Entrepreneurship V2
Customer Acquisition Cost (CAC)
(Marketing expenses + sales expenses) / (#of new customers for period)
Customer retention rate
(number of customers at end of period - number of new customers during period) / (number of customers at start of period) x 100
prebuilt
- has subscription fee to use software - saves user time
build your own
- offers users more control - user is responsible for the maintenance of the software - provides more functionality for specific needs
what might one have to do when listening to feedback from customers
-change markets -create new products
what is the purpose of customer service
-create customer satisfaction -generates business through word-of-mouth referrals
direct distribution channel
-ecommerce sales -door to door sales
set quality standards
-local health and safety inspectors - a government regulatory agency -industry leaders
options for determining what services customers need
-survey customers -talk with individuals interested in the service - place phone calls
lean canvas
1 page document Covers problems and solutions, value propositions, marketing channels, key metrics, costs, and revenue without all of the business plan details
5 elements of design thinking process
1. Empathize 2. Ideate 3. Prototype 4. Test
4 data segments
1. demographic 2. geographical 3. behavioral 4. psychographic
business plan contains
1. executive summary 2. marketing plan 3. organizational structure 4. financial plan
MVPs test...
1. functionality 2. ease of use
5 determinations of business opportunity viability
1. market size 2. relationships 3. cash flow management 4. management skillsets 5. passion
7 sales process steps
1. prospecting 2. preparation 3. approach 4. presentation 5. objection 6. closing 7. follow up
steps of quality control testing process
1. set quality standards 2. establish the product quality testing method 3. review internal quality testing results 4. refine and improve quality methods and measures as needed
executive summary
2 pages, creates first impression of a business plan Summarizes what one wants to accomplish with a business, the products and services one sells, financial outlook, the funding needed, one's goals, and one's achievements.
Business Life Cycle
7 stages
business plan
A written document that details how a business will be structured, managed, run, and grown.
resiliency
Adapting to change, loss, and disappointment
Secondary data
Articles or academic journals that interpret primary data; often includes bias
Indirect competitor
Business that sells different products or services but is similar enough to be competitive with another business
Direct competitor
Business that sells similar products or services as another business
ethical practices
Decision-making based on morals and doing the right thing
marketing plan
Determines the size of a market with marketing analysis and describes potential customers to provide a customized plan to reach them.
Primary data
First hand accounts, such as interviews and surveys, and is more accurate and reliable
Target market
Group of customers that will buy a product or service, which helps the business determine the price of products and services
financial plan
Includes a budget, a 12-month profit and loss projection, cash flow statements, a breakeven analysis, and capital requirements to show investors how their money will be spent.
prototype stage
MVP is created
social responsibilities
Preventing and removing any corruption and unethical behavior that could harm a business, the community, or the environment could harm a business, the community, or the environment.
Which data is more reliable: primary or secondary
Primary
organizational structure/management bios
Provides an overview of the employees and others that are part of a business.
critical thinking
Solving problems in the best way by considering a variety of potential solutions to the problem
value proposition
Statement that explains why a customer should do business with a company; conveys the value of products and services to customers
SWOT analysis
Strengths, weaknesses, opportunities, threats
grit
Tackling goals with courage and perseverance, even when it is challenging
opportunity recognition
The way one approaches new ideas and ventures
piecework
a compensation system in which employees are paid a set rate for each item they produce
distribution channel
a method used to get a product from the manufacturer to the end user
newspaper marketing
allows companies to easily target certain locations
value hypothesis
articulates why you believe customers are likely to use your product; promotes product features, pricing, and business model
growth mindset
believing one can accomplish anything through hard work
C corporation
best for international business even with being double-taxed
pitch deck
brief overview of business plan, funding needed, and financial projections; typically slideshow A brief overview of a business plan, the products and services that will be provided, the funding needed, and financial projections.
success
business is economically healthy
existence
business is up and running
monetization stage
company starts to earn revenue
direct channel
consumer purchases directly from manufacturer
founder
creates the company
business to customer transaction
customer purchases from business
launch stage
develop value hypothesis
sole proprietorship
easy to create but comes with unlimited liability
small business
focuses on generating profits and deals with known risks
entrepreneur
grow fast & take on new opportunities + risks
stakeholder
has a vested interest in the success of the company; might serve board of directors
cost price
how much money it costs a business to make or obtain the products or service
LLC
ideal for a single owner seeking low risk; has a personal tax rate
minimum viable product
inexpensive version of the product
franchise
licensed business that has established operations, products, and branding; requires more money upfront
S corporation
lower tax rate that prevents company from being double-taxed
exit plan
make a profit from selling ownership
product/market fit
making a product or service that many people want
profit margin
net profit the company wants to make from the sale; represented as percentage
non-profit
no ownership, no US federal taxes
equity
non cash compensation
idea stage
one develops a concept for a product
before creating a product
one should research what it takes to produce the product
CFO
oversees company finances
COO
oversees daily operational and administrative functions
resource maturity
owner can separate financially and operationally from business
pivot or persist
owner decides whether to continue to grow business into large company or pivot into new project or, either to continue strategies or use new ones
stockholder
owns stock in company; pay for part of ownership; can select CEO
growth stage
product/market fit is found
trademark
protects brand names and logos
trade secret
protects company's practice, process, or formulas from being shared
copyright
protects creative works, such as art and music
patent
protects inventions
minimum viable product
prototype used to test ease-of-use and functionality to help determine the user's experience and ultimately improve the user's experience with the product
vision and value proposition
provides a brief overview of a business where one talks about the company's mission and the value provided to customers
distribution center
receives and temporarily stores goods before fulfilling the customer's order and is often used for retail stores -Kohls, dicks sporting goods
survival
regularly generating income; customers grow
CEO
reports to board of directors
traction stage
sales gain momentum
salary
set amount of pay in a given period
hourly
set rate of pay for hours worked
partnership
shared financial backing
balance sheet
shows assets, liabilities, and equity
financial plan
specifically directed to investors and lenders
take-off
still economically healthy, owner decides whether/how to expand or to sell business
distribution & fulfillment centers
store and ship products for businesses
fulfillment center
strategically stores products so that when a customer places an order, the product can be quickly picked up and sent out -wayfair, amazon
physical product
tangible items that require pick-up of delivery
most dominant medium for marketing
television
risk tolerance
the amount of loss one is willing to take when making an investment decision
test a prototype...
to ensure that a company is creating a high quality product
international standard organization's definition of quality
totality of features and characteristics of a product or service that bear on its ability to satisfy needs
indirect distribution channels
use intermediaries, like wholesalers, retailers, and agents 1 level- purchased from manufacturer, sold to consumer 2 level- wholesaler purchases products in bulk, sell to resalers, sell to end users 3 level- agent involved on top of wholesalers and retailers
value engineering
used to cut down on costs or to improve product's function
commission
usually found in sales roles
