Chapter 2: Small business Entrepreneurs (Characteristics and Competencies)

List the Five Ps of Entrepreneurial Behavior:

1) Passion 2) Perseverance 3) Promotion-Prevention Focus 4) Planning Cycle 5) Professionalization

List the 5 Key elements of Organizational culture

1) Passion for the mission 2) Passion for the Team 3) Passion for the customer 4) Passion for innovation 5) Passion for Fairness

standard business practice

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

professionalization

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

existence

The second stage of the business life cycle marked by the business being in operation but not yet stable in terms of markets, opera- tions, or finances.

action

the visible behavior a person takes

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.

promotion focus

An entrepreneur's attention to maximizing gains and pursuing opportunities likely to lead to gains.

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.

set-asides

Government contracting funds that are earmarked for particular kinds of firms, such as small busi- nesses, minority-owned firms, women-owned firms, and the like.

opportunity competencies

Skills necessary to identify and exploit elements of the busi- ness environment that can lead to a profitable and sustainable business.

industry-specific knowledge

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.

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.

perseverance

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

time management

The organizing process to help make the most efficient use of the day.

succession

The process of intergenerational transfer of a business.

resource maturity

The resource maturity stage is the most typical fourth stage of the small business. It is characterized by relatively stable or slowly rising sales and profits over several years. In a firm that has a takeoff stage following the success stage, the resource maturity stage occurs after takeoff.

cognition

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

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

competencies

forms of business-related expertise

business life cycle

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

liability of newness

The set of risks faced by firms early in their life cycles that comes from a lack of knowledge by the owners about the business they are in and by customers about the new business.

success

The set of risks faced by firms early in their life cycles that comes from a lack of knowledge by the owners about the business they are in and by customers about the new business.

organizational culture

A set of shared beliefs, basic assumptions, or common, accepted ways of dealing with problems and challenges within a company that demonstrate how things get done.

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 re- sources, and pursues those functions in a professional manner.

prevention focus

An entrepreneur's attention to minimizing losses, with a bias toward inaction or protective action to prevent loss.

certification

An examination-based acknowledgment that the firm is owned and operated as specified.

passion

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

emergence

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

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.

takeoff

The resource maturity stage is the most typical fourth stage of the small business. It is characterized by relatively stable or slowly rising sales and profits over several years. In a firm that has a takeoff stage following the success stage, the resource maturity stage occurs after takeoff.

slack resources

Profits that are available to be used to satisfy the preferences of the owner in how the business is run.

determination competencies

Skills identified with the energy and focus needed to bring a busi- ness into existence.