Small Business Entrepreneurship Chapter 3

Small Business Entrepreneurs: Characteristics and Competencies

• Small business entrepreneurship chapter 3
• Learning Objectives include: entrepreneurial personality types, operational competencies of successful entrepreneurs, career paths of entrepreneurs, challenges of family business owners, special nature of entrepreneurial teams, challenges faced by women and minority business owners, situations of later-life business owners
• Classic entrepreneurial profile characterized by being a loner, hard worker, fast learner, and risk-taker seeking wealth
• Other entrepreneurial profiles include: idea person, small business owner, contemporary classic entrepreneur, salesperson entrepreneur, and managerial entrepreneur
• Today's typical entrepreneurial personalities include: Salesperson Entrepreneur, Managerial Entrepreneur
• Learning objectives also cover Entrepreneurial Operational Competencies

Entrepreneurial Operational Competencies

• Competencies are forms of business expertise
• Basic business competency involves understanding organizational and business processes
• Key business functions include sales, operations, finance, accounting, and human resources
• Industry-specific knowledge refers to specialized skills and knowledge specific to a particular industry
• Resource competencies involve the entrepreneur's ability to find necessary resources (time, information, location, financing, raw materials, expertise) for business operations
• Determination competencies relate to the energy and focus needed to bring a business into existence
• Opportunity competencies involve skills to identify and exploit business environment elements for profitable and sustainable businesses

Professionalization

• Professionalization measures the extent a firm meets or exceeds industry standard business practices
• Expert businesses excel in all aspects of business practices
• Standardized business practices are widely adopted business actions within an industry or occupation
• Specialized businesses are passionate about one or two key business functions
• Minimalized businesses prioritize keeping operations running with a "good enough" approach, potentially lacking systematic accounting and recordkeeping

Family Businesses

• Family businesses are firms where one family holds a majority stake and participates in daily management
• A significant portion (1/3rd) of Standard & Poor's 500 companies are family-owned and managed
• The percentage of small family businesses in the U.S. is 39%
• They employ a substantial portion (58%) of the American workforce

Family Business Challenges

• Role conflict occurs when individuals juggle multiple responsibilities (e.g., parent and business owner), leading to conflicting demands

• Time management is crucial: organizing, prioritizing, delegating, repeating activities, and strategizing lead to efficient day use

Second-Career Entrepreneurs

• Late-career entrepreneurs begin businesses after retirement or leaving corporate jobs (age 50 or older)
• Obtaining advice, taking control of life, building networks and keeping personal finances separate from business operations are crucial aspects of success