Class Notes (839,150)
Canada (511,218)
Business (3,287)
BU111 (655)
Lecture 7

BU111 Lecture 7: Entrepreneurship

5 Pages
16 Views

Department
Business
Course Code
BU111
Professor
Sofy Carayannopoulos

This preview shows pages 1 and half of page 2. Sign up to view the full 5 pages of the document.
Description
Understanding Entrepreneurship NEW VENTURE Preliminary Report Two parts - idea proposal Idea Proposal - briefly describe idea, value, uniqueness, customer, size of market, revenue model - competing & substitute products chart, PEST list, highlighted sections of 5 forces chart, GEL chart Google searches Additional details: - Maximum 3 type-written pages, plus references, charts, cover page, Google search screen shots - Charts single-spaced, remainder double-spaced - Submit to turnitin as well as hard copy - Submit peer evaluations - one piece of positive feedback - one piece of constructive criticism (one thing they could do better) - spill over charts are allowed - sources for everything you get - delete rows without content - use footnotes in chart cites (use superscript numbers) - New Venture: recently formed commercial organization that sells goods/services - Entrepreneurship: identifying an opportunity and accessing resources to capitalize - Small Business: owner-managed, not dominant in market, <100 employees - example of new venture that is not a small business is Tesla - Importance: - 98.1% of all businesses in Canada are small - contribute 30% annually to GDP - provide more jobs than large businesses - new ventures lead in new products and services - Government support: - lower tax rate: - encourage entrepreneurs, support new businesses to create more innovation and growth in the economy because these entrepreneurs are providing huge assets to the economy - resources - advice and sometimes funding - government offers whatever resources they can to support entrepreneurs - ease of establishment - low barriers to entry for entrepreneurs to have easy access to these businesses - influenced by PEST - successful only when entrepreneur, opportunity, and resources fit - begins with entrepreneur identifying an opportunity then accessing resources - is similar to Diamond-E: - entrepreneur is parallel to both managerial preferences as well as organization - opportunity is environment - access resources is parallel to resources - Idea Generation: Understanding Entrepreneurship - often paradigm shifts - originate in events relating to work or daily life, hobbies, chance happening - solve a problem and the solution sells itself: - listen to complaints and frustrations - ask customers what they wish they could get - play the mix and match game; combine functions - offer a lower-priced or more convenient version of an existing product - read the lab manual article on Canadian demographics - lots of problems to be solved - screening: - weeding out bad ideas - saves time, money - ensures you have a viable idea with a competitive advantage Three-Component Screening Process - screening for viability & competitive advantage - A. Idea creates or adds value for customer: - solves a problem, meets a need - customer willing to pay for it - B. Idea provides a competitive advantage that can be sustained - product unique in a valuable way/better than others - how is it different and better from existing products and substitutes? - are differences valuable to customers? - is it something that existing firms can easily do or may want to imitate? - can the idea be protected legally? - C. The idea is marketable and financially viable - Are there enough customers who are willing to buy it? What is the market demand likely to be? - Who are the key competitors and what are the forces that affect profitability? - Is the market growing, shrinking, concentrated, fragmented? - Safety point: Does the idea have low exit costs? - longer time to profitability or greater up-front investment needed = riskier venture New Venture Sample Analysis: Evaluating Your Business Opportunity Criterion High Potential - Good idea Low Potential - Bad Idea Product/value added - big impact - small incremental impact Customer/Market - large growing market, - loyal to others/small/declining reachable market Competition/Rivalry - low competition, fragmented - highly concentrated, mature, competition under capacity Suppliers - many suppliers with low - few, high switching costs switching costs Substitutes - non-existent or very few - man, good quality inexpensive substitutes low switching costs Understanding Entrepreneurship Barriers to Entry - low barriers to entry, high - high, competition stiff, hard to barriers to entry for competitors tap needed networks PEST - trends happening in each factor - conditions will make profitability that give you an advantage or difficult or will cause declining opportunity profitability in the future Accessing Resources - Bootstrapping - doing more with less - make do with as few resources as possible - use other peoples’ resources where possible - find/use free stuff - Debt vs. Equity Financing - debt = interest and control - sources: financial institutions, suppliers - must offer collateral for loans to be worthy of a loan - equity = no interest, less control - sources: savings, love money, private investors, venture capitalists (give bigger amounts of money and more advice for a bigger stake in the business) - example of v.c. : dragons den, no matter how much they want you
More Less
Unlock Document

Only pages 1 and half of page 2 are available for preview. Some parts have been intentionally blurred.

Unlock Document
You're Reading a Preview

Unlock to view full version

Unlock Document

Log In


OR

Join OneClass

Access over 10 million pages of study
documents for 1.3 million courses.

Sign up

Join to view


OR

By registering, I agree to the Terms and Privacy Policies
Already have an account?
Just a few more details

So we can recommend you notes for your school.

Reset Password

Please enter below the email address you registered with and we will send you a link to reset your password.

Add your courses

Get notes from the top students in your class.


Submit