Intro to entrepreneuship exam 2
differentiation strategy
offering products that are different than what was offered before
advantages of stand retail business
-little investment -variety of locations -quickly established -easily ended
trade name franchising
when you are only buying the rights to use the name and the trademarks of the business (true value hardware)
internal understanding
when you join a company (show you the history)
start-up
when you start a business from scratch on your own
buyout
when your buying a substantial amount of business from someone else and you become the owner
moonlighting
working on your own part-time after your regular job
disadvantages of a start-up business
you have no name recognition (takes longer to get customers)
circumstances when its better to start part-time before full-time
1:Do I understand how the business works? 2: Do I have enough resources 3: Do I really want to do this full-time 4:How long will this opportunity last
elevator pitch
30 second pitch on why your business is going to be great (60-100 words)
aggrandizing
making your business more accomplished than what it is. (lying about your success and capabilities and what you do to customers)
boom in industry/product life cycle
marketed by a very rapid increases in sales in a relatively short time
asset
anything that is economic that your company owns
innovative strategy
brand new and very different
Difference between B2B and B2C
business to business: more sales Business to consumer: less sales
revolving credit
buying items on credit and paying them on a future date
poisoning the well
creating a negative impression under your employers customers
growth stage in industry/product life cycle
customer purchases increase at a dramatic rate
external legitimacy
outside public respects and trusts your business
number of hours worked full time
over 35
initiative strategy
doing more or less with what other people are already doing with your business
parallel competition
doing the same as others locally in the same industry
retrenchment in industry/product life cycle
established firms must find new approaches to improve the business and its chances for survival
shake-out in industry/product life cycle
following a boom in which there is a rapid decrease in the number of firms in an industry
volatility
frequency of when a business starts and stops
scope in a small business
geographic range covered (is it local,regional,gloabl)
Number of hours worked part time
under 35
degree of similarity
how similar your business is to what others are doing (cloning)
disadvantages of an existing business
if you have a bad reputation its very difficult to give the business another try
cover page
introduces the business plan and the owner to the recipient and indicates why the recipient is being asked to read the plan
franchise
legal agreement that allows you to use the name of the business
the organization
legal form of the business, where it is registered, its certificates -talk about accomplishments
Cost Strategy
low cost (cost benefits that appeals to the customer)
pure innovation
making new products that have not been seen before
maturity stage in industry/product life cycle
moving to stabilize or improve profits through cost strategies
mission
paragraph describing the firm's goals and competitive advantages 20-50 words (one paragraph)
advantages of an existing business
people know who you are (established customers, employees, less cash to pay upfront)
introduction stage in industry/product life cycle
product or service is being invented and initially invented
Conversion franchising
provides an organization through with independent resources (realtor)
Product distribution franchising
provides specific brand name products sold by that person in a certain territory (card dealership (ford))
decline stage in industry/product life cycle
sales and profits of firm begin a falling trend
conflict of interest
same person has 2 conflicting goals
scale in a small business
size of the market
advantages of a start-up business
start with a clean slate (buy most up to date technology)
vision
tagline to express the idea or goal of the firm (10 words)
cannibalizing
taking business away from your full time employer
focus strategy
targets a portion of the market(niche)
executive summary
the one to two page summary of your business in the front of the business plan (investors will read to see if company is liable)
the market
total population of people or firms you plan to sell to. Target customer section: focuses on who would buy. Demographics: how often they buy and past experience
business plan
(40 pages) cover letter, title page, table of contents, executive summary, the company, the industry, the market, the organization, the financials, the appendixes
disadvantages of stand retail business
-variable income -legal requirements
5 paths to a business
-vision -mission -elevator pitch -executive summary -business plan
