Chapter 1.

Small Business: its Opportunities and Rewards Small Business involves 1-50 people and has its owner managing the business on a day-to-day basis. Entreprenuer a person who owns or starts an organization, such as a business. Independent Small Businesses a business owned by an individual or small group. Imitative Characterized by being like or copying something that already exists. Founders - people who create or start new businesses. Franchise a prepackaged business bought, rented, or leased from a company called franchisor. Buyers people who purchase an existing business. Heir a person who becomes an owner through inheriting or being given a stake in a family business. DEFINING SMALL BUSINESS The international community uses the term small and medium enterprise or SME, it consists of 1-50 people, while medium enterprise have 51-500 people. SME focuses on independent and owner-managed small business. o Independent means that the business whose stock can be bought on an exchange. o Owner-management refers to constant or at least daily management of a business by its owner. Small businesses are imitative in nature. The person who starts a business is living the life of the entrepreneur, anyone who owns a business is an entrepreneur, it also means that the self-employed, anyone who works for himself or herself instead of for others, is also an entrepreneur. Founders FranchiseBuyers (Heirs) Owner-manager, the role in which most entrepreneurs spend their working lives. Small Businesses versus High-Growth Ventures Small business are usually intended to remain small, generally a size that the owner feels comfortable controlling personally. High-Growth Ventures start small but are intended to grow rapidly, often requiring a team of partners or managers to handle the growth. The knowledge needed for a small business focuses on how to start small, with resources from the owner, family and friends. The key market knowledge for a small business focuses on its immediate marketplace and communities. Must know about how to achieve maximum flexibility while pursuing a comfortable level of sales, growth, and profit.

Business worldwide are evaluated on their innovativeness and growth potential o Innovativeness refers to how important to a firm are new ideas, products, services, processes or markets. o Potential for growth refers to the eventual size of the market, which can range from a small, local, or niche market to something used by millions or even billions. Rating firms high or low on these two measures helps identify the different types of businesses in what is called the Dynamic Capitalism Typology.

Differences between Small Businesses and High-Growth Ventures Small Businesses Owners own money Cut costs Sales Retain autonomy Efficiency Imitation Control firm When necessary Personalize Personal validation Loss of control Delegation is difficult High-Growth Ventures Other peoples money Sell more Marketing Involve key others Effectiveness Novelty Control market When possible Professionalize External legitimacy Market response Delegation is essential

Preferred funding source When the firms ion trouble Whats more important Personal control preference Focus Metastrategy External control preference Grow Human resources Acceptance What limits growth Delegation orientation

Rewards for Starting a Small Business for the money, To do things my way Entrepreneurs talks about Three Key Rewards o Flexibility to have greater flexibility for my personal and family life o Livable income to give myself, ,y spouse and my children financial security o Personal growth to continue to grow and learn as a person. Income rewards refers to the money made from owning your own business. Flexibility rewards the most rapidly growing type of reward, refers to the ability of business owners to structure their lives in the way that best suits their needs.

Myths about Small Businesses 1. 2. 3. 4. 5. Not enough financing You cant start business during recession To make profits, you need to make something. If you fail, you never try again. Students dont have the skills to start a business.

Getting Started now: Entry Competencies There are four elements to consider before starting your own business. o A Boundary is something that sets it up as a firm. It can be something as simple as a business name or government registration, a phone or e-mail address dedicated to the business, or a specific location for the firm in a home, commercial space, or even on the internet. It gives you a place to locate and protect the resources youve gathered for the business. o Resources include the product or service to be offered, informational resources on markets and running a business, financial resources, and human resources such as your own time to devote to the business, or that of others working with you or for you. o Intention is the desire to start a business and is the most frequently occurring element of the BRIE model. o Exchange refers to moving resources, goods, or service to others, in exchange for money or other resources. BRIE (boundary-resources-intention-exchange) checklist is a proven and handy way to think about the activities necessary to get a business started.

Aspects of Global Entrepreneurship Factor-driven economies, a nation where the major forces for jobs, revenues, and taxes comes from farming or extractive industries like forestry, mining, or oil production. Efficiency-driven economies, a nation where industrialization is becoming the major force providing jobs, revenues and taxes and where minimizing costs while maximizing productivity is a major goal. Innovation-driven economies, a nation where the major forces for jobs, revenues, and taxes come from high-value added production based on new ideas and technologies and from professional services based on higher education. The Other Forms of Entrepreneurship PICS Model of Entrepreneurship Public Entrepreneurship , involves in revitalizing government agencies, tends to focus on the customer-focus and efficiency aspects of entrepreneurship. Independent Entrepreneurship, involves all four elements Corporate Entrepreneurship, the focus is on customer-focus and innovation, bringing new products or services to market, or opening up new markets to the firm. Social Entrepreneurship, involves creating new charitable and civic organizations which are financially self-sufficient, or for non-profit companies that use much of their profit to fund charities.