ENT Exam One

Ch. 2,3,4,6 and Case Files

Integrity

Is a sense of honesty and reliability that is expressed in a strong desire to do the right thing

Stakeholder Groups

Owners

Customers

Employees

Social Responsiblity

Ethical obligations to the community customer and employees the triple bottom line , help someone who is like you but also not like you

Environmentalism

The creation of the EPA to protect the environment

Ethical Theories

Relativism

Universalism

Foreign Corrupt Practice act

What are standard here are what you have to follow them everywhere (no bribery)

Corporate Culture

Usually designed by the founder or president

Must be maintained by hiring and development

Chick- Fil-A No opening on Sunday can’t make a living on 6 days then the business’s is not right or profitable

Code of Ethics

Must be present to employees and reminded of the consequence of not complying

Method of Monitoring Non-Compliance

Sharon Watkins checked the balance sheet of illegal leasing

Better Buisness Bureau

Monitor Integrity in Buisness

Non-Governmental

Records Non-Compliance With Regulations

Good Source of Information for Consumer

Governmental Regulations

False Reporting of Income and Expenses

Maintains a Good Record of transactions

Observing Intellectual Property

Protecting Your Idea

Trademarks

Patents

Copyrights

Trademarks

Safeguards a company’s use of a name word phrase slogan

Patents

The registered right of an inventor to make use or sell an invention

Copyrights

The exclusive right of a creator to reproduce publish or display work that is that persons intellectual property

5 Greatest Inventions Gallup Poll

Electricity

Automobile

Computer

The Wheel

Telephone

Types of Patent

Utility Patent

Design Patent

Plant patent

Utility Patent

A patent on a process

Design Patent

A patent for original designs for products

Plant Patent

Patent for a new type of floral

Opportunity Recognition

How does it happen ?

Identifying Potential Products or services that may lead to a Promising Business

Sources of New Ideas

From Prior Job (45%)

From a personal interest or Hobby (16%)

From a Chance Happening (11%)

From A suggestion (7%)

From Education Courses/ Family Business ( 6%)

Friends or Relatives (5%)

Other Sources ( 4%)

Entrepreneur Opportunities

Geographical Translation

Innovate Existing Products or Services

Changes in the Marketplace or Delivery

Look at things that used to be done well but aren’t done well anymore

Be a Travel Junkie go to places you wouldn’t to get ideas (Store, Trade Show Museum, Flea Market )

Borrow from existing products or services (solve a problem that exist , improve a product)

Outside In- Analysis

General Environment

Industry Environment

Competitive Environment

General Environment

Broad Environment that influences most businesses ( Economic social , technological , political legal , demographic and global

Industry Environment

factors that affect a firm and its competition

Competitive environment

likely move the competitors in a industry

Core Competencies

something that a company does well ( Low Prices)

Competitive Advantage

something that a company does better than its competitors

SWOT Analysis

• Strengths

• Weaknesses

• Opportunities

• Threats

The Company (SW)

The Industry ( OT)

Strategies for operation

Cost-Based Strategy

Differentiation Strategy

Focus Strategy

Cost - Based Strategy

being able to keep costs low so that lower prices can be utilized

Differentiation Strategy

Emphasizes uniqueness of produce or service and charges a higher price

Focus Strategy

Focuses on a Narrow Market Segment

Beginnings Of Franchising

• The New Testament - Matthew as a Roman Tax Collector

• Singer Sewing Machine Company in U.S 1851

• Ray Kroc Franchising McDonalds is the Most Famous

• Largest Franchise is Subway

Franchising

Business model where in an owner allows someone esle to license a trademark and operations

Franchisor

The one who offers a Buisness to Another

Franchisee

the one who accepts a license to operate a buisness

Pros Of Franchising

• A proven model and brand

• help in setting up and managing

• some provide funding

Cons Of Franchising

• Limits on Expanding

• Misleading Information

• Encroachment ( Subway)

Disclosure Agreement

Background on Franchsior

provides info on estimated cost , Franchise fee ongoing Franchise costs assitances avaliable and renewal or cancellation of contract

• required By federal Trade Commission FTC

Franchising Cost

• initial Fee - $35,000 and up

• Costs of Construction could be a million dollars

• ongoing royalty payments between 5-9%

• Advertising Cost

Buying An existing business

• faster to startup

• seller signs non-complete agreement

• price determined by parties

• less expensive

• established name and ways of operating

• History of costs and profits ( Get 3 to 5 year financials )

How to Evaluate a Business

Use Due Diligence

FInd Out why are they selling business

look at the past 3 to 5 years financial statements

ask an accoutant and or lawyer to look at financials and contract

Business Plan

is a document prepared by the entrepreneur which outlines the basic concerpt underlying the business

who reads a buisness plan

• The entrepreneur

• Potential lenders

• Potential Customers

• Suppliers

• Potential Investors( Friends , relatives venture capitalist)

Types of Business plans

• Short Plan

• Comprehensive Plan

Short Plan

for the entrepreneur to look at the feasibility

Comprehensive Plan

prepared after the short plan when the idea seems feasible for outsiders

The Business Model

this is the way the company intends to make money it includes

• Revenue Model

• Cost Structures

• Required Resources

• Risk

Revenue Model

Unit Based Model- a fixed price is paid for the product

subscription/ membership model Customers Pay a fixed amount at regular intervals

advertising-based model cost per click

Licensing Model- One time fee to sell or use the product

Cost

• Fixed

• Variable

• Semi-Variable

Fixed Cost

Remain the same regardless of volume ( rent)

Variable Cost

Vary with Volume ( sales commissions )

Semi-Variable

Components of Fixed and Variable ( Some Payrolls)

Executive Summary

• Appears First but written last

• not over 1 page

• contains the findings of the plan

• most important part of plan

• venture capitalist may only read this before deciding

Buisness Plan Components

Company Description

Industry Target Customer and Competitive Analysis

Product and Service Plan

Operations and Development Plan

Management Team

Critical Risk

Exit Strategy

Financial Plan

Appendix

Think Like an Investor

Goals

• Maximizing Return on Investment

• Minimizing Risk

• More Market Oriented Than Product Oriented . Look at customers needs

Relativism

no true ethics alter behavior according to their beliefs

Universalism

certain ethical standards apply everywhere

Fraud triangle

• Opportunity

• Pressure

• Rationalization

Warby Parker Case

College Student ( David Gilboa) loses classes while on a trip and refuses to buy a new pair because he cannot find a cheap online retailer so he starts this business of an online eye glass wear company with a few pop up shops ( Gilboa, Blumenthal, Hunt , Raider )

HealthSouth Case

Aaron Beam the ex CFO of Healthsouth is conflicted about exposing how they cooked the books on healthsouth so they wouldn’t get kicked out of wall street and also so Richard Scrushy would hate him. Cult culture work place everyone had to bow down to Richard

Porters’s Generic- Level Strategies

Board Cost - Cost leadership

Board Differentiation - Differentiation

Narrow Cost - Cost Focus

Narrow Differentiation- Differentiation Focus

Etsy Case

esty is struggling to keep their intimacy as they are trying to compete with amazon . they are losing their values over profit because they decided to go public and now have to meet shareholder needs in order to maintain an revenue , they need to shift and focus more on the OG intimacy etsy .

Borrow from existing products or services

• solve a problem that exist

• go with a trend

• improve a product

• provide a service

• look for new technologies

• improve packaging

when opening a business know the franchising amenities such as

• disclosure agreement

• operations manual

• Franchise agreement