SMALL BUSINESS
MANAGEMENT
Chapter 2
The Small Business Decision
CHAPTER OBJECTIVES

1. To discuss the ___________ and disadvantages of
small business ownership as a starting point in making the
small business decision.

2. To review the personal and organizational attributes of
a successful small business owner.

3. To explain the reasons some ___________ succeed and
others fail.

4. To discuss entrepreneurial development in large
business.

5. To identify the differences between an ___________
and a manager.
The Small Business Decision

Personal Evaluation

Self evaluation exercise
Advantages of Small Business
Ownership
More personal ___________ with
people
 Independence
 Skill ___________
 Potential ___________ Rewards
 Challenge
 ___________

Disadvantages of Small Business
Ownership
Risk
 ___________
 Need for Many Abilities
 Limited Financial Rewards
 People ___________
 Time Demands

Entrepreneur Defined



A person who ___________ and/or
operates a business.
All active owner-managers and second
generation ___________ of family owned
firms and owner-managers which buy out
founders of existing firms.
Also includes ___________ managers of
larger corporations who have a flair for
innovation and risk.
Demographic Characteristics of
Entrepreneurs
Parents ___________ business
 Foreign parents
 High school degree or less
 ___________ or more
 Age 31 and under
 ___________ 40 or more

Personality Characteristics Required by
Successful Entrepreneurs






Achievement Orientation
Risk Taking
Independence, Self ___________,
Self Assurance
Innovativeness
Strong Verbal and ___________
Skills
Selling Skills
Personality Characteristics Required by
Successful Entrepreneurs (cont)
Problem ___________ Abilities
 Strategic Planning
___________

The Small Business Decision

Organizational Evaluation
Small Business Successes



Alertness to ___________
Ability to ___________ and Hold
Competent Employees
Staying ___________ to the
Consumer
Small Business Successes



Thoroughness with Operating
Details
Ability to Obtain Needed Capital
Effective Handling of Laws, Rules,
and Regulations
Small Business Successes

Entrepreneurial Success in a Large
Business

Ten Commandments for Intrapreneur
Success
Small Business Failures

Bankruptcies
Entrepreneurialship and Small Business
Management

Entrepreneurial Skills

Characteristics


creativity, ___________, independence,
risk-taking, idea oriented
Situations

generating ideas and solutions to
problems, starting a new business,
expanding or opening new products
Characteristics of
Artisan Entrepreneurs
___________
___________ approach
 Technical
 Reluctance
to delegate
 Narrow view of strategy
 Personal sales effort
 Short
___________ horizon
 Simple
record keeping
Characteristics of
Opportunistic ( Promoter) Entrepreneurs
 Broad-based
education
 Scientific approach to problems
to ___________
 Broad view of strategy
 Willing
 Diversified
 Longer
___________ approach
planning horizon
 Sophisticated accounting
and financial control
Entrepreneurialship and Small Business
Management

Managerial Skills

Characteristics
develops ___________ and goal setting,
 prefers to know outcomes of actions or activities,
 team player,
 works through others,
 skills in finance, marketing, personnel, operations


Situations
reaching ___________ objectives,
 maintaining control of operations

Bright Lights, Deep Waters


Discuss the difference between an
entrepreneur and a manager using
David Green and Carmanah Lights
as examples.
What dangers of obtaining equity
financing are illustrated in this
example?
Concept Checks



1. List the advantages of owning a
small business.
2. List the disadvantages of owning
a small business.
3. What are the characteristics of
successful small business owners?
Concept Checks


4. What are the major cases of
business failure?
5. What is the difference between
an entrepreneur and a manager?