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GMS 200 (566)
Chapter 6

Chapter 6 notes

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Ryerson University
Global Management Studies
GMS 200
Shavin Malhotra

Chapter 6: Entrepreneurship and Small Business The Nature of Entrepreneurship • Entrepreneurship: is dynamic, risk-taking, creative, growth-oriented behaviour Who Are Entrepreneurs? • Entrepreneur: is willing to pursue opportunities in situations others view as problems or threats • Business context, someone that starts new ventures that bring to life new product or service ideas Characteristics of Entrepreneurs • Common image of an entrepreneur is as the founder of a new business enterprise that achieves large-scale success. • Franchisees also entrepreneurs • Self employed service businesses included as entrepreneurs • Assumes responsibility for introducing a new product or change in operations within an organization is also demonstrating the qualities of entrepreneurship • General profile of an entrepreneur: o Internal locus of control o High energy level o High need for achievement o Tolerance for ambiguity o Self-confidence o Passion and action orientation o Self-reliance and desire for independence o Flexibility • Also include family environment and childhood experiences www.notesolution.com • Career or work history (people that try one venture then go on to others) • Deeply embedded life interests (creative stuff) Diversity and Entrepreneurship • More women and minorities becoming entrepreneurs Entrepreneurship and Small Business • Microenterprises: under 10 employees • Small: fewer than 100 employees • Medium-sized: 100-500 employees • Small business offer major economic advantages • Small business in service and retailing sectors of the economy • Motivations to launch small business o Wanting to be your own boss and controlling your future o Going to work for a family-owned business o Seeking to fulfill a dream • Franchise: is when one business owner sells to another the right to operate the same business in another location Entrepreneurship and the Internet • B2B: Business to business that link buyers and sellers International Business Entrepreneurship • International business brings o opportunities for expanded markets o additional financing o access to quality and possibly lower-cost resources o access to labour and technical expertise o Locations for low-cost manufacturing or outsourcing www.notesolution.com Family Business • Family business: is owned and controlled by members of a family\ • When going good, everyone working together, sharing values and a common goal, and knowing that what they do benefits the family • But, Family Business Feud: members of the controlling family get into disagreements about work responsibilities, business strategy, operating approaches finances, or other matters • 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 o Should include at least procedures for choosing or designating the firms’ new leadership, legal aspects of any ownership transfer, and any financial and estate plans relating to the transfer Why Many Small Businesses Fail • High proportion of businesses fail in their first five years of operations • Errors of small businesses: o Lack of experience o Lack of expertise o Lack of strategy o Poor financial control
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