Entrepreneurship Study Guide

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Chapter one
Define what an entrepreneur is
What is the difference between a product and a service?
What is meant by Voluntary Exchange?
Know the major reasons why people become Entrepreneurs
Is the desire to make money the only reason to start a business? What are the main benefits and the costs (downside) of becoming an entrepreneur? Be prepared what is meant by cost/benefit analysis. Be able to define cost and benefits and how they relate to an entrepreneur Explain Opportunity Cost and give examples and why it is an important element that an entrepreneur has to consider when starting a business Be able to explain Peter Schumpeter’s definition of entrepreneurship in terms of the 5 basic ways that entrepreneurs find opportunities to formulate new business concepts (page 12) Entrepreneurs create new business ideas by listening, observing and thinking. Be prepared to explain what is meant by this. Explain why an idea is not necessarily a good idea

What is SWOT Analysis and what does each part of it mean?
On page 17, the author talks of the five roots of opportunity in the marketplace... please know them What is the difference between internal and external opportunities? Name four ways one can start a new business and the advantages and disadvantages (figure 1-3) of each one. What is difference between franchisee and franchisor? And what is the definition of a franchise? In terms of franchising, what is a UFOC? And why is it imperative to have one when thinking of buying a franchise? The author discusses Russell l Simmons and Rick Rubin’s success in starting Def Jam. They followed the seven rules for building a successful business (page 21). Please know them

Chapter Two
Why does one need a business plan? What is a business plan? Know why it is important to have one and how one prepares it. Be familiar with the main components of a business plan... including executive summary, Mission...
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