Intro to Business Ch6
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Created by:
alexandrabrown1 on March 9, 2011
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16 terms
Terms | Definitions |
|---|---|
 Entrepreneurship | The process of creating and managing a business to achieved desired objectives is our working definition for entrepreneurship. "The willingness to get something new done." |
| Small Business | any independently owned and operated business, not dominant in its competitive area, employing less than 500 people |
| 55% of all ____ | _____are by small businesses |
| Industries that attract small businesses | Retailing and wholesaling, services, manufacturing and high technology are especially attractive to entrepreneurs |
| Traits needed to succeed in entrepreneurship | Neuroticism, Extraversion, Conscientiousness, Agreeableness, Openness to innovation |
| Advantages to Small Business Owners | Costs Flexibility Focus Reputation |
| Disadvantages of Small Business Ownership | High Stress Level High Failure Rate 90% of all new businesses fail within the first 5 years Undercapitalization Lack of funds to operate a business normally Managerial Inexperience or Incompetence Inability to Cope with Growth |
| How to start a small business | Start with a concept or general idea Devise a strategy to guide planning & development Make Decisions Form of ownership Financial resources needed Acquire existing business Start a new business Buy a franchise |
| Business Plan | a precise statement of the rationale for the business and a step-by-step explanation of how it will achieve its goals. Acts as a guide and reference document. Explanation of the business Analysis of competition Income/Expense estimates |
| Business Plan Process | Situation Analysis Personal Objectives Business Definition Business Objectives Strategies and Tactics Forecasts and Budget Written Document Review and Control |
| Equity Financing | selling or borrowing against the value of an asset (automobile, insurance policy, savings account) to obtain funds to operate a business. |
| Debt financing | borrowing financial resources typically from a bank or lending institution The SBA (Small Business Administration) offers financial assistance to qualifying businesses |
| Line of credit | an agreement by which a financial institution promises to lend a business a predetermined sum on demand. |
| Franchising | A license to sell another's products or to use another's name in business, or both |
| Future for Small Businesses | Technological & Economic Trends Internet usage continues to increase Increase in service exports Economic turbulence Deregulation of the energy market & alternative fuels |
| Big Businesses Acting Small | Large firms emulate smaller ones to improve bottom line Downsizing or rightsizing Acting small from inception - Southwest Airlines Intrapreneurs - individuals in large firms who take responsibility for the development of innovations within the organization |
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