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Bus Entrepreneur
Ch 1-6 Test questions
| Question | Answer |
|---|---|
| Entrepreneur origins | 17th Century French word, present day meaning someone who undertook any project that entailed risk, military, legal, political. Became know as someone who started new business |
| capitalism aka free market system | individuals and companies competing for economic gains, private property ownership and wealth, free market determines the price |
| profit | A sign that the entrepreneur is adding value with their resources or product. Business must make a profit to stay in business. |
| Entrepreneur benefits: | Independence, Satisfaction, Financial reward, Self-Esteem, Contribution to Society |
| Schumpeter's definition of way entrepreneur's find business opportunities: | Use new tech to produce new product, Use exist tech to produce new product, use exist tech to produce old product in new way, Find a new source of resource, Develop new market for exist product |
| Business-format franchising | form in which a franchisee secures the product and trade-name benefits but also the operating, quality assurance, accounting marketing methods and support to the franchisor. |
| Franchise advantages: | Increased prob of success, franchise track record, assistance in training and financing assistance, purchasing power, advertising and promo support, operating guidelines and management assistance |
| Franchise legal | governed by state and fed laws and regulations. FDD Fran Disclosure Doc: Overview/background, fees/costs, territory, fin performance, data, fin statements, termination/renewal |
| Benefits of buying and existing business: | Quicker, easy start up, Reduced risk, Bargain Potential, Your knowledge can add benefit - study up to learn ahead of time |
| Common undisclosed reasons to sell a business | Lack of cash flow, unprofitable, staff issues, zoning or traffic changes, new competition, desire to start new business diff location, pend or active litigation |
| Why more capital needed to purchase business versus starting one: | Previous owner built up customer base, created product, hired employees, lot of work already done for you, they want compensation for the work. |
| Buying a business drawbacks; | Buying someone else's problems and not a good fit for your interests. |
| Nonfinancial variables of buying an existing business | Employee turnover, co. sturcture, products & service offered, inventory records, customer lists, litigation in process, material changes |
| Business plan definition | A document that throughly explains a business idea and how it will be carried out. Operation guide and key to raising capital |
| Business plan purpose: | Saves time and money upfront, lays outs mission, vision, desciption, marketing, managment, financials, funding and exit strategy |
| Marketing Strategy: four key factors: | PRODUCT- meets the need, PRICING - affordable for customer & profitable for business, PROMOTION - how and where to advertise & PLACE - where will you sell product |
| Elevator Pitch | 15-30 second presentation that conveys in an engaging way what business you are proposing and why the listener should be interested |
| Four type of businesses | Manu, Wholesale, Retail, & Service |
| Competitive Strategy - sustainable - out perform competition | 1. Can attract more customers by quality or special service. 2. Can you supply your product at a lower price than other businesses |
| Profit of One | The amount of gross profit that is earned on each unit of the product or service a business sells |
| gross profit | price minus cost of goods sold |
| tangible product | item you can physically touch, retail stores |
| intangible product | service type businesses, accountant, banker |
| Marketing | the development and use of strategies for getting a product or service to customers and generating interest in it. |
| Market segment methods | Geographic, Demographic, Psychographic (mind set liberal vs cons), Behavioral (buying patters) |
| market saturation | life cycle of product is reaching the end, product no longer in high demand |
| Product Life Cycle (PLC) | Introduction, Growth, Maturity and Decline |
| Mind Share | (Business / Marketing) the level of awareness in the minds of consumers that a particular product commands |
Created by:
wendyk444
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