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Flashcards in Chapter5 Deck (26):
2

Entrepreneurship

Strategic thinking and risk taking behaviour that results in new opportunities  

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Entrepreneur

Risk taking individual who takes action to pursue opportunities others fail to recognize or view as problems or threats

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Characteristics of Entrepreneurs

- Internal Locus of Control - High Energy Level - High need for achievement -  Tolerance for Ambiguity - Self Confidence - Passion and Action Oriented - Self relience and desier for independence - Flexibility  

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Necessity-Based Entrepreneurship

Takes place because other employment options don't exist

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Small Business

Has fewer than 100 employees, in independently owned and operated, and does not dominate its industry.  

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Franchise

A form of business where one business owner sells to another the right to operate the same business in another location  

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Family Business

Owned and controled by members of a family

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Family Business Feud

Family members have major desagreements over how the business should be run

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Succession Problem

Issue of who will run the Business when the current head leaves

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Succession Plan

Describes how the leadership transition and related financial matters will be handled

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Why Many Small Business Fail

- Lack of experience - Lack of Expertise - Lack of Stratergy and Stratergic leadership - Poor financial control - Growing too fast - Insufficient commitment - Ethical Failure

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First Mover Advantage

Comes from being first to exploit a niche or enter a market  

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3 Stage of Entrepreneurial Firms

- Birth Stage - Breakthrough Stage - Maturity Stage

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Challange of Birth Stage

- Establishing the firm - Getting Customers - Finding the money

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Challanges of Breakthrough Stage

- Working on Finances - Becoming Profitable - Growing

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Challanges of the Maturity Stage

- Refining the strategy - Continuing Growth - Managing for success

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Business Plan

Discribes the direction for a new business and the financing needed to operate it

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Sole Proprietorship

A form of business where an individual pursues a profit

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Partnership

A form of business where two or more people agree to contribute resources to start and operate a business together

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Corporation

A lagal entity that exists separately from its owner

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Limited Liability Corporation

A hybrid business form combining adventages of the sole proprietorship, partnership, and corporation

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Debt Financing

Involves borrowing money that must be repaid over time, with interest

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Equity Financing

Involves exchanging ownership shares for outside investment monies

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Venture Capitalists

Make large investment in new ventures in return for an equity stake in the business

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Initial Public Offering (IPO)

Initial selling of shares of stock to the public at large

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Angel Investor

A wealthy individual willing to invest in a new venture in return for equity in a new venture