Podcast
Questions and Answers
What is one advantage of buying an existing business?
What is one advantage of buying an existing business?
- Cash requirements
- Obsolete or inefficient equipment and facilities
- Business is losing money
- Leverage the experience of the previous owner (correct)
What is the primary purpose of promotion in marketing?
What is the primary purpose of promotion in marketing?
- To lower the quality of a product or service
- To inform consumers about a product or service and influence them to make a purchase (correct)
- To decrease the demand for a product or service
- To increase the price of a product or service
What is one common disadvantage of buying an existing business?
What is one common disadvantage of buying an existing business?
- Paying for 'ill will' (correct)
- Installed Equipment with known production capacity
- Low price
- Easier access to financing
Which factor differentiates a small business from its competitors and gives it a unique position in the market?
Which factor differentiates a small business from its competitors and gives it a unique position in the market?
What are the three types of information commonly used in data mining?
What are the three types of information commonly used in data mining?
What does a partnership legally share among co-owners according to the terms of an established partnership agreement?
What does a partnership legally share among co-owners according to the terms of an established partnership agreement?
What does UPA stand for in the context of business and entrepreneurship?
What does UPA stand for in the context of business and entrepreneurship?
Which type of competitors offer the same products and services as a business?
Which type of competitors offer the same products and services as a business?
What is a corporation called if it conducts business in the state where it is incorporated?
What is a corporation called if it conducts business in the state where it is incorporated?
Which of the following methods are used for preparing an advertising budget?
Which of the following methods are used for preparing an advertising budget?
Which factors are important in determining the right price for a product or service?
Which factors are important in determining the right price for a product or service?
What is a key consideration for a company when selecting advertising media?
What is a key consideration for a company when selecting advertising media?
Which business structure features elements of both a partnership and a corporation?
Which business structure features elements of both a partnership and a corporation?
What is a natural part of the creative process?
What is a natural part of the creative process?
Which area should be covered in a business plan presentation?
Which area should be covered in a business plan presentation?
What type of distinction is made for federal income tax purposes but is legally no different from any other corporation?
What type of distinction is made for federal income tax purposes but is legally no different from any other corporation?
What does an entrepreneur draw up as a roadmap for a company's mission, goals, and objectives?
What does an entrepreneur draw up as a roadmap for a company's mission, goals, and objectives?
What method is used for determining the value of a business by using the price/earnings ratios of similar businesses?
What method is used for determining the value of a business by using the price/earnings ratios of similar businesses?
Which pair of terms correctly describes thinking new things and doing new things?
Which pair of terms correctly describes thinking new things and doing new things?
What does the term 'Small business' refer to?
What does the term 'Small business' refer to?
Which statement is NOT correct regarding the benefits of owning a small business?
Which statement is NOT correct regarding the benefits of owning a small business?
What form of business ownership is designed for a business owned and managed by one individual?
What form of business ownership is designed for a business owned and managed by one individual?
What does 'Intellectual capital' refer to in a company's context?
What does 'Intellectual capital' refer to in a company's context?
What is one of the goals of the seller when negotiating a deal for selling a business?
What is one of the goals of the seller when negotiating a deal for selling a business?
Serial entrepreneurs are individuals who:
Serial entrepreneurs are individuals who:
What distinguishes scalable entrepreneurs from social entrepreneurs?
What distinguishes scalable entrepreneurs from social entrepreneurs?
When negotiating a deal, what is NOT a goal of the seller?
When negotiating a deal, what is NOT a goal of the seller?
Which type of entrepreneur creates multiple companies and is involved in running more than one business simultaneously?
Which type of entrepreneur creates multiple companies and is involved in running more than one business simultaneously?
In the context of negotiating a business sale, what does it mean to avoid unreasonable contract terms?
In the context of negotiating a business sale, what does it mean to avoid unreasonable contract terms?
What characterizes scalable startups?
What characterizes scalable startups?
What distinguishes social entrepreneurs from scalable entrepreneurs in their business approach?
What distinguishes social entrepreneurs from scalable entrepreneurs in their business approach?
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Study Notes
Buying an Existing Business
- Advantage: Existing customer base and established reputation
- Disadvantage: Potential for inherited problems and difficulties adapting an existing business to new approaches
Marketing
- Purpose of Promotion: To communicate the value of a product or service to potential customers and encourage them to purchase.
Competitive Advantage
- Unique Position: A differentiating factor that sets a small business apart from its competitors
Data Mining
- Three types of information:
- Descriptive: Summarizes past data
- Predictive: Uses past data to forecast future trends
- Prescriptive: Analyzes past data to advise on the best course of action for the future
Partnership
- Legal Sharing: Co-owners share profits, losses, and management responsibilities according to the partnership agreement.
Business Terminology
- UPA: Uniform Partnership Act, a set of laws governing partnerships
Business Structures
- Direct Competitors: Businesses offering the same products and services.
- Domestic Corporation: A corporation operating in the state where it was incorporated.
- Limited Liability Company (LLC): A business structure combining elements of partnerships and corporations.
Advertising
- Methods for Preparing an Advertising Budget:
- Percentage-of-sales method: A set percentage is allocated from sales revenue.
- Competitive-parity method: Ad spending is matched to competitors' spending.
- Objective-and-task method: Budget is determined by the cost of achieving specific advertising goals.
Pricing Strategy
- Factors to Consider:
- Variable costs: Directly related to production quantity.
- Fixed costs: Constant regardless of production quantity.
- Competitor pricing: The prices of similar products and services.
- Value perception: Customers' perception of the value of your product or service.
Advertising Media Selection
- Key Consideration: Reaching the target audience effectively.
Business Plan
- Presentation Coverage:
- Executive summary: A brief overview of the plan.
- Market analysis: Detailed information on target customers and competitors.
- Financial projections: Projected revenue, expenses, and cash flow.
Corporation Distinctions
- S corporation: A type of corporation with a special tax distinction for federal income tax purposes.
- C corporation: A standard corporation, with no distinction for federal income tax.
Entrepreneurship
- Business plan: A blueprint outlining the company's mission, goals, and objectives.
- Comparable company analysis: A valuation method that uses the price/earnings ratios of comparable businesses.
Thinking and Doing
- Innovation: Thinking new things and doing new things.
Small Business Considerations
- Small Business: A business with fewer than 500 employees, operating in a specific geographic area.
- Benefit: Flexibility and control over operations
- Sole Proprietorship: A business structure where one person owns and manages the business.
Intellectual Capital
- Intellectual capital: Represents the knowledge, skills, and expertise of a company's workforce.
Business Sale Negotiation
- Seller's Goal: Getting the highest possible price for the business.
- Serial Entrepreneur: An individual who creates and runs multiple businesses.
Entrepreneurship Specialization
- Scalable entrepreneur: Focuses on creating businesses that can be expanded to a large scale.
- Social entrepreneur: Focuses on creating businesses that address social issues.
Business Sale Negotiation
- Unreasonable contract terms: Terms that are not fair or beneficial to both the seller and the buyer.
Startup Characteristics
- Scalable startups: Businesses with the potential to grow rapidly.
- Social entrepreneur: Considers both profit generation and social impact.
- Scalable entrepreneur: Prioritizes growth and scalability above all else.
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