Chap 1: Decision to Become an Entrepreneur Flashcards
CH01 Why do people become entrepreneurs?
- Be their OWN BOSS - have had a long-term ambition to own their own business or they have become frustrated working in traditional jobs
- Pursue Their OWN IDEAS - have a desire to see ideas realized when regconizing new ideas
- Realize FINANCIAL GOAL - secondary to the first two
CH01 4 main characteristics of successful entrepreneurs
- PASSION for the business - stems from the entrepreneur’s belief that the business will positively influence people’s lives
- PRODUCT/CUSTOMER FOCUS - stems from the fact that most entrepreneurs are, at heart, craftspeople
- TENACITY despite failure - entrepreneurs are typically trying something new, the failure rate associated with their efforts is naturally high. Developing a new business may require a certain degree of experimentation before a success is attained. Setbacks and failures inevitably occur during the process. The litmus test of entrepreneurs is their ability to persevere through setbacks and failures
- EXECUTION INTELLIGENCE - The ability to effectively execute a business ideas means developing a business model, putting together a new-venture team, raising money, managing finances, leading employees, and so on
CH01 5 common myths regarding entrepreneurship
- Entrepreneurs are born, not MADE - based on the mistaken belief that some people are genetically predisposed to be an entrepreneur
- Entrepreneurs Are GAMBLERS - Entrepreneurs are usually moderate risk takers, as are most people
- Entrepreneurs Are Motivated Primarily by MONEY - It is naïve to think that entrepreneurs don’t seek financial rewards. However, money is rarely the primary reason entrepreneurs start new firms
- Entrepreneurs Should Be YOUNG and ENERGETIC - Although it is important to be energetic, investors often site the strength of the entrepreneurs (in terms of business experience, skill, and talent) as their most important criterion in the decision to fund a new venture.
- Entrepreneurs love the SPOTLIGHT - although some entrepreneurs are flamboyant, the vast majority of them do not attract pubic attention. Many entrepreneurs avoid public notice due to their working on proprietary products/services.
CH01 3 types of start-up firms
- SALARY-SUBSTITUTE Firms - SMALL firms that yield their owner/ owners a similar level of income to what they would earn when working for an employer.
Examples: dry cleaners, convenience stores, restaurants, accounting firms, and hairstyling salons.
- LIFESTYLE Firms - Provide their owner/owners the opportunity to PURSUE a particular lifestyle and earn a living while doing so.
Examples: ski instructors, golf and tennis pros, and tour guides.
- ENTRENEPREURIAL Firms - Bring new products and services to market by creating and seizing opportunities. Creating VALUE (worth, importance, or utility)
Examples: Google, Facebook, LinkedIn…
CH01 What is Entrepreneurship?
the process by which individuals pursue opportunities WITHOUT regard to resources they currently control for the purpose of exploiting future goods and services
OR
the art of turning an IDEA into a BUSINESS
CH01 The Entrepreneurial Process
- Decision to Become an Entrepreneur
- Developing Successful Business Ideas
Many new businesses fail not because the entrepreneur didn’t work hard but because there was no real opportunity to begin with - Moving from an Idea to an Entrepreneurial Firm
CRITICAL stage in the entrepreneurial process. - Managing and Growing an Entrepreneurial Firm
Given today’s competitive environment, all firms must be managed and growth properly maintained to ensure their ongoing success
CH01 What is corporate entrepreneurship?
A specific application of entrepreneurship called corporate entrepreneurship is the conceptualization of entrepreneurship at the ORGANIZATIONAL level
CH01 What are characteristics of entrepreneurial firms?
PROACTIVE, INNOVATIVE, and RISK TAKING
In contrast, conservative firms take a more “wait and see” posture, are less in- novative, and are risk averse
