Entrepreneurship

Initial public offering

transfer method describing the first time public sale of a stock listed on a public stock exchange

Consolidation

transfer method in which a small business is bought by a larger firm for the purpose of quickly growing the larger firm

Indirect exporting

use agents, export management companies, or export trading companies as intermediaries to handle most of the exporting process

Guerilla marketing

use of creative and relatively inexpensive ways to reach your customer. (door knob hangers, flyers under windshield wipers)

Ethical dilemma

occurs when a person's values are in conflict, making it unclear whether a decision the person is thinking about making is right or not; occurs when there are several different options for a decision one has to make and the best choice isn't clear

Stand retail

one of the most ancient forms of small business

Business incubator

organization that provides financial, technical, and managerial help to start up businesses

Royalty

payment to a licensor based on the number or value of licensed items sold

Professionalization

the extent to which a firm meets or exceeds the standard business practices for its industry

Retrenchment

organizational life cycle stage in which established firms must find new approaches to improve the business and its chances for survival

If business owners need an employee's involvement or a supplier's agreement, he or she must get them on board earlier to avoid failure later.

Failing to ask for support

The ________ of a business is characterized by its products or services being different or new.

Novelty

Financial projections section of feasibility study?

Operating expenses and profitability

Competencies are forms of business related expertise

True

Industry leadership

a firm's product based legitimacy increases when it sets technological or service standards adopted by competitors

Heuristic

a rule of thumb commonly used to estimate firm value in relation to some easily observable characteristic of the business

Resource competency

ability or skill of the entrepreneur at finding expandable components necessary to the operation of the business such as time, info, location, financing, raw materials, and expertise

SCAMPER

acronym for a set of cues that trigger new ideas for a business

Habit based planners

do not really plan at all b/c their actions are dictated by their routines

Lifestyle firm

generates an income not enough to provide a living for the owner, typical sales of $25,000 or less a year

Parallel competition

imitative business that competes locally with others in the same industry

Variance

permission from a government organization to act differently than the stated laws

Internal environment

the owner, employees, and any other owners or board members of a firm

Legal restrictions and rights are included in which section of a feasibility study?

the product/service section

Moonlighting

working on your own part time after your regular job

LaRue Hosmer's approach to small business making ethical decisions

1) define the moral problem 2) generate alternatives that could meet the ethical, legal, and economic goals 3) implement, pick the best alternative you and the business can live with

A firm can increase its legitimacy by self-certifying its products

False

Small businesses are characterized by novelty in their products.

False

Small businesses do not usually hire people with atypical work histories.

False

Time management is the process of inter generational transfer of business

False

A team can face conflict over idea ownership when the team is evenly split on choices.

True

Adjusting to the entrepreneurial life is one of the challenges face by late career entrepreneurs

True

Building social capital through social networking involves giving information, letting people know they belong, and providing social support and approval

True

High growth ventures start small but are intended to grow rapidly.

True

Its external control preference is to control the firm.

True

Role conflict and succession are two challenges typical to family businesses

True

Small businesses often use a combination strategy that can use aspects of differentiation or cost approaches that are reformulated for the niche market

True

The most frequently occurring element of the BRIE model is Intentions.

True

The rapid Web site prototyping process involves making quick fixes on products based on customer feedback.

True

To avoid pitfalls, a business owner must voluntarily take personal responsibility to do all the work and solve employees problems

True

Zoning laws and covenants are restrictions that impose limitations on the acceptable use of land and buildings

True

Late career entrepreneurs

a do-it-yourself approach is a challenge

Conversion franchising

agreement that provides an organization through which independent businesses may combine resources

Imitative strategy

buy existing businesses

Search engine optimization

general approach to website design intended to result in the site being displayed toward the beginning of a search engine's listing for that term

Set-asides

government contracting funds which are earmarked for particular kinds of firms, such as small businesses, minority owned firms, women owned firms, and the like

High performing small business

grow at rates of 5-15% a year, adding employees, and often growing through multiple locations and higher levels of professionalization

Intangibles

include accounts receivable, patents, licenses, and liabilities

Family business succession

inheritance is not restricted to parent-child or grandparent-grandchild

Start-ups

just happen

Creativity

process producing an idea or opportunity that is novel and useful, frequently derived from making connections among distinct ideas or opportunities

Virtual instant global entrepreneurship (VIGE)

process that uses the internet to quickly create businesses with a worldwide reach

Business to consumer (B2C)

products like music and cell phones are the kind of goods we buy as individuals

Radical innovation strategy

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

Master franchisees

required to open a minimum number of stores within a specified time period

Buyouts

restricted to businesses that have a formal legal form of organization, including corporations, limited liability companies, and some partnerships

Green retailing

selling products that have a better environmental footprint

Specialized business professionalization

situation that occurs when businesses have founders or owners who are passionate about one or two of the key business functions, such as sales, operations, accounting, finance, or human resources

Asset

something a business owns that is expected to have economic value in the future

Certification

an examination based acknowledgement that the firm is owned and operated by a woman or minority

Network marketing

approach to selling, in which the salesperson recruits customers to become distributors of the product or service to others

Delegations

assignment of work to others over whom you have power

Second career entrepreneurs

begin their businesses after having retired or resigned from work in corporations at the age 50 or later

Changeability into a core business

business owner must read magazines or trade journals outside his or her area of expertise

Outsourcing

contracting with people or companies outside your business to do work for your business

Poisoning the well

creating negative impression among your employers customers

Reciprocal link

listed live connection to a different website, which in turn displays a similar link to the first website; way of attracting users to a website

Social capital

major component of what accountants call "goodwill" and one can find it on a business's balance sheet

Succession

process of inter generational transfer of a business

Due diligence

process of investigating to determine the full and complete implications of buying a business

Verification stage

testing of an idea and reducing it to its most exact form

Mindshare

the degree of attention a target market pays to an idea or organization; innovation driven entrepreneurs are often as interested in having their ideas used or known

Full-time self employment

working more than 35 hours a week, majority of one's time is spent on the business

To create a sustainable enterprise?

by maximizing the use of recycled material

International Standards Organization (ISO)

certification for having met a standard of quality that is consistently evaluated around the world

Franchise

comes with a complete business system

Reactive planners

completely passive, waiting for cues from the environment to determine what actions to take

I2P analysis

consists of a one-page response to seven questions two about the product, four about the market, and one about intellectual property protection

Rewards rarely mentioned by entrepreneurs

family rewards, family tradition in business, and respected by friends

Crowdfunding

financing a business online through the involvement of others who provide donations, loans, or investments

Maturity stage of an industry's life cycle

firms in the industry stabilize profits through cost strategies

First step of strategic planning process (small business)

involves reviewing and confirming the goals that define a firm and knowing the magic number

Incubation stage

involves thinking about the problem or opportunity in a "not-conscious'' way or putting it on the back burner

License

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

Innovative strategy

make their businesses precisely fit their ideas

High performing small business

maximizes its profitability over a long term

Conversion rate

measure of how many visitors to a Web site actually make a purchase from the business owner

Sustainable entrepreneurship

method for managing external relations with customers, governments, and the physical environment

Green entrepreneurship

minimization of the depletion of natural resources, maximization of the use of recycled material, and improvement in the environment are a few positive outcomes of sustainable entrepreneurship

Imitation

most widely used small business strategy, (2/3)

Niche market

narrowly defined segment of the population that is likely to share interests or concerns

Expertise

often, would be entrepreneurs look to their own skills and talents for business ideas

Magic number

the post tax income the entrepreneur personally seeks from the business

Point of indifference

the price at which the buyer is indifferent about buying or not buying the business

Reward that is universally mentioned by entrepreneurs

to have greater flexibility/family life, liveable income, and personal growth

Bootstrapping

using low-cost or free techniques to minimize the cost of doing business

People based legitimacy building

waring uniforms or business attire

Factor-driven economy

consists of nations where most industry relates to farming and extracting raw materials

Limiting the magnitude of possible losses

deliberately keeping a start up small

Role conflict

describes the kind of problem that arises when people have multiple responsibilities, such as parent and boss, and each makes different demands on them

Book value

difference between the original acquisition cost and the amount of accumulated depreciation

Licensing

documented permission from the government to run your business

Challenges of late career entrepreneurs

entrepreneurial life, reestablishing self confidence, and keeping personal finances out of the business

Social network

entrepreneurs relationships and contacts with others; is a way to work trust, reciprocity, and long term relationships into your day-to-day business operations

Direct marketing is selling goods or services to consumers without intermediaries

True

Freight forwarders are firms specializing in packaging, transportation, and paperwork

True

Fulfillment center is a company that warehouses products and fills customer's orders

True

Growth trap refers to a financial crisis that is caused by a business growing faster than it can be financed

True

In leasing, leasehold improvements are permanent changes made to the location to fit any business's needs

True

Me too products are essentially similar to existing products on the market

True

Optimum price is the highest price that will produce the desired level of sales in the intended market

True

Proof of concept website is an internet based type of business plan providing info or demonstration of a product or service designed to solicit info on customer interests

True

When a product or service is kept as a trade secret or is protected legally using patent, copyright, trademark, or service mark, it is termed as proprietary technology

True

Working in an industry or market gives the entrepreneur the kinds of entrepreneurial or managerial competencies needed to start and run a business in that industry

True

Elasticity

economic idea that the market's demand for the product or service is sensitive to changes in its price

Relative to secondary data, primary data is less

economical

External reference price

estimation of what a price should be based on information external to a consumer, such as advice, advertisements, or comparison shopping

Direct mail

selling catalogs, brochures, letters, videos, and other pieces of marketing materials directly to customers

Perish-ability quality of a service

service that is not used when offered, it cannot be saved for later use

New product development

1. idea generation 2. idea screening 3. idea evaluation 4. product development 5. commercialization

An executive summary is an action oriented description of a business designed to sell the idea of the business to another

False

How employees steal cash from employers

Larceny and embezzlement, skimming, and phony disbursements

Differential advantage can be the result of a business serving a target market that is not being served or is undeserved

True

A business life cycle is the sequence or pattern of developmental stages any business goes through during its life span

True

A passion for the business and the expertise about the business and the plan are essential for a business plan presentation

True

A short term debt is any debt that must be paid in less than one year from the date of the financial statement on which it is reported

True

Creating a marketing plan is the first step to putting together a business plan

True

Reconciling

accounting process that identifies the causes of the all differences between book and bank balances

Receivables

amounts that are owed to a business for merchandise that was sold on credit

Cash equivalents

assets that may be turned into cash in a slightly longer time, from a few hours to a few days. Consist of marketable securities, commercial paper, and debt investments that mature in less than three months

Competitive advantage

characteristic that separates one company from another in product, price, promotion, and/or distribution

Price gouging

charging an outrageously high price for something

Bundling

combining two or more products in one unit and pricing it less than if the units were sold seperately

Tactical actions

competitive responses with low resource requirements; (price cutting)

Book balance

difference between inflows of cash and outflows of cash recorded by a firm by a firm

Telemarketing is an example

direct marketing

Business plan

document designed to detail the major characteristics of a firm (production, marketing, management)

Letter of credit

document issued by a bank that guarantees a buyer's payment for a specified period of time upon compliance with specified terms

Contract manufacturing

existing firm with the correct manufacturing capabilities makes your product for you

External legitimacy

extent to which a small business is taken for granted, accepted, or treated as viable by organizations or people outside the small business or the owner's family

New entrant business

firm whose product or service is establish elsewhere, but is new to this market

Focus group

form of data gathering from a small group led by a moderator

Focus strategy

generic strategy that targets a portion of the market, called segment or niche

Reconciliation

gives individuals a way to estimate the bank's available balance for the purpose of managing his or her cash flows

Existence stage

having the business in operation, but not yet stable in terms of markets, operations, or finances

Cash budget

identifies when, how, and why cash is expected to come into the business, and when, how, and why it is expected to leave

During the growth stage acceptance of the product

increases rapidly

Secondary research

inexpensive and quick

Liquidity enhancement

involves arranging (usually insurance) to generate cash to cover the estate taxes

Preselling

involves introducing your product to potential customers and taking orders for later delivery

Penetration pricing

involves setting a low price in order to get market share

Performing secondary analysis

it is wise not to depend entirely on one source

Most important pieces of the marketing plan and business plan

know what ones sales will be

Mail surveys

least expensive

The 5-M model

mantra, mission, measures, method, and mechanics

Daniel Katz and Robert Kahn

measures of success for any organization in short term is profit, and in long term is survival

Tagline

memorable catchphrase that captures the key idea of a business, its service, product, or customer

Ethnographic research

observation methods, makes lists of the products they choose and the time spent making the decision

Direct competition

other companies that make a similar product or provide a similar service

Mission statement

paragraph that describes the firms goals and competitive advantages

Risks

parts of a business or business plan that expose the firm to any kind of loss

Price lining

practice of setting, usually, three price points; good quality, better, and best in an attempt to appeal to several different markets

Final step in preparing a master budget

prepare a balance sheet for each accounting period

Maturity stage

price competition starts to rise, and manufacturers find ways to cut costs or introduce new features to keep or gain market share

4 P's

product, promotion, price, and place

Summary plan or concept plan

provides info on the company, product/service, market, and critical risks to prospective business or marketing partners or to prospective key employees

Heterogeneity

quality of a service in which each time it is provided it will be slightly different from the previous time

Open ended questions

questions that allow respondents to express themselves

Charge back

reduction in the bank account of a merchant by a credit card company. Credit card clearing services reduce the amount deposited, or charge back the amount, removing it from the business's account in the event of fraud or customer challenge

Success profits

represents income levels higher than the person could make working for others

Primary research

research gathered to answer a specific marketing question

Secondary research

research is already gathered for some other reason than a specific question, but can be just as useful

Success profits

returns at levels higher than the entrepreneur could make working for others

Periodic and random discounting

sales conducted at predictable and non-predictable intervals

Cash disbursements budget

schedule of the amounts and timings of payments of cash out of a business

Partitioned pricing

setting a base price and charging extra for all other components

Odd-even pricing

setting a price that ends in the number 5, 7, or 9

Microinventories

small business's answer to just in time inventory methods (try to get it together after order)

Private placement memorandum

specialized legal form of business plan crafted by lawyers for the purpose of soliciting formal investments

Bank ledger balance

sum of deposits and withdrawals recorded in a banks accounting records

Augmented product

the core product plus features that tend to differentiate it from the competition

4 bottom lines of business

the firm, the community, the family, and the entrepreneur

Introduction stage of product life cycle

the sales are low and profits not likely when a product from a small business emerges into the market

Processing float

the time required to move checks among payers, payees, and banks