Podcast
Questions and Answers
The process of evaluating business opportunities is known as ______.
The process of evaluating business opportunities is known as ______.
Opportunity Screening
An entrepreneur must first consider their ______ and capabilities when screening opportunities.
An entrepreneur must first consider their ______ and capabilities when screening opportunities.
preferences
The 12 Rs of Opportunity Screening include relevance to vision, resonance to values, and reinforcement of ______ interests.
The 12 Rs of Opportunity Screening include relevance to vision, resonance to values, and reinforcement of ______ interests.
Entrepreneurial
A risk-return grid helps entrepreneurs assess opportunities based on their potential ______ and risk levels.
A risk-return grid helps entrepreneurs assess opportunities based on their potential ______ and risk levels.
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To succeed, an entrepreneur may need to ______ their existing lifestyle and comforts.
To succeed, an entrepreneur may need to ______ their existing lifestyle and comforts.
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The payback period is calculated using the formula: PAYBACK PERIOD = TOTAL INVESTMENT / ANNUAL NET INCOME AFTER ______
The payback period is calculated using the formula: PAYBACK PERIOD = TOTAL INVESTMENT / ANNUAL NET INCOME AFTER ______
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For ABC Company, with investments of P1,500,000 and net income after taxes of P500,000 a year, the payback period is ______ years.
For ABC Company, with investments of P1,500,000 and net income after taxes of P500,000 a year, the payback period is ______ years.
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In the Cash Payback Period calculation, depreciation expense of P250,000 is added back to the net income after ______.
In the Cash Payback Period calculation, depreciation expense of P250,000 is added back to the net income after ______.
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If the net income after taxes plus depreciation amounts to P750,000 a year, the cash payback period would be ______ years.
If the net income after taxes plus depreciation amounts to P750,000 a year, the cash payback period would be ______ years.
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Creating a balance sheet involves analyzing three components: assets, ______, and equities.
Creating a balance sheet involves analyzing three components: assets, ______, and equities.
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What distinguishes entrepreneurs from ordinary businessmen in terms of opportunity seeking?
What distinguishes entrepreneurs from ordinary businessmen in terms of opportunity seeking?
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How does the entrepreneurial mind frame contribute to an entrepreneur's ability to handle crises?
How does the entrepreneurial mind frame contribute to an entrepreneur's ability to handle crises?
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Explain the significance of the 'heart flame' in the entrepreneurial journey.
Explain the significance of the 'heart flame' in the entrepreneurial journey.
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Identify and explain one way entrepreneurs can change the business paradigm.
Identify and explain one way entrepreneurs can change the business paradigm.
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What role does curiosity play in the opportunity-seeking process of entrepreneurs?
What role does curiosity play in the opportunity-seeking process of entrepreneurs?
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How does an entrepreneur foster a caring culture within their organization?
How does an entrepreneur foster a caring culture within their organization?
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What does the term 'gut game' refer to in entrepreneurship?
What does the term 'gut game' refer to in entrepreneurship?
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What are two key components that a financial forecast must evaluate in a business plan?
What are two key components that a financial forecast must evaluate in a business plan?
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Why is environmental and regulatory compliance important in a business plan?
Why is environmental and regulatory compliance important in a business plan?
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What is a critical aspect of the capital structure and financial offerings section of a business plan?
What is a critical aspect of the capital structure and financial offerings section of a business plan?
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Study Notes
Opportunity Seeking
- Macro environment, industry, market, micromarket, and consumer are key considerations when seeking opportunities
Opportunity Screening
- Entrepreneurs must first consider their own preferences and capabilities
- Risk-return grid helps screen opportunities based on risk and potential return
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The 12 Rs of Opportunity Screening
- Relevance to vision, mission, and objectives
- Resonance to values
- Reinforcement of entrepreneurial interests
- Revenues
- Responsiveness to customer needs and wants
- Reach for expansion through branches, distributorships, dealerships, or franchise outlets
- Range to a wide range of product or service offerings
- Revolutionary Impact as a game-changer
- Returns on investments
- Relative Ease of Implementation
- Resources Required
- Risks
Financial Ratios and Measurements
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Payback Period: measures the time to recover investments
- Income Payback Period: = Total Investment / Annual Net Income After Taxes.
- Cash Payback Period: includes non-cash deductions like depreciation
- Income Statement: shows revenue and expenses
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Balance Sheet: represents assets, liabilities, and equities
- Assets: Investments in the enterprise
- Liabilities: Debts to suppliers, banks, government, etc.
- Equity: Investors' investments in stock/shares.
- Financial Forecasts: determine feasibility by translating strategies and programs into monetary transactions.
Estimating Market Share and Sales
- Determine market coverage or reach
- Identify market segments
- Evaluate relative strength of competitors
- Quantify market potential
Opportunity Screening Matrix
- Evaluate each opportunity based on the 12 Rs
- Assign weights to criteria and scores to assess the opportunity
Opportunity Seeking
- Entrepreneurs are innovative opportunity seekers. They are constantly looking for new ideas and ways to improve existing products and services.
- Entrepreneurs may introduce new products, improve existing products, refine operational efficiency, create new markets, or disrupt existing business paradigms with innovative technology.
Entrepreneurial Mindset
- Entrepreneurs are often optimistic and see challenges as opportunities for innovation.
- The Chinese word for "crisis" contains two characters, one meaning danger and the other meaning opportunity.
- Entrepreneurs are passionate about their work and driven by a desire to achieve their visions.
- Passion is essential for overcoming setbacks and persevering in the face of difficulties.
- Entrepreneurs with emotional intelligence nurture relationships with customers, employees, and suppliers.
Financial Forecasts
- Business plans should include financial forecasts that translate business plans into financial outcomes.
- Key financial calculations include return on sales, return on assets, return on equity, internal rate of return, and net present value.
- Business plans should also evaluate both business and financial risks.
Environmental and Regulatory Compliance
- Business plans should document compliance with relevant laws, rules, and regulations, including permits, licenses, and intellectual property rights.
- Business plans should demonstrate compliance with local government ordinances and ethical standards.
Capital Structure and Financial Offering
- Business plans should outline the capital structure and financial offerings, including investors, financiers, and partners.
- Business plans should target a specific audience and highlight relevant features for them.
Enterprise Delivery System (EDS)
- The EDS involves harnessing resources, converting inputs to outputs, and delivering products or services to customers.
- The EDS includes operations, marketing, finance, administration, and human resource management.
- The EDS enables the enterprise strategy and helps to achieve desired outcomes such as high customer satisfaction, sales volume, financial returns, and employee performance.
Industry Sources of Opportunities
- The industry and market are significant sources of opportunities.
- Identifying what constitutes an industry can be challenging.
- Industry analysis should consider social, political, economic, ecological, and technological factors.
Market Forces and Fluctuations
- Changes in income levels, purchasing power, and industry competitiveness can influence opportunities.
- Entrepreneurs must critically analyze economic events that impact their businesses.
Ecological Environment
- The ecological environment is increasingly important due to concerns about environmental degradation.
- Threats to the environment create opportunities for products and services that promote sustainability.
Technological Environment
- New scientific and technological discoveries can lead to new products and services, rendering older ones obsolete.
- Entrepreneurs must invest in new technologies to stay competitive.
Examples of Opportunities and Threats (Fast Food Chain)
- Social: Increased customer base; demand for healthier food options.
- Political: Increased purchasing power; challenges for smaller suppliers due to foreign competition.
- Economic: Expanding to new markets; increased costs for new packaging.
- Ecological: Opportunities for eco-friendly operations; potential for online customer dissatisfaction due to delivery issues.
- Technological: Opportunities for tech-driven operations; potential for online customer dissatisfaction due to technology glitches.
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Description
This quiz covers the critical aspects of seeking and screening opportunities in entrepreneurship. Key concepts include the macro and micro environments, the importance of personal capabilities, and the 12 Rs of opportunity screening. Additionally, it explores financial measurements like the payback period.
