34 terms

Chapter 5--Entrepreneurship

process of 1)recognizing a business opportunity, 2) using market research to determine if there is a market for a product or service, and 3) gathering the resources needed to go into business.
A new business undertaking that involves risk
Recommended traits for entrepreneurs
1) risk-taker, 2)
Virtual business
business that operates on the Internet
Most US businesses are
sole proprietorships
One of the biggest obstacles in starting a business
obtaining financing
Business Plan
a written description of a business venture that describes all aspects of the business
A business plan is used by
1) potential investors to see if they want to invest in the business, 2) top management involved in the start-up of a new business, and 3) the entrepreneur to keep focused on the goals of the business
The company description section of a business plan
helps investors understand 1) the size of the business, 2) the scope of the business, and 3) the type of the business
Vision Statement
establishes the scope and purpose of the company
Market Analysis
in a business plan, it includes research about the business' customers
Executive Summary
a brief account of the key points contained in a business plan
Media Plan
in a business plan, this is included in the marketing plan
Small Business Administration
unlike people who run corporations or partnerships, these people do not have to consult with others before making a decision
is owned and run by two or more people
4 out 5 businesses
fail in their first 5 years
market research
research that is done to determine if there is a demand for your product or service
small business
an independently owned business that usually has the owner as its manager
having a special meaning or importance
a general idea
Mission statement
a statement that expresses the specific aspirations of the company
Characteristics of successful entrepreneurs
1) persistent, 2) goal-oriented, 3) creative, 4) risk-taking, 5) action-oriented, 6) independent, 7) self-confident, 8) responsible, 9) inquisitive, 10) restless, 11) self-demanding, 12) enthusiastic
Rewards for entrepreneurship
1) being the boss, 2) doing what you enjoy, 3) having the opportunity to be creative, 4) building an enterprise, 5) developing your own schedule
Challenges of entrepreneurship
1) getting funds to start the business, 2) being fully responsible for the business, 3) feeling alone and insecure about making the right decisions, 4) working long hours, 5) facing uncertain income levels; risking loss of the investment if the business fails
Questions to be included in checklist before starting a venture
1) What will I produce? 2) Who are my main competitors? 3) Why is my product or service needed? 4) How much will my product or service cost to produce? 5) How many people will I need to run the business? 6) What physical facilities will I need? 7) What licenses, permits, or other legal documents do I need? 8) How much money will I need to get started?
Contingency plan portion of business plan
This looks at likely risks to the business ( such as lower-than-expected sales and emergencies) and then suggests a way to minimize the risk
Knowing about business
benefits you as an employee AND a consumer
virtual business
IS a real business
small businesses that use the internet
have grown 45% faster than those that do not
Many successful entrepreneurs
work in a related business before starting their own company
Before starting a business
one needs to do market research to see if there is a demand for a product or service
executive summary of business plan
should be no more than 2 pages in length and include important information from each section of the plan
vision and mission statements
state the guiding principles by which a business functions