MGT 386 CH4

Business format franchising

agreement that provides a complete business format, including trade name, operational procedures, marketing and products or services to sell

Conversion franchising

agreement that provides an organization through which independent businesses may combine resources

Product distribution franchising

agreement that provides specific brand name products which are resold by the franchisee in a specific territory

Trade name franchising

agreement that provides to the franchisee only the rights to use the franchisor's trade name and/or trademarks

Effectual reasoning

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

Advantages of a startup

- begin with a clean state - use most up-to-date tech - provide new, unique products or services - can be kept small deliberately to limit magnitude of possible losses

Advantages of a buy-out

- established customers - business processes are already in place - often requires less initial cash outlay

Disadvantages of a startup

- no initial name recognition - requires significant time - very difficult to finance; cannot easily gain credit - may not have experienced managers and workers

Casual (predictive) reasoning

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

Bootstrapping

Using low-cost or free techniques to minimize your cost of doing business

Bricolage

Refers to the process of analyzing the resources available and creating a product or service from them

Disadvantages of a buy-out

- finding a successful business for sale that is appropriate for you is difficult - existing employees may resist change - reputation may be a hindrance - facilities and equipment may be obsolete

5 paths to business ownership

1) start a new business 2) buy an existing business 3) franchise a business 4) inherit a business 5) manage a business

Strategic partnerships

Formal or informal relationships with customers, vendors, or mentors to ensure the success of an entrepreneurial venture

Affordable loss

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

Leveraging contingencies

The practice of and ability to seize upon novel opportunities that become apparent during the conduct of business