MGMT 3000 Chapter 6 Flashcards
what is entrepreneurship ?
the process of initiating a business venture, organizing the necessary resources, assuming the associated risks and enjoying the rewards
what is an entrepreneur?
someone who engages in entrepreneurship
what are the 5 types of small business owners?
- idealist
- optimizers
- hard workers
- jugglers
- sustainers
what is an idealist?
rewarded by chance to work on something new and creative
what is an optimizer?
get personal satisfaction from being business owners
what is a hard worker?
thrive on the challenge of building a larger, more profitable business
what is a juggler?
higher energy person who enjoy handling every detail of their own business
what is a sustainer?
enjoy chance to balance work and personal life
how many minority owned businesses are in the country ?
11 million, nearly twice as many as existed a decade ago
how many people do minority firms employ?
6.3 million people
how much revenue do minority businesses generate annually?
$2 trillion
what type of minority owned businesses have shown the greatest amount of growth over the past 10 years, increasing 34% ?
hispanic - latino owned
what percent of small business owners are white?
78%
true or false? immigrants were almost twice as likely as native born Americans to start a new business in the US in recent years
true
what percent of new entrepreneurs were immigrants?
30 percent
true or false? women have less access to capital because they have to work harder to convince others that they have what it takes to be successful
true
true or false? women have less access to capital because they have to work harder to convince others that they have what it takes to be successful
true
true or false? women have less access to capital because they have to work harder to convince others that they have what it takes to be successful
true
true or false? women have less access to capital because they have to work harder to convince others that they have what it takes to be successful
true
what are the traits of entrepreneurs?
- autonomy
- entrepreneurial sacrifice
- high energy
- locus of control
- self - confidence
- need to achieve
- tolerance to ambiguity
what is the suggested process of starting an online business?
- find a market niche
- create a professional website
- choose a domain name
- know when to pivot
what is social entrepreneurship?
focuses primarily on creating social value by providing solutions to social problems, with a secondary purpose of generating profit and returns
what is a benefit corporation (B corporation)?
entrepreneurs who want to include a strong social or environmental component for-profit business
what is the process for launching a start up?
- come up with viable idea
- create a business plan
- choosing a legal structure
- arrange financing
what is the main reason for starting a business?
joined a family business
what are the two main sources of new business ideas?
- in depth understanding of industry or profession
- market niche spotted
what is a business plan?
a statement specifying the business details prepared by an entrepreneur prior to opening a new business
what are some characteristics of a business plan?
- well defined
- clear and realistic projections
- profile potential customers
- have detailed information about industry
- highlight critical risks
- spell out the sources
what are the types of legal structure?
- sole proprietorship
- partnership
- corporation
what is a sole proprietorship?
an unincorporated business owned by and individual for profit
what type of legal structure make up a majority of businesses in the US?
sole proprietorship
does a sole proprietor have unlimited liability ?
yes
what is a partnership?
an unincorporated business owned by two or more people
are partnerships easy to start?
yes
when do partnerships typically dissolve?
after 5 years
what type of agreement do partnerships use?
formal partnership agreement
do partnerships have unlimited liability?
yes
what is a corporation?
artificial entity created by the state and existing apart from its owners
are corporations liable for its actions and must pay taxes on its income?
yes
who is liable if a corporation gets sued?
the corporation, not the owners
what are the two types of arranging financing?
debt financing and equity financing
what is debt financing?
borrowing money that has to be repaid at a later date to start a business
what is a common source of debt financing for a start up?
borrowing from family or friends
what is equity financing?
funds that are invested in exchange for ownership in the company
what are the types of equity financing?
- angel financing
- venture capital firm
- crowd funding
what is angel financing?
wealthy individuals who believe in the idea for the start up and are willing to invest their personal funds to help the business get started
what is a venture capital firm?
group of companies or individual that invests money in new or expanding businesses for ownership and potential profits
what is crowd funding?
rating capital be receiving small amounts of money from a large number of investors, usually through social media and the Internet
what is a business incubator?
provides shared office space, management support services and management and legal advice to entrepreneurs
what is a co working facility ?
open office environment that is shared by multiple freelance entrepreneurs as well as corporate telecommuting employees or others who do not have a regular officew
what is franchising?
the firm collects upfront and ongoing feeds in exchange for letting other firms offer products and services under its brand name and using its processes
what is the powerful advantage of franchising?
management help is provided by the owner, have a brand name
what are disadvantages of franchises?
- lack of control that occurs when franchisors want every business managed the same way
- expensive and high start up costs
what percent of McDonalds are franchise operations?
93%
how much must franchisee applicants for McDonalds have in liquid assets and what franchise fee must they pay?
$500,000 and $45,000
what percent to McDonalds franchisees pay of store revenue to McDonalds each year?
82%
