Unit 6: Entrepreneurship Flashcards
- Value an entrepreneurial mindset and traits of an entrepreneur - Differentiate between entrepreneurship and intrapreneurship - Describe the challenges of launching a new idea and ways to start a business - Give examples of resources to start a business, including incubators, industry and government supports, and financial resources - Describe some tools that can help you plan a business, including the Value Proposition, Business Model Canvas, and business plans
what does it mean to be an entrepreneur
- Being entrepreneurial means managing uncertainty, taking risks, being creative, and problem solve
- Harnessing an entrepreneurial mindset can set you up for success regardless of your future career
what are some experiences you can gain from part-time, summer, or co-op jobs
- Finding your passion
- Building technical abilities
- Expanding skills
- Gain exposure to different organizational cultures
what are the traits of successful entrepreneurs
- passion & motivation
- tolerant of uncertainty
- learning & growth mindset
- confidence
what does it mean for entrepreneurs to have passion & motivation
- When making money is not the main motivator
- Believes in the purpose of their ideas and pursue them
- Passion helps plan and execute their ideas into a business
what does it mean for entrepreneurs to have tolerant of uncertainty
- Comfortable navigating what you don’t know
- Not being afraid of failing
- Comfortable taking risks
what does it mean for entrepreneurs to have learning & growth mindset
- Having a growth mindset to learn
- Learning from past failures and mistakes and being able to adapt
what does it mean for entrepreneurs to have confidence
- Understanding personal abilities, strengths, and weaknesses
- Actively look for opportunities to improve their skills
- Knowing when to seek help from others
what are some motivators for people to pursue an idea of their own or within a business
- Meet an unmet need (Make life easier)
- Evolve a process (be more efficient or cost-effective)
- Improve an existing product/service
what are some reasons someone would become an entrepreneur
- can be their own boss
- flexibility
- define their own success
why is “being their own boss” a reason why someone would become an entrepreneur
- Making their own ideas come to life
- Making all of the decisions for the business
- Don’t need to work for someone else’s vision
- Do things your way
why is “flexibility” a reason why someone would become an entrepreneur
-Finding work-life balance
- Setting own timelines to manage and grow the business
why is the ability to “define their own success” a reason why someone would become an entrepreneur
- Satisfaction and pride that comes with running your own business
- Defining your own earnings potential overtime through decisions you made
what are the factors that made entrepreneurship more mainstream (more common & supported)
- education
- technology
- social acceptance
- support systems
how does technology make entrepreneurship more mainstream
- Costs of technology has reduced overtime
- Changes the way companies operate
- Ex. use of social media
how does education make entrepreneurship more mainstream
More courses, workshops, etc. on entrepreneurship
how does social acceptance make entrepreneurship more mainstream
- More awareness and interest in non-traditional career paths
- More respect for those taking risks and becoming entrepreneurs
how does support systems make entrepreneurship more mainstream
With social acceptance, there are more support systems that help entrepreneurs succeed
what is intrapreneurship
Being entrepreneurial within a corporate setting; therefore can only exercise creativity to launch new products/services or evolve processes using the existing resources and reputation of a company
how does companies encourage intrapreneurship
- Promoted through competitions to encourage employees to create new features or products in short time frames
- Providing time and resources to employees to think outside traditional ways of doing business
what is the purpose of intrapreneurship
- constantly challenge the status quo and don’t get comfortable relying on current successes
- Constantly find ways to satisfy the changing needs of customers
- Increases competition in the market
what are the stages of entrepreneurial venture
- birth/introduction
- breakthrough/growth
- maturity/exit
what happens in the birth/introduction stage of an entrepreneurial venture
- Can the company define its business model to exist and make money?
- Gets the initial customers in this stage
- Focus is survival
what happens in the breakthrough/growth stage of an entrepreneurial venture
- Business model is proved to work well
- Focus is managing growth
- Can the business effectively manage customer relationships or obtain financing to continue its growth?
what happens in the maturity/exit stage of an entrepreneurial venture
- How to keep the business relevant
- How can the company stay competitive in a constantly changing environment?
- Focus is maintaining and growing market share, and maintaining continued financial stability
- Or an exit strategy; like selling the business
what is the purpose of the entrepreneurial venture stages
- These stages show the importance of honing an entrepreneurial mindset
- Helps entrepreneurs and their businesses stay flexible, focused, and to persevere
what are the different types of strategic leadership an organization is looking for at each of the business stages
- birth/introduction - “risk taker”
- breakthrough/growth - “caretaker”
- maturity/exit - “surgeon”
what are the advice from an entrepreneur
- develop a growth strategy
- map out growth plan
- invest for growth
- increase productivity
- become a better leader
- get advice/guidance
what are some common challenges in launching an idea during the birth/introduction phase
- getting customers
- managing time
- abiding by local rules
how is getting customers a common challenge when launching an idea during the birth/introduction phase
- Is there a storefront or established web presence?
- Attract customers through social media, advertising, or word of mouth
how is managing time a common challenge when launching an idea during the birth/introduction phase
Do you have self-discipline & time management skills to remain engaged and productive?
how is abiding by local rules a common challenge when launching an idea during the birth/introduction phase
- Are there restrictions to where the business can be set up?
- Are there rules/regulations in how to operate?
what are some other ways to get into business (besides starting from scratch)
- buy an existing business
- franchising
why would someone buy an existing business
- Starting your own business requires a lot of planning and money
- Buying an existing business increases the chances of success
- Already have an existing customer base, supplier relationships, and existing reputation
- Sometimes the employee of the business is the one that takes over
what are some considerations buyers should have when buying an existing business
- why is it up for sale?
- due diligence
- what price to pay
what are buyers considering when they are asking why a business is up for sale
What are the opportunities or challenges that are associated with the business?
what do buyers need to consider due diligence
- Verifying the information of the business
- Letter of intent between the seller and potential buyer
- Addresses any privacy/confidentiality concerns during the discussions
- Buyer can assess financial records and agreements
- Getting advice from accountants and lawyers
- Assessing any potential issues which could cause future problems
how do buyers consider what price to pay for a business
The value of a company is based on:
- What the business owns (assets)
- What it currently earns & future profit potential
- What makes it unique (ex. Reputation, quality of employees)
what are the benefits of buying & operating a franchise
- franchisor’s experience & reputation
- proven product or service (already introduced to the market)
- lower failure rates compared to starting from scratch
how is the franchisor’s experience and reputation a benefit of a franchise
Franchisor can provide ongoing management support, assistance in setting up a location, training, marketing, and managing the supply chain to get the best prices
what else should be considered about a franchise
- Consider relationship between franchisor and sign a franchising agreement
- Displays day-to-day responsibilities, standards to follow, and royalty/fee payments
what are some downsides to franchising
- Franchising also has a potential lack of control
- Franchisor may dictate the look or have final say in products/services and operational decisions
what are incubators
- Supportive environments that not only provide working space but also support to grow ideas and manage a business
- Can include coaching, management and operations assistance, networking opportunities, and access to financing
what are the advantages of incubators
- One of the biggest advantages is the community and structure provided
- It is a support system for creative minds and a structured environment that is crucial for the early stages of a business
- Universities, colleges, and government-industry partnerships are investing more into incubators
how do incubators benefit communities
- by creating jobs, stimulating local industry, and allowing Canada to compete in the global marketplace
- Current rise in social entrepreneurship, there are also incubators dedicated to social impact
How does Business Develop Bank of Canada (BDC) support innovation and small businesses
- helps small and medium-sized companies launch and grow
- They provide financing and advisory services to help make businesses successful
why do various levels of the Canadian government support innovation and small business creation
- Entrepreneurial activities drive the economy
- Creates jobs and increase productivity
- Most small businesses in Canada are Canadian-owned and managed
- Larger businesses have foreign ownership
- 98% of employer businesses are small businesses
- 70% of the workforce works for small businesses
what are all the difference sources/types of funding
- personal savings
- bank loans
- borrowing from friends/family
- accessing government grants
- angel investors
- venture capitalists
- crowdfunding
what is the largest source of funding for small businesses and how much is it (%)
personal savings - 84%
what is the second largest source of funding for small businesses and how much is it (%)
bank loans - 37%
what are angel investors
- Wealthy individuals that invest in early-stage businesses
- Want some control in how the business is run in addition to their return on investment
- Can also act as mentors
what are venture capitalists
- Individuals or companies that invest in businesses that are established
- Expecting a return on investment
- Venture capital usually provides millions of dollars
- These funds are used to significantly expand and grow the business
what is crowdfunding
- Raising capital from people online
- Use of platforms where companies can set a financial goal, pitch their idea
- They hope to catch the attention of people known as “backers” to support their business
- Backers contribute small amounts and get something in return like early access, reduced prices, or additional perks
- Crowdfunding can gauge customer interest into an idea before investing much in it
what is a value proposition
- Describes the benefits customers can expect from using the products and services of a company
- What the company offers to the customers and what they will value
what should be done before creating a value proposition
develop a profile on customers (market research)
what market research should be conducted on the customers
- jobs
- pains
- gains
what are “jobs” when conducting market research on customers
- Tasks customers want to accomplish
- Can be professional or personal
Ex. grocery shopping
what are “pains” when conducting market research on customers
- Are what annoy or are obstacles to your customers in getting the job done
Ex. long line-ups or not having payment methods available when grocery shopping
what are “gains” when conducting market research on customers
- Are what customers want
- Outcomes/benefits that they expect, require, or desire when getting a job done
Ex. finding deals or earning benefits like store loyalty points when grocery shopping
why is it important to determine the jobs, pains, & gains of customers
- Understanding these can help you prioritize what is most important to the customer and focus the value proposition on that
- Can understand how a company’s product/services delivers value to a customer
How can businesses find the jobs, pains, and gains of customers
through surveys
Ex. highlighting benefits if a customer fills out a survey at the bottom of a receipt from a grocery store
what is a business model
Captures how you create and deliver value to customers (value proposition) through your products/services and also capture value as a company (earning money through revenue streams)
what is the business model canvas (BMC)
- a tool that helps businesses design and map out their business models
- shows businesses how they can create, deliver, and capture value
what are the 9 sections of a business model canvas
- customer segments
- value propositions
- channels
- customer relationships
- revenue streams
- key resources
- key activities
- key partnerships
- cost structure
which sections of the business model canvas create value
- customer segments
- value propositions
- channels
- customer relationships
which sections of the business model canvas deliver value
- value propositions
- key resources
- key activities
- key partnerships
which sections of the business model canvas capture value
- revenue streams
- cost structure
what are business plans
- can summarize and idea and how the business will operate
- Can be shared with banks and investors to request funding
- Helps ensure you understand your customers, manage resources well, and deliver value to customers
what details do business plans aim to capture
- nature of the business
- target market
- understanding the competition and industry
- qualifications of people involved
what does business plans capture about the nature of the business
What is the vision and mission of the business?
what does business plans capture about the target market
- Who are you reaching?
- What are their wants/needs, background, decision-making process?
what does business plans capture about the understanding the competition and industry
- How does the business fit in the external environment
- Assessing competition, opportunities, and challenges
- Knowing what makes the business unique
what does business plans capture about the qualifications of people involved
- What is the education and experiences of those involved in the business?
- What resources do they bring
what are common mistakes in writing a business plan
- ignoring the competition
- relying on a few customers
- procrastinating
- being too optimistic
how is ignoring the competition a mistake when writing a business plan
- Existing competitors can change their strategies
- New competitors can enter the market
- How to keep a competitive edge as this happens
how is relying on a few customers a mistake when writing a business plan
- Don’t just focus on maintaining relationships with existing customers
- Branch out to capture more market share
how is procrastinating a mistake when writing a business plan
- Creating a business plan is providing a direction for the business
- Help create strategies and act quickly in a competitive and changing business environment
- Can help maintain or find new competitive advantages
how is being too optimistic a mistake when writing a business plan
- Should be realistic with projections
- Consider all possible scenarios and plan courses of action for each
why is record keeping very important
- Can help you understand where the business is headed and help make informed decisions
- Without proper record keeping practices, there is a higher risk of failure
what are examples of areas that record keeping should take place
- accounting systems; captures financial transactions, how much money you have, spent, borrowed, need
- inventory; what you have/don’t have/used
- customer records; maintain long-term relationships
- employee records; maintaining their information
