Domain 1 Lesson 1: Entrepreneurship Basics

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Questions and Answers

Which stage comes directly after the 'Success' stage in the business life cycle?

Exit plan

Pivot or persist

Take off

Resource maturity (correct)

During which stage of the business life cycle is a company likely focused on maintaining profitability after initial success?

Resource maturity (correct)

Survival

Exit plan

Take off

Which of the following is the correct first step in the design thinking process?

Test

Prototype

Empathize (correct)

Define

In which business life cycle stage is a business likely to be when it is trying to gain its first customers?

Existence Signup and view all the answers

What is the primary focus during the 'Empathize' stage of the design thinking process?

Understanding user needs and experiences Signup and view all the answers

Which stage would Michael's profitable tech company be in if it has been approached for acquisition?

Exit plan Signup and view all the answers

What is the typical sequence of stages in the design thinking process?

Empathize, define, ideate, prototype, test Signup and view all the answers

What stage follows the 'Survival' stage in the business life cycle?

Take off Signup and view all the answers

What is the first stage of the design thinking process?

Empathize Signup and view all the answers

During which stage of the design thinking process do teams create solutions to identified problems?

Ideate Signup and view all the answers

What is the purpose of creating prototypes in the design thinking process?

To test multiple solutions Signup and view all the answers

In which stage of the design thinking process is the problem statement formed?

Define Signup and view all the answers

What stage involves understanding the customer's challenges?

Empathize Signup and view all the answers

Which of the following stages comes after ideation in the design thinking process?

Prototype Signup and view all the answers

In the design thinking process, what is the primary goal of the test stage?

To gather user feedback on prototypes Signup and view all the answers

Which order correctly represents the design thinking process stages?

Empathize, Define, Ideate, Prototype, Test Signup and view all the answers

What is a Minimum Viable Product (MVP)?

An inexpensive version of a product used for testing Signup and view all the answers

How do small business owners primarily differ from entrepreneurs?

Small business owners invest in known risks while entrepreneurs may take on unknown risks Signup and view all the answers

What characterizes a franchise in comparison to other small business types?

Operates under established branding and business models Signup and view all the answers

Which statement best describes products compared to services?

Services require training to perform, unlike products Signup and view all the answers

What is a challenge associated with digital products?

It is often difficult to demonstrate their value to customers Signup and view all the answers

Which statement best illustrates the risk profile of entrepreneurs?

They often embrace unknown risks seeking rapid growth Signup and view all the answers

In what way do physical products and services differ in terms of presentation?

Physical products come ready-made while services may require initial training Signup and view all the answers

Why might small businesses prefer e-commerce for selling products?

E-commerce allows for broader market reach without geographical limitations Signup and view all the answers

Study Notes

Domain 1 Lesson 1: Entrepreneurship and Small Business V2

Small business owner objective: Generate profits
Entrepreneurs: Take on new opportunities and unknown risks to grow businesses quickly
Tangible items: Products that require pick-up or delivery
Business-to-consumer (B2C) transaction: Customer purchases an item from a business
S corporations: For-profit corporations with limited liability
C corporations: Ideal for international businesses
Chief Operating Officer (COO): Oversees daily operational and administrative functions
Stockholder: Votes on company management
Salary: Fixed payment employees receive each pay period
Piecework: Compensation based on the amount of work produced
Equity: Offered in addition to salary, a share in the business
Survival stage: Business consistently gains new customers and consistent income
Exit plan stage: Owner sells ownership in the company
Design Thinking Process stages:
Empathize: Understanding customer perspective
Define: Identifying customer problems
Ideate: Generating solutions to problems
Prototype: Creating inexpensive product versions
Test: Refining the final product
Minimum Viable Product (MVP): Inexpensive product versions created by the design team
Small business types:
Small business owners focus on known risks and profit generation
Entrepreneurs tackle new opportunities and unknown risks
Franchises: Businesses utilizing existing operations, products, and branding
Products vs Services: Products are physical goods (e.g., muffins, toilet paper, jewelry), services are intangible (e.g., AC repairs, web designs, guitar lessons)
Legal Structures:
S corporations: Lower tax rates for avoiding double taxation for the company
C corporations: Suitable for international business, but can be double-taxed
Sole proprietorship: Easy to create but comes with unlimited liability (owner personally responsible for business debt)
Limited Liability Company (LLC): A good option for single-owner business seeking lower risk
Partnership: Shares financial backing
Non-profit: Not looking for profit ownership, not taxed by US federal government
Roles and Compensation:
Founder: Creates the company
CEO: Reports to the board of directors, major decisions
CFO: Oversees company finances
COO: Oversees daily operations and administration
Stockholders: Own stock in the company
Stakeholders: Have a vested interest in the success of the company, often board members.
Compensation Types: Hourly, Commission, Salary, Equity
Business Life Cycle Stages:
Existence
Survival
Success
Take-off
Resource Maturity
Pivot/Persist
Exit Plan

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Description

This quiz covers fundamental concepts of entrepreneurship and small business management. It includes key terms related to business structure, operations, and compensation methods. Test your understanding of essential entrepreneurial strategies and stages of business development.