BUSA 210- Entrepreneurship (EXAM 1)

Describe the legal forms of an organization and the pros and cons of each.

Sole Proprietorship, Partnership and Corporation

For an entrepreneur, which is the most popular legal form of organization, today? Which type of organization would include investors?

Sole Proprietorship. Partnership or LLC.

What are the 3 Basic Types of Financing?

Spontaneous debt, External financing and Profit retention.

What is co-branding? Why can this be beneficial? Give an example.

2 or more franchises operated within a single unit. Dunkin'/ Baskin Robins. Can be beneficial if you have seasonal or complimentary franchises.

ESSAY QUESTION- Define Franchising, which was the first franchise in the US, talk about the pros and cons of Franchising, fees involved, training, etc.

A business relationship which reduces risk by using a proven business model. Singer sewing machines. Pros are proven business model, name and brand recognition, training and ongoing support, cons include fees, less flexible, limited hours of operations, can't expand without approval.

Define Social Responsibility.

A company's ethical obligations to the community.

Describe Small Business Owner and Entrepreneur and explain how they relate. Define an Entrepreneur.

A small business is defined by size, number of employees, sales volume and value of assets. An entrepreneur is someone who is relentlessly focused on an opportunity in a new or existing business to create value while assuming risk and reward. A small business owner can be an entrepreneur and vice versa.

Define Entrepreneurial Opportunity.

An economically attractive and timely opportunity that creates value for interested buyers and end users.

What is Integrity?

An uncompromising adherence to values, beliefs and principles.

What are the 2 Basic Types of Entrepreneurs? What are the differences? Which would include an artist, poet or author?

Artisan and Opportunistic. Artisans have technical skills (artists, poets, carpenters) but not much in the way of business skills. Opportunistic people have managerial and technical skills.

Would financing/ leasing provided by a photocopier company be considered Business Supplier financing or Asset Based Lending?

Business Supplier financing

There are 8 steps to Forecasting. Which of the following would NOT be one of the steps?

C) Improvise, where necessary, do not follow a formal plan.

Which of the following would NOT be considered characteristics of a Successful Entrepreneur?

C) Overestimate what you can do

Which of the following would NOT be considered Intellectual Property?

D) an electric car

Define Bootstrapping.

Doing more with less; investing less, but controlling the deal.

What is Joint and Sever Liability?

Each person is 100% obligated for the debt of the entity.

SHORT ANSWER- Explain and discuss the motivation to earn a Profit vs Social Obligations.

Earning a profit is essential. A company won't be able to stay in business long with generating a profit. Being socially responsible can also increase profit by making the company more high profile.

Define E- Commerce. Give an example.

Electronic commerce- conducting business over the internet. For example companies like Ebay and Amazon.

What is a Sales Forecast?

Estimate of how much can be sold in a given market in a defined time period.

Define Marketing Research.

Gathering, processing, interpreting, and reporting of market information.

Define Opportunity Recognition.

Identification of potential new products or services that may lead to promising businesses.

What are the 4 steps in the Marketing Research Process?

Identify the Informational Need, Search for Secondary Data, Collect Primary Data, Interpret Data Collected.

Explain in detail a Marketing Plan.

Includes market analysis, the competition, and marking strategy.

Define Ethical Issues.

Issues that involve right and wrong.

Would a mortgage for 25 years be considered Short or Long Term debt?

Long Term

Define Serendipity.

Making desirable discoveries by accident. Coming up with a business idea when you experience the need.

ESSAY QUESTION- Talk about Family Businesses, different types, pros and cons, founders, commitment, in-laws, spouses, etc.

Most businesses are family businesses. Pros would be commitment, familiarity, stability. Cons would be inability to innovate, comfortable, unchallenging, fighting.

What are the Key Factors in Selecting a Good Location?

Neighbor Mix, Security and Safety, Services, Past Tenants' Fate, Location's Lifecycle Stage.

ESSAY QUESTION- Define Startup and describe the 3 Startup Ideas.

New business ventures created from scratch. Types A, B and C (see pages 69-73).

Are Entrepreneurs only Business Founders? Explain. Include subsequent generations as well as a subsequent business owner in your explanation.

No, they can be a subsequent generation or a subsequent business owner. Like if your parents were the Business Founders and then when they retire they hand over the business to you.

Define Code of Ethics.

Official standards of employee behavior formulated by a business owner.

What is a Business Plan and what does it include?

Outlining the concept and how you plan to execute.

What are the differences between Debt and Equity? The pros and cons?

Potential profitability, financial risk and voting control. Debt is a loan or mortgage with collateral. Cons giving up potential profit and giving up voting on majority from equity.

What are the purposes of Pro Forma Financial Statements?

Project a firm's financial performance and conditions.

What are the pros and cons of a Home Based Business?

Pros- Up and running quickly, own boss, spend more time with family and friends, no commute. Cons- lacks professional image, family interruptions, zoning- legal considerations.

Define Entrepreneurial Alertness.

Readiness to act on existing, but unnoticed, business opportunities.

What are financial statements?

Reports of a firm's financial performance and resources.

What are the differences between Short Term Debt? Which type would generally involve a mortgage? Explain secured (collateralized) and unsecured (uncollateralized) debt.

Shot term= 12 months or less. Long term would involve a mortgage. Secured would involve a lien on property, equipment or inventory.

Are most US businesses small or large companies?

Small

Define Small Business.

Small compared with large companies in the same industry; local operations, financed by a small group, small management team.

What is a SWOT analysis? What does SWOT stand for?

Strengths, Weaknesses, Opportunities and Threats

Define and contrast Sustainable Small Business with Environmentalism.

Sustainable Small Business means a profitable company that responds to customers' needs while showing reasonable concern for the environment. Environmentalism involves an effort to protect the environment.

Explain Depreciation with an example.

The cost of a firm's building and equipment allocated (amortized) over their useful life. Ex. Truck worth $100,000 over 5 years depreciates $20,000/yr.