Chapter 2

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 HR.

Key Business Functions

Activities common to all businesses such as sales, operations, accounting, finance, and HR.

Industry-Specific Knowledge

Activities, knowledge, and skills specific to businesses in particular industry

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 protection action to prevent loss

Competencies

Forms of business related expertise

Set-asides

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

Passion

Intense positive feeling an entrepreneur has toward the business or the idea behind the business

Five P's of Entrepreneurial Behavior

Passion Perserverance Promotion/Prevention Focus Planning Style Professionalization

Late Career Entrepreneurs

People who begin their businesses after having retired or resigned form work in corporations at age 50 or older

Perseverance

The ability to stick with some activity even when it takes a long time and its outcome is not immediately known

Comprehensive Planners

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

Critical-Point Planners

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

Habit-Driven Planners

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

Opportunistic Planners

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

Reactive Planners

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

Resource Competencies

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

Certification

an examination based acknowledgement that the firm is owned and operated as specified

Succession

the process of intergenerational transfer of a business

Standard Business Practice

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

Minimalized Business Professionalization

A situation that occurs when the entrepreneur does nearly everything in the simplest way possible

Family Business

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

role conflict

problem that arises when people have multiple responsibilities, such as parent and boss, and the different responsibilities make different demands on them

Determination Competencies

skills identified with the energy and focus needed to bring a business into existence

Opportunity Competencies

skills necessary to identify and exploit elements of the business environment that can lead to a profitable and sustainable business