Entrepreneurship and Business Growth

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18 Questions

What is the primary purpose of establishing a business plan?

To serve as a roadmap for managing a new business venture

What is a characteristic of an entrepreneurial firm, according to Sahlman (1987)?

It relentlessly pursues opportunities without regard to resources currently controlled

What is the first step in determining the resources required for a new venture?

Appraising the entrepreneur's present resources

What is involved in managing entrepreneurial transition?

Managing growth, maturity, and transfer of ownership

What is the outcome of identifying and evaluating opportunities?

Developing a business plan

What is a key aspect of a marketing skill in an entrepreneurial firm?

Ability to apply optimal decision about the four marketing mixes

What is the final stage of enterprise development?

Evaluation

What is a main goal of a business that seeks to deliver value to customers better than its competitors?

To achieve sustainable competitive advantage

What is a key step in the entrepreneurial process?

Identifying and evaluating business opportunity

What is a key skill required for an entrepreneurial firm to manage its finances effectively?

Ability to keep track of cash flows

Why is it important for an entrepreneurial firm to have a production plan?

To ensure effective operations and logistics

What is a key goal of an entrepreneurial firm's leadership skills?

To inspire people to undertake tasks necessary for the firm's success

What are the four stages of entrepreneurship identified by Sahlman and Gomper?

Identifying opportunities, acquiring resources, implementing a plan, and harvesting rewards

What is the purpose of the fifth stage of entrepreneurship added by Sahlman?

To complete the entrepreneurial cycle and prepare for reinvention

What is the main objective of reevaluating the critical success factors in an entrepreneurial venture?

To increase the probability of success and minimize risks

What is the focus of the 'People' factor in Sahlman's 4-factor framework for identifying and appraising entrepreneurial ventures?

Key players, including founders, and their experience and achievements

What is the primary goal of a business in terms of cash flow management?

To generate enough cash flow to finance growth and explore safer external funding options

What are the three questions that can help entrepreneurs reevaluate their critical success factors?

What can go right, what can go wrong, and what actions can be taken to increase the probability of success?

Study Notes

Entrepreneurship and Business Development

  • Establishing frameworks for identifying opportunities and seeking new and innovative ways of doing things continuously
  • Identifying niches for new products and developing a business plan to ascertain and exploit viability opportunities
  • Determining resources required, including forecasting skills, and assessing risks involved in holding inappropriate or insufficient resources and excess resources

Entrepreneurial Firm

  • A firm that relentlessly pursues opportunities without regard to resources currently controlled
  • Identifies and evaluates opportunities, develops business plans, determines resources required, determines key success factors, and develops appropriate strategies
  • Implements business plans, establishes control systems, and develops plans for managing growth and transition

Entrepreneurial Skills

  • Marketing skills: apply optimal decision about the four marketing mixes (product, price, place, and promotion) and draw up a marketing plan
  • Production skills: engage in or supervise production activities, and develop a production or service plan
  • Strategic skills: organize the business to deliver value to customers better than its competitors
  • Financial skills: keep track of cash flows, understand the impact of trade-offs in key financial decisions, and manage the risk profile
  • Time management skills: utilize time productively, prioritize important jobs, and get things done as scheduled
  • Leadership skills: inspire people to undertake tasks necessary for the success of the firm

Entrepreneurial Process

  • Identify and evaluate business opportunities
  • Generate enough cash flow to finance growth or look for safer external sources to finance growth
  • Expand or reinvest, and consider public securities offerings for further growth
  • Venture (Investment) opportunity screening frameworks, including four stages: identifying opportunities, acquiring resources, implementing a plan, and harvesting rewards

Sahlman's Framework

  • 4-factor framework for identifying and appraising entrepreneurial ventures: People, Opportunity, Deal, and Context
  • Each element is dynamic and can change over time, requiring reevaluation
  • Three questions to help in the process of reevaluation: What can go right? What can go wrong? What actions can be taken to increase the probability of success?

This quiz covers the key stages of entrepreneurship, from identifying opportunities to acquiring resources and expanding business. It also explores the financing options for growth, including venture capital and public securities offerings.

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