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