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112 Cards in this Set
- Front
- Back
- 3rd side (hint)
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How to Approach a Business Problem |
1. Frame problem (define it) 2. Diagram problem 3. Model problem - create insight 4. Present solution |
1234 |
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Entrepreneur Definition |
An individual with the vision, drive, and creativity to start a new company or chart a new course for an existing company |
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Small Business Owners Definition |
An Independently owned company that is not a major player in the market (does not hold great market influence ) - leaders of technology and innovation. |
98% employer and 48% work force |
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DIagram for Profitability |
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True or False: All small business owners are entrepreneurs. |
False - entrepreneurship involves taking risks and may grow out of a small business. |
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What are the 3 types of Entrepreneurship? |
1. Classic Entrepreneur: take the risk to start-up thier own company based off of thier own innovative ideas. 2. Multipreneurs: entrepreneurs that start up a chain of companies and whose vision is to watch them grow into a network. 3. Intrapreneurs: take less risk than multipreneurs and classic entrepreneurs because they strive to change the course of an existing business - work within the security of a stable job and income. |
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How is a Multipreneur different from a growth-orientated entrepreneur? |
Growth-oriented entrepreneurs are a type of classic entrepreneur, and they only strive to build one company and want to watch it grow to a corporation. A multipreneur is it's own catagory of entrepreneurship - and they create multiple companies and hope to see it grow to a corporation network. |
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What is a micro-preneur? |
A type of classical entrepreneur that builds a small company and wishes to stay small. |
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What are some reasons for becoming an entrepreneur? |
1. Control one's destiny 2. Create desired lifestyle 3. Personal satisfaction 4. Financial independance |
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What are some characteristics of entrepreneurs? |
comitted, passionate, ambitious, energetic, self-confident, visionary, creative, risk-takers |
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What is the skill set needed to be an entrepreneur? |
managerial knowledge, supervision capability, technical knowledge, ability to develop operational and financial strategies, good interpersonal skills |
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What are some areas of operation for small businesses? |
Services, wholesale and retail, manufacturing, construction, agriculture |
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List opportunities for Small-Business Owners |
1. Personal satisfaction 2. Best route to sucess - for women and minority 3. Rapidly changing techonology - greater possibilities for start-ups and growth 4. Corporate outsourcing - opportunities to find a niche market 5. Specialization in a custom product - not cost-effective for large coporations 6. Corporate corruption, downsizing and economic downturn makes start-ups more desirable. |
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What do small-businesses stay small? |
1. uncomplicated company structure makes for faster processing and commercialization of products 2. Faster adaptation to market demands 3. Can afford specialization 4. Higher levels of customer satisfaction 5. Operate efficiently to lower ATC 6. Can respond to dynamic tastes of customers |
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What are some Challenges for Small Businesses? |
1. Problems must be immediately and promptly solved 2. Adaptation to changes in the market must be fast and efficient 3. Compliance with regulations 4. Lack of managerial skills from owner 5. Personal sacrifices 6. Lack of development in the business plan 7. Ability to obtain adequate financing 8. Hiring, training, managing and firing employees |
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Over time, what are some of the resources available for small-business owners to use when more managerial and technical expertise are needed? |
1. Outside Consultants - can provide help in managing a business so owners can focus on supervising and managing day-to-day activities. Consultants also bring in specialized knowledge that business owners may not have - i.e. accountants, lawyers, marketing specialists. Outsourcing and contracting can also be cost-effective. 2. Hiring and Retaining Employees - must look for those with the desired skill set (which may change over time as the business grows), and compete with the wages that large corporations offer. 3. Global exportation - is a world of high opportunities for companies; however financial backing and knowledge may be an issue. There are many international companies and specialists available for advice and set-up. |
consult, hire, and globe |
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What are the steps in starting a business? |
1. Brainstorming - Finding an IDEA 2. Determining the type of business organization for the company - sole proprietorship, partnership, corporation? 3. Developing a Business plan 4. Obtaining adequate financial backing. |
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What is a business plan: name it's components, main usage, and importance in a business. |
A business plan is a detailed document that outlines a business idea and how it will be carried out. It contains information about: General description of the company Qualifications of the owner(s) Description of the product Multiple business plans
It's main use is to attract investors for financial backing, but it's development and updates make it a dynamic document that evolves with the business. An ADEQUATE, DETAILED, and DEVELOPED business plan is CRUCIAL to the sucess of the business, as it highlights both the practicality of an idea, as well as forms the backbone for it's start-up and growth. |
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What is a Product / Service Plan? |
describes the product and it's unique features - it explains why customers will buy it (competitive advantage of the product), as well as it's legal protection. |
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What is a Marketing Plan? |
Provides a detailed analysis of the market and target customer of the company - describes the company's competitve edge, and their means of advertisment and selling. It also provides analysis of competiton the company will face. |
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What is a Management Plan? |
Describes the key players in the company - investors, management teams, and directors - and thier expertise and qualifications. Also highlights plan of hiring and attracting employees. |
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What is an Operation Plan? |
Outlines plan for operating a business - source of resources, inventory and quality control and operating facilities. |
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What is a financial plan? |
Involves finacial needs and potential sources of financial backing - historial financial statements and pro-forma financial projecions (cash budget, cash flows, balance sheet, and income statment). |
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True or False: Equity and Debt are the two ways to obtain financing for a company? |
True. |
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What is equity, and what type of investors would form a company's equity? List the PROS and CONS of equity backing. |
Equity - financial backing provided from the sell of company shares. Types of Equity - 1. Common Shares - tied to partial ownership of the company; most popular shares in the market. 2. Preferred Shares - tied to dividends (profit pay-outs) from the company. 3. Venture Capital - investment companies that invest in small, high-growth companies in exhange for ownership. 4. Angel Investors - indivdual / groups of experience individual invesotrs that invest thier own funds early on the start-up and look for results.
PROS: Expertise, no mandatory pay-back CONS: Loss of ownership, Dividends are not tax-deductible |
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True or false: all loans have stipulating terms of pay-back (+ interest)? |
TRUE |
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What is debt? What are the types of debt financing and what are the PROS and CONS? |
Debt - type of financial backing that must be paid back (borrowed funding) Types of Debt financing: Loans - term loans (5-12 yrs), bonds (10-30 yrs), and mortgages , Line of Credit Lease - fixed costs PROS - no loss of ownership, interest tex deductible Government Loans, Line of CreditLease - fixed costsPROS - no loss of ownership, interest tex deductibleCONS - financial risk and adherence to strict payback schedule. CONS - financial risk and adherence to strict payback schedule. |
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What are the terms around Government Loans? |
Additional payment of % of loan to ensure guarantee pay-back Flexible interest rates |
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What are the terms around Line of Credit? |
Monthly payment, flexible interest rates, mainly for "working capital" payments, mximum borrowing limit. |
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How is a Lease different from Loans? |
Does NOT require interest payment - recorded as a fixed expense. |
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What are some areas of risk for starting up a business? |
Economic - booms and busts, Financial, Managerial - i.e. inadequate planning, Personal, HIgh competition, HIgh Growth |
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If your Rate of Return is less than one, then you are making a --------- |
LOSS |
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The average annual rate of return is calculated by the function.... |
GEOMEAN - 1 Multiplier for all years, with the nth root of how many years - (what rate of return, multipled x amount of times gives me this multiplier)? |
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What is the Accounting Equation? |
ASSETS = LIABILITIES + OWNER'S EQUITY |
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What are some ways that financial statments help companies? |
Efficiently organize financial information, help businesses operate effectively, and make finacially informed business decisions. |
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What is the definition of accounting and what it's main result? |
The collecting, recording, classfying, summarizing, reporting and analyzing of financial information. Accounting results in financial statments and reports that help evaluate past financial decisions, make decisisons for the current and future predictions, and compare a com[any's financial performance with others. |
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What are the two types of financial reports and the types of accounting associated with them? |
1. Internal reports - managerial accounting (develops financial statments for management to evaluate past performance, and make informed decisions about current and future operations) 2. External reports - financial accounting (develop financial information for external individuals such as creditors and investors to gain insight on the comapany's financial health and strength). |
In and Out - Man and Fin |
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What does a Chartered Accountant do? |
External reports - taxes, audits and managment services that will will be passes up to the government. CA's determine if a company's financial statments accurately reflect thier financial health. |
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Describe the job of a Certified Mangment Accountant |
Specializes in internal reporting - combines accounting expertise and business knowledge to provide advice in developing marketing, sales, human resources, and financial strategies. |
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What does a Certified General Accountant do? |
External reports - from consulting to tax advice for customers. |
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What is the professional name for the branch of accounting that unites all 3 Canadian accounting professions together? |
Certified professional accountant |
CPA |
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What is a Balance Statment? |
A financial statement that summarizes a company's financial position at a certain point in time - records the current levels of assests, liabilities, and owner's equity. |
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What method is used to keep the accounting equation balanced? |
Double-entry bookeeping |
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What are the 3 type of assets? |
1. Current assests - assets that can be converted into cash within the next 12 months 2. Capital assets - long-term, fixed assets that will be used by the company for more than one year. 3. Intangible assets - assets with no physical value - i.e. patents, copyrights, goodwill. |
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What are some examples of current assets? Why are current assets important? |
Important for paying operational bills. Cash - funds on hand or in bank Marketable securities - investments of excess cash that can be readily drawn out to be used as cash Accounts recievable - money owed to company by customers who purchased with credit Notes recievable - money owed to the company from other companies to which it lent money to Inventory - goods put on sale for customers |
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What is amortization and how does it relate to capital assets? |
With all except land, capital assets lose it's value over time as it begins to age and break-down (thus, generate less revenue). Companies allocate for this slow depreciation of capital assests by writing off an amount of it's purchase cost every year it is expected to generate revenue. tHis helps match it's cost with it's money geenrated. The amount companies can amortize is based off of the regulations from Capital Cost Allowances. |
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True or False: Amortizations (CCA) are not tax deductible? |
FALSE |
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What are liabilities and what are it's two types? |
Liabilities = debt/ borrowed funds that must be paid back 1. Current liabilities - must be paid back within the year: accrued expenses, income taxes, notes payable, accounts payable 2. Long-term liabilities - do not need to be paid back within a short time span |
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What is owner's equity? WHat are the two components that make it up? |
Owner's equity - total investment in a company minus liabilities 1. Shares - preferred or common 2. Retained earnings - profit that is reinvested into the company |
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What is an asset (just the definition). |
Things owned by the company |
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What is an income statement? |
Statment of earnings |
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What is gross profit and how is it different from net profit? |
Gross profit= Net Sales minus COGS Net profit= Gross Profit minus CCA, Operational costs, Taxes |
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What is a statment of cash flows? |
Presents cash inflows and outflows of the company |
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What is a cash budget? |
Tracks expected cash flows for short term and long term expenditures. It helps the company see how it needs to borrow or invest. |
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What is the equation for the cash budget? |
Starting cash + Total collection - disembursments = unadjusted cash balance + Borrowing = Ending Cash Balance |
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What is the profitability ratio? What does it symbolize? |
Net profit/net sales. Analyzes how efficiently a company is managing their resources to generate profit |
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What is the current ratio? |
Current assets/current liabilities. Measures the ability for the company to pay off its short term bills and debt as they come due |
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What is the debt ratio? |
Total liabilities /total assets Shows the proportion of debt and borrowed funds needed to sustain the company v.s. owners financial contributions. |
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What is the asset turnover ratio |
Net sale/total assets. Analyzes how well a company is managing their assets |
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What is future value? How is it calculated in excel (what formula? |
The value of an investment in the future. =FV() |
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What is Simple Interest |
Interest is calculated only with original investment |
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What is compound interest? |
Interest based on original investment + accrued interest |
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Based on the time value of money, money ------ into the future and is -------- back into the present |
Grows, discounted |
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According to ISO 31000, what is risk? What can it affect? |
"Effect of uncertainty on objectives" can affect professional reputation, safety outcomes, societal outcomes, economic performance, etc... |
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What is ISO 31000? |
International Standard of Organization - a enterprise risk managment - that is designed to help all companies and organization effectively manage risk. |
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"the risk of a loss associated with the adverse volatility of market prices of securities, commodities, and currencies" What type of risk is this? |
Market risk |
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What is credit risk? |
The risk of a default in a financial transaction, or a decline in market value of a security due to the decline of the credit quality of debt issuers. |
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What is environmental RIsk? |
RIsks associated with the environment |
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What is Operational risks and give an example? |
A risk of an unexpected loss due to deficiencies in managament of information, supervision, support, control systems and procedures. I.e. broken bikes due to lack of maintenance |
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What is a political/economic risk? |
RIsk that stems from the political or economic environment the company is operating in. Examples include a change in government or an economic downturn or economic growth of the company. |
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The higher the risk, the ------- the return |
Higher |
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What is the Risk Management Process? |
Establishing the context - risk identification - risk analysis - risk evaluation - risk treatment All throughout you should be consulting and communication with the right people After you have chosen a form of risk treatment, you should be monitoring and reviewing |
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What are the four types of risk treatment? |
1. Risk avoidance 2. Risk retention 3. Risk control 4. Risk sharing |
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Changing the consequences and changing the likelihood of the risk are examples of what type of risk? |
Risk control |
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What does risk avoidance include? |
A) removing the source of risk B) ceasing to use or continue using or operating with the source of the risk |
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Risk retention is often done with what kind of understanding? |
The higher the risk, the higher the return - businesses understand the potential risk (and may even increase it) but choose to bear it. |
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What does risk sharing mean? |
Sharing the risk with another company (i.e. insurance) to minimize damage |
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What is the definition of business analytics? |
Use of data, IT statistical analysis, quantitative methods and mathematical or computer based models to help managers gain insight about the business operations and make better, fact-based decisions. |
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Give 4 examples of business analytics in practise, and define them |
1. Pricing - setting price for customer and industrial goods, government and maintenance contracts. 2. Customer segmentation - identifying groups of customers to target in retail, insurance, and credit companies 3. Merchandising - what brands to buy or sell, quantities and allocation 4. Social media - current trends and customer perceptions (assist marketing managers and product designers) 5. Location - find key locations to place banks, ATMs, industrial equipment, etc... |
PCMSL |
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What type of business analytics seeks insight on what type of brands, quantities and allocations to place? |
Merchandising |
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What does a visual venn diagram of business analytics look like? |
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What are some benefits of business analytics? |
Make better, fact-based decisions,cost-effective in the long run, faster decisions, better producytivity, better bottom line performance (better nonprice competition - customer service, satisfaction) |
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What are some challenges with business analytics? |
Lack of analytical skills, lack of knowledge in how to use analytical information, competing business priorities, research is both time and money costly, etc... |
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What is descriptive analytics? |
Use of data to understand past and current business decisions and performance - trying to see how things are now |
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What is the decription of prescriptive analytics? |
Charts alternative courses of action to minimize or maximize an objective |
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Predictive analytics serves to ------- |
Analyzes historical data for trends, patterns, or relationships and extrapolates such data for future, predicted results |
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What is a regression model? |
Statistical technique for predicting future values, extremely stable, can include casual or time series data, can be used to extrapolated or interpolate results, and shows long term trends. Tries to find the least squares regression line to create the line if best fit. |
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What is the difference between analysis and forecasting? |
Analysis: 1. Use data and models to identity trends and group data2. Comes before forecastingForecasting:1.extrapolationof historical data to predict future values |
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What are some tools we used for analysis? |
Goal seek, data tables, pivot tables and chars, other analysis tools from data analysis package |
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True or false: proformas and cash budgets are examples of data analysis |
FALSE - They are examples of forecasting |
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What are operating plans? |
Forecasting plans that map out the next year (《 1yr) |
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Strategic plans extend for --------- yes and are an example of what kind of business analysis? |
2 - 10 yrs, forecasting |
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What are some tools use for forecasting? |
Growth rate, percentage of sales, regression models |
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What is causal data? |
One or more independent variables causes a change in the dependant |
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What is important when communicating? |
1. Be clear 2. Be concise 3. Be simple 4. Be blatantly obvious |
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What to do before presenting data |
1. Understand your data 2. Make sure your analysis method is suitable for your data |
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How should your recommendation be structured? What are the key elements to a good recommendation? |
Start with a good recommendation Lead with your conclusion use strong words Be confident Tie your issues to you recommendation Stick to th facts |
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What to show in your presentaion |
1.results and insights from the analysis.... not the data itself 2. Important trends 3. Key numbers |
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What to AVOID during your presentation |
1. Crowded Data 2. Unsupported information 3. Don't make assumptions you don't state |
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What the three guiding presentation principles? |
1. Energy - stay enthusiastic and passionate about your topic 2. Creativity - make your presentation stand apart from all others 3. Simplicity - be as straightforward and to the point as possible, so as not to tax the audience's cognitive effort, or confuse them |
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What chart should be used to show changes over time? |
Line graph |
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What chart should be used to show parts of a whole? |
Pie chart |
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What does a histogram do? |
Frequency distributions |
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You have two things you wish to compare against each other - which chart do you use? |
Bar graph / column chart |
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When would you use a scatter plot? |
To demonstrate correlation between independent and dependant variables |
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What are the 6 key ways to arrange and organize a slide? |
1.Flow 2. Unity 3. White space 4. Structure 5. Contrast 6. Hierarchy |
Fuschw |
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How can white space improve a side's presentability? |
Sharpen audiences focus to key elements within the slide by isolating elements |
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What is unity? How can unity be a helpful presentation tactic? |
Unity is the consistency in organization of the slides - it can make a message appear more coherent |
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Slide hierarchy - how does it help? |
Helps you determine the most important elements of the slide by drawing audience attention to the most key and important information first - way of organizing information so the audience knows where to look for the main idea |
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How does flow assist the quality of the presentation? |
Directs both the audience in a natural progression of information - directs attention to the most important elements |
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Contrast helps presenters ------, but avoid -------- |
Convey the important ideas across, but avoid green |
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A --------- conveys your idea via a story structure, which helps ------- |
Structure (roller coaster) helps to keep audience interested and curious |
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