Knowt
Untitled Flashcards Set
ibe methods used to protect intellectual property:
(BL:051)
Patents - applies to designs, inventions, etc.
Trademarks - applies to words, phrases, symbols/logos, etc.
Trade secrets - applies to private information, practices, techniques, etc., that are not publicly known
Copyright - the right to copy or reproduce a product
Describe legal issues affecting businesses:
(BL:001)
Wrong Termination Lawsuits - the former employee sues if (s)he believes (s)he was unjustly fired
Harassment/Discrimination Cases - employee/customer was harassed or treated inferiorly due to demographic differences
Immigration Audits - requirement of businesses to file Form 1-9 in order to verify employee eligibility
IP Issues - disputes over ownership of trademarkes, copyrights, and/or patents
Dissatisfied Customer s - consumers feel misled or deceived
Define business tort:
(BL:069)
A business tort is a civic wrong committed against an organization that results in harm to its assets.
Types of Torts:
Intentional Torts - occurs when an individual/entity purposefully engages in conduct that harms another party.
Negligence - occurs when an individual/entity is careless and fails to provide a duty owed to another person. These torts are unintentional, but still result in harm.
Strict Liability - occurs in cases where responsibility for an injury can be imposed on the wrongdoer without proof of negligence or direct fault.
Describe the nature of legally binding contracts:
(BL:002)
A contract is an agreement between two or more parties to do, or refrain from doing, a certain action.
Components of a contract:
Offer - one party must make a clearly stated offer to another party
Acceptance - the offer must be accepted by the other party/parties
Consideration - something of value must be promised in echange for a specific action or non-action
Explain the nature of human resources regulations:
(BL:007)
Human resources regulations exist to provide a safeguard for employees so that they are getting the rights and treatment that they deserve.
Explain the nature of workplace regulations (including OSHA, ADA):
(BL:008)
The nature of workplace regulations are to provide consistency to the structure and guidelines of a company, and to make sure that both the company and its employees are protected against lawsuits.
Explain types of business ownership:
(BL:003)
Sole proprietorship - business is owned/run by one individual who receives all profits and is responsible for all loss or debt
Partnership - business is owned/run by two or more parties who agree to divide the profits, contribute resources, and share liability
Corporation - business is owned/run by multiple shareholders and often sells shares on the stock market. Allows for limited liability.
Limited Liability Company (LLC) - business is owned/run by multiple members (not shareholders) that are not personally liable for the company's losses or debts. Considered a hybrid between corporations and sole proprietorships.
Select form of business ownership:
(BL:006)
Cost of Start-up. ...
Control vs. ...
Profits—to Share or Not to Share. ...
Taxation. ...
Entrepreneurial Ability. ...
Risk Tolerance. ...
Financing. ...
Continuity and Transferability.
Explain the nature of tax regulations on business:
(BL:009)
The nature of tax regulations, or treasury regulations, on businesses are to pick up where the tax laws leave off.
Explain the nature of businesses' reporting requirements:
(BL:010)
Businesses' reporting requirements are meant to make sure that investors and regulators can evaluate a company's financial performance and business operations. Additionally, access to these reports are necessary for company transparency.
Develop strategies for legal/government compliance:
(BL:011)
Establish, evaluate, study, authorize, train, involve, ensure.
Prepare complex written reports.
(CO:009)
Step 1: Do Your Research. A well-planned report is a job half done. ...
Step 2: Create an Outline. ...
Step 3: Determine Formatting Guidelines. ...
Step 4: Think of an Engaging Title. ...
Step 5: Write the Introduction. ...
Step 6: Divide the Body of the Report into Sections. ...
Step 7: Choose Illustrations. ...
Step 8: Conclude Effectively.
- include KPIs, appropiate target market, and purpose when appropiate
Write proposals:
1. Research and outline
2. Title and table of contents
3. Executive summary
4. Problem and solution
5. Milestone and budget
6. Conclusion
(CO:062)
All proposals should be - compliant, compelling and complete.
an executive summary, company description, products and services, market analysis, marketing strategy, financials, and budget
Explain management's role in customer relations:
(CR:008)
Lead and motivate the team to ensure they're giving the best customer service possible, handle complaints and queries, and sort security issues.
Identify company's brand promise:
(CR:001)
Determine the company's goals and make educated business decisions by planning a strategic direction, marketing to the right people, and attracting the right employees.
Identify the impact of small business/entrepreneurship on market economies:
(EC:065)
Statistics have consistently shown that the creation of new businesses drives economic prosperity. It increases the competition of emerging sectors and inspires innovation. Small businesses are critical for economic growth and innovative capacity in many regions. Additionally, they add to job creation, economic growth, and poverty reduction.
Explain the concept of private enterprise:
(EC:009)
Private enterprises are businesses carried on for profit and not owned by government. The system discourages public ownership of business. This is the same as a free enterprise.
Identify factors affecting a business' profit:
(EC:010)
Sales Changes - changes in sales costs are affected by certain external factors (economic health, market stability, natural factors, etc.) and certain internal factors (marketing efforts, pricing, and available payment options)
Material Price Changes - changes in material pricing are often affected by certain external factors (political unrest, natural disasters, global supply issues)
Labor Price Changes - changes in labor pricing are often affected by factors such as insurance changes and the effectiveness of a company's human resource management.
Inventory Method Changes - inventory methods include FIFO (First-In, First-Out), LIFO (Last-In, Last-Out) and average cost
Determine factors affecting business risk:
(EC:011)
Internal Factors - pricing, employees, vendors, technological factors, physical equipment malfunctions, etc.
External Factors - economy, natural causes, political factors, etc.
Explain the concept of competition:
(EC:012)
Competition is the rivalry between companies selling similar products and services. It motivates companies to increase sales volume by utilizing the four components of marketing mix (price, product, promotion, place).
Determine the relationship between government and business:
(EC:008)
In a planned economy or market economy, the government controls the shaping of business activities in the country. Most countries allow for a large degree of private businesses while maintaining a strict regulation of certain aspects of the economy through legislative laws. Today's relationship between government and business is mainly a mixed economy (combines private and public enterprise).
Describe the nature of taxes:
(EC:072)
Taxes benefit the society and are used as instuments for attaining certain social objectives. Governments use taxes to either speed or slow economic growth.
Describe the concept of economies of scale:
(EC:077)
Economies of scale refer to reduced costs per unit that arise from increased total output of a product.
Exhibit cultural sensitivity:
(EI:033)
learn, be respectful, use inclusive language
Leverage personality types in business situations:
(EI:104)
Introverts - prefer to have time to think about their ideas, and generally need solitude and time to recharge after socializing. They can run out of energy quickly when put in group situations for too long.
Extroverts - prefer to generate ideas in a group setting and feel most energized during back and forth communication. They easily become bored when they cannot actively participate in a conversation.
Adapt management style to the personality type of others:
(EI:105)
Identify the strengths and weaknesses, as wel as needs and wants, of each personality type in business.
"Sell" ideas to others:
(EI:108)
Use persuasive language, good arguments, and focus on closing the deal.
Persuade others:
(EI:012)
Use persuasive language, pay attention to what the individual wants or needs, be personal.
Demonstrate negotiation skills:
(EI:062)
Compete (I Win- You Lose) ...
Accommodate (I Lose – You Win) ...
Avoid (I Lose – You Lose) ...
Compromise (I Lose / Win Some – You Lose / Win Some) ...
Collaborate (I Win – You Win)
communicate, collaborate, compromise, stay calm, and embrace change
Encourage team building:
(EI:044)
Use the 9 C's-
- Clear expectations
- Context
- Commitment
- Control
- Collaboration
- Communication
- Consequences
- Coordination
- Culture change
Explain the concept of leadership:
(EI:009)
A good leader aims to establish goals, values, and concepts that make up the organization's personality or how the organization is observes by both outsiders and insiders.
Types of Leadership:
Authoritarian - strictly professional, direct supervision
Paternalistic - father figure, more personal
Democratic - social equality
Laissez Faire - workers have all the power
Transactional - system of rewards and punishments
Transformational - leads change and initiative
Determine personal vision:
(EI:063)
Personal vision is determined through goals.
Demonstrate adaptability:
(EI:006)
Adaptability is the ability to change with market or industry trends, and adjust goals and visions off of market predictions.
Develop an acheivement orientation:
(EI:027)
Acheivement orientation refers to how an individual interprets or reacts to tasks, resulting in different patterns of cognition, effect, and behavior. It refers to an individual's ability to set measurable self-improvement goals.
Enlist others in working towards a shared vision:
(EI:060)
Set the goal and then establish steps to work towards it. Be sure to communicate and motivate your team.
Act as a role model to fulfill the organization's standards/values:
(EI:111)
-seek feedback , always work to continue
-work collaboratively
-support innovation
-communicate effectively, especially through challenge
Recognize/reward others for their efforts and contributions:
(EI:014)
Make it personal and magnify recognition, and provide opportunities for people to be rewarded. Facilitate peer-to-peer recognition and motivate through financial incentives.
Determine stakeholder expectations:
(EI:113)
Identify the stakeholders and the preferred mode of communication, and make sure you have accurately mapped expectations so that they are engaged throughout the process. Classify the level of communication for each stakeholder and identify which stakeholders will be advocates. Engage the stakeholders in decision making processes, and make sure that the manner in which the project is accomplished is positive even if problems arise.
Establish strategic relationships with others:
(EI:114)
A strategic relationship is a relationship between two commercial enterprises, usually formalized by one or more business contracts. They usually fall short of a legal partnership entity, agency, or corporate affiliate relationship.
Share best practices with key individuals and groups:
(EI:115)
Best practices are practices determined to be effective and practicable for business operations. Some knowledge sharing examples include user manuals, training documents, used methodologies, best-proven practices, storytelling, lessons learned, e-learning.
Leverage business relationships:
(EI:116)
Keep selling to clients, talk on a regular basis, send them messages, ask for introductions, and take initiative.
Describe the nature of entrepreneurship:
(EN:039)
Entrepreneurship is the development of a business from the ground up. This includes coming up with the idea and the process of turning it into a profitable business.
the process of planning, operating and assuming the risk of a business venture- often innovative
Discuss entrepreneurial discovery processes:
(EN:002)
The process for entrepreneurial discovery is a learning process. It is a vision about opportunities in existing or emerging sectors, and the process of bringing that idea into reality.
steps: opportunity identification, idea generation, concept testing, business model development, and implementation.
Assess global trends and opportunities for business ventures:
(EN:003)
-AI
-E commerce
-increased globalization
-sustainabilities
-smartization
TO ASSES-
Customer analysis. The key to a business' success is its customers. ...
Competitor analysis. Identify and analyse your competitors to understand the market. ...
Industry analysis. ...
Regulatory constraints
Determine opportunities for venture creation:
(EN:004)
Understand the opportunity space around an idea, and find an idea in an attractive and fast growing opportunity space.
Is there a need in the market? ...
Is there a feasible solution? ...
What is the competition? ...
Can a team be assembled that can execute a commercialization plan? ...
Is the risk / reward profile sufficiently attractive to merit investment of capital?
Assess opportunities for venture creation:
(EN:005)
SWOT Analysis - a compilation of your company's strengths, weaknesses, opportunities, and threats
Ansoff Matrix - a grid used to analyze and plan strategies (market penetration, product development, market development, diversification) for a business based on new and existing products/markets, as well as the risk factors associated with them
Pricing Matrix - when businesses define their costs, features, and what differentiates them from their competition, which (if done well) can motivate a new customer to purchase
Boston Matrix - a model that helps businesses analyze their portfolio of products using the basis of their relative market shares and growth rates to help with long-term strategic planning
Generate venture ideas:
(EN:006)
changing environmental trends, unsolved problems, and gaps in the marketplace.
- attend chamer of commerce meetings/SCORE meeting that help connect business owners
Determine feasibility of venture ideas:
(EN:038)
TMMD Analysis:
Time - evaluate the time it will take to successfully set up a working business
Money - evaluate the costs, set a budget range, and plan accordingly
Market - evaluate the state of the market, the success of the competition, and any opportunities that could lead to profit
Determination - determine if the venture is worth the risk
Describe entrepreneurial planning considerations:
(EN:007)
Identify a real opportunity, create a plan to address that opportunity, determine the feasibility of the idea, forecast the future of the business, find funding, market the idea
Explain tools used by entrepreneurs for venture planning:
(EN:008)
PEST Analysis - helps entrepreneurs make better business decisions and improving efficiency by studying various factors (political, economic, social, technological) that might influence the business
SWOT Analysis - helps raise the organization's awareness of all the risks and factors involved in the making of their business by analyzing their strengths, weaknesses, opportunities, and threats
McKinsey 7s Framework - used to determine a business' organizational effectiveness by analyzing the business' strategy, structure, system, style, shared values, staff and skills
Assess start-up requirements:
(EN:009)
Select a Legal Structure - sole proprietorship, partnership, corporation, LLC
Obtain a Federal Employer Identification Number - apply for a FEIN from the IRS based on the legal structure of the business
Open a Company Bank Account - select a bank and open a company bank account
Lease or Buy an Office, Warehouse, or Retail Space - depending on the type of business, arrange for an office space to be leased
Obtain Licenses and Permits - depending on the industry, a business may need a federal permit, state license, sales tax permit, or business license
Hire Employees - if a business intends to hire employees, they must register with the appropriate state agencies
Set Up an Accounting and Record Keeping System - learn about the taxes the company is responsible for paying and keep a strict record-keeping system (company documents are generally required to be kept for three years)
Assess risks associated with venture:
(EN:010)
Market Timing Risk - determine whether it is the right time to start such a business
Market Adoption Risk - determine whether there are currently strong competitors in the business, and evaluate any major barriers to entry
Market Size Risk - if the company is successful, consider whether the exit scenario is large enough to provide the types of returns for the business' fund needs
Execution Risk - evaluate whether the business has what it takes to fully execute the business plan and acheive the goal
Technology Risk - if the company has to develop new technology that may not reach fruition, evaluate the risk of the development taking longer than expected
Business Model Risk - determine whether the business has a clear business model, and whether the unit economics work out
Platform Risk - determine how strong the relationship between the startup and the platform, and whether their product plans are complementary
Venture Leadership Risk - determine whether the company is receptive to feedback, and if the management team is fit for leadership
Financial Risk - determine the amount of money required for the company to acheive its goals, and whether the financial risk is manageable given the current environment and company trajectory
Legal Risk - determine whether the business has a high likelihood of lawsuit for patent/copyright infringement
Describe external resources useful to entrepreneurs during concept development:
(EN:011)
Indirect Research - looking at trends of similar products, reviews, success by past comparison
Direct Research - speaking to/questioning markets for their experiences in the past (correlate to case)
Assess the need to use external resources for concept development.
(EN:012)
external research- useful would be research. Research could be divided into direct and indirect. Direct research is being done by directly ask the potential customer what they want (through things like questionnaire) And indirect research is being done through observation (pay attention to the market trend)
Describe strategies to protect intellectual property:
(EN:013)
Externally-
Patents - protects designs, inventions, etc.
Trademarks - protects distinguishing logos or designs
Trade Secrets - protects formulas, algoritms, processes, etc.
Copyrights - protects the original works and the right to reproduce or copy such products
Internally-
Non-disclosure Agreements - contract between one or more parties that states that neither will disclose confidential information
Confidential Information - educate all tem members and employees on confidential information
Attourney - hire an attourney in case of legal conflict
Use components of a business plan to define venture idea:
process of identifying opportunities, evaluating said opportunities, deciding on the opportunities and starting
(EN:014)
- product/service team
- management team
- marketing plan
- operational plan
- organizational plan
- financial plan
- industry/market analysis
- growth plan
Describe processes used to acquire adequate financial resources for venture creation/start-up:
(EN:015)
Networking, finding public sector contract possibilities, writing RFP's or requests for proposals, eliciting bids and accepting/networking with potential investors.
Select sources to finance venture creation/start-up:
(EN:016)
Personal Investment - entrepreneur invests cash or personal assets as collateral to secure financing
Personal Connections - entrepreneurs rely on "love money," or capital borrowed from friends and family (usually family and friends don't mind waiting to be repaid until profits start rolling in, but it can be challenging to mix business with personal relationships)
Debt Financing - lenders offer various types of debt financing, including term loans and lines of credit
Outside Equity Financing - businesses with high growth potential may be able to secure start-up money from angel investors, business incubators or venture capital funds, usually in exchange for an equity position in the company
Grants and Subsidies - some companies may be eligible for government grands and subsidies to help with start-up costs
Explain factors to consider in determining a venture's human-resources needs:
(EN:017)
-growth projections
-skill requirements
-business stage
-budget
-cultural fit
Explain considerations in making the decision to hire staff:
(EN:018)
Review the Positions - determine the requirements and eligibilities
Look for workers with related skills and experience, strong work mindset, teamwork-oriented, strong communication skills, etc.
Describe considerations in selecting capital resources:
(EN:019)
Capital resources can be defined as resources that can be used for production (tools, machines, factories, etc.).
Consider a resource's productivity, affordability, ease of access, and sustainability in the selection process.
Identify capital resources needed for the venture:
(EN:020)
Machinery.
Manufacturing Equipment.
Buildings.
Infrastructure.
Technology.
Vehicles.
Furniture
Assess the costs/benefits associated with resources.
(EN:021)
Costs-
Machinery – Expensive, needs maintenance, can become outdated.
Manufacturing Equipment – High cost, requires upkeep, uses energy.
Buildings – Costly to buy/rent, taxes, repairs needed.
Infrastructure – Expensive to build/maintain, regulatory issues.
Technology – High initial cost, needs updates, security risks.
Vehicles – Purchase, fuel, maintenance, depreciation.
Furniture – Costs money, wears out, takes up space.
Benefits-
Machinery – Faster production, lower labor costs, consistent quality.
Manufacturing Equipment – Increases speed, reduces waste, improves precision.
Buildings – Provides workspace, adds business credibility.
Infrastructure – Improves access, supports growth, boosts efficiency.
Technology – Automates tasks, reduces errors, improves decisions.
Vehicles – Moves goods/services, expands reach, adds flexibility.
Furniture – Improves comfort, helps organization, boosts productivity.
Use external resources to supplement entrepreneur's expertise:
(EN:022)
Find people who can fill in for the entrepreneur's lack in expertise (e.g production facilities, manufacturers)
Explain the complexity of business operations:
(EN:023)
Business operations refer to the condition of having several interdependent and interconnected stakeholders, information technology systems, and organizational structures.
(e.g stakeholders, infrastructures, tech, etc.)
Evaluate risk-taking opportunities:
(EN:024)
Risk assessment is the process of identifying every risk of loss associated with a new project or business venture, and then comparing each potential loss against the potential benefit/profit of the whole project.
Explain the need for business systems and procedures:
(EN:025)
Implementing a business system helps improve performance, meet customer expectations, produce consistent results, and engage and educate employees. A systematic approach also allows your organization to receive constant information on areas that need to be improved.
Describe the use of operating procedures:
(EN:026)
A standard operating procedure is a set of step-by-step instructions compiled by an organization to help worker carry out complex routine operations. They provide the baseline and make sure that all regulations are met.
Explain methods/processes for organizing workflow:
(EN:027)
- Identify the ultimate outcome
- Create a series of steps involved to reach the outcome
- Identify the order that each task needs to occur in
- Assigning tasks to a person, if necessary (some tasks may be automated)
- Setting a duration for each task and step
Use creative problem-solving in business activities and decisions:
(EN:029)
Identify and define the problem, look at potential causes for the problem, identify alternatives for approaches to resolve the problem, select an approach to resolve the problem, plan the implementation of the best alternative, monitor the implementation of the plan, verify if the problem has been resolved or not.
Explain the impact of resource productivity on venture success:
(EN:030)
If resource productivity is high, then there is a higher chance of venture success. If the productivity is low, the chance for success decreases accordingly.
Create processes for ongoing opportunity recognition:
(EN:031)
Discover opportunities - entrepreneurs discover opportunities when they search for them in existing markets by observing technological, economic or social trends.
Create opportunities - entrepreneurs create opportunities when they engage with others in bouncing ideas back and forth, where each time it becomes more specific what the user needs are and how they are going to be satisfied.
Develop plan to invest resources into improving current products or creating new ones:
(EN:032)
Product Lifecycle - pay attention to the lifecycle of a product, as it is essential to your profitability. The five stages of a product's life consist of development (idea), introduction (product launch), growth (product is gradually making a profit and establishing itself), maturity (sales growth begins to slow), decline (new and improved products cause competition and lead to a decline in sales). You can extend the lifecycle of your product/service by investing in an "extension strategy," in which you can increase your promotional spending, introduce minor innovations, and seek new markets.
Developing Ideas - produce a plan for the development of a good product. Consider whether your product meets customers' specifications, how technologically feasible it is, and whether the product will satisfy your goals and meet customer expectations.
Match Market Needs - market research is key to the success of new products and services. Pay attention to how customer needs are currently met, why your customers would choose your product/service rather than your competition's, and what risks you are prepared to take to launch your product on the market.
Pricing - establishing a pricing strategy is incredibly important to the success of a product or service. Take into account what your product will have to offer to the customers, whether you're the first on the product or if you already have competition, which selling channels you plan to use, and whether you are covering your costs.
Adapt to changes in business environment:
(EN:033)
Pay attention to internal vs. external environment, and identify any changes, before establishing a solution to adapt to it. BUSINESS EMERGENCY PLAN
Explain the need for continuation planning:
(EN:034)
Business Continuation Planning (BCP) - plans measures and arrangements, and identifies resources.
BCPs are applicable in cases of accidents, disruptions, resource failures/depletions, cyber attacks, etc., and allow for better efficiency.
Describe methods of venture harvesting:
(EN:035)
Harvesting is the final phase in the entrepreneurial value creation process, which includes building, growing, and harvesting. Harvesting is the process entrepreneurs and incestors use to exit a business and liquidate their investment in a firm.
buyouts, mergers, outright sale, employee share ownership scheme and an initial public offering.
Evaluate options for continued venture involvement.
(EN:036)
Grow – Expand locations, products, or markets.
Maintain – Keep things steady and profitable.
Merge/Partner – Team up with another company.
Sell – Exit by selling to a buyer.
Franchise/License – Let others run it for you.
Go Public (IPO) – Sell shares to the public.
Develop exit strategies:
(EN:037)
Merger acquisition - merge company with another company (or being bought by a larger company)
IPO - allow shareholders to take control, while extracting the monetary worth of your company (both this and merger acquisitions are better than liquidation, as they sell at a higher cost)
Selling - company is passed on or sold to select individuals
Liquidation - the full liquidation of a company sells the company at a depreciated face value
Obtain insurance coverage:
(FI:082)
How to Obtain Business Insurance:
Assess Your Needs – Identify risks (e.g., property damage, liability, employee injuries).
Choose the Right Type – Options include general liability, property, workers' comp, professional liability, etc.
Get Quotes – Compare policies from different insurers.
Evaluate Coverage & Costs – Balance affordability with adequate protection.
Purchase & Maintain – Buy the policy and review it regularly as your business grows.
Why Get Business Insurance?
Protects Against Lawsuits – Covers legal costs if sued.
Covers Property & Equipment – Helps recover from theft, fire, or disasters.
Ensures Employee Safety – Workers' compensation covers injuries.
Required by Law – Some policies (like workers' comp) may be mandatory.
Provides Peace of Mind – Reduces financial risks and ensures business continuity
Explain the concept of accounting:
(FI:085)
The goal of accounting is to understand the business finances, and to know the revenues and costs in order to properly address them.
Recording/journaling transactions.
Classifying transactions.
Summarising.
Interpreting financial data.
Explain the nature of balance sheets:
(FI:093)
The purpose of balance sheets are to clearly lay out the statement of assets, liabilities, and capital of a business.
Describe the nature of income statements:
(FI:094)
An income statement is a financial statement that reports a company's financial performance over a specific accounting period.
Prepare cash flow statements:
(FI:092)
Cash Flow From Operating Activities - records a company's operating cash movement
Cash Flow From Investing Activities - records change in cash from purchase or sale of property, plants, equipment, or from general long-term investments
Cash Flow From Financial Activities - reports cash level changes from the purchase of a company's own stock or issue of bonds and payments of interest and dividends to shareholders
Explain the purposes and importance of obtaining business credit:
(FI:023)
The purpose of obtaining business credit is to secure lines of credit, lease equipment, finance a company vehivle, and obtain business loans and credit cards without putting personal credit at risk. This is important because it gives unique financial advantages in the market place.
Analyze critical banking relationships.
(FI:039)
Business Accounts – Manage daily transactions and cash flow.
Lending & Credit – Fund growth, cover expenses, and build credit.
Merchant Services – Accept card payments efficiently.
Treasury & Cash Management – Optimize cash flow and prevent fraud.
Investment & Wealth Management – Grow funds and plan for the future.
Dedicated Banker – Get personalized advice and faster approvals.
Make critical decisions regarding acceptance of bank cards:
(FI:040)
Bank cards are plastic cards issued by banks enabling customers to withdraw money at an automated teller machine. This can be anything from an ATM card to a debit card.
Determine financing needed for business operations:
(FI:043)
The first step is to figure out your expenses. These can be divided into one-time start-up costs and recurring expenses. One-time costs may include such items as legal and professional costs for incorporating or registering your business; starting inventory; licence and permit fees; office supplies and equipment; long-term assets, such as machinery, a vehicle or real estate; consulting services; and website design.
Recurring expenses will include such items as salaries, rent or lease payments, raw materials, marketing costs, office and plant overhead, financing costs, maintenance and professional fees.
Estimate how much starting capital you will have and the amount of revenue you’ll be able to generate each month during the start-up period. To calculate the latter, research your potential market and industry averages to come up with realistic numbers.
To meet any gap in funds, here are sources you can tap:
1. Personal investment
Most start-ups require some personal investment by the entrepreneur—either cash or personal assets used as collateral to secure financing. If you foresee a cash shortfall, you may need to dig deeper into your personal assets.
2. Friends and family
Many new entrepreneurs rely on capital from family and friends (sometimes known as “love money”). Family and friends often don’t mind waiting to be repaid until profits start rolling in, but it can be challenging to mix business with personal relationships.
3. Debt financing
Lenders offer various types of debt financing including term loans and lines of credit. Some lenders offer loans specifically designed for new business ventures that come with flexible repayment terms.
4. Outside equity financing
Businesses with high growth potential may be able to secure start-up money from angel investors, business incubators (also known as accelerators) or venture capital funds. Funds from these sources are usually given in exchange for an equity position in the company.
5. Grants and subsidies
Some companies may be eligible for government grants and subsidies to help with start-up costs.
(See EN:016)
Types of financial forecasting:
1. Sales forecasting · 2. Cash flow forecasting · 3. Budget forecasting · 4. Income forecasting
Identify risks associated with obtaining business credit:
(EN:041)
Personal Liability - if the business fails and is unable to pay its debts, the owner will likely be personally liable for any charges made on their card
Credit Bureau Reporting - once a business defaults to a business credit card, most credit card issuers will report the balance and derogatory information on the credit card, causing the owner's credit score to drop dramatically. Additionally, if the owner's debt is unpaid, it will likely be passed along to a collection agency
CARD Act Protections Are Limited - small business credit cards did not benefit from the CARD Act's protection, the most prominent protection being risk-based repricing (a practice where a bank could increase the interest rate on existing balances if the borrower appeared riskier)
Still Liable For Employee Cards (In Some Circumstances) - if a small business adds an employee to the existing business account, they are effectively creating an authorized user. While the same credit limit will be used, the liability still remains with the owner of the account
APRs Are Not Low - if a business chooses to pay the balance over time, the interest rates (APRs) on business cards nare not low
Explain sources of financial assistance:
(FI:031)
Government grants, crowdfunding, investors, bank loans, personal financing, stocks/shareholders.
Explain loan evaluation criteria used by lending institutions:
(FI:031)
Character, capacity, capital, collateral and conditions
Complete loan application package:
(FI:033)
Personal/joint financial statement, personal/household monthly living expenses form, business information and debt, signed and dated version of the original and final form 1003.
Describe the nature of cost/benefit analysis:
(FI:357)
Cost/benefit analysis is the process of analyzing the costs of a decision vs. the benefits that would be derived.
Determine relationships among total revenue, marginal revenue, output, and profit:
(FI:358)
Output - the quantity of goods or services produced in a given amount of time
Profit - the financial benefit realized when revenue generated from business activity exceeds expenses, costs, and taxes
Total Revenue - the full amount of total sales of goods and services. It is calculated by multiplying the total amount of goods and services sold by their prices
Marginal Revenue - the increase in revenue from selling one additional unit of a good or service
(Marginal revenue is directly related to total revenue because it measures the increase in total revenue from selling a single additional unit of a good or service)
Develop company's/department's budget:
(FI:099)
Set Goals – Identify financial objectives (e.g., growth, cost-cutting, expansion).
Analyze Past Data – Review previous budgets, revenues, and expenses.
Estimate Income – Project revenue based on sales, investments, or funding.
List Fixed Costs – Include rent, salaries, insurance, and utilities.
Identify Variable Costs – Consider materials, marketing, and operational expenses.
Plan for Contingencies – Set aside emergency funds for unexpected costs.
Allocate Funds Efficiently – Prioritize spending to align with business goals.
Monitor & Adjust – Regularly track performance and adjust as needed.
Forecast sales:
estimating future sales revenue based on historical data, market analysis, and other relevant factors.
(FI:096)
Sales forecast = estimated amount of customers x average value of customer purchases
Calculate financial ratios:
(FI:097)
Current Ratio - measures a company's ability to pay off short-term liabilities with current assets
(current ratio = current assets/ current liabilities)
Acid-Test Ratio - measures a company's ability to pay off short term liabilities with quick assets
(acid-test ratio = current assets - inventories / current liabilities)
Cash Ratio - measures a company's ability to pay off short-term liabilities with cash and cash equivalents
(cash ratio = cash + cash equivalents / current liabilities)
Operating Cash Flow Ratio - measures the number of times a company can pay off current liabilities with the cash generated in a given period
(operating cash flow ratio = operating cash flow / current liabilities)
Debt Ratio - measures the relative amount of a company's assets that are provided from debt
(debt ratio = total liabilities / total assets)
Debt to Equity Ratio - calculates the weight of total debt and financial liabilities against shareholders' equity
(debt to equity ratio = total liabilities / shareholder's equity)
Interest Coverage Ratio - shows how easily a company can pay its interest expenses
(interest coverage ratio = operating income / interest expenses)
Debt Service Coverage Ratio - reveals how easily a company can pay its debt obligations
(debt service coverage ratio = operating income / total debt service)
Asset Turnover Ratio - measures a company's ability ot generate sales form assets
(asset turnover ratio = net sales / average total assets)
Inventory Turnover Ratio - measures how many times a company's inventory is sold and replaced over a given period
(inventory turnover ratio = cost of goods sold / average inventory)
Gross Margin Ratio - compares the gross rofit of a company to its net sales to show how much profit a company makes after paying its cost of goods sold
(gross margin ratio = gross profit / net sales)
Operating Margin Ratio - compares the operating income of a company to its net sales to determine operating efficiency
(operating margin ratio = operating income / net sales)
Earnings Per Share Ratio - measures the amoutn of net income earned for each share outstanding
(earnings per share ratio = net earnings / total shares outstanding)
Price-earnings Ratio - compares a comany's share price to its earnings per share
(price-earnings ratio = share price / earnings per share)
Interpret financial statements:
(FI:102)
1. Income Statement (Profit & Loss Statement)
Purpose: Shows revenue, expenses, and profit over a period.
Key Metrics-
Revenue – Total earnings before expenses.
Gross Profit – Revenue minus the cost of goods sold (COGS).
Net Profit – What’s left after all expenses (bottom line).
Interpretation-
A rising net profit means growth.
High expenses relative to revenue may indicate inefficiencies.
2. Balance Sheet
Purpose: Snapshot of assets, liabilities, and equity at a given time.
Key Metrics-
Assets – What the company owns (cash, inventory, equipment).
Liabilities – What the company owes (loans, accounts payable).
Equity – Owner’s stake in the business (Assets - Liabilities).
Interpretation-
A strong balance sheet has more assets than liabilities.
High debt compared to equity may signal financial risk.
3. Cash Flow Statement
Purpose: Tracks cash movement in and out of the business-
Key Sections:
Operating Activities – Cash from core business operations.
Investing Activities – Cash spent on or gained from investments.
Financing Activities – Cash from loans, stock issuance, or repayments.
Interpretation-
Positive cash flow means the business can cover expenses.
Negative cash flow may signal trouble, but context matters (e.g., investing in growth).
File business tax returns:
(FI:652)
Collect records, find the right form, fill out the form, pay attention to deadlines
Verify the accuracy of business financial records.
(FI:653)
-compare bank records with accounting books
-check invoices and receipts
-cross check financial statements
Discuss the nature of human resources management:
(HR:410)
The purpose of human resources managment is to bring people and organizations together so that the goals of each are met.
Strategic planning:
Strategic planning is a process through which business leaders map out their vision for their organization's growth and how they're going to get there
Coordinate human, capital, and fiscal resources to meet business priorities:
(HR:508)
Use strategic planning examples to coordinate human, capital, and fiscal resources (means for purchasing and/or obtaining necessary supplies, materials, equipment, services, labor, etc.) to meet business priorities.
hiring process and firing process:
Hiring Employees
Define the role.
Source candidates.
Screen resumes.
Interview.
Check references.
Make an offer.
Firing Employees
Document issues.
Ensure legal compliance.
Plan the meeting.
Communicate clearly.
Offer transition support.
Handle logistics.
Maintain human resources records:
(HR:359)
Businesses can maintain human resource records either digitally or manually. For smaller businesses, a manual reocrd is the preferred method, while larger companies tend to keep digital records.
train staff:
Define The Job. Itemize the main duties and tasks of the job. ...
Prepare To Train. List the areas of responsibility and procedures to complete each task. ...
Communicate & Demonstrate. ...
Foster Feedback. ...
Follow Up Frequently. ...
Supervise staff:
(HR:393)
Establish structures of organization.
Foster "right" environment for employees:
(HR:403)
Identify personality traits and make decisions based off of the goals of a company.
Assess employee performance:
(HR:368)
Pay attention to the employee's level of execution, quality of work, level of creativity, and the amount of consistent improvement they have experienced, as well as customer and peer feedback and the amount of sales revenue they have generated.
Handle employee complaints and grievances:
(HR:366)
Step 1: Acknowledge and Listen. The first step is listening to the grievance and acknowledging it. ...
Step 2: Investigate. Any time a grievance is filed, you need to do your homework and gather all the facts. ...
Step 3: Meet With All Parties. ...
Step 4: Take Action and Document. ...
Step 5: Follow Up.
Explain the nature of remedial action:
(HR:369)
The purpose of remedial action is to address the deficiency of a non-confirming product or service.
Explain marketing and its importance in a global economy:
(MK:001)
Marketing is the action or business of promoting and selling products or services, including market research and advertising. It is important in the global economy because it inspires competition, thus increasing innovation as well as the global economy.
Describe marketing functions and related activities:
(MK:002)
Marketing functions include performing market research, producing a marketing plan, developing a product, overseeing, advertising and promoting, as well as distribution for sale, maintaining good customer service, and developing public relations.
Explain factors that influence customer/client/business buying behavior:
(MK:014)
Environment of the customer, consumer psychology, motivation, knowledge of products, consumer relations.
Demonstrate connections between company actions and results (e.g influencing consumer buying behavior, gaining market share, etc.):
(MK:019)
Good company actions will bring better results, and bad company actions will bring bad results.
Establish specifications for selecting hardware/software systems:
(NF:091)
Define requirements by assembling a vendor selection team, review the high level features needed for the software system from the original business case and produce a set of requirements by gathering additional information from stakeholders, such as needs, wants, fincancials, feasibility, etc.
Determine venture's information technology needs.
(NF:012)
-business goals, assess current operations (see if you could streamline anything) , assess security risks and benefits
Describe the nature of business records:
(NF:001)
The purpose of business records is to record business dealings for the future so that they can be accurately reviewed as required.
Describe current business trends.
(NF:013)
-AI
-ENVIROMENTALISM
-FLEXIBLE WORKPLACE
-E COMERCE
Monitor internal records for business information:
(NF:014)
income statements, balance sheets, and cash flow statements. Each of these documents can help you monitor long term business success
Conduct an environmental scan to obtain business information:
(NF:015)
An environmental scan is a process that gather information on the external world, its competitors, and itself.
Explain the principles of data analysis:
(NF:139)
Know Your Approach - understand the question that you're trying to answer, what you want to accomplish, and understand the basics about your potential data
Understand How the Data Was Generated - know where your data came from and what interactions were necessary to get it
Profile Your Data - develop familiarity with your data so that you have an easier time recognizing with there is domething "off" with your work later on
Facet All Things - keep in mind that aggregate statistics can be misleading (Simpson's paradox) when going through your data, and look through your data from multiple facets
Be Skeptical - if something in your data doesn't look or feel right, it most likely isn't
Clarify Your Assumptions - hold some assumptions throughout your work, but make sure that these are explicitly stated when sharing results
Check Your Work - make sure your results are accurate
Communicate - work with your team and stakeholders so that everybody understands what is going on along the way
Discuss the nature of data mining:
(NF:148)
The purpose of data mining is to discover pattern in large data sets through an intersection of machine learning, statistics, and database systems.
Explain the nature of operations:
(OP:189)
Operations are the processes and resources that are used to produce the highest quality products/services in the most efficient manner possible.
Identify potential safety issues.
(OP:151)
Workplace injuries (slips, falls, accidents)
Poor ergonomics (repetitive strain or posture problems)
Electrical hazards (exposed wiring, faulty equipment)
Fire safety (lack of fire prevention or emergency exits)
Chemical exposure (harmful substances or improper handling)
Workplace violence (harassment or physical altercations)
Vehicle safety (unsafe driving or vehicle maintenance)
Cybersecurity (data breaches or hacking)
Natural disasters (earthquakes, floods, etc.)
Employee mental health (stress, burnout)
Infectious diseases (e.g., COVID-19 protocols)
Establish safety policies and procedures.
(OP:012)
Safety policies and procedures apply to situations for natural disasters and consequences for willful safety violations. State and government regulations can be used as a guide for establishing safety procedures.
Identify Hazards – Assess the workplace for potential risks.
Create Safety Guidelines – Develop rules for general and specific safety practices.
Emergency Procedures – Set up evacuation plans and emergency contacts.
Provide PPE – Ensure necessary protective gear is available and used.
Training & Education – Train employees on safety protocols regularly.
Monitor & Enforce Policies – Conduct inspections and enforce safety rules.
Report & Investigate Accidents – Set up a system for reporting and investigating incidents.
Review & Update Policies – Regularly update safety policies as needed.
Identify potential security issues.
(OP:151)
Cybersecurity Threats – Hacking, phishing, data breaches.
Physical Security – Unauthorized access, theft, vandalism.
Employee Negligence – Weak passwords, lack of training, insider threats.
Data Privacy – Inadequate protection of sensitive customer or company data.
Unsecured Devices – Lost or stolen laptops, smartphones, or external drives.
Third-Party Risks – Vendor or contractor access leading to vulnerabilities.
Lack of Encryption – Data transmitted or stored without encryption.
Malware/Software Vulnerabilities – Unpatched software or malicious code.
Inadequate Backup Plans – No system for recovering lost or corrupted data.
Social Engineering – Manipulation of employees to gain access to systems.
Establish policies to protect company information and intangibles:
(OP:155)
These policies must state that any original product of material developed in the course of an employee's work remains the property of the business. Employees have a duty to keep company information confidential.
Establish policies and procedures to maintain physical security of the work environment:
(OP:157)
These policies are to make sure that employees and company property in the work environment remain safe from physical harm.
Explain the nature and scope of purchasing:
(OP:015)
The purpose of scope of purchasing is to define the processes and procedures applicable to the puchase of needed goods and services by the county from private sector sources.
Identifying Needs – Determining what products or services are required.
Selecting Suppliers – Finding and choosing reliable vendors.
Negotiating Terms – Discussing prices, delivery, and payment conditions.
Placing Orders – Issuing purchase orders for the required items.
Receiving Goods/Services – Ensuring the correct items are delivered as per the order.
Payment – Processing payments to suppliers based on agreed terms.
The scope includes managing supplier relationships, controlling costs, and ensuring timely delivery of quality products.
Select vendors.
(OP:161)
Define Your Needs – Clarify what products or services you need and your specific requirements.
Research Potential Vendors – Look for vendors with a good reputation, experience, and track record in the industry.
Evaluate Quality – Ensure the vendor offers products or services that meet your quality standards.
Check Pricing – Compare prices from different vendors to find the best value, but don’t focus solely on the lowest price.
Review Reliability – Assess their ability to deliver on time and handle demand fluctuations.
Consider Customer Service – Evaluate how responsive and supportive the vendor is.
Evaluate Financial Stability – Ensure the vendor is financially stable to avoid disruptions.
Check References – Ask for references or read reviews to verify their reliability and performance.
Assess Terms and Conditions – Ensure their terms (e.g., payment, delivery, return policies) align with your business needs.
Evaluate vendor performance.
(OP:162)
establish vendor management key performance indicators (KPIs)
costs, timiliness, quality, lead time, vendor discounts
Explain the concept of production:
(OP:017)
The basis of the concept of production is the emphasis on low production costs, high production efficiency, and mass production. It states that buyers prefer goods and services that are cheap and widely available.
Input – Raw materials, labor, and capital.
Process – Transforming inputs into finished goods or services through machinery, technology, or manual work.
Output – The final products or services ready for consumption or sale.
Production aims to efficiently create products that meet market demand while maximizing resources and minimizing costs.
Describe the role of management in the achievement of quality:
(OP:020)
Management is important because they oversee each step of the production process, from the manufacturing/importation of parts to the assembly to the finished product. They are there to ensure quality at each step of the way so that the finished product is high-quality.
Establish efficient operating systems.
(OP:022)
Define Clear Goals – Set specific objectives for what the system should achieve.
Streamline Processes – Simplify workflows and eliminate unnecessary steps.
Automate Where Possible – Use technology to handle repetitive tasks.
Train Employees – Ensure staff are well-trained in the system and procedures.
Monitor Performance – Regularly track progress and identify areas for improvement.
Maintain Flexibility – Be ready to adjust the system based on changing needs.
Standardize Procedures – Create standard operating procedures for consistency.
Explain the nature of overhead/operating costs:
(OP:024)
Overhead costs are the expenses needed to run a business. Operating costs are directly related to production, and includes the materials, labor, and machinery used to make or deliver a product/service.
Conduct breakeven analysis:
(OP:192)
Breakeven analysis looks at the level of fixed costs relative to the profit earned by each additional unit produced and sold. In general, a company with a lower level of fixed costs will also have a lower breakeven point of sale.
Break-Even point (units) = Fixed Costs ÷ (Sales price per unit – Variable costs per unit)
Develop expense control plans:
(OP:029)
Make sure operations are as efficient as possible, and that fixed costs cannot be lowered. Be sure to find any sources of error of unnecessary expense. If need be, renegotiate costs.
Use budgets to control operations:
(OP:030)
It is important to determine how much money you can spend on operations beforehand.
Explain the concept of supply chain:
(OP:443)
The supply chain is a sequence of processes involved in the production and distribution of a product or service.
Establish performance standards to meet organizational goals:
(PD:256)
Set specific performance expectations, and evaluate progress by reaching specific milestones linked to individual goals and objectives. Efficiency is evaluated by resource utilization within the organizational unit.
Monitor progress in achieving organizational goals:
(PD:257)
Plan - decide what areas/activities to evaluate, define successful outcomes (what is your goal?), plan what sort of action is necessary, decide on methods of carrying out said actions
Monitor - pay attention to the process
Evaluate - analyze the effectiveness of your method and interpret the results
Make Improvements - identify and prioritize improvements, plan and implement action, continue to monitor and evaluate work
Explain the need for innovation skills:
(PD:126)
The four most desired innovation skills are communication skills, strategic thinking, leadership skills, and creative problem-solving. They are necessary for good management and decision-making, which produce successful businesses.
Explain the concept of management:
(SM:001)
The importance of management is to make executive decisions that are vital to achieving group goals. Management arranges the factors of production, assembles and organizes the resources, and integrates the resources in the most effective manner to acheive goals. It then directs group efforts towards achievement of pre-determined goals.
Explain the nature of managerial ethics:
(SM:002)
Managerial ethics are a set of principles and rules dictated by upper management that define what is right and what is wrong in an organization. It is the guideline that helps direct a lower manager's decisions in the scope of his or her job when a conflict of values is presented.
Explain the nature of business plans:
(SM:007)
The purpose of a business plan is to identify, describe, and analyze a business opportunity by examining its technical, economic, and financial feasibility.
Define business mission:
(SM:009)
A business mission is a simple statement that explains your company's goals and acts as a summary of what your company does for its customers, employees, and owners.
Explain external planning considerations:
(SM:011)
A key area of the business planning process involves considering factors that could have an impact on the success of your business, including external industry or environmental factors.
Six Main External Factors=
- Economic
- Sociocultural
- Political
- Legal
- Technical
- Environmental
Identify and benchmark key performance indicators (e.g., dashboards, scorecards, etc.):
(SM:027)
A benchmark is a reference point that allows you to compare your own levels of performance with the performance levels of others. A key performance indicator measures how well an individual, business unit, project, or company performs against their strategic goals.
Develop action plans.
(SM:012)
-Set Clear Objectives – Define specific, measurable goals you want to achieve.
Break Down Tasks – List the steps or tasks needed to reach each goal.
Assign Responsibilities – Determine who will be responsible for each task.
Set Deadlines – Establish realistic timelines for completing each task.
Allocate Resources – Identify what resources (budget, tools, manpower) are needed.
Monitor Progress – Regularly check progress to ensure tasks are on track.
Develop a business plan:
Executive Summary – A brief overview of the business and its goals.
Company Description – Information about your business, mission, and what it offers.
Market Research – Analysis of the target market, competitors, and industry trends.
Organization and Management – The structure of your business and key team members.
Products or Services – What you're selling or what services you're offering.
Marketing and Sales Strategy – How you'll promote your business and attract customers.
Financial Plan – Your budget, financial projections, and funding needs.
Appendix – Additional documents like resumes, permits, or charts.
Select and apply metrics for measuring organizational success:
(SM:074)
Breakeven Point - the amount of money a business needs to get to in a given period in order for the company to cover its own costs and sustain itself
Generated and Converted Leads - keep track of where your leads come from (direct mail, email, ads, etc.) to help you decide where to allocate marketing dollars
Sales Indicators - keeping track of volume and frequency of slaes can provide valuable insight for other actions
Net Income Ratio/Profit - [rpfit is an important benchmark to consider in the success of a business
Customers - collecting customer data gives a company information on the needs of the target audience
Employee Satisfaction - ensuring a positive, supportive work environment is important to the business, as employee satisfaction translates into increased customer satisfaction
Reaching Goals - an important part of a business' success lies in whether or not they have reached the goals they have set, as it gives insight on whether change is needed
Analyze operating results in relation to budget/industry:
(SM:005)
Budget Process:
- Assess variances between actual and budgeted figures in the previous period's plan
- Identify and prioritize business needs and objectives for the forthcoming period
- Forecast and evaluate incoming revenues, incoming company expenses, etc.
Track performance of business plan.
(SM:006)
KPIs:
Revenue Growth – Increase in sales or income over time.
Profit Margin – Percentage of revenue that turns into profit.
Customer Acquisition Cost (CAC) – The cost of gaining a new customer.
Customer Retention Rate – Percentage of customers who return to purchase again.
Conversion Rate – Percentage of leads that become paying customers.
Market Share – The portion of the market your business controls.
Cash Flow – The amount of cash coming in and going out of the business.
Employee Productivity – Output per employee or team.
Return on Investment (ROI) – The profit made relative to the investment.
Operational Efficiency – The ability to deliver products/services with minimal resources.
Explain the nature of risk management:
(SM:075)
Risk management is the process of identifying, assessing, and controlling threats to an organization's capital and earnings. These risks could stem from a wide variety of sources, including financial uncertainty, legal liabilities, strategic management errors, accidents, and natural disasters.
Monitor business' profitablity.
(FI:542)
-Track Revenue – Regularly review total sales or income from products/services.
Analyze Expenses – Keep a close eye on operating costs, including fixed and variable expenses.
Calculate Profit Margins – Determine your gross, operating, and net profit margins.
Review Financial Statements – Regularly check income statements, balance sheets, and cash flow statements.
Monitor Break-Even Point – Know how much you need to earn to cover costs and start making a profit.
Use Key Metrics – Track KPIs like Return on Investment (ROI), Customer Acquisition Cost (CAC), and profit per product.
Define strategies to protect business' digital assets, customer data, and other protected information:
(OP:472)
Keep a list of all digital assets, stay updated, use secure company wifi, limit access, use secure authentication, consider cyber insurance.
Evaluate strategies for protecting business' digital assets (e.g website, social media, email, etc.), customer data, and other protected information.
(OP:473)
Use Strong Passwords – Require strong, unique passwords for all accounts.
Enable Two-Factor Authentication (2FA) – Add an extra layer of security for logins.
Regular Software Updates – Keep all software, apps, and systems up to date to fix vulnerabilities.
Backup Data – Regularly back up important data to prevent loss.
Encrypt Sensitive Data – Encrypt customer data both in transit and at rest.
Limit Access – Only give employees access to the data they need.
Discuss the nature of business analysis:
(OP:327)
Business analysis is the practice of enabling change in an organizational context by defining needs/challenging and recommending solutions that deliver value to stakeholders.
Discuss business process thinking and its impact:
(OP:474)
Process thinking is a philosophy that emphasizes preparation and hard work over consideration of outcomes or results. Process thinking encourages managers on every level to focus on the complete business process and their contribution to its ultimate goal.
Describe the factors that influence business process design.
(OP:475)
Business Objectives – Goals the business wants to achieve.
Customer Needs – What customers expect from products/services.
Technology – Tools available for automation and improvement.
Regulations – Legal and industry standards.
Resources – Available financial, human, and physical resources.
Culture – Company values and work environment.
Employee Skills – Expertise of staff to perform tasks.
Market Conditions – Competitor and market trends.
Cost – Designing cost-effective processes.
Risk Management – Minimizing risks and ensuring continuity.
Explain the causes of business process changes:
(OP:476)
- end-of-line products
- change in government/governmental priorities
- mergers and acquisitions
- strategy and structural changes
Explain the impact of supply chain on business performance (e.g value, customer satisfaction, business design, sustainability):
(OP:477)
Businesses value supply chains because they help control and reduce supply chain costs. This can result in dramatic increases in firm profits.
if supply chains are efficient customers could be more satisfied and find more value in product, if not the customers could be dissatisfied and the business is in danger.
Discuss the nature of supply chain management:
(OP:303)
Supply chain management is th emanagement of the flow of goods and services, and includes all processes that transform raw materials into final products. it involves the active streamlining of a business' supply-side activities to maximize customer value and gain a competitive advantage in the marketplace.
Describe factors that influence management:
(SM:028)
- changes in executive management
- transformations in organizational structure
- competition from other businesses
- social and cultural factors
- laws and regulations
- technological forces in strategic management
Describe relationship among innovation, learning, and change:
(SM:094)
Whereas change applies to existing knowledge within an organization, innovation deals with the unknown and is about learning and exploring new ways to make a company profitable.
Explain the nature of change management:
(SM:095)
Change management refers to the process, tools, and techniques used to manage the people-side of change in order to achieve the required business outcomes.
Explain the nature of quality management:
Quality management is the act of overseeing all activities and tasks that must be accomplished in order to maintain a desired level of excellence. This includes the determination of a quality policy, creating and implementing quality planning and assurance, and quality control and improvement.
Describe types of financial statement analysis (e.g ration analysis, trend analysis, etc.):
(FI:334)
Horizontal Analysis - measures the financial statement's line of items with the base year (compares the figures for a given period with another period)
Vertical Analysis - measures the line item of the income statement or balance sheet by taking any line item of financial statement as a base and will disclose the same in percentage form
Trend Analysis - identifying patterns from multiple time periods and plotting those in a graphical format such that actionable information could be derived
Liquidity Analysis - analyzes the short-term capability of the company with respect to day-to-day payments of trade creditors, short-term borrowings, statutory payments, salaries, etc.
Solvency Analysis - ensures the proper solvency of the company in the near future and to check whether the company is able to pay all the long-term liabilities and obligations
Profitablility Analysis - helps us understand how the company generates gross profit
Discuss limitations of using financial statements to assess business performance:
(FI:655)
- dependence on historical costs
- inflationary effects
- intangible assets are not recorded
- based on specific time period
- not always comparable across companies
- subject to fraud
- no discussion of non-financial issues
- not verified
- no predictive value
Spot problems in/issues with financial statements:
(FI:335)
Rising Debt-To-Equity Ratio - indicates that the company is absorbing more debt that it can handle
Several Years of Revenue Trending Down - while cost-cutting measures can help to offset a revenue downturn, it probably isn't benefiting the company if the company has not rebounded in a few years
Large "Other" Expenses On the Balance Sheet - if these "other" line items have high values, then you should find out what they are specifically
Unsteady Cash Flow - a stockpile of cash can indicate that accounts are being settled, but there isn't much new work coming in; conversely, a shortage of cash could be indicative of under-billing for worky by the company
Rising Accounts Receivable or Inventory in Relation to Sales - money that is tied up in accounts receivable or has already been used to produce inventory is money that cannot generate a return
Rising Outstanding Share Count - the more shares that are available for purchase on the stock market, the more diluted shareholders' stake in the company becomes
Consistently Higher Liabilities Than Assets - if a company is consistently assuming more liability without a proportionate increase in assets, however, it could be a sign it is over-leveraged
Decreasing Gross Profit Margin - gross profit margin measures a company's ratio of profits earned to costs over a set period of time, a declining profit margin is cause for alarm, as the profit margin must account for both the costs to produce the product/service and the additional money needed to cover operating expenses
Describe the financial needs of business at different stages of its development:
(FI:339)
Planning - understand how customers use social channels, prioritize strategic goals where social factors can have the most impact
Presence - amplify existing marketing efforts, encourage sharing
Engagement - drive consideration to purchase, provide direct support and internal employee engagement
Formalized - set governance for social factors, create discipline and process, strategic business goals
Strategic - scale across business units, C-level involvement, and moves into HR, sales, finance, and supply chain
Converged - social factors drive transformation, integrates social philosophy into all aspects of the enterprise
Discuss factors to consider in choosing between debt and equity capital:
(FI:340)
- long-term goals
- available interest rates
- the need for control
- borrowing requirements
- current business structure
- future repayment terms
- access to equity markets
Explain the nature of managerial cost accounting (e.g activities, costs, cost drivers, etc.):
(FI:657)
Managerial cost accounting specifically focuses on caputring a company's total costs of production by assessing the varaible costs of each step of production, as well as fixed costs. Managerial cost production allows businesses to identify and reduce unnecessary spending and maximize profits.
Discuss the importance of corporate governance in business:
(PD:213)
A company's corporate governance is important to investors, as it shows a company's direction and business integrity. Good corporate governance helps companies build trust with investors and the community.
Identify the factors that impact governance structures:
- globalization
- technology
- population
- free market
Describe the components of a well-governed company (e.g board of directors, reporting, transparancy, internal and external audit functions)"
Three Pillars of Corporate Governance-
Transparency - a company allows all processes and transactions to be observale to outsiders, makes necessary disclosures, informs everyone affected about its decisions, and complies with legal requirements
Accountability - a company's shareholders are deeply interested in who will take the blame when something goes wrong in one of a company's many processes. Even when everything goes smoothly as expected, knowing that someone will be held accountable for future mishaps increases shareholders' confidence, which in turn increases their desire to invest more
Security - a company must keep their enterprise data secure from unauthorized access. Companies that experience security breaches involving the exposure of their clients' personal information will quickly lose their credibility
Discuss the nature of enterprise risk management:
(RM:062)
Enterprise risk management (ERM) is a plan-based business strategy that aims to identify, assess, and prepare for any dangers, hazards, and other potentials for disaster that may interfere with an organization's operations and objectives.
Discuss the relationship between risk and business objectives:
(RM:044)
Once the set of risks are linked to objectives, it is vital to report progress using key risk indicators against those same objectives. A clear set of reports from the risk team of the main risks to a set of objectives will help a manager to control those risks and increase their ability to achieve objectives.
Identify business risks.
(RM:056)
1. Compliance risk · 2. Legal risk · 3. Strategic risk · 4. Reputational risk · 5. Operational risk · 6. Human risk.
Explain ways to assess risk:
(RM:059)
Identify the hazards - determine what kind of hazard you are facing, such as natural disasters, biological hazards, workplace accidents, intentional acts, technological hazards, chemical hazards, mental hazards, interruptions in the supply chain, etc.
Determine who might be harmed - based on the type of risk you are facing, identify who will be harmed and how
Evaluate the risks and take precautions - consider how likely it is that the hazard will occur and how severe the consequences will be if that hazard occurs. This evaluation will help you determine where you should reduce the level of risk and which hazards you should prioritize first
Record your findings - if you have more than five employees in your office, you are required by law to write down your risk assessment process. Your plan should include the hazards you've found, the people they affect, and how you plan to mitigate them. The record should show that you conducted a proper check of your workspace, determined who would be affected, controlled and dealt with obvious hazards, initiated precautions to keep risks low, and kept your staff involved in the process
Review assessment and update if necessary - continually review and update your risk assessment process to stay on top of new hazards
Explain the nature and scope of channel management:
(CM:001)
Channel management is used in sales marketing parlance, and is defined as a process where a company develops various marketing techniques, as well as sales strategies, to reach the widest possible customer base. The channels are nothing but ways or outlets to market and sell products.
Explain the nature of channels of distribution:
(CM:003)
Distribution channels are the series of marketing entities through which goods and services pass on their way from producers to end users. Distribution systems focus on the physical transfer of goods and services and on their legal ownership at each stage of the distribution process.
Explain the nature of channel strategies:
(CM:009)
A channel strategy is a plan for reaching customers with products and services. Channels serve two primary functions: selling to the customer and delivering customer experience including products and services themselves.
Evaluate channel members:
(CM:011)
Sales is the most popular performance criteria used in channel evaluation. Sales might further be subdivided into current sales compared with historical sales, comparisons of sales with other channel members, and comparisons of the channel member's sales with predetermined quotas.
Describe the need for marketing data:
(IM:012)
Marketing data can help your business to develop products and services that your customers need, and help you identify the best way to sell them.
Explain the nature of marketing research:
(IM:010)
Marketing research is a systematic approach to gathering, recording, and analyzing data about problems relating to marketing of goods and services.
Explain the concept of marketing strategies:
(MP:001)
A marketing strategy refers to a business' overall game plan for reaching prospective consumers and turning them into customers of the products or services the business provides.
Explain the concept of market and market identification:
(MP:003)
A market is a group of consumers who have a common interest, need, or want for a given good or service. Marketers identify markets' common interests by classifying the consumers' demographic, geographic, and psychographic information.
Identify market segments:
(MP:004)
- Create a list of target segments
- Narrow the search to the most promising target segments
- Repeat until you identify a single target segment
- Validate current thinking and assumptions using market research
Develop customer profile:
(MP:031)
A customer profile is a description of a customer, or set of customers, that includes demographic, geographic, and psychographic characteristics, as well as buying patterns, creditworthiness, and purchase history.
Select target market:
-demographic
-geographic
-behavioral
-psychographic
Conduct market analysis (market size, area, potential, etc.):
(MP:009)
- Determine the purpose of your study
- Look at your industry's outlook
- Pinpoint target customers
- Compare your competition
- Gather additional data
- Analyze your findings
- Put your analysis into action
Conduct SWOT analysis for use in the marketing planning process:
(MP:010)
Compile information on your company's strengths, weaknesses, and potential opportunities and threats.
Conduct competitive analysis:
(MP:012)
A strategy where you identify major competitors and research their products, sales, and marketing strategies. By doing this, you can create solid business strategies that improve upon your competitor's.
Forecast sales for marketing plan:
(MP:014)
To forecast by units, you predict how many units you're going to sell each month, and then figure out what the average price is going to be for each unit. Multiply those two numbers and you have the total sales you plan on making each month.
Explain strategies for linking performance measures to financial outcomes:
(MP:020)
Align KPIs with financial goals
Explain the nature and scope of the pricing function:
(PI:001)
the pricing function includes all activities that determine how much to charge for a good or service. This is an important business activity as it directly impacts the financial success for the company.
considering factors such as production costs, competition, and target market in order to set a price that will be profitable for the company and attractive to customers
Explain factors affecting pricing decisions:
(PI:002)
Internal Factors:
- Organizational factors
- Marketing mix ( a combination of factors that can be controlled by a company to influence consumers to purchase its products)
- Product differentiation
- Cost of the product
- Objectives of the firm
External Factors:
- Demand
- Competition
- Suppliers
- Economic conditions
- Buyers
- Government
Determine initial feasibility of product idea:
(PM:129)
- Find out whether the product will work
- Find out if the product can coexist in a competitive environment and still bring in profits
- Conduct research and look online to see how other companies did it, prototype your product, and time box
Adjust idea to create functional product:
(PM:204)
- Change planes and concepts to meet goals and standards
- Functionality and profitability are the most important (living in delusions is harmful for business)
- Limit a product's features to the most important ones to increase profits without sacrificing customer experience
- Create a chart of features to price ratios
Create processes for ongoing opportunity recognition:
(PM:136)
Opportunity recognition appears to include three distinct processes: sensing or perceiving mark needs and/or underemployed resources, recognizing or discovering a "fit" between particular market needs and resources, and creating a new fit between separate needs and resources.
Explain the concept of product mix:
(PM:003)
Product mix, or product assortment, refers to the total number of product lines a company offers to its customers. For example, a company may sell multiple lines of products.
Determine services to provide customers.
(PM:036)
Nature of the product, Customers want/need +struggle, Business has available resources to provide service, Cost
Identify internal and external service standards:
(PM:273)
Internal service standards refer to their expectations set by the business for how employees will be treated in the workplace which extends to how they are compensated and engaged in corporate decision making. External service standards refer to how the end-user is treated to ensure customer satisfaction.
Build corporate brands:
(PM:126)
Corporate branding refers to the practice of promoting the brand name of a corporate entity, as opposed to specific products or services. The activities and thinking that go into corporate branding are different from product and service branding, since the scope of a corporate brand is generally much broader.
Explain the role of customer service in positioning/image:
(PM:013)
Positioning is an essential part of launching your product or company in the market. Positioning creates an image of your company's product in the mind of your target customer, where customers develop opinions about companies and products.
Identify company's unique selling proposition:
(PM:272)
A unique selling proposition refers to the unique benefit exhibited by a company, service, product or brand that enables it to stand out from competitors. The unique selling proposition must be a feature that highlights product benefits that are meaningful to consumers.
Build product/service brand:
(PM:209)
- Describe your product or service
- Protect your intellectual property (IP)
- Know your market
- Assess your skills
- Identify commercialization pathway
- Design and complete a working prototype
- Write a business plan with a commercialization strategy
- Explore funding options
Explain the role of promotion as a marketing function:
(PR:001)
In marketing, promotion refers to any type of marketing communication used to inform or persuade target audiences of the relative merits of a product, service, brand or issue. The aim of promotion is to increase awareness, create interest, generate sales or create brand loyalty.
Explain types of advertising media:
(PR:007)
Nine Types of Advertising Media-
- Direct mail
- Newspapers and magazines
- Radio advertising
- Television advertising
- Film advertising
- Outdoor advertising
- Window display
- Fairs and exhibition
- Specially Advertising
Describe word-of-mouth channels used to communicate with targeted audiences:
(PR:247)
Customer advocacy is the most common word-of-mouth, in which consumers show approval for a product, service, or business by telling others about them through various media including social media and personal conversation.
Explain the nature of direct marketing channels:
(PR:089)
Direct marketing is a channel-free approach to distribution and/or marketing communications, meaning there are no channel intermediaries (e.g distributors, retailers, wholesalers, etc.). It is "direct" in the sense that the deal is done directly between the manufacturer and the customer.
Identify communications channels used in sales promotion:
(PR:249)
Communication channels used in sales promotion cover telemarketing, social media, mail listings, word of mouth, bill boards, standard media, website
Explain communications channels used in public-relations activities:
(PR:250)
Communication channels are used by the public relations department to smoothe over scandals and increase brand image. The best communications platforms are social media and television ads. Major communication channels include events, publicity, direct marketing, word-of-mouth marketing, and personal selling
Identify types of public-relations activities:
(PR:252)
External Communications - messages disseminated through paid, owned, or earned media to external audiences
Internal Communications - planned messages disseminated to employees through a variety of communication channels, including newsletters, bulletin boards, payroll stuffers, posters, etc.
parts of a distribution channel:
producers, agents, wholesalers, retailers, and consumers
Explain the nature and scope of the selling function:
(SE:017)
The selling function provides consumers with the products or services that they want or need. This includes all members of the distribution channel (Direct selling. Selling through intermediaries.) The selling process is personalized and influences purchse of products for future sales.
