Entrepreneurship short

Entrepreneurship:
The process of starting and operating your own business.
Entrepreneur:
The people who create, launch, organize and manage a new business and take the risk of
business ownership.
Entrepreneurial action:
Action through the creation of new products/ processes and/or the entry into new markets, which
may occur through a newly created organization or within an established organization.
Entrepreneurial opportunities:
Those situations in which new goods, services, raw materials, and organizing methods can be
introduced and sold at greater than their cost of production.
Entrepreneurial thinking :
Individuals’ mental processes of overcoming ignorance to decide whether a signal represents an
opportunity for someone and/or reducing doubt as to whether an opportunity for someone is also
an opportunity for them specifically, and/or processing feedback from action steps taken.
Superficial similarities:
Exist when the basic (relatively easy to observe) elements of the technology resemble (match)
the basic (relatively easy to observe) elements of the market.
Structural similarities:
Exist when the underlying mechanisms of the technology resemble (or match) the underlying
mechanisms of the market.
Crowd funding:
Crowd funding is the use of small amounts of capital from a large number of individuals to
finance a new business venture.
Bricolage :
Entrepreneurs making do by applying combinations of the resources at hand to new problems
and opportunities.
causal process:
A process that starts with a desired outcome and focuses on the means to generate that outcome.
effectuation process:
A process that starts with what one has (who they are, what they know, and whom they know)
and selects among possible outcomes.
entrepreneurial mind-set:
Involves the ability to rapidly sense, act, and mobilize, even under uncertain conditions.
cognitive adaptability:
Describes the extent to which entrepreneurs are dynamic, flexible, self regulating, and engaged
in the process of generating multiple decision frameworks focused on sensing and processing
changes in their environments and then acting on them.
Comprehension questions:
Questions designed to increase entrepreneurs’ understanding of the nature of the environment.
connection tasks :
Tasks designed to stimulate entrepreneurs to think about the current situation in terms of
similarities to and differences from situations previously faced and solved.
Strategic tasks :
Tasks designed to stimulate entrepreneurs to think about which strategies are appropriate for
solving the problem (and why) or pursuing the opportunity (and how).
reflection tasks:
Tasks designed to stimulate entrepreneurs to think about their understanding and feelings as they
Progress through the entrepreneurial process.
Entrepreneurial intentions:
The motivational factors that influence individuals to pursue entrepreneurial outcomes.
Entrepreneurial self-efficacy:
The conviction that one can successfully execute the entrepreneurial process.
Reflection tasks
Tasks designed to stimulate entrepreneurs to think about their understanding and feelings as they
progress through the entrepreneurial process.
Entrepreneurial intentions
The motivational factors that influence individuals to pursue entrepreneurial outcomes.
entrepreneurial self-efficacy
The conviction that one can successfully execute the entrepreneurial process.
perceived desirability
The degree to which an individual has a favorable or unfavorable evaluation of the potential
entrepreneurial outcomes.
What is the role of time management in entrepreneurship?
Effective time management is important for anyone but it's absolutely crucial for entrepreneurs.
entrepreneurs are ultimately responsible for every aspect of their business, allocating the right
amount of time to the right tasks is critical to keeping your business running smoothly.

work history
The past work experience of an individual.
role models
Individuals whose example an entrepreneur can aspire to and copy.
moral-support network
Individuals who give psychological support to an entrepreneur.
professional-support network
Individuals who help the entrepreneur in business activities.
Sustainable entrepreneurship
Entrepreneurship focused on preserving nature, life support, and community (sustainability) in
the pursuit of perceived opportunities to bring future products, processes, and services into
existence for gain (entrepreneurial action) where gain is broadly construed to include economic
and noneconomic benefits to individuals, the economy, and society (development).
Corporate entrepreneurship
Entrepreneurial action within an established organization.
strategic orientation
A focus on those factors that are inputs into the formulation of the firm’s strategy.
Entrepreneurial orientation toward opportunity
A commitment to taking action on potential opportunities.
Entrepreneurial orientation toward commitment of resources
A focus on how to minimize the resources that would be required in the pursuit of a particular
opportunity.
Entrepreneurial orientation toward control of resources
A focus on how to access others’ resources.
Entrepreneurial orientation toward management structure
More organic focus—has few layers of bureaucracy between top management and the customer
and typically has multiple informal networks.
Entrepreneurial philosophy toward rewards
One that compensates employees based on their contribution toward the discovery/generation
and exploitation of opportunity.
Entrepreneurial orientation toward growth
A focus on rapid growth.
Intellectual property:
Intellectual property (IP) refers to creations of mind, such as inventions; literary and artistic
works; designs and symbols, names and images used in commerce.
Intrapreneur:
An intrapreneur is an employee within organization who drives business values generating
opportunities to give their company a competitive edge.
Tagline:
A tagline is a short, memorable phrase used in marketing campaigns to convey the value of a
brand or its products.
Concept testing:
An idea is finally developed to a point where its benefits can be communicated to target
consumers in order to access their reactions.
Names of liquidity ratios:
 Current ratios
 Acid test ratios
Names of activity ratios:
 Average collection period
 Inventory turnover
Names of Leverage ratios:
 Debt ratio
 Debt to equity
Names of Profitability ratios:
 Net profit Margin
 Return on investment.
Culture
The environment of a particular organization
Entrepreneurial orientation toward culture
A focus on encouraging employees to generate ideas, experiment, and engage in other tasks that
might produce opportunities.
Top management commitment
Managers in an organization strongly supporting corporate entrepreneurship.
Dual process model of coping with negative emotions
Involves oscillation between a loss orientation and a restoration orientation
Loss orientation
An approach to negative emotions that involves working through, and processing, some aspect of
the loss experience and, as a result of this process, breaking emotional bonds to the object lost.
restoration orientation
An approach to negative emotions based on both avoidance and a proactiveness toward
secondary sources of stress arising from a major loss.
new entry
Offering a new product to an established or new market, offering an established product to a
new market, or creating a new organization.
entrepreneurial strategy
The set of decisions, actions, and reactions that first generate and then exploit over time a new
Entry.
Resources
The inputs into the production process.
entrepreneurial resource
The ability to obtain, and then recombine, resources into a bundle that is valuable, rare, and
Inimitable.
market knowledge
Possession of information, technology, know-how, and skills that provide insight into a market
and its customers.
technological knowledge
Possession of information, technology, know-how, and skills that provide insight into ways to
create new knowledge.
window of opportunity
The period of time when the environment is favorable for entrepreneurs to exploit a particular
new entry.
Error of commission
Negative outcome from acting.
Error of omission
Negative outcome from not acting.
Assessment of a new entry’s attractiveness
Determining whether the entrepreneur believes she or he can make the proposed new entry work.
Key success factors
The requirements that any firm must meet to successfully compete in a particular industry.
Emerging industries
Industries that have been newly formed and are growing.
Demand uncertainty
Considerable difficulty in accurately estimating the potential size of the market, how fast it will
grow, and the key dimensions along which it will grow.
Technological uncertainty
Considerable difficulty in accurately assessing whether the technology will perform and whether
alternate technologies will emerge and leapfrog over current technologies.

uncertainty for customers

Customers may have considerable difficulty in accurately assessing whether the new product or
service provides value for them.
lead time
The grace period in which the first mover operates in the industry under conditions of limited
competition.
switching costs
The costs that must be borne by customers if they are to stop purchasing from the current
supplier and begin purchasing from another.
Risk
The probability, and magnitude, of downside loss.
Scope
A choice about which customer groups to serve and how to serve them.
Imitation strategies
Copying the practices of other firms.
“me-too” strategy
Copying products that already exist and attempting to build an advantage through minor
variations.
Liabilities of newness
Negative implications arising from an organization’s newness.
Assets of newness
Positive implications arising from an organization’s newness.
Focus groups
Groups of individuals providing information in a structured format.
Brainstorming
A group method for obtaining new ideas and solutions.
Problem inventory analysis
A method for obtaining new ideas and solutions by focusing on problems.
Creative problem solving
A method for obtaining new ideas focusing on the parameters.
Reverse brainstorming
A group method for obtaining new ideas focusing on the negative.
Gordon method
Method for developing new ideas when the individuals are unaware of the problem.
Checklist method
Developing a new idea through a list of related issues.
Free association
Developing a new idea through a chain of word associations.
Forced relationships
Developing a new idea by looking at product combinations.
Collective notebook method
Developing a new idea by group members regularly recording ideas.
Attribute listing
Developing a new idea by looking at the positives and negatives
Big-dream approach
Developing a new idea by thinking without constraints.
Parameter analysis
Developing a new idea by focusing on parameter identification and creative synthesis.
Product life cycle
The stages each product goes through from introduction to decline.
Product planning and development process
The stages in developing a new product.
Idea stage
First stage in product development process.
Concept stage
Second stage in product development process.
Product development stage
Third stage in product development process.
Test marketing stage
Final stage before commercialization in product development process.
International entrepreneurship
An entrepreneur doing business across his or her national boundary.
Exporting
The sale and shipping of products manufactured in one country to a customer located in another
country.
indirect exporting
In international business, involves having a foreign purchaser in the local market or using an
export management firm.
direct exporting
Involves the use of independent distributors or the company’s own overseas sales office in
conducting international business.
nonequity arrangement
A method by which an entrepreneur can enter a market and obtain sales and profits without
direct equity investment in the foreign market.
licensing
Involves giving a foreign manufacturer the right to use a patent, technology, production process,
or product in return for the payment of a royalty.
turn-key projects
A method of doing international business whereby a foreign entrepreneur supplies the
manufacturing technology or infrastructure for a business and then turns it over to local owners.
management contract
A non equity method of international business in which an entrepreneur contracts his or her
management techniques and skills to a (foreign) purchasing company.
minority interest
A form of direct foreign investment in which the investing entrepreneur holds a minority
ownership position in the foreign venture.
joint venture
The joining of two firms in order to form a third company in which the equity is shared.
Majority interest
The purchase of over 50 percent of the equity in a foreign business.
Horizontal merger
A type of merger combining two firms that produce one or more of the same or closely related
products in the same geographic area.
Vertical merger
A type of merger combining two or more firms in successive stages of production.
Product extension merger
A type of merger in which acquiring and acquired companies have related production and/or
distribution activities but do not have products that compete directly with each other.
Market extension merger
A type of merger combining two firms that produce the same products but sell them in
different geographic markets.
Diversified activity merger
A conglomerate merger involving the consolidation of two essentially unrelated firms.
Trade barriers
Hindrances to doing international business.
Patent
Grants holder protection from others making, using, or selling a similar idea.
Provisional patent application
The initial application to the U.S. Patent and Trademark Office providing evidence of first to
market.
Trademark
A distinguishing word, name, or symbol used to identify a product.
Copyright
Right given to prevent others from printing, copying, or publishing any original works of
authorship.
Trade secret
Protection against others revealing or disclosing information that could be damaging to
business.
Licensing
Contractual agreement giving rights to others to use intellectual property in return for a
royalty or fee.
Product safety and liability
Responsibility of a company to meet any legal specifications regarding a new product
covered by the Consumer Product Safety Act.
Contract
A legally binding agreement between two parties.
Business plan
Written document describing all relevant internal and external elements and strategies for
starting a new venture.
Environmental analysis
Assessment of external uncontrollable variables that may impact the business plan.
Industry analysis
Reviews industry trends and competitive strategies.
Description of the venture
Provides complete overview of the product(s), service(s), and operations of a new venture.
Production plan
Details how the product(s) will be manufactured.
Marketing plan
Describes market conditions and strategy related to how the product(s) and service(s) will be
distributed, priced, and promoted.
Organizational plan
Describes form of ownership and lines of authority and responsibility of members of new
venture.
Assessment of risk
Identifies potential hazards and alternative strategies to meet business plan goals and objectives.
Financial plan
Projections of key financial data that determine economic feasibility and necessary financial
investment commitment.
Marketing plan
Written statement of marketing objectives, strategies, and activities to be followed in business
plan.
Marketing system
Interacting internal and external factors that affect venture’s ability to provide goods and
services to meet customer needs.
Marketing mix
Combination of product, price, promotion, and distribution and other marketing activities
needed to meet marketing objectives.
Situation analysis
Describes past and present business achievements of new venture.
Target market
Specific group of potential customers toward which a venture aims its marketing plan.
Market segmentation
Process of dividing a market into definable and measurable groups for purposes of targeting
marketing strategy.
Marketing goals and objectives
Statements of level of performance desired by a new venture.
Marketing strategy and action plan
Specific activities outlined to meet the venture’s business plan goals and objectives.
C Corporation
Most common form of corporation, regulated by statute and treated as a separate legal entity for
liability and tax purposes.
Proprietorship
Form of business with single owner who has unlimited liability, controls all decisions, and
receives all profits.
Partnership
Two or more individuals having unlimited liability who have pooled resources to own a
business.
Corporation
Separate legal entity that is run by stockholders having limited liability.
S corporation
Special type of corporation where profits are distributed to stockholders and taxed as
personal income.
Pro forma income
Projected net profit calculated from projected revenue minus projected costs and expenses.
Pro forma cash flow
Projected cash available calculated from projected cash accumulations minus projected cash
disbursements.
Pro forma balance sheet
Summarizes the projected assets, liabilities, and net worth of the new venture.
Assets
Items that is owned or available to be used in the venture operations.
Liabilities
Money that is owed to creditors.
Owner equity
The amount owners have invested and/or retained from the venture operations.
Breakeven
Volume of sales where the venture neither makes a profit nor incurs a loss.
Pro forma sources and applications of funds
Summarizes all the projected sources of funds available to the venture and how these funds will
be disbursed.
Debt financing
Obtaining borrowed funds for the company.
Equity financing
Obtaining funds for the company in exchange for ownership.
Asset base for loans
Tangible collateral valued at more than the amount of money borrowed.
Conventional bank loan
Standard way banks lend money to companies.
research and development limited partnerships
Money given to a firm for developing a technology that involves a tax shelter.
limited partner
A party in a partnership agreement that usually supplies money and has a few responsibilities.
general partner
The overall coordinating party in a partnership agreement.
SBIR grants program
Grants from the U.S government to small technology-based businesses.
private offering
A formalized method for obtaining funds from private investors.
Regulation D
Laws governing a private offering.
early-stage financing
One of the first financings obtained by a company
development financing
Financing to rapidly expand the business
acquisition financing
Financing to buy another company
risk-capital markets
Markets providing debt and equity to nonsecure financing situations.
informal risk-capital market
Area of risk- capital markets consisting mainly of individuals.
venture-capital market
One of the risk-capital markets consisting of formal firms.
public-equity market
One of the risk-capital markets consisting of publicly owned stocks of companies.
business angels
A name for individuals in the informal risk-capital market.
equity pool
Money raised by venture capitalists to invest.
equity participation
Taking an ownership Position.
SBIC firms
Small companies with some government money that invest in other companies.
private venture-capital firms
A type of venturecapital firm having general and limited partners.
state-sponsored venture capital fund
A fund containing state government money that invests primarily in companies in the state.
venture-capital process
The decision procedure of a venture-capital firm.
significant capital appreciation
Significant capital appreciation is the increase in value of the organization during a specific
period of time.
preliminary screening
Initial evaluation of a deal.
due diligence
The process of deal evaluation.
final approval
A document showing the final terms of the deal.
factors in valuation
Nonmonetary aspects that affect the fund valuation of a company.
financial ratios
Control mechanisms to test the financial strength of the new venture.
general valuation approaches
Methods for determining the worth of a company.
present value of future cash flow
Valuing a company based on its future sales and profits.
replacement value
The cost of replacing all assets of a company.
book value
The indicated worth of the assets of a company.
earnings approach
Determining the worth of a company by looking at its present and future earnings.
factor approach
Using the major aspects of a company to determine its worth.
liquidation value
Worth of a company if everything was sold today.
deal structure
The form of the transaction when money is obtained by a company.
managing underwriter
Lead financial firm in selling stock to the public.
going public
Selling some part of the company by registering with the SEC
registration statement
Materials submitted to the SEC for approval to sell stock to the public
initial public offering (IPO)
The first public registration and sale of a company’s stock
prospectus
Document for distribution to prospective buyers of a public offering.
Form S-1
Form for registration for most initial public offerings of stock.
red herring
Preliminary prospectus of a potential public offering.
pricing amendment
Additional information on price and distribution submitted to the SEC to develop the final
prospectus.
quiet period
90-day period in going public when no new company information should be released.
blue-sky laws
Laws of each state regulating public sale of stock.
aftermarket support
Actions of underwriters to help support the price of stock following the public offering.
comment letter
A letter from the SEC to a company indicating corrections that need to be made in the submitted
prospectus
underwriting syndicate
Group of firms involved in selling stock to the public.
employee stock option plan (ESOP)
A two- to three-year plan to sell the business to employees.
voluntary bankruptcy
Entrepreneur’s decision to file for bankruptcy.
involuntary bankruptcy
Petition of bankruptcy filed by creditors without consent of entrepreneur.
joint venture
Two or more companies forming a new company.
Acquisition
Purchasing all or part of a company.
brokers
People who sell companies.
Merger
Joining two or more companies into one company.
leveraged buyout (LBO)
Purchasing an existing venture by any employee group .
Franchising
An arrangement whereby a franchisor gives exclusive rights of local distribution to a franchisee
in return for payment of royalties and conformance to standardized operating procedures.
Franchisor
The person offering the franchise.
Franchisee
The person who purchases the franchise.
Distribution task
Negotiating how the benefits of the relationship will be allocated between the parties.
Integration task
Exploring possible mutual benefits from the relationship so that the “size of the pie” can be
increased.
Reservation price
The price (the bundle of resources from the agreement) at which the entrepreneur is indifferent
about whether to accept the agreement or choose the alternative.
Bargaining zone
The range of outcomes between the entrepreneur’s reservation price and the reservation price of
the other party.
Penetration strategy
A strategy to grow by encouraging existing customers to buy more of the firm’s current products.
Market development strategy
Strategy to grow by selling the firm’s existing products to new groups of customers.
Product development strategy
A strategy to grow by developing and selling new products to people who are already purchasing
the firm’s existing products.
diversification strategy
A strategy to grow by selling a new product to a new market.
backward integration
A step back (up) in the value-added chain toward the raw materials.
forward integration
A step forward (down) on the value-added chain toward the customers.
horizontal integration
Occurs at the same level of the value-added chain but simply involves a different, but
complementary, value-added chain.
participative style of management
The manager involves others in the decision-making process.
time management
The process of improving an individual’s productivity through more efficient use of time.
principle of desire
A recognition of the need to change personal attitudes and habits regarding the allocation of
time.
principle of effectiveness
A focus on the most important issues.
principle of analysis
Understanding how time is currently being allocated, and where it is being inefficiently invested.
principle of teamwork
Acknowledgment that only a small amount of time is actually under one’s control and that most
of one’s time is taken up by others.
principle of prioritized planning
Categorization of tasks by their degree of importance and then the allocation of time to tasks
based on this categorization.
principle of reanalysis
Periodic review of one’s time management process.
Incubation stage:
Incubation stage will be 6-12 months where startup companies graft product development and
prepare themselves for marketing. During this stage, the entrepreneur takes up the role of a
'Technopreneur', who brings all his efforts (such as technology, team, seed money) to build a
market viable prototype (MVP's).
High tech product:
A high-tech product is a subset of product that involves the application of modern scientific and
technical knowledge for useful purposes and often requires high R&D investments.
Cost Leadership / Low-cost Business Strategy:
A cost leadership strategy is an integrated set of actions designed to produce or deliver goods or
services at the lowest cost, relative to that of competitors, with features that are acceptable to
customers

Business Model:The term business model refers to a company's plan for making a profit. It
identifies the products or services the business plans to sell, its identified target market, and any
anticipated expenses. They help new, developing companies attract investment, recruit talent,
and motivate management and staff.