BizInnovator FINAL EXAM (Units 1-6)

Pick the best definition for: Entrepreneur

an individual who creates a new business, bearing most of the risks and enjoying most of the rewards.

Pick the best definition for: Startup

a temporary organization that searches for a repeatable and scalable business model

Pick the best definition for: Small Business

Started to fill a gap or provide a service, be your own boss

Pick two essential characteristics of successful entrepreneurs

Passionate and Determined

Dante's business is called Sock Nation. He and his team sell customized socks and slippers and donate a pair of shoes for every ten pairs of socks sold. Their priorities are satisfying an unmet need in the marketplace for custom socks and improving society. Their goals or vision includes expanding their product lines and customer segments as well as the magnitude of their social improvements. What type of entrepreneur would best describe Dante?

Social Entrepreneur

Keira's business is called Sustainable Slabs. She and her team sell cutting boards and decorative wood products from reclaimed or recycled wood. Their priorities are creating beautiful home products through sustainable methods. Their goals or vision includes expanding to other products sourced from reclaimed natural resources. What type of business would best describe Keira's Sustainable Slabs?

Climate/Green Entrepreneur

True or False: The Business Plan and Business Model Canvas are static documents that are written early in the planning phase.

false

True or False: The Business Plan is a visual summary of the business model, often on one page.

false

The ______________________ is/are often required by potential investors, lenders, and other financial stakeholders prior to investing money or other assets into the new business venture.

Business Plan

Select all of the following that are NOT part of a Business Model Canvas:

i. Executive Summary

ii. Advertising Strategy

iii. Value Proposition

iv. Profit Analysis

v. Customer Relationships

i, ii, iv

Select all of the following that are NOT part of a formal business plan:

i. Executive Summary

ii. Marketing Plan

iii. Owner Resume

iv. SWOT Analysis

v. Individual Credit Report

iii, v

Which of the following is the primary objective of the early stage entrepreneurial pitch?

All of the above (Information sharing, To measure interest, To gather feedback)

Early stage startups spend significant time doing the following (select all that apply):

i. Finding the customer(s)

ii. Understanding the problem

iii. Selling

iv. Going to the bank/seeking investors

v. Creating partnership agreements

i, ii

Select all that apply: Entrepreneurial opportunities can be described as:

i. Customer-driven solutions to a problem or need

ii. A product in search of a market

iii. Could turn into a profitable venture

iv. An idea with a plan

v. An existing product with low market reach

i, iii, iv

Evaluating an entrepreneurial opportunity requires an analysis of the capital needed to start, projected profit and breakeven points, and the return on investment potential. This analysis is described as:

Economics & Profitability

Evaluating an entrepreneurial opportunity requires an analysis of the benefits the product/service offers potential customers, streamlined processes/efficiency, value of intellectual property, and strategic partnerships. This analysis is described as:

Competitive Advantage Analysis

Evaluating an entrepreneurial opportunity requires an analysis of the business's potential management style, team structure and composition, and their backgrounds and integrity. This analysis is described as:

Management & Team

Which of the following options best describes the contrast between creativity and innovation in entrepreneurship?

Creativity is the potential for the mind to conceive new ideas while innovation is the process of translating an idea into a product or service that provides value to a potential customer.

Select the best definition for Design Thinking.

The process of combining empathy for potential customers' needs and problems with innovation of an entrepreneur and the entrepreneur's ability to iterate numerous prototypes to discover what best meets the customers' needs and creates value.

What is the Problem Statement, as included on the Business Model Canvas?

The identified problem or need of potential customers in the market that an entrepreneur might be able to address with their product or service concept.

Select the key components of the Value Proposition, as included on the Business Model Canvas:

i. identify customer benefits

ii. Differentiation and positioning

iii. Link benefits to product/service value

iv. Problem description

v. Measure of profitability

i, ii, iii

Select the best strategy for starting off the entrepreneurial pitch from the available options:

Acknowledge that the pitch is interactive and aim to engage, or hook, the audience right away.

The Value Proposition is an integral part of the Business Model Canvas. From whose perspective is value derived from?

The potential customer

Which of the 4 "P's" of marketing pertains to advertising?

Promotion

Which statement provides a valuable assumption about the use of Customer Discovery?

provides an entrepreneur with imporant information about their product.

Target Markets can be everyone.

false

Which of the 4 "P's" of marketing deals with financial aspects of your product?

Price

What role do customers play in the success of a product/business?

Customers must like the business idea and be willing to use/purchase the product.

Which of the following resources could provide you with Secondary Research Data?

Trade Magazines

What do the letters MVP stand for in Entrepreneurship?

Minimum Viable Product

Define Channel from a marketing perspective.

Sharing your value propositon with others.

. Which statement accurately desribes why an entrepreneur should understand the concepts of branding?

Branding provides the product with a recognizable identity.

Customer Relationships are critical to an entrepreneurs success. Which statement below is false.

Customer relationships are easy to create and maintain.

Select all the processes that fall under Market Research for entrepreneurs:

i. Test product features

ii. Determine company mission and vision

iii. Determine market and growth potential

iv. Assess competitive advantage

v. Communicate financials to stakeholders

i, iii, iv

Which is the most important difference between primary and secondary market research or data?

Primary market research is designed with a specific outcome in mind and is often expensive to collect and analyze. It is collected directly from the source.

Select the best definition for: Demographics

Who your customer is, including age, gender, ethnic background, income level, marital status.

Select the best definition for: Psychographics

Why your customers buy, including attitudes and beliefs, lifestyle, interests, hobbies, social status or identify

Select the best definition for: Buying Behavior

How your customers buy and how they intend to use your product, including understanding of their needs versus wants, spending patterns, brand preferences, and how they are influenced by advertising

What is most important when it comes to customers?

Relationships

Customer Segments refers to __________________.

Who you believe will benefit from your value proposition, also known as your target market.

True or False: Changes to product or service design should be made based on observable, timely data.

true

The Lean Startup Method aims to help startups by focusing on:

Mitigating risks and increasing the liklihood of success

The purpose of the Minimum Viable Product is to:

Devote the the least amount of resources to develop the product and gauge potential customer interest and validate the product idea, thereby minimizing risk in moving forward

Why is the word "Lean" critical in the Lean Startup Methodology of starting your startup?

Lean means to minimize the effort, resources, and time it takes to test the product and decide whether or not to move forward

Select the definition that best describes: Persevere

Based on your Value Proposition, Target Market, and Minimum Viable Product in the customer discovery and test market phases, your assumptions were proved correct and you should move forward with your product and startup model

Select the definition that best describes: Pivot

Based on your Value Proposition, Target Market, and Minimum Viable Product in the customer discovery and test market phases, your assumptions were proved materially flawed ct and you should redesign the product and startup model and repeat the process

Select the definition that best describes: Iterate

Based on your Value Proposition, Target Market, and Minimum Viable Product in the customer discovery and test market phases, your assumptions were proved only partially correct and you should refine the product and startup model before moving forward

Select all the possible methods of pivoting in the list below:

i. Zoom in/out to focus on product details

ii. Assess supporting technology

iii. Adjust sales channels

iv. Reevaluate customer segments/target market

v. Analyze pricing for profit margins and market tolerance

All of the above.

When determining whether to persevere, pivot, or iterate, which sections of the Business Model Canvas might be revised?

All of them

After deciding to pivot with your product or business idea you will be revising your business pitch. What will your audience be especially interested in seeing as part of your new pitch?

The process for gathering data driving the pivot decision.

Entrepreneurs pay for these expenses once, at the beginning of a business, and often include things like equipment, the inital lease for the building, goods to sell, and utility hookups.

Start Up Costs

These expenses are paid regularly, and often includes things like payroll, rent, inventory, and marketing.

On Going Costs

This process is used to plan for upcoming revenues and expenses.

Budgeting

Net profit or loss is shown on this financial document.

Income Statement

The amount, or percentage, added to the costs of a product to arrive at the selling price.

Mark Up

A ratio that compares the gain or loss from an investment relative to its cost.

ROI

A financial document that explains how cash is being used during a period of time.

Cash-Flow Statement

The different ways that a business plans to generate a profit.

Revenue Stream(s)

The property that you can let the lender keep until the loan is paid off is described as this (5 Cs of Credit).

Collateral

Honoring one's obligation to repay a loan is described as this "C" (5 Cs of Credit).

Character

Ones's financial ability to repay a loan with present income is described as this "C" (5 Cs of Credit).

Capacity

If you need to borrow money, the money you already have describes this "C" (5 Cs of Credit).

Capital

Bootstrapping is a method or raising funding for a start up and utilizes all resources such as as investors and banks.

false

Which item is NOT a possible revenue stream for a business?

Refunding Customers

What is the Return on the Investment for the scenario below: You invest $5000 on a mutual fund and in six months the value of the mutual fund is $5500. What is the ROI for this transaction?

0.05

If your company made $6500 in revenue and had expenses of $6300 which answer best depicts the result of the Income Statement?

Net income of $200

Select the key advantages as they apply to: (Sole) Proprietorship

All decisions made by 1, few restrictions, low startup costs, no add fed. taxes, all profit kept by 1

Select the key advantages as they apply to: General Partnership

Owners can deduct many losses on personal returns; losses share between partners

Select the key advantages as they apply to: Limited Partnership

Good for raising money; Gen partners get money but maintain authority; Ltd partners can leave any time

Select the key advantages as they apply to: C-Corp (default corporation)

Stocks provide funding options; many tax deductions; no shareholder liability

Select the key advantages as they apply to: S-Corp

No corporate taxation; no double taxation, no shareholder liability

Select the key advantages as they apply to: LLC

Protected from liability, easy startup, no add fed. taxes

Select the key advantages as they apply to: Nonprofit

Serve the common good, exempt from taxes

Select the key advantages as they apply to: Co-op

Employees only taxed on income

Select the key advantages as they apply to: Franchise

Low failure rate, business assistance, buying power, name recognition, potential for large profits

What is the primary purpose of the SWOT Analysis?

To evaluate 4 areas important to a businesses success

What is the primary purpose of the PESTEL Analysis?

To examine external variables that affect your business model

True or False: SWOT and PESTEL Analyses are completed early in the business formation and can be used as-is throughout the business life cycle.

false

Examples of key Business Partners that may be listed on the Business Model Canvas include (select all that apply):

i. Distributor

ii. Personal Bank Contact

iii. Accountant

iv. Risk Management Agent

v. CEO

i, iii, iv

Intellectual property is important to understand because:

It will protect your idea, product or service from someone stealing your idea.

Which term is assoicated with a number that identifies your business to your state and the federal government?

Tax ID

Company culture is NOT:

developed quickly

The primary differences between the BMC and Business Plan would be:

The business plan is a formal written plan used to secure funding