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Entrepreneurship > Exam 1 > Flashcards

Exam 1 Flashcards

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1
Q

What is an opportunity?

A

An opportunity is a favorable set of circumstances that creates a need for a new product, service, or business.

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2
Q

What are the four essential qualities of an opportunity?

A
  • Attractive
  • Timely
  • Durable
  • Anchored in a product, service, or business that creates or adds value for its buyer or end user.
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3
Q

What are three ways to identify an opportunity?

A
  • Observing trends
  • Solving a problem
  • Finding gaps in the marketplace.
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4
Q

What are the most important trends that create opportunities for entrepreneurs?

A
  • Economic forces
  • Social forces
  • Technological advances
  • Political and regulatory change.
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5
Q

How do economic trends affect start-ups?

A

Economic trends help determine areas that are ripe for new start-ups and areas that start-ups should avoid.

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6
Q

Give an example of a start-up that arose from economic forces.

A

GasBuddy.com, which helps consumers save money on gas.

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7
Q

What social trends provide opportunities for new businesses?

A
  • Aging of the population
  • Increasing diversity of the workplace
  • Increased participation in social networks
  • Growth in the uses of mobile devices
  • Increasing focus on health and wellness.
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8
Q

What industries have been created as a result of technological advances?

A
  • Computer industry
  • Internet
  • Biotechnology
  • Digital photography.
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9
Q

What political actions create opportunities for entrepreneurs?

A

Laws to protect the environment have created opportunities for firms that help others comply with environmental regulations.

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10
Q

Fill in the blank: An increased focus on health and wellness is an important ________ that is creating opportunities in many areas for entrepreneurial firms.

A

[social force]

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11
Q

What is the second approach to identifying opportunities?

A

Solving a problem.

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12
Q

What is a gap in the marketplace?

A

A gap in the marketplace is created when a product or service is needed by a specific group of people but doesn’t represent a large enough market for mainstream retailers.

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13
Q

Provide an example of a company that filled a gap in the marketplace.

A

Daisy Rock Guitars, which makes guitars specifically for women and girls.

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14
Q

What personal characteristic helps entrepreneurs recognize opportunities?

A
  • Prior experience
  • Cognitive factors
  • Social networks
  • Creativity.
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15
Q

How does prior experience help in recognizing business opportunities?

A

It helps individuals spot underserved market niches and build networks of contacts.

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16
Q

What is entrepreneurial alertness?

A

The ability to notice things without engaging in deliberate search.

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17
Q

What is the difference between strong-tie and weak-tie relationships?

A
  • Strong-tie: frequent interaction, close relationships
  • Weak-tie: infrequent interaction, casual acquaintances.
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18
Q

Which type of relationship is more likely to lead to new business ideas?

A

Weak-tie relationships.

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19
Q

What is creativity in the context of opportunity recognition?

A

The process of generating a novel or useful idea.

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20
Q

What is brainstorming?

A

A technique used to generate a large number of ideas and solutions to problems quickly.

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21
Q

What are the rules for a brainstorming session?

A
  • No criticism
  • Freewheeling is encouraged
  • The session should move quickly
  • Leap-frogging is encouraged.
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22
Q

What is a focus group?

A

A gathering of five to ten people selected based on common characteristics, led by a trained moderator to gain insights.

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23
Q

What is the benefit of library research for generating business ideas?

A

Libraries provide access to industry-specific magazines, trade journals, and reports that can spark new ideas.

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24
Q

What are some resources available through libraries?

A
  • BizMiner
  • ProQuest
  • IBISWorld
  • Mintel
  • LexisNexis Academic.
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25
What is a useful strategy for Internet research on new business ideas?
Typing 'new business ideas' into a search engine or setting up Google mail alerts on specific topics.
26
27
What is entrepreneurship?
The process by which individuals pursue opportunities without regard to resources they currently control for the purpose of exploiting future goods and services.
28
What do entrepreneurs need to transform an idea into a viable business?
Entrepreneurs assemble and integrate resources such as money, people, business model, and strategy.
29
What is a Venture Capitalist?
An investor who provides capital to startups with long-term growth potential.
30
Is opening a restaurant considered an entrepreneurial activity?
Yes, if it involves a new idea or experience that solves a problem.
31
What are salary-substitute firms?
Firms that provide their owner or owners a similar level of income to what they would earn in a conventional job.
32
What are lifestyle firms?
Firms that provide their owner or owners the opportunity to pursue a particular lifestyle while making a living.
33
What defines an entrepreneurial firm?
Firms that bring new products and services to the market by creating and seizing opportunities, regardless of the resources they currently control.
34
How does an entrepreneur differ from a general manager in a restaurant?
An entrepreneur has their own boss, is more passionate, and solves problems, while a general manager has more rules and less risk.
35
What are the three primary reasons people become entrepreneurs?
* Desire to be their own boss * Desire to pursue their own ideas * Financial rewards
36
What is corporate entrepreneurship?
The conceptualization of entrepreneurship at the firm level.
37
What does entrepreneurial intensity refer to?
The position of a firm along a continuum from highly conservative to highly entrepreneurial.
38
What are the characteristics of successful entrepreneurs?
* Passion for the business * Product/customer focus * Tenacity despite failure * Execution intelligence
39
What is the number one characteristic shared by successful entrepreneurs?
Passion for the business.
40
What is the common myth about entrepreneurs being born, not made?
The belief that some people are genetically predisposed to be entrepreneurs; studies show anyone can become an entrepreneur based on environment and choices.
41
True or False: Entrepreneurs are primarily motivated by money.
False.
42
What factors favor older entrepreneurs compared to younger entrepreneurs?
Experience, maturity, a solid reputation, and a track record of success are favored by investors.
43
What is a salary-substitute firm example based on the case of Colorado Sandwich, Soup and Salad?
A firm that provides a level of income similar to a conventional job.
44
What is the economic impact of small innovative firms?
They are 16 times more productive than larger innovative firms in terms of patents per employee.
45
How many new jobs do firms with 500 or fewer employees create annually in the U.S.?
65% of new jobs.
46
What is the first step in the entrepreneurial process?
Deciding to become an entrepreneur.
47
Fill in the blank: Successful entrepreneurs have a keen focus on _______.
[products and customers]
48
What is the primary impact of entrepreneurial firms on society?
Their innovations create new products and services that enhance productivity, improve health, and provide entertainment.
49
What is execution intelligence?
The ability to fashion a solid business idea into a viable business.
50
What is the importance of tenacity for successful entrepreneurs?
It allows them to persevere through setbacks and failures.
51
What is the relationship between entrepreneurial firms and larger firms?
Many entrepreneurial firms produce products and services that help larger firms become more efficient and effective.
52
What is the common misconception about entrepreneurs loving the spotlight?
Most entrepreneurs do not attract public attention and are not well-known.
53
54
What is a Feasibility Analysis?
The process of determining whether a business idea is viable ## Footnote It is a preliminary evaluation conducted to assess if the idea is worth pursuing.
55
When should a feasibility analysis be conducted?
Early in thinking through the prospects for a new business ## Footnote This helps screen ideas before significant resources are expended.
56
What are the four components of a properly conducted feasibility analysis?
* Product/service feasibility * Industry/target market feasibility * Organizational feasibility * Financial feasibility
57
What does product/service feasibility assess?
The overall appeal of the product or service being proposed ## Footnote It evaluates if the product or service meets customer needs.
58
What are the key components of product/service feasibility?
* Product/service desirability * Product/service demand * Will people actually pay for it
59
What questions help determine product/service desirability?
* Does it make sense? * Is it reasonable? * Is it something consumers will get excited about? * Does it solve a problem or fill a market gap? * Is this a good time to introduce it? * Are there any fatal flaws?
60
What is a concept statement?
A one-page description of a business distributed for feedback ## Footnote It helps gauge the viability of the product or service idea.
61
What are the steps to assess product/service demand?
* Talking face-to-face with potential customers * Using online tools * Library, Internet, and gumshoe research
62
What is the purpose of industry/target market feasibility analysis?
To assess the overall appeal of the industry and target market for the proposed business ## Footnote It evaluates if the business can compete effectively.
63
What characteristics make an industry attractive?
* Young rather than old * Early rather than late in their life cycle * Fragmented rather than concentrated * Growing rather than shrinking * Selling must-have products * Not crowded * High operating margins
64
What is organizational feasibility analysis focused on?
Determining if a proposed business has sufficient management expertise, organizational competence, and resources ## Footnote It focuses on non-financial resources.
65
What does management prowess refer to?
The ability of the management team to effectively launch the venture ## Footnote It includes passion and market understanding.
66
What is the purpose of financial feasibility analysis?
To assess the financial viability of the proposed venture ## Footnote It includes a preliminary financial assessment.
67
What are the components of financial feasibility analysis?
* Total startup cash needed * Overall financial attractiveness * Financial performance of similar businesses
68
What is the first issue regarding total start-up cash needed?
The total cash needed to prepare the business for its first sale ## Footnote A budget should list all anticipated capital purchases and operating expenses.
69
What factors are associated with promising business opportunities?
* Steady and rapid growth in sales * High percentage of recurring revenue * Ability to forecast income and expenses * Internally generated funds for growth * Availability of an exit opportunity for investors
70
Fill in the blank: A concept statement is a _______.
[one-page description of a business]
71
True or False: Organizational feasibility analysis focuses on financial resources.
False
72

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