Business Entrepreneurship Mid-Term

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1. Definition of Entrepreneurship

• Someone who perceives an opportunity and creates an organization to pursue it

2. Concept of Apprenticeship

• Learning a trade/business under a skilled mentor

• Gain hands-on experience and gradual responsibility

• Build credibility and networks

• Family business: learn from the ground up, then assume leadership

3. Common Learnable Characteristics of Successful Entrepreneurs

• Perseverance

• Initiative

• Goal orientation

• Adaptability / learning from mistakes

• Self-confidence

4. Most Common Types of Entrepreneurs

• Freedom Fighters – seek independence, small stable business, family focus (e.g., mompreneurs, consultants)

• Empire Builders – achievement/power driven, high-growth businesses (e.g., Terry Matthews, Guy Laliberté)

• Solo / Self-Employed – tradespeople, freelancers, professionals

• Team Builders – grow businesses through delegation

• Innovators – create products/technologies

• Pattern Multipliers – replicate successful business models (franchises)

• Acquirers – buy existing businesses, fix/improve, sell for profit

5. Advantages and Disadvantages of Buying a Franchised Business

• Proven business model

• Brand recognition

• Training & support

• Lower failure rates

Disadvantages of Franchising

• High start-up fees & royalties

• Limited creativity & control

• Risk of franchise termination

6. Ethical Challenges in Business

Ask yourself:

1. Is it legal?

2. Is it fair?

3. How will it affect stakeholders?

7. Business Idea vs. Viable Business Opportunity

• Idea – concept or thought

• Opportunity – tested, realistic, profitable, market fit

8. Ideal Business Attributes

• Recognized market / perceived need

• Dependable supply / distribution

• Minimal regulation or labor requirements

• Frequent purchases / 100% gross margin

• Protected from obsolescence / perishable risks

• Strong publicity / advance-paying customers

• Proprietary rights

9. Long-Term Expectations

• Profitable businesses – steady cash flow, capital investment

• High-growth businesses – rare, tech-driven, media-covered

10. Reasons for Selling a Business

Retirement, relocation, illness, family/marital reasons, better opportunities
Warning reasons: cash flow problems, depressed market, worn equipment, key employees leaving, competition

11. Pros/Cons/Options of Buying an Existing Business

• Established customer base & location

• Developed banking/supplier relationships

• Immediate cash flow

• Track record of success

Cons of Buying a Business

• Old buildings or equipment

• Poor employee relations/performance

• Inventory or accounts receivable issues

• Undesirable location

• Limited flexibility

Buying Options

1. Purchase assets

2. Purchase shares

Goodwill

• Purchase price minus tangible assets

• Pay for: brand loyalty, reputation, location

• Don’t pay for: owner-specific goodwill

12. Steps to Take Over a Family Business

• Express interest

• Gain external experience & education

• Accept responsibility for personal development

• Establish networks (mentors, suppliers, peers, family)

• Avoid family conflicts

13. Potential Sources of Business Ideas

• Personal experience/hobbies

• Trends or market gaps

• Solving problems

• Improving existing products/services

14. Difficulties in Family Business Succession

• Control, fairness, equity among siblings

• Credibility with founders

• Family dynamics/conflicts

• Relinquishing control

15. Reasons Small Businesses Fail

• Poor cash flow or debt management

• Weak hiring & performance monitoring

• Poor market research or planning

• Failure to innovate

• Poor communication & inventory management

• Trying to do everything alone

16. BOSM Framework (Business Opportunity Screening Model)

• Market: growing, accessible, defined customers

• Innovation: solves a problem, technological advantage, first to market potential

• People: skilled, compatible management team, industry experience

• Investment: high ROI, predictable cash flow, long-term income

17. Types of Business Ownership

• Sole Proprietorship: one owner, lifestyle business, simple

• Partnership: shared ownership, revenue, risk

• Small Business: <100 employees, up-front capital investment

• Franchise: buy rights to an existing business, lower failure, support provided