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Entrepreneurial small business Test 2

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business life cycle (4 stages)
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multiple stages of life cycle, stages are 1. Emergence 2. Existence 3. Success 4. Resource Maturity
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If you are talking about a variety of business prospects before finally settling on an idea, which stage of the BLC are you in?
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Emergence
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In 2002, ___% of people expressed an interest in owning their own firm, and ___%of young adults wanted to start their own firm, but only ___% of population was taking steps to start a firm
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In 2002, 50% of people expressed an interest in owning their own firm, and 80%of young adults wanted to start their own firm, but only 7% of population was taking steps to start a firm
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If you have a lot of ideas, a fair amount of merchandise, an absolutely certain set of overhead costs, but no guarantee of sales, what stage of the BLC are you in?
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Existence
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________ is the second riskiest period of the BLC after ________
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Existence is the second riskiest period of the BLC after emergence
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Liabilities of newness (3)
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lack of skill in either 1.marketing 2.production 3.management
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If you have established a market, and are gaining profits for expansion, which stage of the BLC are you in?
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Success
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According to Woody Allen, what % of success is showing up?
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80%
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Slack Resources
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Profits that can be re-channeled into the business if needed
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What is the longest lasting stage of the BLC
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Success stage
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What do most owners call slack resources?
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Flexibility
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If your company has a stable level of sales and profits over several years, which stage of the BLC are you in?
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Resource Maturity
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4 key components to staving off customer complacency
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1. Recency 2. Frequency 3. Potency 4. Recommendation
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Recency
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Being the most recent thing your customers have seen in the past few days
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Frequency
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Keeping in touch with customers on a frequent basis
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Potency
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making your advertisement remembered, and remembered for the right reasons
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Recommendation
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Making clear recommendations to your customers that can help your customers create a memorable way to show that you think about/care about your customer
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Takeoff
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When the success stage, instead of moving to the resource maturity stage, moves to a stage of exceptional growth.
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overall growth strategy
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describes the kind of business the owner would like to have, from the perspective of at what level they want the firm to grow.
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lifestyle or part-time firms
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small income businesses, provides enough profit or salary to supplement an income but not enough to live on.
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Traditional small businesses
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full time businesses, usually one-site businesses with medium sales, generally make enough money for the living of the owner and family
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high-performing small businesses
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high growth, high sales businesses, growing through multiple locations with high level of professionalization
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high-growth ventures
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extremely high growth rate, high sales numbers, these firms aim to become big businesses and pursue high levels of professionalization/external funding
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harvest
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when entrepreneurs try to get some of the value of the hard work they put into the business over the years
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initial public offering
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when a business sells its stock to the public on a major stock exchange
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mergers
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when firms combine to create one mutually beneficial company
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aquisitions
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when one firm absorbs another firm through purchase
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consolidation
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when a company buys up many smaller competitors to form a giant firm
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employee stock ownership plan
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tax protected way to sell a firm to its employees (very rare)
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tranfers
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moving ownership from one legal entity, person, or group, to another
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terminations
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closing down the business
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liquidity enhancement
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arranging to generate cash to cover the estate taxes
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tax management
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structure your transfer to make tax payments as small and manageable as possible
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estate freeze
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depends on moving assets from the entrepreneur to the heirs when they are worth less.
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pass off
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giving away a firm to someone as a gift without compensation
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sell off
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selling the individual assets of a company and using the money to meet obligations, maybe even turning profits
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bankruptcy
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uses a legal method of closing a business and paying off debts
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walkaways
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business termination where the entrepreneur ends the business with its obligations met
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reorganization
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bankruptcy, but your debt is renegotiated and lowered
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serial entrepreneurs
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people who start multiple businesses in their careers
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after 4 years, ___% of owner only firms fail in 4 years and _____% of clients of the small business development centers are still strong after 5 years
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after 4 years, 50% of owner only firms fail in 4 years and 81.5% of clients of the small business development centers are still strong after 5 years
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4 bottom lines are
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1. the firm 2. the community 3. the family 4. yourself
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supplemental profits
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secondary income
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substitution profits
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intended to equal and replace the salary or wages the entrepreneur could draw working somewhere else
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success profits
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income level higher than the person could make working for others
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manufacturer
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entity which produces a product or service to be sold
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word of mouth
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spreading information about your business through the comments friends and customers make
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direct sales
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going directly to your customers (door to door salesmen)
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direct mail
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postcards, catalogs, videos, sales letters, brochures, etc. etc. mailed directly to customers
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microinventory
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set of goods or services that consists of only one or a few items
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direct response advertising
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when you place an ad somewhere, and you wait for the orders to come in.
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guerrilla marketing
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unusual and nearly free advertising (flyers under windshield wipers, waving signs at people driving by)
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multi-channel marketing
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using several outlets for contacting your customers
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fulfillment center
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centers that will warehouse your product, pack/ship them, and send an automated email to your customers
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born internationals
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firm that opens a web site immediately, thus being exposed to customers from around the world
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freight forwarders
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firms specializing in arranging international shipments
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trade missions
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when united states government sends people on tours in other countries to attempt to gain exports to those countries
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typically 3 places services can be performed
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1. clients location 2. mutually accessible location 3. firm’s location
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contract manufacturing
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existing firm with manufacturing capabilities makes your product for you
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sheltered workshop
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nonprofit organization that provides business services by using handicapped or rehabilitated workers
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marketing plan
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systematic written plan of all phases of marketing for a business, including information on the product, price, distribution, and promotion strategy
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marketing research
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collection and interpretation of data to support future marketing decisions
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ethnographic research
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data gathered by simple observation
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scalar questions
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“on a scale of 1 to 5”
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dichotomous questions
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questions with only 2 answers
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categorical questions
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questions answered by selecting the proper category
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differential advantage
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“competitive advantage”. What sets you apart from the rest
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4 P’s
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product place price promotion
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undifferentiated strategy
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marketing strategy that uses no segmentation, assumes all customers have identical needs
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differentiated strategy
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a marketing strategy in which a marketer selects two or more distinct groups of consumers and meets their needs
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concentrated strategy
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marketing strategy in which a marketer selects ONE specific group of consumers and meets their needs
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cash-to-cash cycle
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time required for a business to acquire resources, convert them into product, sell the product, and receive cash from the sale
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payables
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amounts owed to someone else
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receivables
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amounts owed to you from someone else
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clearinghouse
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entity that processes checks and electronic fund transfers for banks and other financial institutions
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float
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delays in the movement of money among depositors and banks
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cash budget
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identifies when, how, and why cash is expected to come into, or leave the business
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noncore projects
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revenue-producing tasks and activities related to, but not part of, the primary strategy of a business
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consignment
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act of accepting goods for resale without taking ownership of them and without being responsible to pay prior to their being sold
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gaming the payment process
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using methods to appear to be paying bills on time, when in fact payment is being delayed or avoided
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growth trap
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financial crisis that is caused by a business growing faster than it can be financed