Chapter 1 ENT3003

Buying a Small Business

Buying a small business is another way to enter the world of entrepreneurship.

If a work colleague tells you about his new work venture over lunch, you should tell your boss.

False -Your work colleague has every right to create a new venture as long as he is not doing it during regular business hours and is using his own funds.

Entrepreneurship is linear and predictable.

False /Nobody ever says being an entrepreneur is easy because it is nonlinear and unpredictable.

The entrepreneurship method allows entrepreneurs to avoid uncertainty.

False/ Uncertainty is common among entrepreneurs.

Only highly trained people have the ability to think and act entrepreneurially.

False/Everyone has the ability to think and act entrepreneurially, you just have to practice.

Why don't the same processes that help large corporations succeed work as well for entrepreneurial ventures?

Following steps in a process relies on past history to predict the future of the business and new ventures don't have any history to draw from. /New ventures don't have past practices to learn from or rules to follow. A process with pre-defined steps relies too much on past history to predict the future.

Which of the following is part of deliberate practice?

Identify weaknesses and improve on them. /Setting goals beforehand, consistency, and continuous feedback are all part of deliberate practice.

What is one of the "pros" of owning a franchise?

It offers a ready-made business system. /Having a ready-made business system may help you to become an operational quicker.

One of the most common mistakes of entrepreneurs is to

O be overly optimistic and confident

The more you practice, the better you will be at whatever you are practicing.

Researchers have found that it depends on how you practice.

Serial Entrepreneurship

Serial entrepreneurs, also known as habitual entrepreneurs, are people who start several businesses, either simultaneously or consecutively.

Deliberate practice can actually have positive effects on your brain.

True /When certain brain cells sense a lot of focused repeated activity, chemicals are produced to create myelin-a fatty, white tissue that increases the speed and strength of neural impulses, thereby improving performance.

We think more like entrepreneurs at a young age.

True /You understand learning by trial and error.

A less risky way to become an entrepreneur is to buy an existing small business.

True/Buying an existing small business is a less risky way to become an entrepreneur because th existing business already has an existing customer base and the new owner can just take over the operations from the previous owner.

Royalties:

a share of the income of a business paid by a franchisee to the franchisor.

A franchise is often referred to

as a "turnkey operation."

A subcategory of social entrepreneurship is the

benefit corporation, or B Corp. is a form of organization certified by the nonprofit B Lab that ensures that strict standards of social and environmental performance, accountability, and transparency are met.

When you invite your friends to a dinner party and ask them to bring an ingredient of their choice, you are thinking like a(n)

entrepreneur /You are thinking like an entrepreneur.

Corporate Entrepreneurship

entrepreneurship (also ... known as ......... intrapreneurship) is a process of creating new products, ventures, processes, or renewal within large corporations.

One of the 7 truths of entrepreneurship is___

entrepreneurship is a life skill /Entrepreneurship provides individuals with the ability to think and take control of personal goals.

Research has shown that if you continue to practice over and over, you______

plateau /We have heard that practice makes perfect, but more deliberate practice provides better results.

SELECT ALL THAT APPLY. Which of the following should be considered when calculating affordable loss?

*Reputation *Time *Money You must consider what you are truly willing to give up in terms of money, reputation, time, and opportunity cost.

Entrepreneurship Inside

Entrepreneurs inside are employees who think and act entrepreneurially within different types of organizations.

Most entrepreneurs are instantly successful.

False

An entrepreneurial venture tends to have lots of data and tools to predict outcomes.

False /Big organizations tend to have lots of information to use to make good decisions, while entrepreneurial ventures do not.

In what type of thinking are you more likely to apply a straightforward approach to problems and opportunities?

Managerial /Managers of corporations use a more systematic approach to analyzing past and present data.

Our lives change due to the work of entrepreneurs, regardless of current economic conditions.

True

A method is a systematic way of approaching a task.

True Unlike a process, which involves steps, a method is systematic involving phases of learning.

One of the main reasons over 50 percent of startups fail after years of business is____

a lack of entrepreneurship education/So many entrepreneurs lack the education and ability to work through messiness.

What is a startup?

an idea for a scalable business model - A startup is an idea that needs to be tested to find out if it can be developed into an independent business, joined with another organization, or purchased by another company.

SELECT ALL THAT APPLY, Which one of the following is identified as one of the four main traits of entrepreneurs in early research?

an innate sense of having the ability to influence events a tendency to take risks a need for achievement

social entrepreneurship

as the process of sourcing innovative solutions to social and environmental problems

Large corporations have corporate entrepreneurs to

enhance competitive position People may not think about corporate entrepreneurship, but this development helps keep corporations profitable.

The process of creating new products, ventures, processes, or renewal within large corporations is

intrapreneurship/ Intrapreneurship, also known as corporate entrepreneurship, seeks ways to innovate from within the current structure and process of a corporation.

Family Enterprising

is a business that is owned and managed by multiple family members, typically for more than one generation.

Entrepreneurship is

nonlinear and unpredictable

deliberate practice

which involves carrying out carefully focused efforts to improve current performance.

Throughout the ages, entrepreneurs have made changes to the world with inventions such as Benjamin Franklin's

lightning rod

Assumptions Underlying the Entrepreneurship Method

-It applies to novices and experts regardless of experience levels. -It is inclusive, which means it works for any organization at any stage of business. -It requires continuous practice with a focus on doing in order to learn. -It is designed for an unpredictable environment. -It changes how we think and act in ambiguous situations. -It helps you get unstuck when you are trying to start something new.

Entrepreneurship as a method requires

learning as you go /Entrepreneurship as a method requires you to learn and practice while you go, reflecting on the events you experience along the way.

If you follow the entrepreneurship method, a change in mindset will lead to new skills and

smarter work /The entrepreneurship method alone does not have a magic formula for success.

Entrepreneurs tend to

take calculated risks -Entrepreneurs are calculated risk-takers and gauge what they are willing to lose.

SELECT ALL THAT APPLY. The entrepreneurship method emphasizes smart action and moving quickly providing which of the following assurances?

-You will do the things you can and you will try to do the things you can't. -You will act sooner, even if you do not know what to do. -You will fail sooner, giving you the ability to make changes for the next iteration. You are starting to see the ways of the entrepreneurial method.

Approximately______ of family businesses fail or are sold before the next generation takes over.

70% Yes, it is true that about 70% of family businesses fail or are sold before the second generation takes over.

Franchising

A franchise is a type of license purchased by an individual (franchisee) from an existing business (franchisor) that allows the franchisee to trade under the name of that business. In this type of entrepreneurship, both the franchisor (the founder of the original business) ànd the franchisee are entrepreneurs.

If an entrepreneurial employee is not certain about future conflicts between her side job and her company, what is her most logical first step?

Disclose the basic information to a human resources representative. /She should carefully consider whether the conflict is possible and if so, contacting human resources is the most logical choice.

An important part of the entrepreneurship practice is to network and share your ideas.

True -It helps to collaborate and share your ideas along the way in order to expand the possibilities and validate your decisions.

When you are starting your new company, you

should check your employment contract for any language prohibiting you from working a side job /concerns come up as you transition from your steady employer to your new venture.

Effectuation

which is the idea that the future is unpredictable yet controllable.

When considering an entrepreneurial idea, it is important to

reflect and be honest with yourself. /One of the eight components is to be honest with yourself and properly reflect on your idea.

1Components of Deliberate Practice

• Requires high levels of focus, attention, and concentration. • Strengthens performance by identifying weaknesses and improving on them. • Must be consistent and be maintained for long periods ortime. • Must be repeated to produce lasting results. • Requires continuous feedback on outcomes. • Involves setting goals beforehand. • Involves self-observation and self-reflection after practice sessions are completed.