Small Business Management- Packet 1 Flashcards
- Comprise 99.7% of all firms with employees
- Employ over 50% of employees in the private sector.
- Acount for 45% of private payrolls
- Generated 60-80% of net new jobs in the past decade.
- Create more than half of the country’s GDP
- Hire 40% fo high-tech employees
- Represent 97.3% of all exporters
Small Businesses
- A person who starts and/or operates a business.
- Individuals who discover market needs and launch new firms to meet those needs.
- Risk takers who provide an impetus for change, innovation, and progress.
- All active owner-managers (founders and/or managers or small businesses).
Entreprenuers
- Business’ size smaller relative to larger competitors.
- Fewer than 100 employees
- Localized business operations (except marketing).
- Financing supplied by one person or small group.
- Has the potential to become more than a “one-person show.”
Criteria for Defining Smallness in Business
An economically attractive and timely opportunity that creates value for interested buyers or end users.
Entrepreneurial Opportunity
A person who becomes an entreprenuer as a result of some severe hardship.
Reluctant Entreprenuer
A person who becomes an entreprenuer to escape an undesirable situation.
Refugee
A person who brings a new firm into existence.
Founder (“Pure” Entreprenuer)
An entreprenuer who oversees the operations of a ongoing business.
Administrative Entreprenuer (Second-Stage)
An entreprenuer whose power is limited by the contractual relationship with a franchising organization.
Franchisee
Two or more people working together as entreprenuers.
- Becoming more common.
Entreprenuerial Team
- Founder (“Pure” Entreprenuer)
- Administrative Entreprenuer (Second-Stage)
- Franchisee
- Entrepreneurial Team
The Many Varieties of Entrepreneurship
- High potential venture (Gazelle)
- Attractive small firm
- Microbusiness
- Lifestyle business
Small Business Growth Potential and Profits
Has great prospects for growth.
High-Potential Venture (Gazelle)
Provides substantial profits to its owner.
Attractive Small Firm
Provides minimal profits to its owner.
Microbusiness
Permits the owner to follow a desired pattern of living.
Lifestyle Business
A person with primarily technical skills and little business knowledge who starts a business.
Artisan Entrepreneurs
- Take a paternalistic approach
- Are reluctant to delegate
- Use few sources of capital
- Have a traditional marketing strategy
- Focus on personal sales effort
- Have a short planning horizon
- Uneven record keeping
Characteristics of Artisan Entreprenuers
A person with both sophisticated managerial skills and technical knowledge who starts a business.
Opportunistic Entreprenuer
- Broad based education
- Scientific approach to problems
- Willing to delegate
- Broad view of strategy
- Diversified marketing approach
- Longer planning horizon
- Sophisticated accounting and financil control
Characteristics of Opportunistic Entreprenuers
- More women than men are starting new businesses.
- 40% of all businesses are now majority female-owned.
- Movement of women into nontraditional industries.
More Women Entrepreneurs
- Discriminatino and difficulties related to gender
- Lack of access to credit
- Lack of networking connections
- Balancing work and family life.
Problems Facing Female Entrepreneurs
- Have no fear of technology
- Are idealistic and optimistic
- Are more collaborative
- Build elements of community in the business
- Start companies while studying entrepreneurship
- Fail fast, learn a lot and keep going.
Millennial Entrepreneurs
- Strong committment to the business (Tenacity)
- Strong internal locus of control. (Self-reliance)
- Moderate risk takers (Financial, career, psychic risks).
Characteristics of Successful Entrepreneurs
