BUS305 Study Guide

Unit 1: Elements of Entrepreneurship

1a. Analyze the entrepreneurial process through which business ideas are evaluated

1. Entrepreneurship plays a significant role in the US economy.

• What does it mean to be an entrepreneur?
• What are at least two ways that business ideas are formed?
• Do you understand what it means to be an entrepreneur?
• Do you feel like you understand how business ideas are formulated?

To review, see What is Entrepreneurship?, Definition of Entrepreneurship, and Why Become an Entrepreneur?.

2. The evolution of entrepreneurship in the United States came about due to many different factors, including the early belief in small business, the growth and expansion of railroads and other means of mass transportation, and legislation that was designed to protect business owners.

• How has economics helped shape the development of entrepreneurship in the United States?
• What legislative acts have contributed to the modern business environment?

To review, see Introduction to Entrepreneurship and Small Business in US History.

3. Entrepreneurs evaluate the potential for their ideas to become viable business opportunities by conducting research.

• What are the stages of the entrepreneurial process where entrepreneurs conduct research?
• What is the difference between incremental innovation and disruptive innovation?

To review, see An Entrepreneurial Model.

1b. Identify the characteristics of successful entrepreneurs

1. Entrepreneurs exhibit various traits that enable them to address the unique set of experiences that come with business ownership. Entrepreneurs can be defined as individuals who start a business from the ground up or individuals who become franchisees. Individuals may be serial entrepreneurs who continually reinvent themselves as business owners, or entrepreneurs can be part of the corporate environment.

• What is the difference between an entrepreneur and an intrapreneur?
• What characteristics that drive the entrepreneur?
• Do you think you have the potential, skills, and personality to become a successful entrepreneur?

To review, see Entrepreneurship Is..., Entrepreneurs vs. Intrapreneurs, The Drive of an Entrepreneur, and What Makes Someone an Entrepreneur?.

2. Explore your entrepreneurial potential. How viable is it to become an entrepreneur?

If you are still unsure whether or not entrepreneurship is right for you, take another look at An Entrepreneurial Model and the Assessment Survey. Both of these resources can help you if you are interested in pursuing an entrepreneurial venture. Entrepreneurship reviews truths and myths about entrepreneurship. Review them to see if these factors apply to you and whether your beliefs about entrepreneurship are accurate.

1c. Distinguish between business ideas and opportunities

1. Not all business ideas have the potential to become successful business ventures.

• What is the primary difference between a business idea and a business opportunity?

In addition to a title page and a table of contents, a business plan will include sections on the market and competition, a marketing strategy, an operations plan, identification of management, a financial plan, and supporting documents. The business plan is a key factor in taking your concept to the next level: determining if a real business potential exists. A business plan can be a complex document, so reviewing its contents will be valuable as you head into the final exam.

To review, see Nine Key Frameworks for Entrepreneurship and Creating a Business Plan.

2. Not all business plans present a viable business opportunity.

• Why do some businesses remain small while others have the potential to become high-growth ventures?
• What are the steps in evaluating the business plan?

If you become an investor in a new enterprise, you will need to know what to look for to evaluate the viability of the product or service described in the business plan.

To review, see Entrepreneurial Thought Leaders Seminar and Due Diligence.

1d. Examine entrepreneurial potential

1. There are several ways to protect your business enterprise.

• What are the features of each of the primary legal entities for a business enterprise? (Sole proprietorship, partnership, limited liability corporations, and corporations)
• What is intellectual property? What might that mean for your business enterprise?
• What are the pros and cons of each legal structure available to the business owner?

To review, see What Legal Entity is Right for Your Business? and Did You Say "Intellectual Property"? It's a Seductive Mirage".

2. Ethics plays a strong role in how business owners operate their company and, in turn, how the public views the company. Companies adopt various strategies for ensuring that they are good corporate citizens, including by making donations of goods and services, either regularly or through periodic contributions.

• What is ethics?
• How are companies judged by the public based on their actions?

To review, see Business Ethics in a Nutshell.

Unit 1 Vocabulary

This vocabulary list includes terms that might help you answer some of the review items above and some terms you should be familiar with to be successful in completing the final exam for the course.

• Angel investor
• Business plan
• Clayton Antitrust Act
• Copyright laws
• Corporate culture
• Corporate responsibility
• Corporations
• Drive
• Due diligence
• Entrepreneur
• Entrepreneurship
• Equity
• Ethics
• Idea
• Innovation
• Intellectual property
• Interstate Commerce Act
• Intrapreneur
• Leadership
• LLC
• Market research
• Motivation
• Opportunity
• Partnerships
• Patent laws
• Robinson Patman Act
• Scalability
• Sherman Antitrust Act
• Sole Proprietors
• Strategy
• Trends
• Venture capital
• Vision

Unit 2: Building the Right Team

2a. Identify and describe the dynamics of team building

1. Managers play an integral role in the operation of all organizations.

2. Effective managers exhibit certain behavioral traits and styles of leadership. The Big Five personality traits are openness, conscientiousness, extraversion, agreeableness, and neuroticism.

To review, see Leading People and Organizations.

3. Emotions and individual personalities affect every workplace.

To review, see Emotions at Work and Designing a High-Performance Work System.

Unit 2 Vocabulary

This vocabulary list includes terms that might help you answer some of the review items above and some terms you should be familiar with to be successful in completing the final exam for the course.

• Attitudes
• Behaviors
• Contingency approaches
• Decision-making styles
• Emotions
• Empowerment
• Human resource management
• Leaders
• Leadership
• Management
• Managers
• Organizational Performance
• Personality traits
• Strategy
• Succession planning

Unit 3: The Business Plan

3a. Explain how to write a formalized business plan

1. The business plan should demonstrate an entrepreneur's preparedness to establish an enterprise, knowledge of the product/service and the business environment, and the ability to communicate the business opportunity to potential investors.

2. The physical appearance and organization of the business plan influence how readers perceive and evaluate the plan's effectiveness. In addition to a cover page and a table of contents, sections of the plan include an executive summary, company overview, industry- or market-analysis, marketing strategy, operations, financials, and implementation strategies. Not all fonts are appropriate for a professional document, and it is, of course, all too easy to mischaracterize facts and figures by presenting them in an inappropriate format.

To review, see Ten Dos and Don'ts of Writing a Business Plan and How to Write a Business Plan.

3b. Identify the information found in the business plan

1. Including the proper information in a business plan demonstrates your professionalism and commitment to your enterprise. Most importantly, however, it helps your business plan make a more persuasive case to potential investors.

The components of the SWOT analysis are strengths, weaknesses, opportunities, and threats. You may want to try performing a SWOT analysis for a real-world company to practice using this business tool.

To review, see:

• Small Business Plan Outline
• Business Plan Template
• How to Write an Executive Summary
• How to Write a Mission Statement for Your Business
• Product or Service Description
• Marketing Plan, Strategies, Distribution, and Channels

2. The management structure of an organization determines how the organization will be run and who will be responsible for management activities.

To review, see Developing a Management Plan.

Unit 3 Vocabulary

This vocabulary list includes terms that might help you answer some of the review items above and some terms you should be familiar with to be successful in completing the final exam for the course.

• Acronyms
• Business model
• Business plan
• Competition
• Demographics
• Executive Summary
• Financial analysis
• Fonts
• Format
• Graphs
• Implementation
• Investors
• Jargon
• Management
• Management models
• Management team
• Market analysis
• Market segments
• Mission Statement
• Product
• Strategy
• SWOT analysis
• Template
• Ten-ten approach
• Text

Unit 4: Marketing Strategy

4a. Identify and describe the strategies that support entrepreneurship

1. Conducting marketing activities – the act of providing customers with a product or service they want and need and making them aware of those goods and services – can provide the entrepreneur with a wide range of tools with which to develop, launch, and grow a business. The elements of the marketing mix are product, price, place, and promotion. Some important examples of demographic information that helps entrepreneurs define a consumer segment are age, income, education, culture, religion, gender, marital status, and occupation.

2. Gathering as much information as possible about the market, the competition, and the enterprise's potential customers will provide a competitive advantage.

• What is the difference between primary research and secondary research?
• What are four sources of primary research?
• What are four sources of secondary research?

3. Learning about the external environment can enable a more effective strategy. A company's competitors may be enterprises within the same industry or businesses that provide a similar or substitute product and service.

• What are psychographics? How do they help companies refine their knowledge of their target market?

To review, see:

• What is Marketing?
• Is Your Business Doing Effective Market Research?
• Primary Market Research
• Primary and Secondary Research
• Demographics
• External Factors

4b. Explain how to write a marketing plan and perform this task

1. A marketing plan is an essential tool for defining a company's mission, identifying potential customers, describing the benefits the company will provide to those customers, and outlining the activities the company will conduct to communicate with customers.

• What are the features of each of the kinds of analyses within the marketing plan: SWOT, 5C analysis, and Porter's Analysis?
• What is the value proposition? How can a company incorporate it into their marketing efforts?
• How do companies identify and define their target markets?
• What is an integrated marketing communications strategy?

2. Total customer management focuses on customers and a corporate philosophy that focuses on a service orientation.

• What are the features of the pricing strategies companies consider for their products and services: penetration pricing, cost-plus pricing, skim pricing, and psychological pricing?

To review, see:

• The Marketing Plan
• Marketing Plan Elements
• The Purpose of a Marketing Plan
• More on The Marketing Plan
• Defining the Target Market
• Scanning and Analysis
• Strategic Planning
• Conducting a Situational Analysis
• Integrated Marketing Communications

Unit 4 Vocabulary

This vocabulary list includes terms that might help you answer some of the review items above and some terms you should be familiar with to be successful in completing the final exam for the course.

• 5C analysis
• Competition
• Culture
• Demographics
• Environmental scanning
• Geography
• Integrated marketing communications
• Marketing
• Marketing concept
• Marketing mix
• Marketing plan
• Mass marketing
• Mission Statement
• Niche marketing
• Porter's analysis
• Pricing
• Primary research
• Psychographics
• Qualitative information
• Quantitative information
• Secondary research
• Segmentation
• SWOT analysis
• Target
• Value proposition

Unit 5: Financing the New Venture

5a. Explain the importance of the financial plan

1. There are two main branches of business accounting: financial accounting and managerial accounting.

• What are the differences between financial and managerial accounting?
• What are the features of each of the types of accounts utilized by a business: asset accounts, liability accounts, equity accounts, revenue or income accounts, expense accounts, and contra accounts?
• What is accrual accounting?

2. Financial statements are records of the financial health and position of a company.

• How do businesses use the income statement, the balance sheet, the cash flow statement, and the statement of changes in equity?
• What are the elements of the accounting equation?
• What is a break-even analysis?

3. The financial plan, as a whole, can help you measure the value of your company. Understanding where your company's money is coming from and where it is going are essential for the organization's financial health.

• What are the potential sources of value, such as stocks, assets, and comparables?
• How can current value be determined by past financial performance?
• How does a company's stage of life relate to financial risk factors?
• How do financial risk factors affect the overall plan for growth?

To review, see:

• Financing Your Organization
• Financial Statements
• Standardizing Financial Statements
• Finance and Forecasting
• Break-Even Analysis

5b. Explain how to finance personal business ventures

Businesses can be financed through personal investment or with the help of outside investors.

• What are the features of each of the traditional types of investment sources for a business venture: angel investors, bootstrapping, venture capitalists, micro-lending, peer-to-peer lending, banks/financial institutions, and government agencies?
• What are the features of new, innovative ways to finance a business venture: customer financing, crowdfunding, and bartering?

To review, see Sources of Financing and Financing Company Operations.

Unit 5 Vocabulary

This vocabulary list includes terms that might help you answer some of the review items above and some terms you should be familiar with to be successful in completing the final exam for the course.

• Accrual accounting
• Angel investor
• Asset accounts
• Assets
• Balance sheet
• Barter
• Bootstrapping
• Break-even
• Cash flow statement
• Contra accounts
• Crowdfunding
• Debt
• Equity
• Equity accounts
• Expenses
• Financial accounting
• Financial equation
• Grants
• Income
• Income statement
• Liabilities
• Loans
• Managerial accounting
• Micro-lending
• Peer-to-peer lending
• Revenue
• Statement of equity
• Strategic partnership
• Venture capitalist
• Working capital