Chapter one

Qn 1-25. What should first-time entrepreneurs know before they launch? What should

entrepreneurs know before they commit to launching their firm?

First-time entrepreneurs must have the basic knowledge on how to make their start-up

businesses have the highest chance of survival and growth. The entrepreneurs should be

confident about their ideas and not let the myths about start-ups deter them from achieving their

goals. Therefore, they have to be wary of the challenges that will definitely occur in their initial

kick-off stages. However, this positivity does not only rely on the ability to take risk. Rather, a

lot of factors such as optimism, self-confidence, creativity, networking, and work ethics come

into play when creating the best model for the start-up. It is also worth noting that the start-up

should not be entirely money or profit-oriented. The core objective is value creation whereby the

business identifies the ways in which it can contribute to the social welfare. Therefore, the start

must portray some level of positive social influence besides its initial objective of making

profits.

Entrepreneurs launching their new businesses must also acknowledge that success does

not come in an instant. It can take varying lengths of time for the start-up to identify its market

niche. Therefore, it is advisable for the entrepreneurs to seek advice from mentors, preferably

established businesses in their field. In this 21st century, entrepreneurial success is greatly reliant

on the application of technology. Therefore, the entrepreneurs must identify the technologies that

complement their business and increase value through increased customer experience and

convenience. Innovativeness is a core factor in the success of a start-up. After settling on a

business idea and getting approval on the business plan, the entrepreneurs should have a strategy

on the management structure as this will prevent last-minute rushes to acquire the best practices.

Chapter two

Qn 2-23. Identify three start-ups, other than those discussed in this chapter, that were

started to solve a problem. Briefly describe the problems the three start-ups are solving

and how they are going about doing so.

Uber is one of the biggest names in the world of entrepreneurship. Uber is an operating

system that is compatible with the taxi services in over 633 cities worldwide. The service was

launched in 2009 to fill the gap identified in the commuting services across the world. Uber

came into the market to create a communication platform between commuters and taxi service

providers. The high-point of Uber is that it helps the customer to approximate the cost for each

trip, and the time they it will take for the nearest taxi to arrive in their location.

Amazon is another startup that has clearly reshaped the experiences of online shopping

across the world. Founded in 1994, Amazon has grown into the biggest retailer in the world.

Amazon entered the market when E-commerce was a relatively new concept and this enabled it

to meet the customer needs that were not being met by the existing businesses. Amazon enables

customers to choose and purchase products online and then it delivers the products within short

timeframes, offering more convenience and reliability than other stores.

eBay is an established business that was created from a startup in the E-commerce

industry. Founded in 1995, the company has since expanded into the global market where it

currently operates in over 30 countries. The company offers online shopping and shipment

services and is a major competitor of Amazon. Although the two companies operate in the E-
commerce industry, eBay has an additional service where it has a bidding system to allow

auctioning of goods. This service has been a major factor in its growth.

Chapter three

Qn 3-25. If you were interested in opening a musical instruments store near the college or

university you are attending in order to sell guitars, drums, and other types of musical

instruments, what online resources would you draw on to conduct secondary research

regarding the industry/target market feasibility of your business idea?

The music scene is highly adaptive to changes in the social trends and the aspects of

needs and preferences. In the modern age, music is rapidly changing with the emergence of new

genres such as Hip-hop which are being embraced by the younger generations. Therefore, before

opening a musical instruments store it is vital to research on the current trending music genres

and the types of instruments they use. Secondary research for the startup would entail watching

Youtube videos to determine the instruments that can perform multiple roles. Musical

instruments of the past are being replaced by newer technologies that are computer-assisted.

Therefore, it would be important to incorporate this technological aspect to give the store the

modern look that would attract music fans.

Besides the research on music genres, the secondary research would also entail an

identification of the local music industry, such as the most popular brands and the type of

instruments they use. Generally, music is all about the ambiance value, or the “vibe” it sends to

listeners. Therefore, the startup would need to stock the kind of instruments that attract the local

audience. It would be an additional advantage to interview local bands and seek their opinions on

the future of music in the area, such as how they see the music scene changes in terms of the

needs and demands of their fans.

 Another aspect to consider in the research would be the requirements for learning how to

play the different instruments. The store should prioritize stocking the instruments that are

easiest to play because such instruments would have a wider market among the locals. Therefore,

the store needs to balance between instrumental expertise and the instruments played for fun or

enjoyment.

Chapter four

4-22. Do you think the business models of daily newspapers are viable in the long run? If

you were the owner of a daily newspaper in a major U.S. city, would you try to maintain

the print edition of the paper, evolve to strictly an online presence, or do something else?

Print media has encountered drastic changes as a result of the rapid advancement of

technology and its adoption in the information-sharing platforms. In the past decades, print

media has enjoyed dominance in the sharing of knowledge, information, and news. However,

today’s print media is required to allocate significant portions of its resources towards online

platforms which are replacing the mainstream consumers of information. However, daily

newspapers are still relevant because they offer an additional sense of authenticity which is not

guaranteed by online media. Furthermore, the emergence of the “fake news” mania has reduced

significantly the reliability of social media and other online media as a source of information.

For any individual or group that owns a daily newspaper in the U.S cities, they need to

create a balance between online relay of news and maintaining their print editions. Both areas

have loyal consumers who would not rely on other forms of information. Therefore, daily

newspapers should focus on boosting the reliability of their news rather than restructuring the

means of relaying that information. Lately, daily newspapers have been criticized for their

reliance on social media to collect news since this has been a major factor in the spread of fake
news and misinformation. The major problem facing newspapers is the resource restraints that

limit their ability to gather enough content for their print and digital columns. However, the

newspapers should understand that the amount of content is less significant than its validity in

consumers’ perception. Regardless, a newspaper company can win in all these areas if it

implements information filters to authenticate their information sources since this would enhance

their ability to advance in both digital and print media coverage.

Chapter five

5-29. Eric Andrews has been investigating the possibility of starting a service that will

partner with grocery stores to provide a delivery service for their customers. The idea is

that after purchasing their groceries, customers could go to a kiosk in the store, pay a small

fee, and have their groceries delivered to their homes within 60 minutes. Which of the five

forces in Porter’s five forces model do you anticipate will most strongly affect Eric’s

potential business and why?

The threat of new entrants is a potential influencer in the business since there is the risk

of competitive infiltration in the industry. This risk is a result of the existing gap whereby new

businesses can promise better services by offering faster service delivery at a lesser cost thus

minimizing profitability. In this effect, the startup is significantly affected by the issue of time,

which is crucial for the customer’s perception of the business.

The threat of substitutes is also significant in the success of the business because the

supplier can opt to deliver the products himself since he is in direct contact with the customer.

Also, there is the likelihood of a more facilitated inventor emerging and promising to offer the

service more conveniently. This risk is further escalated by Andrew’s ability to finance the

business without the assistance of the supplying store. In this regard, the fact that Eric is not the
owner of the grocery encourages the entry of new substitutes that will be recommended to

customers by the store’s management and staff.

Bargaining power of the buyer is also a major hindrance since customers have the

advantage of having the decisive choice in the service provider. In this regard, Eric’s fee of

transport could prompt a customer to opt for a different store that gives delivery as an after sale

service rather than an additional cost. Therefore, price negotiations can suppress the profits

expected and the eventual success of Eric’s business.

The power of bargaining of the supplier can cloud his pricing strategy for the services

offered and not negatively affect sales of the products at the grocery. In this case, the supplier

will negotiate and tend to dictate terms on service delivery.

Chapter six

6-24. Imagine you just received an e-mail message from a friend. The message reads:

“Want to let you know that I just finished writing the business plan for my new venture.

I’m very proud of what I’ve written. The plan is comprehensive and just a bit over 100

pages in length. The executive summary itself is 9 pages long. I intend to send my plan to

investors beginning next week. Do you have any words of advice for me before I do this? Be

honest. I really want to get funding!” How would you respond to your friend’s request for

feedback?

Responding to the advice I would give, I would urge my friend to ensure that the plan is

intensively researched from various sites and captures authentic details and findings that are

applicable. The accounts should balance correctly with no guess work on figures given. Investors

are attracted if firstly you invest on yourself reasonably to attract confidence in chipping in their

funds. Also, avoid exaggerating the broad spectrum of diversity in network capture involved. It
is good to start from a low level and expand to higher expectations into the later stages of

implementation and growth. Also, ensure that you grammatically outlay your plan to avoid

misconception of ideas, and provide authentic documents to accompany the plan as evidence.

For examples, bank statements speak a lot about the authenticity of information proovided.

Chapter seven

7-27. Under what conditions should ethical considerations be part of a company’s business

plan? Should a company periodically measure its ethical performance? If so, what are the

best ways for a firm to do this?

Ethical considerations are integral aspect of any business practice. On the other hand, a

business plan is a conceptual model of the activities of the proposed business. Therefore, the

possibility of a business plan being approved is significantly reliant on its ability to conduct

ethical considerations in all sections. Ethical considerations portray the willingness of a business

to abide to the ethical standards in the industry and the environment where it operates.

Particularly, all areas that have a direct impact on social and environment welfare must be

accompanied by the relevant ethical considerations that show the business’s commitment to

sustainability. For instance, the criteria for selecting the workforce should be accompanied by the

ethical considerations of the criteria used on the existing standards of equality in the areas of

gender, race, religion, and sexuality. In the developed countries, the ability of a business to

portray this form of diversity is a crucial element in determining their level of Corporate Social

Responsibility (CSR).

The best approach towards ethical performance is the implementation of a clear Code of

Conduct to guide the activities of all levels of the workforce. The standards set by the Code of

Conduct outline the significance of ethical conduct and the implications it has on the individual
and collective performance. Furthermore, the code of conduct outlines the consequences of

violations of certain ethical standards and this shown the commitment of all stakeholders towards

promoting ethical conduct.

Chapter eight

8-27. Casey Cordell is the owner of a digital photography service in Madison, Wisconsin.

The company has been profitable every year of its existence. Its debt ratio is currently 68

percent, its current ratio is 1.1, and its debt-to-equity ratio is 72.2 percent. Do these

financial numbers cause any reason to be concerned? Why or why not?

Casey Cordell’s digital photography business has had a good progress from its consistent

ability to make profits. However, in a business there are other factors to consider when assessing

the overall performance. Debt ratio is an important tool that measures the percentage of assets

that are acquired through debts. A debt ratio of 68 percent shows that most of the assets were

purchased through debts, portraying a negative aspect of the business’s financial stability.

Therefore, based on the debt ratio the business cannot cover its assets if the creditors decided to

pull out their credit support. Another important indicator is the current ration which is the

measure of a company’s ability to pay off its short-term debts using the value of its current

assets. In this regard, the current ratio of 1:1 shows a balance between current assets and

liabilities, which is not an entirely good indicator for the business.

Similarly, the debt-to-equity ratio portrays a low level of financial leverage in the

business. Debt-to-equity ratio is used to measure financial leverage by comparing a company’s

the debt figure with the amount of shareholder’s equity. A healthy business should work towards

having a low debt-to-equity ratio since a high ratio shows that the company relies on debts more

than its own capital to finance its capital. In Cassey Cordell’s business, the debt-to-equity ratio of
72.2 percent indicates poor leverage because it shows more reliance on shareholder equity than

the internal funding. Therefore, there is a definite cause for concern in Casey Cordell’s business

because the three ratios indicate high dependence on debt and significantly low ability to

generate capital internally.

Chapter nine

9-30. Charlie Berry, Shelly Toombs, Nancy Harder, James Ndofor, Jennifer Atwood, and

Cliff Bell are all experienced software engineers. For some time, they’ve been talking about

starting a company—the six of them—around a software solution in which all of them have

an interest. Based on materials in this chapter, what challenges do you anticipate these six

people will likely encounter cofounding a firm?

Partnerships are businesses where more than one individual contribute towards the

collective performance of the business. A partnership is an efficient business strategy for a start-

up because it helps in areas such as cost and labor division. For the six software engineering

planning to start a partnership, they need to read comprehensively about their individual

obligations to a business. Some of the areas they need to comprehend fully before signing the

partnership agreement include the terms for termination of a partnership, which is a common

issue in most partnerships.

In the workplace, the partners are likely to encounter challenges in decision-making,

appraisal, and long-term achievement of goals. Decision-making is slower in partnerships

because all partners have to consent to an idea before its implementation. Furthermore, partners

are likely to have conflicting ideas in their decisions and this could create poor performance due

to the lags in performance and productivity. The partners will also encounter challenges in their

division of roles and responsibilities since some people are likely to feel that their roles are more
complex than the roles allocated to the other partners. Another common issue they will encounter

is workplace subordination where partners could perceive conducts by others as ineptitudes.

The partners will also encounter challenges in their individual roles to appraise others.

Appraising requires the fair and honest opinion of the supervisor, and complete neutrality among

all persons being assessed. In a partnership, merit appraisal is influenced negatively by the

relationships between stakeholders since the practice encounter barriers in its ability to remain

neutral and standardized.

 References

Barringer, B. (2012). Entrepreneurship: Successfully Launching New Ventures, (2012).