entrepreneurship exam review
how do you calculate gain on investment
(payout - investment + dividends) / investment
what is the marketing funnel for internet advertising and mass marketing ration
1,000 to 1
what are the reasons that ventures go public
1.) raise equity capital to fund current and future operations 2.) raise a venture's public profile, making it easier to attract high quality customers, business partners, and employees 3.) liquidity event that provides a way for investors to recoup their initial investments 4.) creates a form of currency that can be used to grow the venture via acquisitions
how long do design patents last
14 years from date of application
how long do plant patents last
20 years from application
how long do utility patents last
20 years from application date
what study was conducted measuring different nations level of fear
GEM study
what is a master budget
a budget which consists of sets of budgets that detail all projected receipts and spending for the budgeted period
what is financial flexibility
a business's ability to manage cash flows in such a manner that the company can respond appropriately to unexpected opportunities and needs
what is interest
a charge for the use of money, usually figured as a percentage of the principal
what is profitability
a company's ability to make a profit
what is liquidity
a company's ability to meet its short-term obligations
what is an IPO
a company's first sale of stock to the public
what is a survey
a data-collection method using a questionnaire
what is a budget
a financial plan for the future, based on a single level of operations
what is an income statement
a financial report that measures the financial performance of your business on a monthly or annual basis
what is a copyright
a form of intellectual property protection that grants the owner of a work of authorship the legal right to determine how the work is used and to obtain the economic benefits of the work
a new car is an example of what on the goods/services mix
a good-dominated product
what is a patent
a grant from a federal government conferring the rights to exclude others from making, selling, or using an invention for the term of the patent
what is a revenue model
a key component of the business model that identifies how the company will earn income and make profits
what is a corporation
a legal "artificial" entity that is formed by filing specific documents with a state government
what is a limited liability company
a legal form of business organization that is created by filing required documentation with a state government
what is a limited partnership
a legal form of business organization that is created by filing required documentation with a state government
what is vicarious liability
a legal liability of workers that states indirect liability or responsibility for the actions of others
what is debt
a legal obligation to pay money in the future
what is tax abatement
a legal reduction in taxes by a government
what is durability
a measure of product life
what is financial leverage
a measure of the amount of debt relative to total investment
what is operations
a picture of how you actually create value each day
what is a cost of goods sold budget
a schedule that shows the predicted cost of product actually sold during the accounting period
accounting services is an example of what on the goods/services mix
a service-dominated product
what is the cash flow statement
a statement of the sources and uses of cash in a business for a specific period of time
what is a balance sheet
a statement of what a business owns (assets), what it owes to others (liabilities), and how much value the owners have invested in it (equity)
what is a marketing plan
a systematic written plan of all phases of marketing for a business, including the marketing mix and a clear identification of the target market and competition
what is microfinance
a type of banking service that is provided to unemployed or low-income individuals or groups who otherwise have no other access to financial services
what is hold harmless
a type of waiver in which a party agrees not to hold another party responsible for certain events
what is infrastructure
ability of the entire organization to adapt to change
what is volume
ability to accommodate variations in production quantities
what is procedural
ability to create products using alternative methods, routings, and techniques
what is resource
ability to handle variation in input resources
what is modification
ability to implement rapid design changes
what is innovation
ability to introduce new products into operations
what is mix
ability to produce a variety of products/services with fast setups
what is equipment
ability to rapidly change over equipment and technology for a variety of products
what are operating activities
activities involved in producing and selling goods and services
what are financing activities
activities through which cash is obtained from and paid to lenders, owners, and investors
what is the mark-up pricing strategy
adding a % to the cost
what are the pros and cons of building a location for your venture
advantage of having the perfect layout in the perfect location and the street appeal of a new building, but is costly and slow
what are articles of partnership
agreement between the partners of a firm on matter pertaining to the formation and operation of the partnership
what are contracts
agreements in which the parties exchange promises
what is distribution
all activities that move your products from the place of origin to the consumer
what are activity-based cost estimates regarding a budget
an accounting method which assigns costs based on the different types of work a business does in order to sell a particular product or service
what is foundation
an institution to which private wealth is contributed and from which private wealth is distributed for public purposes
what are accelerator
an organization that supports startup technology businesses by providing inexpensive office space, a variety of support services, and resources
do venture capitalists or angel investors fund more ventures
angel investors
what is the third most common form of funding by ventures
angel investors
what is the difference between angel investors and venture capitalist firms
angel investors typically take more risk by investing early and give less money. angels also provide mentoring
what are forms of equity financing
angel investors, venture capitalists, IPO
what are trade secrets
any formula, pattern, physical device, idea, process, or other information that provides the owner of the information with a competitive advantage in the marketplace- cannot steal trade secrets
what is a plant patent
any new varieties of plants that can be reproduced asexually
what is intellectual property
any product of human intellect that is intangible but has value in the marketplace
what is a trademark
any word, name, symbol, or device used to identify the source or origin of products or services and to distinguish those products or services from others
what is a product
anything that is offered to the market to satisfy consumer wants, needs, or demands
how is a c corp taxed
as an entity
what is adverse selection
as venture grows, it becomes increasingly difficult to find the right employees, place them in the appropriate positions, and provide adequate supervision
what is another name for trade name
assumed name, doing business name
what are the the three types of locations
at the clients location, at a mutually accessible location, at your firms location
what are the points to consider when expanding the number of employees
attracting potential employees, evaluating potential employees, training new employees, retaining existing employees, legal issues
what is an example of guerrilla marketing
bagel the beagle
what is the fremium financial model
basic component is free, add-ons are extra
what is the core product
basic description of what the product is (ex. Iphone: just a phone)
what is major key in succeeding in rewards-based crowdfunding
be passionate
what three characteristics must be performed for a person to be an independent contractor
behavioral, financial, relational
what are elements of traditional marketing
big cash investment, main focus is on the product, goal is to maximize profit, short-term relationship with customer, delivers marketing message as a monologue
What are the three reasons why most new ventures need to raise money during their early life
cash flow challenges, capital investments, lengthy product development cycles
what are the four C's of debt
character, capacity, conditions, collateral
what are the most common forms of debt financing
commercial banks, SBA guaranteed loans
what is a standard contract
company can just fill in the blanks as needed
what is another name for the master budget
comprehensive budget
what is an intellectual property audit
conducted to determine the intellectual property a firm owns
what are the pros and cons of leasing a location for your venture
considerably lower initial cash outlay, often only feasible choice, lease expenses are deductible business expenses, but restrictions are possible
what is a contribution margin ratio
contribution margin / revenue per unit
what is the idea-expression dichotomy
copyright laws cannot protect ideas
what are four types of intellectual property
copyright, trademark, trade secret, patent
what are the two types of product according to the total product approach
core product, augmented product
what is the augmented product
core product, plus features that tend to differentiate it from the competition (ex. Iphone: brand name, quality level, packaging)
what are the keys for advertising success
correct objectives, right message, right medium, right time, right frequency
what make up cost drivers
cost of goods sold, operating expenses
what are variable costs
costs that change in direct proportion to your unit of analysis
what are fixed costs
costs that remain the same over a given range of volume and are not affected by activity within the business
how can you get serious attention from the media and the public
create newsworthy events
what are four key revenue drivers
customers, frequency, selling process, price
what is ethnographic research
data gathered by simple observation
when a venture has low risk with a more predictable return, what should be used for funding
debt financing
what is on-the-job training
delivered to employees while they perform their regular jobs
what factors should you consider when setting your price
demand for the product, value delivered to the customers, prices set by competitors, your business strategy and product placement
what is the criteria to determine if you should protect intellectual property
determine whether the IP in question is directly related to the firm's competitive advantage, decide whether the intellectual property in question has value in the marketplace
what are tax credits
direct reductions in the amount of taxes that must be paid, dependent upon meeting a legal criteria
what is a way to minimize risk from a lenders view
diversify
what are the articles of organization
document setting forth information about a limited liability company that is filed with the state to establish a LLC
who is crowdfunding for
early-stage ventures, 10,000 or less
what is at a mutually accessible location
eg. barber shop and you operate out of the shop
what is at the clients location
eg. home cleaning and you operate out of a home office
what is at your firm's location
eg. you have multiple barber shops or janitorial employees and you have a separate office
what are the different types of workers
employees, contractors, unpaid interns, volunteers
what are forecasts
estimate of ventures future income and expenses based on past performance, its current circumstances, and its future plans
what are front-stage operations
every aspect the customer is exposed to
what are back-stage operations
every aspect the customer never sees but that is important to the business
if your organizations financial gains are close to potential and you own complete control of the company, what are you
exception
if your organizations financial gains are well below potential and you own little of the venture, what are you
failure
what is failure typically associated with
fear
what information does a balance sheet provide
financial flexibility, financial strength
what is bootstrapping
finding ways to avoid the need for external money via creativity, ingenuity, thriftiness, cost cutting, or any means necessary
is more risk associated with a higher fixed cost or higher variable cost
fixed cost
what is a focus group
form of data gathering from a small group led by a moderator
what is the second source of funds for many new ventures
friends and family
what is GAAP
generally accepted accounting principles that are the standardized rules for accounting procedures
what are examples of products
goods, services, people, ideas
what is a primary concern for equity investors
growth potential
what are bootstrapping strategies
guerrilla marketing, interns, minimize personal salary
what is the first step of delegation
hiring new employees
what is aesthetic
how a product or service looks, feels, sounds, tastes, or smells
what is the marketing mix
how much of each promotional outlet you use to reach your target market
what is efficiency
how productively a firm utilizes its assets
a restaurant is an example of what on the goods/services mix
hybrid
who is prosocial crowdfunding for
impoverished individuals, generally less than $1,000
what is off-the-job training
includes lectures, special study, videos, television, conferences, case studies, role-playing, simulation, etc.
what are five common financial statements
income statement, statement of retained earnings, statement of owner's equity, balance sheet, cash flow statement
what are angel investors
individuals who invest their personal capital directly in startups. Also provide mentoring
who is the crowd on kickstarter
inexperienced laypersons, desire for belonging, desire to support an entrepreneur
what is secondary research
information already collected for some other purpose than the current problem or question
what is guerrilla marketing
innovative, unconventional, and low-cost marketing techniques aimed at obtaining maximum exposure for a product
what is the first step a firm should take to protect its intellectual property
intellectual property audit
what are the pros of failure
intensifies cognitive process, learning resulting in improvements, motivation to start another venture
what is a design patent
invention of new, original, and ornamental design for manufactured products
what are elements of entrepreneurial marketing
investment of time, energy, creativity, commitment, main focus is on the customer, goal is to meet and satisfy customer needs, long-term interactive relationship with customer, delivers marketing message as a dialogue
what is the world's largest rewards-based crowdfunding platform
kickstarter
if your organizations financial gains are well below potential and you own complete control over the venture, what are you
king/queen
what is a single-step format income statement
lists all revenues and gains together, then lists all expenses and losses together s
what is a multi-step format income statement
lists revenues form operations seperately from other income and gains
what are advantages for starting your venture in your hometown
local bankers know you, you understand market's needs and wants, friends and family are usually first customers
how can entrepreneurs overcome adverse selection
looking to signals such as education, experience, other qualifications, exams
what two things does financial management deal with
managing the venture's finances in a way that achieves the highest rate of return, raising funds
what is the most common pricing strategy
mark-up pricing
what is a certification mark
marks, words, names, symbols, or devices used by a person other than the owner to certify a particular quality about a good or service
what is direct sales
method of going directly to your customer in order to sell your products
what is prosocial crowdfunding
microlending, poverty alleviation
what are the dimensions for competing on flexibility
mix, equipment, modification, procedural, volume, innovation, resource, infrastructure
what is debt capital
money borrowed specifically for the purpose of investment in the venture
what is equity financing
money contributed to the venture in return for part ownership, typically in the form of stock
what are grants
money from the government that doesnt need to be paid back
how do venture capitalists invest their money
money is invested in stages, so not all money is received at once
what are venture capitalists
money that is invested by venture capital firms in start-ups and small ventures with exceptional growth potential
what are the pros and cons of primary research
most current and valuable, but costly
what is moral hazard
new hires typically do not have the same ownership incentives as the original founders, so they may not be as motivated and may try to avoid work
what is primary research
new information collected to solve a problem at hand or answer current questions
what is a utility patent
new or useful process, machine, manufacturer, or composition of material or any new and useful improvement thereof
are commercial banks viable for funding for startups
no
are independent contractors subject to vicarious liability
no
are marketing expenses variable costs
no
can a sole proprietorship sell ownership
no
do limited liability companies face double taxaction
no
do trademarks protect descriptive matter
no
is failure always bad
no
what is the number one reasons startups fail
no market need
what is rewards based crowdfunding
non-financial rewards
what is copyright infringement
occurs when one work derives from another or is an exact copy or shows substantial similarity to the original work
how does the contemporary business distinguish itself
on the experiences that it creates for customers
what do cash flow statements include
operating activities, investing activities, financing activities
how is an s corp taxed
owners are taxed
what is a waiver
part of a contract in which a party intentionally gives up legal rights or claims
what is an exculpatory clause
part of a contract in which a party to the contract states that he or she will not be responsible for certain actions
what is a noncompete clause
part of a contract in which a person agrees not to open a certain type of business or seek employment doing certain things in a particular area for a period of time
what is a business method patent
patent that protects an invention that is or facilitates a method of doing business (ex. amazon's one-click ordering system)
what are dividends
payments of profits to the owners of corporations
what are the dimensions for competing on quality
performance, features, reliability, conformance, durability, serviceability, aesthetic, perceived quality
what is the first source of funds for many new ventueres
personal funds
what are common non-equity sources of funding for ventures
personal funds, friends and family, debt, bootstrapping
when a venture has high risk with an uncertain return, what should be used for funding
personal money, friends, family, bootstrapping
what are independent contractors
persons working to achieve a certain goal without being subjected to substantial controls by another
what question does "how will the customer be reached? where will they buy my product or service" relate to regarding the 4 P's of marketing
place
what question does "what is the value of my offering and what are customers willing to pay" relate to regarding the 4 P's of marketing
price
what is the odd-even pricing pricing strategy
price ending in the number 5, 7, or 9 (psychological)
what must change when using intermediaries for distribution
pricing
what are the two types of market research
primary and secondary
what is reliability
probability of the product or service failing within a specified period of time
what question do "what are the benefits and features of my product" relate to regarding the 4 P's of marketing
product
what are the four P's of marketing
product, price, place, promotion
what is another name for the income statement
profit and loss statement
what are the financial objectives of the venture
profitability, liquidity, efficiency, stabiltiy
what is a favorable variance
profits are greater than budgeted
what are unfavorable variances
profits are less than budgeted
what is the SBA Guaranteed Loan Program
program operates through private-sector lenders who provide loans that are guaranteed by the SBA. Loans are for small businesses that are not able to obtain credit elsewhere
what are pro forma financial statements
projections for future periods based on forecasts and are typically completed two to three years in the future
what question does "how will they know my business exists" relate to regarding the 4 P's of marketing
promotion
what are the steps of personal selling
prospect and evaluate, prepare, present, close, follow-up
why do entrepreneurs fail
psyche mistakes, waiting too long mistakes, hiring msitakes
shampoo is an example of what on the goods/services mix
pure good
getting the car washed is an example of what on the goods/services mix
pure service
what is a dichotomous survey question
question that has only two possible choices
what is a scalar survey question
questions answered by some sort of scale
what are open-ended survey questions
questions that allow respondents to express themselves as they choose
what are categorical survey questions
questions that are answered by selecting the proper category (ex. what is your ethnicity)
what is a way to interpret financial statements
ratio analysis
what are historical financial statements
reflect past performance and are usually prepared on a quarterly and annual basis
what must you do with with the trade name
register it with state along with owners of business
how long does a collective mark last
renewable every 10 years
how long does a service mark last
renewable every 10 years
how long does a trademark last
renewable every 10 years
how long does a certification mark last
renewable very 10 years
what are the two key principles of guerrilla marketing
resource leveraging, risk management
which financial report is what you have in the bank
retained earnings
what is a contribution margin
revenue per unit - variable cost per unit
what is the most common form of crowdfunding
rewards-based
what are the different types of crowdfunding
rewards-based, equity-based, prosocial
if your organizations financial gains are close to potential and you own a little of the company, what are you
rich
what are the types of companies that do not face double taxation
s corp, c corp
what is one of the most important pieces of the marketing plan
sales forcast
what are the different survey question types
scalar question, dichotomous queston
what are the different options for distribution
selling direct, selling through intermediaries
what must entrepreneurs do after failure
separate personal and professional failure, accept failure as part of the learning process, admit mistakes and move forward
what is the premium pricing strategy
setting above the competition to indicate quality or prestige (ex. swiss watch)
what is the skimming pricing strategy
setting at the highest price possible (ex. diamonds)
what is the goal of pricing your product
setting the optimum price
what is the partitioned pricing pricing strategy
setting the price for the base product and charging more for additional components (ex. car + navigation)
what are the pros and cons of buying a location for your venture
shortens the time and may be cheaper, but lack customization
what are the different types of income statements
single-step format, multi-step format
what is the most common and easiest to create form of venture
sole proprietorship
what is the direct cross-subsidies financial model
something free, but something connected is sold (eg. sell minutes, giveaway phone)
what is the multi-party markets financial model
something free, but something separate is sold (eg. linkedin- free resume listing, sell search)
where does the US fall in regard to their level of fear
somewhere in the middle
how can entrepreneurs overcome moral hazard
stock ownership, strong company culture, pay increases, other benefits
what does the income statement show
subtracts the COGS and expenses from the total revenue to show net income
what is customer retention
techniques that focus on efforts to promote satisfaction with and interest in the firm
what is financial strength
the ability of a business to survive adverse financial events
what are features
the characteristics that define the function of the product or service
what is conformance
the degree to which a product or service meets acknowledged standards
what is variance
the difference between an actual and budgeted revenue or cost
what is the total product approach
the entire bundle of products, services, and meanings of your offering (includes extras like service, warranty, or deliver as well as what product means to consumer ex. iphone: app store, apple care, feeling, etc.)
what is weighted average cost of capital
the expected average future cost of funds
what is the optimum price
the highest price that will produce your desired level of sales in your target market
what is revenue
the income gained from sales of goods and services
what is risk
the level of probability that the venture will not be able to repay the loan
what is employee fit
the match between the needs, expectations, and culture of the small business with the expectations and the skill of the individual employee
what is marketing
the method of placing the right product at the right place and the right time
what is a trade name
the name of your business
what is stability
the overall health of the financial structure of the firm, particularly as it relates to the debt equity ratio
what is gain on investment
the percentage amount that the payout of an investment differs from original amount
what is cost of capital
the percentage cost of obtaining future funds
what is breakeven
the point at which total costs equal gross revenue
what is the price lining pricing strategy
the practice of setting multiple price points for different quality
what is performance
the primary characteristics of the product or service
what is delegation
the process of assigning activities/tasks to others
what is variance analysis
the process of determining the effect of price and quantity changes on revenues and expenses
what is crowdfunding
the process of raising funding for a new venture from a large audience via an internet-based platform
what is a pitch
the process of selling
what is personal selling
the process of selling your products and service
what is customer relationship management (CRM)
the process of tracking the customer's different contacts with the firm, and using data to help improve sales as well as the customer's experience
what is crowdsourcing
the process of using the internet to attract, aggregate, and mange ostensibly free labor from enthusiastic customers and like-minded people
what are investing activities
the purchase and sale of land, buildings, equipment, and securities
what is grit
the quality that enables people to work hard and sustain interest in their long-term goals
what is optimum capital structure
the ratio of debt to equity that provides the maximum level of profits
what is the marketing funnel
the rule of thumb in marketing that it takes a large number of people to be made aware of your product in order to find a purchaser
what is a target market
the segment or segments you select on which to concentrate your marketing efforts
what is serviceability
the speed, courtesy, competence, and ease of repair and recovery
what is retained earnings
the sum of all profits and losses, less all dividends paid since the beginning of the business
what is failure
the termination of a commercial organization that has missed its goals and failed to achieve investors expectations
what are cost of goods sold
the value of goods sold when a sales takes place
what is sweat equity
the value of the time and effort that a founder puts into a new venture
where is the first choice for many entrepreneurs to start their venture
their hometown
what is advertising used for
to support the identity and value propositions that are established through public relations efforts
how do you calculate break even quantity
total fixed costs / contribution margin
how do you calculate break even money
total fixed costs / contribution margin ratio
what is a collective mark
trademarks or service marks used by the members of a cooperative, association, or other collected group
what are the three critical site selection considerations for high customer contact business
traffic, customer ease, competition
what is a factor most valuable to employees
training
what is a probationary period
trial period in which an employee has temporary status before a formal offer to work full time is presented
when is bootstrapping employed
typically out of necessity
where does the fear of failure come from
underlying psychology, emotion, culture, political/regulatory environment
what is a specialty contract
unique contract terms, large dollar amounts at stake
what is a service mark
used to identify the services or intangible activities of a business, rather than a business's physical products
what are the three basic requirements for obtaining a patent
useful, novel, not obvious
should you cover your fixed or variable costs first
variable
what is perceived quality
various tangible and intangible aspects of the product from which quality is inferred
who is equity-based crowdfunding for
ventures at all stages, high growth high profitability ventures, large investments
what is an open-book policy
way to overcome moral hazard where key employees can see and understand firms financials
what is a psychological contract
way to overcome moral hazard which refers to employees beliefs about the promises between the employee and the firm
what is patent infringement
when one party engages in the unauthorized use of another party's patent
what is bootstrapping
when the going gets tough, the tough get going
where does value come from
your offering and the customer's interactions with your organization
