Chap 4 Part 1/2

Question 1

What is an entrepreneur

Answer 1

Someone who assumes the risk of creating organizing and operating a business who directs all ressources
Also satisfy opportunity niche—> A need in the market place that is not being adequately fufilled

Question 2

What are the types of entrepreneurs

Answer 2

• Lifestyle: look more than profit when they begin a business (flexible hours, homebased..)
• Microentrepreneur: entrepreuneur who start business who are satisfied to keep it small
• Homebased: entrepreneur who run their businesses out of their homes
• Internet: entrepreneur who creates business operation online
• Growth: strive a fast-growing businesses and look foward an expension
• intrapreneur: employees who work in organizational environment

Question 3

Reasons to start a small business

Answer 3

• Opportunity and innovation: new idead and needs bring new businesses
• Financial independance: owners feel they can make more money operating their own business
• Control: more control of business descisions
• Schedule flexibility: better work/life balance
• Unemployement: seeking income due to loss jobs

Question 4

What does a business plan consist of

Answer 4

• Company information: status, history
• Marketing plan: pricing, distribution
• Operational plan: R&D, manufacturing plan
• Financial plan: current financing, financial needs
• Risk analysis: risk evaluation

Question 5

Different sources of investor

Answer 5

• Venture capitalist: investors who contribute money to your business in return for some form of equity
• Angel investors Wealthy individuals who are willing to put their own money into your business in hopes of a profit in return

Question 6

Different forms of ownership

Answer 6

•Sole proprietorship: A business owned by one person and not protected by limited liability–> safeguard assets from being seized as payment for debt and claims
•Partnership: 2+ individuals agree to combine financial, managerial and technical abilities
- GP=>actively involved partner
- LP=>not actively involved partner
•Corporation: a business that is a separate legal entity that is liable for its own debts
•Cooperative:a business owned and governed by members who use its products or services, not by outside investors

Question 7

Difference between Article of incorporation and Bylaws

Answer 7

• Article of incorporation: lay out the general nature of the corporation, the name of the corporation and its directors, the type and number of shares to be issued, and location of the company’s operations
• Bylaws: are the rules of a corporation, established by the board of directors during the process of starting a corporation.

Question 8

Difference between merger and aquisition

Answer 8

Merger: two companies join to form one company

Aquisition: One company takes over another

Question 9

What are the types of merger

Answer 9

• Horizontal merger: two companies that share the same products
• Vertical merger: two companies that shares the same customer/supplier relationship
• Product extension merger: two different products but share the same market
• Market extension merger: same products but different market
• Conglomeration: two businesses with noe common businesses area murge to obtain diversity