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Entrepreneurship Test 1 Review > Test 1 Reveiw > Flashcards

Test 1 Reveiw Flashcards

(92 cards)

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1
Q

In order to start a bz you need 4 elements: boundary, resources, intention, and exchange (BRIE)

A

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2
Q

A business needs the benefits of a boundary

A

something that sets it up as a firm, and sets it off from the buying or selling or barting we all do

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3
Q

A boundary can be something as simples as a business name or gov’t registration, a phone or email address dedicated to a business

A

…continued: specific location for the firm

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4
Q

Having a boundary gives you a place to locate and protect the resources you’ve gathered for the bz

A

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5
Q

Resources include the product or svc to be offered, informational resources on markets & running a bz

A

…continued: financial resources, and human resources

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6
Q

Intention is the desire to start a bz & is the most frequently occurring element in the BRIE model

A

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7
Q

Exchange refers to moving resources, goods, or svc to others, in exchange for money or other resources

A

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8
Q

SCAMPER is based on the work of Alex Osborne, a pioneer in the field of creativity

A

Alex Osborn coined the word brainstorming. He also created a tool for this known as SCAMPER

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9
Q

“S” in SCAMPER represents substitute

A

think of what you might substitute for something else to form a new idea. Creative ideas for solving annoying problems

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10
Q

“C” in SCAMPER represents combine

A

Think of possible combination you can make that result in something entirely different

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11
Q

“A” in SCAMPER represents adapt

A

Think about what could be adapted from products or services that already exist

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12
Q

“M” in SCAMPER represents magnify or modify

A

Taking an existing product and changing its appearance or adding more features or increasing the hours your store is open or making its advertising more dramatic

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13
Q

“P” in SCAMPER represents put to other uses

A

Think of ways you could generate a high number of opportunities for your product or service beyond what is is traditionally used for

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14
Q

“E” in SCAMPER represents eliminate

A

Search for opportunities that arise when you get rid of something or stop doing something

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15
Q

“R” in SCAMPER represents rearrange or reverse

A

Challenge old ways of thinking

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16
Q

SCAMPER is a very effective method for helping business owners and their employees come up with alternative solutions and opportunities

A

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17
Q

SCAMPER works bc it helps you to step outside the usual way you look at opportunities or try to solve problems

A

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18
Q

SCAMPER offers cues that push you outside your traditional areas of expertise, to consider what interesting new forms might be out there you could try

A

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19
Q

Characteristics of small businesses

JobCreation; CultureCreation; Needs; Outside help

A

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20
Q

Entrepreneurial alertness

A

Spcl set of observational & thinking skills that help entrepreneurs identify good opportunities

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21
Q

Entrepreneurial alertness…continued

A

the ability to notice things that have been overlooed, w/o actually launching a formal search for opportunities, and the motivation to look for opportunities

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22
Q

Bootstrapping is using low-cost or free techniques to minimize your cost of doing business

A

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23
Q

Business Plan: why?

A
  1. outsiders expect it. Shows your professionalism and external legitimacy
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24
Q

Business Plan: why?

A

Internal understanding-the extent to which employees, investors, and family members involved in the business know the business’e purposes and operations

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25
Business Plan components
cover page; title page; table of contents; executive summary; company description; product/service and industry
26
Business Plan components continued...
the market (target, competition, marketing strategy); the organization; the financials; appendixes
27
Purchase Existing Business - Types of Cash Flows
Discounted Cash Flow-estimates of future cash outflows & inflows, given the chg in ownership
28
3 methods used to est value of a firms assets
1. Book value - original acquisition (An asset or object bought or obtained) cost of the asset, minus all depreciation expense recognized to date
29
3 methods used to est value of a firms assets
2. Net realizable value-est. of amt for which an asset would sell, less the costs of selling it
30
3 methods used to est value of a firms assets
3.Replacement value- est. of what an identical asset would cost to be acquired & readied for service
31
Advantages of Start-ups
1. Begins with a clean slate. 2.Provides the owner w/the opportunity to use the most up-to-date technologies
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Advantages of start-ups, continued...
3. Can provide new, unique products or svcs that are not avail from existing businesses or franchises
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Advantages of start-ups, continued...
4. Can be kept small deliberately to limit the magnitude of possible losses.
34
Disadvantages of start-ups
1. No initial name recognition 2.Will require significant time to become est. and provide positive cash-flows
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Disadvantages of start-ups, continued...
3.Can be very difficult to finance. 4.Usually cannot easily gain revolving credit from suppliers and financial institutions
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Disadvantages of start-ups, continued...
5.May not have experienced managers and workers
37
SWOT Analysis
Stands for strength, weakness, opportunity, and threat
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SWOT Analysis, continued...
Strengths are characteristices of the business or team that give it an advantage over others in the industry
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SWOT Analysis, continued...
Weaknesses are characteristics that place the firm at a disadvantage relative to others
40
SWOT Analysis, continued...
Opportunities are changes to make greater sales or profits in the environment
41
SWOT Analysis, continued...
Threats are elements in the environment that could cause trouble for the business
42
SWOT Analysis, continued...
is a strategic planning tool that looks critically at these factors
43
SWOT Analysis, continued...
Once gathered info and put into cell, look at the 4 cells and rank order which are likely to have the greatest impact on your proposed bz
44
SWOT Analysis, continued...
Strength/Opportunity comb: you are positioned to flaunt your strengths. Should consider investing to grow your buz & move firm ahead of competitors. Outside funding is easily obtained.
45
SWOT Analysis, continued...
Strength/Threat comb:need to fight against the threats to your bz, by org your start-up to compete more aggressively & to more visibly emphasize your strengths
46
SWOT Analysis, continued...
Weakness/Opportunity: Need to fix your fimr to eliminate the weaknesses before you open & make it possible for your firm to seize the powerful opportunities in the environment. If unsuccessful, need to think of another bz
47
SWOT Analysis, continued...
Weakness/Threat Comb: Bz may not be in the right industry. Could make snese to flee this industry & look for an industry where you & any firm you start would have some strengths & where threats from environment are likely to be less
48
SWOT Analysis, continued...
Strength/Weakness Comb: May have a new product or svc more of an invention at this stage than a bz
49
SWOT Analysis, continued...
Opportunity/Threat Comb: a lively or dynamic set of environmental conditions have been identified, but the current product or svc is possibly not distinctive enough to be competitive
50
Imitation v. Innovation
Imitative strategy - overall strategic approach in which the entrepreneur does mor or less what other are already doing
51
Imitation v. Innovation
Innovation strategy-overall strategic approach in which a firm seeks to do something that is very different from what others in the industry are doing
52
Imitation v. Innovation
Imitation benefit:benefit from being able to buy existing technologies
53
Imitation v. Innovation
Imitation benefit:chances are your customers already know about the kind of product or svc you offer. This means your mktg efforts can focus on the benefits you offer instead of explaining the product itself
54
Imitation v. Innovation
Innovative: Not much opportunity to sell the bz, and the owner spends a lot of energy in creating the processes & mkts as well as informing suppliers, resellers, & investors abt new product or svc
55
Marketing
Mktg plan-examines your curent situation, incl. what your existing competition is doing, & states how you define your product/svc to whom ou will sell it, at what price, with what advertising & how yo will get it to your customers
56
Marketing
Mktg research-verify the size of the potential market, what the competitors are doing correctly or what their weaknesses are.
57
Franchising
a legal agreement that allows one business tobe operated using the name and business procedures of another
58
Franchising, continued...
Elements of franchising: 1.provides the franchisee with a legal right to engage in the business of offering, selling, or distributing gods or services
59
Franchising, continued...
Elements: 2. provide the franchisee may engage in business using a marketing planner system provided by the franchisor
60
Franchising, continued...
Element: 3.grants the franchisee use of a brand name, trademark, service mark, logo, or other commercial symbol which designates the franchisee as an affiliate of the franchisor
61
Franchising, continued...
Element: 4.requires the franchisee to pay a fee for the right to enter into the business
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Franchising, continued...
The value of a franchise is determined by 1.rights granted and 2.cash flow potential to the franchisee
63
Franchising, continued...
4 forms of franchising: trade name; product distribution; conversion; business format
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Franchising, continued...
Trad name franchising:an agreement that provides only the rights to use the franchisor's trade name and/or trademark
65
Franchising, continued...
Product distribution: provides the franchisee with specific brand named products, which are resold by the franchisee in a specified territory
66
Franchising, continued...
Conversion franchising: provides an organization through which independent businesses may combine resources
67
Franchising, continued...
Business format: franchise includes the right to use trade names, specifications of the product to be sold, operating metods, marketing plan, and national advertising. Pay franchisor both an up-front fee to obtain the franchise rights and a percentage of gross sales
68
Franchising, continued...
greatest advantage of a franchise is that is comes with a complete business system
69
Rewards for Starting a Small Bz
Universally Mentioned, Occasionally mentioned, and rarely mentioned
70
Rewards for Starting a Small Bz, cont'd....
Univ- Flexibility-have greater flexibility for my personal and family life
71
Rewards for Starting a Small Bz, cont'd....
Univ-Income: to give myself, my spouse, and my children financial security
72
Rewards for Starting a Small Bz, cont'd....
Univ.- Growth: to continue to grow and learn as a person
73
Rewards for Starting a Small Bz, cont'd....
Occasionally- Wealth: to have a chance to build great wealth or a very high income
74
Rewards for Starting a Small Bz, cont'd....
Occasionally- Product: to develop idea for a product
75
Rewards for Starting a Small Bz, cont'd....
Rarely-Recognition; to achieve something and get recognition for it
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Rewards for Starting a Small Bz, cont'd....
Rarely- Admiration: to be respected by my friends
77
Rewards for Starting a Small Bz, cont'd....
Rarely- Power: to lead and motivate others
78
Rewards for Starting a Small Bz, cont'd....
Rarely- Family: to continue a family tradition
79
Rewards for Starting a Small Bz, cont'd....
Growth rewards: what people get from facing and beating challenges
80
Rewards for Starting a Small Bz, cont'd....
Income rewards-the money made by owning one's own business
81
Rewards for Starting a Small Bz, cont'd....
Flexibility rewards- ability of business owners to structure life in the way that suits their needs best
82
Feasibility
Define: the extent to which an idea is viable & realistic & the extent to which you are aware of internal (to your bz) and external (industry, market, & regulatory environment) forces that could affect your bz
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Feasibility, continued...
Includes: the business idea- description of your bz; you, your firm, 7 your fit
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Feasibility, continued...
Includes: the product/service- unique features of benefits/limitations; stage of development; legal restrictions & rights; insurance requirements; trends related to the product; productions/svc delivery costs
85
Feasibility, continued...
Includes: the industry & market- current industry; market potential; the competition; your customers; market penetration
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Feasibility, continued...
Includes: Financial projections-pricing; sales revenue forecast; cost forecast; gross profit; operating expenses; profitability
87
Feasibility, continued...
Includes: Future Action Plan-start-up capital; sources of start-up captial; further information needed; writing a bz plan; support needed
88
Start-up Success Factors
1. Boundary: separating & balancing bz & home 2. Exchange- Dealing with others 3. Pricing & Costing-
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Increasing the Chance of Start-up Success
1. Start the bz in a bz incubator 2. Take part in a mentoring pgrm 3. Have a detailed start-up budget
90
Increasing the Chance of Start-up Success, cont'd...
4. Produce a product or svc for which there is a proven demand 5. Secure outside investment 6. Start with more than on founder
91
Increasing the Chance of Start-up Success, cont'd...
7. Have experience managing small firms 8. Have industry experience 9. Have previous experience in creating a start-up bz
92
Increasing the Chance of Start-up Success, cont'd...
10. Choose a bz that produces high margins 11. Start the bz with established customers 12. Build trust in your story

Entrepreneurship Test 1 Review (1 decks)

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