Entrepreneurship and Business Fundamentals

Entrepreneurial Mindset

A set of skills enabling people to identify and act on opportunities.

Initiative (Trait)

Taking action proactively without needing to be told what to do.

Opportunity Recognition (Trait)

Identifying unmet needs in the market that can be turned into a business.

Problem Solving (Trait)

Finding creative and effective solutions to obstacles and challenges.

Risk Taking (Trait)

Willingness to invest resources in ventures with uncertain outcomes.

Organization & Execution (Trait)

Coordinating resources and implementing plans to achieve goals.

Adaptability (Trait)

Adjusting strategies and actions quickly in response to changing environments.

Achievement Orientation (Trait)

A strong drive to succeed and outperform competitors.

Gig Economy

A labor economy characterized by short-term, independent jobs.

Gig Economy Pros

Offers flexibility and diverse job opportunities.

Gig Economy Cons

Causes lack of job security, limited benefits, and income instability.

5 Societal Impacts of Entrepreneurs

Job creation, innovation, economic growth, cool stuff, and social support.

Business Stakeholders

Customers, employees, suppliers, community, and government.

Social Entrepreneurship

Starting a business with the goal of solving a societal issue.

ESG

UN-guided policies to steer businesses toward an ethical future.

E in ESG

Environment: How a company affects nature (e.g., recycling, energy use).

S in ESG

Social: How a company treats people (e.g., fair wages, safety).

G in ESG

Governance: How a company is managed (e.g., ethical leadership, transparency).

ESG Challenge: Measurement

Different rating agencies provide inconsistent ESG scores.

Greenwashing

Using superficial terms to trick consumers into believing a company is eco-friendly.

Equable vs. Expert Governance

Shareholder governance pushes are futile as board members usually have more experience.

DEI (Diversity, Equity, Inclusion)

Achieving a diverse workforce through strictly meritocratic hiring.

Product Life Cycle (Ethical)

How ethically a product is made from creation to disposal.

Ethical Supply Chains

The assurance that all products and materials are sourced ethically.

Product Transparency

Providing clear, honest information about all aspects of a product.

Idea vs. Opportunity

An idea is a possibility; an opportunity is validated against real-world conditions.

Trend Intersection Analysis

The concept that the best business opportunities exist between different worlds.

Scenario Planning

Planning best, middle, and worst-case scenarios for a company's future.

7 Steps to Better Creativity

Define problem, saturation, divergent thinking, incubation, convergent thinking, decision, feedback.

Porter's Five Forces

Rivalry, supplier power, buyer power, threat of new entrants, threat of substitutes.

Cost Leadership Strategy

Being the lowest-cost producer in an industry.

Focus Strategy

Selecting and targeting a specific, narrow customer segment.

Differentiation Strategy

Making products or services unique to stand out from competitors.

Business Model Canvas (BMC)

A 9-segment model grouped into infrastructure, financial, customer, and value proposition clusters.

Sustainable Competitive Advantage

A long-term edge that cannot be easily replicated by competitors.

Unsustainable Competitive Advantage

A temporary market advantage that a company cannot maintain long-term.

Economies of Scale

Increased production leads to lower per-unit costs.

Diseconomies of Scale

Increased production leads to higher per-unit costs.

Pareto's Law (80/20 Rule)

The principle that 80% of revenue comes from 20% of inventory.

ABC Method: A Items

Tight control, forecast-based reordering, detailed records, low safety stock, frequent monitoring.

ABC Method: B Items

Moderate control, EOQ-based reordering, periodic inspections, moderate safety stock.

ABC Method: C Items

Loose control, reorder when low, no records, high safety stock, few checks.

Just-In-Time (JIT)

Receiving inventory materials only as they are needed in the production process.

Carrying Costs

The financial cost of holding and storing unsold inventory.

Lead Time

The time span between placing an order and receiving the product.

Safety Stock

Extra inventory held as a buffer against unexpected surges in demand.

Re-Order Point

The specific inventory level that triggers an order for replenishment.

Barriers to Entry

Factors that make it difficult for new businesses to enter a market.

Market Share

The percentage of total market revenue controlled by a specific product.

Cost-Plus Pricing

Adding a standard markup margin to the cost of a product.

Penetration Pricing

Pricing low to enter a competitive market and win market share.

Skimming Pricing

Charging high prices initially when there is no competition.

Psychological Pricing

Pricing items slightly below round numbers (e.g., $295.95 instead of $300).

Loss Leader Pricing

Selling a product at or below cost to attract customers for other purchases.

Balance Sheet Equation

Assets = Liabilities + Owner's Equity.

Fixed Costs vs. Variable Costs

Fixed costs do not vary with production (e.g., rent); variable costs do.

Debt Financing

Temporary funding that must be paid back, such as bank loans.

Equity Financing

Raising capital by selling partial ownership to investors like VCs or angels.

Income Statement

A financial report showing revenue, expenses, and net profit over a specific timeframe.

Accounts Payable vs. Receivable

Payable is money you owe to suppliers; receivable is money clients owe you.

Angel Investors vs. Venture Capitalists (VCs)

Angels invest personal wealth in small startups; VCs pool institutional funds for high-growth firms.

Breakeven Point Formula

Fixed Costs / (Selling Price per Unit - Variable Cost per Unit).

Cash Flow

The movement of cash in and out of a business.

IPO (Initial Public Offering)

When a private company sells stock to the public for the first time.

Profit Margin

The amount of net profit earned for every dollar of revenue generated.

Follow the Competition Pricing

Basing your pricing on the competition