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AFM 132 > AFM 132 - Chp. 6 - Entrepreneurship > Flashcards

AFM 132 - Chp. 6 - Entrepreneurship Flashcards

1
Q

What does is mean to be entreprenuerial?

A

ability to manage uncertainty, take risks, be creative, and problem solve

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2
Q

What are the traits of an entrepreneur?

A

passion + motivation, tolerant of uncertainty, learning and growth mindset, confidence

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3
Q

Why is there increased support for entrepreneurship?

A

Education, technology, social acceptance, support system

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4
Q

What is intrapreneurship?

A

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

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5
Q

What’s the life cycle of entrepreneurial venture?

A
  1. Birth/introduction - define the business model + make money
  2. Breakthrough/growth - where business model proves itself to work well - managing growth
  3. Maturity/exit - how to keep business relevant, exit strategy
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6
Q

What some challenges in launching an idea?

A
  1. getting customers - established web presence or storefront?
  2. managing time - self-discipline + time management to remain productive?
  3. abiding by local rules - restrictions on where you can set up business? any rules and regulation?
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7
Q

What are the other ways to get into business - not entrepreneurship

A
  1. buying an existing business
  2. franchising
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8
Q

Why would you want to buy an existing business?

A

chances of success increase as you may being with an established customer base, supplier relationships, and an existing reputation

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9
Q

What are some considerations to think of when buying an existing business?

A
  1. why is it up for sale? - understand the opportunities/challenges you’re stepping into
  2. due diligence
  3. what a price to pay
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10
Q

What is the process of due diligence?

A

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

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11
Q

What is the value of companies based on?

A
  1. what the business owns (assets)
  2. what the business currently earns + future profit potential
  3. what makes it unique - reputation or quality of employees
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12
Q

what are the benefits of Franchising

A
  1. 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
  2. proven product or service - failure rates for franchise can be lower than starting a business form scratch
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13
Q

What does the franchising agreement usually include?

A

day-to-day responsibilities, standards to follow, and franchising (fee) payments from your profits

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14
Q

What’s a drawback of franchising?

A

potential lack of control - franchisor may dictate the look or have final say in product/services offerings + operational decisions

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15
Q

What types of resources are available for entrepreneurs?

A
  1. innovative work locations
  2. government support
  3. various forms of financing
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16
Q

Define incubators (in terms of entrepreneurship context)

A

supportive environments that provide working space + support to grow ideas + mange a business

17
Q

What’s an advantage of launching an idea within an incubator”

A

community + structure it provides - provides a support system to get creative minds together + structured environment = crucial in the early development stages for a business

18
Q

Does the Canadian government support innovation + small business creation?

A

Yes! VARIOUS LEVELS DO!

19
Q

What’s the role of Business Development Bank of Canada?

A

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

20
Q

What are the 2 largest sources of funds for small businesses? what are their percentages?

A
  1. personal savings (84%)
  2. bank loans (37%)
21
Q

What are 2 smaller sources of funds for small businesses?

A
  1. borrowing from family + friends
  2. accessing government grants
22
Q

what are Angel investors?

A

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

23
Q

What is venture capitalists?

A

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

24
Q

what is Crowdfunding?

A

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)

25
Q

What are “backers”

A

People from online who are willing to provide funds to grow a business

26
Q

What’s a benefit of crowdfunding?

A

the ability to gauge customer interest in an idea or product before you commit too many resources or operations around it

27
Q

What are some helpful tools in making plans for a business?

A
  1. value proposition
  2. business modal canvas (BMC)
  3. Business plans
28
Q

Define Value proposition

A

describe the benefits customers can expect from using the products + services of a company

describes what the company offers its customers + what they will value

Jobs, pains and gains

29
Q

What’s helpful to do before crafting a value proposition/

A

develop a profile of your customer - conduct market research + reflecting on what their jobs, pains (obstacles/challenges) + gains (desires) are

30
Q

What is a way that companies continuously try to understand these gains, pains + jobs?

A

using survey found at the bottom of receipts

31
Q

Define a business model Canvas

A

captures how you create + deliver value to customers through your product/services + capture value as a company (earn money through revenue streams)

BMC helps new or existing businesses design + map out their business models

32
Q

What is business plan?

A

summarizes an idea + how the business will operate, can be be shared with banks + investors to request funding

33
Q

What does the business plan aim to capture?

A
  1. nature of the business - mission + vision of the business
  2. target market - who you are reaching
  3. understanding the competition + industry - how a business fits within its external environment, assessment of the competitive landscape, opportunities + challenges they face
  4. qualifications of the people involved
34
Q

What are some common mistakes when writing a business plan?

A
  1. ignoring competition - consider how you will maintain a competitive edge s the business environment evolves
  2. relying on a few customers - maintaining relationships with existing + new customers
  3. procrastinating - business plan provides direction for business - helps strategize + act quickly in a competitive + changing business environment
  4. being too optimistic - important to be realistic with projections + consider all possible scenarios
35
Q

What do businesses without proper record keeping practices face?

A

higher risk of failure

36
Q

Define accounting systems + importance of them

A

capture financial transactions to know how much money the company has, how much is being spent, how much is borrowed , and if more funds are required

consider financial impact of common business activities

37
Q

Define inventory + importance

A

materials for producing goods + services

consider the cost of time + money to stop or delay production due to not enough inventory

38
Q

Define customer records + importance

A

consider if customer information is up to date + ability to capture additional data (past purchases or prior communications) - helps to tailor future engagement efforts

39
Q

define employee records + importance

A

data company has on their employee

AFM 132 (12 decks)

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