SBM 1
Standard business practice
A business action that has been widely adopted within an industry or occupation
Independent small businesses
A business owned by an individual or small group
Owner-managed firms
A business run by the individual who owns it
Traditional small business
A firm intended to provide a living income to the owner, and operating in a manner and on a schedule consistent with other firms in the industry and market
High-performing small business
A firm intended to provide the owner with a high income through sales or profits superior to those of the traditional small business
High-growth venture
A firm started with the intent of eventually going public, following the pattern of growth and operations of a big business
Perceptual map
A graphic display which positions products, services, brands, or companies according to their scores of important strategic dimensions
Decline stage
A life cycle stage in which sales and profits of the firm begin a falling trend
Innovation-driven economy
A nation there 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
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
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
Heir
A person who becomes an owner through inheriting or being given a stake in a family business
Self-efficacy
A person's belief in his or her ability to achieve a goal
Cognition
A person's way of perceiving and thinking about his or her experience
Main street businesses
A popular term for small businesses reflecting the idea that these are the kinds of firms you would expect to find on the main street of a typical American city, and are the opposite of big businesses or "Wall Street" businesses
Franchise
A prepackaged business bought, rented, or leased from a company called a franchiser
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
Minimalized business professionalization
A situation that occurs when the entrepreneur does nearly everything in the simplest way possible
Lifestyle or part-time firm
A small business primarily intended to provide partial or subsistence financial support for the existing lifestyle of the owner, most often through operations that fit the owner's schedule and way of working
Boom
A type of life cycle growth stage marked by a very rapid increase in sales in a relatively short time
Shake-out
A type of life cycle stage following a boom in which there is a rapid decrease in the number of firms in an industry
Effectuation
An approach used to create alternatives in uncertain environments
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
Parallel competition
An imitative business that competes locally with others in the same industry
Growth stage
An industry life cycle stage in which customer purchases increase at a dramatic rate.
Passion
An intense positive feeling an entrepreneur has toward the business or the idea behind the business
Firm
An organization that sells to or trades with others
Incremental innovation
An overall strategic approach in which a firm patterns itself on other firms, with the exception of one or two key areas
Innovative strategy
An overall strategic approach in which a firm seeks to do something that is very different from what others in the industry are doing
Imitative strategy
An overall strategic approach in which the entrepreneur does more or less what others are already doing
Industry dynamics
Changes in competitors, sales and profits in an industry over time
Novelty
Characterized by being different or new
Imitative
Characterized by being like or copying something that already exists
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
Critical-point planners
Entrepreneurs who develop plans focused on the most important aspect of the business first
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
Reactive planners
Entrepreneurs with a passive approach, who wait for cues from the environment to determine what actions to take
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, and women-owned firms
Discrimination in financing
Minority applicants were denied at twice the rate of whites. Asian and Hispanic owners pay higher interest rates on their loans
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
Founders
People who create or start new businesses
Serial entrepreneurs
People who open multiple businesses throughout their career
Buyers
People who purchase an existing business
Crowdsourcing
Techniques often based on Internet-based services to get opinions or ideas through the collective involvement of others
Degree of similarity
The extent to which a product or service is like another
Industry
The general name for the line of product or service being sold, or the firms in that line of business Key is selecting an industry that offers good potential for making a profit Also needs to offer attractive opportunities to work with a minimum of risk and competition
Small and medium enterprise
The international term for small businesses
Introduction stage
The life cycle stage in which the product or service is being invented and initially developed.
Magic number
The post-tax income the entrepreneur personally seeks from the business
Pure innovation (blue ocean strategy)
The process of creating new products or services, which results in a previously unseen product or service. Also called blue ocean strategy
Goods or services
The tangible things (goods) or intangible commodities (services) created for sale.
Maturity stage
The third life cycle stage, marked by a stabilization of demand, with firms in the industry moving to stabilize or improve profits through cost strategies
Action
The visible behavior a person takes
Creative destruction
The way that newly created goods, services, or firms can hurt existing goods, services, or firms
Bootstrapping
Using low-cost or free techniques to minimize your cost of doing business
Self-employed
Working for yourself
Family business
a firm in which one family owns a majority stake and is involved in the daily management of the business 1/3 of the Standard & Poor's 500 are family owned and managed
Small Business Administration
a part of U.S. government which provides support and advocacy for small business
Entrepreneur
a person who owns or starts an organization, such as a business
Flexibility rewards
ability of business owners to structure life in the way that suits their needs
Key business functions
activities common to all businesses sales, operations, accounting, finance, and human resources
Industry-specific knowledge
activities, skills, and knowledge, specific to businesses in an industry
Competitor
all the firms also selling that product or service
Certification
an examination base acknowledgement that the firm is owned and operated as specified
Market
business term for the population of customers for your product or service
Benefits
characteristics of a product or service that the target customer would consider worthwhile value benefit, cost benefit
Mindshare
degree of attention to which your target market pays to your idea or organization
Innovation
focus which looks at a new thing or a new way of doing things
Creation
focus which looks at the making of new entities
Customer-focus
focus which refers to being in tune with one's market
Efficiency
focus which refers to doing the most work with the fewest resources
Independent entrepreneurship
form of entrepreneurship in which a person or group own their own for-profit business
Social entrepreneurship
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
form of entrepreneurship which takes place in existing businesses around new products, services or markets
Competencies
forms of business-related expertise
Scope
geographic range covered by the market Local to Global Knowing your market scope helps deciding where to focus sales and advertising efforts Knowing your target market gives you a way to know which competitors to worry about most, namely those within your market scope
Small Business
involves 1-50 people and has its owner managing the business on a day-to-day basis
Mass market
large portions of the population
Income rewards
money made by owning one's own business
Niche market
narrowly defined segment of the population that is likely to share interests or concerns
Time management
organizing process to help make the most efficient use of the day
Late career entrepreneurs
people who begin their businesses after having retired or resigned from work in corporations at age 50 or older
Virtual Instant Global Entrepreneurship (VIGE)
process that uses the Internet to quickly create businesses with a worldwide reach. Depends on using websites like eBay or eLance to quickly establish a global presence
Innovativeness
refers to how important a role new ideas, products, services, processes, or markets play in an organization
Scale
size of the market
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
Resource competencies
the ability or skill of the entrepreneur at finding expendable components necessary to the operation of the business Time, information, location, financing, raw materials, expertise
Perseverance
the ability to stick with some activity even when it takes a long time, and when a successful or unsuccessful outcome is not immediately known learned optimism
Strategy
the ideas and actions that explain how a firm will make its profit
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 Whenever possible, make decisions based on business necessities.
Succession
the process of intergenerational transfer of a business Lack of clear transition plan is the death knell
Basic business competency
understanding the organizational and business processes of a firm
Growth rewards
what people get from facing and beating challenges