INDIVIDUAL ASSIGNMENT

Entrepreneurship

NAME: NINH ĐỨC SANG

STUDENT ID: HS140523
CLASS: FIN 1402
SUBJECT: ETR 401
LECTURER: TRỊNH TRỌNG HÙNG

Date: 24/10/2021
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1. Briefly describe the sources that lead small business owners to their
business ideas:

- Small business owners may have decided that they want to start a
business but they are not sure what business they want to get into.
Business ideas are all around us. There are many places to start searching
for ideas. Let's look at some good sources for ideas.
● Past work experience: If you've been working somewhere for a few years,
you must be doing something good. You've earned experience in your
industry and been professionally exposed to a variety of other fields over
this time. You've made contacts within your firm as well as in the
industry as a whole. You've acquired talents and possibly gotten training
in a specialized field. When you start a firm that is related to the work
you used to do, you have a lot of benefits to begin with. You bring your
expertise, technical knowledge, contacts, and so on. In the uncertain
world of business, this is a tremendous plus.
● Hobbies and interest: Professional athletes make a living out of what they
love doing. Taking a good look at what you enjoy doing is a good way to
look for business ideas. For example, if you are interested in cooking, you
can start a restaurant. The possibilities are endless.
● Travel: Ideas may develop when you travel to different parts of the
country or to different countries and see different ways of doing things or
products that may work at home. Travel makes you aware of the
alternatives. In Hanoi, many restaurants serving Japanese or European
standards succeed because the owners have lived abroad and they bring
what they experience to serve customers.

2. How can business ideas be screened for their viability? Explain.

- It's critical to test your business idea to see if it's a feasible business plan.
Don't hurry into introducing a product; if it fails due to a lack of rigorous
consideration and planning, it could be a waste of valuable resources.
Here are some steps to testing your business idea to be screened for their
viability.
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● Build a prototype or test service: The service prototype has the

objective of replicating, as much as possible, the final experience of
interacting with the service, in order to test and validate all the design
choices. The complexity in the simulation is due to the fact that the
service only exists once it’s delivered, and while testing the experience of
using a specific touchpoint such as a mobile product could be relatively.
● Build a minimum viable product: The lean startup strategy is an
excellent way to grow your company or a specific product. Above all,
you need to create a minimal viable product. Having a version of the
product to test and market early in the development process so that any
tweaks or changes are in response to real feedback from the target
audience.
● Tweak it to suit your test market: The feedback from customers in fine-
tuning the original idea. After running viable products and service
prototypes, synthesize the information to improve their products to suit
the target market.
● Create a test website with social media tie-ins: Once news of your
product or service has spread, your target market will need a location to
go to get more about it or exhibit it to their friends. Using social media to
give information and track how many people are interested in what you're
selling is a terrific method to provide information and monitor how many
people are interested in what you're selling.
● Create a marketing plan: All of the preparatory work means nothing if
you do not perform enough actions to get a good measure of response.
Once you have a viable product, you need to act on the interest in it by
marketing.

3. What are the main concerns when individuals moonlight? Explain.

- “Moonlighting is defined as to work at an additional job after one’s

regular, full-time employment, as at night”. The reasons employees
moonlight varies but common motivations are: to earn extra money, pay
off debt, start a business, and the enjoyment that comes from working a
2nd job. “The Bureau of Labor Statistics (BLS) estimates that an average
of 4.9% of workers have multiple jobs”.
- So should organizations be concerned with their employees
moonlighting?
● Employees can learn and improve job skills on someone else’s dime.
Employees may have the opportunity to learn new skills that can benefit
both organizations.
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● If one employer pays for skill development the second employer will
benefit from it.
● Moonlighting also can also improve employee retention because workers
may not feel as much pressure to look for another job earning more
money when they are struggling financially.
● Working a second job can provide employees with added income which
can reduce the pressure of financial obligations.
- Besides the advantages, moonlighting also has some disadvantages that
employers need to pay cornsern to:
● Trade Secrets: Moonlighting may give employees the opportunity to
divulge trade secrets if they are working in a similar industry and job.
● Exhausted Employees: If employees are working long hours, the second
job may cause the employee to become distracted, unproductive, and
neglect job responsibilities because of physical fatigue.
● Use of Company Resources: Employees may use company resources for
their second job which increases operating expenses.
- The organization should determine if the second job interferes with
organizational objectives and should have conflict-of-interest and
confidentiality policies that employees understand and sign upon
employment. The bottom line is, employers need to hold employees
accountable for their job, regardless of their responsibilities to another
employer.

4. Briefly describe the industry life cycle:

- The industry life cycle refers to the evolution of an industry or business

through four stages based on the business characteristics commonly
displayed in each phase. The four phases of an industry life cycle are the
introduction, growth, maturity, and decline stages. Industries are born
when new products are developed, with significant uncertainty regarding
market size, product specifications, and main competitors. Consolidation
and failure whittle down an established industry as it grows, and the
remaining competitors minimize expenses as growth slows and demand
eventually wanes. There is no universal definition for the various stages
of the industry life cycle, but commonly, it can be organized into
introduction, growth, maturity, and decline. The relative length of each
phase can also vary substantially among industries. The standard model
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typically deals with manufactured goods, but today's service economy

can function somewhat differently, especially in the realm of Internet
communications technology.
● Introduction Phase: The introduction, or startup, phase involves the
development and early marketing of a new product or service. Innovators
often create new businesses to enable the production and proliferation of
the new offering. Information on the products and industry participants
are often limited, so demand tends to be unclear. Consumers of the goods
and services need to learn more about them, while the new providers are
still developing and honing the offering. Participants tend to be
unprofitable because expenses are incurred to develop and market the
offering while revenues are still low.
● Growth Phase: Consumers in the new industry have come to understand
the value of the new offering, and demand grows rapidly. A handful of
important players usually become apparent, and they compete to establish
a share of the new market. Immediate profits usually are not a top priority
as companies spend on research and development or marketing. Business
processes are improved, and geographical expansion is common. Once
the new product has demonstrated viability, larger companies in adjacent
industries tend to enter the market through acquisitions or internal
development.
● Maturity Phase: The maturity phase begins with a shake out period,
during which growth slows, focus shifts toward expense reduction, and
consolidation occurs. Some firms achieve economies of scale, hampering
the sustainability of smaller competitors. As maturity is achieved, barriers
to entry become higher, and the competitive landscape becomes more
clear. Market share, cash flow, and profitability become the primary goals
of the remaining companies now that growth is relatively less important.
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Price competition becomes much more relevant as product differentiation

declines with consolidation.
● Decline Phase: The decline phase marks the end of an industry's ability
to support growth. Obsolescence and evolving end markets negatively
impact demand, leading to declining revenues. This creates margin
pressure, forcing weaker competitors out of the industry. Further
consolidation is common as participants seek synergies and further gains
from scale.

5. Briefly discuss the different types of budgets that make up the master
budget:

- A master budget is a comprehensive budget created from a series of

smaller, specialized business budgets. The master budget process has two
parts: an operating budget and a financial budget.
● The operating budget shows the income-generating activities of the firm,
including revenues and expenses. The result is a budgeted income
statement.
● The financial budget shows the inflows and outflows of cash and other
elements of the firm's financial position. The inflows and outflows of
cash come from the cash budget. As such, the result of the financial
budget is the budgeted balance sheet.
- Master budget include:
➨Sales Budget
➨Production Schedule
➨Direct Materials, Labor, and Overhead Budget
➨Finished Goods Inventory and Cost of Goods Sold Budget
➨Administrative Budget
➨Cash Budget
➨Budgeted Balance Sheet
➨Capital Expenditures
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- All the divisional budgets are interrelated. A mistake in preparation for

any budget leads to a mistake in the master budget. The master budget is
considered one of the most important planning tools for an organization.
While planning, top-level management discusses the overall profitability
and the asset and liability position of the company. However, The
divisional staff is forced to achieve the target despite having practical
difficulties in achieving the same. It is because of the pressure from the
top management. This leads to low revenue estimates and higher expense
estimates and it is also difficult to update. The master budget is not easy
to modify. To add, alter or delete small changes requires a lot of steps in
the entire budget.

6. What are some of the tasks an accounting system should be able to

perform in order to ensure that a business's accounting information
is accurate, reliable, and useful?
- Staying on top of a company's finances is crucial, and the larger a
business grows, the more challenging it becomes to keep track of income,
expenses, assets and liabilities. A good accounting system is a must for
businesses of any size. An accounting system needs to be accurate and
timely information for more effective decisions. Let’s check some
advantages of keeping a good accounting record.
● Manage cash flows and meet deadlines: Cash flow management means
knowing what you do with the cash that comes into your business. A
good accounting system will help you identify the areas that need cash
and when it will be needed.
● Evaluate the performance of your business: A good accounting system
gives you a thorough overview of the financial performance of your
business. A comparison of current results with the previous year’s
activity, as well as against budgeted results, will provide useful
information to help with decision making.
● Compliance with laws: Maintaining proper books of account is a legal
requirement for all companies in other country, and will also ensure that
the company will be able to comply with its various VAT, Corporation
Tax and other statutory filing requirements.
● A better and more prestigious image of the business: Having financial
statements prepared and accompanied by an auditor's report is an
important factor for a growing business to be able to present a better and
more prestigious image of the business.