Business Study Notes PDF

Small Business: ​ Independently owned organization existing to make profit, has less than 500 employees Entrepreneur: ​ Someone who risks money (or their own time and effort) to make a profit. All business owners, freelancers and otherwise self-employed people are entrepreneurs. Employe...

Small Business: ​ Independently owned organization existing to make profit, has less than 500 employees Entrepreneur: ​ Someone who risks money (or their own time and effort) to make a profit. All business owners, freelancers and otherwise self-employed people are entrepreneurs. Employee vs Entrepreneur: Employability Skills - ​ Oral and written communications ​ Mathematics ​ Time management ​ Teamwork ​ Computer literacy Entrepreneur Skills - ​ Financial planning - Understand cash flow ​ Sales/ Negotiation - Relationship building ​ People Management - Recruit, train, motivate What is My Business Idea?: ​ Gap - unsatisfied need or opportunity in marketplace, produced by change taken place. ​ Specialization - Specializing in a particular product or service. ​ Targeting - Specializing in a particular group or groups of potential customers. What will my business mean legally?: ​ Sole Proprietorship – ○​ Legal form of business where only 1 person owns and has legal right to operate the company. The sole proprietor has unlimited liability for the company’s debts ​ General Partnership – ○​ Business where 2 or more people own and have right to manage company. Each owner is a general partnership has unlimited liability for all debts of company. ​ Corporation – ○​ A legal form of business that exists separately from its owners(shareholders) who have limited liability for the company’s debts. How Do I Know It Will Work?: ​ Feasibility - The likelihood that concept or plan could work. ​ Market Research - Gathering and organizing information about groups of potential customers that your business is targeting. ​ Marketing Research - Gathering and organizing information about the process for getting products or services to customers. Basic Rent: ​ The minimum rent charged by a landlord for commercial space. Competition: ​ Direct ○​ Provide similar products and services ○​ Pursuing the same potential clients ​ Indirect ○​ An alternate for your customers to satisfy their needs ○​ Where else will my customer be able to get the products and services I offer Definitions: ​ Market Potential: ○​ How much money a group of potential customers will spend on a particular product or service ​ Primary Research: ○​ Gathering new information from original sources ​ Secondary Research: ○​ Using information that has already been gathered and published ​ Sales Forecast: ○​ An estimate of how much money a business will bring in over a given period Marketing: ​ Process of selecting groups of potential customers, identifying their needs and developing strategy to satisfy those need PROJECTED IMAGE: ​ Impression of business created by minds of potential customers by everything you do EXPECTED IMAGE: ​ Impression carried by potential customers of what your business should be like Cognitive Dissonance: ​ Psychological discomfort felt when trying to hold 2 opposing ideas in mind at same time Penetration pricing: ​ Marketing strategy used by businesses to attract customers to new product/service by offering a lower price during its initial offering. Price skimming: ​ Pricing strategy in which a company starts by charging highest price customers will pay. ​ Over time, company lowers price to reach different types of customers. The high price targets early adopters willing to pay more for new product. As these early customers are satisfied and competitors enter the market, the company reduces prices to attract more price-sensitive consumers. Marketing Mix: ​ The particular combination of marketing elements that a business uses to find and satisfy its customers; the marketing strategy ○​ Product or service strategy ○​ Pricing strategy ○​ Distribution strategy ○​ Promotion strategy Marketing Strategy: ​ Promotion strategy ○​ The approach a business uses to inform and persuade its customers ​ Advertising ​ Social media, direct mail, print ads, billboards, vehicles, radio, newsletter, referral program a.​ Grab their attention - ask a question, solve a problem b.​ Project the right image c.​ Get action - “Drop by today”, “Please call” d.​ Measure - activity, sales and profit (purpose of AD) Distribution Strategy: ​ How will my products or services get to the end user? ○​ Place - location, mobile services ○​ Products (who will be buying your product) ​ Manufacturer-distributor-professional-consumer ​ Inventory ​ Ordering ​ Storage ​ Transportation Promotion Strategy: ​ Publicity - by spreading information about your company, product or service without paying for space or time ○​ Word of mouth ​ Sales promotions - collection of techniques for getting potential customers to buy goods or services. ○​ Give aways - pens, magnets, t-shirts ○​ Coupons - to get new customers ○​ 2 for 1 deals - combos, buy 5 get the 6th free ○​ Events - open house ○​ Tradeshows - weddings ○​ Displays - brochures in other businesses ○​ Free samples - try before you buy