Midterm Notes COMM 320 Ch. 1,2,3,5,6
CHAPTER 1 – INTRODUCTION TO ENTREPRENEURSHIP
WHY BECOME AN ENTREPRENEUR?
Desire to be own boss – Desire to pursue their own ideas – Financial rewards
CHARACTERISTICS OF SUCCESSFULENTREPRENEURS:
Passion for business - Product/customer focus - Execution intelligence - Tenacity despite failure
COMMON MYTHS ABOUT ENTREPRENEURS
1: Born, not made.
However, there are common traits (risk taking, networker, creative, visionary, self-confident,
persuasive, energetic, achievement motivated, strong work ethic, lengthy attention span, alert to
opportunities, tenacious, optimistic, self-starter, etc)
1 Midterm Notes COMM 320 Ch. 1,2,3,5,6
3: Motivated by money.
4. Young and energetic
5. Love the spotlight.
TYPES OF START-UPFIRMS
1) Salary Substitute Firms: Small firms, yield a level an income that an owner would earn if
they worked for an employer. Non-innovative businesses (dry cleaners, restaurants, etc.)
2) Lifestyle Firms: Owner does something they are passionate about for a living (ski instructor,
tour guides, etc.)
3) Entrepreneurial Firms: Innovative Create and seize opportunities regardless of their
ECONOMIC IMPACT OF ENTREPRENEURSHIP
Innovation Create something new; outdo larger counterparts in obtaining patents
Job Creation Creators of most new jobs in the US, employ half of all private-sector
Impact on Society Makes consumer’s life easier, improves health, enhances work
productivity, and entertains us.
Impact on Large Firms Many entrepreneurial firms exist to enhance productivity of large
2 Midterm Notes COMM 320 Ch. 1,2,3,5,6
1) Decide to become an entrepreneur
2) Develop successful business idea
3) Move from idea to entrepreneurial firm
4) Manage and grow the entrepreneurial firm
Describe the following respectively:
Concept, Opportunity, Marketing Plan, Operations Plan, Financial Plan
CHAPPTER 2 – RECOGNIZING OPPORTUNITIES AND GENERATING IDEAS
An opportunity is a favorable set of circumstances that creates a need for a new product, service,
- Anchored in a product, service, or business that creates or adds value for its end user.
Identify Opportunity by:
- Observing Trends (PESTAnalysis Political, Economic, Social, Political)
- Solving a Problem
- Finding Gaps in the Marketplace
PERSONALCHARACTERISTICS OFAN ENTREPRENEUR
Characteristics that tend to make some people better at recognizing opportunities than others.
1) Prior Experience
3 Midterm Notes COMM 320 Ch. 1,2,3,5,6
2) Cognitive Factors
3) Social Networks
- Strong-tie relationship: Frequent interaction (family, friends, coworkers)
- Weak-tie relationship: Acquaintances
- More likely to develop a business idea from weak-tie relationships.
- Five steps to generate creative ideas:
Prep Incubation Insight Evaluation Elaboration
TECHNIQUES FOR GENERATING IDEAS
2) Focus Group
3) Library/Internet Research
PROTECT AN IDEAFROM BEING LOST OR STOLEN
1) Idea should be recorded in a tangible/accessible manner (computer, notebook, etc.) with date.
2) Idea should be secured (obviously)
3) Avoid making an inadvertent or voluntary disclosure of an idea, in a manner that forfeits the
right to claim exclusive rights to it.
CHAPTER 3 – FEASIBILITYANALYSIS
4 Midterm Notes COMM 320 Ch. 1,2,3,5,6
- Preliminary evaluation of the business idea
- Answers “Is the idea viable and worth pursuing?”
- Should be considered early on, before resources are spent on business.
FORMS OF FEASIBILITYANALYSIS
1) Product/Service Feasibility Analysis
- Is this product/service what the public really wants?
- Components include the DEMAND (with a buying intentions survey or library, internet,
and gumshoe research) and DESIRABILITY (with a concept test).
2) Industry/Target Market Feasibility Analysis
- Assessment of the overall appeal of the industry and target market of a certain
- Components include the attractiveness of INDUSTRYand TARGET MARKET
3) Organizational Feasibility Analysis
- Determine whether a business has sufficient management expertise, organizational
competence, and resources to successfully launch. Focuses on non-financial resources.
- Components include the MANAGEMENT PROWESS (motivation, passion, ability)
and RESOURCE SUFFICENCY (i.e. office space, support personnel, ability to obtain
intellectual property protection, ability to form favorable business partnerships).
4) Financial Feasibility Analysis
- This is the final component of a comprehensive feasibility analysis.
5 Midterm Notes COMM 320 Ch. 1,2,3,5,6
- Components include the TOTAL START-UP CASH NEEDED, FINANCIAL
PERFORMANCE OF SIMILAR BUSINESSES (reports are often readily available), and
OVERALL FINANCIALATTRACTIVENESS OF THE PROPOSED VENTURE.
- Financial attractiveness includes steady and rapid growth in sales during first 5-7
years in a clearly defined market niche, high % of recurring revenue, Ability to accurately
forecast income and expenses, internally generated funds to sustain growth, and the
ability for investors to co