Chapter_6_Study_Notes

Chapter_6_Study_Notes - Chapter 6 Managing Small Business...

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Unformatted text preview: Chapter 6 Managing Small Business Start-Ups Chapter Outline I. What Is Entrepreneurship? II. Entrepreneurship and the Environment A. Entrepreneurship Today B. Definition of Small Business C. Impact of Entrepreneurial Companies III. Who Are Entrepreneurs? A. Diversity of Entrepreneurs B. Personality Traits IV. Starting an Entrepreneurial Firm A. New-Business Idea B. The Business Plan C. Legal Form D. Financial Resources E. Tactics V. Launching a High-Tech Start-Up VI. Managing a Growing Business A. Stages of Growth B. Planning C. Organizing D. Leading E. Controlling Annotated Learning Objectives After studying this chapter, students should be able to: 1 1. Describe the importance of entrepreneurship to the U.S. economy. Entrepreneurship is the process of initiating a business venture, organizing the necessary resources, and assuming the associated risks and rewards. Today, entrepreneurship and small businesses are increasingly important parts of the business world. Small businesses in the U.S. create two out of every three new jobs and account for more than half the sales of all goods and services. There are approximately 20 million Americans who make their living as solo professionals, often working out of their homes. One- person offices constitute a $7.5 billion segment of the computer and office equipment markets. New data shows that most new businesses survive for the first three to five years. Small entrepreneurial companies are responsible for the creation of most new jobs in the United States. Small business (excluding farming) represents 58 percent of all U.S. business employment and directly or indirectly provides the livelihood of more than 100 million Americans. 2. Define personality characteristics of a typical entrepreneur. A survey of the CEOs of the nations fastest-growing small firms found that these entrepreneurs could be best characterized as hardworking and practical, with great familiarity with their market and industry. Characteristics common among most successful entrepreneurs are as follows: Internal locus of control. The belief by individuals that they are in control of their future and that other external forces will have little influence. High energy level. Business start-ups require great effort. Need to achieve. They are motivated to excel and pick situations in which success is likely. Self-confidence. People who start and run a business must act decisively. Tolerance for ambiguity. A psychological characteristic that allows a person to be untroubled by disorder and uncertainty. Awareness of passing of time and tendency to be impatient. 3. Describe the planning necessary to undertake a new business venture. A business plan is a document specifying the business details prepared by an entrepreneur in preparation for opening a new business. Planning forces the entrepreneur to review the issues and problems associated with starting and developing a new business. A typical business plan contains information about the mission or vision of the company, information...
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Chapter_6_Study_Notes - Chapter 6 Managing Small Business...

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