Podcast
Questions and Answers
According to GEM indicators, what is the defining characteristic of a 'Nascent Entrepreneur'?
According to GEM indicators, what is the defining characteristic of a 'Nascent Entrepreneur'?
- Having actively devoted resources to starting a business but not yet paid wages or salaries for three months. (correct)
- Having paid wages or salaries for three months or more.
- Running a business that has paid salaries for 42 months or more.
- Being involved in entrepreneurial activities within a company as an employee.
What does 'TEA' stand for in the context of GEM indicators?
What does 'TEA' stand for in the context of GEM indicators?
- Total Established Activity
- Total Emerging Activity
- Total Entrepreneurial Activity (correct)
- Total Employee Activity
What is the core difference between a 'New Business Owner' and an 'Established Business Owner' according to GEM?
What is the core difference between a 'New Business Owner' and an 'Established Business Owner' according to GEM?
- New Business Owners have paid salaries for less than 42 months, while Established Business Owners have paid salaries for 42 months or more. (correct)
- New Business Owners are still developing their business plan, while Established Business Owners are not.
- New Business Owners tend to be younger, while Established Business Owners are older.
- New Business Owners have not yet secured any funding, while Established Business Owners have.
Which of the following is NOT a key activity of an entrepreneur?
Which of the following is NOT a key activity of an entrepreneur?
What does 'EEA' measure in the context of GEM indicators?
What does 'EEA' measure in the context of GEM indicators?
According to the GEM study, which demographic is most likely to start a business?
According to the GEM study, which demographic is most likely to start a business?
Where do most entrepreneurs typically seek their initial capital?
Where do most entrepreneurs typically seek their initial capital?
What age group is most likely to launch a business, according to the GEM study?
What age group is most likely to launch a business, according to the GEM study?
Which trait is LEAST likely to be associated with a successful entrepreneur?
Which trait is LEAST likely to be associated with a successful entrepreneur?
An entrepreneur's desire for immediate feedback is primarily driven by what need?
An entrepreneur's desire for immediate feedback is primarily driven by what need?
What aspect of entrepreneurial success is MOST emphasized in the text?
What aspect of entrepreneurial success is MOST emphasized in the text?
Which of the following is NOT identified as a feeding factor for entrepreneurial growth?
Which of the following is NOT identified as a feeding factor for entrepreneurial growth?
An entrepreneur who is described as a 'risk eliminator' likely has what kind of risk preference?
An entrepreneur who is described as a 'risk eliminator' likely has what kind of risk preference?
Which characteristic is LEAST likely to be associated with a 'corporate dropout' turned entrepreneur?
Which characteristic is LEAST likely to be associated with a 'corporate dropout' turned entrepreneur?
If an entrepreneur is described as 'future-oriented,' which is the MOST applicable characteristic?
If an entrepreneur is described as 'future-oriented,' which is the MOST applicable characteristic?
What is the MOST significant benefit of the internet, cloud computing, and mobile marketing as it relates to entrepreneurs?
What is the MOST significant benefit of the internet, cloud computing, and mobile marketing as it relates to entrepreneurs?
What percentage of the United States' private sector workforce do small businesses employ?
What percentage of the United States' private sector workforce do small businesses employ?
What percentage of net new jobs created over the last decade were attributed to small businesses?
What percentage of net new jobs created over the last decade were attributed to small businesses?
What is the defining characteristic of a 'Gazelle' business?
What is the defining characteristic of a 'Gazelle' business?
Which of the following is NOT identified as one of the '10 Deadly Mistakes' that can lead to small business failure?
Which of the following is NOT identified as one of the '10 Deadly Mistakes' that can lead to small business failure?
What is a key characteristic of successful entrepreneurs in relation to failure?
What is a key characteristic of successful entrepreneurs in relation to failure?
Which of these is a recommended action for avoiding small business pitfalls given in the text?
Which of these is a recommended action for avoiding small business pitfalls given in the text?
Besides experience, what can allow entrepreneurs enhance their profitability, according to the text?
Besides experience, what can allow entrepreneurs enhance their profitability, according to the text?
What is the percentage of small companies that create 67% of net new jobs in the economy?
What is the percentage of small companies that create 67% of net new jobs in the economy?
Flashcards
Established Business Owners
Established Business Owners
Individuals who have started a business and paid salaries for 42 months or more.
New Business Owners
New Business Owners
Individuals who have started a business and paid salaries for at least three months.
Nascent Entrepreneurs
Nascent Entrepreneurs
Individuals who have actively put resources into starting a business but haven't paid salaries yet for three months.
Total Early-Stage Entrepreneurial Activity (TEA)
Total Early-Stage Entrepreneurial Activity (TEA)
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Established Business Ownership (EBO)
Established Business Ownership (EBO)
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Employee Entrepreneurial Activity (EEA)
Employee Entrepreneurial Activity (EEA)
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Entrepreneurship
Entrepreneurship
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Entrepreneur
Entrepreneur
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Entrepreneurial Traits
Entrepreneurial Traits
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Future Orientation
Future Orientation
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Tolerating Ambiguity
Tolerating Ambiguity
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Commitment and Tenacity
Commitment and Tenacity
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Who Can Become an Entrepreneur?
Who Can Become an Entrepreneur?
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Factors Driving Entrepreneurship
Factors Driving Entrepreneurship
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Stressors for Entrepreneurs
Stressors for Entrepreneurs
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Feeding the Entrepreneurial Fire
Feeding the Entrepreneurial Fire
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What is a small business?
What is a small business?
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What are Gazelles?
What are Gazelles?
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How do entrepreneurs view failure?
How do entrepreneurs view failure?
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What are some common mistakes that lead to small business failure?
What are some common mistakes that lead to small business failure?
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What are some key steps to avoid small business pitfalls?
What are some key steps to avoid small business pitfalls?
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What is the role of entrepreneurs in the free enterprise system?
What is the role of entrepreneurs in the free enterprise system?
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Who are entrepreneurs?
Who are entrepreneurs?
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How can entrepreneurs enhance their business profitability?
How can entrepreneurs enhance their business profitability?
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Study Notes
GEM Indicators
- Nascent Entrepreneurs: Individuals actively starting a business but haven't paid wages/salaries for 3 months (including to themselves).
- New Business Owners: Individuals who started and are running a business, paying wages/salaries for 3+ months.
- Established Business Owners: Businesses operating for 42+ months, paying salaries.
- TEA (Total Early-Stage Entrepreneurial Activity): The proportion of adults starting/running a new business in an economy. This is equivalent to the sum of Nascent + New Business Owners.
- EBO (Established Business Ownership): The percentage of adults running an established business.
- EEA (Levels of Employee Entrepreneurial Activity): The involvement of workers in entrepreneurial projects, like developing new services/products.
The World of the Entrepreneur
- Global Entrepreneurship Monitor (GEM) study reports:
- Men are twice as likely to start a business as women.
- Most entrepreneurs primarily seek capital from family and friends.
- Entrepreneurs who launch businesses are mostly between the ages of 35 and 44.
What is Entrepreneurship?
- Entrepreneurship is recognizing business opportunities to develop innovative solutions for problems or to introduce new products, services, or businesses to the market.
- It involves taking calculated risks, organizing resources, and assuming the financial, managerial, and operational responsibilities required to start and grow a venture.
What is an Entrepreneur?
- An entrepreneur is an individual who initiates and manages a business venture, taking on the risks and rewards.
- Entrepreneurs are characterized by their ability to identify opportunities, innovate, and take action to bring their ideas to life.
Characteristics of Entrepreneurs
- Desire for responsibility
- Preference for moderate risk-taking.
- Confidence in their ability to succeed.
- Desire for feedback.
- High energy levels.
- Future orientation.
- Skilled at organization.
- A strong desire for achievement over money.
- Exhibit a high level of commitment.
- Tolerance for ambiguity.
- Flexibility.
- Willingness to work hard.
- Tenacity.
Most Important Qualities of an Entrepreneur
- Vision (61%)
- Work ethic (45%)
- Resilience (41%)
- Positivity (35%)
- Passion (34%)
Sources of Entrepreneurial Success
- Prior industry/work experience (96%)
- Lessons learned from previous successes (89%)
- Company's management team (82%)
- Lessons learned from previous failures (78%)
- Good fortune (73%)
- Professional/business networks (72%)
- Personal/social networks (61%)
Entrepreneurship: Diversity
- Anyone, regardless of age, race, gender, color, national origin, or any other characteristic, can become an entrepreneur.
Entrepreneurship: Benefits and Drawbacks
- Benefits:*
- Creating your own destiny
- Making a difference
- Reaching your full potential
- Reaping impressive profits
- Contributing to society.
- Being recognized for your efforts
- Doing what you enjoy and having fun.
- Drawbacks:*
- Uncertainty of income
- Risk of losing your investment
- Long hours and hard work
- Lower quality of life until the business is established.
- High levels of stress
- Complete responsibility
- Discouragement
Sources of Stress for Entrepreneurs
- Losing the business (54%)
- Repaying personal debt (52%)
- Losing clients (51%)
- Bringing in new business (49%)
- Health and well-being (41%)
- Being on call 24/7 (38%)
- Repaying business debt (35%)
Feeding the Entrepreneurial Fire
- Entrepreneurs as heroes.
- Entrepreneurial education.
- Demographic and economic factors.
- Shift to a service economy.
- Technological advancements.
- Independent lifestyle.
- E-commerce and Internet/cloud computing/mobile marketing.
- International opportunities/micro-multinationals.
Global Entrepreneurial Activity by Age Group
- Data shows fluctuating rates of entrepreneurial activity across different age groups.
U.S. Online Retail Sales
- Data on U.S. online retail sales for various years (2012-2020).
The Cultural Diversity of Entrepreneurship
- Young entrepreneurs
- Women entrepreneurs
- Minority-owned enterprises
- Immigrant entrepreneurs
- Part-time entrepreneurs
Other Entrepreneurial Groups
- Home-based businesses
- Family businesses
- Copreneurs
- Corporate castoffs
- Corporate dropouts
- Social entrepreneurs
- Retiring baby boomers
Characteristics of Women-Owned Businesses
- Data on the number of women-owned businesses, employees, and sales revenue for different periods.
The Cultural Diversity of Entrepreneurship: By Age Group
- Average index of entrepreneurial activity across different age groups (1996-2016).
Small Businesses
- Make up 99.7% of U.S. businesses.
- Employ 48% of the nation's private sector workforce.
- Create more jobs than large businesses.
- Created 63% of net new jobs in the last decade.
- 5% of small companies create 67% of net new jobs.
- A small business (Gazelle) employs fewer than 100 people and grows 20%+ per year with $100,000+ in sales.
The Power of "Small" Business
- A breakdown of business sectors in the U.S., and their percentage of total small business ownership.
Putting Failure into Perspective
- Entrepreneurs are not paralyzed by the prospect of failure.
- Failure is a natural part of the creative process.
- Successful entrepreneurs learn to fail intelligently.
Small Business Failure Rate
- Data on the failure rate of small businesses over time.
10 Deadly Mistakes of Entrepreneurship
- Management mistakes
- Lack of experience
- Poor financial control
- Weak marketing efforts
- Failure to develop a strategic plan
- Uncontrolled growth
- Poor location
- Improper inventory control
- Incorrect pricing
- Inability to make the "entrepreneurial transition"
Avoiding the Pitfalls of Small Business Failure
- Know your business in depth.
- Build a viable business model and test it.
- Develop a solid business plan.
- Manage financial resources.
- Understand financial statements.
- Learn to manage people effectively.
- Set your business apart from the competition.
- Maintain a positive attitude.
Conclusion
- Entrepreneurs are a vital part of the free enterprise system.
- They represent a diverse and talented group of individuals.
- They represent a cross-section of society.
- Entrepreneurs can enhance profitability by seeking additional knowledge and experience.
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