ENT 200 Final Exam

Personal Achiever Super Sales Person Real Manager Idea Generator

Miner's Entrepreneurial Profiles

Hard worker Loner (could team up) Socially isolated Fast learner Fame seeker Risk taker

idea person

assume that our fate is under our control

illusion of control

research has shown that the highest Total Entrepreneurship Activity rates exist for people that are 18-34 year old

true

Team CHIPS, after having won the CMU New Venture Competition go on Shark Tank and ask for $100,00 for 25% Equity in their company. How much are they suggesting their company is worth

$400,000

The Rented Rolls Royce Syndrome The Hustle The Cash-Only Transaction The Boast The Big-Money Claim The Couch Potato's Dream Location, Location, Location The Disclosure Dance The Registration Ruse The Thinly Capitalized Franchisor

Franchising Frauds 10 Warning Signs

Proven successful business model Receive training and management support Proprietary computer programs Marketing, product placement, advertising, and promotion is all controlled for you Often less risky than starting or acquiring a business

advantages of franchising

Established customers Business processes are already in place Often requires less cash outlay

advantages of purchasing an existing business

Give up control of marketing and operations Franchisor often sets policies Must buy inventory from specific vendors Regularly inspected Success is determined by success of franchise itself

disadvantages of franchising

Finding a successful business for sale that is appropriate for you Existing employees may resist change Reputation Facilities and equipment may be obsolete

disadvantages of purchasing an existing business

cash flows reduced in value because they are to be received in the future

discounted cash flows

the potential for a tarnished franchise reputation if a franchisee disregards the training and fails to operate the business properly; difficulty securing qualified franchisees; payment issues and lawsuits from franchisees that do not experience success; and costs and challenges due to the many federal and state regulations regarding franchising.

drawbacks to being a franchisor

process of investigating a business to determine its value

due diligence

ratio of value of a firm to its annual earnings

earnings multiple

Ability to understand and control your own emotional reactions (and stress) to events and other people Ability to read other's emotions and respond effectively to them. (EMPATHY)

emotional intelligence (EQ)

The ability to quickly sense, take action, and get organized under uncertain conditions. Includes the ability to persevere, accept and learn from failure, and get comfortable with a certain level of discomfort.

entrepreneurial mindset

belief in own ability to begin new ventures

entrepreneurial self-efficacy (ESE)

Believe that fate is the biggest influence on personal outcomes More comfortable in hierarchic situations where they have someone telling them what to do.

external locus of control

Pros: Intensifies cognitive process Learning resulting in improvements Motivation to start another venture Cons:Financially costly Emotionally painful Can decrease inclination for risk-taking

failure

Michael gerber describes the need to balance three different personalities to run a successful business: The personalities are the technician, entrepreneur, and the visionary

false

corporate entrepreneurship focuses on buying smaller businesses and then incorporating their products and services into the corporation's business model

false

human resource policies for "selected rotation" has been shown to be a mail roadblock impeding corporate innovation and entrepreneurship

false

in the US, micro businesses are defined as ss with 20 or fewer employees with start capital requirements of less than $50,000

false

nascent entrepreneurs are people whose personality matches the personality profile of successful entrepreneurs so that they have a natural aptitude for being an entrepreneur

false

necessity based entrepreneurs are people who start businesses because they have a deep seated need or passion to create something new and express through a vision to create their business

false

novice entrepreneurship is a process whereby an individual or a group of individuals, in association with an existing organization, creates a new organization or instigates renewal or innovation within the organization

false

social entrepreneurship is defined as the process of innovating new social media business opportunities

false

the US government generally defines small businesses as firms with fewer than 250 employees

false

the first step in designing for manufacturing is to research technologies, suppliers, and manufacturers that you might use when producing your product

false

the first step in the effectuation process is to identify a customer need that is not being met

false

Should be in an industry in which you have experience Product or service that has demand and high margins Adequate financing Contact business brokers

first problem in finding a business for sale

Talents are traits. Brains plus talent equals success. Constructive criticism is a personal attack. Others' success is due to luck. Avoid challenges

fixed mindset views

which of the following is NOT a common mistake of a novice entrepreneur

focusing on the speed of revenue generation

The basic contract generated by the franchisor for all franchisees; it usually contains clauses requiring the purchase of supplies, the displaying of marketing material, and the payment of fees that are based upon the sales of the branch operation.

franchise agreement

An established brand. Operate for a set period of time. Single or multiple stores. Limited competition within a set radius.

franchise typically includes the right to...

The entrepreneur who buys the franchise from the franchisor.

franchisee

The firm that originates the idea for the business and develops the operational methods, then sells them to franchisees.

franchisor

elements of franchising

franchisor, franchisee, franchise agreement

according to birch's bestiary, which animal represents a business establishment with at least 20% sales growth every year starting with a base of at least $100,000

gazelles

Evaluate your potential fit Examine each industry and potential competitors. Examine competitive strength of various franchises in the industry. Identify a franchisor that is the best potential match for you. Thoroughly examine the identified franchisor.

general franchise issues

Believe abilities can be developed through hard work Brains and talent are only the beginning of success Lifelong learners View failure as an opportunity to improve

growth mindset

Desire to innovate Personable, get alone well with others Willing to share power High tolerance for ambiguity Prefer loose control, want independence, dislike following rules Believe in New Product Development Good (High) IQ Desire to avoid risks - EIGs drawn to risk more that other types but need to minimize risk.

idea generator characteristics

The art of spontaneously creating something without preparation.

improvisation

Not just for actors or musicians No such thing as being wrong No questioning or rejecting suggestions Ideas are taken on board, expanded, and passed on for further input Everything is important It is a group activity Trust that the group will solve problem Listen closely and accept what you are given Be spontaneous and imaginative

improvisation guidelines

Believe that personally controlled factors are biggest influence on outcomes High internals are less stressed by (and recover quicker from) negative events, and more self directed

internal locus of control

Self evaluation franchise track record market and concept viability franchisor/franchisee relations

investigation of franchises

Responsiveness Empathy Communication Dependability Give and Take Anticipation Structure Open Mindedness

key elements of strong franchisor: franchisee relationship

which of the following is the MOST COMMON cause of Hardware startup failures

lack of consumer demand

according to the text, which of the following is NOT a condition required for small and medium businesses to flourish in a country

large population size

Hard worker Team player Socially connected Fast learner Wealth seeker Risk averse

managerial entrepreneur

if someone works for a construction business during the week and has their own construction business in another city during the weekends, the person is...

moonlighting

individuals who have set up a business they will own or co-own which is less than three months old, and has not yet generated wages or salaries for the owners are known as

nascent entrepreneurs

Making aspects of a task more enjoyable by building in features to focus on the most positive aspects of the tasks. Examples: Walking, music, coffee, or stretching breaks

natural reward strategies

which of the following is not a stage in the inclusive entrepreneurship process

novice entrepreneur

Meet and discuss the transition with current staff, Be visible in the new operation, Make all significant changes in one day, Implement new standards as soon as possible, and Ask former owner to refrain from visiting while transition is taking place. Inform customers and suppliers about ownership change.

once negotiations are complete, the new owner should...

expect things to turn out well without basis

optimistic bias

High Need to Achieve High Desire for Feedback Desire to Plan and Set Goals Strong personal initiative High commitment to their projects they create Belief that one person can make a difference Belief that work should be guided by personal goals

personal achiever

Conduct extensive interviews Study financial reports Personal examination of the site Interview customers and suppliers Detailed business plan Negotiate an appropriate price Obtain sufficient capital

process of due diligence

when a company establishes and supports a full-service group with a mandate for innovation and entrepreneurship, then it is using the ... model of corporate entrepreneurship

producer

what type of business usually has the highest capital requirements associated with start up costs

product/hardware based businesses

which of the following is NOT a reason to consider part time entrepreneurship as presented in the PPT slides

time commitments to community service

a business model canvas is the visual representation of the businesses core components

true

corporate entrepreneurs have long approval cycles, where startups may make quick decisions

true

Buy out seller's interest Buy in Buy key assets Takeover

4 ways to buy business

amount for which an asset will sell, less the costs of selling

net realizable value

cost to acquire an essentially identical asset

replacement value

the small business administration defines a small business as a business with less than 500 employees or $7.5 million in gross annual sales

true

you can be a serial entrepreneur and a nascent entrepreneur at the same time

true

what percentage of the US workforce do family-owned businesses employ?

60%

Restriction of sales territory Approval of site and facility's appearance Restriction of goods/services to be sold Required operating hours and advertising

Typical Franchisor Controls

Tony is a manager a company that builds solar panels. in his position as a manager, tony used the feedback from his team members to as the basis of a plan for the company to start installing the solar panels, as well, in order to enhance the company's competitive position and profitability. Tony is an example of...

a corporate entrepreneur

A contract between the FRANCHISOR and FRANCHISEE which grants the franchisee certain rights to use a name, sell a product, etc. and receive certain services in exchange for franchise fees.

a franchise

the global entrepreneurship monitor defines total entrepreneurial activity as the percentage of the population of each country who are either

a nascent entrepreneur or owner-manager of a new business

understanding the organizational and business processes of a firm

basic business competency

Self-awareness Self-observation Self-goal setting Self-reward Self-punishment Self-cueing

behavior-focused strategy

growth with minimal capital investment; lower marketing and promotional costs; and royalties.

benefits to being a franchisor

difference between original acquisition cost and the amount of accumulated depreciation

book value

Hard worker Loner Socially isolated Fast learner Wealth seeker Risk taker

classic entrepreneur

Overconfidence Representativeness - over generalize from small sample (superstitious learning) Less likely to be counterfactual (fantasy thinking)

cognitive bias

Initial franchise fee Cash investment and Capitalization requirements Royalty payments Advertising and other shared expenses

components of franchising costs

notice, process, and remember information that confirms current beliefs

confirmation bias

Forming productive ways of thinking that can benefit our performance. How to practice: Identify and reframe destructive beliefs by practicing positive self-talk and mental imagery.

constructive thought pattern strategies

friends show up unexpectedly to your house and are hungry. you go through your kitchen cupboards to see what ingredients you can throw together to prepare a satisfactory meal. this is an example of

creating logic and described in the effectuation model of entrepreneurship

which of the following is true

creative entrepreneurs tend to be under-capitalized and under managed - getting by with "seat of the pants" improvisation

The capacity to produce new ideas, insights, inventions, products or artistic objects, which are considered to be unique, useful, and of value to others.

creativity

dealerships business service new (combination franchises)

types of franchises

business brokers Attorney and CPA firms, Offer to buy a business, Trade association listings, Your local SBA office, and Look for bankruptcy listings.

resources to buy businesses

Hard worker Team player Socially connected Fast learner (socially) Average learner (technologically) Acceptance seeker Risk averse

salesperson entrepreneur

Individuals must influence and control their own behavior, actions, and thinking to achieve the self-direction and self-motivation necessary to build their entrepreneurial business ventures.

self-leadership

what is the activity of planning and organizing people, infrastructure, communication, and material components of a business in order to improve its quality and the interaction between the business and its customers

service design

Commitment and determination Leadership Opportunity obsession Tolerance of risk, ambiguity, and uncertainty Creativity, self-reliance, and adaptability Motivation to excel

six themes (desirable and acquirable attitudes and behaviors)

which of the following is a pathway to entrepreneurship that we discussed in class?

start and build new business inherent business secure franchise rights buy an existing business

TRIM stands for

team, resources, idea, market

the... is the planning tool that includes 9 boxes presented in poster or graphic figure

the business model canvas

Desire to be a corporate leader Decisiveness Positive Attitudes toward authority Desire to compete Desire for power Desire to stand out from crowd

the real manager

Behavior-focused strategies Natural reward strategies Constructive thought pattern strategies

three strategies for self-leadership

creative arts entrepreneurs are concerned first and foremost with the creation and exploitation of creative or intellectual capital and this makes them different from other types of entrepreneurs

true

recommendations for family business advisory boards suggests that the advisory board should include family members, non-family members, and external specialists

true

service based business start-ups have average gross margins that are more than 50 percent higher than product based business start-ups

true

the cycle of act - learn - build encourages entrepreneurs to take small actions in order to learn and build that learning into the next action

true