Small Business Management: Launching & Growing Entrepreneurial Ventures 19th Edition by Longenecker

ANSWER:  Overestimate what you can do. Those who take on too much will find they do not have enough time to perform well in each activity. Something promised may not happen, upsetting customers and/or employees. Setting goals too high and then failing to meet them can be discouraging to the entrepreneur and disappointing to other stakeholders.
Lack an understanding of the market. This can lead to an overestimation of revenues and overspending, resulting in cash flow problems. Customers will purchase only those products and services that meet their needs.
Hire mediocre people. Customers delight in stellar customer service and better-than-expected products. Mediocre people turn out mediocre work, which can disappoint customers and cause them to make their next purchases from a competitor.
Fail to be a team player.  Employees do not enjoy working for prima donnas. Building a business requires commitment from everyone in the organization, including the entrepreneur. Failure to be a team player can drive away the best employees, leaving the entrepreneur with the mediocre workers.
Be a domineering manager. It is very easy for the founder to become a micromanager. But the founder must accept that his or her solution is not the only good one. Employees also have good ideas that deserve to be heard. Dominating employees can drive them to the competition, leaving again only the mediocre workers.
Fail to share ownership in the business in an equitable way. Those who do the work should reap the rewards. These rewards need not be in the form of stock or partnerships, but some generous recognition of the contribution of key employees is necessary to retain the best.
 
82. Explain what social entrepreneurship is. Give an example of a social entrepreneur.
ANSWER:  Social entrepreneurship is entrepreneurial activity whose goal is to find innovative solutions to social needs, problems, and opportunities.


Students' examples of social entrepreneurs will vary. One example that may be listed would be a company that produces non-disposable products to replace paper or plastic, then donates some of their profits to activities that improve the lives of people in underdeveloped countries.
 
83. Identify and explain the four fundamental reasons entrepreneurs own their own businesses.
ANSWER:  Personal fulfillment. Persons who feel the need to contribute to make a difference in their community by giving back are drawn to entrepreneurship because of this reward.
Personal satisfaction. The lifestyle provided by some independent business ventures is inherently enjoyable. 
Independence. This reward involves a desire to be one's own boss and avoid having others tell one what to do.
Financial rewards. Many entrepreneurs are highly motivated by the prospect of making money, and in fact, some entrepreneurs earn lots of money. In general, self-employed individuals are more likely to create greater personal wealth than persons who work for others.
 
84. Briefly summarize the three types of personalities that come into play when a person is starting a business.
ANSWER:  In his book, The E-Myth Revisited: Why Most Businesses Don't Work and What to Do about It, Michael Gerber describes three personalities that come into play when a person is starting a business:
The technician personality. A technician personality focuses on an already developed technical skill, wants to be left alone to get the job done, and is primarily concerned about the present. A technical personality tends to do the following:
Use short-term thinking with little planning for future growth or change.
Be paternalistic.
Define marketing strategy in terms of the traditional components of price, quality, and company reputation.
Be reluctant to delegate.
Focus on sales efforts that are primarily personal.
The manager personality. A manager personality is pragmatic and likes order and planning operations. A manager personality tends to do the following:
Avoid paternalism.
Delegate authority as necessary for growth.
Employ diverse marketing strategies.
Use different types of sales approaches.
Obtain original financing from more than two sources.
The entrepreneur personality. An entrepreneur personality focuses on the business and providing results for the customer. An entrepreneurial personality tends to do the following:
Ask the question, "How must the business work?"
See the business as a system for producing outside results for the customer and, in so doing, producing profits.
Start with a picture of a well-defined future, and then attempt to change the present to match the vision.
Develop strategies for the business by first seeing the whole picture.