Fundamentals of Management, Chapter 5 Lecture Notes Entrepreneurship Isabel M. Isidro (2007) tells us that there are ten rules that entrepreneurs should follow to make sure their businesses grow and prosper. Her suggestions include: find a niche market to target, be small but think big, differentiate the product or service, make a good first impression, plan for success, and establish long-term relationships with customers and suppliers. She further states that by listening to your customers you can best determine potential innovations and plan for success. An entrepreneur should understand the power of planning. A good plan helps you increase your chances of succeeding and can help you define your business concepts, estimate costs, predict sales and control your risks. It tells you where you are going and how to get there. (Isidro, 2007) Entrepreneurs, like all business people, must also keep an eye on the financial status of their firms. The difference between their focus and that of a corporate CEO is that entrepreneurs must understand that their sustainability is also predicated on other factors. Hupalo (2007) states, If entrepreneurs become too earnings focused, they may cut corners leading to less customer satisfaction. They may not reinvest enough in their company’s future. They may compromise their relationship with their employees. This can lead to less success in the future. Entrepreneurs, therefore, must measure their success by means beyond revenue or profitability. Other measures include increasing profit margins, paying down debt, year-over-year performance, growth in sales, product quality, the number of new clients, and customer satisfaction. Hupalo also makes the following statement about employees: Employee satisfaction is another measure of success. The great companies tend to have employees who pride themselves in working for their company. Consider what your company has done for its employees throughout the year. If you added a 401(k) plan or improved the level of employee feedback and recognition, for example, you should deem your company more successful than last year. You own a better company. So, what does it take to be an entrepreneur? Let’s take a look at the case of Sherryl Ford, owner of Facelogic International Inc. According to Lee (2007), Sherryl Ford wrote the first business plan for a new spa venture on a 4-by-6-inch card at 2 a.m. Three years later, Ford and business partners Shari Nevarez and Evangelina Eastman have established Facelogic International Inc. as a comparatively inexpensive spa chain with more than 22 franchises in the United States and Canada. By year-end, Ford expects to have opened 45 spas, each employing 10 staff members. The company's revenues to date are $2.3 million. (p. 39) A recent interview with Ms. Ford brought forth some critical elements behind her entrepreneurial success. Here are some of her comments relating to the following topics: Reason for Getting into Business: .

1. Fundamentals of Management, Chapter 5
Lecture Notes
Entrepreneurship
Isabel M. Isidro (2007) tells us that there are ten rules that
entrepreneurs should follow to make sure their businesses grow
and prosper. Her suggestions include: find a niche market to
target, be small but think big, differentiate the product or
service, make a good first impression, plan for success, and
establish long-term relationships with customers and suppliers.
She further states that by listening to your customers you can
best determine potential innovations and plan for success.
An entrepreneur should understand the power of planning. A
good plan helps you increase your chances of succeeding and
can help you define your business concepts, estimate costs,
predict sales and control your risks. It tells you where you are
going and how to get there. (Isidro, 2007)
Entrepreneurs, like all business people, must also keep an eye
on the financial status of their firms. The difference between
their focus and that of a corporate CEO is that entrepreneurs
must understand that their sustainability is also predicated on
other factors. Hupalo (2007) states,
If entrepreneurs become too earnings focused, they may cut
corners leading to less customer satisfaction. They may not
reinvest enough in their company’s future. They may
compromise their relationship with their employees. This can
lead to less success in the future.

2. Entrepreneurs, therefore, must measure their success by means
beyond revenue or profitability. Other measures include
increasing profit margins, paying down debt, year-over-year
performance, growth in sales, product quality, the number of
new clients, and customer satisfaction. Hupalo also makes the
following statement about employees:
Employee satisfaction is another measure of success. The great
companies tend to have employees who pride themselves in
working for their company. Consider what your company has
done for its employees throughout the year. If you added a
401(k) plan or improved the level of employee feedback and
recognition, for example, you should deem your company more
successful than last year. You own a better company.
So, what does it take to be an entrepreneur? Let’s take a look at
the case of Sherryl Ford, owner of Facelogic International Inc.
According to Lee (2007),
Sherryl Ford wrote the first business plan for a new spa venture
on a 4-by-6-inch card at 2 a.m. Three years later, Ford and
business partners Shari Nevarez and Evangelina Eastman have
established Facelogic International Inc. as a comparatively
inexpensive spa chain with more than 22 franchises in the
United States and Canada. By year-end, Ford expects to have
opened 45 spas, each employing 10 staff members. The
company's revenues to date are $2.3 million. (p. 39)
A recent interview with Ms. Ford brought forth some critical
elements behind her entrepreneurial success. Here are some of
her comments relating to the following topics:
Reason for Getting into Business: It is an inspired concept and a
missed service in the current market.
Biggest Plus of Business Ownership: Personally helping women

3. to own their own businesses in an exciting and growing industry
Biggest Business Strength: Passion, vision, and growth in the
beauty industry with a strong corporate team along with my two
outstanding business partners, Shari Nevarez and Evangelina
Eastman
Biggest Business Weakness: Creating national consumer
awareness
Best Way to Stay Competitive: Researching what the consumer
wants and needs
My Business Works Best When: When I stay inspired, the
corporate team stays inspired. In turn, that inspires franchisees
and excitement follows to the consumer. (Lee, 2007, p. 40)
Ms. Ford was successful because she first was inspired to bring
her idea to reality, was passionate about her business, instilled
the vision in others, and brought the right people into the
business to make it successful.
So what can we take away from our discussion on
entrepreneurship? The following equation sums it up:
Inspiration + Passion + Vision + People = Entrepreneurial
Success
References
Hupalo, P. (2007). Measuring success in small business and
entrepreneurship.
Retrieved on October 4, 2007, from
http: www.thinkinglike.com Essays Measuring-Success-In-
Small-Business.html

4. Isidro, I. (2007). 10 Rules for Small Business Success.
Retrieved
on October 4, 2007, from
http://www.powerhomebiz.com/vol19/rules.htm
Lee, J. (2007, Sept. 3). Entrepreneur profile: Sherryl Ford.
San Diego Business Journal, 28(36)38.
additional info
Perhaps the most important facet of the “employer mind-set” to
begin
with is making very public the notion that you are always
looking for
employees who will fit in with your team; you are always in the
recruiting
mode. Make sure that friends, family members, existing
employees,
suppliers, and even customers know that you are always willing
to
interview someone who is interested in working for you. Be
sure that
your employees know this as well – it will keep them on their
toes and
make them feel valued. Think of reasons why someone would
want to
work for you and make a brochure to give to prospective
employees.
Once you have employees, be sure to acknowledge their efforts.
All
human beings need recognition of some sort and, although it
does not
have to be grand or expensive, it should be given by employers,
and given
as close to the time it is deserved as possible, so that employees

5. will know
that what they do is appreciated and they will want to continue
to work
for those employers. Without spending very much money you
can give
employees personalized T-shirts, coffee mugs, pencils, or
calendars on
which you have printed their names and/or something about the
way
they do their jobs. In addition, remember that a little employee
turnover
is healthy; sometimes an employee move is healthy for all
parties.
(Pages 153-154)
2. The concept of cause marketing is one that aims at doing
good in the world.
For small businesses that “good” should be done in the
business’ local
community. Such an aim means that the organization will help
people
outside its own members. But what difference does involvement
in cause
marketing make for the company itself? First, having a
reputation for
caring enough to actively take part in helping the community
will entice
customers to shop at a store, but customers are not the only
people who
notice company reputation. Potential employees also know
where
businesses stand on helping someone besides themselves, and
they are
more likely to want to be part of such a company than part of a
company
that does not give back to its community. In addition, anyone

6. thinking of
referring good employees will be more apt to refer them to
businesses that
are run with a thought about the communities in which they
operate.
Owners who make an effort to address the needs of the
communities
around their stores will be seen as employers who will make an
effort to
address the needs of their employees. (Pages 156-157)
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3. Although there are myriad reasons people take the jobs they
take, there
are some reasons that are universal and that are in every list
when
employees are asked what they are looking for in their jobs.
First on most
lists is the amount of pay they will receive; employees want this
to be
above average. Good working conditions ((clean, safe, and up-
to-date)
and a place they can say they are proud to work are next on the
list. Two
criteria seem to be important to most employees regardless of
the levels of
the jobs for which they apply: genuine appreciation for their
efforts and
respect for their opinions. Employers who do not take the time
to let
their workers know that their work is valuable to the company
will not
keep those employees very long, or, if they do, they will not
receive high

7. quality work from them. Employees like to be heard and to have
their
opinions respected, and employers should heed what they have
to say. Of
course not every employee opinion will be highly useful –
perhaps it will
not be useful at all – but employers should make staff members
feel
comfortable coming to them with their ideas and perceptions.
An item that is included the majority of times employees are
asked about
what they want from their jobs is one that has appeared in high
percentages only in the past few years, and that is having a job
that is
close to where they live. Congested traffic and large amounts of
road
construction have become so common that many employees
must add
hours to their daily commutes, and they are finding that their
drives are
more tiring than their jobs. Finally, employees want an
opportunity to
enjoy work and have some fun. People who like their work will
keep
their jobs even if they could make more money somewhere else.
(Page 155)
4. The most obvious, and usually least expensive, method of
finding
employees is through referrals. Let customers know that you are
hiring,
and they can be excellent sources for referrals. Likewise, you
should let
your current employees know that you want to hire so that they
can be
part of the procedure for finding others who will work with

8. them. By
including your employees, you will not only receive good
recommendations from people who know the details of available
jobs but
you will also reinforce the idea that their opinions are valuable
to you and
to the organization. In fact, you may want to offer monetary
incentives for
referrals whom you actually hire. Just be sure that all employees
know
that they may refer anyone at any time but that you will not be
able to
favor those applicants simply because they were referred by
employees.
You should let them know this partly because of morale but also
because
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L e s s o n 7
you will be breaking the laws against discrimination if you have
your
mind made up before giving all applicants a chance.
Other good sources of referrals are community networking
events
(Chambers of Commerce, local service organizations such as
Lions Club
and Rotary International, and even religious groups and parents
groups
such as PTA), Internet job postings (this is often free and is
becoming
more popular all the time), job fairs (sometimes if you hire
higher-risk
employees from these sources you can qualify for financial
benefits),
cause marketing (people want to work for companies that care),
government programs (such as the local unemployment office)

9. and,
finally, your competitors (do this in a way that is ethical and
good for
business). (Pages 154-157)
5. In order to know an interviewee well enough to make a hiring
decision,
store owners should ask at least eight questions of each one:
1) To you, what is the most important element in a job?
2) What did you like best about your last job?
3) Why did you accept your last job?
4) What did you like least about your last job?
5) What are your goals?
6) Where would you like to be in two years?
7) What do you think are the most important traits in a
supervisor?
8) If you were to work here, what would be your ideal job?
(Page 158)
6. Brainstorming is an excellent tool for retailer to use to assist
them as they
organize and operate their businesses. This method of problem
solving is
innovative and provides solutions that employees will own.
Employees
feel valued and connected to the business and that they “own
the plan,”
striving harder to make it work because it was their idea. (Pages
159-160)
7. The exit interview is an opportunity for retailers to learn
more about their
businesses. In the exit interview, the employee and his or her
employer
will be on the same level for the first time since they met.
Employees can
speak freely without causing damage to work opportunities, and

10. employers can ask questions without having to worry about hurt
feelings
and gossip in the workplace. Regardless of whether the person’s
reason
for leaving is positive or negative, employers can learn
something from
everybody if they are willing to listen.
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L e s s o n 7
Employers should prepare for this last visit with employees by
creating
forms that include questions they want to ask, areas they want
to cover,
and enough room for them to write notes. As with the entrance
interviews, employers should hold exit interviews in quiet
settings and
allow no interruptions, either in person or by phone. Now is the
time to
bring up such subjects as dealing with disgruntled employees,
training,
shoplifting and employee theft, and any other subjects about
which the
employer may have no other way to find out. Don’t forget to
include
procedures for operating the store, receiving merchandise, and
others that
can always be improved. The more time employers have spent
listening
to employees and respecting their views before they terminate,
the more
information those employees will share during exit interviews.
(Page 163)
8. The two primary categories of insurance small-business

11. owners should
purchase, whether they purchase others or not, are Workers’
Compensation, and Business Owners’ Policies (BOPs).
Workers’
Compensation Insurance is required in most states and varies in
cost from
state to state and from industry to industry. In addition, if a
business
incurs a Workers’ Compensation claim, the rates for that
particular
business go up. A Business Owner’s Policy is a business version
of a
homeowner’s policy, designed to meet the property and liability
insurance
needs of small-business owners. Retailers are among the
allowed types of
industries that may purchase Business Owners’ Policies. (Page
164)
9. As a small-business owner, you must be cautious when
deciding whether
to engage the services of an attorney. You must consider four
primary
concerns when making such a decision. First, you should ask
yourself
why you need an attorney. The need should become apparent
when you
are choosing a legal structure for your business. Next you
should
determine what to look for when hiring an attorney; this
includes fees but
also includes finding a personality that will work well with your
own.
Third, you need to determine what will happen if you and your
attorney
disagree, and, finally, once you choose an attorney, be sure that

12. you use
the services the attorney offers. (Pages 168-169)
10. Employees are likely to commit fraud on their employers
more because of
motivation than because of opportunity. One theory is that
employees
who commit fraud at work feel that they are doing nothing more
than
balancing things out. They believe that they are not being
treated fairly,
or maybe that they are not being compensated adequately, so
they take
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items from the store in which they work to make up for what
they believe
they deserve but are not being given. Another theory is simply
that
financial pressures are too much for some employees and so
they take
items, or even money, from their places of employment. (Page
171)
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Fundamentals of Management, Chapters 12-13
Lecture Notes
The Importance of Communication
RWE

13. Solution
s was grown from the merger of more than 100 mid-size utility
companies throughout Europe. A wholly owned subsidiary of a
German multi-utility enterprise, the newly formed company had
in excess of 132,000 employees and offices in more than 100
countries. A merger of this import required the company to
orchestrate changes at all levels, focusing on corporate culture
and communication. Some of the merged companies had been in
business for 50 years or more, making cultural adaptation
difficult. The mechanisms for managing change and establishing
a strong corporate identity were critical.
There were steps necessary to ensure ongoing customer loyalty
as well as a need for corporate communications programs that
would impact the perceptions of internal staff. “In order to
position the newly formed company as a player in an emerging
energy market in the shortest time, 350 executives of RWE