EEE Midterm Exam – Flashcards
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According to the Global Entrepreneurship Monitor (GEM) 2010 Survey, about _______ of adults in the U.S. are either starting their business or are running a business that has been in existence for less than 3 1/2 years.
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7.6 Percent
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Which of the following statements regarding business success or (failure rates) is correct?
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After Four years, 50 percent of new businesses are still open.
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Apple Inc. is a firm that is proactive, innovative and risk-taking. From this description, we can most accurately conclude that Apple has a high level of
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Entrepreneurial Intensity
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The 3 primary reasons that people become entrepreneurs and start their own firms are to:
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Be their own boss, pursue their own ideas, and realize financial rewards.
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According to the textbook, entrepreneurs are:
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Moderate Risk Takers
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A ________ is a written document that describes all the aspects of a business venture in a concise manner.
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Business Plan
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An _______ is a favorable set of circumstances that creates a need or a new product, service, or business. An ___ is a thought, an impression or a notion.
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Opportunity, Idea
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3 ways to identify an opportunity include:
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observing trends, solving a problem, and finding gaps in the market place.
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If a new firm was launched to help public schools comply with The No Child Left Behind Act of 2002, that opportunity was created by:
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Political actions and regulatory changes.
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According to research in this area, it is more likely that an entrepreneur will get a new business idea through a _______ relationship than the alternatives
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Weak-Tie
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Which of the following represents the correct order of the five sages of the creative process?
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Preparation, Incubation, insight, evaluation, elaboration.
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To make sure that its customers are satisfied and to probe for new product ideas, Inuit routinely sends employees to the facilities of their customers. This technique for generating new business ideas is called:
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Day-in-the-life research
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According to the textbook, which is the proper sequence of events in developing successful business ideas?
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opportunity recognition, feasibility analysis, development of a business plan.
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Does it make sense? is it reasonable? is it something consumer will get excited about? does it take advantage of an environmental trend, solve a problem, or fill a gap in the market place? These types of questions asked during the _________ component of a complete feasibility analysis.
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Product/Service Feasibility
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A _______ survey is an instrument that is used to gauge customer interest in a product or service
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Buying intentions
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Which of the following is not an attribute of an attractive industry?
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is late rather than early in its life cycle
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A _________ market is a place within a larger market segment that represent a narrower group of customers with similar needs.
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Target
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The most important issues to consider in financial feasibility analysis are:
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total startup cash needed, financial performance of similar businesses, and the overall financial attractiveness, resource sufficiency, and product/service demand.
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Which of the following is the main purpose for writing a business plan?
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The plan helps the company develop a "road map" to follow, The plan introduced potential investors and other stakeholders to the business opportunity
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A business plan is important for two reasons: it forces the founding team to systematically think through every aspect of their new venture and:
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it communicates the merits of a new venture to outsiders, such as investors and bankers
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Which of the following is one of the "red flags" listed in the textbook that raises questions about one or aspects of a company's business plan?
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defining the market size too broadly
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there are three types of business plans
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summary business plan, contingency plan, full business plan
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the ________ is a short overview of the entire business plan
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executive summary
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A __________, in a business plan context, is an noteworthy event in the past or future development of a business.
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milestone
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operating leverage is highest in companies that have
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a high proportion of fixed costs relative to their variable costs
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According to the textbook, the _____ are heart of the financial section of a business plan.
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Pro formal financial statements
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Business Model
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A firms plan for how it competes, uses its resources, structures its relationships, interfaces with customers, and creates value to sustain itself on the basis of the profits it generates.
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Business Plan
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A written document that describes all the aspects of a business venture in a concise manner
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Entrepreneurship
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the process by which individuals pursue opportunities without regard to resources they currently control.
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Creative destruction
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when entrepreneurs develop new products and technologies that over time make current products and technology obsolete
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Entrepreneurial intensity
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the position of a firm on the continuum that ranges from highly conservative to highly entrepreneurial.
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Corporate Entrepreneurship
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the conceptualization of entrepreneurship at the organizational level
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Execution Intelligence
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The ability to fashion a solid idea into a viable business is a key characteristic of successful entrepreneurs
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Innovation
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The process of creating something new, which is central to the entrepreneurial processs
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Lifestyle Firms
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provide their owner or owners the opportunity to pursue a particular lifestyle and earn a living while doing so.
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Moderate Risk Takers
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Entrepreneurs are usually this, as are most people.
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Passion For Their Business
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number one characteristic shared by successful entrepreneurs, whether it is in the context of anew firm or an existing business.
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Product/Customer Focus
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a second defining characteristic of successful entrepreneurs.
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Entrepreneurial firms
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bring new products and service to the market. they are proactive, innovative, and risk taking.
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Salary-substitute firms
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small firms that yield a level of income for their owner or owners that is similar to what they would earn when working for an employer.
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triggering event
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prompts an individual to become an entrepreneur.
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value
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referring to worth, importance, or utility.
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The three primary reasons that people decide to become entrepreneurs and start their own firms:
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To be their own boss, to pursue their own ideas, and to realize financial rewards.
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The four primary characteristics of successful entrepreneurs:
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Passion for business, product/customer focus, tenacity despite failure, and execution intelligence.
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Five most common myths regarding entrepreneurship:
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Entrepreneurs are born, not made; entrepreneurs are gamblers, that entrepreneurs are motivated primarily by money; that entrepreneurs should be young and energetic, and that entrepreneurs love the spotlight.
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Type of Start up firms
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Salary substitute, Lifestyle, Entrepreneurial
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Entrepreneurial firms stress innovation, which is not the case for salary-substitute and lifestyle firms.
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True
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Salary-Substitute Firms
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Small firms that provide their owner/owners a similar level of income to what they would be abel to earn in a conventional job
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Lifestyle Firms
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Firms that bring new products and service to the market by creating and seizing opportunities regardless of the resources they currently control
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The Entrepreneurial Process
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Step 1) Deciding to become an entrepreneur. Step 2) Developing successful business ideas. Step 3) Moving form an idea to an entrepreneurial firm. 4) Managing and growing the entrepreneurial firm.
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Rate of early-stage entrepreneurial activity in the United States:
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%7.6 1 out of every 13 american adults is actively engaged in starting a business or s the owner/manager of a business that is less than 3 and 1/2 years old
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Entrepreneurial behavior has a significant impact on economic stability and strength; contributes the most on job growth; and strong impact on effectiveness of larger firms
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True
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CHAP 2
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CHAP 2
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Brainstorming
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a common way to generate new business ideas
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Corridor Principle
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once an entrepreneur starts a firm, he or she begins a journey down a path where "corridors" leading to new venture opportunities become apparent.
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Creativity
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process of generating a novel or useful idea
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Customer advisory boards
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meet regularly to discuss needs, wants, and problems that may lead to new ideas
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day-in-the-life research
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sending out teams of testers to the home san businesses of its users to see how its products are working and to seek insights for new product ideas.
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entrepreneurial altertness
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the ability to notice things without engaging in deliberate search.
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focus group
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gathering of 5 to 10 people who are selected because of their relationship to the issue being discussed.
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idea
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a thought, impression, or notion
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idea bank
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physical or digital repository for storing ideas.
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intellectual property
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any product of human intellect that is intangible but has value in the marketplace
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intranent
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?
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network entrepreneurs
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those who identified their ideas through social contacts
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opportunity
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a favorable set of circumstances that creates a need for anew product, service, or business. not all ideas are opportunities.
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opportunity gap
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a problem/gap in the market
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opportunity recognition
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process of perceiving the possibility of a profitable new business or a new product or service
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solo entrepreneurs
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identified their business ideas on their own
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strong tie relationships
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characterized by frequent interaction and ties between coworkers, friends and spouses
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weak tie relationships
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characterized by infrequent interaction and ties between casual acquaintances
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window of opportunity
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a metaphor describe the time period in which a firm can realistically enter a new market
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3 general approaches used to identify an opportunity:
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observing trends, solving a problem, and finding gaps in the marketplace are three general approaches entrepreneurs use to identify an opportunity.
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four environmental trends that are most instrumental in creating opportunities:
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economic forces, social forces, technological advances, and political action and regulatory changes .
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personal characteristics researchers have identified that tend to make some people better at recognizing business opportunities than others:
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Prior experience, cognitive factors, social networks, and creativity
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five steps in the creative process for an individual:
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preparation, incubation, insight, evaluation, and elaboration.
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3 main steps to be taken to protect ideas from being lost or stolen:
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putting an idea into tangible form by such means as entering it in a logbook, or saving it in a computer file, securing the idea, and avoiding making an inadvertent or voluntary disclosure of an idea in a manner that forfeits the right to claim exclusive rights to it if it falls into someone else's hands.
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CHAP 3
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CHAP 3
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buying intentions survey
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an instrument that is used to gauge customer interest in a product or sevice
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concept statement
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industry experts and prospective customers to solicit their feedback.
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concept test
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involves showing a preliminary description of a product or service idea
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feasibility analysis
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process of determining if a business idea is viable
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financial feasibility analysis
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final component of a comprehensive feasibility analysis
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industry
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group of firms producing a similar product or service such as computers, children's toys, airplanes, or social networks
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new-venture team
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group of founders, key employees, and advisers that either manage or help manage a new bsuiness in its start-up years.
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organizational feasibility analysis
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conducted to determine whether a proposed business has sufficient management expertise, organizational competence, and resources to successfully launch its business.
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primary research
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research that is collected by the person or persons completing the analysis
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Product/service feasibility analysis
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an assessment of the overall appeal of the product or service being proposed.
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secondary research
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probes data that is already collected
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Proper time to conduct a feasibility analysis:
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early in thinking through the prospects for anew business idea. follows opportunity recognition but comes before the development of a business plan.
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Two components of product/service feasibility analysis:
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product desirability and product demand.
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Two techniques for determining the likely demand for a product or service:
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buying intensions survey, and conducting library, internet, and gumshoe research.
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Two primary issues a business should consider:
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industry and target market attractiveness
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a template for completing a feasibility analysis:
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first screen.
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CHAP 4
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CHAP 4
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Assumptions sheet
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an explanation of the most critical assumptions that your financial statements are based on
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board of directors
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a panel of individual selected by a corporations shareholder to oversee the management of a the firm
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board of advisors
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a panel of experts asked by a firms management to provide counsel and advice on an ongoing basis
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competitor analysis
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a detailed analysis of a firm's competitors
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contribution margin
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amount per unit of sale thats left over an is available to contribute
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costs of goods sold
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materials and direct labor needed to produce the revenue driver
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executive summary
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a short overview of the entire business plan
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fixed costs
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costs a company incurs whether it sells something or not
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market analysis
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breaks the industry into segments and zeroes in on the specific segment (or target market) to which the firm will try to appeal.
