ENTREPRENEURSHIP CHAPTER 1

The American Recovery and Reinvestment Act of 2009

- $30 billion in tax relief for small businesses - $13 billion in loans, lines of credit, and equity capital

business success or failure

- 67% of new business survive at lest 2 years - 44% of new businesses survive at least 4 years

sources of information (4)

- Internet - library - County Business Patterns - Small Business Administration

small businesses: (4)

- are an important part of the economic recovery - are willing and able to make changes quickly - are more creative than large companies (their experimentation and innovation lead to technological change and increased productivity)

good team members display these traits (5)

- commitment - competency (knowing what you're doing) - cooperation - creativity

success rates can be enhanced if businesses (2)

- have adequate capital - are large enough to have employees

ideas come from a variety of sources including (3)

- hobbies and interests - past experiences - discovery or invention

successful entrepreneurs are (8)

- independent - self-confident - determined - goal-oriented - achievement-oriented with high standards - creative - able to act quickly - technologically current

types of entrepreneurial businesses (4)

- manufacturing - wholesaling - retailing - service

non-financial goals may include

- personal satisfaction - serving a community need - doing something you like - enjoying personal independence

financial goals should be: (3)

- realistic - measurable - easily attainable in the time allotted

disadvantages of entrepreneurship

- risk - uncertain and irregular incomes - long hours - all decisions are made independently

to test your suitability for entrepreneurship, you should consider your

- strengths and weaknesses - hobbies and interests - past experiences - aptitude

why do people become entrepreneurs? (3)

- to set your own schedule - to work out of your home - to pursue a personal dream

for each business opportunity, you should consider: (6)

- will people buy my product of service? - how much money is required to start the business? - how many hours per week will it take to run the business? - what are the risks associated with this business? - do I have the right background to run this business? - how much money could I make running this business?

the problem-solving model's 6 steps

1. Define the problem 2. Gather information 3. Identify various solutions 4. Evaluate alternatives and select the best option 5. Take action 6. Evaluate the action

entrepreneurs must realize that there are other stakeholders in their business such as A) partners B) investors C) employees D) all of these

D) all of these

advantages of entrepreneurship

entrepreneurs - are their own bosses - can choose a business that interests them - can be creative - can make large sums of money (nobody tells them what to do)

true/false: an advantage of entrepreneurship is that owners make all decisions by themselves.

false

true/false: everyone has the qualities and aptitude needed to become a successful entrepreneur.

false

true/false: successful entrepreneurs need to be self-confident because they must make decisions alone, but they do not need to be creative because they can hire creative people.

false

how much money you want to earn is a _____ goal

financial

two key factors that aid an entrepreneur's commitment to a business are

interests and past experiences

analyzing _____ experiences and jobs can help you come up with ideas for a business you would enjoy owning

past

entrepreneurs

people who own, operate, and take the risk of a business

employees

people who work for someone else

opportunities

possibilities that arise from existing conditions

brainstorming

problem-solving technique that generates many fresh ideas

if it is not possible to quantify the alternatives in the fourth step of the problem-solving model, the decision maker may _____ each alternative

rank

_____ businesses sell products directly to the people who use or consume them

retail

in comparing different business opportunities, you should look at the particular _____ associated with the business

risks

trade shows

special meetings where companies of the same or related industry display their products,

aptitude

the ability to learn a particular kind of job

businesses may fail if

the owner lacks business knowledge

entrepreneurship

the process of running a business of one's own

ideas

thoughts or concepts that come from creative thinking

true/false: before starting a business, it is important to identify the kinds of entrepreneurial opportunities that match your aptitudes and interests.

true

true/false: entrepreneurs need to be able to make quick decisions.

true

true/false: entrepreneurship involves risk, which is both an advantage and a disadvantage.

true

true/false: many companies began with one person who started a business based on a single opportunity.

true

true/false: small firms, with fewer than 500 employees, represent 99.9% of American businesses.

true

true/false: to determine if entrepreneurship is right for you, you need to perform a self-assessment.

true

true/false: your past experiences are a key factor in determining your commitment to a business.

true

entrepreneurs try to identify the _____ of the marketplace; they provide a service or product

unmet needs

researchers have determined that successful entrepreneurs

want to make their own decisions

risk is

both an advantage and a disadvantage of entrepreneurship

self-assessment

an evaluation of your strengths and weaknesses