Business 292 Exam 1

feasibility study

A feasibility studies evaluates the potential of a business opportunity by studying five primary areas in depth: the overall business idea, the product/service, the industry and market, financial projections (profitability), and the plan for future action.

traditional small business (growth strategy)

A firm intended to provide a living income to the owner, and operating in a manner and on a schedule consistent with other firms in the industry and market (sales between 25,000-100,00/yr) (Growth levels off after operations settle into a consistent, money-making pattern, generating enough income to provide a living for the owner and family)(22% of small businesses fall in this category)

high-preforming small business (growth strategy)

A firm intended to provide the owner with a high income through sales or profits superior to those of the traditional small business. (sales between 100,000- 1,000,000, grow between 5-15% per year) (20% of businesses fall in this category)

lifestyle or part-time firm (growth strategy)

A small business primarily intended to provide partial or subsistence financial support for the existing lifestyle of the owner, most often through operations that fit the owner's schedule and way of working. (sales of $25,000 or less per year)(Growth in these firms tends to quickly level off after the owners operate long enough to learn the basics of making money in their industry and setting) (53% of small businesses fall in this category)

BRIE model

Boundary: creating a place for your business - in location and in peoples minds, Resources: the money, product, knowledge, etc. that make up a business, Intention: the desire to start a business. Exchange: moving resources/ products/services in exchange for money

licensee

One who receives a license to use, or enter onto, another's property.

pros and cons of a family business

Pros: decision making is quicker/easier, strong family bond can mean strong business culture, children can learn and gain experience by watching family work Cons: role conflict, succession, and time management

licensor

The owner of copyrighted, patented, or trademarked material

Exchange (BRIE model)

This refers to moving resources, goods, or service to others in exchange for money or other resources. If the firm doesn't exchange with its environment, there is no "business" taking place

SCAMPER and all components

a creativity tool that provides cues to trigger new ideas for your business( Substitute, Combine, Adapt, Magnify or modify, Put to other uses, Eliminate, Rearrange)

Family business

a firm in which one family owns a majority stake and is involved in the daily management of the business (employs 58% of american workforce)

high preforming small business

a firm intended to provide the owner with a high income through sales or profits superior to those of the traditional small business

high-growth venture business

a firm started with the intent of eventually going public, following a pattern of growth and operations of a big business. (aim to achieve growths of 25% or more per year, sales over 1 million) (5% of all businesses)

efficiency-driven economies

a nation where industrialization is becoming the major force providing jobs, revenues, and taxes, and where minimizing costs while maximizing productivity (i.e. efficiency) is a major goal

innovation driven economies

a nation where the major forces for jobs, revenues, and taxes come from high-value added production based on new ideas and technologies and from professional services based on higher education

heir

a person who becomes an owner through inheriting or being given a stake in a family business

franchise

a prepackaged business bought, rented, or leased from a company called a franchisor

entrepreneurial alertness

a special set of observational and thinking skills that help entrepreneurs identify good opportunities. the ability to notice things that have been overlooked, without actually launching a formal search for opportunities, and the motivation to look for opportunities

entrepreneurial ecosystem

a specific configuration of the environment that reflects the components that are most central to developing a strong and active community of start up businesses. The components are entrepreneurs, government, universities, investors, service people, mentors, and large organizations

flexibility rewards

ability of a business owners to structure life in the way that suits their needs

Adapt

adaption from existing products or services (idea trigger: what could you adapt from other industries or fields to your business)

challenges of second career entrepreneur

adjusting to the entrepreneurial life (most aspects of business were done for you before but now its all you) and keeping personal finances out of the business (using settlements or retirement funds to start a business is not ideal)

imitative strategy

an overall strategic approach in which the entrepreneur does more or less what others are already doing

components of social capital

characteristics of a business, such as trust, consistency, and networks, that represent potential social obligations that are assets of the firm or entrepreneur (apple has good social capital)

organizational identity

composed of the name, description, and distinctive elements of a firm, such as trademarks, uniforms, logos, characters and stories (part of BRIE model)

External control preference (small business vs. high-growth ventures)

control firm vs control market

when the firm's in trouble (small business vs. high-growth ventures)

cut costs vs. sell more

delegation orientation (small business vs. high-growth ventures)

delegation is difficult, vs Delegation is essential

Focus (small business vs. high-growth ventures)

efficiency vs effectiveness

social entrepreneurship

form of entrepreneurship involving the creation of self-sustaining charitable and civic organizations, or for-profit organizations which invest significant profits in charitable activities

corporate entrepreneurship

form of entrepreneurship which takes place in existing businesses around new products, services or markets. it focuses on customer-focus and innovation

competencies

forms of business related expertise

growth strategies of high-preforming small business

growth, income rewards, flexibility rewards

meta-strategy (small business vs. high-growth ventures)

imitation vs novelty

Resources (BRIE model)

include the product or service to be offered, informational resources on markets and running a business, financial resources, and human resources such as your own time to devote to the business or that of others working with you or for you

small business

involves 1-50 people and has its owner managing the business on a day-to-day baisis

Intention (BRIE model)

is the desire to start a business and is the most frequently occurring element of the BRIE model. Those 56 percent of young Americans who think about starting their own business are expressing their intentions

license

legal agreement granting you rights to use a particular piece of intellectual property

what limits growth (small business vs. high-growth ventures)

loss of control vs. market response

rearrange (or reverse)

magnetic poetry example (idea trigger: what can you rearrange or reorder in the way your product or service appears? )

income rewards

money made by owning one's own business

time management in a family business

organization process to help make the most efficient use of the day (list, 123 prioritize, delegate, repeat, strategize)

preferred funding source (small business vs. high-growth ventures)

owners own money vs other peoples money

royalty

payment based on the number or value of licensed items sold

second career entrepreneur

people who begin their businesses after having left, retired, or resigned from work. (can include veterans of the armed forces and civilians from a broad range of industries)

founder

people who create or start a new business

buyer

people who purchase an existing business

Acceptance (small business vs. high-growth ventures)

personal validation vs. external legitimacy

Human resources (small business vs. high-growth ventures)

personalize vs. professionalize

Combine

possible combinations that result in something completely different (idea trigger: what separate products, services, or whole business can you put together to create another distinct business? Barnes and Noble)

radical innovation strategy

rejecting existing ideas, and presenting a way to do things differently

personal control preference (small business vs. high-growth ventures)

retain autonomy vs. involve key others

whats more important (small business vs. high-growth ventures)

sales vs. marketing

Eliminate

search for opportunites that arise when you get rid of something or stop doing something (idea trigger: what could I get rid of or reduce that would eliminate something my customer has to do?)

determination competencies

skills identified with the energy and focus needed to bring a business into existence

opportunity competencies

skills necessary to identify and exploit elements of the business environment that can lead to a profitable and sustainable business

Boundary (BRIE model)

something that sets it up as a firm, and sets it off from the buying or selling or bartering we all do occasionally. A boundary can be a business name or government registration, a phone or email address dedicated to the business, or a specific location for the firm in a home, commercial space, or even on the Internet. Having a boundary gives you a place to locate and protect the resources you've gathered for the business.

Magnify (or Modify)

taking an existing product and changing its appearance or adding more features, can also cue you to minimize something (idea trigger: what could i make more noticeable or dramatic, or different in some way from my competitors)

incremental strategy

taking an idea and offering a way to do something better than it is done presently

resource competencies

the ability or skill of the entrepreneur at finding expendable components necessary to the operation of the business, (time, information, location, financing, raw materials, expertise)

external environment components

the forces, institutions, and people (i.e. the rest of the world) outside the boundary of the firm

role conflicts in a family business

the kind of problem that arises when people have multiple responsibilities, such as a parent and boss, and the different responsibilities make different demands on them, (whenever possible make decisions based on business necessities)

internal environment components

the people and groups within the boundary of a firm, including the owners, managers, employees, and board members of the firm

succession in a family business

the process of intergenerational transfer of a business (lack of clear transition is the death knell)

Put to other uses

think of ways you could generate a high number of opportunities for your product or service (idea trigger: suppose you learned that all the traditional uses for your product had disappeared; what other uses might there be?)

basic business competency

understanding the organizational and business processes of a firm

bootstrapping

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

Substitute

what might substitute for something else to form an idea. (Idea trigger: what opportunities can you think of that come as a result of substituting or replacing something that already exists?)

growth rewards

what people get from facing and beating challenges

Grow (small business vs. high-growth ventures)

when necessary vs. when possible

when opening a business which industry do women typically choose and which industry do men typically choose?

women choose service industry firms(lower average sales) & men choose construction and financial industry firms (higher average sales)

self-employed

working for yourself