Pathways to Entrepreneurial Ventures Flashcards
3 ways of initiating a venture
- creating new ventures
- acquiring an existing venture
- franchising
Entrepreneurial individuals may want to create a _____ product or service (or to improve existing ones) and make a successful business out of it.
completely new
Refers to the creation of new products and services and turning it into a profitable venture
New-new approach
Ways to uncover new product concepts:
* _____ of the world around you
* Making lists of _____ or of problems in using known products or services: examples: household chores are difficult to do, processes that are hard to do, etc.
* Most business ideas tend to come from _____
* Main sources for both men and women are prior jobs, hobbies or interests, and personally _______.
- Close observation
- annoying everyday experiences
- people’s experience
- identified problems
An entrepreneur piggybacks on someone else’s idea by either improving a product or offering a service in a location where it is not available yet.
New-old approach
New ventures which started without a totally unique idea
New-old approach
Entrepreneurs considering this kind of ventures should try to offer a product or service that is difficult to copy
New-old approach
Examining the Financial Picture: Cost of starting up (10) (EXAM)
- Fixtures and Equipment and Installation
- Decorating and Remodeling
- Starting Inventory
- Deposits with public utilities
- Legal and other professional fees
- Licenses and Permits
- Advertising and Promotion
- Accounts Receivable
- Cash
- Other Expenses
Examining the Financial Picture: Monthly to annual expenses (13)
- Salary of owner/manager
- Other Salaries and Wages
- Rent
- Advertising
- Delivery Expense
- Phone bills
- Other utilities
- Insurance
- Taxes, Social Security
- Interest
- Maintenance
- Legal and other professional assistance
- Miscellaneous
Acquiring An Existing Venture: A prospective or budding entrepreneur may choose instead to ____ or buy an _______, instead of starting-up a completely new venture
- purchase
- already established business
Where to find opportunities in acquiring an existing venture
- business brokers
- newspaper ads
- trade sources
- professional sources
3 advantages of acquiring an established venture (EXAM)
- less fear about successful future operation
- reduced time and effort
- Good price
Guide to evaluating a selected venture (7)
- why is the business being sold?
- what is the current physical condition of the business?
- what is the condition of the inventory?
- what is the state of the company’s assets?
- how many of the employees will remain?
- what type of competition does the business face?
- what is the financial position of the business?
An arrangement in which the owner of a trademark, trade name, or copyright has licensed others to use it in selling goods or services
Franchising
Franchising: An arrangement in which the owner of a _____, _______, or _______ has licensed others to use it in selling goods or services
- trademark, trade name, or copyright
A ______ (the buyer of a franchise) is ____ independent from but _____ dependent on the integrated business system of the ______ (the seller of the franchise).
- franchisee
- legally
- economically
- franchisor
5 common obligations of a franchisee
- Make a financial investment in the operation
- Obtain and maintain a standardized inventory and/or equipment package, usually purchased from the franchisor
- Maintain a specified quality of performance
- Follow a franchisee fee, as well as a percentage of the gross revenue
- Engage in a continuing business relationship
4 advantages of buying a franchise (EXAM)
- training and guidance
- brand-name appeal
- proven track record
- financial assistance
3 disadvantages of franchising (EXAM)
- franchise fees
- franchisor control
- unfulfilled promises
3 ways of evaluating opportunities for franchising
- cost of franchising
- investigating the franchisor
- seeking professional help
10 costs of Franchising (EXAM)
- Basic Franchising Fee
- Insurance
- Opening Product Inventory
- Remodeling and Leasehold Improvements
- Utility Charges
- Payroll
- Debt Service
- Bookkeeping and Accounting Fees
- Legal and Professional Fees
- Licenses and Permits
