Understanding Business Chapter 6

More personal ______________________ service and the ability to respond quickly is an advantage for small businesses.

customer

In addition to good ideas, entrepreneurs must

have a burning desire to realize and actualize their dream want to see their dream become reality be action oriented

Small Business Investment Company (SBIC) Program

A program through which private investment companies licensed by the Small Business Administration lend money to small businesses.

Entrepreneurship

Accepting the risk of starting and running a business.

Which of the following characteristics are needed to become a successful entrepreneur?

Action-oriented Tolerant of uncertainty Initiative

Small Business

Business that is independently owned & operated is not dominant in its field of operation meets certain standards of size in terms of employees or annual receipts.

Incubators

Centers that offer new businesses low-cost offices with basic business services According to a recent study, offering low-cost offices with basic services to new businesses in the early stages of development results in an 87% success rate of incubator graduates.

Intrepreneurs

Creative people who work as entrepreneurs within corporations.

Micropreneurs

Entrepreneurs willing to accept the risk of starting and managing the type of business that remains small, lets them do the kind of work they want to do, and offers them a balanced lifestyle.

Market

People with unsatisfied wants and needs who have both the resources and the willingness to buy.

Chris spent his own money on marketing research, and consulted his sister Kara, who is an accountant. They spent the next few months writing a business plan. What are some business functions Chris has addressed?

Planning Financing Marketing

Enterprise Zones

Specific geographic areas to which governments try to attract private business investment by offering lower taxes and other support.

Small Business Adminstration (SBA)

US government agency that advises and assists small businesses by providing management training and financial advice and loans.

marketing research study may help you determine which of the following?

Whom to select as your target market What is an effective strategy for reaching your target market Where to locate

Select the characteristics of an intrapreneur.

a creative person who works within a corporation he or she generates profits by leveraging a firm's human financial and physical resources. someone who uses company's resources to launch new products

Service Corps of Retired Executives (SCORE)

an SBA office with volunteers from industry, trade associations, and education who counsel small businesses at no cost (except for expenses)

Among the hurdles small businesses must overcome in starting to operate globally are:

bureaucratic paperwork difficulty finding financing understanding cultural differences

When writing a business plan, it is important to:

calculate how much money you need to start analyze the competition

Individuals who possess such attributes as being self-directed, action-oriented, and tolerant of uncertainty can make excellent ______________________ like Bill Gates and Steve Jobs.

entrepreneurs

Many _______________ use their time, money, and energy to turn their passions into sustainable businesses. They are comfortable being their own bosses and are not afraid of failure.

entrepreneurs

Since entrepreneurs can't compete with larger firms' pay and benefits, what are three ways they can motivate employees?

maintain good employee relations provide more challenging opportunities to learn be respectful of employees' opinions

Entrepreneurs start a business with the desire to grow the business and generate wealth while _________________start a business that will stay small, allowing them to have a balanced lifestyle and the ability to do the kind of work they want to do.

micropreneurs

Two advantages small firms have over large firms include more personal customer service and the ability to respond quickly to:

opportunities

Some common causes of small business failure include:

starting with too little capital underpricing or overpricing goods or services no experience in that business or industry

Learning from others is a useful way to avoid pitfalls when starting a small business. Some things you may be told would include:

that finding and retaining good workers is hard starting with enough money to hire a good lawyer and accountant

A business plan is a detailed written statement that describes:

the target market the resources and qualifications of its owner(s)

Entrepreneurial attributes include:

tolerant of uncertainty highly energetic action-oriented

Select the characteristics of an entrepreneurial team that will be developing and marketing a new product.

1. each from different areas of business 2. a group of experienced people 3. members have complementary skills and are creative

Affiliate Marketing

An Internet-based marketing strategy in which a business rewards individuals or other business (affiliates) for each visitor or customer the affiliate sends to its Web site.

Business Plan

Detailed written statement that describes the nature of the business, the target market, the advantages the business will have in relation to competition the resources and qualifications of the owner(s). Includes: cover letter - most attractive points of your project in as few words as possible executive summary - A short description of the business along with major goals and objectives company background - describes company operations to date (if any), potential legal considerations, and areas of risk and opportunity. This portion also summarizes the firm's financial condition, and includes past and current balance sheets, income and cash flow statements. management team - job descriptions of listed positions resumes of current and proposed executives an organizational chart financial plan - how you plan to fund the business at various stages of the company's growth capital required marketing plan - covers patents location analysis manufacturing plan appendix

Entrepreneurial Team

Group of experienced people from different areas of business who join together to form a managerial team with the skills needed to develop, make and market a new product.

Venture Capitalists

Individuals or companies that invest in new businesses in exchange for partial ownership of those businesses.

Which of the following are good ways to learn how to run your own business?

Talk to other business owners Work for a successful entrepreneur Run a small business during your off hours

Most entrepreneurs do not get their ideas from a flash of inspiration; they come more from their passions or looking at problems.

True

Becoming a(n) __________________ is one of the best ways to learn about how to run a business

apprentice

David opened his own bicycle shop 30 years ago, and although he enjoyed his work, he needed more free time. When Josie requested to work as an apprentice, David was very willing. Before long Josie was able to run the store without any help. This is an example of how:

apprenticeships can benefit both the business owner and the apprentice

In 2019,online retail sales reached over $365 ______________ , or approximately___________________ percent of all retail sales.

billion 12

Jason has prepared a comprehensive ______________________ ___________________ which includes a cover letter, executive summary, company background, management team, financial plan, capital required, marketing plan, location analysis, manufacturing plan, and an appendix.

business plan

A good business plan takes a lot of time to write, but you have only a few minutes to convince readers not to throw it away. This is why your ______________________________summary is very important.

executive

Because investors want to be protected against any possible mishaps, it is also a good idea to include a description of __________________ coverage in the Company Background portion of the business plan.

insurance

___________________________businesses are businesses that are independently owned and operated, are not dominant in their field of operation, and meet certain standards of size in terms of employees or annual receipts.

small

The principles of management are similar for a small neighborhood business and a giant global firm

true

Select reasons why people become entrepreneurs.

Profit Independence Opportunity

After working for a large auto manufacturing company for over 20 years, Silvia decided to start her own auto accessory store. While facing new challenges every day, Silvia enjoys being free to manage her company as she desires. This example illustrates:

why people take the risks of entrepreneurship