Questions and Answers of Entrepreneurship

What is a feasibility analysis? What is it designed to accomplish?
Briefly describe each of the four areas that a properly executed feasibility analysis explores.
What is a product/service feasibility analysis?
Describe the difference between primary research and secondary research.
What is a buying intentions survey, and what does it accomplish?
Describe the attributes of an attractive industry for a new venture.
Briefly describe each of the two primary issues to consider when conducting an organizational feasibility analysis.
He told Kelly, “When you were growing up, I started and sold three successful businesses and never completed a feasibility analysis once. I wonder what the authors of your entrepreneurship book
Jason Willis just applied for a bank loan to finance a smoothie restaurant that he plans to open. The banker asked Jason if he conducted any primary research to assess the feasibility of the
Assume that you were one of the recipients of New Venture Fitness Drink’s concept statement. What type of feedback would you have given the company about the viability of its product idea?
Shelly Mills, who has considerable experience in the home security industry, is planning to launch a firm that will sell a new line of home security alarms that she believes will be superior to
Suppose you’re interested in opening a musical instruments store near the college or university you attend, to sell guitars, drums, and other types of musical instruments. What online resources
Keith Ambrose, who is a physical therapist, is thinking about starting a firm to provide in-home therapy services for people who are suffering from sportsrelated injuries. Keith lives in Columbus,
Susan Campbell is thinking about launching a Web site to sell sports apparel for petite women. She’s designed a Web site but isn’t sure if it’s userfriendly enough to launch. Provide Susan some
Some neighbors of yours are hoping to open a Thai restaurant near a local community college. They have a limited budget so it is very important to them to have as good of an idea as possible of what
Look at the Web site of Rufus Shirts (www.rufusshirts.com), a company that was launched by first-time entrepreneur April Singer and makes high-end shirts for men and dresses for women. During the
Sounds like a good idea. You’re replacing your laptop computer with a new one, but your current laptop still works and should be worth something. You’d like to sell it on eBay but don’t want to
One thing that becomes clear to many potential business founders, while conducting organizational feasibility analysis, is that they need one or more partners to help launch their business. You might
The Segway PT is a two-wheeled, self-balancing transportation device that consists primarily of a set of tall handlebars on top of two disc-like wheels. There are no chains or visible mechanical
What is a business plan? What are the advantages of preparing a business plan for a new venture? Explain your answer.
What are the two primary reasons for writing a business plan?
A business plan is often called a selling document for a new company. In what ways does a business plan provide a mechanism for a young company to present itself to potential investors, suppliers,
It is often argued that the process of writing a business plan is as important as the plan itself, particularly for the top management team of a young firm. How is this so?
Who reads the business plan and what are they looking for?
Why is it necessary for a business plan to be realistic? How will investors typically react if they think a business plan is based on estimates and predictions rather than on careful thinking and
What is the difference between a concentrated and a fragmented industry? What type of industry is usually more open to new firms?
If you’re developing a completely new product or service, what type of information should you include in your business plan regarding the status of the development efforts?
Why is the “Management Team and Company Structure” section of a business plan often touted as one of the most important sections?
What is the purpose of an assumptions sheet? Why is it important to include an assumptions sheet in a business plan’s financial section?
Shelly Jacobs is a high school math teacher, who has created an iPhone app centered on engaging games that require high school students to use math to master the games.The idea is that the games are
A good friend or yours, Kelly Ford, has decided to leave his corporate job to launch a private Web marketing firm. He is putting together his business plan and asks you, “I’ve read several books
Suppose you have been asked by your local chamber of commerce to teach a two-hour workshop on how to write an effective business plan. The workshop will be attended by people who are thinking about
John Brunner is a biochemist at a major university. He is thinking about starting a business to commercialize some animal vaccines on which he has been working.John just registered for a biotech
Imagine you just received an e-mail message from a friend. The message reads, “Just wanted to tell you that I just finished writing my business plan. I’m very proud of it. It’s very
d.light, the subject of Case 4.2, is a for-profit social enterprise. What, if any, special factors should be kept in mind when writing a business plan for a for-profit social enterprise?Case
Heather Smith and Katie Jones are launching a personal finance software company. They conducted a thorough feasibility analysis, and are now working on their business plan.Heather just sent you an
Bill Sharp, a friend of yours, has an idea for a new type of kitchen utensil, which will make it easier for busy people to scramble eggs in the morning. He showed his business plan to a local SCORE
Laura Carroll is thinking about opening a high-end fashion boutique in an affluent suburb of Miami, Florida. She contacts an angel investor who she knows has invested in fashion boutiques before, and
Spend some time searching the Internet for sample business plans. What site, or sites, do you think provide access to the best sample plans? In what ways do sample business plans serve a useful
Suppose you are asked to serve as a judge for a local business plan competition. In preparing for the competition, the organizer has asked you to write a very brief article titled “What the Judges
There is no denying it. It’s tough for an independent toy store to compete against Walmart, Target, Toys “R” Us, and other large retailers (including online giant retailer Amazon.com) selling
What is an industry? Provide an example of an industry and several firms in it.
What is the purpose of industry analysis?
What are the four primary categories of environmental trends? Provide an example of how a trend in each category could affect the toy industry.
What is meant by the term barrier to entry? Describe the six major sources of barriers to entry that can restrict a firm’s entry into a market.
Describe the four primary factors that play a role in determining the nature and intensity of the bargaining power of suppliers. How does the bargaining power of suppliers have the potential to
Describe the differences between direct competitors, indirect competitors, and future competitors.
What is meant by the term competitive intelligence? Why is it important for firms to collect intelligence about their competitors?
Identify three sources of competitive intelligence.
Jason Murphy is thinking about starting a firm in the fitness drinks industry. When asked by a potential investor if he had studied the industry, Jason replied,“The fitness drink industry is so
Starbucks has been very successfully selling high-priced coffee despite the fact that consumers could easily substitute Starbucks coffee for less expensive coffee or substitute its coffee for less
Kendall Jones is in the process of opening a new pet store. The store will sell pet food, pet supplies, and a select variety of pets (excluding dogs and cats). It will also offer grooming services
One thing that’s important for a start-up is to become active in the industry it’s entering. Activity leads to learning the ins and outs of an industry, finding business partners, and becoming
Former Microsoft employee Vern Reborn founded Eclipse Aviation in 1998. The idea was to solve a problem in the aviation industry: although private jet service is safe and convenient, it is also very
Firms do well in a crowded industry when two conditions exist: (1) they create meaningful value for customers at a fair price and (2) they effectively differentiate themselves from competitors. In
If you analyzed the restaurant industry using Porter’s five forces model, you wouldn’t be favorably impressed. Three of the threats to profitability—the threat of substitutes, the threat of new
Define the term business model. How can entrepreneurial firms benefit by developing and using a business model? What are the downsides for entrepreneurial ventures when an effective business model
Explain what business model innovation means. Provide an example of business model innovation other than the examples included in the chapter.
Write a brief critique of Stroome’s business model. What do you think are the strengths and weaknesses of the model? Do you think that Stroome has a sustainable competitive advantage? Why or why
Write a brief description of Apple Inc.’s business model.
The “You Be the VC 6.1” feature at the end of the chapter focuses on GroupMe, a cell phone app that allows group messaging on any phone that can text—regardless of who makes the phone or what
Business model innovation is an important part of the entrepreneurial process. Not only do entrepreneurs bring new products and services to market, but new business models often revolutionize how
Joost was a hot start-up when it launched. If you’re familiar with Hulu, Joost was Hulu before Hulu existed. Joost launched in 2006 as a premier online video service that aggregated and streamed
In general, do entrepreneurs tend to overestimate or underestimate their knowledge of the laws that pertain to starting a new firm? What does the answer to this question suggest that entrepreneurs do
Why is it important for an entrepreneur to build a strong ethical culture for his or her firm? What are some of the specific steps that can be taken in an entrepreneurial venture for the purpose of
Describe several ways entrepreneurial ventures can avoid legal disputes.
Explain what mediation is and how mediation is used to resolve disputes.
At what point, during the process of starting a firm, does a business need to focus on the business licenses and permits that it needs? Are business licenses and permits the same in all cities and
Suppose you have been asked by your school newspaper to write a short article about business ethics and entrepreneurship.The editor of the paper has asked you to write a 300-word piece. She’s asked
Reacquaint yourself with ScriptPad. Imagine that ScriptPad’s founders are writing an operating manual that describes the administrative processes they’ll use in running their business. They’d
Patagonia sells rugged clothing and gear to mountain climbers, skiers, and other extreme-sport enthusiasts. The company is also well known for its environmental stands and its commitment to product
Credibility is a vital part of any start-up’s persona. Whether a prospective customer in a for-profit context, or a prospective donor in a nonprofit context, it’s important that the company or
The “You Be the VC 1.1” feature focuses on Windspire, a company that’s making wind turbines to generate electricity that can be used by businesses and home owners. If the founder of Windspire
Spend some time studying Nila, the subject of the “You Be the VC 8.1” feature.Given the nature of its business, what financial management issues should Nila be most attentive to and why?
Refer to the “You Be the VC 5.1” feature, which focuses on Xeros, the company that produces a “virtually waterless” washing machine. If the founders of Xeros asked you what ratios they can
Reread this chapter’s opening case. What factors did Sunil Rajaraman have working in his favor, and what factors did he have working against him as the cofounder of Scripped?
Spend some time looking at the “Team” section of Songkick’s Web site (under the “About Us” tab). Songkick is the subject of the “You Be the VC 1.2” feature. On a scale of 1 to 10 (10 is
Devver (pronounced like “developer,” not “devious”) launched in 2008 to help software developers use cloud-based services to “test” their code in a more expedient manner than current
Although most firms that have a customer advisory board set them up after their firm is started, primarily to assess customer satisfaction and brainstorm new product ideas, customer advisory boards
In 2005, Sharelle Klaus was lamenting the lack of beverage choices for women who like upscale dining but can’t drink alcohol while they’re pregnant. A mother of four, she had experienced this
Suppose you were asked by the founders of Nila LED, the subject of the “You Be the VC 8.1” feature, to advise them on protecting their trade secrets. Assume the company operates out of a single
What evidence is available suggesting that the often reported statistic that 9 out of 10 new businesses fail is an exaggeration?What is a more realistic failure rate for new firms?
What is entrepreneurship? How can one differentiate an entrepreneurial firm from any other type of firm? In what ways is an entrepreneur who just launched a restaurant different from someone who just
What are the three main attributes of firms that pursue high levels of corporate entrepreneurship?Would these firms score high or low on an entrepreneurial intensity scale?
What are the three primary reasons people become entrepreneurs? Which reason is given most commonly? Which reason best describes why you may choose to become an entrepreneur?
Some people start their own firms to pursue financial rewards. However, these rewards are often far fewer than imagined and/or expected. Why is this so?
What are the four primary traits and characteristics of successful entrepreneurs?
Why is passion such an important characteristic of successful entrepreneurs?What is it about passion that makes it particularly compatible with the entrepreneurial process?
How would you characterize the risktaking propensity of most entrepreneurs?
In general, what effects does entrepreneurship have on economies around the world?
How is the demographic makeup of entrepreneurs changing in the United States? What do you believe is accounting for these changes?
Describe several examples of the impact that entrepreneurial firms have on a society.
Reread the opening case, and then list all the smart or effective moves Sam Hogg made in the early days of building GiftZip.com. Which three moves were most instrumental in GiftZip.com’s early
Imagine that you’re the dean of your college and you’ve suggested that more entrepreneurship courses be taught throughout your college’s curriculum.You’re getting resistance from some
Select one of the following large firms:Cessna Aircraft Company, Tempur-Pedic, or Corning Incorporated. Familiarize yourself with the company. Assess how entrepreneurial the firm is, based on the
Karen Jenkins has a good job working for the city of Rapid City, South Dakota, but is weary of 2 percent (or less) per year pay raises. Because she has read magazine articles about young
Mark, a friend of yours, has always had a nagging desire to be his own boss. He has a good job with AT&T but has several ideas for new products that he can’t get AT&T interested in. Mark has done a
Make a list of 10 prominent entrepreneurs who are women, minorities, or seniors (55 years or older when their firms were started). Single out one of these entrepreneurs and provide a brief overview
People are sometimes puzzled by the fact that entrepreneurs who have made millions of dollars still put in 60- to 80-hour weeks helping their companies innovate and grow. After reading the chapter,
Identify a successful entrepreneur that you admire and respect. (It can be someone that is nationally prominent or someone you know personally, such as a family member or a friend.) Briefly describe

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