Entrepreneurship Concepts and Financial Planning

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Questions and Answers

What differentiates entrepreneurs from ordinary businessmen?

They specialize in buying and selling goods.

Their primary goal is to earn profits.

They focus solely on operational efficiency.

They seek to discover and create new value. (correct)

How do entrepreneurs typically respond to crises or difficult situations?

They seek to evade challenges in their business.

They use these situations as inspiration to create something innovative. (correct)

They often become discouraged and stop innovating.

They focus on immediate profit-making solutions.

What does the term 'heart flame' in the entrepreneurial context refer to?

A method for operational efficiency.

A surge of passion and emotional intelligence. (correct)

A focus on profit margins.

A technique for financial investments.

Which of the following actions exemplifies the highest level of entrepreneurial opportunity seeking?

Introducing disruptive technologies and processes. Signup and view all the answers

What characterizes the entrepreneurial mind frame during challenging times?

The ability to turn danger into opportunity. Signup and view all the answers

What is the purpose of the entrepreneurial 'gut game'?

To sense opportunities through intuition Signup and view all the answers

Which of the following is NOT included in the expected return calculations within a financial forecast?

Expected return on market share Signup and view all the answers

What must a business plan evaluate in relation to risks?

Both business risks and financial risks Signup and view all the answers

What does the capital structure and financial offering section of a business plan focus on?

The relationships with investors, financiers, and partners Signup and view all the answers

What must a business plan assure regarding regulatory compliance?

That necessary local government ordinances and ethics will be followed Signup and view all the answers

What is considered a direct participant in an industry?

Rivals competing for the same market Signup and view all the answers

Which of the following represents a potential threat to an enterprise in the social context?

Rising trend of healthy food preferences Signup and view all the answers

How can an entrepreneur benefit from understanding industry dynamics?

By identifying profitable opportunities within the industry Signup and view all the answers

What is an economic opportunity presented by the ASEAN Integration in 2015?

Access to zero tariff trading in ASEAN countries Signup and view all the answers

Which factor may lead to failure in the industry regarding political dynamics?

Difficulty of smaller suppliers to compete with foreign rivals Signup and view all the answers

Study Notes

Opportunity Seeking

Entrepreneurs are innovative opportunity seekers
Entrepreneurs see opportunities in the midst of difficulty. They see the danger (crisis) as an opportunity
Entrepreneurs are passionate about their vision and mission. They have a heart flame that keeps them motivated
Entrepreneurs are able to sense opportunities through intuition (gut game)
The heart flame is also about emotional intelligence (EQ)

Financial Forecasts

Expected returns:
- Expected return on sales
- Expected return on assets or investments
- Expected return on stockholders' equity
- Business plan should calculate long-term returns (internal rate of return and net present value)
Business plan should evaluate business and financial risks involved.

Environmental and Regulatory Compliance

Business plan should list all laws, rules, and regulations relevant to the business
Business plan should assure that all necessary permits, licenses, and authorities have been acquired.

Capital Structure and Financial Offering

Identify investors, financiers, and partners
Business plan must appeal to its target audience

Industry Analysis

Relevant customers, competitors, and market characteristics can be identified by properly classifying the industry.
Participants in an industry:
- Rivals or competitors
- Suppliers of input
- Consumer market segments served
- Substitute products or services
- All other support and enabling industries

Industry Threats

Social:
- Opportunities: Increased double income earners (mother and father both working) and trend towards healthier food choices
- Threats: Trend towards healthier food choices may mean more healthy food offerings are demanded by customers
Political:
- Opportunities: Tax exemption for 13th month pay and other bonuses increases purchasing power of consumers
- Threats: Smaller suppliers struggling with greater competition from foreign rivals
Economic:
- Opportunities: ASEAN Integration in 2015 makes it easier to expand to other ASEAN markets
- Threats: Additional costs (e.g., new packaging) can reduce profitability
Ecological:
- Opportunities: Increased usage of eco bags and environment-friendly containers can be used to start an advocacy for a greener operation
- Threats: Increased usage of apps for delivery orders may lead to online customer disappointments and negative reviews
Technological:
- Opportunities: Increased use of smartphones to share information provides opportunity to start an advocacy toward a 'greener' operation
- Threats: Increased use of apps for delivery orders may lead to online customer disappointments due to technical glitches, resulting in negative reviews

Ecological Environment

Ecological environment includes all natural resources and the ecosystem.
Environmental degradation creates opportunities, such as smoke and spill detectors, filters, pollution counters, and energy-saving devices.

Technological Environment

New scientific and technological discoveries can render old products obsolete.
To stay competitive, entrepreneurs need to invest in new technologies.

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Description

This quiz covers essential concepts related to entrepreneurship, including opportunity seeking, financial forecasts, and compliance with regulations. Understand how entrepreneurs identify opportunities and how businesses forecast financial returns while adhering to legal requirements.