small business management chapter 2 vocabulary

competencies

forms of business-related expertise

existence stage

the second stage of the business life cycle marked by the business being in operation but not yet stable in terms of markets, operations, or finances

business life cycle

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

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 business into existence

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

cognition

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

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

succession

the process of intergenerational transfer of a business

standard business practice

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

certification

an examination-based acknowledgement that the firm is owned and operated as specified

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

time management

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

resource maturity

the resource maturity stage is the most typical fourth stage of the small business. it is characterized by relatively stable or slow 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

action

the visible behavior a person takes

second career entrepreneurs

People who begin their businesses after having left, retired, or resigned from work. These can include veterans of the armed forces and civilians from a broad range of industries.

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.

family business

a firm in which one family owns a majority stake and is involved in the daily management of the 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

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

passion

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

minimalized business professionalization

a situation that occurs when the entrepreneur does nearly everything in the simplest way possible

opportunity competencies

skills necessary to identify and exploit elements of the business environment that can lead to a profitable and sustainable business

professionalization

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

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

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.

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

success stage

the third stage of the business life cycle marked by the firm being established in its market, operation, and finance

takeoff

this stage occurs after the success stage for a small percentage of businesses. it is characterized by rapid growth (5-10% a month or more). when this growth levels off, the firm enters the resource maturity stage