Starting a Business – Comprehensive Study Notes

Question: What is the name of a person who starts their own business? Answer: Entrepreneur.

Definition: People who take a risk and start a business to solve a problem or take advantage of an opportunity.
Often satisfying a need or want that is not met in the community.
Prompt: Name 5 entrepreneurs that have changed the business world?

Brainstorm in groups: what are the characteristics of someone who starts their own business?
Common traits listed:
- Self confidence
- Outgoing
- Like new ideas/innovation
- The ability to work alone
- An aptitude for managing others
Note: Going to spend more time on entrepreneurship later in this course.

NEEDS – essential for human survival i.e. food, shelter, clothing
WANTS – human desires that go beyond basic needs and are not essential for survival
The essence of entrepreneurship is the creation and building of a VENTURE to fulfill a need or want of consumers
VENTURE - a risky or new business idea to undertake
Core idea: Entrepreneurship is the creation and building of a VENTURE to fulfill a need or want of consumers.

After identifying needs & wants and identifying competition, you need to figure out how you will attract business away from competitors = get customers.

Reflect on personal breakfast choices:
- Brand of cereal
- Brand of orange juice
- Type of bread
Why you made those decisions:
- Price
- Taste
- Promotion
- Health reasons

General Mills launched a new cereal for kids called Wheaties Dunk-A-Balls shaped like basketballs.
Parents bought the cereals but did not like that it encouraged kids to play with their food, so the cereal failed.
Question: How could this have been avoided?

The Decision-Making Process (Figure 1.2)
Steps:
1) Define the decision to be made
2) Identify the alternatives
3) Evaluate the alternatives
4) Make a decision and take action
5) Evaluate the decision
Visual representation in the text shows a problem leading to alternatives, a good decision and action, followed by evaluation.

To evaluate using a decision matrix we must come up with decision criteria and rank them.
What is important to us? Examples: Good grades, Popularity, Relationship with family

Alternatives/Decision Criteria and a Likert scale ranking (1-5)
Example options for dinner and the corresponding criteria:
- Alternatives: Party, Study, Hang with family
- Criteria: Good Grades, Popularity, Relationship with Family
Pros vs. Cons and ranking are used to tally totals for each option

Make a decision: Take the matrix into account but still make the decision that’s best for you
5) Evaluate your decision

Alternatives and Decision Criteria; use a Likert scale (1-5) to rank
Example shows how to compare Steak, Pasta, PB&J across Cost, Time to make, Enjoyment, resulting in a total score

Activity: Work in pairs or individually
List 5 things that a car owner would need in a car
List 10 things that a car owner would want in a car
Describe what you believe a good salesperson should try to do when selling you a car (relate to wants and needs)
Why is a good sales pitch important?

Real-world relevance: entrepreneurship addresses needs and wants; misalignment in marketing can lead to product failure (General Mills example).
Ethical considerations: Marketing to children; marketing claims; consumer safety and responsibility in product design and packaging.

Entrepreneur: a person who starts a business to solve a problem or seize an opportunity and accepts risk
Venture: a new or risky business idea intended to fulfill consumer needs or wants
Needs: essentials for survival (food, shelter, clothing)
Wants: desires beyond basic needs
Likert scale: a 1–5 scale used to rank preferences or criteria
Decision criteria: factors used to evaluate alternatives (eg. cost, time to make, enjoyment, etc.)
Pros and Cons: a simple evaluative method for comparing options
Decision matrix: a tabular method to score alternatives against criteria
Car pitch: a succinct sales argument tailored to the buyer’s needs and wants

5-Step Decision-Making Model (enumerated steps 1 through 5)
Likert scale used for ranking decisions on a 1–5 scale
Representative equation-like summary of the model (LaTeX):

\text{Steps: } 1) \text{Define},\ 2) \text{Identify},\ 3) \text{Evaluate},\ 4) \text{Decide & Act},\ 5) \text{Evaluate}\