Entrepreneurship and Small Businesses Chapter 6

Entrepreneur

Someone who takes a risk in starting a business to earn a profit.

Entrepreneurship

The process of starting, organizing, managing, and assuming the responsibility for a business.

Venture Capital

Money provided by large investors to finance new products and new businesses that have a good chance to be very profitable.

Innovation

An invention or creation that is brand new.

Improvement

A designed change that increases the usefulness of a product, service, or process.

Small Business

An independent business with fewer than 500 employees

Small Business Administration

A government agency that helps small business owners develop business plans and obtain financing and other support for their companies.

Service Corps of Retired Executives (SCORE)

The sponsors of SBA who are retired local businesspeople who volunteer their services to counsel and mentor new business owners.

Entrepreneur characteristics are:

competitive; | creative; | energetic; | goal oriented; | independent; | inquisitive; | persistent; | reliable; | self-confident

Successful Entrepreneurs have:

the ability to partner; | secure resources; | spot opportunity; | the capability to learn from failure; | personal initiative; | problem-solving skills; | strong integrity; | tolerance for ambiguity; | willingness to work hard.

Entrepreneur opportunities

begin with innovations such as ideas about new products and services or improvements on ideas for changes to existing products, services, or processes.

10%

is the percentage of Americans that are involved in some type of entrepreneurial activates

Businesses started by Entrepreneurs close due to

lack of adequate capital; | low sales; | higher than expected expenses; | competitive pressure; | The owner was unprepared to manage a growing business; | Operations requiring more time than the owner is willing to commit.

A large number of small businesses

are professional, scientific, and technical SERVICES

women

own 1/4 or 25% of all small businesses

Small Business Advantages

providing more personalized services and products to their customers, such as providing for smaller or specialized orders that large companies can not easily provide.

Common Small Business failures

Not keeping adequate records; | Not having enough start-up money; | Lack of management experience; | experience with the type of business; | not controlling operating expenses; | poor location for the business; | failure to manage credit offered to custom

Description of a small business

The owner is usually the manager; | it operates in one or very few locations; | it typically serves a small market; | it is not dominant in its field.

Risk-Taking and Innovation

is strongly encouraged by the American enterprise system.

Teens

is the age of most entrepreneurs when they start their first businesses.

High Demand for a product or services

is the best time to start a new small business because already-established companies may not be able to meet customer needs

American Employment

most Americans are employed by small businesses