Small business management Mid-Term

Many people think of the United States as one of the most entrepreneurial countries in the world. Are there other countries with higher levels of entrepreneurship?

China and Russia could have higher levels of entrepreneurship because as their economy is developing and turning basic manufacturing into industrialized economy. This is helping grow the middle class and a growing retail.

Update to our ethical problems prevailing to part-time small businesses, Which do you think is the biggest problem for entrepreneurs?

Aggrandizement is the biggest problem because it is not the real truth of the business and people can find out the real status.

What is the competitive advantage of a business, and how does it lead to success?

Competitive advantage is a particular way a firm implements customer benefits that keeps the firm ahead of other firms in the industry. These advantages allow business to generate more sales in a more desirable fashion. In business, it is an attribute that provides potential to a business to outperform its competitors.

The most frequently occuring element of the BRIE model is boundary.

False

The point of indifference is the lowest price at which the seller is willing to sell the business.

False

The sale of cell phones and music products from a store an individual customer is an example of business-to-business e-commerce.

False

Time management is the process of intergenerational transfer of a business.

False

To avoid pitfalls, a business owner must voluntarily take personal responsibility to do all the work and solve employees' problems.

False

In the cycle of an industry, how can you tell when it has left the introductory and entered the growth stage?

Once the company starts experiencing rapid sales that will define going into the growth stage because the introductory stage is when sales are at its low because it is just starting up.

One evening when you went to pick up your child the KinderKare, The owner mentioned to you that she would like to sell the business. You have always wanted to run a daycare facility and would like to try to buy her business. What facts should you consider in making this decision?

You should consider how much is the business grossing, what are current operating expenses, what licensing is required, what will the business cost, what financing is available, can it be transferred to you and what fees will it encounter.

What should you watch out for as you are searching for new opportunities?

When searching for new opportunities you should watch out for identifying the wrong problem, judging ideas too quickly, stopping with the first good idea, failing to get the "bandits on the train" and ask for support, and obeying rules that don't exist.

What are the three situations in which it might make more sense to go into business part-time rather than full-time?

When you are new to a business and need to gain basic experience, you lack resources to pursue a full-scale business or create a business plan, or it is a narrow opportunity.

Is it possible to sell products on eBay without having an online store? What would be the advantages and disadvantages of doing so?

Yes, it is possible. An advantage would be if someone wanted to test the waters with a product or had only a few items to sell they would be able to. The disadvantages are that it cost for every item that you sell through eBay.

Based on the information you developed you have decided that the Maximum value of KinderCare including the building in law is $350,000. You have $35,000 dollars that you inherited from your favorite great aunt. Your parents have promised to invest $25,000. Based on the $70,000 that you have available, the bank has promised to make you an SBA guarantee the loan of $70,000.What are your options if you wish to pursue this opportunity?

You can go to investors and be prepared to be charged a fixed percentage of profits, or you can find someone to partner with. U 7 SCORE- small corporate offering registration.

What are some common ways you can search for new business opportunities?

You can search for new business opportunities from work experience, you can get ideas from similar business that you find intriguing, turning a hobby or a personal interest into a business, chance happening meaning either being in the right place at the right time or being observant of your surroundings, and family and friends could have great suggestions. The list goes on about where you can search for new business ideas because you can find them anywhere.

After discussing the KinderKare purchase with your banker, you decided to make a determined effort to purchase the business. To make a good decision, what information must you have, and how will you get it?

You will need the existing business plan, 3-5 years of audited financial reports, legal agreements, the rights of intellectual property and other copyrights should be purchased, and make sure standing liabilities stays with the existing owner.

What is the difference between the general environment and the task environment? Is it possible to say one is more important to a small business in the other?

A general environment is all the forces outside of the firm or entrepreneur. A task environment is the parts of the environment that directly and consistently touch on the firm. They are components that directly relate to your firm performing its basic business task. It is not possible to say one is more important than another because task environment is embedded in general environment therefore, they need a balance of both.

What should a good feasibility study contain? What questions can it help you answer to determine if your business idea is a sound one?

A good feasible study should contain the following in their report, the overall business idea, the product/service, the industry and the market, financial projection, and the plan for future action. A feasibility study gathers and analyzes the information to decide whether the chosen business is a good idea. It helps determine if it can be carried forward and if there is enough or any resources at all to proceed with the idea. Simply it helps determine if the business will survive and generate good returns.

What are the different aspects of the entrepreneurial personality?

All entrepreneurs do not act the same however their drive for the new firm that meets the goals for the entrepreneur can relate to all. There are five aspects of behavior that most successful entrepreneurs display. Passion is all about living for your business. It is a positive feeling that the entrepreneur has to keep your business moving forward. There are three types of ways passion can be displayed: by looking at the challenges of the business in a creative way, by being persistently focused on the business, and by being absorbed by the tasks and concerns of the business. Perseverance can be simply described as "If you don't succeed the first time, try, try again." Of course, is something goes wrong in your business you don't want to give up, but you have to take the time to sit down and figure out what went wrong and how to fix it. Promotion/Prevention focus comes down to being able to balance these two to be successful. A plan is best to keep everything a flow, but plans aren't perfect so when your plans don't have the answers trust you instinct and take control of the situation. Planning style come in all different types. The entrepreneurs are very cautious about their planning style. They know the importance of unique selling propositions and so they follow differential strategies such as: comprehensive, critical-point, opportunistic, reactive and habit-based planning. Professionalism is a quality that all entrepreneurs should possess. There are three levels of professionalization: expert, when most aspects of the business meet or exceed the industry's standards, specialized, when one or two aspects of the business are at this level or minimalized which is when none of the business can achieve the industry standard.

What are the four philosophies you can use to evaluate alternatives you have generated to solve an ethical problem?

Am I treating others the way I would want to be treated? Is my solution the best thing for the most people over the long term? What if everyone did what I want to do? What kind of world would it be? What if my decision were advertised on a billboard?

How can entrepreneurs evaluate the merit of a new idea?

An entrepreneur can evaluate the merit of a new idea by putting it through an opportunity screening. An opportunity screening consists of a number of questions to ask yourself about your new business idea. Evaluating your answers to the questions should give you a better idea of where your business idea stands.

Suppose that you have developed an idea for a new business service. You have limited capital and you do not want to drop out of college. How might you successfully start up a new business using your idea?

Consider starting part-time, hire fellow students, create a franchise and have others do the work, or provide your idea and business plan to others for a royalty or a license fee.

How are creative methods for opportunity recognition different from traditional ways of searching for ideas?

Creative methods for opportunity recognition is different from the traditional way because creative methods such as SCAMPER meaning, substitute, combine, adapt, magnify or modify, put to other uses, eliminate, and rearrange or reverse, is an effective method that helps you to step outside the usual way you look at opportunities or try to solve problems. Of course, everyone has the internet and all the articles it provides everyone, but creative methods force you to take that information and consider what new forms could be out there.

What are the three steps of ethical decision-making?

Define: Define the moral problem Generate: Generate alternatives that could meet the ethical, legal, and economic goals every business must balance. Implement: Pick the best alternative you and your business can live with and implement it.

The two major types of business websites are informational and e-commerce. What are the differences between them?

E-commerce is the use of the internet to conduct business transactions. Informational websites are internet sites designed to introduce and explain a business to others.

How can entrepreneurs ensure that their business stays innovative and fresh? Why do you think some small businesses lose their creative edge as the business grows?

Entrepreneurs can ensure that their business stays innovative and fresh by following these steps: · The culture of the company should be made creative and welcoming to new ideas and it is flexible to adapt to change. · There should be time for the owner and employees to talk see if they have any ideas, any complaints that can be fixed, etc. · Positively reinforce ideas, keeping an open mind and not automatically saying no. · There are many sources of opportunities that are still unknown. You never know where creativity and innovation will emerge. · Allow your employees different experiences, letting them learn different positions, talk to customers. Allow people to get a different perspective and when routines are change that is when ideas are discovered.

What kind of reward do you think might be the one most often mentioned by independent entrepreneurs? Corporate entrepreneurs? Social entrepreneurs?

Every person starts a business to have more flexibility and become their own boss along with good income. Independent entrepreneurs focus on income and profit. Corporate entrepreneurs focus on wealth of generations and take place in a lot of investing and creating huge returns for the business. Social entrepreneurs focus on doing good for others. They work towards gaining recognition and admiration, not their income.

Pick a small business with which all of the class is familiar. Discuss what are the customer benefits that business is trying to offer. Could they do a better job if they chose some other benefit?

Fabletics offers 2 for 24 leggings when you become a member. That is a pretty good benefit considering their leggings are about $60 each. I believe they do pretty well for their business, and they offer great benefits among that.

An asset is a legal debt or obligation.

False

Delegation refers to contracting with people or companies outside your business to do work for your business.

False

Lifestyle firms often maximize their profitability over a long term.

False

Network marketing is an approach to selling products through a system of networked computers.

False

One of the disadvantages of a typical I2P analysis is that it does not discuss a product's IP protection features.

False

Part-time self-employment refers to working for oneself for more than 35 hours a week.

False

Small businesses do not usually hire people with atypical work histories.

False

Social capital is the major component of what accountants call "intellectual property," and one cannot find it on a business's balance sheet.

False

Start-ups are always deliberate, well planned, and finannced.

False

Sustainable entrepreneurship damages businesses' external relations with customers, governments, and the physical environment.

False

What are the strengths and weaknesses of the team?

Having a team allows you to get more work done than you would as an individual. If it is a family team, they already have the trust needed and know everything about each other. Teams are also likely to have more money, time, and expertise to put into the business. As well as if they lived together, they can save that much more for the business. A team can have its disadvantage as well such as if someone is putting more time or money into the business and the others expect to make identical returns. Also fights can happen over decision making and goals for the business.

When managing your time using a to do list how do you go about prioritizing the list?

I always do what really needs to be done in that day first, so I am not rushing to finish anything that needs to be done then.

In doing environmental scanning, the chapter mentions looking at the trade press and magazines outside your area of business, as well as asking customers, suppliers, your attorney, and your accountant for ideas about what is happening and what is coming next. If you have employees in your small business, so you ask them to?

I believe it is important to ask your employees because many times they see certain things that you don't because they are more on the floor than you in your business.

Role conflict and succession are two challenges typical to a family businesses.

True

The book asserts "All strategy starts with the owner." Many of the gurus of strategy starts with the environment outside of the firm. Which do you thin is true? BE ready to back It up.

I believe the strategy starts outside the firm because you have to look into how business like yours are exceeding and what in the environment can help or hurt your potential business.

Could someone with good industry specific knowledge but low competency in basic business skills be successful as an entrepreneur in that industry?

I believe they could be successful if they truly wanted it they would have to take the time to learn more of the basic skills to be successful or partner with someone who knows the parts they don't. It comes back to passion of how much they want their business to succeed what they are willing to put in to get out of it.

Imagine you have developed a new two-way GPS system for trucks and their dispatchers. Trucking companies are all over the country. So are you looking at a mass market? Why or why not?

I believe you are looking at a mass market because you are not only grabbing the attention of the truck drivers but the owners as well. It also does not just apply to big truck companies who travel across the country but truck companies who are in a smaller diameter as well.

Do you think that a small business could get by if they only did social networking using online sites like Facebook or LinkedIn? What would they miss by using this approach and do you think it is important?

I don't think it's possible to get by with just social media networking. I believe it is a great way to get your business out there, but it is also important to have. that personal relationship with people who can help you and your business grow. It is easier to trust and make long-term relationships when you communicate with people face to face.

What is the best way to get into business? Why do you think so?

I think start-ups are the best way to start a business because if you inherit or take over someone else's you do not know what is fully going on and if you buy into a franchise that is not your business. There are certain rules that you have to follow, and you are under someone else. When you start your own business from scratch you control and know exactly what is going on and you can make your business into whatever you feel is appropriate.

A lot of famous entrepreneurs brag hoe innovative their product is, when it is fundamentally like the competition, although better in one way or another. How do you classify such entrepreneurs in terms of the innovation/imitation balance?

I would classify them as imitative because they most likely discovered the product, thought how could I make this better, but it probably looks to them same and performs the same tasks but slightly better. It is not their original idea.

If you were able to enter into any small business that you desired, what things would you look for in the business?

I would look into my competition and see how they are exceeding and also how they are not and figure how I can provide in the area they are failing in. Also, I would prepare myself for the challenges and be patient with my business and give it time to grow into what it will come.

You took a job bagging coffee for the business that purchases directly from Guatemalan farmers, thereby getting the coffee at a bargain price, while still paying the farmers above market for the coffee. Working with all that caffeine has you charged up and about going into business for yourself.The owner is only 60 years old, but he has told you that he liked to slow down.He has offered to so you all or part of the business. Within should you consider in making a decision about what to do?

If you buy all you should consider how much is the business grossing, what are current operating expenses, what licensing is required, what will the business cost, what financing is available, can it be transferred to you and what fees will it encounter. You will also need the existing business plan, financial reports, legal agreements, the rights of intellectual property and other copyrights should be purchased, and make sure standing liabilities stays with the existing owner. If you buy partial of the business you have to think can you get along with the current owner, will the business produce sufficient revenues for you to make salary or wage, to what extent will you be in charge, how will any disputes be settled, what rights will you have to purchase the owners shares in the future, and what happens if the current owner dies or becomes unfit to take care of the business.

If you were going to start a home-based business in a dorm room, what do you think would be the greatest challenge to face? What about if you were starting the same business from home?

If you were going to start a home-based consulting business in a dorm room it wouldn't be effective especially when it is a consulting business because you would want to be in a quiet comfortable place and that is not a dorm room. If it was at a house it would be better because you will have your own space and you can keep it tidied up.

What are the differences between innovative and imitative strategies? Which is more likely to be something a small business can pursue?

Imitative strategy is an overall strategic approach in which the entrepreneur does more or less what others are already doing. Innovative strategy is an overall strategic approach in which a firm seeks to do something that is very different from what others in the industry are doing. A small business is most likely to pursue imitative strategy because the technology and ideas are already out there you just have to tweak it and find a way to make it yours.

What are the differences between imitation, incremental, and radical innovation strategies? How can you assess which one is right for your business?

Imitative strategy takes up the idea which is already been taken by someone. They take the basic idea ad launch the business based on differentiation and unique propositions. Incremental strategies work towards finding alternatives for existing products. Radical innovation means to build an entirely new concept and eliminate the existing ones. Entrepreneurs go through market trends and analysis and then decide which strategy is best for their business.

When does it make sense to create a business using an minimalized approach to professionalization?

Minimalized approach means to value needs rather than material things, wants. It forces them to focus on fulfilling demands keeping everything simple. The best time to use this approach is for when you are running a business for a short period of time such as a popup shop or a concert over the weekend. If there is small window to make profits you aren't worries as much about the setup of things.

How would you use multi channel marketing to promote your part-time business? If you had to use one of the nonfree approaches, which would you choose and why?

Multichannel marketing refers to selling and promoting products through many channels simultaneously. A part-time business can be promoted through many channels just like a full-time business. I would promote my company through Instagram or say social media adds because social media is in right now and the best way to get the word around.

What are the differences between partying and door to door retailing?

Party retailing is done with the help of party planners who are self-employed traders. Door-to-door is done with the help of direct sales representatives and distributors and can be done by the owner or appointing sales people.

What makes the situation of late career entrepreneurs problematic? What can they do to smooth their way?

Second career entrepreneurs face three challenges - adjusting to the entrepreneurial life, re-establishing self-confidence, and keeping personal finances out of the business. In adjusting to the entrepreneurial life the problem is getting used to having responsibility for getting everything done. They need to get advice from people in their line of business, or from consultants about the basic activities of the small business, and make sure they are all covered. If something is particularly hard, subcontract it to others. The problem of self-confidence comes if the person feels they "lost" their job. Focusing on the positive - the chance to do things their own way, to start over in another location or industry, can help refocus attention toward positives. Networking with other entrepreneurs can help through the opportunity to see and share the energy and enthusiasm common to the self-employed. If the idea can only be funded by the individual, it is important to be very careful in limiting financial exposure until the business has proven itself in terms of sales. In short treat your own business as if it were someone else's - be objective. Make sure you have a good business plan before getting yourself in trouble late in the game.

How does this story of Sir PaulMcCartney reflects the key article idea of this chapter,"Do well. Do good"?

Sir Paul McCartney reflects the key ethical idea of the chapter, "Do well. Do good," because he is a down to earth, giving guy regardless where he came from or what he does. He follows the idea of ethics. He has a desire to push himself to his highest limits which is a unique characteristic. Although he is famous for his music career he also well known for his kind heart.

Describe the population of small businesses in America. How many firms are there ad how many new firms are started each year?

Small business are privately owned corporations. They have a few numbers of employees and generate about $25,000-$100,000 a year. Small businesses are becoming very popular in this generation because they are not as complex as business larger than them. In 2010 there was about 27.3 million small business and about 630,000 small business are started every year.

What are the differences between small businesses and high-growth ventures?

Small business are the smallest full-time businesses with sales between $25,000-$100,000. After the start of the company growth levels stop and move into consistent money-making patterns. High-growth ventures make more than $1 million in sales and achieve growth rates of 25% or more a year.

What kinds of task do small businesses most often outsource? What do you think they're popular test to others?

Small business most often outsource to things that aren't always needed or that is better off done by a professional to make sure it is done correctly like fixing certain equipment in say a restaurant or liquor distributor. They are popular because they are needed.

Why should small businesses make stronger efforts to achieve sustainability?

Small business should make stronger efforts to achieve sustainability because the organizational culture and the work atmosphere of these businesses are flexible and open to innovation.

Why are small businesses better at innovation than large businesses?

Small businesses are better at innovation because they have quicker access to resources. Because of this they are able to take risks that are more difficult for large companies.

Why is presence of small businesses important for large businesses?

Small businesses are important to large business because often small businesses are important to them. Also, small business come up with creative and innovative ideas which are commercialized and advertised by big corporations. Lastly, most young people chose to start their careers at start-ups therefor by the time they get to the big corporations they will be trained.

Why is a social network important for a small business?

Social network is important for a small business because it gives them the opportunity not only to keep business a flow but also to help it grow. It is important to create relationships with people that have knowledge and skills that are willing to help you to better your business.

Royalty is licensing fee paid to a licensor based on the number of licensed items sold.

True

SCAMPER is an IP protection strategy for new products and services.

True

Suppose you had arranged enough capital so that you could either buy into an existing outback steakhouse working start your own independent steakhouse restaurant. What are the advantages and disadvantages of each alternative? Which would you prefer and why?

Some advantages in buying into an Outback Steakhouse is you would already have established customers for immediate sales and cash inflows. Business processes are already in place in an existing, operating business so you don't have to setup employees, vendors, etc. Also, it requires less cash outlay than creating a startup. Some disadvantages are finding a successful business that is appropriate for you, determining its worth, and existing employees may resist change. Starting your own steak house, you are able to make it whatever you want. You can hire your own employees, set up your own vendors and attract the customers you want. The disadvantages are you have to get everything together, you will need a bit of cashflow, and make sure you have a good business plan.

What are the six steps of handling a crisis?

Steps of handling a crisis: 1. Admit you're in trouble, quickly. 2. Get to the scene as soon as possible. 3. Communicate facts you know to employees, customers, and suppliers. 4. Have one person serve as the firm's spokesperson. 5. Separate crisis management from the everyday management of the firm. 6. Deal with the crisis quickly. Take steps to solve the problems and make the process of dealing with it as open as possible.

Describe the BRIE model and how it applies to creating a firm.

The BRIE model is the four elements needed to get your business started. Boundary is about creating a place for your business in space and in people's minds. Resources is about the things that make up the business, like money, products, knowledge, etc. Intention is about demonstrating a determination to get the business going and for it to be successful. Lastly, Exchange is about making investments in and sales from the business. It is a outline of what activities need to take place to get going.

Small businesses that pursue a cost (or a cost focus) strategy often do so by using a location in a very low-rent district, with the store itself made up of used furniture, no decorations, and a very no-frills atmosphere. What is the problem with such and approach? Can you think of ways to achieve low-cost without encountering similar problems?

The business could look run down and cheap. Customers do not want to enter a business that does not catch their eye. The book mentions how you could cut out intermediaries for certain products.

How do the six steps of handling a crisis compared to the US government three step approach to planning for disasters?

The first step by the U.S government applies to the first two steps of handling a crisis saying to plan to stay in business. The second step of planning for a disaster says to speak to your people which agrees with the third and fourth step of a crisis. Lastly the third step of planning for a disaster says to protect the investment which is very similar to the last two steps of handling a crisis. These steps express the message. To make a separate team and find the solution quickly so the survival of the business can be protected.

What is the major challenge facing women and minority owned firms? And how can this be solved?

The key problem noted in the book is access which is referring to markets, opportunities and financing. Access means that minority or women-owned firms are not informed about or do not get the chance to participate in business activities in their target markets. There are two types of solutions. A macro or institutional solution comes from US government programs called set asides in which a portion of government procurement or contracting funds are specifically set aside for firms certified as minority-owned or woman-owned. Following the government lead, many big businesses also have set-aside programs. Also, businesses contracting with the government are obligated to have set-aside programs too.The second solution involves networking by the business, not only among other minority or women owned firms, but in the larger local economy - industry and trade associations, chambers of commerce, etc.. In these settings, the minority or woman entrepreneur might feel less comfortable, and less representative, but success comes from having a diverse set of contacts, and this means networking in the larger community.

How do entrepreneurs recognize new ideas for their business?

The search and capture of new ideas that lead to business opportunities is called opportunity recognition. Research has shown that opportunity recognition behavior is the most basic and important entrepreneurial behavior. While the reason for why entrepreneurs seem to be better at finding ideas that work than others, entrepreneurial alertness is one idea that has stuck out. Entrepreneurial alertness means they have a special set of observational and thinking skills that help them identify positive opportunities.

Small businesses are characterized by novelty in their products.

True

The rapid Website prototyping process involves making quick fixes on products based on customer feedback.

True

Using low-cost or free techniques to minimize the cost of doing business is called bootstrapping.

True

Zoning laws and covenants are restrictions that impose limitations on the acceptable use of land and buildings.

True

What are the three general forms of legitimacy? Give two examples of ways to build legitimacy and each general form.

The three general forms of legitimacy are people-based legitimacy, product-based legitimacy and organization-based legitimacy. Two examples of ways to build people-based are 1. In a firm where employees, owners as well as other members have a good reputation in the market, enhances the goodwill of the organization. 2. A firm's owner and employees receive awards for their outstanding performances also enhances the public recognition of the firm Product-based legitimacy examples 1. The products which have try-before-buy, guarantees as well as return policies increase product assurance among customers. 2. The products which are made up of recyclable material depict green design as well as decrease the carbon footprint, help in uplifting environmental friendliness Organization-based legitimacy examples 1. Articles, interviews as well as columns in the print or digital media about the firm enhance the visibility of the firm. 2. An organization having a business for a long time shows the history of the organization, which eventually enhances the legitimacy of the firm.

Why would you think 56 percent of 15-25 year olds say they would like to a small business, but only about ten percent who express an interest actually do anything?

There are a couple of reasons why only 10 percent of who express an interest actually do anything. A big part of it is there no drive to actually achieve their goal of opening their own business. There are also many myths such as there is not enough funding, you can' start a business during a recession, to make profits you need to make something, if you fail you can never try again, students (or moms or some other group) don't have the skills to start a business, and 90% of all new business fail within two years.

Would be the likely impact on a start up if the entrepreneur had a strong promotion focus and a weak prevention focus?

This entrepreneur would likely jump at every opportunity without considering the cost. While the pursuit of opportunities has the chance of great riches, not considering the cost could lead as quickly to bankruptcy.

What are the three keys to success and building your network using a social networking website?

Three keys to success in building your network using a social networking web site is: You must make sure all of your contact information is there when it comes to the business: your name, number, email, store's address, etc. Then once you have a nice setup invite people ask people to collaborate with you who are known. Lastly collab with people for their benefit because you will get something out of it too. You have to stay up on your posting and information all the time social networking is not just a one-time project.

A business incubator is an organization that provides financial, technical, and managerial help to start-up businesses.

True

A firm can increase its legitimacy by self-certifying its products.

True

Adjusting to the entrepreneurial life is one of the challenges faced by laate career entrepreneurs.

True

Building social capital through social networking involves giving information, letting people know they belong, and providing social support and approval.

True

Competencies are forms of a business-related expertise.

True

High-growth ventures start small but are intended to grow rapidly.

True

Most new products and services fall to gain acceptance.

True

Professionalization refers to a business action that has been widely adopted within an industry or occupation.

True