ENT Exam 1

Entrepreneur

someone who creates a new business in the face of risk/uncertainty for the purpose of achieving profit/growth by identifying significant opportunities and assembling the necessary resources to capitalize on them

Benefits on entrepreneurship

-create your own destiny
-make a difference
-reach full potential
-reap impressive profits
-contribute to society and be recognized for your efforts
-enjoy what you do and have fun

Drawbacks of entrepreneurship

-uncertainty of income
-risk of losing entire investment
-long hours and hard work
-lower quality of life until business gets established
-high levels of stress
-complete responsibility
-discouragement

Why are we experiencing an entrepreneurial boom?

-entrepreneurs as heroes
-entrepreneurial education
-demographic factors
-shift to a service economy
-technology advancements
-independent lifestyle
-outsourcing
-the internet, cloud computing and mobile marketing
-international opportunities

Small business

business that employs fewer than 100 people

Diversity of entrepreneurship

young people, women, minority enterprises, immigrants, part-time workers, home-based businesses, family business, copreneurs, corporate castoffs, encore entrepreneurs, retiring baby boomers

Failure

a natural part of the creative process

How to avoid failure

-know your business in depth
-build a viable business model and test it
-use lean start-up principles
-know when to pivot
-develop a solid business plan
-manage financial resources
-understand financial statements
-build the right team
-learn to manage people effectively
-set business apart from competitors
-maintain positive attitude

Left brain

-Deals with language, logic, and symbols
-Narrowly focused and systematic
-Guided by linear, vertical thought process progressing from one logical conclusion to the next

Right brain

-Deals with emotions, intuition, and spatial functions
-Lateral thinking; unsystematic
-Process based around considering a problem from all sides; jumping into it at different points

Entrepreneur problem solving skills

1. Using new technology to produce something new
2. Using existing technology to produce something new
3. Using existing technology to produce old things in new ways
4. Finding a new source of resources for production
5. Developing a new market for an existing product

Creativity

the ability to develop new ideas and to discover new ways of looking at problems and opportunities

Innovation

the ability to apply creative solutions to those problems and opportunities to enhance or to enrich people's lives

barriers to creativity

-searching for the one "right" answer
-focusing on "being logical"
-blindly following the rules
-constantly being practical
-viewing laughter/play as frivolous
-becoming overly specialized
-avoiding ambiguity
-fearing looking foolish
-fearing mistakes/failure
-believing "I'm not creative"

thinking creatively

-Is there a better way?
-challenge customer, routine, tradition
-think and reflect

How to promote creativity within yourself and for your employees

-include creativity as a core company value and make it and integral part of your company's culture
-embrace diversity
-incorporate fun into the work environment
-view problems as opportunities
-encourage curiosity
-provide support

The Creative Process

1. Preparation
-Educate yourself
2. Investigation
-Observe and understand a problem's basic components
3. Transformation
-see the similarities and differences among data/events
4. Incubation
-walk away from the problem and engage in routine tasks
5. Illumination
-when the light build goes off
6. Verification
-activities designed to verify that the new idea will work and is practical to implement
7. Implementation
-transform the idea into reality

Creative process techniques

-brainstorming
-mind mapping
-force field
-TRIZ
-rapid prototyping

Identify an opportunity

-attractive to customers
-will work in the environment
-can be executed in a reasonable time frame
-have the skills to undertake

Evaluating opportunities

-Take what you know from work experiences​
-Keep up with industry trends​
-Exchange ideas internally and externally​
-Listen to your team, customers, friends, and family​
-Weigh costs and benefits (including opp. costs)​

Utility Patent

exclusive right to make, use, and sell an invention
lasts 20 years
very expensive

Design Patent

protects new, original changes in the design of an existing product that enhances its sales
lasts 14 years
very expensive

trademark

protects any distinctive word, phrase, symbol, design, name, logo, slogan, or trade dress that a company uses to identify the origin of a product or to distinguish it from other goods on the market
renewable every 10 years
$1000-$2500

Service mark

protects any distinctive word, phrase, symbol, design, name, logo, slogan, or trade dress that a company uses to identify the source of a service rather than a product
renewable every 10 years
$1000-$2500

Copyright

protects original works of authorship, such as literary, dramatic musical, and artistic work
lasts the life of the author or creator plus 70 years
$140-$200

Idea assessment

1. Customers
2. Offering
3. Value proposition
4. Core competencies
5. People

feasibility analysis

an analysis of the viability of a business idea an industry and market analysis, the product or service analysis, a financial analysis, and an entrepreneur analysis

Components of a feasibility analysis

1. an industry and market analysis
2. the product or service analysis
3. a financial analysis
4. an entrepreneur analysis

Potter's 5 Forces

1. Rivalry
2. Bargaining Power of Suppliers
3. Bargaining Power of Buyer
4. Threat of Potential New Entrants
5. Threat of Substitutes

Macroenvironmental forces within an industry

Macroenvironment
- Sociocultural forces
-Technological forces
-Demographic forces
-Global forces
-Political & Legal Forces
-Economic forces

primary market research

done by collecting data yourself through surveys or interviews with your target market

secondary market research

uses existing data that you can find online or in research reports and books

business model elements

-customer segments
-value proposition
-customer relationships
-channels
-key activities
-key resources
-key partners
-revenue streams
-cost structure

sole proprietorship

-a business owned and managed by one individual
-advantages: simple to create, least costly ownership to begin, profit incentive, total decision-making authority, no special legal restrictions, easy to discontinue
-disadvantages: unlimited personal liability, limited skills and capabilities, feelings of isolation, limited access to capital, lack of continuity of the business

Partnership

-an association of two or more people who co-own a business for the purpose of making a profit.
-advantages: easy to establish, complementary skills, division of profits, larger pool of capital. ability to attract limited partners, minimal government regulation, flexibility, taxation
-disadvantages: unlimited Liability of at Least One Partner, Capital Accumulation, Difficulty in Disposing of Partnership Interest, Potential for Personality and Authority Conflicts, Partners are Bound by the Law of Agency,

partnership agreement

an association of two or more people who co-own a business for the purpose of making a profit.

general partners

partners who have unlimited liability for the partnership’s debts and usually take an active role in managing the business

limited partners

partners who are financial investors in a partnership, cannot participate in the day-to-day management of a company, and have limited liability for the partnership’s debts

silent partners

partners who are not active in a business but generally are known to be members of the partnership

dormant partners

partners who are neither active nor generally known to be members of the partnership

limited liability partnerships

a partnership in which all partners in the business are limited partners, giving them the advantage of limited liability for the partnership's debts

corporation

a separate legal entity apart from its owners that receives the right to exist from the state in which it is incorporated

closely held corporation

a corporation whose shares are controlled by a relatively small number of people, often family members, friends, or employees

publicly held corporation

a corporation that has a large number of shareholders and whose stock usually is traded on one of the large stock exchanges

C Corporation

advantages: limited liability to stockholders, attracting capital, indefinite continuance, transferable ownership
disadvantages: expensive/a lot of time, double taxation, diminished managerial incentives, loss of control

S Corporation

Firm meets 6 criteria:
-must be domestic US corporation
-cannot have a nonresident alien as shareholder
-can only issue one class of common stock (right to dividends)
-must limit shareholders to individuals, estates, certain trusts
-cannot have more than 100 shareholders
-cannot be an ineligible corporation
advantages: being taxed as a partnership (only taxed at individual rate)

limited liability company

-a form of ownership that, like an S corporation, is a cross between a partnership and a corporation; it is not subject to the restrictions imposed on S corporations
-advantages:flexible, limited personal liability, eliminates double taxation
-disadvantages: can be expensive, may incur annual fees from states, cost of benefits is not tax deductible, not well-suited to moving an IPO

macrosystems

- Sociocultural systems
-Technological systems
-Demographic systems
-Global systems
-Political & Legal systems
-Economic systems

Macrosystems evolving

Macro systems can strain what entrepreneurs can do, but entrepreneurs innovations can push back on those systems, leading to both better lives and better systems