Chapter 5 Management – Flashcards
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Entrepreneurhsip
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Is the process of planning, operating, and assuming the risks of a business venture.
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Entrepreneneur
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someone who engages in entreprenurship
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Small business
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a business that is privately owned by one individual or a small group of individuals and has sales and assets that are not large enough to meaningfully influence its environment
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Established market
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a market in which several large firms compete according to relatively well-defined criteria
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Niche
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a segment of a market not currently being exploited
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First-mover advantage
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any advantage that comes to a firm because it exploits an opportunity before any other firm
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Business plan
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a document that summarizes the business strategy and structure
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Venture capital companies
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a group of small investors seeking to make profits on companies with rapid growth potential
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Franchising agreements
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a contract between an entrepreneur (the franchisee) and a parent company (the franchiser); the entrepreneur pays the parent company for the use of its trademarks, products, formulas, and business plans
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Services (Strategy for Entrepreneurial Organizations)
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primarily because they require few resources, services businesses are the fastest-growing segment of small-business enterprise
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Retailing (Strategy for Entrepreneurial Organizations)
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sells directly to consumers products manufactured by other firms.
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Construction (Strategy for Entrepreneurial Organizations)
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about 11.72% of business with fewer than 20 employees are involved in construction. because many construction jobs are relatively small, local projects, local construction firms are often ideally suited as construction.
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Finance and Insurance (Strategy for Entrepreneurial Organizations)
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business comprise about 4.2% of all firms with fewer than 20 employees.
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Wholesaling (Strategy for Entrepreneurial Organizations)
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small-business owners often also do very well in wholesaling; about 5.2% of business with fewer than 20 employees are wholesalers.
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Transportation (Strategy for Entrepreneurial Organizations)
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some small firms-about 2.8% of all U.S. companies with fewer than 20 employees- do well in transportation and transportation-related business.
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Manufacturing (Strategy for Entrepreneurial Organizations)
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More than any other industry, manufacturing lends itself to big business - and for good reason.
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Identifying New Markets
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successful entrepreneurs also excel at discovering whole new markets.
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Buying an Existing Business (Starting the New Business)
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After choosing a product and making sure that the choice fits their own skills and interests, entrepreneurs must decide whether to buy an existing business or to start from scratch.
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Starting From Scratch (Starting the New Business)
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A new business does not suffer the ill effects of a prior owner's errors. The start-up owner is also free to choose lenders, equipment, inventories, locations, suppliers, and workers, unbound by a predecessor's commitments and policies.
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Personal Resources (financing the New business)
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According to a study by the National Federation of Independent Business, an owner's personal resources, not loans, are the most important source of money.
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Strategic Alliances (financing the New business)
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are also becoming a popular method for financing business growth.
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Lenders (financing the New business)
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Although banks, independent investors, and government loans all provide much smaller portions of start-up funds than the personal resources of owners, they are important in many cases.
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Venture Capital Companies (financing the New business)
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are groups of small investors seeking to make profits on companies with rapid growth potential.
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Small-Business Investment Companies (financing the New business)
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taking a more balanced approach in their choices than venture capital companies, small-business investment companies seek profits by investing in companies with potential for rapid growth.
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SBA Financial programs
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has offered more than 20 financing programs to small businesses that meet standards of size and independence.
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Emergence of E-Commerce (Trends in Small-Business Start-Ups)
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one of the most significant recent trends in small-business start-ups is the rapid emergence of electronic commerce.
