Entrepreneurial Small Business Chapter 4

Entrepreneurial Alertness

a special set of observational and thinking skills that help entrepreneurs identify good opportunities; being able to notice things that have been overlooked, without actually launching a formal search for opportunities, and being motivated to look for opportunities.

A/B testing

a way to check customer reaction to Websites describing your product or service. Two versions of the site area posted and served up randomly to perspective customers. The versions that gets the most commitments from customers is the one kept and the less attractive is revised and the two version tested until one gets consistently superior values.

RBI Screen

RBI stands for Really Big Idea and it a fast technique for making initial assessments (called screens) of prospective business ideas based on five questions.

Customer segment

a group or subgroup of potential purchasers that can be approached in a coherent manner.

License

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

Royalty

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

Imitative Strategy

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

Gain

any sort of outcome (product, service, or situation) customers or potential customers would like to encounter or be able to depend on. One of two driving forces of creating new products or services. (The other is pain.)

Opportunity Recognition

searching and capturing new ideas that lead to business opportunities. This process often involves creative thinking that leads to discovery of new and useful ideas.

Value Proposition

small business owners' unique selling points (or benefits) that customers can expect from your goods or services including benefits that differentiate your offering from those of competition.

Incremental Strategy

taking an idea and offering a way to do something better than it is done presently.

Pilot test

a preliminary run of a business, sales effort, program or website with the goal of assessing how well the overall approach works and what problems it might have.

Creativity

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

Radical Innovation Strategy

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

Licensee

the person or firm which is obtaining the rights to use a particular piece of intellectual property.

Licensor

the person or organization which is offering the rights to use a particular piece of intellectual property.

Feasibility study

evaluates the potential of a business opportunity by studying five primary areas in depth: overall business idea, the product/service, the industry and market, financial projections (profitability) and the plan for future action.

Freemium

an approach to pricing and a business model that connects free ad premium products or services. Typically, a free version is offered and users have the option to pay more to move up to premium feathers.

Pain

any sort of problem, annoyance, source of aggravation, shortcoming or suboptimal situation customers or potential customers face. One of two driving forces of creating new products or services. (The other is gain.)

Feasibility

The extent to which an idea is viable and realistic and the extent to which you are aware of internal (to your business) and external (industry, market, and regulatory environment) forces that could affect your business.

Business models

a way to identify and organize key information on a business and how it achieves its goal. Business models can be analytical tools (like the Business Model Canvas) or a way to do business (like the "razor and blade" business model.

Causal model of entrepreneurship

an approach to entrepreneurship in which you create a particular product or service that does not yet exist, and, to achieve that end, you have to cause the product or service to exist. This mean you will have to learn new skills, or find other to help you achieve your end.

Conversion rate

the measure of how many visitors to your website (or people who click on you online advertisement) who actually make a purchase from you.