Entrepreneurship and Small Business Management Review

This set of $$100$$ vocabulary flashcards covers concepts from the Entrepreneurship SLC test transcript, including small business characteristics, strategic management, human resources, and business planning.

Small Business Competitor Barrier

The false belief that a company must have fewer than $10$ direct competitors to fit the definition of a small business.

Small Business Job Creation

A significant role of small businesses, which in the United States, create the majority of new jobs.

Technological Advance Sources

While large firms have R&D, most significant technological advances come from the efforts of small business innovations.

Small Business Importance

They are critical because they provide employment for a significant number of employees.

Wholesale Sector Performance

Small businesses in this sector generally perform well compared to large businesses.

Economy of Scale

The relationship where the cost of producing each unit decreases as the manufacturer produces a greater number of units.

Niche

A segment of a market that offers a new opportunity because it is not currently being satisfied.

Small Business Environmental Control

Small businesses typically have little control over their external environment.

Niche Demand

Entrepreneurs find specific segments for products or services to ensure sufficient demand.

Business Plan

A means of developing a business on paper before actually investing money and launching it.

Business Plan Initial Step

The first step for the entrepreneur involves engaging in self-analysis.

Market Research

A key step in building a business plan to identify potential demand.

Personal Financial Resources

The most common source of funds for entrepreneurs to start a new business.

Venture Capitalist

A group of small investors seeking to make a profit on companies with rapid growth potential.

Large-Scale Manufacturing Limitation

Small businesses have limited success here because they are unable to compete based on economy of scale.

Small Business Administration (SBA)

A government agency that helps entrepreneurs obtain money and provides consulting at virtually no cost.

SBA SCORE Program

The Service Corps of Retired Executives which provides free advice and business mentors to small businesses.

Market Discovery

An area where small businesses are often more successful than larger organizations in finding new markets for products.

SBA ACE Program

The Active Corps of Executives, made up of managers currently in the workforce who provide advice to entrepreneurs.

Franchise Risk

Usually involves less uncertainty and less risk than starting a business from scratch.

Entrepreneurship

The process of planning, organizing, operating, and assuming the risk of a business venture.

Entrepreneurs

Individuals like the founders of Pizza Hut who plan, organize, and assume the risk of a business venture.

Palouse Red Sauce Example

An example of a business started by entrepreneurs Danielson and Hall who now ship to $35$ states.

Entrepreneurial Management

Distinct from purely managing a business owned by others, which does not define an entrepreneur.

Small Business Description

A business characterized as being independently owned and having a relatively small impact on its industry.

Small Business Population

Small businesses outnumber large businesses by nearly $100$ to $1$.

Role of Small Business

Includes development of new products, creation of new jobs, and manufacture of materials for large businesses.

New Job Statistics

Small business creates more new jobs than big business each year.

Mass-Produced Efficiency

Big businesses are generally more efficient at producing and delivering mass-produced products than small businesses.

Makin Bacon Tray

An example of small business innovation and its importance to a big company like Armour Bacon.

Newly Patented Invention

A desirable characteristic for a start-up expected to dominate a market.

Service Industry

The industry where one is most likely to find a small business enterprise.

Service Business Growth

The fastest growing segment of small-business enterprises primarily due to low initial capital investment.

Service Nature

Small service businesses appeal to the innovative nature of entrepreneurs and offer high returns on time invested.

Retailing Success

Small business operators are most likely to succeed in clothing stores catering to working women.

Specialty Shops

An area of retailing where small businesses are especially effective.

Specialty Market Economics

The dollar size is often too small for large companies, making it ideal for small businesses.

Wholesaling Success Factors

Success stems from small business owners developing personal working relationships with their buyers.

Scalar Principle vs Economy of Scale

Economy of scale specifically refers to falling manufacturing costs as production volume increases.

Manufacturing Barriers

Small businesses often fail here due to a lack of economy of scale.

Modifying Products

An example of identifying a new niche in an established market by making products usable for untrained persons.

Meat Product Niche

An example of a new niche involving developing a meat product with a shelf life of $20$ years.

Retailing and Service Niche

Finding a market gap by combining an herb store with educational classes on how to grow and use them.

New Market Identifier

Introducing a domestic product for the first time to consumers in a foreign market, such as Europe.

First Mover Advantage

The advantage earned by the first company, like ETEC with Autocite, to develop a solution for a recognized problem.

Getting Through Customs Example

A company with first mover advantage established to help clients adapt to cultural differences and etiquette.

Business Plan Purpose

To identify all actions required up to the point when the firm opens its doors.

Researching the Market

The most important activity in the development of a professional business plan.

Entrepreneur Self-Analysis

The first step for an entrepreneur in planning their business.

Cash Budget

The most important part of the small business financial plan because it tells how much money is needed to operate.

Operating Money Calculation

Identified through the cash budget to determine funds necessary for operation.

Target Customer Analysis

Key questions include identifying who the customers are, their locations, and how to differentiate from competitors.

Common Source of Funds

Personal financial resources are the most common source, followed by loans and venture capital.

Small Growth Investors

Venture capitalists seeking rapid growth potential in new companies.

Strategic Alliances

A method used by entrepreneurs as part of their financing strategy beyond personal resources and SBICs.

Management Advice Sources

Include the SBA, SCORE, and ACE, but excluding the Federal Trade Commission (FTC).

Small Business Development Center (SBDC)

A major consulting program offered by the SBA at virtually no cost to the entrepreneur.

National Federation of Independent Businesses (NFIB)

An organization that offers excellent networking opportunities for new entrepreneurs.

Franchising Method

A business approach where one pays a share of income for the use of trademarks and business formulas.

Franchising Trends

Franchising is growing rapidly and projected to account for half of all retail sales.

Franchising Start-up Costs

The most significant disadvantage to franchising as a means of acquiring a business.

Managerial Incompetence

One of the four general factors that contribute to the failure rate of small businesses.

Buffer Capital

Anyone opening a new business should be strong enough to operate without income for at least $6$ months.

Small Business Failure Factors

Includes owner neglect, insufficient capital, and weak control systems.

Success Frequency Factors

Managerial competence, careful market analysis, and luck contribute to small business success.

Scope

The range of markets in which a firm wants to compete.

Resource Deployment Strategy

Using existing organizational assets (like learning centers) to support different business lines (like correspondence courses).

Business-Level Strategy

Focuses on the areas in which the firm may have advantages and how organizational parts enhance each other.

Strategy Formulation

A set of processes involving the development of the organization's strategies.

Strategy Implementation

The phase where a business strategy is operationalized and executed, such as marketing honey mustard at fairs.

Naples Valley Products Example

A small business case where Robin Hoder engaged in strategic formulation to manufacture and market mustard.

Job Analysis

The systematic collection and recording of information about jobs in the organization.

Screening Job Applicants

The step in the hiring process that follows the development of an applicant pool.

Hiring First Step

Typically involves having prospective employees complete a job application.

Equal Pay Act

A legal constraint requiring that men and women be paid the same for doing the same job.

Subjective Performance Appraisal

Measures such as the ranking of coworkers by their superior, as opposed to objective sales counts.

Performance Appraisal Feedback

Considered the final and often most difficult part of the performance appraisal process.

Strategic Implementation Focus

Primarily concerned with how the strategy is operationalized and executed.

Internal Organizational Position

In SWOT analysis, this is analyzed according to internal strengths and weaknesses.

Strategy Formulaton Starting Point

Usually begins with the development of a mission statement.

Distinctive Competence

The idea of successful firms \"sticking to their knitting\" or concentrating on what they do well.

Sustained Competitive Advantage

A manufacturing process or advantage that competitors cannot imitate, like those at Fort Howard Paper Company.

SBA Funding Role

The specific agency used to help entrepreneurs obtain money if private financing is unavailable.

Current Workforce Managers

Describing members of the Active Corps of Executives (ACE).

Small Business Institute (SBI)

A program involving university students who help small businesses with business plans and consulting.

SCORE Personnel

Retired executives who provide free advice to small businesses.

Advice Access (Franchise)

A benefit of buying a franchise is obtaining ongoing access to advice from experts.

Favorable Credit Terms

New businesses started from scratch may struggle to negotiate these with suppliers.

Historical Records Access

An advantage of buying an existing business, as they answer questions about cash flow problems.

Innovation Talent (Service)

The service industry often appeals to the talent for innovation found in most entrepreneurs.

Wholesaling Economy of Scale

The success of small businesses in this industry is closely linked to managing economy of scale.

Transportation Deregulation

A trend that has decreased the number of small businesses in the transportation industry.

Retailing Gap Filling

Small businesses successfully enter retailing by filling a niche or providing products not readily available.

Service Resource Requirements

The industry that requires the fewest start-up resources for entrepreneurs.

Service Growth Statistics

This industry contains the fastest growing segment of small business enterprises.

Service Industry ROI

Offers a high return on the time invested by the entrepreneur.

Business Mentor Need

New start-ups find business mentors through the SCORE program.

Unbiased Industry Advice

Entrepreneurs contact the Active Corps of Executives (ACE) for advice from current industry professionals.

College Business Plan Program

Entrepreneurs locate college classes to design business plans through the Small Business Institute (SBI).

Last Resort Private Funding

The SBA is the destination for loans when private financing at reasonable terms cannot be secured.