MGT 330

the three types of start-up firms

salary substitute firms, lifestyle firms, entrepreneurial firms

nondisclosure and a non compete agreement

-A nondisclosure agreement binds an employee or other party (such as a supplier) to not disclose a company's trade secrets. -A noncompete agreement prevents an individual from competing against a former employer for a specific period of time

the three primary reasons that people become entrepreneurs and start their own firms

-Desire to be their own boss -Desire to pursue their own ideas -Financial rewards

common myths about entrepreneurs

-Entrepreneurs are born, not made -Entrepreneurs are gamblers -Entrepreneurs are motivated primarily by money -Entrepreneurs should be young and energetic -Entrepreneurs love the spotlight

environmental trend

-Environmental trends include economic trends, social trends, technological advances, and political and regulatory changes.

an emerging industry

-Industries in which standard operating procedures have yet to be developed. §Opportunity: First-mover advantage.

fragmented industry

-Industries that are characterized by a large number of firms of approximately equal size. §Opportunity: Consolidation.

global industry

-Industries that are experiencing significant international sales. §Opportunities: Multidomestic and global strategies.

components of company description section

-Items to include in this section: §Company description. §Company history. §Mission statement. §Products and services. §Current status. §Legal status and ownership. Key partnerships (if any).

business trend

-Other trends affect industries that aren't environmental trends per se but are part of the core nature of an industry. Ex. the firms in some industries benefit from an increasing ability to outsource manufacturing or service functions to lower-cost foreign labor markets

two types of business models

-Standard business models -Disruptive business model

identify a standard business model and a distributive business model

-Standard business models depict existing plans or recipes firms can use to determine how they will create, deliver, and capture value. -They are impactful enough that they disrupt or change the way business is conducted in an industry or an important niche within an industry.

characteristics of strong-tie and weak-tie relationships

-Strong-tie relationships are characterized by frequent interaction and form between coworkers, friends, and spouses. -Weak-tie relationships are characterized by infrequent interaction and form between casual acquaintances.

core strategy

-The first component of the business model is core strategy. -describes how the firm plans to compete relative to its competitors. -The primary elements of core strategy are: §Business Mission §Basis of Differentiation §Target Market Product/Market Scope

what determines the average rate of return for the firms in an industry

-The five competitive forces model is a framework for understanding the structure of an industry. -The model is composed of the forces that determine industry profitability.

Threat of Substitutes

-The price that consumers are willing to pay for a product depends in part on the availability of substitute products. -For example, there are few, if any, substitutes for prescription medicines, which is one of the reasons the pharmaceutical industry is so profitable. -In contrast, when close substitutes for a product exist, industry profitability is suppressed, because consumers will opt out if the price gets too high.

components of the economics of the business section

-This section addresses the basic logic of how profits are earned in the business and how many units of a business's profits must be sold for the business to "break even" and then start earning a profit. -Items to include in this section: §Revenue drivers and profit margins. §Fixed and variable costs. §Operating leverage and its implications. §Start-up costs. Break-even chart and calculations.

product/service production

-This section focuses on how a firm's products and/or services are produced.

core competency

-a specific factor or capability that supports a firm's business model and sets it apart from rivals.

key asset in the Barringer/Ireland Business Model Template

-assets that a firm owns that enable its business model to work. The assets can be physical, financial, intellectual, or human. §Physical assets include physical space, equipment, vehicles §Intellectual assets include resources such as patents, trademarks, copyrights, and trade secrets §Financial assets include cash, lines of credit §Human assets include a company's founder or founders, its key employees

business mission

-describes why it exists and what its business model is supposed to accomplish.

guidelines for gumshoe research

-important for gaining a sense of the likely demand for a product or service idea -is a detective or an investigator that scrounges around for information or clues wherever they can be found. -Ask people what they think about your product or service ide

the changing demographics of minority entrepreneurs

-there are eight million minority-owned firms in the United States—a 38 percent increase since 2007.

For most business plans, how many pages are sufficient

-typically 25 to 35 pages long

the four essential qualities of opportunity

1. attractive 2. timely 3. durable 4. anchored in a product, service, or business that creates or adds value for its buyer or end user

economic forces

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

Describe Entrepreneurial Firms and Conservative Firms

Entrepreneurial Firms •Proactive •Innovative Risk taking Conservative Firms •Take a more "wait and see" posture •Less innovative •Risk averse

Cost Advantage Independent of Size

Existing firms may have cost advantages not related to size. For example, the existing firms in an industry may have purchased land when it was less expensive than it is today.

first-mover advantage

If a start-up pioneers an industry or a new concept within an industry, the name recognition the start-up establishes may create a barrier to entry.

product differentiation

Industries such as the soft drink industry that are characterized by firms with strong brands are difficult to break into without spending heavily on advertising.

which form of business ownership where owners are called "members."

LLC

technological advances

Once a technology is created, products often emerge to advance it.

components of the operations plan section

Outlines how your business will be run and how your product or service will be produced ‒Items to include in this section: §General approach to operations. §Business location. Facilities and equipment

the two organized corporations

Subchapter c corporation and sub chapter c corporation

political actions and regulatory changes

Political and regulatory changes also provide the basis for opportunities. Ex. Affordable Care Act in 2010

finding a gap in the marketplace

Product gaps in the marketplace represent potentially viable business opportunities.

identify the categories in the Barringer/Ireland Business Model Template

SEE IMAGE

the four steps on the entrepreneurial process

Step 1: Deciding to become an entrepreneur. Step 2: Developing successful business ideas. Step 3: Moving from an idea to an entrepreneurial firm. Step 4: Managing and growing the entrepreneurial firm.

the first rule of making an oral presentation

The first rule in making an oral presentation is to follow directions. If you're told you have 20 minutes, don't talk for more than the allotted time

Opportunity

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

business mode

a firm's plan or recipe for how it creates, delivers, and captures value for its stakeholders.

the four factors identified in selecting a form of business ownership

cost of setting up and maintaining the legal form, the extent to which personal assets can be shielded from the liabilities of business, tax considerations, the number sand types of investors involved

What is a code of conduct

is a formal statement of an organization's values on certain ethical and social issues.

What is a founders' agreement

is a written document that deals with issues such as the relative split of the equity among the founders of the firm, how individual founders will be compensated for the cash or the "sweat equity" they put into the firm, and how long the founders will have to remain with the firm for their shares to fully vest.

What is the most important thing a(n) entrepreneur(s) do to build a strong ethical culture in their organization

lead by example

characteristics of successful entrepreneurs

passion for the business, product/customer focus, tenacity despite failure, execution intelligence

What are the three types of business plans

summary, full, operational

innovation

the process of creating something new, which is central to the entrepreneurial process

What is brainstorming? What are the rules of a brainstorming session

the process of generating several ideas about a specific topic. No criticism. Freewheeling is encouraged. The session should move quickly. Leap-frogging is encourage

discuss a fictitious business name permit

§A fictitious name permit allows a business to operate under a fictitious name, like Gold Coast Sea Food or Red Rock Bakery.

concept test

§gives A sense of the viability of the product or service idea. §Suggestions for how the idea can be strengthened or "tweaked" before proceeding further.

limited partnership

•A modified form of general partnership. •The major difference between the two is that a limited partnership includes two classes of owners: general partners and limited partners. The general partners are liable for the debts and obligations of the partnership, but the limited partners are only liable up to the amount of their investment

What are other techniques for generating ideas beside brainstorming, focus groups, and library and internet research

•Customer Advisory Boards •Day-In-The-Life Research -A type of anthropological research, where the employees of a company spend a day with a customer.

types of questions asked during the product/service feasibility component of a complete feasibility analysis

•Does it make sense? Is it reasonable? Is it something consumers will get excited about? •Does it take advantage of an environmental trend, solve a problem, or take advantage of a gap in the marketplace? •Is this a good time to introduce the product or service to the market? •Are there any fatal flaws in the product or service's basic design or concept?

Industry/target market feasibility analysis

•Industries vary in terms of their overall attractiveness. -the degree to which environmental and business trends are moving in favor rather than against the industry.

organization; feasibility analysis

•Is conducted to determine whether a proposed business has sufficient management expertise, organizational competence, and resources to successfully launch a business. - Focuses on non-financial resources

two primary issues to consider in organizational feasibility analysis

•Management Prowess •Resource Sufficiency

mature and declining industry

•Mature Industries -Industries that are experiencing slow or no increase in demand. §Opportunities: Process innovation and after-sale service innovation. •Declining Industries -Industries that are experiencing a reduction in demand. §Opportunities: Leadership, establishing a niche market, and pursuing a cost reduction strategy.

the two component of product/service feasibility analysis

•Product/Service Desirability •Product/Service Demand

the four areas of feasibility analysis

•Product/Service Feasibility •Industry/Target Market Feasibility •Organizational Feasibility •Financial Feasibility

the three commonly utilized methods for determining product/service demand

•Step 1: Talking Face-to-Face with Potential Customers •Step 2: Using Online Tools •Step 3: Library, Internet and Gumshoe Research

Product/service feasibility

•an assessment of the overall appeal of the product or service being proposed.

Feasibility Analysis

•the process of determining whether a business idea is viable.