ENT 200 Final Exam
Personal Achiever Super Sales Person Real Manager Idea Generator
Miner's Entrepreneurial Profiles
Hard worker Loner (could team up) Socially isolated Fast learner Fame seeker Risk taker
idea person
assume that our fate is under our control
illusion of control
research has shown that the highest Total Entrepreneurship Activity rates exist for people that are 18-34 year old
true
Team CHIPS, after having won the CMU New Venture Competition go on Shark Tank and ask for $100,00 for 25% Equity in their company. How much are they suggesting their company is worth
$400,000
The Rented Rolls Royce Syndrome The Hustle The Cash-Only Transaction The Boast The Big-Money Claim The Couch Potato's Dream Location, Location, Location The Disclosure Dance The Registration Ruse The Thinly Capitalized Franchisor
Franchising Frauds 10 Warning Signs
Proven successful business model Receive training and management support Proprietary computer programs Marketing, product placement, advertising, and promotion is all controlled for you Often less risky than starting or acquiring a business
advantages of franchising
Established customers Business processes are already in place Often requires less cash outlay
advantages of purchasing an existing business
Give up control of marketing and operations Franchisor often sets policies Must buy inventory from specific vendors Regularly inspected Success is determined by success of franchise itself
disadvantages of franchising
Finding a successful business for sale that is appropriate for you Existing employees may resist change Reputation Facilities and equipment may be obsolete
disadvantages of purchasing an existing business
cash flows reduced in value because they are to be received in the future
discounted cash flows
the potential for a tarnished franchise reputation if a franchisee disregards the training and fails to operate the business properly; difficulty securing qualified franchisees; payment issues and lawsuits from franchisees that do not experience success; and costs and challenges due to the many federal and state regulations regarding franchising.
drawbacks to being a franchisor
process of investigating a business to determine its value
due diligence
ratio of value of a firm to its annual earnings
earnings multiple
Ability to understand and control your own emotional reactions (and stress) to events and other people Ability to read other's emotions and respond effectively to them. (EMPATHY)
emotional intelligence (EQ)
The ability to quickly sense, take action, and get organized under uncertain conditions. Includes the ability to persevere, accept and learn from failure, and get comfortable with a certain level of discomfort.
entrepreneurial mindset
belief in own ability to begin new ventures
entrepreneurial self-efficacy (ESE)
Believe that fate is the biggest influence on personal outcomes More comfortable in hierarchic situations where they have someone telling them what to do.
external locus of control
Pros: Intensifies cognitive process Learning resulting in improvements Motivation to start another venture Cons:Financially costly Emotionally painful Can decrease inclination for risk-taking
failure
Michael gerber describes the need to balance three different personalities to run a successful business: The personalities are the technician, entrepreneur, and the visionary
false
corporate entrepreneurship focuses on buying smaller businesses and then incorporating their products and services into the corporation's business model
false
human resource policies for "selected rotation" has been shown to be a mail roadblock impeding corporate innovation and entrepreneurship
false
in the US, micro businesses are defined as ss with 20 or fewer employees with start capital requirements of less than $50,000
false
nascent entrepreneurs are people whose personality matches the personality profile of successful entrepreneurs so that they have a natural aptitude for being an entrepreneur
false
necessity based entrepreneurs are people who start businesses because they have a deep seated need or passion to create something new and express through a vision to create their business
false
novice entrepreneurship is a process whereby an individual or a group of individuals, in association with an existing organization, creates a new organization or instigates renewal or innovation within the organization
false
social entrepreneurship is defined as the process of innovating new social media business opportunities
false
the US government generally defines small businesses as firms with fewer than 250 employees
false
the first step in designing for manufacturing is to research technologies, suppliers, and manufacturers that you might use when producing your product
false
the first step in the effectuation process is to identify a customer need that is not being met
false
Should be in an industry in which you have experience Product or service that has demand and high margins Adequate financing Contact business brokers
first problem in finding a business for sale
Talents are traits. Brains plus talent equals success. Constructive criticism is a personal attack. Others' success is due to luck. Avoid challenges
fixed mindset views
which of the following is NOT a common mistake of a novice entrepreneur
focusing on the speed of revenue generation
The basic contract generated by the franchisor for all franchisees; it usually contains clauses requiring the purchase of supplies, the displaying of marketing material, and the payment of fees that are based upon the sales of the branch operation.
franchise agreement
An established brand. Operate for a set period of time. Single or multiple stores. Limited competition within a set radius.
franchise typically includes the right to...
The entrepreneur who buys the franchise from the franchisor.
franchisee
The firm that originates the idea for the business and develops the operational methods, then sells them to franchisees.
franchisor
elements of franchising
franchisor, franchisee, franchise agreement
according to birch's bestiary, which animal represents a business establishment with at least 20% sales growth every year starting with a base of at least $100,000
gazelles
Evaluate your potential fit Examine each industry and potential competitors. Examine competitive strength of various franchises in the industry. Identify a franchisor that is the best potential match for you. Thoroughly examine the identified franchisor.
general franchise issues
Believe abilities can be developed through hard work Brains and talent are only the beginning of success Lifelong learners View failure as an opportunity to improve
growth mindset
Desire to innovate Personable, get alone well with others Willing to share power High tolerance for ambiguity Prefer loose control, want independence, dislike following rules Believe in New Product Development Good (High) IQ Desire to avoid risks - EIGs drawn to risk more that other types but need to minimize risk.
idea generator characteristics
The art of spontaneously creating something without preparation.
improvisation
Not just for actors or musicians No such thing as being wrong No questioning or rejecting suggestions Ideas are taken on board, expanded, and passed on for further input Everything is important It is a group activity Trust that the group will solve problem Listen closely and accept what you are given Be spontaneous and imaginative
improvisation guidelines
Believe that personally controlled factors are biggest influence on outcomes High internals are less stressed by (and recover quicker from) negative events, and more self directed
internal locus of control
Self evaluation franchise track record market and concept viability franchisor/franchisee relations
investigation of franchises
Responsiveness Empathy Communication Dependability Give and Take Anticipation Structure Open Mindedness
key elements of strong franchisor: franchisee relationship
which of the following is the MOST COMMON cause of Hardware startup failures
lack of consumer demand
according to the text, which of the following is NOT a condition required for small and medium businesses to flourish in a country
large population size
Hard worker Team player Socially connected Fast learner Wealth seeker Risk averse
managerial entrepreneur
if someone works for a construction business during the week and has their own construction business in another city during the weekends, the person is...
moonlighting
individuals who have set up a business they will own or co-own which is less than three months old, and has not yet generated wages or salaries for the owners are known as
nascent entrepreneurs
Making aspects of a task more enjoyable by building in features to focus on the most positive aspects of the tasks. Examples: Walking, music, coffee, or stretching breaks
natural reward strategies
which of the following is not a stage in the inclusive entrepreneurship process
novice entrepreneur
Meet and discuss the transition with current staff, Be visible in the new operation, Make all significant changes in one day, Implement new standards as soon as possible, and Ask former owner to refrain from visiting while transition is taking place. Inform customers and suppliers about ownership change.
once negotiations are complete, the new owner should...
expect things to turn out well without basis
optimistic bias
High Need to Achieve High Desire for Feedback Desire to Plan and Set Goals Strong personal initiative High commitment to their projects they create Belief that one person can make a difference Belief that work should be guided by personal goals
personal achiever
Conduct extensive interviews Study financial reports Personal examination of the site Interview customers and suppliers Detailed business plan Negotiate an appropriate price Obtain sufficient capital
process of due diligence
when a company establishes and supports a full-service group with a mandate for innovation and entrepreneurship, then it is using the ... model of corporate entrepreneurship
producer
what type of business usually has the highest capital requirements associated with start up costs
product/hardware based businesses
which of the following is NOT a reason to consider part time entrepreneurship as presented in the PPT slides
time commitments to community service
a business model canvas is the visual representation of the businesses core components
true
corporate entrepreneurs have long approval cycles, where startups may make quick decisions
true
Buy out seller's interest Buy in Buy key assets Takeover
4 ways to buy business
amount for which an asset will sell, less the costs of selling
net realizable value
cost to acquire an essentially identical asset
replacement value
the small business administration defines a small business as a business with less than 500 employees or $7.5 million in gross annual sales
true
you can be a serial entrepreneur and a nascent entrepreneur at the same time
true
what percentage of the US workforce do family-owned businesses employ?
60%
Restriction of sales territory Approval of site and facility's appearance Restriction of goods/services to be sold Required operating hours and advertising
Typical Franchisor Controls
Tony is a manager a company that builds solar panels. in his position as a manager, tony used the feedback from his team members to as the basis of a plan for the company to start installing the solar panels, as well, in order to enhance the company's competitive position and profitability. Tony is an example of...
a corporate entrepreneur
A contract between the FRANCHISOR and FRANCHISEE which grants the franchisee certain rights to use a name, sell a product, etc. and receive certain services in exchange for franchise fees.
a franchise
the global entrepreneurship monitor defines total entrepreneurial activity as the percentage of the population of each country who are either
a nascent entrepreneur or owner-manager of a new business
understanding the organizational and business processes of a firm
basic business competency
Self-awareness Self-observation Self-goal setting Self-reward Self-punishment Self-cueing
behavior-focused strategy
growth with minimal capital investment; lower marketing and promotional costs; and royalties.
benefits to being a franchisor
difference between original acquisition cost and the amount of accumulated depreciation
book value
Hard worker Loner Socially isolated Fast learner Wealth seeker Risk taker
classic entrepreneur
Overconfidence Representativeness - over generalize from small sample (superstitious learning) Less likely to be counterfactual (fantasy thinking)
cognitive bias
Initial franchise fee Cash investment and Capitalization requirements Royalty payments Advertising and other shared expenses
components of franchising costs
notice, process, and remember information that confirms current beliefs
confirmation bias
Forming productive ways of thinking that can benefit our performance. How to practice: Identify and reframe destructive beliefs by practicing positive self-talk and mental imagery.
constructive thought pattern strategies
friends show up unexpectedly to your house and are hungry. you go through your kitchen cupboards to see what ingredients you can throw together to prepare a satisfactory meal. this is an example of
creating logic and described in the effectuation model of entrepreneurship
which of the following is true
creative entrepreneurs tend to be under-capitalized and under managed - getting by with "seat of the pants" improvisation
The capacity to produce new ideas, insights, inventions, products or artistic objects, which are considered to be unique, useful, and of value to others.
creativity
dealerships business service new (combination franchises)
types of franchises
business brokers Attorney and CPA firms, Offer to buy a business, Trade association listings, Your local SBA office, and Look for bankruptcy listings.
resources to buy businesses
Hard worker Team player Socially connected Fast learner (socially) Average learner (technologically) Acceptance seeker Risk averse
salesperson entrepreneur
Individuals must influence and control their own behavior, actions, and thinking to achieve the self-direction and self-motivation necessary to build their entrepreneurial business ventures.
self-leadership
what is the activity of planning and organizing people, infrastructure, communication, and material components of a business in order to improve its quality and the interaction between the business and its customers
service design
Commitment and determination Leadership Opportunity obsession Tolerance of risk, ambiguity, and uncertainty Creativity, self-reliance, and adaptability Motivation to excel
six themes (desirable and acquirable attitudes and behaviors)
which of the following is a pathway to entrepreneurship that we discussed in class?
start and build new business inherent business secure franchise rights buy an existing business
TRIM stands for
team, resources, idea, market
the... is the planning tool that includes 9 boxes presented in poster or graphic figure
the business model canvas
Desire to be a corporate leader Decisiveness Positive Attitudes toward authority Desire to compete Desire for power Desire to stand out from crowd
the real manager
Behavior-focused strategies Natural reward strategies Constructive thought pattern strategies
three strategies for self-leadership
creative arts entrepreneurs are concerned first and foremost with the creation and exploitation of creative or intellectual capital and this makes them different from other types of entrepreneurs
true
recommendations for family business advisory boards suggests that the advisory board should include family members, non-family members, and external specialists
true
service based business start-ups have average gross margins that are more than 50 percent higher than product based business start-ups
true
the cycle of act - learn - build encourages entrepreneurs to take small actions in order to learn and build that learning into the next action
true