AFM131 Chapter Notes - Chapter 7: Small Business, New Idea, Flashlight

• School: University of Waterloo
• Department: Accounting & Financial Management
• Course: AFM131
• Professor: Bob Sproule

Document Summary

Chapter 7 entrepreneurship and starting a small business. Entrepreneurship: accepting the challenge of starting and running a business. Entrepreneurial ventures differ from small businesses in four ways: amount of wealth creation. Rather than simply generating an income stream that replaces traditional employment, a successful entrepreneurial venture creates substantial wealth, typically in excess of several million dollars of profit: speed of wealth creation. While a successful small business can generate several million dollars of profit over a lifetime, entrepreneurial wealth creation is often rapid. Ex: may occur within five years: risk. The risk of an entrepreneurial venture must be high. Otherwise, with the incentive of sure profits, many people would pursue the idea of entrepreneurship, making business ventures impossibly competitive: innovation. Entrepreneurship often involves substantial innovation beyond what a small business might exhibit. This innovation gives the venture the competitive advantage that results in wealth creation.