entrepreneurship exam review

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how do you calculate gain on investment

(payout - investment + dividends) / investment

what is the marketing funnel for internet advertising and mass marketing ration

1,000 to 1

what are the reasons that ventures go public

1.) raise equity capital to fund current and future operations 2.) raise a venture's public profile, making it easier to attract high quality customers, business partners, and employees 3.) liquidity event that provides a way for investors to recoup their initial investments 4.) creates a form of currency that can be used to grow the venture via acquisitions

how long do design patents last

14 years from date of application

how long do plant patents last

20 years from application

how long do utility patents last

20 years from application date

what study was conducted measuring different nations level of fear

GEM study

what is a master budget

a budget which consists of sets of budgets that detail all projected receipts and spending for the budgeted period

what is financial flexibility

a business's ability to manage cash flows in such a manner that the company can respond appropriately to unexpected opportunities and needs

what is interest

a charge for the use of money, usually figured as a percentage of the principal

what is profitability

a company's ability to make a profit

what is liquidity

a company's ability to meet its short-term obligations

what is an IPO

a company's first sale of stock to the public

what is a survey

a data-collection method using a questionnaire

what is a budget

a financial plan for the future, based on a single level of operations

what is an income statement

a financial report that measures the financial performance of your business on a monthly or annual basis

what is a copyright

a form of intellectual property protection that grants the owner of a work of authorship the legal right to determine how the work is used and to obtain the economic benefits of the work

a new car is an example of what on the goods/services mix

a good-dominated product

what is a patent

a grant from a federal government conferring the rights to exclude others from making, selling, or using an invention for the term of the patent

what is a revenue model

a key component of the business model that identifies how the company will earn income and make profits

what is a corporation

a legal "artificial" entity that is formed by filing specific documents with a state government

what is a limited liability company

a legal form of business organization that is created by filing required documentation with a state government

what is a limited partnership

a legal form of business organization that is created by filing required documentation with a state government

what is vicarious liability

a legal liability of workers that states indirect liability or responsibility for the actions of others

what is debt

a legal obligation to pay money in the future

what is tax abatement

a legal reduction in taxes by a government

what is durability

a measure of product life

what is financial leverage

a measure of the amount of debt relative to total investment

what is operations

a picture of how you actually create value each day

what is a cost of goods sold budget

a schedule that shows the predicted cost of product actually sold during the accounting period

accounting services is an example of what on the goods/services mix

a service-dominated product

what is the cash flow statement

a statement of the sources and uses of cash in a business for a specific period of time

what is a balance sheet

a statement of what a business owns (assets), what it owes to others (liabilities), and how much value the owners have invested in it (equity)

what is a marketing plan

a systematic written plan of all phases of marketing for a business, including the marketing mix and a clear identification of the target market and competition

what is microfinance

a type of banking service that is provided to unemployed or low-income individuals or groups who otherwise have no other access to financial services

what is hold harmless

a type of waiver in which a party agrees not to hold another party responsible for certain events

what is infrastructure

ability of the entire organization to adapt to change

what is volume

ability to accommodate variations in production quantities

what is procedural

ability to create products using alternative methods, routings, and techniques

what is resource

ability to handle variation in input resources

what is modification

ability to implement rapid design changes

what is innovation

ability to introduce new products into operations

what is mix

ability to produce a variety of products/services with fast setups

what is equipment

ability to rapidly change over equipment and technology for a variety of products

what are operating activities

activities involved in producing and selling goods and services

what are financing activities

activities through which cash is obtained from and paid to lenders, owners, and investors

what is the mark-up pricing strategy

adding a % to the cost

what are the pros and cons of building a location for your venture

advantage of having the perfect layout in the perfect location and the street appeal of a new building, but is costly and slow

what are articles of partnership

agreement between the partners of a firm on matter pertaining to the formation and operation of the partnership

what are contracts

agreements in which the parties exchange promises

what is distribution

all activities that move your products from the place of origin to the consumer

what are activity-based cost estimates regarding a budget

an accounting method which assigns costs based on the different types of work a business does in order to sell a particular product or service

what is foundation

an institution to which private wealth is contributed and from which private wealth is distributed for public purposes

what are accelerator

an organization that supports startup technology businesses by providing inexpensive office space, a variety of support services, and resources

do venture capitalists or angel investors fund more ventures

angel investors

what is the third most common form of funding by ventures

angel investors

what is the difference between angel investors and venture capitalist firms

angel investors typically take more risk by investing early and give less money. angels also provide mentoring

what are forms of equity financing

angel investors, venture capitalists, IPO

what are trade secrets

any formula, pattern, physical device, idea, process, or other information that provides the owner of the information with a competitive advantage in the marketplace- cannot steal trade secrets

what is a plant patent

any new varieties of plants that can be reproduced asexually

what is intellectual property

any product of human intellect that is intangible but has value in the marketplace

what is a trademark

any word, name, symbol, or device used to identify the source or origin of products or services and to distinguish those products or services from others

what is a product

anything that is offered to the market to satisfy consumer wants, needs, or demands

how is a c corp taxed

as an entity

what is adverse selection

as venture grows, it becomes increasingly difficult to find the right employees, place them in the appropriate positions, and provide adequate supervision

what is another name for trade name

assumed name, doing business name

what are the the three types of locations

at the clients location, at a mutually accessible location, at your firms location

what are the points to consider when expanding the number of employees

attracting potential employees, evaluating potential employees, training new employees, retaining existing employees, legal issues

what is an example of guerrilla marketing

bagel the beagle

what is the fremium financial model

basic component is free, add-ons are extra

what is the core product

basic description of what the product is (ex. Iphone: just a phone)

what is major key in succeeding in rewards-based crowdfunding

be passionate

what three characteristics must be performed for a person to be an independent contractor

behavioral, financial, relational

what are elements of traditional marketing

big cash investment, main focus is on the product, goal is to maximize profit, short-term relationship with customer, delivers marketing message as a monologue

What are the three reasons why most new ventures need to raise money during their early life

cash flow challenges, capital investments, lengthy product development cycles

what are the four C's of debt

character, capacity, conditions, collateral

what are the most common forms of debt financing

commercial banks, SBA guaranteed loans

what is a standard contract

company can just fill in the blanks as needed

what is another name for the master budget

comprehensive budget

what is an intellectual property audit

conducted to determine the intellectual property a firm owns

what are the pros and cons of leasing a location for your venture

considerably lower initial cash outlay, often only feasible choice, lease expenses are deductible business expenses, but restrictions are possible

what is a contribution margin ratio

contribution margin / revenue per unit

what is the idea-expression dichotomy

copyright laws cannot protect ideas

what are four types of intellectual property

copyright, trademark, trade secret, patent

what are the two types of product according to the total product approach

core product, augmented product

what is the augmented product

core product, plus features that tend to differentiate it from the competition (ex. Iphone: brand name, quality level, packaging)

what are the keys for advertising success

correct objectives, right message, right medium, right time, right frequency

what make up cost drivers

cost of goods sold, operating expenses

what are variable costs

costs that change in direct proportion to your unit of analysis

what are fixed costs

costs that remain the same over a given range of volume and are not affected by activity within the business

how can you get serious attention from the media and the public

create newsworthy events

what are four key revenue drivers

customers, frequency, selling process, price

what is ethnographic research

data gathered by simple observation

when a venture has low risk with a more predictable return, what should be used for funding

debt financing

what is on-the-job training

delivered to employees while they perform their regular jobs

what factors should you consider when setting your price

demand for the product, value delivered to the customers, prices set by competitors, your business strategy and product placement

what is the criteria to determine if you should protect intellectual property

determine whether the IP in question is directly related to the firm's competitive advantage, decide whether the intellectual property in question has value in the marketplace

what are tax credits

direct reductions in the amount of taxes that must be paid, dependent upon meeting a legal criteria

what is a way to minimize risk from a lenders view

diversify

what are the articles of organization

document setting forth information about a limited liability company that is filed with the state to establish a LLC

who is crowdfunding for

early-stage ventures, 10,000 or less

what is at a mutually accessible location

eg. barber shop and you operate out of the shop

what is at the clients location

eg. home cleaning and you operate out of a home office

what is at your firm's location

eg. you have multiple barber shops or janitorial employees and you have a separate office

what are the different types of workers

employees, contractors, unpaid interns, volunteers

what are forecasts

estimate of ventures future income and expenses based on past performance, its current circumstances, and its future plans

what are front-stage operations

every aspect the customer is exposed to

what are back-stage operations

every aspect the customer never sees but that is important to the business

if your organizations financial gains are close to potential and you own complete control of the company, what are you

exception

if your organizations financial gains are well below potential and you own little of the venture, what are you

failure

what is failure typically associated with

fear

what information does a balance sheet provide

financial flexibility, financial strength

what is bootstrapping

finding ways to avoid the need for external money via creativity, ingenuity, thriftiness, cost cutting, or any means necessary

is more risk associated with a higher fixed cost or higher variable cost

fixed cost

what is a focus group

form of data gathering from a small group led by a moderator

what is the second source of funds for many new ventures

friends and family

what is GAAP

generally accepted accounting principles that are the standardized rules for accounting procedures

what are examples of products

goods, services, people, ideas

what is a primary concern for equity investors

growth potential

what are bootstrapping strategies

guerrilla marketing, interns, minimize personal salary

what is the first step of delegation

hiring new employees

what is aesthetic

how a product or service looks, feels, sounds, tastes, or smells

what is the marketing mix

how much of each promotional outlet you use to reach your target market

what is efficiency

how productively a firm utilizes its assets

a restaurant is an example of what on the goods/services mix

hybrid

who is prosocial crowdfunding for

impoverished individuals, generally less than $1,000

what is off-the-job training

includes lectures, special study, videos, television, conferences, case studies, role-playing, simulation, etc.

what are five common financial statements

income statement, statement of retained earnings, statement of owner's equity, balance sheet, cash flow statement

what are angel investors

individuals who invest their personal capital directly in startups. Also provide mentoring

who is the crowd on kickstarter

inexperienced laypersons, desire for belonging, desire to support an entrepreneur

what is secondary research

information already collected for some other purpose than the current problem or question

what is guerrilla marketing

innovative, unconventional, and low-cost marketing techniques aimed at obtaining maximum exposure for a product

what is the first step a firm should take to protect its intellectual property

intellectual property audit

what are the pros of failure

intensifies cognitive process, learning resulting in improvements, motivation to start another venture

what is a design patent

invention of new, original, and ornamental design for manufactured products

what are elements of entrepreneurial marketing

investment of time, energy, creativity, commitment, main focus is on the customer, goal is to meet and satisfy customer needs, long-term interactive relationship with customer, delivers marketing message as a dialogue

what is the world's largest rewards-based crowdfunding platform

kickstarter

if your organizations financial gains are well below potential and you own complete control over the venture, what are you

king/queen

what is a single-step format income statement

lists all revenues and gains together, then lists all expenses and losses together s

what is a multi-step format income statement

lists revenues form operations seperately from other income and gains

what are advantages for starting your venture in your hometown

local bankers know you, you understand market's needs and wants, friends and family are usually first customers

how can entrepreneurs overcome adverse selection

looking to signals such as education, experience, other qualifications, exams

what two things does financial management deal with

managing the venture's finances in a way that achieves the highest rate of return, raising funds

what is the most common pricing strategy

mark-up pricing

what is a certification mark

marks, words, names, symbols, or devices used by a person other than the owner to certify a particular quality about a good or service

what is direct sales

method of going directly to your customer in order to sell your products

what is prosocial crowdfunding

microlending, poverty alleviation

what are the dimensions for competing on flexibility

mix, equipment, modification, procedural, volume, innovation, resource, infrastructure

what is debt capital

money borrowed specifically for the purpose of investment in the venture

what is equity financing

money contributed to the venture in return for part ownership, typically in the form of stock

what are grants

money from the government that doesnt need to be paid back

how do venture capitalists invest their money

money is invested in stages, so not all money is received at once

what are venture capitalists

money that is invested by venture capital firms in start-ups and small ventures with exceptional growth potential

what are the pros and cons of primary research

most current and valuable, but costly

what is moral hazard

new hires typically do not have the same ownership incentives as the original founders, so they may not be as motivated and may try to avoid work

what is primary research

new information collected to solve a problem at hand or answer current questions

what is a utility patent

new or useful process, machine, manufacturer, or composition of material or any new and useful improvement thereof

are commercial banks viable for funding for startups

no

are independent contractors subject to vicarious liability

no

are marketing expenses variable costs

no

can a sole proprietorship sell ownership

no

do limited liability companies face double taxaction

no

do trademarks protect descriptive matter

no

is failure always bad

no

what is the number one reasons startups fail

no market need

what is rewards based crowdfunding

non-financial rewards

what is copyright infringement

occurs when one work derives from another or is an exact copy or shows substantial similarity to the original work

how does the contemporary business distinguish itself

on the experiences that it creates for customers

what do cash flow statements include

operating activities, investing activities, financing activities

how is an s corp taxed

owners are taxed

what is a waiver

part of a contract in which a party intentionally gives up legal rights or claims

what is an exculpatory clause

part of a contract in which a party to the contract states that he or she will not be responsible for certain actions

what is a noncompete clause

part of a contract in which a person agrees not to open a certain type of business or seek employment doing certain things in a particular area for a period of time

what is a business method patent

patent that protects an invention that is or facilitates a method of doing business (ex. amazon's one-click ordering system)

what are dividends

payments of profits to the owners of corporations

what are the dimensions for competing on quality

performance, features, reliability, conformance, durability, serviceability, aesthetic, perceived quality

what is the first source of funds for many new ventueres

personal funds

what are common non-equity sources of funding for ventures

personal funds, friends and family, debt, bootstrapping

when a venture has high risk with an uncertain return, what should be used for funding

personal money, friends, family, bootstrapping

what are independent contractors

persons working to achieve a certain goal without being subjected to substantial controls by another

what question does "how will the customer be reached? where will they buy my product or service" relate to regarding the 4 P's of marketing

place

what question does "what is the value of my offering and what are customers willing to pay" relate to regarding the 4 P's of marketing

price

what is the odd-even pricing pricing strategy

price ending in the number 5, 7, or 9 (psychological)

what must change when using intermediaries for distribution

pricing

what are the two types of market research

primary and secondary

what is reliability

probability of the product or service failing within a specified period of time

what question do "what are the benefits and features of my product" relate to regarding the 4 P's of marketing

product

what are the four P's of marketing

product, price, place, promotion

what is another name for the income statement

profit and loss statement

what are the financial objectives of the venture

profitability, liquidity, efficiency, stabiltiy

what is a favorable variance

profits are greater than budgeted

what are unfavorable variances

profits are less than budgeted

what is the SBA Guaranteed Loan Program

program operates through private-sector lenders who provide loans that are guaranteed by the SBA. Loans are for small businesses that are not able to obtain credit elsewhere

what are pro forma financial statements

projections for future periods based on forecasts and are typically completed two to three years in the future

what question does "how will they know my business exists" relate to regarding the 4 P's of marketing

promotion

what are the steps of personal selling

prospect and evaluate, prepare, present, close, follow-up

why do entrepreneurs fail

psyche mistakes, waiting too long mistakes, hiring msitakes

shampoo is an example of what on the goods/services mix

pure good

getting the car washed is an example of what on the goods/services mix

pure service

what is a dichotomous survey question

question that has only two possible choices

what is a scalar survey question

questions answered by some sort of scale

what are open-ended survey questions

questions that allow respondents to express themselves as they choose

what are categorical survey questions

questions that are answered by selecting the proper category (ex. what is your ethnicity)

what is a way to interpret financial statements

ratio analysis

what are historical financial statements

reflect past performance and are usually prepared on a quarterly and annual basis

what must you do with with the trade name

register it with state along with owners of business

how long does a collective mark last

renewable every 10 years

how long does a service mark last

renewable every 10 years

how long does a trademark last

renewable every 10 years

how long does a certification mark last

renewable very 10 years

what are the two key principles of guerrilla marketing

resource leveraging, risk management

which financial report is what you have in the bank

retained earnings

what is a contribution margin

revenue per unit - variable cost per unit

what is the most common form of crowdfunding

rewards-based

what are the different types of crowdfunding

rewards-based, equity-based, prosocial

if your organizations financial gains are close to potential and you own a little of the company, what are you

rich

what are the types of companies that do not face double taxation

s corp, c corp

what is one of the most important pieces of the marketing plan

sales forcast

what are the different survey question types

scalar question, dichotomous queston

what are the different options for distribution

selling direct, selling through intermediaries

what must entrepreneurs do after failure

separate personal and professional failure, accept failure as part of the learning process, admit mistakes and move forward

what is the premium pricing strategy

setting above the competition to indicate quality or prestige (ex. swiss watch)

what is the skimming pricing strategy

setting at the highest price possible (ex. diamonds)

what is the goal of pricing your product

setting the optimum price

what is the partitioned pricing pricing strategy

setting the price for the base product and charging more for additional components (ex. car + navigation)

what are the pros and cons of buying a location for your venture

shortens the time and may be cheaper, but lack customization

what are the different types of income statements

single-step format, multi-step format

what is the most common and easiest to create form of venture

sole proprietorship

what is the direct cross-subsidies financial model

something free, but something connected is sold (eg. sell minutes, giveaway phone)

what is the multi-party markets financial model

something free, but something separate is sold (eg. linkedin- free resume listing, sell search)

where does the US fall in regard to their level of fear

somewhere in the middle

how can entrepreneurs overcome moral hazard

stock ownership, strong company culture, pay increases, other benefits

what does the income statement show

subtracts the COGS and expenses from the total revenue to show net income

what is customer retention

techniques that focus on efforts to promote satisfaction with and interest in the firm

what is financial strength

the ability of a business to survive adverse financial events

what are features

the characteristics that define the function of the product or service

what is conformance

the degree to which a product or service meets acknowledged standards

what is variance

the difference between an actual and budgeted revenue or cost

what is the total product approach

the entire bundle of products, services, and meanings of your offering (includes extras like service, warranty, or deliver as well as what product means to consumer ex. iphone: app store, apple care, feeling, etc.)

what is weighted average cost of capital

the expected average future cost of funds

what is the optimum price

the highest price that will produce your desired level of sales in your target market

what is revenue

the income gained from sales of goods and services

what is risk

the level of probability that the venture will not be able to repay the loan

what is employee fit

the match between the needs, expectations, and culture of the small business with the expectations and the skill of the individual employee

what is marketing

the method of placing the right product at the right place and the right time

what is a trade name

the name of your business

what is stability

the overall health of the financial structure of the firm, particularly as it relates to the debt equity ratio

what is gain on investment

the percentage amount that the payout of an investment differs from original amount

what is cost of capital

the percentage cost of obtaining future funds

what is breakeven

the point at which total costs equal gross revenue

what is the price lining pricing strategy

the practice of setting multiple price points for different quality

what is performance

the primary characteristics of the product or service

what is delegation

the process of assigning activities/tasks to others

what is variance analysis

the process of determining the effect of price and quantity changes on revenues and expenses

what is crowdfunding

the process of raising funding for a new venture from a large audience via an internet-based platform

what is a pitch

the process of selling

what is personal selling

the process of selling your products and service

what is customer relationship management (CRM)

the process of tracking the customer's different contacts with the firm, and using data to help improve sales as well as the customer's experience

what is crowdsourcing

the process of using the internet to attract, aggregate, and mange ostensibly free labor from enthusiastic customers and like-minded people

what are investing activities

the purchase and sale of land, buildings, equipment, and securities

what is grit

the quality that enables people to work hard and sustain interest in their long-term goals

what is optimum capital structure

the ratio of debt to equity that provides the maximum level of profits

what is the marketing funnel

the rule of thumb in marketing that it takes a large number of people to be made aware of your product in order to find a purchaser

what is a target market

the segment or segments you select on which to concentrate your marketing efforts

what is serviceability

the speed, courtesy, competence, and ease of repair and recovery

what is retained earnings

the sum of all profits and losses, less all dividends paid since the beginning of the business

what is failure

the termination of a commercial organization that has missed its goals and failed to achieve investors expectations

what are cost of goods sold

the value of goods sold when a sales takes place

what is sweat equity

the value of the time and effort that a founder puts into a new venture

where is the first choice for many entrepreneurs to start their venture

their hometown

what is advertising used for

to support the identity and value propositions that are established through public relations efforts

how do you calculate break even quantity

total fixed costs / contribution margin

how do you calculate break even money

total fixed costs / contribution margin ratio

what is a collective mark

trademarks or service marks used by the members of a cooperative, association, or other collected group

what are the three critical site selection considerations for high customer contact business

traffic, customer ease, competition

what is a factor most valuable to employees

training

what is a probationary period

trial period in which an employee has temporary status before a formal offer to work full time is presented

when is bootstrapping employed

typically out of necessity

where does the fear of failure come from

underlying psychology, emotion, culture, political/regulatory environment

what is a specialty contract

unique contract terms, large dollar amounts at stake

what is a service mark

used to identify the services or intangible activities of a business, rather than a business's physical products

what are the three basic requirements for obtaining a patent

useful, novel, not obvious

should you cover your fixed or variable costs first

variable

what is perceived quality

various tangible and intangible aspects of the product from which quality is inferred

who is equity-based crowdfunding for

ventures at all stages, high growth high profitability ventures, large investments

what is an open-book policy

way to overcome moral hazard where key employees can see and understand firms financials

what is a psychological contract

way to overcome moral hazard which refers to employees beliefs about the promises between the employee and the firm

what is patent infringement

when one party engages in the unauthorized use of another party's patent

what is bootstrapping

when the going gets tough, the tough get going

where does value come from

your offering and the customer's interactions with your organization


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