Entrepreneurship midterm
Lean Business Practices
addresses the specifics of new business creation, particularlyInternet-based businesses, where rapid experimentation and constant monitoring of viewers' choices are possible
creative destruction
the way that newly created goods, services, or firms can hurt existing goods, services, or firms
minimum viable product
-A concept central to lean business practices where you make a minimum product, but one that can be sold. -By selling to customers and collecting feedback, an entrepreneur can develop a product at minimum cost.
planning styles
-Comprehensive: long term -Critical Point: most important first -Opportunistic: start with a goal -Reactive: passive -Habit: don't plan
Caveat emptor
-Latin: let the buyer beware -Philosophy sometimes used by businesses to put the burden for consumer protection onto the customer
the key to selecting an industry
-Offers good potential for making a profit -Offers attractive opportunities to work with a minimum of risk and competition
strategy
-The ideas and actions that explain how a firm will make its profit -Good strategy leads to greater chances for survival and higher profits
product
-anything that is offered to the market to satisfy consumer wants, needs, and demands -goods, services, people, ideas
oppurtunity recognition
-searching and capturing new ideas that lead to business opportunities -involves creative thinking that leads to discovery of new and useful ideas
steps to follow when acquiring a business
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 (or sites) of the business.4. Interview customers and suppliers of the business 5. Develop a detailed business plan for the acquisition.6. Negotiate an appropriate price for the business, based upon the business plan projections.7. Obtain sufficient capital to purchase and operate the business
RBI screening questions
1. People: Who are you? 2. Offering: What are you offering? 3. Customer: Whom are you offering it to? 4. Value proposition: Why do they care? 5. Distinctive competencies: Do you have any key or core science/technology or feature?
path to business plan
1. Vision- tagline, 5-10 words 2. Mission- paragraph that describes the firms goals 3. Elevator Pitch- 1 min or less action oriented speech 4. Executive Summary- one to two page overview of the business 5. Business Plan- includes cover letter, title page, table of contents, executive summary, the company, the industry, the market, the organization, the financials, the appendixes
Goals os Due diligence
1. You are attempting to find any wrongdoing: (1) fraud, (2)misrepresentations of the sellers and (3) missing information 2. You are trying to find any inefficiencies, unnoticed opportunities, waste, and mismanagement
what is looked for when pitching a plan
1. Your passion for the business 2. Your expertise about the business and the plan 3. How professional you are in your work 4. How easy it would be to work with you
four key ideas when starting a business
1. believe that you can do this 2. planning + action = success 3. help helps 4. do well. do good
Feasibility 5 primary areas
1. the overall business idea 2. the product/service 3. the industry and market 4. financial projections (profitability) 5. the plan for future action
influencer
A customer role describing a person or group who can make credible or recognized suggestions or recommendations to others regarding purchase choices
decision maker
A customer role that describes a person in an organization who is responsible for choosing which product or service will be obtained
purchaser
A customer role that describes an individual or institution that pays for or obtains a product or service
end user
A customer role that describes the person who eventually makes actual use of a product or service in his or her personal or work life
customer profile
A detailed description of a hypothetical potential customer for a product or service, also called a customer persona
business plan
A document designed to detail the major characteristics of a firm— its product or service, its industry, its market, its manner of operating(production, marketing, management), and its financial outcomes with an emphasis on the firm's present and future
Serviceable obtainable market (SOM)
A marketing term (also called the target market) that represents the customers that a firm expects to be interested in its particular product or service, and able to be serviced by the firm
Penetrated Market (PM)
A marketing term that describes the actual number of customers of an operating firm, divided by the size of the target market, which gives a percentage of the market the firm (or product/service) has attained so far
Total Available Market (TAM)
A marketing term that refers to all of the people or organizations (in one nation, region, or the world) who might consider a product or service being offered
Serviceable available market (SAM)
A marketing term that refers to the customers within the geographic reach of a firm
industry analysis
A research process that provides the entrepreneur with key information about the industry, such as its current situation and trends
organizational culture
A set of shared beliefs, basic assumptions, orcommon, accepted ways of dealing withproblems and challenges within a company thatdemonstrate how things get done
budget cycle
A term applied to the process for setting the schedule for making purchases by an individual or an organization
Primary Research
An approach to researching based on the gathering of new information, using techniques such as interviewing, surveying, and observation (focus group, survey)
Secondary Research
An approach to researching based on the use of existing information, often from government, commercial, or academic databases and research efforts
Promotion Focus
An entrepreneur's attention to maximizing gains
prevention focus
An entrepreneur's attention to minimizing losses
industry dynamics
Changes in competitors, sales and profits in an industry over time
Minority Owned Businesses
Minority-owned businesses represent 14.6%of all United States businesses
The Five Ps of Entrepreneurial Behavior
Passion, Perseverance, Promotion/Prevention focus, Planning style, Professionalization
radical innovation strategy
Rejecting existing ideas and presenting a way to do thingsdifferently
value proposition
Small business owners' unique selling points (also known as benefits)that customers can expect from your goods or services, including benefits that differentiate your offering from those of the competition
marekting research
Systematic collection and interpretation of data to support future marketing decisions
total product
The entire bundle of products, services, and meanings of your offering; includes extras like service, warranty, or delivery, as well as what the product means to the customer
external legitimacy
The 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
industry
The general name for the line of product or service being sold, or the firms in that line of business
pitch
The name given to the formal slide presentation summarizing your business plan given before judges or potential investors or partners
purchasing process
The sequence of steps an individual or organization goes through in deciding to buy a product or service
Business life cycle
The sequence or pattern of developmental stages any business goes through during its life span. Stages: emergence, existence, success, take off, resource maturity
competitive advantage
The way a firm implements customer benefits that keeps the firm ahead of other firms in the industry
boot strapping
Using low-cost or free techniques to minimize your cost of doing business
Entrepreneur
a person who owns or starts an organization, such as a business
Women Owned Businesses
Women-owned businesses are one of the fastest-growing sectors of all United States businesses. makes up 29.6%
RBI screen ("Really Big Idea")
a fast technique for making initial assessments(called screens) of prospective business ideas based on five questions
family businesses
a firm in which one family owns a majority stake and is involved in the daily management of the business. makes up 39% of US businesses
Independent Entrepreneurship
a person or a group own their own for profit business
competitors
all the firms also selling that product or service
imitative strategy
an overall strategic approach in which the entrepreneur does more or less what others are already doing
core product
basic description of what a product is
Paths to Business Ownership
buy an existing business, buy a franchise, start from scratch, may inherit a business, may be the manager of a business
novelty
characterized by being different or new
imitative
characterized by being like or copying something that already exists
Augmented product
core product plus features that tend to differentiate it from the competition
internal understanding
extent to which employees, investors, and family members in the business know the business's purposes and operations
4 Ps of marketing
four components of marketing: price, promotion, place, product
product life cycle
introduction, growth, maturity, decline
pitch deck
the slideshow presentation that summarizes a business plan
social entrepreneurship
involving the creation of self sustaining charitable and civic organizations
what makes a strategy good?
its fit to the goals and objectives of your business and there sources you can bring to it
sustainable entrepreneurship (green entrepreneurship)
minimize the depletion of natural resources, maximize the use of a recycles material, or improve the environment
Causal model of entrepreneurship
one in which you want to create a product or service that does not yet exist and to achieve that end, you have to cause the product or service to exist.
firm
organization that sells to or trades with others
founders
people who create or start a new business
serial entrepreneur
people who open multiple business throughout their career
buyers
people who purchase and existing business
heir
person who becomes and owner through inheriting
franchise
prepackaged business bought, rented, or leased from a company
due diligence
process of investigating a business to determine its value
Innovativeness
refers to how important a role new ideas, products, services, processes, or markets play in an organization
how entrepreneurs handle challenges
scale back, bird in the hand, pivot, take it on the road, ask for help, plan to earn
goods or services
the tangible things (goods) or intangible commodities (services) created for sale
entrepreneurial alertness
set of observational and thinking skills that help entrepreneurs identify good opportunities
Types of organziations
sole proprietorship, partnership, limited liability corp, c-corp or s-corp, non profit
Corporate Entrepreneurship
takes place in existing businesses around new products, services, or markets
Incremental strategy
taking an idea and offering a way to do something better than it is done presently
flexibility rewards
the ability of business owners to structure life in the way that suits their needs best
Feasibility
the extent to which an idea is viable and realistic and the extent to which you are aware of internal and external forces (environment) that could affect your business
industry life cycle
the five different stages - introduction, growth, shakeout, maturity, and decline - that occur in the evolution of an industry over time
income rewards
the money made by owning one's own business
growth rewards
what people get from facing and beating challenges
self employed
working for yourself