Entrepreneurship and Business Growth

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Questions and Answers

What is the primary purpose of establishing a business plan?

To determine the resources required for a venture

To serve as a roadmap for managing a new business venture (correct)

To identify new business opportunities

To assess the risks involved in holding excess resources

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

It focuses on market research

It relentlessly pursues opportunities without regard to resources currently controlled (correct)

It prioritizes risk management

It focuses on resource allocation

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

Appraising the entrepreneur's present resources (correct)

Evaluating market opportunities

Identifying key success factors

Developing a growth strategy

What is involved in managing entrepreneurial transition?

Managing growth, maturity, and transfer of ownership Signup and view all the answers

What is the outcome of identifying and evaluating opportunities?

Developing a business plan Signup and view all the answers

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

Ability to apply optimal decision about the four marketing mixes Signup and view all the answers

What is the final stage of enterprise development?

Evaluation Signup and view all the answers

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

To achieve sustainable competitive advantage Signup and view all the answers

What is a key step in the entrepreneurial process?

Identifying and evaluating business opportunity Signup and view all the answers

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

Ability to keep track of cash flows Signup and view all the answers

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

To ensure effective operations and logistics Signup and view all the answers

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

To inspire people to undertake tasks necessary for the firm's success Signup and view all the answers

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

Identifying opportunities, acquiring resources, implementing a plan, and harvesting rewards Signup and view all the answers

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

To complete the entrepreneurial cycle and prepare for reinvention Signup and view all the answers

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

To increase the probability of success and minimize risks Signup and view all the answers

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 Signup and view all the answers

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 Signup and view all the answers

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? Signup and view all the answers

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?

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Description

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.