Chapter 2: Small Business Entrepreneurs: Characteristics and Competencies

business life cycle

the sequence or pattern of developmental stages any business goes through during its life span

standard business practice

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

cognition

a person's way of perceiving and thinking about his or her experience

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 human resources, and pursues those functions in a professional manner

minimalized business professionalization

a situation that occurs when the entrepreneur does nearly everything in the simplest way possible, rather than in a professional way

key business functions

activities common to all businesses such as sales, operations (also called production), accounting, finance, and human resources

industry-specific knowledge

activities, knowledge, and skills specific to businesses in a 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 protective action to prevent loss

passion

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

comprehensive planners

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

critical point planners

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

habit-based 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

reactive planners

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

compentencies

forms of business-related expertise

determination

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

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

perserverance

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

professionalization

the extent to which a firm meets or exceeds the standard business practices for its industry

emergence stage

the first stage of the small business life cycle, where the entrepreneur moves from thinking about starting the business to actually starting the business

action

the visible behavior a person takes