DECA Entrepreneurship Performance Indicators

Describe elements used to protect intellectual property (BL:051)(SP)

Definition:

• Firewalls: Installing firewalls can prevent unauthorized access to sensitive information and data.
• Copyright protection: This method protects literary, musical, and other creative works.
• Trademark protection: This type of protection safeguards names, phrases, and symbols associated with a business or product.
• Patent protection: Patent protection is available for novel, non-obvious, and useful inventions, providing a 20-year monopoly on the product.
• Trade secret protection: Keeping sensitive information confidential to prevent others from replicating it is another effective method.

Explain:

• By utilizing these methods, businesses can safeguard their ideas and maintain their competitive advantage in the marketplace.

Describe legal issues affecting businesses (BL:001) (SP)

Definition:

• Wrongful termination: Firing someone without a good reason can result in a lawsuit
• Discrimination/harassment cases: Treating employees unfairly or creating a hostile work environment can lead to legal action
• Immigration audits: Hiring illegal immigrants is illegal and can result in legal consequences
• Copyright and patent issues: Unauthorized use of someone else's intellectual property can result in legal action
• Class action lawsuits: A group of people can file a lawsuit against a business over faulty products, services, or promises
• Tax litigation: Disputes over taxes can lead to legal action
• Licensing issues: Operating a business without a license is illegal
• Minimum wage issues: Not paying employees the minimum wage can result in legal action
• Workplace safety issues from OSHA: Failing to provide a safe work environment can lead to legal action
• Monopoly laws: Engaging in anti-competitive practices can result in legal consequences
• False advertising: Making false claims about products or services is illegal.

Explain:

Understanding the potential legal issues that a business can face is crucial for several reasons.

1. Financial risk: Legal issues can be costly, both in terms of time and money. Lawsuits, penalties, and fines can all impact a business's bottom line and financial stability.
2. Reputation: Legal issues can damage a business's reputation and lead to negative publicity, which can affect customer trust and loyalty.
3. Compliance: Understanding and complying with legal requirements is essential for businesses to operate legally and avoid legal consequences.
4. Employee morale: Legal issues such as discrimination or harassment can create a negative work environment and harm employee morale, leading to lower productivity and increased turnover.
5. Business growth: Legal issues can hinder a business's growth and expansion, as they can create uncertainty and discourage potential investors or partners.

By understanding and taking steps to prevent potential legal issues, businesses can protect themselves from financial and reputational harm, maintain compliance, promote a positive work environment, and support long-term growth and success.

Describe elements used to protect intellectual property (BL:051)(SP)

Definition:

• Firewalls: Installing firewalls can prevent unauthorized access to sensitive information and data.
• Copyright protection: This method protects literary, musical, and other creative works.
• Trademark protection: This type of protection safeguards names, phrases, and symbols associated with a business or product.
• Patent protection: Patent protection is available for novel, non-obvious, and useful inventions, providing a 20-year monopoly on the product.
• Trade secret protection: Keeping sensitive information confidential to prevent others from replicating it is another effective method.

Explain:

• By utilizing these methods, businesses can safeguard their ideas and maintain their competitive advantage in the marketplace.

Describe legal issues affecting businesses (BL:001) (SP)

Definition:

• Wrongful termination: Firing someone without a good reason can result in a lawsuit
• Discrimination/harassment cases: Treating employees unfairly or creating a hostile work environment can lead to legal action
• Immigration audits: Hiring illegal immigrants is illegal and can result in legal consequences
• Copyright and patent issues: Unauthorized use of someone else's intellectual property can result in legal action
• Class action lawsuits: A group of people can file a lawsuit against a business over faulty products, services, or promises
• Tax litigation: Disputes over taxes can lead to legal action
• Licensing issues: Operating a business without a license is illegal
• Minimum wage issues: Not paying employees the minimum wage can result in legal action
• Workplace safety issues from OSHA: Failing to provide a safe work environment can lead to legal action
• Monopoly laws: Engaging in anti-competitive practices can result in legal consequences
• False advertising: Making false claims about products or services is illegal.

Explain:

Understanding the potential legal issues that a business can face is crucial for several reasons.

1. Financial risk: Legal issues can be costly, both in terms of time and money. Lawsuits, penalties, and fines can all impact a business's bottom line and financial stability.
2. Reputation: Legal issues can damage a business's reputation and lead to negative publicity, which can affect customer trust and loyalty.
3. Compliance: Understanding and complying with legal requirements is essential for businesses to operate legally and avoid legal consequences.
4. Employee morale: Legal issues such as discrimination or harassment can create a negative work environment and harm employee morale, leading to lower productivity and increased turnover.
5. Business growth: Legal issues can hinder a business's growth and expansion, as they can create uncertainty and discourage potential investors or partners.

By understanding and taking steps to prevent potential legal issues, businesses can protect themselves from financial and reputational harm, maintain compliance, promote a positive work environment, and support long-term growth and success.

Identify the basic torts relating to business enterprises (BL:069) (SP)

Definition:

A tort is an action that hurts another party, either on purpose or by accident. Typically, torts are when a company harms another company's reputation or intellectual property.

• Defamation
• Fraud
• Slander

Explain:

Identifying potential business torts can help businesses prevent harm, protect their assets, comply with legal requirements, manage their reputation, and gain a competitive advantage.

Describe the nature of legally binding contracts (BL:002) (SP)

Definition:

A legally binding contract is an agreement between two or more parties that creates mutual obligations and is enforceable by law. It requires an offer, acceptance, consideration, and mutual assent to the terms of the contract. When a contract is legally binding, it means that if one party fails to fulfill its obligations under the contract, the other party can take legal action to enforce the terms and recover damages.

Explain:

Legally binding contracts are important because they provide clarity, protection, and risk mitigation, demonstrate professionalism, and help to avoid legal disputes. Compliance with these contracts is crucial to ensure that all parties fulfill their obligations and responsibilities.

Explain the nature of human resources regulations (BL:007) (SU)

Definition:

Human resources regulations are rules that protect employees from unfair treatment, discrimination, and unsafe working conditions. These rules cover topics such as equal employment opportunity, occupational safety and health, fair labor standards, employee benefits, and privacy. The purpose of these regulations is to ensure that employers follow fair employment practices and provide a safe and healthy workplace for their employees.

Explain:

Human resources regulations impact the workplace by promoting fair employment practices, protecting employees from harm, ensuring fair compensation, and preventing legal disputes. It's important for businesses to comply with these regulations to avoid legal penalties and reputational damage.

Explain the nature of workplace regulations (including OSHA, ADA) (BL:008) (SU)

Definition:

Workplace regulations are a set of rules and guidelines that protect employees from harm and ensure fair treatment in the workplace. Two important regulations are OSHA, which focuses on safety, and the ADA, which ensures equal employment opportunities for individuals with disabilities.

Explain:

Compliance with these regulations is important for businesses to maintain a safe workplace and avoid legal penalties.

Explain types of business ownership (BL:003) (CS)

Definition:

• Sole proprietorship: One person runs the whole small business, responsible for all profits and losses; has fewer legal controls and taxes

• General Partnership: 2 or more people who contribute money, skill, or labor to a business; all partners share profit and loss; all partners manage the business

• Limited Partnership: Same as a general partnership, but one or more partners will only share in the loss as much as they have invested; limited partners usually do not help to run the business

• Limited Liability Partnership (LLP): Like a general partnership, but one partner has nothing to do with it if another partner is negligent

• LLC: Company and owners are separate legal entities

• Corporation: Corporations are a more complex business structure; corporations have certain rights, privileges, and liabilities beyond those of an individual; doing business as a corporation may yield tax or financial benefits, but these can be offset by other considerations, such as increased licensing fees or decreased personal control; corporations are both for and not for profit.

  \n Explain:

It's important for entrepreneurs to understand the different types of business ownership because each type has its own advantages and disadvantages. Knowing these differences can help entrepreneurs make better decisions and reduce the risks associated with running a business.

Select form of business ownership (BL:006) (ON)

Choose a type of business ownership

Explain the nature of tax regulations on business (BL:009) (ON)

Definition:

1. Income tax: This is the tax that businesses must pay on their profits.
2. Payroll tax: This tax is used to fund social security, Medicare, and other benefits for employees.
3. Sales tax: Businesses must collect and remit sales tax to the state government on goods and services they sell.
4. Property tax: Businesses must pay taxes on any real estate or personal property they own.
5. Excise tax: This tax is levied on certain goods or services, such as gasoline or tobacco.
6. Import/export tax: Businesses must pay taxes on goods they import or export.

Explain:

Businesses must comply with these regulations and file accurate tax returns to avoid penalties or legal consequences. Tax regulations help the government raise revenue and ensure that businesses are paying their fair share of taxes.

Explain the nature of businesses' reporting requirements (BL:010) (ON)

Definition:

Businesses are required to report any changes in the business to the state licensing office. The information can include employee count, income reports, and officers in the business.

Explain:

The purpose of these requirements is to provide transparency and accountability, ensure compliance with laws and regulations, and help stakeholders make informed decisions about the business. Failure to meet reporting requirements can result in penalties, fines, and legal consequences.

Develop strategies for legal/government compliance (BL:011) (ON)

Definition:

1. Stay updated on laws and regulations by subscribing to newsletters and attending seminars.

2. Develop a compliance program that includes regular audits, training, and a code of conduct.

3. Train employees on their roles and responsibilities in following laws and regulations.

4. Document compliance efforts to identify areas for improvement.

5. Have a plan in place to deal with violations, including reporting, investigating, and addressing them.

6. Seek legal counsel to ensure compliance and avoid legal consequences.

   \n Explain:

These strategies help businesses follow laws and regulations, avoid legal consequences, and demonstrate their commitment to compliance.

Prepare complex written reports (CO:009) (MN)

Definition:

A written report in business is a document that provides information on a specific topic or issue. It is used to communicate important information to stakeholders, such as employees, customers, investors, and management. The report should be clear, concise, and well-organized, and may include data, analysis, and recommendations.

Explain:

A written report in business is a document that communicates information and data about a specific topic, problem or situation to an intended audience. It is an important tool for decision making, problem-solving, and planning. A well-written report can help businesses to make informed decisions, identify areas for improvement, and communicate ideas effectively.

Write proposals (CO:062) (MN)

Definition:

A proposal is a document that outlines a plan or idea and offers it to others for consideration or implementation. It is typically used in business settings to propose a new product, service, or project to potential clients or investors.

Explain:

A well-written proposal can help secure funding, partnerships, or business opportunities.

Explain management's role in customer relations (CR:008) (MN)

Definition:

The role of management in customer relations involves overseeing and implementing strategies that enhance the customer experience. This includes training employees on customer service skills, creating policies that prioritize customer satisfaction, and monitoring customer feedback to identify areas for improvement. Ultimately, effective management of customer relations can lead to increased customer loyalty and business success.

Explain:

This refers to the role of managers in building and maintaining good relationships with customers. It is important because customers are the lifeblood of a business and a good customer relationship can lead to repeat business and positive word-of-mouth marketing. Managers should take an active role in ensuring that customers are satisfied with the products or services provided by the business.

Identify company's brand promise (CR:001) (CS)

Definition:

A brand promise is a statement that communicates what a brand offers and what customers can expect from it. It is a commitment that a brand makes to its customers about the benefits they will receive from using the brand's products or services. A brand promise helps build trust and loyalty among customers, and it differentiates a brand from its competitors.

\n Explain:

It is important because it helps create a unique identity for a brand and sets expectations for customers, which can ultimately lead to customer loyalty and repeat business.

Identify the impact of small business/entrepreneurship on market economies (EC:065) (CS)

Definition/Explain:

Small businesses and entrepreneurship have a significant impact on market economies. They create jobs, promote competition, and provide consumers with more choices. Small businesses also foster innovation and economic growth by bringing new products and services to the market. Overall, small businesses play a crucial role in driving economic development and vitality.

Explain the concept of private enterprise (EC:009) (CS)

Definition:

Private enterprise refers to an economic system where individuals and businesses operate in a free market, free from government control or intervention. It means individuals and businesses have the right to own and use property and resources to produce goods and services and compete with others in the market.

Explain:

It is important because it encourages innovation, competition, and efficiency in the economy, leading to economic growth and job creation. It also allows individuals to pursue their own interests and maximize their profits while providing goods and services that meet the needs and wants of consumers.

Identify factors affecting a business's profit (EC:010) (CS)

Definition:

• cost of goods sold
• operating expenses
• sales volume: Amount of goods/services sold within a period of time
• pricing strategy
• competition
• economic conditions
• management decisions

Explain:

Understanding factors that impact a business's profit is crucial for its success and sustainability. By knowing these factors, businesses can make smart decisions and strategies to increase profits and reduce losses.

Determine factors affecting business risk (EC:011) (CS)

Definition:

Business risk refers to the potential for losses or negative consequences that may arise due to internal or external factors impacting a business's operations, performance, or financial stability.

• economic conditions
• competition
• changes in government policies and regulations
• technological advancements
• natural disasters
• financial performance

Explain:

Identifying and analyzing these factors is important for businesses to make informed decisions and implement strategies to manage and mitigate risk.

Explain the concept of competition (EC:012) (CS)

Definition:

In business, competition refers to the rivalry between two or more businesses that are striving to attract customers, sell their products or services, and generate profits. It involves the use of various strategies and tactics to gain a competitive advantage, such as offering better quality products, lower prices, or superior customer service. The ultimate goal of the competition is to increase market share and profitability while delivering value to customers.

Explain:

Competition is important in business because it leads to better products and services, lower prices, and innovation. It creates a level playing field where businesses must strive to offer better value to customers in order to succeed. This ultimately benefits consumers by giving them more choices and better value for their money.

Determine the relationship between government and business (EC:008) (CS)

Definition:

The relationship between government and business is important because it can have a significant impact on a country's economy and society. Governments may provide support, regulation, and incentives to businesses, while businesses may contribute to economic growth and job creation. Balancing the interests of both can lead to a healthy and prosperous business environment.

\n Explain:

The importance of the relationship between government and business lies in the fact that government policies and regulations can have a significant impact on businesses, while businesses also have an impact on the economy and society. A collaborative and constructive relationship between government and business can lead to a more stable and prosperous economy.

Describe the nature of taxes (EC:072) (SP)

Definition:

Taxes are mandatory payments imposed by governments on individuals and businesses to fund public expenditures such as education, healthcare, infrastructure, and other services. The nature of taxes can vary, but they are generally based on income, property, goods and services, and profits.

Explain:

Taxes are important as it directly affects profits. Additionally, paying taxes is a legal requirement and failure to do so can result in penalties and legal action. Businesses should ensure they are compliant with tax laws to avoid any negative consequences.

Describe the concept of economies of scale (EC:077) (MN)

Definition:

Economies of scale refer to the cost advantages that a business can achieve by increasing production. As a company produces more units of a good, the cost per unit decreases due to factors such as spreading fixed costs over a larger output. This can lead to increased profitability and a competitive advantage for larger firms.

Explain:

Economies of scale means producing more leads to lower costs, allowing companies to produce goods more efficiently and at a lower cost. This can lead to lower prices for consumers and higher profits for the company. It also makes it harder for new competitors to enter the market.

Exhibit cultural sensitivity (EI:033) (CS)

Definition:

Cultural sensitivity means being aware and respectful of the customs and beliefs of people from different cultures. It's important to understand the differences between cultures and avoid any actions or language that might be insensitive or offensive to others. It applies to many fields, including business, education, healthcare, and social work.

Explain:

Cultural sensitivity is important in business because it helps build trust with clients and colleagues from different cultures. It can help businesses avoid offending others and attract a diverse workforce, which can bring new ideas to the table and benefit the business.

Leverage personality types in business situations (EI:104) (SP)

Definition:

Studies have shown that people that tend to be extroverted, intuitive, and judging thinkers communicate best with others.

Explain:

Businesses need to modify their approach to improve communication which leads to smoother business operations.

Adapt management style to the personality type of others (EI:105) (SU)

Identify employee feelings. needs, and concerns to enhance communication

“Sell” ideas to others (EI:108) (SP)

Sell your idea.

Persuade others (EI:012) (SP)

Persuade others.

Demonstrate negotiation skills (EI:062) (SP)

Demonstrate negotiation skills.

Encourage team building (EI:044) (SU)

Encourage team building

Explain the concept of leadership

Definition:

Leadership is a process by which a person influences others to accomplish an objective and directs the organization in a way that makes it more organized.

Explain:

Leadership is crucial in businesses because it is responsible for guiding and directing employees towards achieving the company's goals and objectives. Effective leadership can inspire and motivate employees to work together and increase productivity, leading to improved business performance and success.

Determine personal vision (EI:063) (CS)

Definition:

Personal vision in business refers to an individual's long-term aspirations, goals, and purpose within a business or entrepreneurial setting. This is usually described in a vision statement.

Explain:

Having a clear vision is important for businesses as it provides direction and purpose. A vision statement communicates the organization's long-term aspirations and helps to align and motivate employees towards a common goal. It also provides a framework for decision-making and can help businesses stay focused on their core values and priorities. By having a well-defined vision, businesses can work towards achieving their desired outcomes and success.

Demonstrate adaptability (EI:006) (CS)

Definition:

Adaptability in business refers to the ability of a company or organization to adjust to changing circumstances, including market conditions, customer needs, and technology advancements. It involves the ability to identify and respond quickly to changes in the business environment, adopt new processes and strategies, and make necessary adjustments to stay competitive and successful.

Explain:

Adaptability is important in business because it allows a company to respond to changing circumstances and remain competitive. In today's rapidly changing business environment, companies that are able to adapt quickly to new technologies, market trends, and customer needs are more likely to succeed. Being adaptable also enables companies to take advantage of new opportunities and minimize the negative impacts of external threats.

Develop an achievement orientation (EI:027) (CS)

Define:

Achievement orientation is a personal characteristic in which an individual has a strong desire to meet or exceed goals, and values the satisfaction that comes with accomplishing tasks.

\n Explain:

Achievement orientation in business is important because it can motivate employees to work towards their goals, improve their performance, and contribute to the success of the company. By having a desire to achieve results, employees can increase productivity, job satisfaction, and identify growth opportunities.

Enlist others in working toward a shared vision (EI:060) (CS)

Definition/Explain:

A shared team vision acts as a guide for decision-making, allows team members to feel a sense of "ownership," provides a focus for team members' energy, stimulates creativity, and creates accountability.

Act as a role model to fulfill the organization's standards/values (EI:111) (SU)

Definition:

A role model is a person who serves as an example to others, particularly in terms of behavior and values. they should show:

• Integrity
• Honesty
• Empathy
• Inspiration

Explain:

Being a role model helps employees grow and inspires them. this allows for better company performance.

Recognize/Reward others for their efforts and contributions (EI:014) (SU)

Definition/Explain:

The vast majority of employees love to be recognized and rewarded. by being rewarded and recognized for their hard work, employees will want to continue their form and will strive to help the company further.

Determine stakeholder expectations (EI:113) (MN)

Find out what the stakeholders want.

Establish strategic relationships with others (EI:114) (MN)

Definition:

A strategic relationship is a relationship that benefits and helps out all parties within it.

Explain:

Having strategic relationships helps bring more money to companies.

Share best practices with key individuals and groups (EI:115) (MN)

Explain:

This will help improve efficiency and productivity within the company.

Leverage business relationships (EI:116) (MN)

Leverage business relationships.

Describe the nature of entrepreneurship (EN:039) (SP)

Definition:

Entrepreneurship is the process of creating, developing, and running a new business venture. It involves identifying opportunities, taking risks, and using creativity, innovation, and strategic thinking to achieve success.

Explain:

Entrepreneurship is important as it drives innovation, creates jobs, and contributes to economic growth.

Explain the role requirements of entrepreneurs and owners (EN:040) (SP)

Definition/Explain:

Entrepreneurs and owners should be good leaders and well-versed in business.

Describe small-business opportunities in international trade (EN:041) (SP)

Definition/Explain:

Small businesses can use the globalization offered by the Internet to reach a wider audience to market and sell to.

Explain the need for entrepreneurial discovery (EN:001) (ON)

Definition/Explain:

The need for entrepreneurship discovery goes along with innovation. Entrepreneurship discovery increases market competition, inspires more innovation, leads to industrial progress, and increases jobs and production.

Discuss entrepreneurial discovery processes (EN:002) (ON)

Definition:

Entrepreneurial discovery processes are the methods that entrepreneurs use to identify and evaluate potential business opportunities. They involve the process of gathering information, analyzing data, and assessing the feasibility of an idea. This is important because it helps entrepreneurs identify opportunities that are worth pursuing and avoid wasting resources on ideas that are unlikely to succeed.

Explain:

Entrepreneurial discovery processes are important because they allow individuals to identify new opportunities and create innovative solutions to address problems or meet unmet needs. Through this process, entrepreneurs can develop and launch successful businesses, which can drive economic growth and create jobs. Additionally, entrepreneurship can foster creativity, inspire others to take risks, and contribute to positive social and environmental change.

Assess global trends and opportunities for business ventures (EN:003) (ON)

Assess trends

Determine opportunities for venture creation (EN:004) (ON)

Understand the opportunity space around an idea, find an idea in an attractive and fast-growing opportunity space

Assess opportunities for venture creation (EN:005) (ON)

Use SWOT Analysis (Strengths, Weaknesses, Opportunities, Threats)

Generate venture ideas (EN:006) (ON)

Create a venture idea.

Determine feasibility of venture ideas (EN:038) (ON)

Use TMMD Analysis (Time, Money, Market, Determination)

Describe entrepreneurial planning considerations (EN:007) (ON)

Definition:

• Identify a real opportunity
• Create a plan to address the opportunity, forecast, funding, marketing, feasibility

Explain tools used by entrepreneurs for venture planning (EN:008) (ON)

Definition:

SWOT Analysis, TMMD Analysis, PEST Analysis (Political Factors, Economic Factors, Social Factors, Technological Factors)

Explain:

Venture planning tools such as SWOT Analysis, TMMD Analysis, and PEST Analysis are important for entrepreneurs because they provide a systematic and comprehensive approach to evaluate the feasibility and potential of a business venture. These tools help entrepreneurs identify the strengths and weaknesses of their business, assess the opportunities and threats in the market, analyze the trends and changes in the industry, and develop effective strategies to achieve their goals and objectives. By using these tools, entrepreneurs can make informed decisions and minimize risks in their venture.

Assess start-up requirements (EN:009) (ON)

Definition:

Assessing start-up requirements means identifying the resources required to start a new business. This involves evaluating the funding, equipment, personnel, legal requirements, and other factors needed to launch the business. Conducting thorough research and developing a detailed business plan are key to assessing start-up requirements accurately.

Assess risks associated with venture (EN:010) (ON)

Definition:

• Market timing risk
• Market adoption risk
• Market size risk, execution risk
• Technology risk
• Business model risk
• Platform risk
• Venture leadership risk
• Financial risk
• Defensibility risk

Explain:

Assessing and identifying business risks is important to minimize losses and maximize profits. It helps businesses to make informed decisions and implement strategies to stay competitive and profitable in their market.

Describe external resources useful to entrepreneurs during concept development (EN:011) (ON)

Definition:

External resources that can be useful to entrepreneurs during concept development include industry associations, trade shows, business incubators, government agencies, and academic institutions.

Explain:

These resources can provide access to market research, networking opportunities, mentorship, funding, and other support services to help entrepreneurs develop and refine their business ideas.

Assess the need to use external resources for concept development (EN:012) (ON)

Definition:

Resources that provide valuable insight, expertise, support, and funding to help entrepreneurs. These include:

1. Business incubators and accelerators
2. Industry associations and trade groups
3. Market research firms and consultants
4. Professional networks and mentors
5. Government agencies and programs
6. Funding sources, such as venture capitalists or angel investors
7. Universities and research institutions
8. Online resources, such as forums and communities
9. Freelancers and consultants with specific expertise.

Explain:

Assessing the need to use external resources is important because it helps entrepreneurs identify areas where they lack expertise or resources, and determine if seeking outside help can lead to more efficient and effective concept development.

Describe strategies to protect intellectual property (EN:013) (ON)

Definition:

• Patents
• Trademarks
• Copyrights
• Keep secrets
• Non-Disclosure Agreements
• Hire an attorney

Explain:

This will help advance the business and will help it earn more money.

Use components of business plan to define venture idea (EN:014) (ON)

Definition:

• Product or Service: A description of the product or service offered, including its features, benefits, and unique selling proposition.

• Market Analysis: An evaluation of the target market, including size, growth potential, and competition.

• Marketing Strategy: A plan for promoting and selling the product or service, including pricing, distribution, and advertising.

• Operations Plan: A description of the day-to-day activities of the business, including staffing, facilities, and production processes.

• Organizational Structure: An overview of the management team and how the business will be structured.

• Financial Plan: A projection of the financial performance of the business, including income statements, cash flow statements, and balance sheets.

• Investment Proposal: A proposal for investors or lenders outlining the funding needed to start and grow the business.

Explain:

This means using different elements of a business plan to define a venture idea. It is important because it helps entrepreneurs to identify key components and strategies for their business, understand their target market, plan their operations, and ultimately increase the likelihood of success.

Describe processes used to acquire adequate financial resources for venture creation/start-up \n (EN:015) (ON)

Definition:

Networking, Finding public sector contract possibilities, writing RFPs or requests for proposals and eliciting bids, and accepting and networking with potential investors.

Explain:

These are important as they can kickstart a venture.

Select sources to finance venture creation/start-up (EN:016) (ON)

Definition:

• Personal investments
• Patient capital
• Venture capital
• Crowdfunding
• Business incubators
• Grants and subsidies

Explain factors to consider in determining a venture's human-resources needs (EN:017) (ON)

Definition:

When determining a venture's human resources needs, several factors must be considered, including the type of business, the size of the organization, the stage of development, the current workforce, and the level of expertise required. Additionally, the venture's short- and long-term goals, financial resources, and competition should be evaluated to ensure that the company has the right human resources in place to achieve success.

Explain:

Understanding these factors will help the business expand.

Explain considerations in making the decision to hire staff (EN:018) (ON)

Definition:

When considering hiring staff, entrepreneurs should assess their business needs, budget constraints, and available resources. They should also consider the potential benefits and risks of hiring, such as increased productivity versus increased costs and management complexity. Companies should look for applicants who have the necessary skills and experience to perform the job, as well as a good cultural fit with the company's values and mission. Additionally, they should assess the applicant's potential for growth and contribution to the company's long-term success.

Explain:

It is important for businesses to hire the right applicants as they can contribute to the success of the company. Good employees can help improve productivity, customer satisfaction, and innovation, while poor employees can have a negative impact on the business. Hiring the right people can also save time and money on training, turnover costs, and potential legal issues.

Describe considerations in selecting capital resources (EN:019) (ON)

Definition:

Considerations when selecting capital resources include the cost, durability, and maintenance of the equipment, as well as the compatibility with existing technology and the potential for future upgrades and expansion.

Explain:

Selecting the right capital resources is crucial for a business as it can impact the efficiency and effectiveness of the production process, and ultimately the success of the venture. By carefully considering the factors involved in selecting capital resources, businesses can ensure that they are making the most cost-effective and productive decisions, leading to greater profitability and growth potential.

Identify capital resources needed for the venture (EN:020) (ON)

Definition:

Identifying the capital resources needed for a venture involves assessing the specific needs of the business, such as equipment, inventory, facilities, and financing, and developing a plan to acquire and manage these resources effectively.

Explain:

Identifying the capital resources needed for a venture is important because it helps to determine the amount of funding required, the most appropriate sources of funding, and the best way to allocate resources to achieve business goals. It also helps to avoid undercapitalization or overcapitalization of the business.

Assess the costs/benefits associated with resources (EN:021) (ON)

Definition/Explain:

Assessing the costs and benefits of resources is important for entrepreneurs to ensure that they are investing their resources wisely. By evaluating the potential return on investment (ROI) of a resource against its costs, entrepreneurs can make informed decisions that will help to maximize the success of their venture. This can help to minimize waste, reduce the risk of financial loss, and ultimately increase the chances of long-term success.

Use external resources to supplement entrepreneur's expertise (EN:022) (ON)

Definition:

External resources can be used to supplement an entrepreneur's expertise by identifying areas where they lack knowledge or experience and seeking out expert advice. This can involve hiring consultants or advisors, attending industry conferences and workshops, conducting market research, and networking with other professionals in the field.

Explain:

The goal is to leverage the expertise of others to enhance the entrepreneur's own knowledge and capabilities, ultimately improving the chances of success for the venture.

Explain the complexity of business operations (EN:023) (ON)

Definition:

Business operations involve multiple functions such as sales, marketing, production, human resources, finance, and logistics. Each function has its own complexities and requires careful coordination and management to ensure the overall success of the business.

\n Explain:

Understanding the complexity of business operations is important as it allows entrepreneurs to effectively manage their resources, make informed decisions, and ensure their venture's success and sustainability.

Evaluate risk-taking opportunities (EN:024) (ON)

Definition:

Evaluating risk-taking opportunities involves identifying potential risks and rewards, analyzing the probability of success, assessing the potential impact of failure, and making informed decisions based on this information.

Explain:

Evaluating risk-taking opportunities is important for entrepreneurs as it helps them make informed decisions, minimize potential losses, and maximize potential gains for their ventures.

Explain the need for business systems and procedures (EN:025) (ON)

Definition:

Business systems and procedures refer to the processes and methods that a company uses to operate and manage its daily activities, which may include everything from manufacturing and sales to accounting and human resources. These systems are designed to create efficiency, improve productivity, and ensure consistency in operations.

Explain:

Effective business systems and procedures are important as they improve efficiency and productivity while reducing errors and waste, leading to cost savings and improved customer satisfaction.

Describe the use of operating procedures (EN:026) (ON)

Definition:

A standard operating procedure, or SOP, is a set of step-by-step instructions compiled by an organization to help workers carry out complex routine operations.

Explain:

They provide the baseline and make sure that all regulations are met.

Explain methods/processes for organizing workflow (EN:027) (ON)

Definition:

Workflow organization involves setting up a systematic process for completing tasks, determining the best methods for each task, and assigning responsibilities to team members to ensure efficient completion of work.

Explain:

Organizing workflow is important to ensure tasks are completed efficiently, minimize errors and confusion, optimize time and resources, and promote clear communication among team members.

Develop and/or provide product/service (EN:028) (ON)

Develop a product/service

Use creative problem-solving in business activities/decisions (EN:029) (ON)

Use creative problem-solving in business activities/decisions

Explain the impact of resource productivity on venture success (EN:030) (ON)

Definition/Explain:

Resource productivity is a key factor in venture success as it helps maximize efficiency, reduce waste, and improve profitability. Effective management of resources can give businesses a competitive advantage and help them achieve their goals.

Create processes for ongoing opportunity recognition (EN:031) (ON)

Definition:

Develop a system for regularly scanning internal and external environments, attending industry events, staying informed on industry news, and soliciting feedback from customers and employees to identify new opportunities for growth and innovation.

Explain:

Continuous opportunity recognition is crucial for entrepreneurs to adapt to changing market conditions and stay ahead of competitors.

Develop a plan to invest resources into improving current products or creating new ones (EN:032)(ON)

Definition:

This involves creating a detailed strategy to allocate resources toward enhancing existing products or developing new ones that can meet market needs and demands.

Adapt to changes in business environment (EN:033) (ON)

Definition:

Examples of changes to the business environment include economic fluctuations, technological advancements, regulatory changes, changes in consumer behavior and preferences, and shifts in market trends.

\n Explain:

Adapting to changes will allow the business to prosper.

Explain the need for continuation planning (EN:034) (ON)

Definition:

A continuation plan, also known as a business continuity plan, is a document that outlines procedures and strategies to ensure an organization can continue to operate in the event of a significant disruption or disaster.

Explain:

Continuation planning is crucial to ensure business survival in case of unexpected events such as natural disasters or sudden market changes, and to ensure smooth transition during changes in leadership or ownership.

Describe methods of venture harvesting (EN:035) (ON)

Definition:

Venture harvesting refers to the methods of exiting or selling a business, such as through an initial public offering, merger or acquisition, or management buyout.

Explain:

Venture harvesting is important for entrepreneurs as it helps to maximize returns on their investment, allows them to exit the venture when they desire, and helps to finance new ventures.

Evaluate options for continued venture involvement (EN:036) (ON)

Definition:

Venture involvement refers to the degree to which an entrepreneur or investor is actively engaged in the operations of a business or investment. It can include activities such as management, decision-making, financial investment, and strategic planning.

Explain:

Assessing potential for growth/profit, personal/professional goals and business needs helps entrepreneurs decide to invest in or harvest a venture.

Develop exit strategies (EN:037) (ON)

Definition:

Exit strategies are methods or plans for investors or entrepreneurs to exit or liquidate their investment or ownership in a company. Some common exit strategies include:

• Selling the company to another entity
• Conducting an initial public offering (IPO): Shareholders take control
• A management or leveraged buyout
• Merging with another company
• Liquidating assets
• Shutting down the business.

Explain:

Exit strategies are necessary to provide entrepreneurs with a planned and effective way to leave their venture and maximize returns while mitigating risk.

Obtain insurance coverage (FI:082) (ON)

Definition:

Insurance in business is a contractual arrangement in which the insurer agrees to compensate the insured for losses incurred due to covered events, in exchange for a premium paid by the insured.

Explain:

Insurance is useful for businesses because it helps to mitigate financial risks associated with unexpected events such as property damage, liability claims, and employee injuries. By paying premiums, businesses transfer the risk of these events to insurance companies, which can help to protect their financial stability and assets.

Explain the concept of accounting (FI:085) (CS)

Definition:

Accounting is the process of recording, analyzing, and summarizing financial transactions to provide information that is useful in making business decisions.

Explain:

Accounting is important in providing financial information to business owners to make informed decisions, comply with legal requirements, and evaluate the financial health of the business. It helps to track income and expenses, manage cash flow, and assess profitability.

Explain the nature of balance sheets (FI:093) (SP)

Definition:

A balance sheet is a financial statement that reports a company's assets, liabilities, and equity at a specific point in time. The balance sheet provides a snapshot of the company's financial position and helps to assess its liquidity and solvency.

Explain:

Balance sheets provide a snapshot of a company's financial health by showing its assets, liabilities, and equity. They help investors and analysts evaluate a company's financial position and make informed decisions.

Describe the nature of income statements (FI:094) (SP)

Definition:

An income statement is a financial statement that reports a company's revenue, expenses, and net income over a specific period of time, typically a quarter or a year.

Explain:

An income statement is important because it provides a snapshot of a business's profitability over a specific period by showing the revenues earned and expenses incurred, helping to evaluate financial performance and make informed decisions.

Prepare cash flow statements (FI:092) (MN)

Definition:

A cash flow statement is a financial statement that tracks cash inflows and outflows in a business over a period of time. It shows the sources and uses of cash, which helps businesses to manage their liquidity and make informed financial decisions.

\n Explain:

Cash flow statements are important financial statements that provide a detailed picture of the inflows and outflows of cash in a business. They help businesses monitor their cash position, identify potential cash flow problems, and make informed decisions to manage their cash resources effectively.

Explain the purposes and importance of obtaining business credit (FI:023) (ON)

Definition:

The purpose of obtaining business credit is to secure lines of credit, lease equipment, finance a company vehicle, and obtain business loans and credit cards without putting personal credit at risk.

Explain:

It is important because it gives unique financial advantages in the market place.

Analyze critical banking relationships (FI:039) (ON)

Definition:

Critical banking relationships refer to the close relationships that a business develops with its banking partners, such as lenders, financial advisors, and other financial service providers, in order to support its financial activities and achieve its business objectives.

Explain:

Critical banking relationships are important for entrepreneurs to secure financing, manage cash flow, and build credibility with lenders, ultimately supporting the growth and success of their venture.

Make critical decisions regarding acceptance of bank cards (FI:040) (ON)

Define:

Bank cards are plastic cards issued by banks enabling customers to withdraw money at an automated teller machine. Anything from an ATM card to a debit card.

Explain:

Critical banking relationships are important for securing funding, managing cash flow, and building a strong financial reputation, which can lead to better terms and opportunities for growth.

Determine financing needed for business operations (FI:043) (ON)

Definition:

• Loans
• Personal Investment
• Crowdfunding
• Selling Stocks

Explain:

These will help keep the business operating.

Identify risks associated with obtaining business credit (FI:041) (ON)

Definition:

• High-interest rates
• Hidden fees
• Potential damage to credit score

Explain sources of financial assistance (FI:031) (ON)

Definition:

Sources of financial assistance include crowdfunding, angel investors, bank loans, government grants, personal financing, stocks/shareholders.

Explain loan evaluation criteria used by lending institutions (FI:034) (ON)

Definition:

Lending institutions use various criteria to evaluate loan applications, including credit history, income, debt-to-income ratio, collateral, and loan purpose. They also consider the business's financial statements, industry trends, and the borrower's repayment capacity.

\n Explain:

Understanding the loan evaluation criteria used by lending institutions is important for entrepreneurs who are seeking financing for their businesses because it helps them prepare a strong loan application that meets the lender's requirements and increases their chances of approval.

Complete loan application package (FI:033) (ON)

Definition:

A complete loan application package typically includes the loan application form, business plan, financial statements, personal financial statements, business tax returns, personal tax returns, legal documentation, collateral information, and any other required documents.

Describe the nature of cost/benefit analysis (FI:357) (MN)

Definition:

A cost/benefit analysis is a process of evaluating the potential costs and potential benefits of a project or decision, in order to determine if the benefits outweigh the costs.

Explain:

The importance of a cost/benefit analysis is that it helps businesses determine the financial viability of a proposed project or investment by comparing the costs associated with it to the potential benefits that it could bring, allowing them to make informed decisions about resource allocation.

Determine relationships among total revenue, marginal revenue, output, and profit (FI:358) (MN)

Definition:

Total revenue is total sales, marginal is what is the per unit sale so how much we make per unit or per additional sale, output is total production and profit is our green sales.

Develop company's/department's budget (FI:099) (MN)

Develop company's/department's budget

Forecast sales (FI:096) (MN)

Forecast sales

Calculate financial ratios (FI:097) (MN)

Definition:

• Quick ratio = (cash + cash equivalents + short-term investments + current receivables) / current liabilities
• Current ratio = current assets / current liabilities
• Working capital ratio = current assets - current liabilities
• Debt to equity ratio = total liabilities / total equity
• Equity ratio = total equity / total assets
• Debt ratio = total liabilities / total assets
• Asset turnover ratio = net sales / average total assets
• Inventory turnover ratio = cost of goods sold / average inventory
• Gross margin ratio = gross margin / net sales
• Profit margin ratio = net income / net sales
• Return on assets ratio = net income / average total assets
• Return on capital employed = net operating profit / employed capital
• Return on equity = net income / shareholder's equity
• Price earnings ratio = market value price per share / earnings per share
• Dividend payout ratio = total dividends / net income
• Debt service coverage ratio = operating income / total debt service costs