GMS Chap 5 Flashcards Preview

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Flashcards in GMS Chap 5 Deck (26):
1

Entrepreneurship

Strategic thinking and risk taking behaviour that results in new opportunities

 

2

Entrepreneur


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

3

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

 

4


Necessity-Based Entrepreneurship


Takes place because other employment options don't exist

5

Small Business

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

 

6

Franchise

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

 

7

Family Business


Owned and controled by members of a family

8


Family Business Feud


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

9

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

11

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

12

First Mover Advantage

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

 

13

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

17


Business Plan


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

18


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

25


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