Chapter 6 · Entrepreneurship

A new or improved offering with initiative, plans and resources to make it real.

An idea becomes entrepreneurial action when resources are organized to deliver it.

A person who starts a new organization to pursue an idea.

Classic entrepreneurs create organizations; intrapreneurs innovate within existing ones.

An SME is defined by size; entrepreneurship is defined by initiative and novelty.

A small inherited firm need not be entrepreneurial, and entrepreneurs can manage large firms.

Cost savings from producing a large volume of output.

Large-volume production can spread costs and use specialized methods unavailable to very small operations.

A greater failure risk associated with being a small organization.

Limited resources, financing and diversification make small firms more vulnerable.

A greater failure risk associated with being newly established.

New firms have less established reputation, routines and stakeholder relationships.

An organization controlled by two or more members of one family, together or in succession.

Family control describes relationships and governance, not size or novelty.

Expenses owners incur to ensure managers act in the firm's interests.

Trust and aligned incentives can reduce the need for costly monitoring.

Misaligned incentives and information asymmetry.

Managers may benefit from choices owners do not prefer, while owners cannot fully observe or evaluate them.

Identify an opportunity; test the idea; develop a plan; take action.

Feedback makes the sequence iterative rather than a one-way checklist.

Selecting promising ideas for further development that meet a real need.

Novelty alone does not establish a viable opportunity.

How a worthwhile outcome could be achieved.

It reframes constraints to identify possibilities, as the MAD Travel case illustrates.

A financially attractive way to reduce negative social or ecological externalities.

Its harm reduction supports the goal of financial returns.

A financially viable way to enhance social or ecological well-being.

SET treats stakeholder well-being as an end rather than only a profit-making means.

A brief, focused description of the problem, proposed solution, challenge and customer benefit.

The chapter recommends about 30–60 seconds and a clear intended response.

Different stakeholders reveal needs, constraints and effects the founder may miss.

Customers, employees, suppliers and communities can reshape the idea before scaling.

A written description of a proposed venture's key features, actions, structure and systems.

It coordinates the evidence and resources needed to pursue the opportunity.

The general-management subset of a complete business plan.

A full plan also needs specialist marketing, finance and operations information.

After the other sections are completed.

Its overview should accurately reflect the venture and its supporting analyses.

Debt must be repaid; equity gives investors ownership shares.

Equity may also give funders influence over major decisions.

Many specialized offerings with relatively few customers for each.

Internet reach can make small niches accessible to entrepreneurs.

How an organization creates, delivers and captures value.

Its components connect inputs and activities with customers, revenues and outcomes.

Social/environmental costs or considerations and social/environmental benefits.

These make externalities visible alongside financial costs and revenues.

Confidence and belief that one can accomplish a task successfully.

It supports entrepreneurial action, unlike merely enjoying risk.

Obtaining small amounts of funding from many people.

Rewards, repayment and ownership arrangements vary across crowdfunding forms.

Everyone who could potentially benefit from a product or service.

Everyone who could potentially benefit from a product or service.

People in the total available market likely to actually use the product or service.

People in the total available market likely to actually use the product or service.

A performance advantage enjoyed by the first organization or product to reach a large portion of its potential market.

A performance advantage enjoyed by the first organization or product to reach a large portion of its potential market.

An investor providing funds in exchange for a share of ownership and profits, sometimes participating in major decisions.

An investor providing funds in exchange for a share of ownership and profits, sometimes participating in major decisions.