Small Business Management smartbook 2

standard business practice

A business action that has been widely adopted within an industry or occupation.

risk-taking

A person's tendency to tolerate and act where there is a potential risk, or where a positive outcome cannot be fully assured. It is one of the component measures of Individual Entrepreneurial Orientation.

cognition

A person's way of perceiving and thinking about his or her experience.

stakeholder

A person, organization, or entity that has an interest or concern in a particular business or decision.

Expert business professionalization

A situation that occurs when all the major functions of a firm are conducted according to the standard business practices of its industry.

specialized business professionalization

A situation that occurs when businesses have founders or owners who are passionate about one or two of the key business functions, such as sales, operations, accounting, finance, or human resources, and pursues those functions in a professional manner.

proactivity

An attitude describing a person's tendency to go ahead and do something rather than wait to see what will happen or wait for someone else to do it. It is one of the measures used for Entrepreneurial Orientation.

promotion focus

An entrepreneur's attention to maximizing gains and pursuing opportunities likely to lead to gains.

prevention focus

An entrepreneur's attention to minimizing losses, with a bias toward inaction or protective action to prevent loss.

passion

An intense positive feeling an entrepreneur has toward the business or the idea behind the business.

comprehensive planners

Entrepreneurs who develop long-range plans for all aspects of the business.

Critical-point planners

Entrepreneurs who develop plans focused on the most important aspect of the business first.

habit-based planners

Entrepreneurs who do not plan, preferring to let all actions be dictated by their routines

opportunistic planners

Entrepreneurs who start with a goal instead of a plan and look for opportunities to achieve it.

reactive planners

Entrepreneurs with a passive approach, who wait for cues from the environment to determine what actions to take.

industry-specific knowledge

Industry-specific knowledge Activities, knowledge, and skills specific to businesses in a particular industry.

innovativeness

Refers to how important a role new ideas, products, services, processes, or markets play in an organization.

perserverance

The behavior of continued effort to achieve a goal

Professionalization

The extent to which a firm meets or exceeds the standard business practices for its industry.

entrepreneurial mindset

The motivations, cognitions, attitudes, aptitudes, and behaviors that lead to a propensity to create solutions to problems or seek opportunities to do something new or better.

action

The visible behavior a person takes.

business life cycle

business life cycle The sequence or pattern of developmental stages any business goes through during its life span

certification

certification An examination-based acknowledgment that the firm is owned and operated as specified.

competencies

competencies Forms of business-related expertise.

determination competencies

determination competencies Skills identified with the energy and focus needed to bring a business into existence.

emergence stage

emergence stage The first stage of the small business life cycle, where the entrepreneur moves from thinking about starting the business to actually starting the business.

existence stage

existence stage The second stage of the business life cycle marked by the business being in operation but not yet stable in terms of markets, operations, or finances.

family business

family business A firm in which one family owns a majority stake and is involved in the daily management of the business.

family office

family office A private wealth management firm that deals with issues of high-net-worth families and family businesses such as taxes,estateplanning, and and charitable giving.

flexibility rewards

flexibility rewards The ability of business owners to structure life in the way that suits their needs best.

glass ceiling

glass ceiling The idea that an invisible barrier exists that prevents women from rising above certain levels in an organization.

glass cliffs

glass cliffs The phenomenon of placing women in leadership positions that are risky or where organizations are in a precarious state which means they would be more likely to fail in an important role.

growth rewards

growth rewards What people get from facing and beating challenges.

Income rewards

income rewards The money made by owning one's own business.

key business functions

key business functions Activities common to all businesses such as sales, operations (also called production), accounting, finance, and human resources.

liability of newness

liability of newness The set of risks faced by firms early in their life cycles that comes from a lack of knowledge by the owners about the business they are in and by customers about the new business.

micro-commitment

micro-commitment An online action that is quick and easy to make and connects you to the message, but does not require a substantial personal or financial commitment, such a liking or favoriting a post or reposting it to your own social media account.

Minimalized business professionalization

minimalized business professionalization A situation that occurs when the entrepreneur does nearly everything in the simplest way possible, rather than in a professional way.

opportunity competencies

opportunity competencies Skills necessary to identify and exploit elements of the business environment that can lead to a profitable and sustainable business.

organizational culture

organizational culture A set of shared beliefs, basic assumptions, or common, accepted ways of dealing with problems and challenges within a company that demonstrate how things get done.

resource competencies

resource competencies The ability or skill of the entrepreneur at finding expendable components necessary to the operation of the business such as time, information, location, financing, raw materials, and expertise.

resource maturity

resource maturity The resource maturity stage is the most typical fourth stage of the small business. It is characterized by relatively stable or slowly rising sales and profits over several years. In a firm that has a takeoff stage following the success stage, the resource maturity stage occurs after takeoff.

role conflict

role conflict The kind of problem that arises when people have multiple responsibilities, such as parent and boss, and the different responsibilities make different demands on them.

second career entrepreneurs

second career entrepreneur Person who begins a business after having left, retired, or resigned from work. Can include veterans of the armed forces and civilians from a broad range of industries.

set-asides

set-asides Government contracting funds that are earmarked for particular kinds of firms, such as small businesses, minority-owned firms, women-owned firms, and the like.

slack resources

slack resources Profits that are available to be used to satisfy the preferences of the owner in how the business is run.

success stage

success stage The third stage of the business life cycle marked by the firm being established in its market, operation, and finances.

succession

succession The process of intergenerational transfer of a business.

takeoff

takeoff This stage occurs after the success stage for a small percentage of businesses. It is characterized by rapid growth (5-10 percent a month or more). When this growth levels off, the firm enters the resource maturity stage.

time management

time management The organizing process to help make the most efficient use of the day.

veteran entrepreneur

veteran entrepreneur Individual who was formerly in military service who decides to become self-employed as a subsequent career. (Not to be confused with serial entrepreneur.)