SBM exam 2

What are the challenges of being an entrepreneur part time?

Teamwork and delegation Focus and productivity Work-life balance issues Developing good habits and achieving goals Procrastination and time management Business growth and scaling

What are the characteristics of pop-up businesses?

Temporary venue space

industry.

The general name for the line of product or service being sold, or the firms in that line of business

Covenants

The limitations imposed on an individual's property by the neighborhood group

What is affordable loss?

The minimum possible expenditure of capital and other resources in order to bring an entrepreneurial idea to market

What is a pitch deck?

The name of a slideshow presentation that summarizes a business or more often a business plan

point of indifference

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

What is due diligence?

The process of investigating a business to determine its value and potential for investment

Casual or predictive reasoning

The process of setting a goal and then determining the strategy and resources required to attain the goal.

What are the characteristics of stand retail?

The roadside, flea market, farmers' markets, or craft fair business.

Multi-channel marketing

The use of several different channels to reach your consumers, for example, website, direct, mail, and traditional retailing.

Market

a group of buyers and sellers of a particular good or service

Differentiation

aimed at clarifying how one product us unlike another ina mass market

mass market

all possible customers in a market, regardless of the differences in their specific needs and wants

Ebay -- reverse auction

an auction in which the low bid gets the business or wins

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 owners family

Zoning laws

government specifications for acceptable use of land and buildings in particular areas

Strategy

idea and actions that explain how a firm will make profit

Tagline

memorable catch phrase that captures the key idea of a business, its service, product, or customers (slogan)

Understand how to start a new business in an existing field.

no definition

Innovative

overall strategic approach in which a firm seeks to do something that is very different

Imitative

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

Mission

paragraph that describes the firms' goals and competitive advantages

Franchisee

pays a fee for the rights, and who agrees to abide by the conditions and standards

Variances

permission from a government organization to act differently that the laws state

Franchise

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

Franchisor

sets conditions and standards and who grants operating permissions

Competitive advantage

the particular way a firm implements customer benefits that keeps the firm ahead of other firms in the industry

What is an incubator?

A facility that offers subsidized space and business advice to companies in their earliest stages of operation.

Effectual reasoning

A logical process in which one analyzes the resources available and the restraints on the use of resources to create an attainable goal

Core competencies

the main work of a firm in a particular line of business

Value proposition

small business owners unique selling points that customers can expect from your goods or services, including benefits that differentiate your offering from those of the competition

Moonlighting

working on your own part time after your regular job

What are the four (4) types of situations in which it makes good sense to first undertake a part-time business? (pages 122-123)

1) If you aren't sure how the business runs at first 2) If you don't have enough resources to be in operation full time 3) If you're not sure if you want this long term 4) If you aren't sure how long the opportunity will last

Executive summary

1-2 page overview of the business, its business model, market, expectations, and immediate goals

What are the two primary goals of due diligence?

1. Attempting to find any wrongdoing 2. Trying to find any inefficiencies

What are steps of due diligence?

1. Conduct extensive interviews with the sellers of the business 2. Study the financial reports and other records of the business 3. Make a personal examination of the site 4. Interview customers and suppliers 5. Develop a detailed business plan for the acquisition 6. Negotiate an appropriate price for the business 7. Obtain sufficient capital

What is a mobile office?

A business ran out of a vehicle, face to face selling

Lean business practices

An application created by Eric Ries that addresses the specifics of new business creation, particularly internet based, where rapid experimentation and constant monitoring of viewers choices are possible.

business-to-business (B2B)?

B2B - business to business transactions

What is business-to-consumer (B2C)

B2C business to consumers transactions

How do you find a business to purchase?

Business should be in an industry that you have experience in Should be producing a product in demand with high margins Adequate financing available

Define industry dynamics.

Changes in competitors' sales and profits in an industry overtime

Distinguish between the various forms of customers. (page 201)

Corporate customers - selling to other businesses Loyal customers - return and are already presold Local customers - people from surrounding area Passionate customers - not just loyal but are likely to rave about your business

Part time Business Exchange

Dealing with others ( Government and Customers ) Registration or licensing, taxes and zoning (Govt)

What are the key considerations for success in part-time entrepreneurship?

Delegation - the assignment of work to other over whom you have power Outsourcing - contracting with people or companies outside your business to do work for your business.

How do you calculate magic number?

Determine this number by: Flexibility personal growth solid personal income

Differentiate between e-commerce and informational websites.

E-commerce is conducting business on the internet while an informational website is a site designed to introduce and explain a business to others

What are the advantages and disadvantages of buying an existing business? DISADVANTAGES

Finding a successful business for sale Difficult to determine what a small business is worth Existing managers and employees may resist change The reputation may be a hindrance to future success Business may be declining because of changes of technology The facilities and equipment may be obsolete or in need of major repair

Search engine optimization

General approach to website design intended to result in the site being displayed toward the beginning of a search engines listing. (google, yahoo)

What are the most common forms of part-time businesses?

Home based Internet informational businesses E-commerce and ebay websites Home retail Pop-up Mobil offices Virtual offices Consignments and agents

What is considered home retail?

Home parties Door to door selling Network marketing

Know the advantages and disadvantages of starting a new business. DISADVANTAGES

No initial name recognition Significant time to become established Very difficult to finance May not have experienced managers or workers Faced with training employees and obtaining management support

What is an industry analysis?

Research prices that provides the entrepreneur with key information about the industry, such as its current situation and trends

Part time Business Boundary

Separating business and home - finding space for your business in your home

What elements should you make sure that your website does NOT have?

Slow loading graphics/pages Too many layers of screens to get somewhere Dead links (404 error) Pop-up ads Pages that work on a computer but not a phone Online forms hard to fill in

Part time Business Pricing and Costing

Understand real cost of a product or service in your industry

Know the advantages and disadvantages of starting a new business. ADVANTAGES

You can do it your way You will begin with a clean slate You have the opportunity to use the most up to date technologies You can provide, new, unique products or services You can deliberately keep the business small to limit the size of financial losses You can take time to perfect the product or service

Distinctive competence

compares your company's product or service to that of your competitors

Poisoning the well

creating a negative impression among your employers' customers

Cannibalizing

taking business away from your employer

Focus

targets a portion of the market called a segment or niche

Popup business

temporary business that offers services or products in a variety of locations for a brief period of time

Episodic business

temporary, project based, or sporadically operating business

Marketing

the actions of a business related to promoting and selling products or services

Generic strategies

three widely applicable strategies for businesses of all types

scale

to increase revenue at a faster rate than costs.

Bootstrapping

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

Vision statement

very simple 5-10-word sentence or tagline that expresses the fundamental idea or goal of the firm

What are some things an entrepreneur can do to increase the odds of success? (Pages 166-170)

-start in a business incubator or accelerator - take part in a mentoring program - have a detailed startup budget - produce a product or service for which there is a proven demand - secure outside investment -start with more than one founder - have experience managing small firms - have industry experience - have previous experience creating a start-up business - choose a business that produces high margins -start the business with established customers - build trust in your story

What are the five paths to business ownership?

1. Entrepreneur started a completely new business 2. Purchases franchise rights to an existing business 3. Bought an already operating business 4. Worked in a small business and eventually gained ownership 5. Inherited a business from a family member

What is an elevator pitch?

30 second action oriented description of a business designed to sell the idea of the business to another

niche market

A smaller part of a larger market in which customers have more specific needs and wants

What are some key ideas of bootstrapping?

Do without as long as you can Cut your personal and business expenses to the bone If you need something, see if you can get it for free or borrow it Offer equity instead of money for outside services Find lower cost alternatives Borrow money from yourself first then friends and family Limit credit card purchases Always keep track of your cash

What are the advantages and disadvantages of buying an existing business? ADVANTAGES

Established customers provide immediate sales and cash inflows because the business is already successful Business processes are already in place Purchasing a business often requires less cash outlay than creating a start-up

What are the stages of an industry life cycle?

Introduction stage - life cycle stage in which the product or service is being invented and initially developed Growth - customer purchases increase at a dramatic rate Boom - marked by a very rapid increase in sales in a relatively short time Shake out - there is a rapid decrease in the number of firms in an industry

What is the magic number?

Magic number - the post-tax income the entrepreneur personally seeks from the business

Cost

aimed at mass markets in which a firm offers a combination of cost benefits that appeals to the customer

Business plan

document designed to detail the major characteristics of a firm

Ebay -- reserve price

minimum acceptable selling price in an auction. If the bidding does not exceed the price, the sale will not go through.

What are the four main components of an elevator pitch?

Hook Support Solution Ask

Hybrid entrepreneurship

process of initiating a business while simultaneously remaining employed for wages and salary