc
Buying a franchise-combines freedom of working for self, gains instant name recognisability and standard of goods and services, however no control in managerial levels and little or no decision making capacity regarding products and services, also substantial initial costs (licensing fees)
Starting from scratch - complete freedom, high job satisfaction,typically 90% of start ups fail in first 5 years, requires sweat equity, commitment with uncertain results.
Summary
Enterprise is not only about economic gains
Entrepreneurial types, characteristics and skills are relevant beyond small business ownership
SME OWNERS are sustainability oriented and entrepreneurs are growth oriented
Enterprise enthuses and grows a dynamic economy
