Notesale: Turn your study into money

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Midterm Exam Review ̶ BUS101
Chapter 1
• SB challenges, p 8
• Top Ten Challenges
1
...
6% of small business owners)
2
...
Workers compensation
4
...
Federal taxes on business income
6
...
Cash flow
8
...
Unreasonable government regulations
10
...
Exporting products/services
2
...
Competing with internet business
4
...
Competing with imported products
6
...
Winning contracts from federal/ state/ local governments
8
...
Protecting intellectual property
10
...
Even with market research forecasts are
only right an upwards of 50% of the time
...

• The corporate venture ̶ an individual who works at a large corporate company and acts in an
entrepreneurial way by developing new products, divisions, or spinoff companies
...

• The opportunistic entrepreneur ̶ looking for a business that will make money very quickly
rather than a business surrounding something they are passionate about
...

• Vision: a bold view of what the company can become
• Barriers to entry , p
...

• Access to Distribution Channels: difficult to get distributors to accept a new business
...
Also appropriate for location
...
Small businesses cannot match these prices
...
This controls the prices at which products are ultimately sold
...
43
• Stratagies for entering
• Niche ̶ recognizing or creating a niche
• Differentiation ̶ make product or service different from what is currently on the market
• Cost superiority ̶ providing a product or service at the lowest price to the customer

Chapter 3
• Feasibility analysis, p 60
• Answers three fundamental questions
• Are there customers and a market of sufficient size to make the concept feasible?
• Do the capital requirements to start, based on estimates of sales and expenses, make
sense?
• Can an appropriate start-up team be put together to make it happen?
• Components
• Industry/ Market/ Customer
• Market/ Customer
• Product or Service ̶ looks at what product or services will be offered, how they will be
developed, and how they will be protected
• Founding Team ̶ analyzing the pros and cons of the individuals in the founding team
...
)
• Financials ̶ calculate the start up capital requirements based on the projection of sales
and expenses
• Business life cycle: pre-start up, start-up, growth, maturity, rebirth/decline (Matching exercise)

Pre-Start-Up

Growth

Maturity

Rebirth/ Decline

Creation of
business plan

Acquiring
customers

Staffing

Innovation

Determining
concept feasibility

Description

Start-Up

Creating cash
flow

Figuring out
financing

Retaining
customers

Company can be
reborn and go
through a new
growth stage or it
can begin failing

Creating cash
flow

Managing
resources

Acquiring
resources

Larger in size
Diversifies
Management

Product focused,
creating the
concept that
forms the basis of
the business
opportunity

Product focus
continues, tests
its operation plan,
and figures out
how to respond to
customers

Management
focuses on
gaining a large
customer base

The management N/A
focuses on
retaining it’s
customers and
must choose to
either reinvent the
business or have
it be forced into a
decline
...

• What is the product and/or service that is the basis for the business? What is the business and
what is it offering?
• Who is the customer?
• What is the benefit to the customer?
• How will the benefit be delivered?
• Business model: how the business will make money
• Four step process
• Position the company in the value chain ̶ a value chain is the stretch of companies that
allow a product to be placed in the hands of a consumer
...

• Figure out who pays whom ̶ by figuring out where a company is on the value chain, then
one can figure out what they must purchase and who they can sell the product to
...


• Feasibility frameworks:
• Porter s 5 forces, p
...
A large number of competitors that control
the supply chain may make it difficult for a new venture to enter and survive
• Uncertainty: the degree of ambiguity and volatility in the industry
...
It relates to the firms capabilities ̶ or lack
of them ̶ and how they may be leverages to create potential for growth (opportunities) and
facts that could negatively affect the firm (threats)
• STEP Analysis: Another matrix that focuses on specific aspects of the microenvironment
• Social: the demographic and cultural aspects of the industry
• Technological: includes R&D activity and rate of technological change
• Economic: the firms cost of capital and industry purchasing power
• Political factors: things such as government regulation that might affect the business
• Bootstrapping, p 69: start up entrepreneurs who have no financial resources beyond their own
savings
...

• Lenders ̶ primarily concerned with getting their money back
...

• Key Management ̶ wish to know how they will be involved in the growth of the business
...
This
may cause the business to fail due to the pressure to meet the expectations it set for itself
...
It is important to have a management
team to delegate tasks to
...
It is
unlikely one will exceed the industry standard unless they have an extreme competitive
advantage
...

• Pricing the product or service too low
...

• Persuasiveness p 180
• What need is being served? ̶ In-depth market research with potential customers will provide
proof of need and demonstrate the level of demand for the product
• Can the founding team successfully execute the plan?
• Why is it the right time to launch this business?
• What is the ventures bundle of competitive advantages?
• How will the business make money?
• What kind of start-up capital required?
• How does a business plan differ from a feasibility study?
• The business plan is the key blueprint of how the business will be run
...
However, a feasibility study is
centered on testing the market to decide the likeness of a business to succeed

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