Chapter 6 – Entrepreneurship and Small Business
Key Questions for Chapter 6
1. What is entrepreneurship?
2. What is special about small businesses?
3. How does one start a new venture?
4. What resources support entrepreneurship and business development?
Study Question 1: What is entrepreneurship?
o Strategic thinking and risk-taking behavior that results in the creation of
new opportunities for individuals and/or organizations.
o Risk-taking individuals who take actions to pursue opportunities and
situations others may fail to recognize or may view as problems or threats.
• Entrepreneurs are …
o Founders of businesses that become large-scale enterprises.
o People who:
Buy a local franchise outlet
Open a small retail shop
Operate a self-employed service business
o People who introduce a new product or operational change in an existing
• Typical characteristics of entrepreneurs:
o Internal locus of control
o High energy level
o High need for achievement
o Tolerance for ambiguity
o Passion and action-orientation
o Self-reliance and desire for independence
Figure 6.1 Personal traits and characteristics of entrepreneurs
www.notesolution.com • Typical entrepreneurial backgrounds and experiences:
o Parents were entrepreneurs or self-employed.
o Families encouraged responsibility, initiative, and independence.
o Have tried more than one business venture.
o Have relevant personal or career experience.
o Become entrepreneurs between 22 and 45 years of age.
o Have strong interests in creative production and enterprise control.
o Seek independence and sense of mastery.
• Reasons for women becoming entrepreneurs:
o Being motivated by a new idea.
o Doing for themselves what they were already doing for other employers.
o Seeking a pathway to opportunity.
• Common myths about entrepreneurs:
o Entrepreneurs are born, not made.
o Entrepreneurs are gamblers.
www.notesolution.com o Money is the key to entrepreneurial success.
o You have to be young to be an entrepreneur.
o You must have a degree in business to be an entrepreneur.
Study Question 2: What is special about small businesses?
• Small businesses …
o Ones with 100 or fewer employees.
o Independently owned and operated.
o 50 percent of the private labour force works in small businesses.
o Are established by:
Starting a new business.
Buying an existing business.
Buying and running a franchise.
• Entrepreneurship and the Internet …
o The Internet offers numerous entrepreneurial opportunities.
Online buying and selling
o Businesses are limited only by personal creativity.
o Business-to-Business (B2B) ventures are possible.
• International business entrepreneurship …
o Provides strategic opportunities for small businesses.
o Creates exporting and importing opportunities.
o Supported through appropriate governmental and non-governmental
• Family businesses …
o Owned and financially controlled by family membe