Chapter 5: Sound Business Idea Flashcards
(27 cards)
It may be defined as the economic opportunity, which is within the reach of an entrepreneur, and which will provide him with a desirable value
Sound Business Idea
When an aspiring entrepreneur is confronted with a business idea, it is his best interest to:
Determine its soundness
Procedure in Determining Best Business Idea:
- Preparation of List of Business Ideas
- Screening
- Final Selection
When entrepreneur finds business ideas without serious effort, the method is referred to as:
Unanticipated means
Included in unanticipated means are the following:
The person’s
- Work
- Hobbies
- Acquaintances
- Chance event encountered
A disadvantage of unanticipated means in idea generation is the difficulty of ascertaining the exact date when ideas will come pouring in. To offset this problem, _____ is made
Deliberate search
In screening, this feasibility indicates the following:
- Stable and sufficient demand
- Potential competitive strength of the firm
Market Feasibility
In screening, this feasibility makes business ideas oftentimes appear easy to execute, but it is not really so when converting them into real products or services with required quality or quantity
Technical Feasibility
In screening, this feasibility entails there are sufficient funds to fund operations. The proposed owners of the venture must have sufficient capital, or if insufficient, must be a good credit standing in the community.
Financing Feasibility
In screening, this feasibility ensures that business ideas that cannot provide some indication of profitability must be screened out
Financial Feasibility
It is a financial record summarizing a firm’s planned, or expected financial performance in terms of revenues, expenses, and profits over a given time period
Projected Income Statement
The forecast of something which will happen in the future is referred to as
Projected Financial Statement
It shows the planned or expected financial position of the enterprise on a particular date
Projected balance sheet
It shows the planned or expected cash sale and/or purchases
Projected Cash Flow Statement
In Final Screening, this list means all business ideas passed the adapted criteria
Status quo listing
In Final Selection, this is a list of some generated ideas that were eliminated
Short List
In Final Selection, this list shows all generated business ideas were eliminated
Zero List
Innovation can thrive in a _____
Creative organization
Refers to activities that are proactive methods in solving problems
Creativity
involves bringing a hypothetical business idea to lifeand challenging its possibilities
Risk-taking
When creativity is _____, there is an assurance that creativity will continuously be generated
Rewarded
the flow of exchanging ideas between organizational members
Open communication
When an error is detected, a move should be made to correct it
This shows that creativity is a catalyst for not only creating ideas, but also for solving problems
Allowance for Errors
When an organization encourages a climate of ____ employees will not hesitate to contribute and provide
A Climate of Participation
