Chapter 7 Management 3000

Which statements about business plans are true?

-Many business plans focus heavily on financial projections. -Potential investors want to know more than just financial projections.

Challenges you might face as an entrepreneur

-You might not enjoy it -Survival is difficult -Growth creates new challenges -It's hard to delegate -Misuse of funds -Poor controls -Mortality and succession

Which are included in an opportunity analysis?

-description of the good or service -source of capital -specification of resources needed -assessment of the opportunity -assessment of the entrepreneur

Opportunity

-Core of entrepreneurship -Entrepreneurs find ways to spot, create, and capture opportunities

In addition to the financial projections, the best business plans convey which key factors?

-the risks and rewards -the context -the competition -the people -the opportunity

Franchising

An entrepreneurial alliance between a franchisor (an innovator who has created at least one successful store and wants to grow) and a franchisee (a partner who manages a new store of the same type in a new location).

Lifestyle and taste changes

start-ups have capitalized on new clothing and music trends, desire for fast food, and growing interest in sports

making cheerleaders

while building support for one's idea, getting together people will offer support before formal approval from higher levels

Small business

A business having fewer than 500 employees, independently owned and operated, not dominant in its field, and not characterized by many innovative practices.

Opportunity Analysis

A description of the good or service, an assessment of the opportunity, an assessment of the entrepreneur, specification of activities and resources needed to translate your idea into a viable business, and your source(s) of capital.

opportunity analysis

A description of the good or service, an assessment of the opportunity, an assessment of the entrepreneur, specification of activities and resources needed to translate your idea into a viable business, and your source(s) of capital.

Entrepreneurial venture

A new business having growth and high profitability as primary objectives.

franchising

An entrepreneurial alliance between a franchisor (an innovator who has created at least one successful store and wants to grow) and a franchisee (a partner who manages a new store of the same type in a new location).

Demographic changes

Any change relating to the size, age distribution or make-up a population

storefront website

Designed to sell products that are from the seller or third parties and once purchased are drop shipped to customers.

True or false: Management has very little influence on fostering entrepreneurial orientation.

False

What is the promise of payoffs from the project in return for support, time, money, and other resources?

Horse trading

Which statement about Initial Public Offerings (IPOs) is true?

IPOs need to be federally registered.

Entrepreneurs

Individual who establishes a new organization without the benefit of corporate sponsorship.

Business-to-business (B2B)

Individuals and organizations that buy goods and services to use in production or to sell, rent, or supply to others.

What nonfinancial resource involves people's judgment of a company's acceptance, appropriateness, and desirability?

Legitimacy

Intrapreneurs

New venture creators working inside big companies.

social enterprises

Organization that applies business models and leverages resources in ways that address social problems.

Legitimacy

People's judgment of a company's acceptance, appropriateness, and desirability, generally stemming from company goals and methods that are consistent with societal values.

Technological discoveries

Start-ups in biotechnology, microcomputers, and nanotechnology followed technological advances.

How important are non-financial resources to new venture success?

The are essential to the success of a new business.

Entrepreneurship

The pursuit of lucrative opportunities by enterprising individuals.

Entrepreneurial Orientation

The tendency of an organization to identify and capitalize successfully on opportunities to launch new ventures by entering new or established markets with new or existing goods or services

Entrepreneurial orientation

The tendency of an organization to identify and capitalize successfully on opportunities to launch new ventures by entering new or established markets with new or existing goods or services.

Subscription

Websites like The New York Times and Harvard Business Review allow individuals to read or access information similar to subscribing to a newspaper or magazine

Business plan

a formal written document that describes the nature of a business and how it will operate

Skunkworks

a project team designated to produce a new, innovative product

What are the two common approaches used to stimulate intrapreneurial activity?

bootlegging skunkworks

The ______ describes all the elements involved in starting the new venture.

business plan

Entrepreneurship involves ______.

creating new systems, resources, or processes to produce new goods or services and/or serve new markets

Government initiatives and rule changes

deregulation spawned new airlines and trucking companies, tighten energy requirements=> opportunity for alternative energy use products

Calamities

disasters or terrible misfortunes

Lourdes, an innovator, has created a successful store and wants to grow the business. She finds a partner who agrees to manage a new store of the same type as Lourdes' but in a new location. The partner will pay Lourdes for allowing him to use her business model and name. This type of arrangement is called ______.

franchising

Social Capital

goodwill stemming from your social relationships

low innovation/high risk

i. Conventional entries in well-established fields 1. Ex. New restaurants or retail shops

high innovation/high risk

i. Novel products that are accompanied by high risk because the financial investments are high and competition is great 1. Ex. New drug or automobile

high innovation/low risk

i. Truly novel ideas with little risk 1. Ex. Legos, Velcro

low innovation/low risk

i. Ventures that require minimal investment and/or face minimal competition 1. Ex. Service businesses with low start-up costs

Bootlegging

informal work on projects, other than those officially assigned, of employees' own choosing and initiative

Han has an innovative idea for a new technology service and wants to start his own business. Han is most likely to be successful if he ______.

is creative and and has good business know-how

A(n) ______ firm will have an easier time acquiring other resources such as top managers, good employees, financial resources, and government support.

legitimate

social entrepreneurship

leveraging resources to address social problems

Getting support for a project from peers before seeking formal approval from higher levels in a company is known as Blank______.

making cheerleaders

The most dangerous risk in corporate entrepreneurship is the risk of ______.

overreliance on a single project

Initial Public Offering (IPO)

sale to the public, for the first time, of federally registered and underwritten shares of stock in the company

Leveraging resources to address social problems is called ______.

social entrepreneurship

Economic dislocations

such as booms or failures. Rising oil prices result in development of alternative energy

One of the keys to starting a business is obtaining the money to do so. Where do start-up businesses typically get most of their money from?

the owners, their families, and bank lines of credit

One thing entrepreneurs may not realize when they begin their venture is that ______.

they usually have to work every aspect of the business