Chapter 3 small business entrepreneurs characteristics and competencies
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Chapter 3 Small Business Entrepreneurs: Characteristics and Competencies. Small Business Management 4660. 1. Individual Personality. 2. Entrepreneurial Personality. Idea person Small business owner Contemporary classic Salesperson Managerial entrepreneur. 3- 4.

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Chapter 3 Small Business Entrepreneurs: Characteristics and Competencies

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Chapter 3 small business entrepreneurs characteristics and competencies

Chapter 3Small Business Entrepreneurs: Characteristics and Competencies

Small Business Management

4660


Chapter 3 small business entrepreneurs characteristics and competencies

1. Individual Personality


2 entrepreneurial personality

2. Entrepreneurial Personality

  • Idea person

  • Small business owner

  • Contemporary classic

  • Salesperson

  • Managerial entrepreneur


Chapter 3 small business entrepreneurs characteristics and competencies

3-4


3 entrepreneurial operational competencies

3. Entrepreneurial Operational Competencies

  • Competencies

    • forms of business-related expertise

    • Pg. 61 level of competency assessment

    • Role model

    • 4 levels - needs development, needs refinement, competent, excellent


Chapter 3 small business entrepreneurs characteristics and competencies

  • Five competencies appear repeatedly in successful entrepreneurs

  • KIRDO

  • Key Business Functions

  • Industry-Specific Knowledge

  • Resource Competencies

  • Determination Competencies

  • Opportunity Competencies


Chapter 3 small business entrepreneurs characteristics and competencies

  • Key business functions

    • activities common to all businesses

    • sales, operations/production, accounting, finance, and human resources

    • Delegate / outsource


Chapter 3 small business entrepreneurs characteristics and competencies

  • Industry-specific knowledge

    • activities, knowledge, and skills specific to businesses in a particular industry

    • industry expertise, industry skill, market knowledge, ability to diagnose the business’s health, ability to see opportunities


Chapter 3 small business entrepreneurs characteristics and competencies

  • Resource competencies

    • the ability or skill of the entrepreneur at finding expendable components necessary to the operation of the business

    • Time, information, location, financing, raw materials, support people (e.g. founders, advisors, partners, customers)

    • E.g. gocell2u.com


Chapter 3 small business entrepreneurs characteristics and competencies

  • Determination competencies

    • skill identified with the energy and focus needed to bring a business into existence

    • Willingness to take action

    • Stick with the business

    • E.g. The spirit of Samurai knight


Chapter 3 small business entrepreneurs characteristics and competencies

  • Opportunity competencies

    • skills necessary to identify and exploit elements of the business environment that can lead to a profitable and sustainable business

    • Ideally distinctive, hard for others to copy

    • E.g. mbg.com


4 professionalization

4. Professionalization

  • The extent to which a company meets or exceeds standard businesses practices for its industry

  • Standard business practice

    • a business action that has been widely adopted within an industry or occupation

    • E.g. a professional design website


Chapter 3 small business entrepreneurs characteristics and competencies

  • Professionalization

    • Three levels:

    • Expert, specialized, minimalized


Chapter 3 small business entrepreneurs characteristics and competencies

  • Expert businesses

    • A situation that occurs when all the major functions of a company are conducted according to the standard business practices of its industry

    • A pool of talented management team


Chapter 3 small business entrepreneurs characteristics and competencies

  • Everything seems to be done in the best way possible

  • Exceeds the standard business practices of the industry

  • E.g. ESQ 165 leadership training regarded as ‘the best’

  • Why? ISO certification, CS Survey, ‘Kaizen’ philosophy


Chapter 3 small business entrepreneurs characteristics and competencies

  • Specialized

    • The middle level

    • A situation that occurs when businesses have founders or owners who passionate about one or two of the key business functions such as sales, operations, accounting, finance or human resources


Chapter 3 small business entrepreneurs characteristics and competencies

  • E.g PR consultant, SEO, Interior Designer, lawyer, accountant

  • Satisfied if other activities are no worse than other companies in the market

  • Dr. FadhilahKamsah, training consultancy

  • Trainers, facilitators, owns training centre


Chapter 3 small business entrepreneurs characteristics and competencies

  • Minimalized

    • A situation that occurs when the entrepreneur does nearly everything in the simplest way possible


Chapter 3 small business entrepreneurs characteristics and competencies

  • Entrepreneur figures that “good enough” - to keep the business going

  • No systematic accounting

  • Little recordkeeping

  • E.g. Dr. RobiahHamzah

  • Individual-based Motivational Speaker


5 entrepreneurial careers

5. Entrepreneurial Careers

  • Combine personality characteristics, competencies, and professionalization levels.

  • Actual types of ‘entrepreneurial careers’:

    • Habitual entrepreneurs

    • Growth entrepreneurs

    • Harvest entrepreneurs

    • Spiral or helical

    • Occasional entrepreneurs


Chapter 3 small business entrepreneurs characteristics and competencies

  • Habitual entrepreneurs

    • Owners for a lifetime

    • Businesses may vary, 1 or more

    • Primary goal = personal satisfaction

    • Secondary goal = income

    • No succession plan

    • keep working until they can no longer continue

    • E.g. Steve Jobs - Apple, NEXT Computers, Pixar, and Apple


Chapter 3 small business entrepreneurs characteristics and competencies

  • Growth entrepreneurs

    • Also owners of a lifetime

    • Goal = major success

    • As soon as success is achieved - enter into the next venture – high growth-oriented

    • Keep working until they can no longer work

    • When they retire, they tend to micromanage their successors

    • E.g. Bill Gates


Chapter 3 small business entrepreneurs characteristics and competencies

  • Harvest entrepreneurs

    • With an exit plan

    • Work first, play later

    • Interested – strong balance sheets, sizable market shares and capable management team

    • Build one company at a time, sell it, enjoy the proceeds, and then start another

    • Very wealthy but largely unknown

    • E.g. Valueclick, Bluelithium


Chapter 3 small business entrepreneurs characteristics and competencies

  • Spiral (helical) entrepreneurs

    • Alternate periods of growth and stability which are driven by personal or family needs

    • A typical spiral strategy – slow down when children are young – push for growth when the children are older

    • The endgame strategy is scaling down the business

    • Advantage Advertising – Laura Tidwell


Chapter 3 small business entrepreneurs characteristics and competencies

  • Occasional entrepreneurs

    • Generally have another primary job

    • Fascinated by entrepreneurship and pursue it periodically

    • Classic part-time entrepreneur

    • Seasonal basis

    • E.g. event organiser, or making EidulFitri’s cookies


Chapter 3 small business entrepreneurs characteristics and competencies

  • Which form of the various entrepreneurial careers appeals to you most?

  • Why?


6 family businesses

6. Family Businesses

  • Family business

    • a company in which one family owns a majority stake

    • Involved in the daily management of the business


Chapter 3 small business entrepreneurs characteristics and competencies

  • Interesting Facts:

  • 1/3 of the Standard & Poor’s 500 companies are family owned and managed

  • Family businesses make up over 1/2 of the businesses in the United States.

  • 39%of businesses in the United States are small family businesses.

  • They employ 58%of America’s workforce.


Its advantages

Its Advantages

  • Communication can be more effective

  • Decision making may be easier and quicker

  • Strong family bonds may lead to strong corporate culture


Chapter 3 small business entrepreneurs characteristics and competencies

  • Pre-established family relationship carries over into the workplace

  • Families are often the first source for business capital

  • Entrepreneurial parents often serve as the first entrepreneurship teachers for their children


7 family business challenges

7. Family Business Challenges

  • Role conflict

    • Problem arises when people have multiple responsibilities such as parent and boss, and different responsibilities make different demands on them.

    • Occurs when family issues bleed into the workplace and vice versa

    • At worst, when people fail to recognise it.

    • A boss – daughter to work – a parent – e.g. to ask her to be with own children


Chapter 3 small business entrepreneurs characteristics and competencies

  • Solutions

    • To keep family issues out of the business

    • Whenever possible, make decisions based on business necessities.

    • When making decision from a family perspective, broaden it to apply equally to nonfamily as well as family members.


Chapter 3 small business entrepreneurs characteristics and competencies

  • Role conflict breeds another unending problem-the shortage of time.

  • Time management skills can help meet the overload

    • organizing process to help make the most efficient use of the day

    • List, 123 Prioritize, Delegate, Repeat, Strategize


Chapter 3 small business entrepreneurs characteristics and competencies

  • Succession

    • Process of intergenerational transfer of a business.

    • Only 1/3 survive beyond the first generation

    • Reality - founders get ill / incapacitated / die


Chapter 3 small business entrepreneurs characteristics and competencies

Challenges

  • Refusing to let go, or appointing a new manager

  • Interfering and undermining him/her – consciously and unconsciously

  • No clear cut succession plan and a family member is thrust into the position with little or no preparation


Chapter 3 small business entrepreneurs characteristics and competencies

  • Loss of the founder causes dissension between family members competing for the top position

  • Or taking side on who they’d like to see in that position


Chapter 3 small business entrepreneurs characteristics and competencies

  • Taking a Professional Approach

    • Creates a family council – immediate interests

    • An advisory board – board of directors – strategic direction

    • Set boundarybetween a family council and a board of directors

    • To keep family involved - focused on running the business


Chapter 3 small business entrepreneurs characteristics and competencies

  • Identifies who will take over – roles, support

  • Sets up the necessarytrainingfor the successor

  • Provides a schedule for the changeover or trigger a point at which the changeover is affected

  • A good plan will also handle the assets to minimize the tax burden on the family and company


Revision

Revision


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