Before the midterm Flashcards
This will make up 20 per cent of the test.
What is entrepreneurship?
Strategic thinking and risk-taking behaviour that creates new opportunities. And building a sustainable business model.
What are the five business formats?
Sole proprietorship Partnership (agreement in writing!) Corporation Cooperative Franchise
Advantages/disadvantages of a sole proprietorship:
+/
Ease of formation (simple and inexpensive)
Basic requirements - name registration, licensing
-/
Unlimited liability (you’re on the hook)
Can be difficult to raise capital alone
Taxation rates can be higher than corporations
Advantages/disadvantages of a partnership
+/
Allows pooling of talent and capital
Easier and cheaper to form than a corporation
-/
Partners are personally liable.
Any partner can force the firm to do shit
Difficult to change ownership
Raising capital can be tough
Rax rates can be higher than corporations
Advantages/disadvantages of a corporation
\+/ Limited liability Ease of transfer of shares Can't be controlled by one shareholder Separate from the person(s) running it Can sell shares to raise capital Altered tax rates
-/
Expensive to set up
High operational and admin costs
Double taxation (corporate income and shareholder dividends)
[Note]
Corporations can be public or private, or in governments, federal or provincial.
Advantages/disadvantages of a co-operative
+/
No shareholder has more than one vote
Limited liability
Control is kept by the people that use the business
-/
No one person can dominate decisions
There’s no incentive to invest above and beyond since everybody gets the same kickback
Everybody shares in losses as well
Advantages/disadvantages of a franchise
+/
Already successful business model
-/
Licensing fees
Restrictions on what you can do
Mission Statements are…
Statements of the organization/individual’s purpose and why they exist. Who they are, what they do.
Mission statements are important because they:
Clarify a core purpose Guide the actions of the organization Spell out overall goals Guide decision making Chart the future of the entity
Value propositions involve:
What you can provide to the market
Why you’re unique
Why someone should purchase your services
How your offering can help someone reach their goals.
What questions should you ask to develop a brand?
What is your business niche(s)?
What’s your value proposition?
What are your products or services?
What differentiates you from others? (overlap w/ V.P.)
Things to include in a portfolio
List of accomplishments from work, volunteer experiences and academics.
Use a PAR format.
What’s the PAR model?
Problem you were faced with
Action you took to face said problem
Results that came from your actions.
Dafuq is SWOT?
An analysis tool for business and personal contexts.
Strengths and Weaknesses are internal
Opportunities and Threats are external.
What are business plans?
The strategic and operational framework for running a business
What are key elements of business plans?
Written Nature of business and offerings Market info Advantages Owners, their qualifications Financial projections Needed startup funding Operational details A path forward
What are common causes of business failure?
Not enough capital
Poor pricing
Assuming you’re going to get customers fast
Not knowing about the market
Not accounting for setbacks/unexpected expenses
Your records suck
Losing track of the numbers - NEVER do this!
What are financial statements and what are they used for?
They’re objective tools for keeping score of your biz
They’re useful communication tools for stakeholders
They’re needed to apply for loans
What are the main two uses for financial statements, and how?
Management: Compare how you're doing against the industry Identify strengths/weaknesses Identify improvement strategies Useful for tax prep and valuation
Evaluation:
Lenders, to see if they should give you a loan or fuck that.
Customers, because they want reliable suppliers
Governments, for regulatory purposes and taxation.
What are the three main financial statements?
Balance sheets
Income statement
Cash flow statement (A.K.A. budget)
What do balance sheets contain, what are they good for?
They list what the business owns and what it owes.
They list outstanding debts and creditors
They list assets available for collateral
They tell lenders or investors about your liquidity and solvency position,
What do income statements contain, what are they good for?
This lists revenues and expenses
They show economic profit for a period of time
These are usually put together every week by retailers
Lenders and managers use them to assess profitability, solvency, efficiency.
What do cash flow statements contain; what are they good for?
Shows all cash coming in and out, and when. These are also called budgets.
Cash flow statements are considered the most powerful statement for managers.
They help lenders and managers:
Estimate cash surpluses and deficits
Shift the timing of cash flows
Determine what kind of loan you need, when to schedule payments.
What’s the #1 most important resource you have? (besides time)
Cash.
What is cash flow, how do you increase it?
incoming minus outgoing cash.
Increase by: Collecting receivables Tightening credit requirements Using proper pricing Manage expenses, down to only what's necessary and reasonable.
How do you get customers?
Research and network to determine potential leads.
Qualify those leads by learning about their: Business and its challenges Market, and their position within it Key competitors Problems and pain points.
In preparing for a cusomer meeting, what is the 5+5+5 of research you should be doing?
5 important facts about the company
5 intelligent questions to ask about the company
5 potential ways your product or service could assist
What are useful information sources for preparing for a customer meeting?
Company reports
Personal contacts
Product complaints
What are the six principles of the art of persuasion?
Liking/friendship (people like those that like them)
Reciprocity (give what you want to receive)
Social proof (we follow the lead of similar others)
Consistency (have one, unified, positive voice)
Authority (people defer to experts)
Scarcity (Rare? I want more.)
What are the three steps to successful selling?
Make a connection with customers
Ask salespeople how to improve
Focus on the customer experience
What is communication used for?
Exchanging information, opinions, ideas and feelings Providing feedback Reaching decisions Solving problems Making requests Influencing others Reaching understanding
What are the four main methods of communication, and what’s something you can say about each one?
Oral:
Rapid and builds trust and openness
Written:
For official messages with long-term implications
Electronic:
Next-day, FYI and graphic content
Non-verbal:
Gestures and other movements
What’s the first step of problem solving?
Define the problem. This is CRITICAL.
What are the other elements of problem solving
Write down all the possible answers
Ensure that the problem statement only has one issue.
Communicating 75% of the story early is better than 100% late or after the fact.
What are the steps in brainstorming?
Start with silent think time
Let everyone share ideas in order until everyone passes
Don’t make comments on ideas, just gather all of them regardless of how stupid.
Hitchhike - build upon ideas already presented
What is the Nominal Group Technique, and what are its steps?
It’s used to create a consensus on the importance of proposals.
First, establish ground rules.
Then, everybody ranks each item.
Discuss the results and move forward.
What’s a cause-and-effect (fishbone) diagram used for?
Identifying the root causes of issues
What’s an affinity diagram used for?
Quickly organizing ideas and issues into patterns. Ensures participation.
The fuck is a RACI chart? What are the letters?
Responsible: who performs a task? (this can be shared)
Accountable: who makes sure it gets done?
Consulted: Who do we check with before taking action?
Informed: Who do we keep in the loop?
What are key characteristics of conflict?
The parties are interdependent
There’s a belief that goals are incompatible
There’s a sense of urgency
Conflict exists in all organizations
Conflict can affect relationships if not addressed
What are the two types of conflict?
Substantive: disagreements over tasks, goals, resource allocation, policies and procedures etc.
Emotional: personal clashes, anger, fear, resentment, distrust
Is conflict good or bad?
SOME conflict is a GOOD thing! It can stimulate new ideas of looking at issues and spark creativity.
N.B.: If conflict is too high (or too low) it’s destructive.
What are the main types of conflict resolution?
Conciliation: 3rd party acts as a go-between
Arbitration: 3rd party acts as judge and makes a binding ruling
Negotiation: both parties work together for a mutually agreeable solution
Mediation: 3rd party assists with individual negotiations
Facilitation: 3rd party assists in group discussions
What are characteristics of conventional negotiating?
Focus on winning (WIIFM)
Assert positions and personal preferences
Stubbornly concede
Seeking compromises based on arbitrary dividing lines
Threats, bluffs, or other negotiation tactics
What are steps to negotiating successfully?
Develop ground rules Jointly identify issues Explore interests Develop objective standards Brainstorm options Evaluate the options using the standards Try to arrive at a consensus
What are characteristics of effective meetings?
Clearly defined goals, with an agenda distributed ahead of time All agenda items covered, goals met Key players show up Stays on schedule and on track Minimal disruptions Clear decisions Next steps documented Solid minutes produced fast and sent out
How can you plan effective meetings?
A huge amount of time is wasted on poor meetings.
Start with the end in mind – what problem(s) are we trying to solve?
Design agenda items to meet outcomes (what’s best, presentation, activities, workshop?)
Execute the agenda and write everything down.
• Who has to do What, by When?
