New Business Venture Exam2
RBI Screen
"Really Big Idea" -a fast technique for making initial assessments of prospective business ideas based on five questions
Types of part time business
- Home based - E-commerce
Ways to buy
-Buy out sellers interest -Buy in -Buy key assets -Takeover
Freemium
subscriptions that provide some content for free but require a monthly subscription to take advantage of all the site has to offer
Cost to start up
the amount of money it takes to start a new business
Partnering
2 or more entities agreeing to work together
C
Combine- Mix something that exist into something new
M
Modify- Changing g the appearance of other ideas and adding features
P
Put to other use- Find a new way to use a product
Value proposition
Unique selling points/benefits
part time self employment
Working for yourself for 35 or fewer hrs a week
4 type of E-commerce businesses
- Informational website - Business to business - Business to customer - Etsy, eBay, online
The Sources of Business Ideas
- Work Experience -A Similar Business -Chance/ Serendipity -Family and Friends -Education or Expertise -Idea Sites
Issues in Business Inheritance
- family has to accept -provide opportunity to obtain education -Allow family to do the functions they do best -Not all family have leadership skills
Dev a Formal management structure
-Clear goals and objectives -Establish formal positions -See weakness and strengths of family memebers
Disadvantages of start ups
-No initial name recognition - Require significant time - Very difficult to finance - Cannot easily gain revolving credit - may not have experienced managers and workers
Ways to Keep On Being Creative
-Read magazines -Invite someone you've never included before to a meeting -Have a "Scan the environment" day -Try a mini-internship -Put yourself in customer's shoes -Redesign your work environment
3 Possible Contributions of Partnership
-Reduce personal investment -Leverage the contribution of the partner to grow faster -Established customers
3 ways to Increase start up success
-Star a business with established customers -Build trust in your story -Secure outside investment
5 Paths to Full time entrepreneurship
-Start a new business - Buy and existing business -Franchise a business -Inherit a business -Hired to be a professional manager of a small business
When to consider par time entrepreneurship
-You want to gain experience -There is a narrow window of opportunity -You lack resources for a full scale business
Advantage of start ups
-begin with a clean slate -use to most up to date tech Provide new, unique products -can be kept small deliberately to eliminate the magnitude of possible loss
Purpose of due diligence
-find wrong doing -Find any inefficiencies
Steps to follow when acquiring a business
1. Conduct extensive interviews with the sellers of the business. 2. Study the financial reports and other records of the business. 3. Make a personal examination of the site (or sites) of the business. 4. Interview customers and suppliers of the business. 5. Develop a detailed business plan for the acquisition. 6. Negotiate an appropriate price for the business, based upon the business plan projections. 7. Obtain sufficient capital to purchase and operate the business.
avoid pitfalls
1. Identifying the wrong problem 2. Judging ideas too quickly 3. Stopping with the first good idea 4. Failing to act 5. Obeying rules that don't exist
Screen Ideas
1. People: Who are you 2. Offering: What are you offering? 3. Customer: Whom are you offering it to? 4. Value proposition: Why do they care? 5. Distinctive Competencies: Do you have any key or core science, tech, or features.
Customer Segment
A group or subgroup of potential purchasers that can be approached in a coherent manner.
innovation
A new method, idea, product, etc.
Business Models
A way to identify and organize key business info on a business and how it achieves its goals
A
Adapt- adapt from existing ideas: Radical Thinking
Disruptive innovation
An innovation that creates new market and valuenetworq that eventually disrupts the existing one.
MVP 3 Steps
Build- Measure- Learn Figure out a problem Develop a MVP Learn as quickly as possible
E
Eliminate- Opportunities that arise from taking away something
Feasibility
Extinct to which and idea is viable or realistic
The Casual Model of Entrepreneurship
Feel- Check- Plan- Do
validation process
Idea- Financial Viability- Ability to produce- Minimal Prototype- Test- Feedback- Learn- Adapt
Caveat Emptor
Let the buyer beware (Latin)
Pilot Test
Preliminary run of a business, sales effort, program, or website with the goal of assessing ho well the overall approach works and what problems it might have.
R
Rearrange- (or reverse) to make a different product
Opportunity Recognition
Searching and capturing new business ideas that lead to business opportunities.
Entrepreneurial Alertness
Set of observational and thing skills that help entrepreneurs identify good opportunities.
S
Substitute- replace something that already exist
Minimum Viable Testing
Testing a product with minimum effort to see if it works
Permanence
The impression of long term continuity a business gives others
Pain
any sort of problem customers might face
Gain
any source of outcome customers or potential customers would like to encounter or be able to depend on
Classic Feasibility Study
careful investigation of 5 primary areas 1. Overall business ides 2. The product 3.The market 4.Profibility 5.The plan for future action
Online Pilot Testing Procedure
deploy, track, revise, repeat
A/B Testing
experiment in which one group of participants is randomly assigned to see one version of a message and another group is randomly assigned to see a second version. Results are then compared to test the effectiveness of message variations
Time to Start Up
how long it takes to start a new business
Due Diligence
investing a business to determine its value
Conversion rate
measures the frequency that someone who clicks on an ad makes a purchase, "likes" a site, or takes some other action desired by the advertiser