vocab entrepreneurship sole proprietorship unlimited liability partnership corporation stock limited...
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Vocab
• Entrepreneurship
• Sole proprietorship
• Unlimited liability
• Partnership
• Corporation
• Stock
• Limited liability
• Franchise
• Nonprofit organization
• Cooperative
Dictionary: Entreprenedre - “To undertake”
Perception: A person of very high aptitude who pioneers change; Anyone who wants to work for himself or herself
What is an Entrepreneur?
Source: www.QuickMBA.com
Characteristics of an entrepreneur:
• Independent, Self-confident, self-motivated, disciplined and risk takers, persistent, creative, responsible, enthusiastic,
• Of all the characteristics being independent or wanting to work for themselves seems to be the most dominant.
Textbook Traits •Desire for responsibility •Preference for moderate risk•Confidence in ability to
succeed•Desire for immediate
feedback •High level of energy •Future orientation •Skill at organizing •Value of achievement over
money •High degree of commitment •Tolerance for ambiguity•Flexibility
Source: Zimmerer, Thomas W. and Scarborough, Norman S., Essentials of Entrepreneurship and Small Business Management, Prentice Hall, 2005.
Entrepreneurial Traits… What Entrepreneurs Say:
•Tenacity and drive •Opportunity “vision”•Passion •Relationships•Judgment
Source: Frey, Katherine Korman, Vision Forward, LLC case studies: The Hot MommasTM Project, Cool Daddies Project, Extreme Entrepreneurs, & Innovative
Intrapreneurs, 2004-2007.
Skills you should develop
• Communication
• Human Relation
• Math
• Problem-solving/ decision making
• Technical
• Basic business
Common traits• 47% are under age 35 when they start (16% are
under 25)
• 40% have only a high school diploma. 27% - some college -33% complete college
• 62% had a parent or relative who own a business
• Frequently had work experience at a young age .
• Influenced early in life by a role model.
Exercise 1-4The Role of Small Business in AmericaWhich of the below is/are FALSE?
1. Employ more than half of all private sector employees.
2. Create more than 50 percent of nonfarm private gross domestic product (GDP).
3. Produce 13 to 14 times more patents per employee than large patenting firms.
4. Are employers of 39 percent of high tech workers (such as scientists, engineers, and computer workers).
5. Made up 97 percent of all identified exporters and produced 29 percent of the known export value in FY 2001.
6. Provide 83% of the world’s steel.
Disadvantages
Long Hours
Total Responsibility
Financial Risks
Entrepreneurs reduce failure by using calculated risks. They do extensive research before starting a business.
Researching about potential customers, products already on the market, competition, and supply/demand is called Demographics.
An essential part of starting a business is a business plan. The plan is a written guide to help you develop your goals (future plans). A business plan is required by most banks to obtain a loan.
Types of business ownership:• Sole proprietorship – individually
owned business
– Unlimited liability, unlimited profit, taxed once
• Partnership – 2 or more people who may have equal share in the running of the business.
– Shared liability, shared profit, taxed once
The Role of Small Business in America
Types of Sole Proprietorships by Industry and Receipts (Revenues) 2003.
Figure 1:
Source: www.bizstats.com
IndustryNumber of sole-proprietorships %
Receipts (in thousands) %
Professional, scientific & technical services 4,226,056 24% $ 148,359,796 15%
Other services 3,047,639 17% $ 85,381,003 9%
Retail trade 2,309,270 13% $ 185,175,310 19%
Construction 2,283,929 13% $ 154,225,367 16%
Health care and social assistance 1,520,435 9% $ 82,760,451 9%
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Franchise– Advantages:
Prepackaging of a system of operation.
Parent company helps owners start business
Name of company draws customers
– Disadvantages:
Large amount of money needed to purchase.
A share of the sales or yearly fee must be paid
May have limited choices as to how the company is run.
Corporation
• – Owned by many people who all have a vote, but is treated like a separate person, which can pay taxes and own property.
– Limited liability, profit based on stock portfolio, taxed twice
Cooperative
• – owned by a group of people to save money (pool resources)– Pay less taxes than corporations,
can sell stock,
– Examples: Ocean Spray, Welch’s REI
Non-Profit
• organized so as to give out as much as it takes in. (Churches, shelters, government, public schools, etc.)
– doesn’t pay taxes, donors deduct from their taxes.
Types of Businesses• Producing raw goods
– (mining or fishing)
• Processing raw goods – (packing fish, fish oil, making iron ore bricks)
• Manufacturing – (automobiles, canned tuna)
• Intermediaries – buys, moves, stores and resells
• Wholesaler
• Retail
• Service – fastest growing type of business
Vocab Chapters 7 & 8
• Organizational chart
• Centralized organization
• Decentralized organization
• Departmentalization
• Top, middle, operational managers
Managerial Skills
• Perform a varied of tasks
• Work under pressure
• Effective communication
• Interpersonal skills
• Gather and use information“Management is doing things right; leadership is doing the
right things”
Peter Drucker
Formally
• Centralized (one manager in charge), also called line authority
• Departmentalized (different areas of the business working with different managers)
• Decentralized (projects which people come together for a short time and then move on.)
Informal
• A loose structure which most small businesses use. Top manager may do all; or give responsibility to others.
Styles of Leadership
• Autocratic – you run the show – you make all the decisions
• Democratic – everyone meets and makes the decision
• Free-Rein – leader sets goals for managers and they decide how best to get the job done. (hands-off)