AFM 132 - Chp. 6 - Entrepreneurship Flashcards
What does is mean to be entreprenuerial?
ability to manage uncertainty, take risks, be creative, and problem solve
What are the traits of an entrepreneur?
passion + motivation, tolerant of uncertainty, learning and growth mindset, confidence
Why is there increased support for entrepreneurship?
Education, technology, social acceptance, support system
What is intrapreneurship?
Being entrepreneurial within a corporate setting - one can exercise creativity to launch new products or services or evolve processes using a company’s existing resources and reputation
What’s the life cycle of entrepreneurial venture?
- Birth/introduction - define the business model + make money
- Breakthrough/growth - where business model proves itself to work well - managing growth
- Maturity/exit - how to keep business relevant, exit strategy
What some challenges in launching an idea?
- getting customers - established web presence or storefront?
- managing time - self-discipline + time management to remain productive?
- abiding by local rules - restrictions on where you can set up business? any rules and regulation?
What are the other ways to get into business - not entrepreneurship
- buying an existing business
- franchising
Why would you want to buy an existing business?
chances of success increase as you may being with an established customer base, supplier relationships, and an existing reputation
What are some considerations to think of when buying an existing business?
- why is it up for sale? - understand the opportunities/challenges you’re stepping into
- due diligence
- what a price to pay
What is the process of due diligence?
verifying the info of a business
starts with a letter of intent between the current owner + potential buyer + addresses any privacy/confidentiality concerns during these discussions - allows the buyer to assess financial records + agreements
involves assessing any potential issues which could cause future problems
getting outside advice from accountants + lawyers is advised at this stage
What is the value of companies based on?
- what the business owns (assets)
- what the business currently earns + future profit potential
- what makes it unique - reputation or quality of employees
what are the benefits of Franchising
- franchisor’s experience + reputation - franchisor can provide franchisee with ongoing management support, assistance in setting up location, training, marketing, and managing the supply chain to get the best prices
- proven product or service - failure rates for franchise can be lower than starting a business form scratch
What does the franchising agreement usually include?
day-to-day responsibilities, standards to follow, and franchising (fee) payments from your profits
What’s a drawback of franchising?
potential lack of control - franchisor may dictate the look or have final say in product/services offerings + operational decisions
What types of resources are available for entrepreneurs?
- innovative work locations
- government support
- various forms of financing
Define incubators (in terms of entrepreneurship context)
supportive environments that provide working space + support to grow ideas + mange a business
What’s an advantage of launching an idea within an incubator”
community + structure it provides - provides a support system to get creative minds together + structured environment = crucial in the early development stages for a business
Does the Canadian government support innovation + small business creation?
Yes! VARIOUS LEVELS DO!
What’s the role of Business Development Bank of Canada?
helps small + medium-sized companies launch + grow
they are devoted to entrepreneurs + provide financing + advisory services on how to manage your business, increase revenues, + optimize operations
What are the 2 largest sources of funds for small businesses? what are their percentages?
- personal savings (84%)
- bank loans (37%)
What are 2 smaller sources of funds for small businesses?
- borrowing from family + friends
- accessing government grants
what are Angel investors?
wealthy individuals that typically invest in early-stage business - in return for investing money into the business, they want some control in the business operation + seeking a return on their investments
they may act as mentors, and provide suggestions on business operations
What is venture capitalists?
individuals or companies that invest in businesses that are already established + expect a return on their investment
those that receive venture capital (typically millions of dollars, use these funds to significantly expand + grow the business
what is Crowdfunding?
raising capital from online
backers typically contribute small amounts to get something in return (early access or reduced price for a unique product or additional perks + benefits)
