Small Business Management Exam #1
late career entrepreneurs
(also known as second career entrepreneurs ) People who begin their businesses after having retired or resigned from work in corporations at age 50 or later.
promotion/prevention focus
A focus on maximizing gains while minimizing loses
sponsored link
A form of paid advertising that gets your company's website at the top of a search list.
search engine optimization
A general approach to website design intended to result in the site being displayed toward the beginning of a search engine's (e.g., Google, Yahoo!, etc.) listing for that term.
license
A legal agreement granting you rights to use a particular piece of intellectual property.
reciprocal links
A listed, live connection to a different website, which in turn displays a similar link to the first website.
efficiency-driven economy
A nation where industrialization is becoming the major force providing jobs, revenues, and taxes, and where minimizing costs while maximizing productivity (i.e. efficiency) is a major goal. Entrepreneurship levels are moderate.
factor-driven economy
A nation where the major forces for jobs, revenues, and taxes come from farming or extractive industries like forestry, mining, or oil production. Entrepreneurship levels are high.
innovation-driven economy
A nation where the major forces for jobs, revenues, and taxes come from high-value added production based on new ideas and technologies and from professional services based on higher education. Entrepreneurship levels are low.
Small Business Administration
A part of the U.S. government, which provides support and advocacy for small businesses
task environment
A part of the external environment made up of those components that the firm deals with directly such as customers, suppliers, consultants, media, interest groups, and the like.
royalty
A payment to a licensor based on the number or value of licensed items sold.
pilot test
A preliminary run of a business, sales effort, program, or Web site with the goal of assessing how well the overall approach works and what problems it might have
virtual instant global entrepreneurship
A process that uses the Internet to quickly create businesses with a worldwide reach.
expert 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 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 human resources.
minimalized professionalization
A situation that occurs when the entrepreneur does nearly everything in the simplest way possible.
entrepreneurial alertness
A special set of observational and thinking skills that help entrepreneurs identify good opportunities; the ability to notice things that have been overlooked, without actually launching a formal search for opportunities, and the motivation to look for opportunities.
RSS feed
An Internet messaging service that pushes (sends) whatever web material you specify to subscribers to that feed.
sustainable entrepreneurship
An approach to operating a firm or a line of business which identifies, creates and exploits opportunities to make a profit in a way that can minimize the depletion of natural resources, maximize the use of a recycled material, or improve the environment.
effectuation
An approach used to create alternatives in uncertain environments.
reverse auction
An auction in which the low bid gets the business or wins.
billboard principle
An ethical model that asks whether someone would be comfortable having his or her decision and name advertised on a billboard for the public to see.
universalism
An ethical model that suggests that there is a code of right and wrong that everyone can see and follow.
utilitarianism
An ethical model that supports seeking the greatest good for the greatest number of people.
certification
An examination based acknowledgement that the firm is owned and operated as specified.
imitative stategy
An overall strategic approach in which the entrepreneur does more or less what others are already doing.
standard business practice
Average level of business professionalization. A business action that has been widely adopted within an industry or occupation.
boundary, resources, intention, exchange
BRIE elements needed to start a small business
social capital
Characteristics of a business, like trusts, consistency, and networks, that represent potential social obligations which are an asset of the firm or entrepreneur.
necessity-driven entrepreneurship
Creating a firm as an alternative to unemployment.
opportunity-driven entrepreneurship
Creating a firm to improve one's income or a product or service.
comprehensive planners
Entrepreneurs who develop long-range plans for all aspects of the business. Highly successful.
critical-point planners
Entrepreneurs who develop plans focused on the most important aspect of the business first. 2nd best type of planner
habit-driven planners
Entrepreneurs who do not plan, preferring to let all actions be dictated by their routines.
opportunistic planners
Entrepreneurs who start with a goal instead of a plan and look for opportunities to achieve it. 3rd best type of planner.
reactive planners
Entrepreneurs with a passive approach, who wait for cues from the environment to determine what actions to take. Generally do poorly.
lifestyle (or part-time) firm
Firms with sales of $25,000 or less per year. Growth tends to level off once firm becomes established. 53% of all small businesses.
passion, perseverance, promotion/prevention focus, planning style, professionalization
Five P's of entrepreneurial behavior
crowdfunding
Funding a business online through the collective involvement of others who provide donations, loans, or investments
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.
zoning laws
Government specifications for acceptable use of land and buildings in particular areas.
overall growth strategy
One of four general ways to position a business based on the rate and level of growth entrepreneurs anticipate for their firm: lifestyle firm, traditional small business, high-performing small business, or high growth venture
organizational identity
Part of the BRIE model; composed of the name, description, and distinctive elements of a firm, such as trademarks, uniforms, logos, characters, and stories.
variance
Permission from a government organization to act differently than the laws state.
high growth ventures
Sales of $1,000,000 and up. Growth rates of 25% or more per year. Aim to become big businesses, highly professionalized, and receive external funding.
high-performing small business
Sales of $100,000 to $999,999. Grow at 5 to 15 percent per year. Sometimes multiple locations and higher levels of professionalization.
traditional small business
Sales of $25,000 to $99,999. Schedules defined by customer needs. Intended to provide income for owner. Generally one location. 22% in this category.
opportunity recognition
Searching and capturing new ideas that lead to business opportunities. This process often involves creative thinking that leads to discovery of new and useful ideas.
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.
preparation
Stage of the creative process: exploring the problem or opportunity in all directions.
verification
Stage of the creative process: testing of the idea and reducing it to its most exact form.
illumination
Stage of the creative process: the light bulb comes on, and ideas begin to flow.
incubation
Stage of the creative process: thinking about the problem or opportunity in a "not-conscious" way, putting it on the back burner, so to speak.
incremental strategy
Taking an idea and offering a way to do something slightly better than it is done presently.
crowdsourcing
Techniques often based on Internet-based services to get opinions or ideas through the collective involvement of others.
resource competencies
The 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.
legitimacy
The belief that a firm is worthy of consideration or doing business with because of the impressions or opinions of customers, suppliers, investors, or competitors.
external environment
The forces, institutions and people (i.e., the rest of the world) outside the boundary of the firm.
independent entrepreneurship
The form of entrepreneurship in which a person or group own their own for-profit business
social entrepreneurship
The form of entrepreneurship involving the creation of self-sustaining charitable and civic organizations, or for-profit organizations which invest significant profits in charitable activities.
corporate entrepreneurship
The form of entrepreneurship which takes place in existing businesses around new products, services, or markets.
volatility
The frequency of business starts and stops.
external relations
The general description for the processes and skills used in the management of a firm's interactions with people, organizations, and institutions outside of its boundary.
permanence
The impression of long-term continuity a business gives others.
role conflict
The kind of problem that arises when people have multiple responsibilities, such as parent and boss, and the different responsibilities make different demands on them.
covenants
The limitations imposed on your property by your neighborhood group.
conversion rate
The measure of how many visitors to your Web site (or people who click on your online advertisement) actually make a purchase from you.
internal environment
The people and groups within the boundary of a firm, including the owners, managers, employees, and board members of the firm.
multichannel marketing
The use of several different channels to reach your customers, for example, a website, direct mail, and traditional retailing.
bootstrapping
Using low-cost or free techniques to minimize your cost of doing business.
chargeback
a fee the service levels on you for any of a variety of problems related to the sale, for example, a lost, stolen, or fraudulent card was used, the customer reports nothing was received, the product was not the one promised, or there were problems with the product
heir
a person who becomes an owner by inheriting or being given a stake in a family business
entrepreneur
a person who owns or operates an organization, such as a business
self-efficacy
a person's belief in his or her ability to achieve a goal
franchise
a prepackaged business bought, rented, or leased from a company called a franchisor
imitative
characterized by being like or copying something that already exists
novelty
characterized by being new or different
boundary
creating a place for your business- in location and in people's minds
competencies
forms of business-related expertise
Baldrige Award
given by the U.S. government to businesses and nonprofit organizations that have been judged outstanding in seven measures of quality leadership; strategic planning; customer and market focus; measurement, analysis, and knowledge management; human resource focus; process management; and results
small business
involves 1-50 people and has its owner managing the business on a day-to-day basis
exchange
moving resources/products/services in exchange for money
founders
people who create or start new businesses
serial entrepreneurs
people who open multiple business throughout their career
buyers
people who purchase an existing business
International Standard Organization
refers to certification for having met a standard of quality that is consistently evaluated around the world
intention
the desire to start a business
resources
the money, product, knowledge, etc. that make up the business
Best Alternative to a Negotiated Settlement (BATNA)
the second-best outcome is identified by the parties in a negotiation to help clarify the value of achieving a successful negotiation.
creative destruction
the way that newly created goods, services, or firms can hurt existing goods, services, or firms
define, generate, implement
three steps to ethical decision making
substitute
which part of SCAMPER is this example?: A feature that allows your customers to order directly from a Web site rather than visiting your store or ordering by mail
eliminate
which part of SCAMPER is this example?: Search for opportunities that arise when you get rid of something or stop doing something.
put to other uses
which part of SCAMPER is this example?: Suppose you learned that all the traditional uses for your product had disappeared and that you have trailer truckloads out back with tons of product. What other uses might there be?
magnify or modify
which part of SCAMPER is this example?: Taking an existing product and changing its appearance or adding more features or increasing the hours your store is open or making its advertising more dramatic
rearrange or reverse
which part of SCAMPER is this example?: What can you rearrange or reorder in the way your product or service appears, or the way businesses in your industry usually look or are decorated or located?
adapt
which part of SCAMPER is this example?: one day a manufacturer of toilet tissue received a shipment of paper that was too thick to use? The manufacturer could have thrown it out, but instead the manufacturer improvised, and paper towels were introduced!
combine
which part of SCAMPER is this example?: pick up some groceries along with basic auto supplies, and maybe even CDs or videotapes.
