1. Define the terms entrepreneur and small business owner, and explain how the terms are related.
• An entrepreneur is a person who relentlessly pursues an opportunity, in either a new or an existing enterprise, to create value, while assuming both the risk and the reward for his or her efforts.
• An entrepreneur thinks differently about how to use resources than do employee-managers.
• Owner-managers who buy out founders of existing firms, franchisees, and second-generation operators of family firms may also be considered entrepreneurs.
• Definitions of small business are arbitrary, but we focus on firms that are small compared to the biggest firms in the industry, that have mostly localized operations, are financed by a small number of individuals, and have growth potential.
• Our focus is on small business owners who are unrelent¬ing in their search for opportunities that create value for customers and owners alike.
2. Explain the basic characteristics of entrepreneurial opportunities, and give examples of individuals who successfully started their own businesses.
• An entrepreneurial opportunity is an economically attrac¬tive and timely opportunity that creates value for prospec¬tive customers and the firm’s owners alike, which involves much more than merely having a good idea.
• Entrepreneurial opportunities make the enterprise economically attractive for the owners while offering cus-tomers a product or service that is so appealing that they are willing to pay their hard-earned money for it.
• Ace Hotels, Late Model Restoration Supply, and Five Guys Burgers and Fries are examples of highly successful start¬ups in different industries and different types of owners.
3. Describe some motivators or rewards for owning your own business.
• One of the primary reasons for becoming an entrepre¬neur is to make the world a better place (make meaning).
• Important secondary attractions to entrepreneurship are personal satisfaction, personal fulfillment (contributing to one’s community), profit, independence, and freedom (escaping from a bad situation).
4. Identify some of the basic types of entrepreneurs and entrepreneurial ventures.
• Founders of firms are “pure” entrepreneurs, but those who acquire established businesses and franchisees may also be considered entrepreneurs.
• A few entrepreneurs start high-potential ventures (gazelles); other entrepreneurs operate attractive small firms and microbusinesses (lifestyle businesses).
• Women entrepreneurs are starting new businesses at twice the rate of men, and they are entering many non¬traditional fields previously dominated by men.
• Based on their backgrounds and management styles, entrepreneurs may be characterized as artisan entrepre¬neurs or opportunistic entrepreneurs.
• Entrepreneurial teams consist of two or more individuals who combine their efforts to function as entrepreneurs.
5. Describe five potential competitive advantages of small entrepreneurial firms compared to large companies.
• Customer focus: Small business owners have an opportu¬nity to know their customers well and to focus on meet¬ing their needs.
• Quality performance: By emphasizing quality in prod¬ucts and services, small firms can build a competitive advantage.
• Integrity and responsibility: Independent business own¬ers can build an internal culture based on integrity and responsibility that is reflected in relationships both inside and outside the firm. Such a culture helps strengthen the firm’s position in a competitive environment.
• Innovation and globalization: Many small firms and indi¬vidual operators have demonstrated a superior talent for finding innovative products and developing better ways of doing business. Offshoring has also given some small companies a competitive edge.
• Special niche: Small firms that find a special niche of some type can gain an advantage in the marketplace.
6. Discuss factors related to readiness for entrepreneurship and getting started in an entrepreneurial career.
• The ideal age to start a business appears to be between the late 20s and early 40s, when a person’s education (knowledge), work experience, family situation, and financial resources are most likely to enable him or her to become an entrepreneur.
• Many of the Millennials, or Generation Y, are proving to be effective entrepreneurs, in spite of their young age.
• Persons in their 50s and 60s are becoming entrepreneurs at a faster rate than those at any other age.
• There is no well-defined entrepreneurial profile, but many entrepreneurs have such characteristics as a passion for their business, self-confidence, and a willingness to assume moderate risks.
• Successful entrepreneurs are also thought to possess leadership skills, a strong focus on opportunities, creativ¬ity and adaptability, and motivation to excel.
• Entrepreneurs can make no better decision than to develop relationships with mentors who can provide advice and counsel