Principles of Management
Entrepreneurial Truths(1)
(1)Entrepreneurship is not reserved for startups
Entrepreneurial Truths(2)
(2)Entrepreneurs are not limited to a specific set of personality traits
Entrepreneurial Truths(3)
(3)Entrepreneurship can be taught
Entrepreneurial Truths(4)
(4)Entrepreneurs are not extreme risk takers
Entrepreneurial Truths(5)
(5)Entrepreneurs collaborate more than they compete
Entrepreneurial Truths(6)
(6)Entrepreneurs act more than they plan
Entrepreneurial Truths(7)
(7) Entrepreneurship is a life skill
Financing a new business
-personal resources -strategic alliance -lenders -venture capital companies -small business investment companies (SBIC) -SBA financial programs
Small business
A business that is privately owned by one individual or a small group of individuals; it has sales and assets that are not large enough to influence its environment.
Venture capital companies
Groups of small investors who provide capital funds to small high-growth potential start-up firms in exchange for an equity position (stock) in the firms.
8 entrepreneurial personality traits
Internal Locus of Control, High Energy Level, Self-Confidence, Tolerance for Ambiguity, Self-reliance and desire for independence, high need for achievement, flexibility, passion and action orientation
Reasons for failure with a business
Managerial incompetence, insufficient funds, weak control system, growing to fast, lack of commitment, ethical failure
Starting from scratch disadvantages
More business risk and uncertainty
Buying an existing business disadvantage
New owners inherit any existing problems
Lenders
Obtaining funding from traditional lenders (e.g., banks, independent investors, and government loans).
Affirmative Action
an effort to give a preference in employment to women and minority group members who have traditionally been underrepresented
Sole Proprietorship
an individual pursuing business for a profit
initial public offering (ipo)
an initial selling of shares of stock to the public at large
human resource planning
analyses staffing needs and identifies actions to fill those needs
behavioral interviews
ask job applicants about past behaviors
Buying an existing business advantages
business has a proven ability to draw customers and make a profit Networks are already established
selection
choosing individuals to hire from a pool of qualified job applicants
first-mover advantage
comes from being first to exploit a niche or enter a market
Limited Partnership
consists of a general partner and one or more limited partners who do not participate in day-today business management
succession plan
describes how the leadership transition and related financial matters will be handled
business plan
describes the direction for a new business and the financing needed to operate it
job description
details the duties and responsibilities of a job holder
Bona Fide Occupational Qualifications
employment criteria justified by capacity to perform a job
High Energy Level
entrepreneurs are persistent, hardworking, and willing to exert extraordinary efforts to succeed
Self-Confidence
entrepreneurs feel competent, believe in themselves, and are willing to make decisions
crowdfunding
entrepreneurs starting new ventures go online to get startup financing from crowds of investors
Passion and Action orientation
entrepreneurs try to act ahead of problems; they want to get things done and not waste valuable time
traditional recruitment
focuses on selling the job and organization to applicants
Small Business Development Centers (SBDCs)
founded with support from the U.S. Small Business Administration provide advice to new and existing small businesses
Reasons for success with a business
hard work, careful analysis of market conditions, managerial competence, luck can contribute to success
Small business
has fewer than 500 employees, is independently owned and operated, and does not dominate its industry
social enterprises
have a social mission to help make lives better for underserved populations
independent contractors
hired as needed and are not part of the organization's permanent workforce
comparable worth
holds that persons performing jobs of similar importance should be paid at comparable levels
debt financing
involves borrowing money that must be repaid over time, with interest
equity financing
involves exchanging ownership shares for outside investment monies
social entrepreneurship
is a unique form of ethical entrepreneurship that seeks novel ways to solve pressing social problems
equal employment oppurtunity
is the requirement that employment decisions be made without regard to sex, race, color, ethnicity, national origin, able-bodiedness, or religion
job specifications
list the qualifications required of a job holder
venture capitalists
make large investments in new ventures in return for an equity stake in the business
reliability
means that a selection device repeatedly gives consistent results
validity
means that scores on a selection device have a demonstrated correlation with job performance
strategic human resource management
mobilizes human capital to implement organizational strategies
family business feud
occurs when family members have major disagreements over how the business should be run
job discrimination
occurs when someone is denied a job or work assignment for reasons that are not job relevant
business incubators
offer space, shared services, and advice to help get small businesses started
family business
owned and controlled by members of a family
employee value propositions
packages of opportunities and rewards that make diverse and talented people want to belong to and work hard for the organization
realistic job previews
provide job candidates with all pertinent information about a job and organization, both positive and negative
Mompreneurs
pursue business opportunities they spot as mothers
Entrepreneurship
risk-taking behavior that results in new opportunities
internal recruitment
seeks job applicants from inside the organization
external recruitment
seeks job applicants from outside the organization
Forms of ownership
sole proprietorship, partnership, corporation, benefit corporation, limited liability corporation
Classic Entrepreneurship
someone willing to pursue opportunities in situations others view as problems or threats
Serial Entrepreneur
starts and runs businesses and nonprofits over and over again, moving from one interest and opportunity to the next
job analysis
studies exactly what is done in a job and why
Necessity-based entrepreneurship
takes place because other employment options don't exist
partnership
when two or more people agree to contribute resources to start and operate a business together
social recruiting
where employers browse social media sites looking for prospective job candidates
permatemps
workers that are employed in a temporary statis for an extended period of time
Why has Entrepreneurship Increased in Popularity?
1. downsizing of large corporations 2. crossovers to small businesses by former large business employees 3. increased options in franchising 4. the emergence of E-commerce 5. increased entrepreneurial opportunities for minorities and women 6. better survival rates for small businesses 7. technological advances
What percentage of businesses fail in their first five years of operation
60 to 80%
Entrepreneurial personality
8 personality traits that distinguish entrepreneurs from non-entrepreneurs
Internal Locus of Control
Entrepreneurs believe they are in control of their own destiny; they are self directing
Self-reliance and desire for independence
Entrepreneurs want independence; they are self-reliant; they want to be their own bosses, not work for others
7 Types of Entrepreneurship
1. Corporate entrepreneurship(intrapreneurship) 2. Entrepreneurship inside 3. Franchising 4. Buying a small business 5. Social entrepreneurship 6. Family entrepreneurship 7. Serial entrepreneurship
Starting from scratch advantages
Avoids problems associated with previous owners Freedom to choose suppliers, equipment, location, and workers
role of entrepreneurship in society
Employ some 52 percent of private workers Provide 51 percent of private-sector output Receive 35 percent of federal government contract dollars Provide as many as 7 out of every 10 new jobs in the economy
High need for achievement
Entrepreneurs are motivated to accomplish challenging goals; they thrive on performance feedback
Tolerance for Ambiguity
Entrepreneurs are risk takers; they tolerate situations with high degrees of uncertainty
Flexibility
Entrepreneurs are willing to admit problems and errors, and are willing to change a course of action when plans aren't working
Writing the business plan
Part 1: Description of the Business Part 2: Marketing Plan Part 3: Production/operations plan Part 4: Management Plan Part 5: Financial Plan
Strategic Alliances
Partnering with established firms such as suppliers in a mutually beneficial relationship
General Partnership
Partners share management responsibilities
Services
The fastest growing segment of small-business enterprise
benefit corporation (B corp)
a corporate form for businesses whose stated goals are to combine making a profit with benefiting society and the environment
limited liability corporation
a hybrid business form combining the advantages of the sole proprietorship, partnership, and corporation
corporation
a legal entity that exists separately from its owners
startup
a new and temporary venture that is trying to discover a profitable business model for future success
business model
a plan for making a profit by generating revenues that are greater than costs
Human Resource Management
a process of attracting, developing, and maintaining a talented workforce
recruitment
a set of activities designed to attract a talented pool of job applicants
angel investor
a wealthy individual willing to invest in a new venture in return for an equity stake
Human capital
the economic value of people with job-relevant abilities, knowledge, ideas, energies, and commitments
person-job fit
the extent to which an individual's knowledge, skills, experiences and personal characteristics are consistent with the requirements of their work
person-organization fit
the extent to which an individual's values, interests, and behavior are consistent with the culture of the organization
unstructued interviews
the interviewer does not work from a formal and pre-established list of questions that is asked for all interviewees
succession problem
the issue of who will run the business when the current head leaves
Entrepreneurship
the process of starting a new venture, organizing and managing, and assuming the risks
workplace privacy
the right to privacy while at work
lean startup
use resources like open-source software, while containing costs, staying small, and keeping operations as simple as possible
Personal Resources
using your own money and money borrowed from friends and relatives to finance the business
franchise
when one business owner sells to another the right to operate the same business in another location