Schermerhorn Chapter 5: Entrepreneurship and Small Business Management

Question 1

Define Entrepreneaurship

Answer 1

Strategic thinking and risk-taking behavior that results in the creation of new opportunities.

Question 2

Define Entrepreneurs

Answer 2

Risk-taking individuals who take actions to pursue opportunities and situations others may fail to recognize

Question 3

Entrepreneurs are:

Answer 3

Founders of business that becomes large scale enterprises

People who:
buy a local franchise outlet
Open a small retail shop
Operate a self-employed service business
Introduce a new product or operational change in an existing organization

Question 4

Name some characteristics of an entrepreneur:

Answer 4

DESCRIBE: ELON MUSK
Believe themselves to be in control
High energy level
High need for achievement
Self-Confidence
Flexibility
Passion and action-orientation

Question 5

What are the typical entrepreneurial backgrounds and experiences

Answer 5

Basically your typical rags to riches upbringing

Families encouraged responsibility, initiative, and independence
Have tried more than one venture
Relevant personal or career experience
Become entrepreneurs 22 and 45 years of age

Question 6

Name 3 reasons for women and member of visible minorities to become entrepreneurs

Answer 6

Out of necessity
Gain economic independence
Provide a pathway to career success that may be blocked otherwise

Question 7

What are common myths about entrepreneurs?

Answer 7

Born, not made
Gamblers
Money is the key to success
Must have a degree in business

Question 8

Explain Social Entrepreneurship

Answer 8

Mission to help society
Seeks ways to solve social problems
A social mission to serve the underserved populations

Question 9

What makes up a small business?

Answer 9

100 or fewer employees
Independently owned and operated
Accounts for 23% of Canada’s GDP and 48% of private labour work force

Question 10

What is Web-based entrepreneurship?

Answer 10

A business that utilizes the use of the internet

Nearly 85% conduct business on the internet

Question 11

Name some types of Web-based models

Answer 11

Freemium - Open source webpages
Infomediary - Provide info on consumer interests
Merchant - Kijiji, FB Marketplace
Referral - Airbnb, Facebook
Subscription
Advertising
Brokerage
Community

Question 12

Describe a Family Business

Answer 12

Financially owned to family members
Largest percentage of business worldwide
Can provide an ideal business situation

Question 13

What are the 8 reasons small businesses fail?

Answer 13

Lack of:

1. Experience
2. Commitment
3. Strategy
4. Expertise
5. Strategic Leadership
6. Financial control
7. Grow too fast
8. Ethical failure

Question 14

What are some important issues in new venture creation

Answer 14

Good ideas and the courage to give them a chance?Mastering the test of strategy and competitive advantage
Generating a first-move advantage by identifying a new market

Question 15

Whats the Life Cycle of entrepreneurial firms (BBM)

Answer 15

Birth stage
-Fighting for survival
Breakthrough stage
-Coping with growth
Maturity Stage
-Investing wisely and staying flexible

Each stage poses different managerial challenges
and requires different managerial competencies

Question 16

Name some basic items in a business plan

Answer 16

THINK OF IND303/IND400 FINAL REPORT OUTLINE
Executive Summary
Company description
Product and Services
Operations description
Financial projection

Question 17

What are the 4 forms of legal ownership

Answer 17

Sole proprietorship
Partnership
-General
-Limited
-Limited Liability
Corporation
Limited Liability Corporation (LLC)