Chapter 5: Entrepreneurship and Small Business Management
THE NATURE OF ENTREPRENEURSHIP
Entrepreneurship: is risk‐taking behaviour that results in new opportunities
Who are the Entrepreneurs?
Entrepreneur: is willing to pursue opportunities in situations others view as problems or threats
• start new ventures that bring to life new products or service ideas
Characteristics of Entrepreneurs
entrepreneur is as the founder of a new business enterprise that achieves large‐scale success
• individual who is very self‐confident, determined, resilient, adaptable, and driven by excellence.
• tend to have unique backgrounds and personal experiences
Diversity and Entrepreneurship
Necessity‐Based Entrepreneurship: takes place because other employment options don't exist
• offers women and members of visible minorities opportunities to strike out on their own and gain economic independ-
ence, glass-ceiling effect
ENTREPRENEURSHIP AND SMALL BUSINESSES
Small business: has fewer than 100 employees, is independently owned and operated, and does not dominate its industry
• small business sector is very important in most nations because small businesses offer major economic advantages
How to get started?
Reasons why entrepreneurs start small businesses:
1. wanting to be your own boss and control your future
2. going to work for a family‐owned business
1 3. seeking to fulfill a dream
Franchise: where one business owner sells to another the right to operate the same business in another location
Family Business: is owned and controlled by members of a family
• everyone working together, sharing values and a common goal, and knowing that what they do benefits the family
Family Business Feud: occurs when family members have major disagreements over how the business should be run
• disagreements about work responsibilities, business strategy, operating approaches, finances
Succession problem: is the issue of who will run the business when the current head leaves
Succession plan: describes how the leadership transition and related financial matters will be handled.
• should include at least procedures for choosing or designating the firm's new leadership, legal