Small Business - Chap 9

Preferred attributes of a sole entrepreneur or a member of a new venture team

1. higher education 2. prior entre. experience 3. relevant industry experience 4. broad social and professional network

board of advisor

A board of advisors is a panel of experts who are asked by a firm's managers to provide counsel and advice on an ongoing basis. Unlike a board of directors, an advisory board possesses no legal responsibility for the firm and gives nonbinding advice. An advisory board can be established for general purposes or can be set up to address a specific issue or need. Many people are more willing to serve on a company's board of advisors than its board of directors because it requires less time and there is no potential legal liability involved. Like the members of a board of directors, the members of a company's board of advisors provide guidance and lend credibility to the firm. -Guidelines to Organizing a Board of Advisors- Advisors will become disillusioned if they don't play a meaningful role in the firm's development and growth. A firm should look for board members who are compatible and complement one another in terms of experience and expertise. When inviting people to serve on its board of advisors, a company should carefully spell out to the individuals involved the rules in terms of access to confidential information.

freelancer

A person who is in business for themselves, works on their own time with their own tools and equipment, and performs services for a number of different clients.

virtual assistant

A type of freelancer who provides administrative, technical, or creative assistance to clients remotely from a home office.

roles of a board of director member

If a new venture organizes as a corporation, it is legally required to have a board of directors. A board of directors is a panel of individuals who are elected by a corporation's shareholders to oversee the management of the firm. A board is typically made up of both inside directors and outside directors. An inside director is a person who is also an officer of the firm. An outside director is someone who is not employed by the firm. Formal Responsibility of the Board A board of directors has three formal responsibilities. Appoint the officers of the firm. Declare dividends. Oversee the affairs of the corporation. Frequency of Meetings and Compensation Most boards of directors meet three to four times a year. New ventures are more likely to pay their board members in company stock or ask them to serve on a voluntary basis rather than pay a cash honorarium.

full or part-time employee

Someone who works for a business, at the business's location, utilizing the business's tools and equipment and according to the business's policies and procedures.

Disadvantages of starting a new venture

Team members may not get along. If two or more people start a firm as "equals," conflicts can arise when the firm needs to establish a formal structure and designate one person as the CEO. If the founders have similar areas of expertise, they may duplicate rather than complement one another. Team members can easily disagree in terms of work habits, tolerances for risk, levels of passion for the business, ideas on how the business should be run, and similar key issues.

Advantages of starting a new venture

Teams bring more talent, resources, and ideas to a new venture. Teams bring a broader and deeper network of social and professional contacts to a new business. The psychological support that the cofounders of a business can offer one another can be an important element of a new venture's success.

skills profile

a chart that depicts the most important skills that are needed and where skills gaps exists.

intern

a person who works for a business as an apprentice or trainee for the purpose of obtaining practical experience.

homogeneous

a team who's areas of expertise are very similar to one another, therefore will have very similar ideas on things.

networking

building and maintaining relationships with people whose interests are similar of whose relationship could bring advantages to a firm

heterogenous team

diverse team pertaining to abilities and experiences

prior entrepreneurial experience

one of the most consistent predictors of future entrepreneurial performance

liability of newness

refers to the fact that companies often falter because the people who started them aren't able to adjust quickly enough to their new roles and because the firm lacks a track record with outside buyers and suppliers.

new venture team

the group of founders, key employees, and advisers that move a new venture from an idea to a fully functioning firm

founding team

when founders decide to not start the firm themselves