Chapter 1: The Entrepreneurial Life

Entrepreneurs

-A person who starts and/or operates a business. -Individuals who discover market needs and launch new firms to meet those needs. -Risk takers who provide an impetus for change, innovation, and progress. -All active owner-managers ofsmall businesses.

Silver Entrepreneurs (Baby Boomers)

-Almost a quarter of new businesses were started people ages 55-64 in 2013 -They want to get back (or stay) in the game Lost a job and can't find another like it -Need the income -Want to try something new -Source of personal satisfaction -Repurposing or recycling their skills

Mentors

-Are knowledgeable persons who can offer guidance from their experience in a given field. -Teach entrepreneurs what and how to do. -Show them how to avoid mistakes. -Provide entrepreneurs encouragementwhen needed.

Competitive Advantages of Entrepreneurial Firms

-Customer Focus -Quality Performance -Integrity & Responsibility -Innovation & Globalization -Niche Markets

Millennial Entrepreneurs (Gen-Y)

-Have no fear of technology -Are idealistic and optimistic -Are more collaborative -Build elements of community in the business Start companies while studying entrepreneurship -Fail fast, learn a lot, and keep going

Manager Personality

1 person, 3 personalities: -avoids paternalism -delegates authority -Varies marketing starts -Uses different sales approaches -Seeks multiple financing sources

Small Business

1. Small in size relative to larger competitors (fewer than 100 employees) 2. Localized business operations (except marketing) 3. Financing supplied by one person or small group 4. Has the potential to become more than a "one-person show" 5. Has growth potential

Microbusiness

Provides minimal profits to its owner

Franchisers

____________ are entrepreneurs who make contractual arrangements with established business chains rather than doing everything themselves.

Looking Back At An Entrepreneurial Life

-Proper values and actions lead to a good exit. -Evaluating accomplishments

Entrepreneurial Team

-Two or more people working together as entrepreneurs -Is becoming more common

Technician, Manager, Entrepreneur

1 person, 3 personalities (What 3)

Entrepreneur Personality

1 person, 3 personalities: -asks how business must work -sees the business as a system -visualizes the future -develops strategies for the business by first seeing the whole picture

Technician Personality

1 person, 3 personalities: -Is short-term oriented -Paternalistic -Used only traditional marketing strategies -Reluctant to delegate -Relies on Personal Selling

paradigm shift

A change in how we fundamentally see a situation.

Reluctant Entrepreneur

A person who becomes an entrepreneur as a result of some severe hardship.

(Corporate) Refugee

A person who becomes an entrepreneur to escape an undesirable situation.

Founder

A person who brings a new firm into existence

Opportunistic Entrepreneur

A person with both sophisticated managerial skills and technical knowledge who starts a business

Artisan Entrepreneur

A person with primarily technical skills and little business knowledge who starts a business

Niche Market

A specific group of customers with an identifiable but narrow range of product or service interests.

Satisfaction & Fulfillment

Achieving balance with what do I want to do

Second Stage Entrepreneur

An administrative entrepreneur who overseas the operations of a ongoing bus

Entrepreneurial Opportunity

An economically attractive and timely opportunity that creates value for interested buyers or end users; and owners/investors

Franchisee

An entrepreneur whose power is limited by the contractual relationship with a franchising organization

Gazelle

Another Name for High-potential venture

Pure Entrepreneur

Another name for founder

Lifestyle

Businesses that do not attract investors, but allow their owners to live the way they want to live are called ____________ businesses.

Bootstrapping

Doing more with less in terms of resources invested in a business, and, where possible, controlling the resources without owning them.

C

Entrepreneurs generally think differently about resources than do employee-managers in which of the following ways? a. Managers prefer bootstrapping; entrepreneurs tend to use only their own resources. b. Managers tend to barter for resources; entrepreneurs prefer cash transactions. c. Managers want larger budgets; entrepreneurs work to do more with less. d. Managers take on risk personally; entrepreneurs can offload the risk to equity investors.

D

Entrepreneurs who start and lead small businesses contribute to the economy in which of the following ways? a. They make up the overwhelming majority of all businesses. b. They hire nearly half of all high-tech employees. c. They are increasingly going global, representing 97 percent of all exporters. d. All of the above

High-Potential Venture

Has great prospects for growth

Social Entrepreneurship

Is entrepreneurial activity whose goal is to find innovative solutions to society's most pressing needs, problems, and opportunities.

Personal Fulfillment, Personal Satisfaction, Independence, Financial Rewards

Motivations for founding a company (4)

Financial Rewards

Motivations for founding a company: -Building Personal Financial wealth.

Independence

Motivations for founding a company: -Being my own boss -Controlling my own future -Discretionary time & flexibility

Personal Satisfaction

Motivations for founding a company: -Intellectually challenging -Passion for firm's product or service -Recognition & Respect

Personal Fulfillment

Motivations for founding a company: -Making a difference -sense of belonging & working together

Lifestyle Business

Permits the owner to follow a desired pattern of living

Attractive Small Firm

Provides substantial profits to its owner

Social Entrepreneur

Seeks ways to solve societal and environmental problems that incorporate the triple bottom line of people, profits, and the planet.

B

Small companies are particularly adept at competing with larger companies when they focus on: a. Becoming a low-cost producer. b. Customer service. c. Mass market advertising. d. Gaining a large market share.

Opportunity

The main difference between lifestyle business owners and entrepreneurs is the way they perceive:

Winning the Wrong Game

The nature of the entrepreneurial endeavor reflects personal goals and values.

Crafting a Worthy Entrepreneurial Legacy

The tangible items and intangible qualities passed on to both heirs and society.

microloans

Very small loans, often provided to entrepreneurs in developing countries.

B

Which of the following is MOST descriptive of entrepreneurial passion? a. The more passion an entrepreneur has, the more success he/she tends to have. b. An entrepreneur must have passion, but unchecked passion can be destructive. c. Entrepreneurs should eliminate emotion from consideration and focus only on the facts. d. Passion makes entrepreneurs open to hearing criticism of their ideas.

D

Which of the following statements is NOT one of the desirable traits of entrepreneurs listed by Spinelli and Adams? a. Tolerance of risk b. Opportunity obsession c. Determination d. A domineering attitude