entrepreneurship study guide finals.docx

ENV Notes organized Historical perspectives on entrepreneurship Richard Cantillon Richard Cantillon is a key figure in the historical evolution of entrepreneurship His contributions to economic theories and definitions of entrepreneurship Other key figures in the evolution of entrepreneurship: Jere...

ENV Notes organized Historical perspectives on entrepreneurship Richard Cantillon Richard Cantillon is a key figure in the historical evolution of entrepreneurship His contributions to economic theories and definitions of entrepreneurship Other key figures in the evolution of entrepreneurship: Jeremy Bentham, Von Thunen, Carl Menger, and Alfred Marshall Modern definitions of entrepreneurship by scholars such as William Gartner, Bateman and Snell, Hisrich and Peters, V.R. Gaikwad, Scott Shane, Howard Stevenson, Frank H. Knight, and Peter Drucker Thought-provoking questions about the entrepreneurial nature of individuals such as Sanjit 'Bunker' Roy and Patrick Naughton Characteristics of successful entrepreneurs  4 characteristics Execution intelligence Tenacity despite failure Passion for the business Focus on customer/product Debunking common myths Entrepreneurs are not only born, but can also be made Incredible companies can start anywhere, not just in a garage Entrepreneurs are motivated by more than just money Entrepreneurs are not necessarily gamblers Entrepreneurs can be of any age, not just young and energetic Entrepreneurs don't always seek the spotlight Varieties of entrepreneurship  Types of entrepreneurship Home-based businesses: child care services, medical transcription, legal transcription, photography, debt collection agency, repossession services, virtual assistant, bakery, tutoring, consulting, business coaching, senior care services Unicorns: definition and examples of startup companies valued over $1 billion Small businesses and growth Cultural diversity of entrepreneurship: senior entrepreneurs, minority entrepreneurs, women entrepreneurs, young entrepreneurs, immigrant entrepreneurs, emigrant entrepreneurs Characteristics of successful entrepreneurs: tenacity despite failure, artisan and opportunistic entrepreneurs Motivations for becoming an entrepreneur  Primary reasons Desire to pursue their own ideas Aspiration to be their own boss Potential for financial rewards Measuring entrepreneurial activity  TEA Index: Total Entrepreneurial Activity Definition and calculation of TEA Index Insights into the level of entrepreneurial activity within a population Criticism of TEA Index for its one-dimensional measure and lack of consideration for environmental and institutional factors  GEI Index: Global Entrepreneurship Index Definition and components of GEI Index Insights into the overall entrepreneurial environment and potential for new business creation Use of GEI Index to gauge innovation, economic growth, and job creation Complexity of GEI Index and need for nuanced interpretation Recognizing and capitalizing on opportunities  Definition of opportunity Favorable set of circumstances for creating or developing new goods, services, markets, processes, or materials Importance of identifying and evaluating potential avenues for innovation and value creation Insights from Scott Shane and Howard Stevenson on opportunity in entrepreneurship Sources of innovation opportunity Observing trends Solving a problem Finding gaps in the marketplace Importance of recognizing trends versus fads Significance of technological advances, social forces, and political action as sources of innovation Approaches to recognizing opportunities Causal reasoning: conducting market studies to identify opportunities Effectual reasoning: making opportunities through entrepreneurial actions Different perspectives on recognizing and capitalizing on opportunities Windows of opportunity Favorable circumstances or periods for identifying and exploiting new business prospects Importance of timing and proactive decision-making Vigilance in recognizing and leveraging windows of opportunity Personal characteristics for recognizing opportunities Prior experience Cognitive factors Social networks Creativity Factors that make some people better at recognizing opportunities Business models and value proposition  Business Model Canvas Importance of understanding and communicating key elements of a business model Examples of customer segments, value propositions, key activities, key partnerships, and revenue streams Case studies of Air France vs. RyanAir and Zara's fast-fashion model Historical significance of business models: Xerox 914 copier and JCDecaux's business model innovation  Value proposition Collection of reasons why a person or company benefits from buying something Importance of articulating unique value and differentiation from competitors Critical component of a business model Strategies for success and growth  Blue Ocean Strategy Avoidance of costly competition through innovation Creating a market where no firms currently operate Eliminate, raise, reduce, create framework  Value chain and strategic resources Value chain as a series of activities for delivering a valuable product or service Importance of optimizing internal processes and delivering unique benefits to customers Strategic resources that enhance the value of a firm's core innovation Intellectual property and funding  Types of intellectual property protection Patents: protection for inventions Trademarks: protection for brand names and logos Copyrights: protection for original works of authorship Trade secrets: protection for confidential business information Domain names: unique identifiers for websites  Intellectual property duration and use Duration of protection for patents, trademarks, copyrights, and trade secrets Use of specific forms of intellectual property for different types of creations and innovations  Appropriability and complementary assets Appropriability as the ability to capture economic benefits from innovation Complementary assets as resources or capabilities that enhance the value of an innovation Importance of understanding appropriability and complementary assets in leveraging innovations  Trade secrets vs. patents Trade secrets: keeping confidential information within a company Patents: exclusive rights to prevent others from using or selling an invention Considerations for choosing between trade secrets and patents Financing and business plans  Feasibility study Assessment of the practicality and potential success of a proposed project or venture Evaluation of technical, economic, legal, and scheduling factors Importance of feasibility studies in decision-making and resource allocation  Business plan Comprehensive roadmap for a new venture Outlining objectives, strategies, and action plans Selling document to attract investors and stakeholders Importance of business plans in obtaining financing and guiding business growth  Why write a business plan Roadmap for the company's future Establishing milestones and attracting investors and employees Reducing risks and identifying potential challenges Guide for growth and long-term success  Executive summary Concise overview of the entire business plan Key insights and selling points Importance as the most critical section of a business plan  Information needs Identification of information required for decision-making and planning Importance of gathering relevant and accurate data  Lean startups Methodology for developing businesses and products Shortening product development cycles and validating business models Emphasis on customer feedback, iterative design, and minimum viable products (MVPs)  Seed stage financing Initial stage of funding for a new venture Supporting development, research, and market testing Common sources of seed financing: personal funds, family and friends, bootstrapping  Why most ventures need funding Supporting growth, research and development, and marketing Hiring key personnel and expanding operations Accommodating rapid growth and competition  Types of funding and financing Debt financing: conventional bank loans, asset-based loans Venture capital: expected returns and role as private equity investors Crowdfunding: funding source for projects or ventures Importance of understanding different funding sources and financing options  What bankers expect Factors considered by commercial lenders when evaluating business loan applicants The 'five Cs': character, capacity, collateral, conditions, capital Types of loans provided by banks: conventional bank loans, asset-based loans Importance of meeting bankers' expectations for securing financing