Entrepreneurial and Small Business Concepts

the foundational concepts of entrepreneurship and small business ownership (ESB 1.1)

1.1.1 Entrepreneurship and Small Business definition 

• Small Business Owners

  • Not always interested in taking on new business opportunities.

  • Their key objective is to generate profits. 

  • Content to stick with what their current business does. 

• Entrepreneurs

  • Interested in taking on new business opportunities. 

  • An individual with an innovative product or service. 

  • Formulates and grows a business from that idea. 

  • Willing to take on risk. 

1.1.2 Types of Businesses 

• Franchise

  • The owners license their operations, products or services, branding, and knowledge for a franchise fee. 

  • Higher upfront costs but less risky.

  • Direction, guidance, and training usually available. 

1.1.3 Legal Structures of a Business 

• S Corp - pass-through taxation, strict qualification requirements, limited liability protection

• C Corp - taxed separate from owners (double layer), ideal for international businesses, limited liability protection

• LLC - pass-through taxation

• Sole Proprietorship - easy to create, unlimited personal liability

• Non-profit entity

1.1.4 Roles and Responsibilities within a Business 

• CEO - highest ranked, makes the major decisions

• CFO - in charge of finances

• COO - oversees day-to-day

• CTO - responsible for information technology

• Founder - creator, not interchangeable

• Stakeholders - directly or indirectly involved (different from shareholders / stockholders)

• Partnership

• Stockholders

• Employees

1.1.5 Business Compensation Structures 

• Salary

• Hourly

• Commission

• Piece Work

• Equity

1.1.6 Business Life Cycle Stages 

1. Existence

2. Survival - take on new customers

3. Success - look to grow or pass on

4. Take-off - get big 

5. Resource Maturity - owner separation

6. Pivot or Persist

7. Exit Plan 

1.1.7 Elements of the Design Thinking Process 

• Empathize, Define, Ideate, Prototype, Test

1.2 Identify knowledge and skills of a successful entrepreneur 

1.2.1 Identify characteristics of an entrepreneurial mindset 

1.2.2 Identify the risks, benefits, opportunities, and drawbacks of being an entrepreneur 

1.3 Recognize potential business opportunities 

1.3.1 Identify characteristics of a business opportunity 

1.3.2 Determine the viability of a business opportunity 

1.4 Identify the elements of a business plan 

1.4.1 Identify the purposes and value of a business plan, pitch deck, and lean canvas 

1.4.2 Define the key components of a business plan and pitch deck 

1.5 Identify intellectual property concepts 

1.5.1 Differentiate between trademarks, trade secrets, copyrights, and patents 

1.5.2 Identify the value, risks, and guidelines associated with using licensed materials