Entrepreneurship of small and medium-sized enterprises

CHAPTER 1
The Importance of Small and Medium-Sized Enterprises in the Economy of a Country .... 11
1.1 Definition of Entrepreneur, Entrepreneurship and Enterprise ..........................................12
1.2 Functions of an Enterprise ................................................................................................................12
1.3 Classification of Small and Medium-Sized Enterprises (SMEs) .........................................13
1.4 Impulses and Drivers of Entrepreneurship ................................................................................16
1.5 National Economic Functions of SMEs in the Slovak Republic, Features,
Advantages and Disadvantages of SMEs in the Slovak Republic .......................................17
1.6 Development of Entrepreneurship in the Slovak Republic ..................................................18

CHAPTER 2
The Business Environment in the EU and the Enterprise Life Cycle ................................. 21
2.1 Business Environment in the Slovak Republic ..........................................................................22
2.2 Business Life Cycle ..............................................................................................................................24

3CONTENTS
CONTENTS
List of Abreviattions...................................................................................................... 7
List of Tables ................................................................................................................. 9
List of Figures .............................................................................................................. 10
CHAPTER 1
The Importance of Small and Medium-Sized Enterprises in the Economy of a Country .... 11
1.1 Definition of Entrepreneur, Entrepreneurship and Enterprise ..........................................12
1.2 Functions of an Enterprise ................................................................................................................12
1.3 Classification of Small and Medium-Sized Enterprises (SMEs) .........................................13
1.4 Impulses and Drivers of Entrepreneurship ................................................................................16
1.5 National Economic Functions of SMEs in the Slovak Republic, Features,
Advantages and Disadvantages of SMEs in the Slovak Republic .......................................17
1.6 Development of Entrepreneurship in the Slovak Republic ..................................................18
CHAPTER 2
The Business Environment in the EU and the Enterprise Life Cycle ................................. 21
2.1 Business Environment in the Slovak Republic ..........................................................................22
2.2 Business Life Cycle ..............................................................................................................................24
CHAPTER 3
The Personality of the Entrepreneur ...................................................................................... 27
3.1 The Entrepreneur‘s View ...................................................................................................................28
3.2 The Personality of the Entrepreneur .............................................................................................29
3.2.1 Personality Aspects of a True Entrepreneur .................................................................30
3.3 Profile of a Successful Entrepreneur..............................................................................................30
3.3.1 Discipline ...................................................................................................................................31
3.3.2 Creativity....................................................................................................................................32
3.3.3 Motivation .................................................................................................................................34
3.3.4 Passion .......................................................................................................................................35
3.3.5 Self-Awareness .........................................................................................................................35
3.3.6 Empathy .....................................................................................................................................36
3.3.7 Risk-Taking ...............................................................................................................................37

CHAPTER 4
Legal Forms of Business............................................................................................................ 39
4.1 Legal form of Business ........................................................................................................................40
4.2 Legal forms of Business of a Natural Person ..............................................................................40
4.2.1 Self-Employed ..........................................................................................................................41
4.2.2 Business Conducted Through Special Regulations (Free Profession).................42
4.2.3 Self-Employed Farmer ..........................................................................................................43
4.3 Legal Forms of Business of Legal Person .....................................................................................43
4.3.1 Public Company ......................................................................................................................45
4.3.2 Limited Partnership ...............................................................................................................46
4.3.3 Limited Liability Company .................................................................................................47
4.3.4 Joint-Stock Company ............................................................................................................49
4.3.5 A simple Joint-Stock Company .........................................................................................50
4.3.6 Cooperative Society...............................................................................................................52
4.3.7 A European Economic Interest Grouping.....................................................................54
4.3.8 European Company ...............................................................................................................55
4.3.9 European Cooperative Society ..........................................................................................57
4.3.10 European Private Company ................................................................................................59
4.4 Business without Legal Personality ...............................................................................................59
4.4.1 Agreement on the Silent Partnership..............................................................................59

CHAPTER 5
Business Ideas and Creation of a Business Plan .................................................................... 61
5.1 Budding Entrepreneur .......................................................................................................................62
5.2 Where to Look for Business Ideas? ...............................................................................................62
5.3 Business Plan..........................................................................................................................................63
5.3.1 Contents of the Cover Page of the Business Plan........................................................64
5.3.2 Executive Summary ...............................................................................................................65
5.3.3 Description of the Company ..............................................................................................65
5.3.4 Organizational Structure and Management ................................................................65
5.3.5 Description of Products/Services ....................................................................................65
5.3.6 Market Analysis ......................................................................................................................65
5.3.7 Description of Competition and its Analysis ...............................................................66
5.3.8 Marketing and Sales Plan – Market Entry Strategy ...................................................66
5.3.9 Assuring Intellectual Property Rights (IRP) ................................................................67
5.3.10 Production Plan .......................................................................................................................67
5CONTENTS
5.3.11 Personnel Plan..........................................................................................................................68
5.3.12 Financial Planning and Financial Plan ............................................................................68
5.3.12.1 Structure, Content and Level of Detail of the Financial Plan
and its Implementation ........................................................................................69
5.3.12.2 Financial Statements..............................................................................................71
5.3.12.3 Methods, techniques and models in creating a financial plan ...............74
5.3.13 Annexes to the Business Plan .............................................................................................76

CHAPTER 6
Business Support for Small and Medium-Sized Enterprises
and Enterprise Europe Network ............................................................................................. 77
6.1 Legislative and Institutional Framework of SME Support ..................................................78
6.1.1 Legislative and Framework for SME Support .............................................................78
6.1.2 European Network for SME Support..............................................................................79
6.2 Enterprise Europe Network ............................................................................................................80
6.2.1 Consulting areas of EEN.......................................................................................................81
6.3 Financing through EU Policies, Institutions and Projects .....................................................83
6.4 Slovak Business Agency .....................................................................................................................85
6.4.1 Financial Services ..................................................................................................................86
6.4.2 Non-Financial Services.........................................................................................................86
6.4.3 Family Business Support Scheme .....................................................................................87
6.5 SARIO – Slovak Agency for the Development of Investments and Trade ...................87

CHAPTER 7
Innovation in Small and Medium-Sized Enterprises........................................................... 89
7.1 Definition of Innovation, Invention, Innovation Potential ..................................................90
7.2 The role of Innovation in Business.................................................................................................91
7.3 Types of Innovation.............................................................................................................................92
7.3.1 Innovation Matrix ..................................................................................................................92
7.3.2 Other Types of Innovation ..................................................................................................94
7.4 Innovation Barriers of SMEs............................................................................................................95
7.5 Business Model and Business Model Canva ..............................................................................96
7.5.1 Business Model Canvas ........................................................................................................97
7.6 Startup .................................................................................................................................................. 100
7.6.1 Special Considerations of Startup ................................................................................. 100
7.6.2 Advantages and Disadvantages of Startups ............................................................... 101
7.7 Scalup .................................................................................................................................................... 102
7.8 Coworking Space .............................................................................................................................. 104
7.9 What Is Crowdfunding? ................................................................................................................. 105

Chapter 8
Family Businesses .................................................................................................................... 109
8.1 Definition of Family Business ....................................................................................................... 110
8.2 Types of Family Businesses ........................................................................................................... 112
8.3 Advantages and Disadvantages of Family Businesses.......................................................... 113
8.4 Issues In Family Businesses............................................................................................................ 113
8.4.1 Generational Exchange and Succession ...................................................................... 114