Intro to entrepreneuship exam 2

differentiation strategy

offering products that are different than what was offered before

advantages of stand retail business

-little investment -variety of locations -quickly established -easily ended

trade name franchising

when you are only buying the rights to use the name and the trademarks of the business (true value hardware)

internal understanding

when you join a company (show you the history)

start-up

when you start a business from scratch on your own

buyout

when your buying a substantial amount of business from someone else and you become the owner

moonlighting

working on your own part-time after your regular job

disadvantages of a start-up business

you have no name recognition (takes longer to get customers)

circumstances when its better to start part-time before full-time

1:Do I understand how the business works? 2: Do I have enough resources 3: Do I really want to do this full-time 4:How long will this opportunity last

elevator pitch

30 second pitch on why your business is going to be great (60-100 words)

aggrandizing

making your business more accomplished than what it is. (lying about your success and capabilities and what you do to customers)

boom in industry/product life cycle

marketed by a very rapid increases in sales in a relatively short time

asset

anything that is economic that your company owns

innovative strategy

brand new and very different

Difference between B2B and B2C

business to business: more sales Business to consumer: less sales

revolving credit

buying items on credit and paying them on a future date

poisoning the well

creating a negative impression under your employers customers

growth stage in industry/product life cycle

customer purchases increase at a dramatic rate

external legitimacy

outside public respects and trusts your business

number of hours worked full time

over 35

initiative strategy

doing more or less with what other people are already doing with your business

parallel competition

doing the same as others locally in the same industry

retrenchment in industry/product life cycle

established firms must find new approaches to improve the business and its chances for survival

shake-out in industry/product life cycle

following a boom in which there is a rapid decrease in the number of firms in an industry

volatility

frequency of when a business starts and stops

scope in a small business

geographic range covered (is it local,regional,gloabl)

Number of hours worked part time

under 35

degree of similarity

how similar your business is to what others are doing (cloning)

disadvantages of an existing business

if you have a bad reputation its very difficult to give the business another try

cover page

introduces the business plan and the owner to the recipient and indicates why the recipient is being asked to read the plan

franchise

legal agreement that allows you to use the name of the business

the organization

legal form of the business, where it is registered, its certificates -talk about accomplishments

Cost Strategy

low cost (cost benefits that appeals to the customer)

pure innovation

making new products that have not been seen before

maturity stage in industry/product life cycle

moving to stabilize or improve profits through cost strategies

mission

paragraph describing the firm's goals and competitive advantages 20-50 words (one paragraph)

advantages of an existing business

people know who you are (established customers, employees, less cash to pay upfront)

introduction stage in industry/product life cycle

product or service is being invented and initially invented

Conversion franchising

provides an organization through with independent resources (realtor)

Product distribution franchising

provides specific brand name products sold by that person in a certain territory (card dealership (ford))

decline stage in industry/product life cycle

sales and profits of firm begin a falling trend

conflict of interest

same person has 2 conflicting goals

scale in a small business

size of the market

advantages of a start-up business

start with a clean slate (buy most up to date technology)

vision

tagline to express the idea or goal of the firm (10 words)

cannibalizing

taking business away from your full time employer

focus strategy

targets a portion of the market(niche)

executive summary

the one to two page summary of your business in the front of the business plan (investors will read to see if company is liable)

the market

total population of people or firms you plan to sell to. Target customer section: focuses on who would buy. Demographics: how often they buy and past experience

business plan

(40 pages) cover letter, title page, table of contents, executive summary, the company, the industry, the market, the organization, the financials, the appendixes

disadvantages of stand retail business

-variable income -legal requirements

5 paths to a business

-vision -mission -elevator pitch -executive summary -business plan