Strategic Issues in Entreprenuerial Ventures
Chapter 13
STRATEGIC ISSUES IN ENTREPRENEURIAL VENTURES AND SMALL BUSINESSES
The Importance of Small-Business and Entrepreneurial Ventures
A. Definition of Small-Business Firms and Entrepreneurial Ventures
The most commonly accepted definition of a small business firm is one that employs fewer than 500 people and that generates sales of less than $20 million annually. According to the U.S. Small Business Administration, “A small business is one which is independently owned and operated, and which is not dominant in its field of operation.”
Although there is considerable overlap between what is meant by the terms small business and entrepreneurship. The concepts are different. The small-business firm is independently owned and operated, not dominant in its field, and doesn’t engage in innovative practices. The entrepreneurial venture, in contrast, is any business whose primary goals are profitability and growth and that can be characterized by innovative practices. The basic difference between the small business firm and the entrepreneurial venture, therefore, lies not in the type of goods or services provided, but in their fundamental views on growth and innovation. Thus, according to Donald Sexton, an authority on entrepreneurship, strategic planning is more likely to be an integral part of an entrepreneurial venture than of the typical small-business firm:
“Most firms start with just a single product. Those oriented toward growth immediately start looking for another one. It’s that planning approach that separates the entrepreneur from the small-business owner.”
B. The Entrepreneur as a Strategic Manager
Often defined as a person who organizes and manages a business undertaking and who assumes risk for the sake of a profit, the entrepreneur is the ultimate strategic manager. He or she makes all the strategic and operational decisions. All three levels of strategy – corporate, business, and functional – are the concerns of the founder
STRATEGIC ISSUES IN ENTREPRENEURIAL VENTURES AND SMALL BUSINESSES
The Importance of Small-Business and Entrepreneurial Ventures
A. Definition of Small-Business Firms and Entrepreneurial Ventures
The most commonly accepted definition of a small business firm is one that employs fewer than 500 people and that generates sales of less than $20 million annually. According to the U.S. Small Business Administration, “A small business is one which is independently owned and operated, and which is not dominant in its field of operation.”
Although there is considerable overlap between what is meant by the terms small business and entrepreneurship. The concepts are different. The small-business firm is independently owned and operated, not dominant in its field, and doesn’t engage in innovative practices. The entrepreneurial venture, in contrast, is any business whose primary goals are profitability and growth and that can be characterized by innovative practices. The basic difference between the small business firm and the entrepreneurial venture, therefore, lies not in the type of goods or services provided, but in their fundamental views on growth and innovation. Thus, according to Donald Sexton, an authority on entrepreneurship, strategic planning is more likely to be an integral part of an entrepreneurial venture than of the typical small-business firm:
“Most firms start with just a single product. Those oriented toward growth immediately start looking for another one. It’s that planning approach that separates the entrepreneur from the small-business owner.”
B. The Entrepreneur as a Strategic Manager
Often defined as a person who organizes and manages a business undertaking and who assumes risk for the sake of a profit, the entrepreneur is the ultimate strategic manager. He or she makes all the strategic and operational decisions. All three levels of strategy – corporate, business, and functional – are the concerns of the founder