978-1259912191 Chapter 3 Solutions Manual Part 2

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Chapter Three: Business Idea Generation and Initial

Evaluation

Lecture Links

Lecture Link 3.1: M-Commerce and the Entrepreneur

(LO 3-2)

The world has changed as a result of M-commerce, also known as mobile commerce,

as it relates to technological advances in the United States and abroad. It is easy to

surmise that this M-commerce phenomenon cannot give enough fast enough. Consider

how the advances in technology changed the way everyone on the planet

communicates. As a result, there is an increase in the consumer markets, service

providers, and retail markets. Potential entrepreneurs can research this marvel of

opportunities to discover a gap in the market and create a product or service.

1. Perform a Google search with M-commerce as a topic and evaluate three

sources that you found related to M-commerce.

2. Discuss the various products and services related to the topic. What did you

discover?

3. Did you discover any additional needs, or gaps, related to additional products,

services, or process changes in the marketplace that might generate a new

business venture? If yes, discuss the outcome of your research.

4. Discuss your interests in initiating a new entrepreneurial business based on the

outcome of your research. Be specific.

Lecture Link 3.2: E-Commerce and the Entrepreneur

(LO 3-2)

Many individuals and groups utilize the internet to purchase and sell goods in the

marketplace. Perhaps you have considered buying or selling goods on the World Wide

Web? Visit two of these sites or choose a source where you can buy or sell goods on

the World Wide Web: EBay, Amazon.com, Craigslist.org, Search.com, and BizRate.com

and complete the discussion questions.

1. Summarize the various products and services that you can buy and sell products

and services through the internet.

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Chapter Three: Business Idea Generation and Initial

Evaluation

2. Have you ever thought about opening an online business? Discuss some

business types that allow you to buy and sell goods on the internet. Why or why

not?

3. How would you receive payments for your products or services? Discuss any

security issues that you have for opening this type of business.

4. Are there other sites that you could use to sell your products? Describe them

and explain why they will be suitable for your business.

Lecture Link 3.3: Assess Your Skills

(LO 3-1, 3-2)

In Chapter Three of the text, the authors revealed that new small business owners

should pursue business opportunities based on a number of important factors. One

important consideration was for individuals to pursue business interests that they enjoy.

Perhaps individuals who enjoy their work appear to be happier than individuals who

pursue business interests in fields they do not enjoy.

There is an abundance of new small business options for individuals to consider. Have

you explored the area where you might prove to be the most productive? Visit USA Jobs

at https://careerwise.mnscu.edu/careers/clusterSurvey and complete the

Questionnaire.

Discussion Questions:

1. What were the results of the questionnaire?

2. Did the results surprise you? If yes, explain why. If not, discuss your area of

interest.

3. What industry do you expect to pursue. Be specific.

Bonus Internet Exercises

Bonus Internet Exercise 3.-1: Opportunity Analysis from New Business Trends

(LO 3-1, 3-2, 3-3)

One important learning outcome in Chapter Three is to observe the elements

associated with opportunity analysis. New ideas have the potential to develop as a

result of effective research. Entrepreneurs discover new business ideas and trends that

result in new business implementation strategies.

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Chapter Three: Business Idea Generation and Initial

Evaluation

Perform an internet search with the keywords “new businesses trends for 20xx” (the

year that you complete this assignment) and discuss the following:

1. List the two websites that you observed to discover new business trends.

2. List and summarize at least three new business trends that you observed from

research.

3. Discuss the potential new business opportunities that you could create as a

result of your research.

4. Do you believe that these opportunities can result in successful new

entrepreneurial business opportunities? Why or why not?

Bonus Internet Exercise 3.2: Green Alternatives for the New Entrepreneur

(LO 3-1, 3-2, 3-3)

In this chapter we discussed how to establish new business ideas. One popular trend in

innovative new business development is the concept and creation of green alternatives

for individuals and businesses. Many individuals and groups change their way of life to

assure they are friendly to the environment.

Visit the official Business Link to the U.S. government Green Business Guidei website at

http://www.business.usa.gov and type “green business” in the Search box.

Discussion Questions:

1. Were there any tips on starting a green business on the web site?

2. Why should new small business owners consider a new green business type?

3. Brainstorm and list two new green businesses that you believe would enhance

the economy.

4. List three or four reasons why you believe a new green business would be

successful.

Bonus Internet Exercise 3.2: Green Alternatives for the New Entrepreneur

(LO 3-1, 3-2, 3-3) – Note

Discussion Questions:

1. Were there any tips on starting a green business on the web site? There is

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Chapter Three: Business Idea Generation and Initial

Evaluation

2. Why should new small business owners consider a new green business

3. Brainstorm and list two new green businesses that you believe would

enhance the economy. Student responses will vary.

4. List three or four reasons why you believe a new green business would be

successful. Student responses will vary.

Bonus Internet Exercise 3.3: The Bureau of Labor Statistics Projections

(LO 3-1, 3-2, 3-3)

The unemployment rate in the United States could be estimated at an all time high with

a record number of unemployed individuals. This is only one reason why new small

business owners pursue entrepreneurship. One important factor in reference to

employment is the anticipated amount of new job creation in the United States. Review

the Current Population Survey ii at http://www.census.gov/cps/data/cpstablecreator.html

and answer the following questions:

1. What is the current breakdown of the individuals unemployed in the United

States?

2. What are the employment projections for the United States? Is the employment

rate expected to increase or decrease?

3. What does the outcome of this research reveal about employment opportunities

in the United States?

4. Find the most recent data for the economic census. How many establishments

are involved in oil and gas extraction? How many establishments are involved in

food manufacturing? How many retail bakeries are there?

5. What are the characteristics of the population aged 60 and older? How many

males and females? How many have a bachelors degree or higher? What is

the disability status that has “no disability?”

Note to Instructors: The statistics on this site are updated monthly.

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Chapter Three: Business Idea Generation and Initial

Evaluation

Critical Thinking Exercises

Critical Thinking Exercise 3.1: The Detail Oriented Entrepreneur

(LO 3-1)

Perhaps you prefer to work extensively with people in your daily work environment.

Frequently, individuals work in environments where they find themselves uncomfortable.

For example, if you work in an environment with many individuals and you are not

happy in that environment, you might consider changing your focus to a business that

has minimal interpersonal demands. For example, you might be better suited to work at

an internet-based business, or a business that performs tasks for other businesses.

1. Discuss your current work environment. Do you enjoy working with individuals

and groups? Or, do you prefer to work in an environment that has limited people

exposure? If you are not employed, discuss your people skills.

2. Imagine that you could open your perfect business. Describe the business and

discuss whether or not you prefer to work alone. Be specific.

Critical Thinking Exercise 3.2: Chart the Business Idea

(LO 3-1)

As we learned in this chapter, entrepreneurs engage in processes that permit them to

identify and develop potential business opportunities. Analyze your personal

characteristics and traits, evaluate the environment for a business opportunity, and

identify that new business opportunity. Use the following chart to develop your new

small business opportunity.

NEW BUSINESS IDEA DEVELOPMENT CHART

PERSONAL SKILL SET GAP/PRECEIVED BUSINESS

NEED

BUSINESS OPPORTUNITY

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Chapter Three: Business Idea Generation and Initial

Evaluation

1. List your personal skill set in column one. Include all the skills that you developed

from hobbies, current work, past work experience, and/or family history.

2. Evaluate the market to discover an unmet business need. Be creative.

3. In column three, list the potential new entrepreneurial opportunity that you

identified in the market. Is this a viable new small business idea? Why or why

not? Be specific.

4. Summarize your analysis and present your new entrepreneurial idea to the class

in a presentation or power point presentation.Critical Thinking Exercise 3.3: The

deficit Analysis

(LO 3-3)

The authors discussed in the text how potential entrepreneurs can assess whether or

not they have a viable business idea to develop into their new entrepreneurial business.

From the discussion of gap analysis, create a list of three to five business ideas. Next,

use the following chart structure and develop a spreadsheet to analyze the various

issues that could impact the new small business.

DEFICIT ANALYSIS CHART (text page 50 through 54)

BUSINESS IDEA CATEGORY YOUR

RESOURCES

REQUIRED

DEFICIT

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Chapter Three: Business Idea Generation and Initial

Evaluation

1. Using an excel spreadsheet; create columns to complete a deficit analysis chart.

2. List at least three business ideas in the business idea column of the chart.

Include a brief description of each business idea. Be specific.

3. In the second column, category, list one of the five categories that you intend to

use to identify your new business idea. Recall that these include finances, time,

nonfinancial resources, risk, and the competition as applied to the new small

business idea.

4. In the third column, list the resources that are available for you to use.

5. Estimate the resources that you believe you will need for your new small

business and list them in column four. Be specific.

6. To complete the fifth column, deficit, compare the skills and resources that you

have available to the resources that you believe you need for the new business

idea. Evaluate the gaps or perceived deficit.

7. Summarize your analysis in at least two paragraphs. Ask yourself “Is that deficit

surmountable or is it one that kills the idea?”

Bonus Cases

Bonus Case 3.1: Uber Changes the Business.

(LO 3-1, 3-2, 3-3)

The opening case in Chapter 3, “Uber Changes the Business,” presents a business

model that has generated some problems for the company including a class-action

lawsuit. Taxicab companies in some cities have tried to shut down the service.

However, the company which started with no employees and very small budget has

developed into a venture-backed company with revenues of over $125 million.

Discussion Questions:

1. Summarize how the founders in the case study utilized their skills and

capabilities to diversify their service and establish a new business venture.

2. Discuss how gap analysis was used to meet demands in the industry. Be

specific.

3. Discuss the amount of risk associated with their new venture. Include both

personal and business risk in your response.

4. In your opinion, how much risk did the founders assume?

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Chapter Three: Business Idea Generation and Initial

Evaluation

Bonus Case 3.1: Uber Changes the Business

(LO 3-1, 3-2, 3-3) – Notes

Discussion Questions:

1. Summarize how the founders in the case study utilized their skills and

capabilities to diversify their service and establish a new business venture.

2. Discuss how gap analysis was used to meet demands in the industry. Be

3. Discuss the amount of risk associated with their new venture. Include both

personal and business risk in your response. The risk was not as great as if

4. In your opinion, how much risk did the founders assume? Because there

Bonus Case 3.2: Retirement and the Entrepreneur

(LO 3-1)

Have you thought about your retirement lately? Many individuals do not plan for their

retirement. As potential entrepreneurs, it is time to start planning. Remember, planning

is essential to the new entrepreneurial venture owner. If you haven’t started your new

small business you might ask, why plan for retirement when the new business isn’t

organized. Well, this is a perfect time to start.

Visit the Social Security Administration at http://www.ssa.gov and review the estimate

your retirement section. First, recall that there are guidelines that indicate how long you

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Chapter Three: Business Idea Generation and Initial

Evaluation

must pay into social security before you are eligible to receive benefits. In addition,

there are various age requirements associated with benefit payments.

Visit the link and discuss the following:

1. How many years until you are eligible to retire?

2. What is the time frame associated with receiving benefits?

3. Why is it important for a new small business owner to pay taxes?

Bonus Case 3.3: Community and the New Entrepreneur

(LO 3-1)

Many aspiring entrepreneurs develop their new small businesses as a result of hard

work, dedication, skill assessment, and of course their continued start-up initiative

associated with the development of a new small business environment. A good starting

point for new entrepreneurs in their quest to establish their businesses is to evaluate

how they will work with the other individuals associated with the new small businesses.

Many businesses today establish a sense of community within their business

environment after they establish their operations. J. Johnson (2007)iii , a retired learning

teacher in Quesnel, said that organizations which do not implement a sense of

community in the workplace create a “toxic work environment (p 1).” Employees seem

to spend more time at work than they do at their homes. Perhaps small business

owners should evaluate the concept of employee bonding at the workplace.

Discussion Questions

1. Express your opinion of the sense of community concept at the workplace. Do

you think it is a good idea for individuals to bond at work? Discuss the pros and

cons associated with building a sense of community at the workplace.

2. What can entrepreneurs do to prevent a “toxic work environment” at their new

small business and create a better work/life balance for employees? Make a list

of 5 things.

3. Summarize your opinion of this concept. Does the establishment of community at

the new entrepreneurial business express leadership skills.

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Chapter Three: Business Idea Generation and Initial

Evaluation

Bonus Case 3.3: Community and the New Entrepreneur

(LO 3-1) – Notes

Student responses will vary. Ask the students to share their work experiences. Did they

feel that worked in an environment where they felt they were part of the workplace

community? Or did they feel that the workplace was just a place they went to earn a

paycheck? Have the students list the situations that made their workplaces “toxic”.

Responses may include lack of leadership, favoritism and inability to make a decision.

Ask what changes these businesses could make to make the work environment better

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i Green Business Guide. (2009). The Official Business Link to the U.S. Government is Business.Gov.

http://www.business.gov/expand/green-business/Retrieved on October 11, 2009.

ii Current Population Survey. (2009). US Bureau of Labor Statistics. http://www,bls.gov/cps. Retrieved on October 16, 2009.

iii Johnson, J. (2007). On being well: Building community in the workplace. Teacher News Magazine, 19(5) p. 1.

http://bctf.ca/publications/NewsmagArticle.aspx?id=11502. Retrieved on October 16, 2009.