ENFB 4170 Exam 1

ENFB 4170 Exam 1 What are the four steps to the *entrepreneurial strategy*? - ✔✔think big, start small, fail quickly, and grow fast What are the 3 advantages to *thinking big* - ✔✔1. get investors attention 2. get a ...

ENFB 4170 Exam 1 What are the four steps to the *entrepreneurial strategy*? - ✔✔think big, start small, fail quickly, and grow fast What are the 3 advantages to *thinking big* - ✔✔1. get investors attention 2. get a greater return 3. make it easy to inspire people/recruit What are the 4 advantages to *starting small* - ✔✔1. minimizes losses from failures 2. raise smaller amount of money, meaning less dilution of ownership 3. less time to raise less amount of $ 4. easier to measure results and easier for management to observe What are the 3 advantages to *failing quickly* - ✔✔1. Saves time 2. Saves money 3. Gets us to the right answer quicker What are the 4 advantages to *grow faster* - ✔✔1. window of opportunity closes fast 2. get to the break-even point faster 3. get to profit faster 4. easier to raise capital What is the most important part of supervision? - ✔✔hiring people What are 7 tips on hiring well? Which two are most important - ✔✔1. Nub: "hire people who already know how to work" (important) 2. hire people you like (important) 3. has necessary skill sets 4. hire people who are excited about the company 5. hire from within company if at all possible 6. interview 5-7 people for an opening 7. interview too many vs. too few What are 4 benefits of hiring within your company? - ✔✔1. Already part of the culture 2. motivating to other employees, improves morale 3. less risk 4. encourages overly qualified from outside to apply What are five tips for an interview? - ✔✔1. 60% of words will be interviewee, and 40% of the words will be interviewer, two-way communication 2. early on describe the job 3. early on cast a vision of the company 4. ask "W" questions 5. Ask open-ended questions that the candidate does not know the right answer What are 6 big things in *supervision* (but the two biggest first) - ✔✔1. treat others as you want to be treated 2. be a servant to those you supervise 3. open communication 4. be consistent, steady, predictable 5. don't let little things build up 6. reinforce positive behavior What are two tips to help with open communication? - ✔✔1. at least once a week go out and speak one on one to each employee and say "tell me something I don't know" 2. Make sure you as the supervisor go to the employee what are 6 ways to reinforce positive behavior among employees? - ✔✔1. money 2. promotion 3. compliments through one on one communication 4. acknowledgment before peers 5. make sure you can empower the person doing the task 6. explain why what they (the employee) is doing what they are doing (and how that fits into the "big picture") What are the 5 tips with *delegating*? - ✔✔1. critical to the growth of the company 2. hire with delegation in mind 3. don't take back authority or tasks previously delegated. 4. know how to handle mistakes 5. Don't practice the "Peter Principle" How many of the people (out of 8) that you hire should be capable of managing that same position? - ✔✔2-3 of that 8 How much should you delegate if you are growing fast? What about if you are growing small? - ✔✔Fast: delegate too much vs. too little Slow: delegate too little vs too much What is the maximum # of people you should give someone to delegate? - ✔✔12 What are 6 things you should take into account when delegating when it comes to mistakes? - ✔✔1. tell your supervisors "don't be afraid of mistakes!" 2. admit them as early as possible 3. support the person who made the mistake 4. clean up the mess, don't criticize 5. clean up FAST 6. learn from it What does Jim mean when he says don't practice the peter principle? - ✔✔It is *okay* to demote! Have a trial or probationary period for all promotions (1-6 months) What are the 4 types of organizational structures? Which is Corman's favorite? Which is most common? - ✔✔1. function (most common) 2. Areas/Geography 3. Products [think microsoft] 4. Matrix {Corman's favorite} Hire ________ first, then _________ - ✔✔generalists, specialists What are six advantages to a matrix structure? - ✔✔1. It is flat (few management levels as possible) 2. more innovations 3. quicker 4. fewer people involved 5. less expensive 6. closer you are to the customer What is the number 1 outsourced function in a company? What is number 2? - ✔✔IT, Accounting What are the three steps in hiring people based on functions of a small business? - ✔✔1. hire generalists first 2. outsource early - as much as you can afford 3. hire specialists How do you recruit someone to your early stage company? - ✔✔Give them *equity* Exercise Price=_________________ - ✔✔current market price. If your company is worth $100,000 and you offer a recruit 4% equity with a maturity date of 4 years what does this mean? - ✔✔They can claim 4% of 100,000 so 4,000 shares for a maturity date of 4 years What are three types of ownership you can offer a new recruit? - ✔✔1. # of shares - % ownership 2. exercise date 3. maturity date [you can buy stock up until a date] What two things does do stock options help with? - ✔✔1. attracting mngt team 2. motivate him to work hard and create value What is an options pool? What % of stock goes into the options pool? What percent of that goes to VPs? - ✔✔Created by stockholder vote but the options are issued to the management team by the board of directors. 10-15% of the stock goes into the options pool. 2-3% of this goes to VPs. You have a company and go through several rounds of funding in order to get started. (1) you give 10% to seed funding (2) you give 10% to options pool to recruit (3) you go to series A-1 and give them 20% (4) you go to series A-2 and get an investment of 14%. *write out the cap table* - ✔✔___________seed____options____A-1______A-2 *Joe*_____90%____81%________64.8%___45.36% *Seed*__10%_____9%_________7.2%______5.04% *Options*_________10%________8%_______5.6% *A-1*_____________________________20%______14% *A-2__________________________________________30% ________________________________________*total 100%* What is the purpose of strategic planning - ✔✔Create a competitive advantage. What is a competitive advantage? - ✔✔what we do better than the competition, or the reason consumers buy from us vs. the competition What are three attributes of a competitive advantage? - ✔✔1. can have more than one [although one is more dominant and you should focus on that one] 2. the competitive advantage can change over time 3. the more sustainable, the better What are the four kinds of competitive advantages? Which is most and which is least common? - ✔✔1. Better price/lower cost [least common] -walmart 2. differentiation [most common] -apple 3. niche/focus/segmentation -Victoria's Secret 4. Be first to market When does strategic planning end? - ✔✔Never What does a SWAT analysis ask? - ✔✔1. What do I do well? 2. What do I do poorly? then look at what you do well and then look for competition that is poor at what you do well. What are the two types of swat analysis? - ✔✔1. generic/universal (small business) 2. unique analysis specific to your company What are the six ways to recruit? What are the main three? - ✔✔1. *Online job board- (LinkedIn, indeed, monster)* 2. Traditional recruiting services 3. *Employee Referrals* 4. Professional organizations-(universities etc) 5. Job Fairs 6. *Posting jobs internally* What is the biggest advantage and weakness of a matrix structure? - ✔✔Advantage: flexibility Weakness: Ongoing projects cause people to have 2 bosses