Generating and protecting business ideas

Question 1

What is a franchise?

Answer 1

A franchise is a business structure where a business sells the right to trade under their name, this is done at the cost of royalty fees.

Question 2

Advantages of a franchise

Answer 2

Already a well known name
help and support
Training for staff

Question 3

Disadvantages of a franchise

Answer 3

Get less control
Have to give up some of the profits
Dont have the freedom to make decisions alone

Question 4

What is copyright?

Answer 4

The protection given to books, plays, films and music.

Question 5

What is a patent?

Answer 5

A exclusive right to use a process or produce a product, usually for a fixed period of time, normally 20 years.

Question 6

What is trademark?

Answer 6

A word, image, sound or smell that enables a business to differntiate itself from its competitors.

Question 7

Sources of business ideas

Answer 7

Using business dictonaries such as the Yellow Pages, Thomsons Local and the telephone directory.
Using local maps to locate existing competitors.
Using small scale research such as questionnaires.

Question 8

Advantages of Knowing the product or service

Answer 8

Entrepreneur will have a good knowledge of the features of the product.
Good contacts in established market.
Already have a good reputation.

Question 9

Disadvantages of knowing the product or service

Answer 9

Is there room for another competitor?
Might overestimate the size of the market
Might be the only person with the passion for the product.

Question 10

Advantages of spotting a gap in the market

Answer 10

Basing it on customer needs, rather than their own needs.
More likely to enjoy ‘first mover advantage’ as they will be the first in the market.
Little or no competition.

Question 11

Disadvantages of spotting a gap in the market

Answer 11

Have little or no expertise in the product
Can the gap actually be exploted?
Competition can enter quickly.