Busi 1301 chapter 5 terms and questions

Why do people become entrepreneurs?

1. Be their own boss 2. Pursue their own ideas 3. Pursue Financial Rewards

small business

A business with under 500 employees that is independently managed, is owned by an individual or a small group of investors, is based locally, and is not a dominant company in its industry.

debt

A form of business financing consisting of borrowed funds that must be repaid with interest over a stated time period.

business plan

A formal written statement that describes in detail the idea for a new business and how it will be carried out; includes a general description of the company, the qualifications of the owner(s), a description of the product or service, an analysis of the market, and a financial plan.

Small Business Administration (SBA)

A government agency that speaks on behalf of small business; specifically it helps people start and manage small businesses, advises them in the areas of finance and management, and helps them win federal contracts.

checklist for starting a business

Identify your reasons Self-analysis Personal skills and experience Finding a niche Conduct market research Plan your start-up: write a business plan Finances: how to fund your business

Angel Investors

Individual investors or groups of experienced investors who provide financing for start-up businesses by investing their own funds.

_____ are entrepreneurs who apply their creativity, vision, and risk taking within a large corporation rather than starting a company of their own. They enjoy a high degree of autonomy while receiving a regular salary and financial backing from their employer.

Intrapreneurs

Entrepreneurial personality traits

Ambitious Independent self-confident Risk-taker Visionary Creative Energetic Passionate Committed

what characteristics do successful entrepreneurs share?

Being an entrepreneur requires special drive, perseverance, passion, and a spirit of adventure, in addition to managerial and technical ability. Entrepreneurs are the company; they tend to work longer hours, take fewer vacations, and cannot leave problems at the office at the end of the day. They also share other common characteristics as described in the next section.

what are the types of entrepreneurs?

Classic entrepreneurs, multi-preneurs, and intrapreneurs

Intrapreneurs

Entrepreneurs who apply their creativity, vision, and risk-taking within a large corporation, rather than starting a company of their own.

Key Elements of a Business Plan

Executive summary Vision and mission statement Company overview Product and/or service plan Marketing plan Management plan Operating plan Financial plan Appendix of supporting documents

Established small businesses are defined as companies that have been in business at least fifteen years and employ between 50 to 500 employees.

False

The two sources for debt financing are angel investors and venture capitalists

False

venture Capital

Financing obtained from venture capitalists, investment firms that specialize in financing small, high-growth companies and receive an ownership interest and a voice in management in return for their money.

Small business investment company (SBIC)

Privately owned and managed investment companies that are licensed by the Small Business Administration and provide long-term financing for small businesses.

Micropreneurs are entrepreneurs who start small and plan to stay small.

True

Equity

a form of business financing consisting of funds raised through the sale of stock in a business.

Multipreneurs

are entrepreneurs who start a series of companies. thriving on the challenge of building a business and watching it grow.

classic entrepreneur

are risk-takers who start their own companies based on innovative ideas aka micropreneurs- who start small and plan to stay small

what are the first steps in starting your own business?

business is a self-assessment to determine whether you have the personal traits you need to succeed and, if so, what type of business would be best for you.

Mark Ghermizian had quit his job and was looking to start a small business so he could be his own boss. When he read that people spend up to fifteen minutes every day staring at a bathroom stall door, he decided he would find advertisers who wanted to pay to have their advertising messages on bathroom stall doors. Since he has his idea, Ghermizianâ s next step is to:

choose a form of business organization

A well-written business plan should contain:

executive summary or company overview a marketing plan a vision and mission statement a management plan

In 2000, Eric Baker and Jeff Fluhr came up with a concept that would do away with scalping if they had their wish, and everyone used StubHub.com. The Internet company brings people who want tickets and people who have tickets that they are not using together. The company has assisted in the sale of tens of millions dollars worth of tickets annually and is always trying to sell more. It charges a small fee for its assistance. Baker and Fluhr would be classified as:

growth-oriented entrepreneur

Lachlan Stuart is employed by International Paper, a company that values his vision and creativity. To stay ahead in a very competitive industry, International Paper gives Stuart, and his division has almost complete autonomy to develop innovative and effective communications. Stuart is an example of a(n):

intrapreneur

Michael Bronner made a killing in the direct marketing business as the cofounder and CEO of Bronner Slosberg Humphrey, a wildly successful direct-marketing firm. His newest venture, Upromise Inc., enlists some of America's largest corporations to help families pay for college and is extremely successful. The 40-year-old Bronner will more than likely start at least one more new company before he retires because Bonner is a(n):

multipreneur

What are 3 ways small businesses can be defined?

new/start-up businesses, the number of employees, total revenue, length of time in business, nonemployees, businesses with employees, geographic location, and so on.

Entrepreneur

people with vision, drive, and creativity who are willing to take the risk of starting and managing a business to make a profit, or greatly changing the scope of direction of an existing firm.

How do small businesses contribute to the US economy?

representing about half of U.S. economic output, employing about half the private sector workforce, and giving individuals from all walks of life a chance to succeed.

growth-oriented entrepreneurs

want their business to grow into a major corporation

Angel investors are

wealthy individuals who invest in start-ups