Principles Of Entrepreneurship

Entrepreneur/Entrepreneurship

-Always looking for the next or new opportunity

-Have innovative (unique) products and services

-Willing to take unknown risks

Small Business Owners

-Owned by 1 person or a small group of people

-Not interested in new opportunities

-Key objective is to generate profit

Franchise

-Owners license their operations, products, and services for a royalty fee.

-Higher up front cost

Examples: Disney, Isa’s steak ‘n shake, training and guidance

S-Corporation

"Spare me; help me with my taxes"

Lower tax rate that prevents the company from being double-taxed

C-Corporation

“Come get me, double tax me”

Best for international business even with being double taxed.

LLC

“Aht Aht, I’m not liable!”

Idea, for a single owner seeking low risk.

Sole Proprietorship

“One Soul, I’m on my own; Everything falls on me”

Easy to create buy come with unlimited liability

( This means you can be responsible to an uncapped amount).

Non-Profit

“No owner, No Taxes”

No ownership, no US federal taxes.

Partnership

More than one person shared financial banking,

Founder

Creates the company. It is the only position that will never change.

Chief Financial Officer (CFO)

Oversees company finances

Chief Executive Officer (CEO)

Highest ranking person in a company. Reports to the board of directors.

Chief Operating Officer (COO)

Overseas daily operations and administrative functions.

Chief Technology Officer (CTO)

Oversees the technology in a company and makes technology related decisions.

Stakeholder

Had vested interest in the success of the company.

StoCkhOldEr (CEO)

Owns stocks in the company, CAN REMOVE CEO

Hourly Wage

A payment for the hours a person have worked. * This compensation is affected by minimum wage laws. (Example: Maya makes $13 an hour, which is minimum wage in the state of Florida.)

Piece Work

Employees are compensated for

the number of units they produce. (Example:

jewelry makers will often get paid for each

piece of jewelry they create.)

Salary

A fixed payment amount for each pay period. (Example: Nicole makes $154,000 a year, so her bi-weekly check is $5,923.08.)

Equity

is non-cash compensation commonly

offered to employees in place of cash or in

addition to a lower salary. (Example: An

employee may be given a low salary with a

free car, or stocks in the company.)

Commission

A fee paid for completing a task and usually found in sales positions. (Example: Mark gets $50 dollars for every car he sales to a customer.)

"E" double S, "T" "M" "P", Exit Plan! Exit Plan!!

Existence

Survival

Success

Take-off

Maturity (or resource maturity)

Pivot or persist

Exit plan, Exit Plan

Existence

Business is up and running

Survival

-Reliable number of customers to stay open

(starting to generate income).

Success

Owners look for avenues to leverage the company.

Take Off

-Owners decide if they want a big company and decide how to

finance it.(Owner decide if they want to sell the company)

Maturity

The owner has separated themselves financially and

operationally.

Pivot Or Persist

–Persist with current strategy or pivot new strategy

Exit Plan

Owner makes profit from selling their company

Empathize

Learn about the customer's challenges. "Putting yourself in the customer's shoes".

Define

Analyze observations and define the core problem as a problem statement.

Ideate

Develop Solutions ideas and created innovative ideas.

Prototype

Th Minimum Viable Product (MVP) is created and addressed the core problem. (Used to test the problem solutions).

Test

Review and refine the product. (Identify and additional problems).

EveryDay I Practice Typing

1.Empathize

2, Define

3. Ideate

4. Prototype

5. Test

Self Reliance

Trusting yourself, your goals and the process. You cannot

rely on others.

Forward Thinking Mentality

Thinking about and planning for the

future.

Opportunity Recognition

The way you approach new ideas and

ventures.

Initiative

Turning an idea into action. Generate new ideas!

Resiliency

Adapting to change, loss, and disappointment.

Grit

Tackling goals with COURAGE and PERSERVERANCE.

Risk Tolerance

Entrepreneurs face multiple risks because they are risk

takers.

Growth Mindset

Believing that you can accomplish anything with hard

work

Critical Thinking

Solving problems by considering different

solutions.

Creativity and Innovation

Entrepreneurs can think outside the box!

(They don’t look to do things the same way as everyone else.)

Collaboration

Working with others towards a common goal.

Problem Solving

Coming up with solutions to problems.

Personal Agency

The ability to work toward achieving a goal without

someone directing or making sure you get it done.

Ethical Practices

Making decisions based on morals. Doing the right

thing!

Social Responsibilities

Preventing unethical (bad) behavior that can harm your business or community

Entrepreneurship Benefits

• Working with like-minded people

• Setting your own hours

Entrepreneurship Drawbacks

• Not a promised paycheck

• Unpredictable hours

Financial Risk

Bankruptcy

Environmental Risk

• Natural disaster

• Poor food supply

• Inflation

Political Risk/ Other Risk

• Increased tax rate

• Large tariffs

Other:

• Direct or indirect competition

• Reputation

Business Plan

• is a written document that details how a business will be structured,

managed, run, and grown.

• A strategic plan that details the short and long-term goals of the business

• Used to show investors how they will see a return on their investment • and can be the dealmaker or breaker with them wanting to invest in your company

• 10-100 pages

• Highly text based

• Used to get investor buy-in

Pitch Deck

is a brief overview of your business plan. The purpose of a pitch deck is to attract potential investors, get them excited about your idea, and hopefully get another meeting with them. • Includes products and services provided

• Funding needed

• Financial projections

• 10-20 slides

• Highly visual

• Used to get investor’s attention

Lean Canvas

A short written document discussing your business plan.

• one page long

• Discuss key information

• It covers problems, solutions, value propositions, marketing channels, key metrics,

costs, and revenue. • It is used to brainstorm without creating a complete business plan

• It allows you to gather feedback from others (since it is short)

Executive Summary

-should briefly

explain everything in a business plan in two

pages.

 The most important section because it is

read first!

 Establishes the first impression of a

business.

 Summarizes intended accomplishments

 Includes Products and services sold

 Financial outlook

 Funding needed

 Business goals

 Business’s achievements

Marketing Plan

 Identifies market size using market analysis.

 Identify competitors along with their strengths and weaknesses.

 Describe potential customers and a plan to reach them

Organizational Structure

An overview of employees within the business.

 Highlight team roles and experience

 Include roles that are not filled yet

Financial Plan

 Should be directed towards investors and lenders

 Include Budget

 12-month profit and loss projection

 Cash flow statements

 Breakeven analysis

 Capital requirements

Pitch Deck

A Pitch Deck is presented in the form of a slide presentation.

 10-12 slides long

 The slides should be informative and used to excite your potential investors.

Copyright

“Can’t copy my song” (used to protect songs, art, creative arts, and literature)

Patent

“No Cappin, my invention!” (used to protect Inventions and designs) – You will need to

pay a Royalty Fee to use someone’s inventions.

Trademark

“Mark my logo” (used to protect logos and company names)

Trade Secret

“Secret Formula” ( used to protect recipes and company processes) – Business will

often make you sign a confidentiality agreement or an NDA( Non-disclosure agreement).

*Any time you want to use any one else’s work, you MUST ask for Authorization or Permission!!!!

Remember, for copyright and Trademark, you must sign a licensing agreement and pay a licensing

fee to use someone else’s work.

Target Market

The customer group to which a company markets its products and/or services.

 Companies cannot market to everyone

 A target market doesn’t exclude those that don’t fit the specific criteria, it just identifies the market

from which they’re likely to see the most sales.

Value Proposition

is a statement that explains to customers why they should do business with your company.

 It should convey why your company’s products or services are superior to those of your competitors.

 Determining your product or services’ value may help you determine its price for it.

Pricing

The payment amounts a company charges for the product or service they sell.

Primary Data

 Firsthand research (surveys, focus groups, interviews, and statistical data).

 It is the most accurate and reliable in

comparison to secondary data.

Secondary Data

 Commonly an interpretation of primary data, so it contains personal bias (opinion).

 It includes data collected by other people, articles from

the internet, company newsletters, information collected

through the census, and academic journals

Creative Commons License (CC)

(Circle with two C’s in it)

a type of license that allows copyright owners to grant permission for others to use their creative works under specified conditions.

BY (Circle with a person in it)

Users can use the license work but must give the creator credit.

SA (Backwards C in a circle)

Users can use, share, adapt, and build on the work, but must give the creator credit

NC (Money sign with a X across in a circle)

Users can use, distribute, remix, adapt, and build on the work for non-commercial purposes only.

ND (Circle with an equal sign in it)

No derivatives or adaptations of the work are permitted. Users can copy and distribute the work as it is, but cannot modify, remix or build on it in any way.

Direct Competitors

 Businesses that sell the same or similar

products or services as your company.

Example: McDonalds sells sandwiches,

wraps, and nuggets; so BurgerKing would

be considered a direct competitor

because they sells the same items.

Indirect Competitors

 Businesses that sell products that are

different from yours but are similar enough

that their products could satisfy the same

need.

Example: Aaliyah wanted something sweet,

but the ice cream shop she normally goes to

is closed. She then decides to go to a

bakery that sells desserts.

The bakery is an indirect competitor of the

ice cream shop because they both can fulfill

a sweet craving.

SWOT Analysis (Strength)

Strength- Things a company does well. Ex.) Skilled Employees

SWOT Analysis (Weakness)

Things a company lack and is holding the company back. Ex) Limited Resources, Financial Limitations

SWOT Analysis (Opportunities)

Anything that can increase sales or grow a company.

Example.) New Customers, Donation/ Grants

SWOT Analysis (Threats)

Anything that is a threats or could harm the success of a company. Ex.) Competitors

Behavioral

Customer's behaviors that help understand their buying habits.

* Anticipate a customer’s needs

Geographical

Provides customers locations.

Demographic

Statistical data about customers. This includes age, gender, ethnicity, and income)

Psychographic

Information on customer’s values, beliefs, personality traits, and motivations.

Customer’s view on the world.

Customer Acquisition Cost (CAC)

The customer Acquisition cost is used to help the company determine if they are profitable.

CAC Formula

Marketing Expenses + Sale Expenses/ Number of new customers for the period.

Customer Retention Rate

The customer Retention rate gives owners an idea of how many customers continually shop with the company. In other words, how many customers stay loyal.

Customer Retention Rate Formula (Everyone Needs Snacks!)

[(E-N)/S] x 100

E- The number of customers at the END of the period

N- The. umber of NEW customers during the period.

S-The number of customers at the START of the period.

Extra info.) Any decimal .5 or HIGHER, round up.

Executive Summary

Is an overview and summary of a marketing plan.

(This is used because not everyone will read the marketing plan in its entirety).

The 4 P’s

Product, Price, Place, and Promotion

The Sales Process

A sales process consists of repeatable steps that a salesperson can use to sell products or services. This process helps the sales team find clients, close sales, and retain customers

Prospecting

-Potential customers be identified.

Preparation

-Developing a sales presentation.

Approach

Potential clients are contacted.

Presentation

A presentation is shown to a customer.

Objection

Addresses customer concerns.

Closing

Customer decide to purchase a product.