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What Is Entrepreneurship and Why Is It Important?

Autor:   •  May 23, 2018  •  947 Words (4 Pages)  •  437 Views

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-Management Prowess

- Step requires honesty

- Does a sufficient level of passion for the business exist?

- How well is the market(s) understood that the business will operate in?

-Resource Sufficiency

- Does the organize have or is it capable of obtaining resources to move forward

- Focus here is on nonfinancial resources (skills, intellectual protections of key aspects (see Table 3.5)

- Financial Feasibility Analysis

-At this point this is a preliminary financial assessment

-Key issues:

- Start-up cash needed

- Prepare an actual budget indicating all purchases and costs

- Provide an explanation where money will come from (winning the lottery is not reasonable)

- Overestimation better than underestimation (you will run higher than you think)

- Financial performance of similar businesses

- Compare to similar existing businesses

-Archival data exists: can also speak with owners and observe

- -Key issues (cont’d):

- Financial attractiveness of proposal

- Concerned with business’s projected rate of return(profitability) – at this point, based on judgment

- Project rate of return should be considered against the following:

- Amount of capital invested

- Risks assumed in launching the business

- Existing alternatives for the money being invested

- Existing alternatives for the entrepreneur’s time and efforts

- See Table 3.6 for other factors to consider

Chap 4

- Business Models and Their Importance

- General Categories of Business Models

-Standard Business Models: depict existing plans firms can use to determine how the will create, deliver, and capture value for stakeholders

- Advertising Business Model

- Auction Business Model

- Manufacturer/Retailer Business Model

- Bricks and Clicks Business Model

- Peer-to-Peer Business Model

- Franchise Business Model

- Razor and Blades Business Model

- Freemium Business Model

- Subscription Business Model

- Low-Cost Business Model

- Traditional Retailer Business Model

Disruptive Business Models are rare; don’t fit the standard models and disrupt the way business is conduct in an industry or important niche of an industry

Two disruptive models:

- New market disruption – addresses a market that previously wasn’t served

- Low-end market disruption – over supply of over improved products provide market for simpler, cheaper or more convenient ways of performing a task (e.g., Southwest Air)

- The Barringer/Ireland Business Model Template

- Core Strategy

- Resources

- Financials

- Operations

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