Entrepreneurship successfully lauching new ventures bruce r barringer

Entrepreneurship successfully lauching new ventures bruce r barringer Entrepreneurship successfully lauching new ventures bruce r barringer Entrepreneurship successfully lauching new ventures bruce r barringer Entrepreneurship successfully lauching new ventures bruce r barringer Entrepreneurship successfully lauching new ventures bruce r barringer Entrepreneurship successfully lauching new ventures bruce r barringer Entrepreneurship successfully lauching new ventures bruce r barringer Entrepreneurship successfully lauching new ventures bruce r barringer Entrepreneurship successfully lauching new ventures bruce r barringer

Entrepreneurship SucceSSfully launching new VentureS FiFth Edition Bruce R Barringer Oklahoma State University R Duane Ireland Texas A & M University Boston Columbus Indianapolis New York San Francisco Amsterdam Cape Town Dubai London Madrid Milan Munich Paris Montréal Toronto Delhi Mexico City São Paulo Sydney Hong Kong Seoul Singapore Taipei Tokyo Vice President, Business Publishing: Donna Battista Editor in Chief: Stephanie Wall Acquisitions Editor: Daniel Tylman Program Management Lead: Ashley Santora Program Manager: Claudia Fernandes Editorial Assistant: Linda Albelli Vice President, Product Marketing: Maggie Moylan Director of Marketing, Digital Services and Products: Jeanette Koskinas Executive Product Marketing Manager: Anne Fahlgren Field Marketing Manager: Lenny Ann Raper Senior Strategic Marketing Manager: Erin Gardner Project Management Lead: Judy Leale Project Manager: Ann Pulido Procurement Specialist: Diane Peirano VP, Director of Digital Strategy & Assessment: Paul Gentile Manager of Learning Applications: Paul Deluca Digital Editor: Brian Surette Digital Studio Manager: Diane Lombardo Digital Studio Project Manager: Robin Lazrus Digital Studio Project Manager: Alana Coles Digital Studio Project Manager: Monique Lawrence Digital Studio Project Manager: Regina DaSilva Text and Cover Designer: Integra-Chicago Cover Images: LuminAID Lab, LLC Full-Service Project Management: Alverne Ball/Integra-Chicago Composition: Integra Software Services Printer/Binder: RR Donnelley/Willard Cover Printer: Phoenix Color/Hagerstown Text Font: 10/12 ITC Bookman Std Copyright © 2016, 2012, 2010 by Pearson Education, Inc All rights reserved Manufactured in the United States of America This publication is protected by Copyright, and permission should be obtained from the publisher prior to any prohibited reproduction, storage in a retrieval system, or transmission in any form or by any means, electronic, mechanical, photocopying, recording, or likewise For information regarding permissions, request forms and the appropriate contacts within the Pearson Education Global Rights & Permissions department, please visit www pearsoned.com/permissions/ Acknowledgments of third party content appear on the appropriate page within the text, which constitutes an extension of this copyright page Unless otherwise indicated herein, any third-party trademarks that may appear in this work are the property of their respective owners and any references to third-party trademarks, logos or other trade dress are for demonstrative or descriptive purposes only Such references are not intended to imply any sponsorship, endorsement, authorization, or promotion of Pearson’s products by the owners of such marks, or any relationship between the owner and Pearson Education, Inc or its affiliates, authors, licensees or distributors Library of Congress Cataloging-in-Publication Data Barringer, Bruce R Entrepreneurship : successfully launching new ventures/Bruce Barringer, Oklahoma State University, Duane Ireland, Texas A&M University.—5 Edition pages cm Includes bibliographical references and index ISBN 978-0-13-379719-0 (alk paper) Entrepreneurship New business enterprises I Ireland, R Duane II Title HB615.B374 2016 658.1’1—dc23 2014016425 10 ISBN 10: 0-13-379719-8 ISBN 13: 978-0-13-379719-0 Dedication To my wife, Jan Thanks for your never-ending encouragement and support Without you, this book would have never been possible Also, thanks to all the student entrepreneurs who contributed to the chapter opening features in the book Your stories are both insightful and inspiring —Bruce R Barringer To my family: I am so proud of each of you and so blessed by your perseverance and never-ending love and support I know that sometimes it seems as though “we lose ourselves in work to and bills to pay and that it’s a ride, ride, ride without much cover.” But you are always in my heart, a gift for which I remain deeply grateful —R Duane Ireland Brief Contents Preface xi Part Decision to Become an Entrepreneur Introduction to Entrepreneurship ChaPter Part Developing Successful Business Ideas 39 Recognizing Opportunities and Generating Ideas 41 Feasibility Analysis 75 Developing an Effective Business Model 111 Industry and Competitor Analysis 149 Writing a Business Plan 181 ChaPter ChaPter ChaPter ChaPter ChaPter Part Moving from an Idea to an Entrepreneurial Firm 217 Preparing the Proper Ethical and Legal Foundation 219 ChaPter Assessing a New Venture’s Financial Strength and Viability 259 ChaPter Building a New-Venture Team 295 ChaPter 10 Getting Financing or Funding 327 ChaPter Part Managing and Growing an Entrepreneurial Firm 363 ChaPter 11 Unique Marketing Issues 365 ChaPter 12 The Importance of Intellectual Property 403 ChaPter 13 Preparing for and Evaluating the Challenges of Growth 441 ChaPter 14 Strategies for Firm Growth 473 ChaPter 15 Franchising 507 Glossary 548 Name Index 558 Company Index Subject Index iv 560 564 Contents Preface xi Economic Impact of Entrepreneurial Firms Entrepreneurial Firms’ Impact on Society Entrepreneurial Firms’ Impact on Larger Firms Part Decision to Become an Entrepreneur the Entrepreneurial Process introduction to Entrepreneurship What is Entrepreneurship and Why is it important? Why People Become Entrepreneurs? Moving from an Idea to an Entrepreneurial Firm (Chapters 7–10) 26 Managing and Growing an Entrepreneurial Firm (Chapters 11–15) 26 Chapter Summary 28 | Key Terms 29 Review Questions 29 | Application Questions 30 You Be the VC 1.1 31 | You Be the VC 1.2 31 CASE 1.1 32 | CASE 1.2 35 7 Endnotes Pursue Financial Rewards Characteristics of Successful Entrepreneurs Passion for the Business 9 What WEnt Wrong? Prim: How a lack of Passion and resolve Can Kill a Business 11 Product/Customer Focus Tenacity Despite Failure Execution Intelligence 12 13 Savvy EntrEPrEnEurial Firm: Pandora: What’s Possible When an entire Company Has “Tenacity” 14 Common myths about Entrepreneurs Solving a Problem Myth 4: Entrepreneurs Should Be Young and Energetic 17 Finding Gaps in the Marketplace 18 PartnEring For SuCCESS: start-up incubators and Accelerators: A New Way of Gaining Access to Mentors, Partners, investors, and Other Critical start-up resources 19 Women Entrepreneurs Minority Entrepreneurs Senior Entrepreneurs Young Entrepreneurs 20 21 50 20 54 What WEnt Wrong? Why a Company that solved a Problem With a Great Product Went Out of Business 55 Prior Experience 56 Cognitive Factors Social Networks Creativity 56 57 57 techniques for generating ideas 21 Brainstorming 59 21 Focus Groups 60 the Positive Effects of Entrepreneurship and Entrepreneurial Firms 22 53 Personal Characteristics of the Entrepreneur 17 Changing demographics of Entrepreneurs 44 Savvy EntrEPrEnEurial Firm: How to learn About emerging Trends Through the effective use of social Media 50 Myth 3: Entrepreneurs Are Motivated Primarily by Money 16 types of Start-up Firms ChaPter Recognizing Opportunities and Generating Ideas 41 Observing Trends 15 15 Myth 5: Entrepreneurs Love the Spotlight Part Developing Successful Business Ideas 39 the differences Between opportunities and ideas 43 three Ways to identify opportunities 44 14 Myth 1: Entrepreneurs Are Born, Not Made 37 Opening Profile—iCrACKed: solving a Problem and Building a Business in an exploding industry 41 12 Myth 2: Entrepreneurs Are Gamblers 25 Developing Successful Business Ideas (Chapters 2–6) 25 Opening Profile—Pure Fix CyCles: The Classic entrepreneurial story Pursue Their Own Ideas 24 25 Decision to Become an Entrepreneur (Chapter 1) ChaPter Introduction to Entrepreneurship Be Their Own Boss 22 24 Library and Internet Research Other Techniques 62 59 61 v vi CONTENTS Encouraging the development of new ideas Establishing a Focal Point for Ideas 62 62 Encouraging Creativity at the Firm Level 62 PartnEring For SuCCESS: Want Help Fine-Tuning a Business idea? Find a Mentor 63 Chapter Summary 64 | Key Terms 65 Review Questions 65 | Application Questions 66 You Be the VC 2.1 67 | You Be the VC 2.2 67 CASE 2.1 68 | CASE 2.2 70 Endnotes 72 ChaPter Feasibility Analysis 75 Savvy EntrEPrEnEurial Firm: Quirky: How One Company Creates, delivers, and Captures Value for its stakeholders 114 general Categories of Business models Standard Business Models What WEnt Wrong? Peer-to-Peer Business Models: Good for some, Not so Good for Others 117 Disruptive Business Models Core Strategy 120 Resources 124 Feasibility analysis 77 Product/Service Feasibility analysis Financials 126 Operations Product/Service Desirability Product/Service Demand 78 83 industry/target market Feasibility analysis 85 Savvy EntrEPrEnEurial Firm: How learning from Customers Caused a successful Firm to Make a 180-degree Turn on the Positioning of a Product 86 Industry Attractiveness 87 Target Market Attractiveness 88 organizational Feasibility analysis Management Prowess Resource Sufficiency 89 What WEnt Wrong? How Feasible Was standout Jobs from the Beginning? 90 PartnEring For SuCCESS: Finding the right Business Partner 91 Total Start-Up Cash Needed 92 92 Financial Performance of Similar Businesses 93 Overall Financial Attractiveness of the Proposed Venture 94 a Feasibility analysis template 109 146 Opening Profile—GreeNVelOPe: Occupying a unique Position in an evolving industry—and Thriving 149 industry analysis 151 Studying Industry Trends 152 PartnEring For SuCCESS: Three Ts That Are important for Becoming Active in an industry: Trade Associations, Trade shows, and Trade Journals 153 the Five Forces model Threat of Substitutes 154 155 Threat of New Entrants 156 Opening Profile—Her CAMPus MediA: executing on an established Business Model and Preparing for the Future 111 113 157 Bargaining Power of Suppliers Bargaining Power of Buyers 158 159 the value of the Five Forces model 160 industry types and the opportunities they offer 162 Emerging Industries 163 Fragmented Industries ChaPter Developing an Effective Business Model 111 Business models and their importance Endnotes Rivalry Among Existing Firms 94 Chapter Summary 95 | Key Terms 96 Review Questions 97 | Application Questions 97 You Be the VC 3.1 99 | You Be the VC 3.2 99 CASE 3.1 100 | CASE 3.2 102 Appendix 3.1 105 Appendix 3.2 107 Endnotes 129 PartnEring For SuCCESS: Odesk, elance, and Guru: Platforms That Facilitate the Forming of Partnerships with Freelancers 132 Chapter Summary 133 | Key Terms 134 Review Questions 134 | Application Questions 135 You Be the VC 4.1 136 | You Be the VC 4.2 136 CASE 4.1 137 | CASE 4.2 141 Appendix 145 ChaPter Industry and Competitor Analysis 149 89 89 Financial Feasibility analysis 118 the Barringer/ireland Business model template 119 Opening Profile—luMiNAid: The Value of Validating a Business idea 75 78 115 115 Mature Industries 163 Declining Industries Global Industries 163 164 165 Competitor analysis Identifying Competitors 165 165 Sources of Competitive Intelligence 166 vii CONTENTS Savvy EntrEPrEnEurial Firm: Thriving in a Crowded industry by Creating Meaningful Value and differentiation from Competitors 167 Completing a Competitive Analysis Grid 168 What WEnt Wrong? digg: A start-up That lost its Way and its Place in its industry 170 Chapter Summary 171 | Key Terms 172 Review Questions 172 | Application Questions 173 You Be the VC 5.1 174 | You Be the VC 5.2 174 CASE 5.1 175 | CASE 5.2 177 Endnotes 179 ChaPter Writing a Business Plan 181 183 185 Investors and Other External Stakeholders guidelines for Writing a Business Plan Structure of the Business Plan Content of the Business Plan outline of the Business Plan 185 186 189 190 Savvy EntrEPrEnEurial Firm: Know When to Hold Them, Know When to Fold Them 191 PartnEring For SuCCESS: Types of Partnerships That Are Common in Business Plans 195 What WEnt Wrong? What eventVue learned the Hard Way About Making Assumptions 202 Presenting the Business Plan to investors 203 203 Questions and Feedback to Expect from Investors 205 Chapter Summary 205 | Key Terms 206 Review Questions 206 | Application Questions 207 You Be the VC 6.1 209 | You Be the VC 6.2 209 CASE 6.1 210 | CASE 6.2 213 Endnotes 216 ChaPter Preparing the Proper Ethical and Legal Foundation 219 Opening Profile—TeMPered MiNd: Proceeding on a Firm legal Foundation 219 Establishing a Strong Ethical Culture for a Firm 221 222 225 Drafting a Founders’ Agreement Avoiding Legal Disputes 228 228 Savvy EntrEPrEnEurial Firm: Vesting Ownership in Company stock: A sound strategy for start-ups 229 233 233 State Licenses and Permits 233 Local Licenses and Permits 234 Choosing a Form of Business organization Sole Proprietorship Partnerships 238 Corporations 239 235 236 Endnotes 242 256 ChaPter Assessing a New Venture’s Financial Strength and Viability 259 Opening Profile—GyMFlOW: Managing Finances Prudently 259 introduction to Financial management 261 Financial objectives of a Firm 262 the Process of Financial management 262 PartnEring For SuCCESS: Organizing Buying Groups to Cut Costs and Maintain Competitiveness 263 Financial Statements Part Moving from an Idea to an Entrepreneurial Firm 217 Lead by Example 225 What WEnt Wrong? Fitbit Force recall: did Fitbit react Quickly enough? 226 Limited Liability Company 187 The Oral Presentation of a Business Plan 224 Chapter Summary 243 | Key Terms 244 Review Questions 244 | Application Questions 245 You Be the VC 7.1 247 | You Be the VC 7.2 247 CASE 7.1 248 | CASE 7.2 251 Appendix 7.1 254 186 Exploring Each Section of the Plan Choosing an Attorney for a Firm Federal Licenses and Permits Who reads the Business Plan—and What are they looking for? 185 A Firm’s Employees Implement an Ethics Training Program dealing Effectively with legal issues obtaining Business licenses and Permits 183 Reasons for Writing a Business Plan 223 PartnEring For SuCCESS: Patagonia and Build-ABear Workshop: Picking Trustworthy Partners 232 Opening Profile—TeMPOruN: Proceeding on the strength of a Winning Business Plan 181 the Business Plan Establish a Code of Conduct 265 Historical Financial Statements 265 Savvy EntrEPrEnEurial Firm: Know the Facts Behind the Numbers 268 Forecasts 273 Sales Forecast 273 Forecast of Costs of Sales and Other Items Pro Forma Financial Statements Pro Forma Income Statement 275 277 278 What WEnt Wrong? Be Careful What you Wish For: How Growing Too Quickly Overwhelmed One Company’s Cash Flow 279 viii CONTENTS Pro Forma Balance Sheet 279 Friends and Family Pro Forma Statement of Cash Flows Ratio Analysis 280 Bootstrapping 283 Chapter Summary 284 | Key Terms 285 Review Questions 285 | Application Questions 286 You Be the VC 8.1 287 | You Be the VC 8.2 287 CASE 8.1 288 | CASE 8.2 290 Endnotes 292 ChaPter Building a New-Venture Team 295 Opening Profile—NexT BiG sOuNd: Hitting the Ground running 295 liability of newness as a Challenge 297 Creating a new-venture team 297 PartnEring For SuCCESS: To Overcome the liabilities of Newness, Consider Joining a start-up Accelerator 298 The Founder or Founders What WEnt Wrong? devver: How Miscues in regard to the Composition and Management of a New-Venture Team Can Kill a start-up 302 The Management Team and Key Employees 303 Savvy EntrEPrEnEurial Firm: Overcoming a lack of Business experience 304 307 rounding out the team: the role of Professional advisers 310 Board of Advisors 310 Lenders and Investors other Professionals Consultants 311 313 324 ChaPter 10 Getting Financing or Funding 327 Opening Profile—rOOMiNATe: raising Money Carefully and deliberately 327 the importance of getting Financing or Funding 329 Why most new ventures need Funding 329 Cash Flow Challenges Capital Investments 329 330 Lengthy Product Development Cycles 330 PartnEring For SuCCESS: startup Weekend: A Fertile Place to Meet Business Cofounders 331 Sources of Personal Financing Personal Funds 332 Business Angels Venture Capital 334 337 338 Initial Public Offering 340 What WEnt Wrong? How One start-up Caught the Attention of VCs, Gained 25,000 daily users, and still Failed 341 Sources of debt Financing Commercial Banks 343 343 SBA Guaranteed Loans 344 Other Sources of Debt Financing 345 Creative Sources of Financing and Funding Crowdfunding Leasing 345 345 346 Other Grant Programs 347 348 Savvy EntrEPrEnEurial Firm: Working Together: How Biotech Firms and large drug Companies Bring Pharmaceutical Products to Market 349 Strategic Partners 349 Chapter Summary 350 | Key Terms 351 Review Questions 351 | Application Questions 352 You Be the VC 10.1 354 | You Be the VC 10.2 354 CASE 10.1 355 | CASE 10.2 358 Endnotes 361 Part Managing and Growing an Entrepreneurial Firm 363 313 Chapter Summary 314 | Key Terms 315 Review Questions 315 | Application Questions 315 You Be the VC 9.1 317 | You Be the VC 9.2 317 CASE 9.1 318 | CASE 9.2 321 Endnotes 333 Preparing to raise debt or Equity Financing Sources of Equity Funding 337 SBIR and STTR Grant Programs 299 The Roles of the Board of Directors 332 332 ChaPter 11 Unique Marketing Issues 365 Opening Profile—WiNK NATurAl COsMeTiCs: Creating a New Brand in the Cosmetics industry 365 Selecting a market and Establishing a Position 367 Segmenting the Market Selecting a Target Market 367 368 Crafting a Unique Market Position 369 Branding 370 the 4Ps of marketing for new ventures Product 373 373 PartnEring For SuCCESS: How Co-Branding is Combining the strengths of Two Already successful Brands 374 Price 376 Promotion 377 What WEnt Wrong? What start-ups Can learn About Marketing from Missteps at JCPenney 378 ix CONTENTS Savvy EntrEPrEnEurial Firm: How Airbnb used Blogs as a stepping-stone to Generate substantial Buzz About its service 383 Place (or Distribution) 386 Sales Process and related issues 387 Chapter Summary 390 | Key Terms 391 Review Questions 391 | Application Questions 392 You Be the VC 11.1 393 | You Be the VC 11.2 393 CASE 11.1 394 | CASE 11.2 397 Endnotes 400 The Process of Conducting an Intellectual Property Audit 429 Chapter Summary 430 | Key Terms 432 Review Questions 432 | Application Questions 433 You Be the VC 12.1 434 | You Be the VC 12.2 434 CASE 12.1 435 | CASE 12.2 437 Endnotes 438 ChaPter 13 Preparing for and Evaluating the Challenges of Growth 441 Opening Profile—BiG FisH PreseNTATiONs: Growing in a Cautious, yet deliberate Manner 441 ChaPter 12 The Importance of Intellectual Property 403 Preparing for growth Opening Profile—driPCATCH: The Key role of intellectual Property early in a Firm’s life and its Ongoing success 403 443 Appreciating the Nature of Business Growth Staying Committed to a Core Strategy 443 445 Determining What Intellectual Property to Legally Protect 407 PartnEring For SuCCESS: How Threadless Averted Collapse by Bringing on a Partner with Back-end Operational expertise 446 The Four Key Forms of Intellectual Property Planning for Growth the importance of intellectual Property Patents 405 407 reasons for growth 408 Types of Patents Who Can Apply for a Patent? Market Leadership 412 The Four Types of Trademarks Ability to Attract and Retain Talented Employees managing growth What Is Protected Under Trademark Law? 418 Exclusions from Trademark Protection 419 The Process of Obtaining a Trademark 419 How to Obtain a Copyright 421 422 422 Endnotes 424 426 What Qualifies for Trade Secret Protection? Trade Secret Disputes 470 ChaPter 14 Strategies for Firm Growth 473 internal growth Strategies 428 New Product Development Conducting an intellectual Property audit Why Conduct an Intellectual Property Audit? 456 Opening Profile—sHAKe sMArT: Maintaining Consistent strategies for Growth 473 427 427 Trade Secret Protection Methods 455 455 What WEnt Wrong? How Trying to Build Out its Own Capabilities in a Key Area Contributed to the Failure of a Promising Firm 458 Chapter Summary 459 | Key Terms 460 Review Questions 461 | Application Questions 461 You Be the VC 13.1 463 | You Be the VC 13.2 463 CASE 13.1 464 | CASE 13.2 467 What WEnt Wrong? GoldieBlox vs Beastie Boys: The Type of Fight That No start-up Wants to Be a Part Of 425 trade Secrets Challenges of growth Day-to-Day Challenges of Growing a Firm 423 Copyright and the Internet 451 Savvy EntrEPrEnEurial Firm: safesforce.com Crosses the Chasm 454 Managerial Capacity 421 Exclusions from Copyright Protection 450 450 Knowing and Managing the Stages of Growth 416 PartnEring For SuCCESS: individual inventors and large Firms: Partnering to Bring New Products to Market 417 What Is Protected by a Copyright? 449 Need to Accommodate the Growth of Key Customers 450 414 Copyright Infringement 449 449 Influence, Power, and Survivability 414 Savvy EntrEPrEnEurial Firm: Knowing the ins and Outs of Filing a Provisional Patent Application 415 Copyrights 449 Capturing Economies of Scope 411 The Process of Obtaining a Patent trademarks 448 Capturing Economies of Scale 410 Patent Infringement 447 429 429 475 475 Savvy EntrEPrEnEurial Firm: switchFlops: How to Create Built-in Avenues for Future Growth 477 Company Index Fundbox, 288–290 FundersClub, 346 Funding Circle, 345 Fuze Beverages, 453 G GameTruck, 543–545 Gap Inc., 481 GasBuddy, 46 GasPriceWatch.com, 46 G Asset Management, 166 General Electric (GE), 261 General Mills, 414, 417 General Motors (GM), 254, 511 Get Satisfaction, 61 GiveForward, 247, 346 The Giving Partners, 143 Glaukos, 47 Global Entrepreneurship Monitor (GEM), GoDaddy.com, 248, 255, 408 GoldieBlox, 197–198, 424, 425–426 Goldman Sachs, 500 Gold’s Gym, 526–527 Google, 6, 8, 22, 43–44, 46, 84, 92, 101, 118, 119, 161, 223–224, 255, 260, 306, 337, 339, 379, 443, 493–494 Google Ventures, 340, 500, 501 GoPro, 32–34, 130, 385 Gowalla, 191 GreatCall, Inc., 51, 194, 368 GreenJob Spider, 53 Green Mountain Coffee Roasters, Greenvelope, 148–150, 157, 161, 169 GrubHub, 191, 342 Guru.com, 132 Guthy-Renker, 398–399 GymFlow, 258–260 H Hampton Inn Hotel, 523 H&R Block, 510, 529 Hardee’s, 518 Harley-Davidson, 490 Harry’s, 177 The Hartford, 183 Hasbro, 131, 312 Heinz, 464, 466 Her Campus Media, 110–113, 115–116, 124, 125 HerUni.com, 112 Hewlett-Packard, 161, 290, 291, 494 Hidden Curriculum Education, 348 Hipmunk, 167 HomeAway, 494 Home Depot, 114, 254, 261 Honest Tea, 489 Hoovers, 93, 272 How Do You Roll? 287–288 I IBISWorld, 61, 85, 88, 93, 151, 152, 154, 368 IBM, 161 IBM Business Global Services, 313 iBoats.com, 468 IceBorn, 540 iCracked, 40–42 iCreate to Educate, Idealab, 86 Inc., 183, 366, 381, 435, 443, 446, 525 Independent Pharmacy Cooperative (IPC), 263 Indiegogo, 76, 345–346, 360 iNovia Capital, 90 Insight Partners, 446 Instagram, 191, 486 Intel, 156, 159, 418, 540 Intel Capital, 340 Intercounty Appliance, 263 International Franchise Association, 417 International Franchising Organization, 530 Intouch Health, 311 Intuit, 7, 62, 458, 503 Inventors Assistance Center, 406 iRobot, 16 iUser Accessories, 248–250, 255 Izzy, 319 J Java Jacket, 51 Jawbone, 226 JCPenny, 323, 377, 378–379 Jenny Craig, 521 JetBlue, 163, 254 Jiffy Print, 254 John Deere, 468 Johnson & Johnson, 24, 349, 499 JolieBox, 212 Jones’s and Boylan’s, 287 JumpStart, 86 Justin’s, 163, 318–320 K Kabbage, 289 KaZAM, 434 Keihl’s, 211 Kentucky Fried Chicken, 510, 523, 534 Kickstarter, 76, 101, 318, 328, 345–346, 356–357, 358–361, 394 Kid to Kid, 507, 509 King Digital Entertainment, 342 Kleiner Perkins Caufield & Byers, 468 Knowledge Adventure, 86 Kohl’s, 378 Kraft Foods, 417 Kroger, 320 L Ladies Who Launch, 183–184, 304 La Petite Femme, 253 LaunchRock, 84 The Laundress, 183 Le Duff America, 374 LegalZoom, 227, 333 Lemonade Day, 22 Lending Club, 289, 345 LendingKarma, 333 LensCrafters, 177 Lerer Ventures, 341 Liberty Tax Service, 523 LinkedIn, 50, 63, 317 LinkExchange, 321–322 Liz Claiborne, 254 Local Dirt, 253–254 LongHorn Steakhouse, 518 LuminAID, 74–76, 193–194, 346 Luxottica, 177 Lyft, 117, 501 M Macy’s, 378, 479 Magic Johnson Enterprises, 254 MailFinch, 368–369 Major League Baseball, 101, 102 561 Mango Health, 136–137 McDonald’s, 232–233, 420, 481, 510, 512, 513, 523, 534 Meetup, 304 Memobottle, 359–360 Merck, 195, 349 Merrill Lynch, 454 MGM, 418 Miami-Dade Empowerment Trust, 348 MicroMentor.org, 63 Microsoft, 44, 159, 379, 414, 503 Midas Muffler, 510 Mint.com, 458, 489, 502–504 Mintel, 88, 93, 154, 368 Minute Maid, 453 ModCloth, 53, 163, 382–384, 385, 394–396, 475, 490 Modify Watches, 61, 100–102, 186 Monster Beverage, 453 Monster.com, 317 Mophie, 114 Motorcycle.com, 468 Mountains to Sound, 150 Murray’s Cheese, 465 The Muse, 317 Mutual of Omaha, 442 MyFax, 333 N Namo Media, 494 Napkin Labs, 61, 101 Nars, 211 NASDAQ, 6–7, 17, 240 National Association for Women Business Owners (NAWBO), 63 National Basketball Association (NBA), 68 National Clearinghouse, 406 National Football League (NFL), 418 National Hockey Association (NHL), 68 National Institutes of Health (NIH), 209 NatureBox, 67 Neighborrow.com, 117 Neiman Marcus, 88 Nest Labs, 46, 493–494 Nestlé, 493 Netflix, 124, 158, 410–411 Neutrogena, 398 New Venture Fitness Drinks, 305 New York Stock Exchange, 240 Next Big Sound, 294–296 Nike, 226, 417, 418 Nolo, 227 Nordstrom, 140 North Castle Partners, 521 Nucor Steel, 163, 164 O Oakley, 177, 376 Odesk, 132, 306–307 Odesk.com, 220 Odwalla, 453 Olive Garden, 518 OnDeck, 289 1-800-CONTACTS, 418 1-800-FLOWERS, 165, 254 1-800-GOT-JUNK, 163 1800contacts.com, 158 1800diapers, 339 OnlineFaxes, 333 OpenTable com, 48 Oracle, 480 562 Company Index P The Pampered Chef, 444 Pandora, 13, 14, 296 Panera Bread, 161, 175–176, 372, 408, 481 Papa John’s Pizza, 523, 529, 534 Paperless Post, 150 Paramount Pictures, 442 Parking Panda, 67–68 Passport Video, 437–438 Patagonia, 231, 232 PatientsLikeMe, 35–36, 47, 407 Paul Green School of Rock Music, 541 Paychex, 195 Payless Shoes, 323 PCC Markets, 498 Pearle Vision, 177 Pebble, 358, 394 Peet’s, 317 Pepsi, 319 Persol, 177 PetCare.com, 70 PetCo, 72 Pfizer, 195, 349, 491 PharmaJet, 163 Photobucket, 377 Picas Web Albums, 377 PillPack, 247–248 Pine Ridge Native American Reservation, 320 Pinterest, 385 Pixar, 485 Planet Smoothie, 511 Play It Again Sports, 512, 535 PledgeMusic, 354–355, 360 PopCap Games, 54 Position Logic, 448 Potbelly, 309 Pottery Barn, 479 Priceline.com, 410 Prim, 10–11 The Princeton Review, 417 Proactiv, 60, 397–399, 447, 479 Procter & Gamble, 312, 414, 417 ProntoWash, 512 Pure Fix Cycles, 2–4, 130, 163 Q Qdoba Mexican Grill, 523 Quirky, 113, 114 R Raising Cane’s, 441 Ray-Ban, 177 RedBrick Health, 48 Redfin, 339 Reference USA, 93 Refill Revolution, 100 REI, 33, 319 Revolights, 355–357 Ridjoy, 117 Ritchie Brothers Auctioneers, 468 Rock&Dirt, 468 RocketHub, 345–346, 360 RocketLawyer, 227, 333, 494 Rokit, 48 Roominate, 326–328, 346 Room to Read, 9–10 Rover.com, 70, 129 Rufus, 451 Ryanair, 118 S SafetyWeb, 52 Safeway, 320, 465 Saint Louis Bread Company, 175 Salesforce.com, 119, 454 Samsung, 24 School of Rock, 541–543 Sears Optical, 177 Sears Roebuck and Company, 115 Seasons 52, 518 Sequoia Capital, 336 Service Corps of Retired Executives (SCORE), 93, 304, 313 Seva Foundation, 142 Shabby Chic, 453 Shake Smart, 472–474 Shoebuy.com, 323 Sidecar, 501 Sierra Angels, 357 Singer Sewing Machine Company, 510 Sir Kensington, 464–466, 475 Small Business & Entrepreneurship Council (SBE), 481 Small Business Development Center (SBDC), 249, 304, 313 Smuckers, 435–436 SmugMug, 377 Snap Fitness, 369–370, 521 SOFA Entertainment, 437–438 Soggy Bottom Canoe and Kayak Rental, 81 Soma, 317–318 Songkick, 191 Sony, 34 Southpaw Guitars, 53 Southwest Airlines, 118, 262, 371–372 SpeakLike, 24–25 Spotify, 296 Sprig Toys, 84 Sprindrift Soda, 287 Sprouts, 498 Square, 158 Standard & Poor’s NetAdvantage, 154 Standout Jobs, 89, 90 Stanley Black & Decker, 417 Staples, 290 Starbucks, 13, 155–156, 307, 317, 372, 479, 490, 518 Startup America, 101 StartupNation, 304 Startup Weekend, 22, 70, 91, 330–331 StartX, 328 Sterling Partners, 541 StixToGo, 404 Subway, 529 Sunglass Hut, 177 Sunkist Growers, 371 Swann, 34 SwitchFlops, 475, 477 T Talent Technology, 90 TapCommerce, 486 Target, 114, 320, 378, 425, 453, 465, 479 Target Optical, 177 TechStars, 19, 295–296, 298, 302 TEDMED, 36 Tempered Mind, Inc., 218–220 TempoRun, 180–182 TerraPass, 468 Tesla, 156 Threadless, 446 Day Startup, 331 3D Robotics, 48 Thums Up, 453 Time Warner Investments, 340 T.J.Maxx, 378 Tommy John, 88 TOMS, 141–144, 306, 374, 449 Total, 214 Toys“R”Us, 198, 328, 425 TriNet, 195 Tumblr, 50 23andMe, 494 Twitter, 50, 170, 296, 322, 339, 342, 382, 384–385, 486, 526 U Uber, 117, 119, 125, 494, 499–501 Ubersense, 48, 174–175 Union Square Ventures, 341 United National Foods, 279 United Nations, 213 United States Hispanic Chamber of Commerce, 530 UPS Store, 523 Uptown Cheapskate, 506–509 USA Today, 525 U.S Census Bureau, 20 U.S Consumer Products Safety Commission (CPSC), 226 U.S Copyright Office, 422 U.S Department of Commerce, 540 U.S Department of Health and Human Services, 48 U.S Federal Trade Commission (FTC), 530–531 U.S Internal Revenue Service (IRS), 233, 235, 307 U.S Minority Business Development Agency (MBDA), 21 U.S Patent and Trademark Office (USPTO), 404, 406, 409, 411, 412–415, 435–436 U.S Securities and Exchange Commission (SEC), 168, 342 U.S Small Business Administration (SBA), 24, 63, 93, 335, 344–345, 526 UserVoice, 61 uShip, 447, 467–469, 481, 483 V Verizon, 255, 417 VeryWendy, Victory Marketing Agency, 457 Virerbi Startup Garage, 260 Virgin Group, Virgin Records, VisionSpring, 177 Visiting Angels, 535 VMG Partners, 320 Voodoo BBQ, 441 W Wahoo’s Fish Taco, 514, 515 Walgreens, 263, 481 Wall Street Journal, 482, 525 Walmart, 53, 263, 290, 328, 393, 514 Walt Disney Corporation, 8, 254, 312, 393, 485, 544 Warby Parker, 127–128, 130, 177–178, 418, 443 WaterSmart Software, 46 Weebly.com, 100 Company Index Wegmans, 279, 498 Wello, 31, 194, 255 Wesabe, 456, 458, 489 West Elm, 140 Wetzel’s Pretzels, 523 WhitePages.com, 12 White Wave, 164 Whole Food Markets, 125, 279, 319, 465, 498 Williams-Sonoma, 465 Windspire, 163 Wink Natural Cosmetics, 364–366 Wise Acre Frozen Treats, 278, 279 Women in Franchising, 530 Woodinville’s Cashmere Molding, 404 WorldCom, 307, 342 Y Yahoo! 43, 118, 161, 379, 416, 418 Yard House, 518 Y Combinator, 11, 19, 42, 68, 298 Yelp, 12–13 Yodlee, 458, 489, 502 563 Yogitoes, 52 YouTube, 69, 211, 296, 385 Z Zagster, 136 Zappos, 124, 130, 321–323, 447, 475 Zephyrhill, 418 ZinePak, 393 Zipcar, 47, 480 ZUCA, 122 Zynga, 47, 121, 122–123, 125–126, 131 Subject Index Page references with “f” refer to figures and page references with “t” refer to tables A accelerator programs, 19, 260, 297, 298, 328 accounts receivable, 262 accredited investors, 346 acquirer, 486 acquisitions, 485–489 AdAge Viral Video Awards, 463 adverse selection, 455 advertising, 377, 379–380, 380t, 381f advisory boards, 310–311 Affordable Care Act, 36, 48 agency theory, 518 alliances, 492–493 American Express OPEN study, 20 American Invents Act, 406 angel investors, 322, 337–338 area franchise agreements, 512 articles of incorporation, 240 The Art of War (Sun Tzu), 151 assignment of invention agreements, 411–412 assumptions sheet, 201, 273 attorneys, 220, 225, 227, 227t, 412t audits, of intellectual property, 429–430, 430t, 516 B baby boomers, 46 backward integration, 160 balance sheets, 267, 269–270 barrier to entry, 156, 158t Barringer/Ireland Business Model Template, 113, 119–124, 121f, 145–146 basis of differentiation, 122 biotech firms, 349 blogs, 50, 381, 382–385 See also specific blogs Blue Streak (Peterson), 254 board of advisors, 200, 310–311 board of directors, 200, 307–309, 308t bookkeeping software, 289 bootstrapping, 333–334, 333t brainstorming, 59–60, 59t, 60t brand equity, 372–373 branding, 370–373, 371t brand management, 371 brands, 370, 371t break-even point, 275, 277 budgets, 263 bug reports, 60 burn rate, 329 business angels, 322, 337–338 business format franchise, 511–512 business licenses and permits, 233–235, 234t business method patents, 410–411 Business Model Canvas, 120 Business Model Generation (Osterwalder and Pigneur), 120 business models, 25, 110–147 Barringer/Ireland Template, 113, 119–124, 121f, 145–146 core strategy, 120–124 disruptive type, 118–119, 119t financials, 126–129, 127t 564 importance of, 113 operations, 129–131 resources, 124–126 standard type, 115–116, 116t, 118 types of partnerships, 131t business names, 253–255 business plans, 25–26, 180–216, 187t content of, 187–189 employees, 185 estimating initial sales in, 196, 196t financial projections, 201–203 investors/external stakeholders, 185–186 oral presentations to investors, 203–205, 204t outline of, 189–203, 190t purpose of, 183–185, 203t structure of, 186–187 business trends, 152 buyback clauses, 228, 229 buyers, in five forces model, 159–160 buzz, 372 C carry, 338 cash flow shortfalls, 288–290 C corporations, 239–241 certification marks, 416t, 418 channels, 130 Chris Dixon (blog), 341 churn, 115 closely held corporations, 240 co-branding, 373, 374, 525 code of conduct, 223–224, 223–224t collective marks, 416t, 417 commercial banks, 335, 336t, 343–344 common stock, 239–240 Competitive Advantage (Porter), 154 competitive analysis grids, 168–169, 169t competitive intelligence, 166, 168, 168t competitor analysis, 151, 165–169 See also industry analysis in business plans, 196 competitive analysis grids, 168–169, 169t identifying competitors, 165–166, 166f sources of competitive intelligence, 166, 168, 168t Computer Software Copyright Act, 421–422 concept statement, 79–80, 80f concept test, 79 constant ratio method of forecasting, 275 consultants, 313 contribution margin, 197 copyright bug, 422 copyright infringement, 423–424 Copyright Revision Act, 421 copyrights, 407–408, 421–426 infringement of, 423–424 internet and, 424, 426 legal protections, 421–422 process for obtaining, 422–423 Core77 Design Award, 357 core competencies, 124–125, 445 core strategy, 120–124 basis of differentiation, 122 mission statement, 121–122 product/market scope, 123–124 target markets, 122–123 corporate entrepreneurship, corporate venture capital, 340 corporations, 239–242 cost-based pricing, 376 cost of sales/goods sold, 196, 266–267 cost reduction strategy, 164 cost structure, in business models, 127–128 creative destruction, 22 creativity for identifying opportunities and ideas, 57–59, 62, 64, 64t stages of, 57f, 58 Crossing the Chasm (Moore), 454, 464–465, 465f crowdfunding, 345–346 current assets, 267 current liabilities, 269 current ratio, 269 customer advisory boards, 62 customers, in feasibility analysis, 83–84, 84t D day-in-the-life research, 62 debt financing, 334–337, 336–337t, 343–345 debt-to-equity ratio, 262 declining industries, 163t, 164 derivative works, 421 design patents, 411, 411t disintermediation, 386 disruptive business models, 118–119, 119t distribution channels, 386 “Does Anyone in Healthcare Want to Be Understood?” (Okun), 36 double taxation, 240 Draper Fisher Jurvetson Venture Challenge, 214 drones, 48 due diligence, 186, 339–340 E Economic Espionage Act, 426 economic impacts, 22, 24 economies of scale, 156, 449 economies of scope, 449 efficiency, 262 elevator speeches (pitch), 335, 337t emerging industries, 163, 163t employee benefits, 306 Employee Identification Number (EIN), 235 employees, 305–306, 306t The E-Myth Revisited (Gerber), 452 entrepreneurial alertness, 56 entrepreneurial firms, 18, 18f entrepreneurial intensity, Subject Index entrepreneurial process, 25–26f, 25–27 entrepreneurial services, 455–456, 456f entrepreneurship, entrepreneurship and entrepreneurs, overview, 1–38 changing demographics and, 20–22 characteristics of, 9–13, 9f, 10t common myths, 14–18, 16–17t explanation of, introduction, 5–6, 5t positive effects of, 22–25 process of, 25–26f, 25–27 rationale for, 6–9 types of start-up firms, 18, 18f young entrepreneurs, 23t environmental trends, 152 equity-based crowdfunding, 346 equity financing preparing for, 334–337, 336–337t sources of, 337–343, 340t ethical cultures, 221–225, 225f code of conduct, 223–224, 223–224t franchising and, 533–534 implementing ethics training programs, 224–225 leading by example, 222 misconduct/unethical behavior survey, 222t ethical dilemmas, 224 ethics training programs, 224–225 exclusive distribution arrangements, 387 execution intelligence, 13 executive summary, 190, 192 external growth strategies, 485–494, 486t F factoring, 345 fair use, 424, 437 feasibility analysis, 74–109 explanation of, 77–78, 77f, 78t financial assessment, 92–94, 92t First Screen Marketing survey, 104–106t of industry/target markets, 85–89, 87t of management prowess, 89 online tools for, 81–82t, 106–108t of product/service demand, 83–85, 83t of product/service desirability, 78–82, 81–82t of resource sufficiency, 89, 91–92 template for, 94–95, 94t Federal Employee Identification Number (EIN), 235 fictitious business name permits, 235, 236 fiduciary obligation, 531 final prospectus, 342 financial feasibility analysis explanation of, 92 nonfinancial resources, 92t overall financial attractiveness, 94 performance of similar businesses, 93–94 start-up cash, 92–93 financial management, 261, 262–264 financial objectives, 262, 263f financial projections, 201–203 financial ratios, 264 financials, in business models, 126–129 cost structure, 127–128 financing and funding, 128–129 revenue streams, 126–127, 127t financial statements, 262–263 financial statements, historical See historical financial statements financing activities, 271 financing and funding, 326–362 accelerator programs, 19 in business models, 128–129 crowdfunding, 345–346 importance of, 329 leasing, 346–347 other grant programs, 348–349 preparing for debt or equity financing, 334–337, 336–337t SBIR and STTR grant programs, 347–348 sources of debt financing, 343–345 sources of equity funding, 337–343 sources of personal financing, 332– 334, 333t for startups, 329–331 strategic partners, 349 first-mover advantage, 163 five forces model (Porter), 154–161, 154f for assessing new ventures, 160–161, 160t, 162f bargaining power of buyers, 159–160 bargaining power of suppliers, 158–159 rivalry among existing firms, 157–158 threat of new entrants, 156–157 threat of substitutes, 155–156 fixed assets, 267 fixed costs, 128, 197, 449 focus groups, 60–61 follow-on funding, 339 forecasts, 263, 273–277 forward integration, 159 founders new-venture teams and, 299–303 qualities of, 301, 303, 303t founders’ agreements, 228, 228t founding teams, 300 fragmented industries, 163, 163t franchise agreements, 531 Franchise Disclosure Document (FDD), 516, 523, 528, 530–533, 532t franchises, 510 franchising, 506–547 criteria for, 517, 517t ethics and, 533–534 explanation of, 506–512 federal rules and regulations for, 530–531, 532t future trends, 535 industries for, 512t international, 534–535 misconceptions about, 529–530 pros and cons of, 518–520, 519t purchasing of, 520, 522–529, 523t, 526–527t state rules and regulations, 531, 533 steps for establishing, 513–517 types of systems, 512–513, 513f franchisors, 510 freelancers, 132, 306 freemium model, 69, 112–113 full business plans, 188, 188f G general partners, 338 general partnerships, 238 565 geographic expansion, 480–481 geographic roll-up strategy, 163 global industries, 163t, 165 global strategy, 165 Good to Great (Collins), 447 Google AdSense, 379, 380t Google AdWords, 84, 149, 379, 380t, 468 government regulation as basis for opportunities and ideas, 48–49, 49t of franchises, 530–531, 532t, 533 Stopfakes.gov, 408 grant programs, 347–349 growth, challenges of, 440–471 capital constraints, 459 cash flow management, 456–457 challenges of, 445t, 455–459 core strategy and, 445, 447 managerial capacity, 455–456 managing stages of, 450–453, 451f planning for, 447–448 preparing for, 443–445 price stability, 457, 459 quality control, 459 rationale for, 448–450 growth, strategies for, 472–505 See also franchising geographic expansion, 480–481 international expansion, 481–485, 483–484t licensing, 489–490 market penetration strategy, 479–480 mergers and acquisitions, 485–489, 488f new product development, 475, 478–479 product line extension strategy, 480 product/service improvement, 479 strategic alliances and joint ventures, 490–491, 491t, 493–494 guerilla marketing, 386 Guerilla Marketing (Levinson), 386 H The Hartford’s 2013 Small Business Success Study, 16 heterogeneous, 300 His Brother’s Keeper (Weiner), 35 historical financial statements, 265–273 balance sheets, 267, 269–270 comparison to industry norms, 272 income statements, 266–267 ratio analysis, 271–272 statement of cash flows, 270–271 holacracy (Zappos), 322 homogenous, 300 I idea, 44 idea banks, 62 idea-expression dichotomy, 422 idea generation See opportunities and ideas illiquid, 240 improving an existing product or service, 479 income statement forecasts, 275, 277 income statements, 266–267 incubators, 19 individual franchise agreements, 512 566 Subject Index industry, 85, 150 industry analysis, 151–165 See also competitor analysis in business plans, 192–193 explanation of, 151–152 five forces model, 154–161, 154f, 160t, 162f industry types, 162–165, 163t industry attractiveness, 87–88, 87t, 160–161, 160t industry/target market feasibility, 85–89, 87t industry trends, 152 infomercials, 398–399 initial public offering (IPO), 340, 342–343 innovation, 24 The Innovator’s Dilemma (Christensen), 118 inside directors, 307 intellectual property, 402–439 conducting audits of, 429–430, 430t copyrights, 407–408, 421–426 criteria for protection of, 407 importance of, 405–408 patents, 407–414, 411t trademarks, 407–408, 414–421, 416t trade secrets, 426–429 intellectual property audits, 429–430, 430t intent-to-use trademark applications, 420–421 internal growth strategies, 475–481, 476t International CES, 382 International Consumer Electronics Trade Show, 153 International Franchise Expo, 525–526 international new ventures, 481, 483, 483–484t internet See also library and internet research copyrights and, 424, 426 domain names, 255, 408 interns, 306 intranets, 62 inventory, 262 investing activities, 271 investment banks, 342 investors accredited, 346 business angels, 322, 337–338 new-venture teams and, 311–312, 312t presentation of business plans to, 203–205, 204t IP Law For Startups (blog), 408 J job creation, 24 JOBS Act, 346 joint ventures, 131, 493–494 K The Kauffman Foundation and LegalZoom 2102 Startup Environment Index, 17, 17t, 21 key assets, 125–126 L labor sources, 305–307, 306t landing page, 84 Lanham Act, 418 leadership strategy, 164 Lean Startup movement, 100, 189 leases, 346–347 Leaving Microsoft to Change the World (Wood), legal issues, 225–243 avoiding legal disputes, 228–233 business licenses and permits, 233–235, 234t business names, 254–255 choosing attorneys, 225, 227, 227t choosing form of business organization, 235–243, 237t copyrights, 421–422 drafting founders’ agreements, 228, 228t trademarks, 418–419 lenders, 311–312, 312t LexisNexis Academic, 93 liability of newness, 297 library and internet research for feasibility analysis, 81–82t, 84–85, 106–108t for identifying opportunities and ideas, 61–62 licensees, 489 licenses See business licenses and permits licensing, 489–490 licensing agreements, 489, 490 licensors, 489 lifestyle firms, 18, 18f limited liability company (LLC), 242–243 limited partners, 338 limited partnership agreements, 239 limited partnerships, 239 line of credit, 343 link joint ventures, 493 liquidity, 236, 262 liquidity events, 334 liquid market, 240 long-term liabilities, 269 low-end market disruption, 118 M management prowess, 89 management team in business plans, 200 new-venture teams and, 303, 305–307, 306t managerial capacity problem, 455 managerial services, 455–456, 456f market analysis, 194 marketing, 364–401 branding, 370–373, 371t creating unique market position, 369–370, 370t market segmentation, 367–368 place/distribution, 386–387 price and, 376–377 product, 373, 375–376 promotion activities, 377, 379–386, 380t, 381f, 382t sales process issues, 387–390, 388f selecting target markets, 368–369 marketing alliances, 491, 493 marketing mix, 373 marketing plans, 197–198 marketing strategy, 197 market leadership, 449 market penetration strategy, 479–480 marketplace gaps, 53, 54t market segmentation, 194, 367–368 Mashable (blog), 381 master franchise agreements, 512 mature industries, 163–164, 163t mediation, 231 mentors, 63 merchandise and character licensing, 490 merchant cash advance, 345 mergers, 485–489 milestone, 194 minority entrepreneurs, 21 misconduct/unethical behavior, 222t mission statements, 121–122, 194 moderate risk takers, 15–16 moral hazard, 455–456 multidomestic strategy, 165 multiple-unit franchisees, 512–513 N naming businesses See business names National Business Ethics Survey, 222t National Parent Center Seal of Approval, 434 National Venture Capital Yearbook (2014), 339 net sales, 266 network entrepreneurs, 57 Network for Teaching Entrepreneurship (NFTE), 21–22 networking, 303 The New Business Road Test (Mullins), 77 new market disruption, 118 new product development, 475, 478–479 new ventures, assessment of, 258–293 financial management, 261, 262–264, 264f financial objectives, 262, 263f financial statements, 262, 265–273 forecasts, 263, 273–277 pro forma (or projected) financial statements, 265, 277–283 new-venture teams, 89, 294–325 building process, 297, 299 consultants and, 313 founders and, 299–303, 303t lenders and investors, 311–312, 312t liability of newness, 297 management team/key employees and, 303, 305–307, 306t role of board of advisors, 310–311 role of board of directors, 307–309, 308t niche markets, 368–369 niche strategy, 164 noncompete agreements, 231, 231f nondisclosure agreements, 231, 231f O one year after first use deadline, 410 online forums, 304 online surveys, 84 online tools, for feasibility analysis, 81–82t, 106–108t OnStartups (Q&A site), 304 operating activities, 271 operating expenses, 267 operating leverage, 197 operational business plans, 188, 188f operations, in business models, 129–131 channels, 130 key partners, 130–131, 131t product/service production, 129 operations plans, 199 Oppenheim Toy Portfolio Gold Seal Award, 434 Subject Index opportunities and ideas, 40–73, 58f brainstorming, 59–60, 59t, 60t characteristics of entrepreneurs, 54, 56 cognitive factors, 56 creativity, 57–59, 57f, 62, 64, 64t differences between, 43–44 essential qualities of, 43f focal points for, 62 focus groups, 60–61 identifying, 44–54, 45f, 49t, 52–54t library and internet research, 61–62 marketplace gaps, 53, 54t prior experience, 56 problem solving approach, 50–52, 52–53t social networks, 57 opportunity, 43 opportunity gap, 43 opportunity recognition, 54, 56, 58f organic growth, 475 organizational charts, 200 organizational feasibility analysis, 89–92 other assets, 267 outside directors, 307–308 outsourcing, 480 owners’ equity, 269 P pace of growth, 445t, 448 partners, 91 partnership agreements, 238 partnerships, 131t, 195, 237t, 238–239 passion for their business, 9–11, 10t patent infringement, 414 patent research, 92 patents, 407–414 attorney fees for, 412t eligibility for, 411–412 growth in applications for, 409, 409t infringement of, 414 process for obtaining, 412–414 types of, 410–411, 411t pay-per-click advertising, 379 peer-to-peer business models, 117 peer-to-peer lending, 345 percent-of-sales method, 275 permits See business licenses and permits personal financing, 332–334 piercing the corporate veil, 240 place (marketing), 386 plant patents, 411, 411t position in industry analysis, 151 of product/service, 194 PowerPoint, 185, 186, 204t preferred stock, 239 preliminary prospectus, 342 prepaid gift cards, 479–480 Preparing Effective Business Plans (Barringer), 388 press kits, 381–382 price, 376–377 price-quality attribution, 376–377 price-to-earnings (P/E) ratio, 267 primary research, 78 prior entrepreneurial experience, 301 private corporations, 240 private placement, 343 problem solving approach, 50–52, 52–53t product, 373 product and trademark franchise, 511 product attribute maps, 369–370 product/customer focus, 12 productive opportunity set, 455 product line extension strategy, 480 product/market scope, 123–124 product prototypes, 198 products, and marketing, 373, 375–376 product/service demand, 83–85, 83t product/service desirability, 78–82, 81–82t product/service feasibility analysis, 78 professional employer organizations (PEOs), 195 profitability, 262 profit margin, 267 pro forma (or projected) financial statements, 201, 265, 277–283 pro forma balance sheets, 279–280 pro forma income statements, 278 pro forma statement of cash flows, 280–283 promotion, 377 promotion activities, 377, 379–386 advertising, 377, 379–380, 380t, 381f guerilla marketing, 386 public relations, 381–382, 382t social media, 382–385 viral marketing, 385 ProQuest, 93 provisional patent applications, 414, 415–416 public corporations, 240 public relations, 381–382, 382t Q Quora (Q&A site), 304 R ratio analysis, 201, 271–272, 283 reference accounts, 375 registered marks, 419–420 regression analysis, 274–275 relevant industry experience, 301 resources, in business models, 124–126 resource sufficiency, 89, 91–92 revenue streams, 126–127, 127t rewards-based crowdfunding, 345–346 road shows, 342–343 Rock School (documentary), 541 rounds (venture capital), 339, 340t S salary-substitute firms, 18, 18f sales forecasts, 273–275, 274f sales process, 387–390, 388f sales tax permits, 234 Sarbanes-Oxley Act, 342 SBA Guaranteed Loan Program, 335, 344–345 SBIR Program, 347, 348t scale joint ventures, 493 School of Rock (film), 541 search engines, 43–44 secondary market offering, 340 secondary meaning, of trademarks, 420 secondary research, 78 senior entrepreneurs, 21 service, 373 service marks, 416t, 417 7(A) Loan Guaranty Program, 344–345 567 shareholders, 239–240 Shark Tank (tv show), 288, 356–357, 434, 442 Shipping Wars (tv show), 468 signaling, 309 Simple Internet, 93 single-purpose loans, 343 skills profiles, 305 Small Business Innovation Research (SBIR), 347, 348t Small Business Technology Transfer (STTR), 348 smartphones, 47–48, 51–52 social media identifying emerging trends via, 50 popularity of, 46, 47 for product sales, 34, 322 promotion activities and, 382–385 social networks, 57 social plug-ins, 384 software for bookkeeping, 289 for writing business plans, 187 sole proprietorship, 236–238, 237t solo entrepreneurs, 57 So Much So Fast (film), 35 sources and uses of funds statement, 201 South by Southwest Music and Media Conference, 181–182 spin-ins, 494 spin-outs, 494 stability, 262 StackOverflow (Q&A site), 304 standard business models, 115–116, 116t, 118 start-up cash, 92–93 start-up incubators, 19 statement of cash flows, 270–271 stock options, 240–241 Stopfakes.gov, 408 strategic alliances, 131, 491, 493 strategic partners, 349 strong-tie relationships, 57 STTR Program, 348 subchapter S corporations, 241–242 subfranchisees, 512 summary business plans, 188, 188f suppliers, 130–131, 158–159 sustained growth, 443 sweat equity, 332 switching costs, 159 T taglines, 194, 370, 370t target markets, 85, 87, 88–89, 122–123, 368–369 targets, 486 teams See new-venture teams TechCrunch (blog), 289, 341, 381 TechCrunch40 (competition), 503 technological advances, 47–48, 49t technological alliances, 491, 493 technology adoption life cycle (Moore), 464–465, 465f technology licensing, 490 10-K, 265 The Theory of Economic Development (Schumpeter), 22 The Theory of the Growth of the Firm (Penrose), 455–456, 456f trade associations, 84, 153 trade journals, 153 Trademark Act, 419 568 Subject Index trademarks, 255, 407–408, 414–421 legal protections, 418–419 process for obtaining, 419–421 types of, 416–418, 416t trade secrets, 157, 426–429 disputes, 427–428 eligibility for, 427 protection methods, 428–429 Trade Show News Network, 153 trade shows, 153, 382 trends, 44–49, 45f, 49t business, 152 economic forces and, 45–46 environmental, 152 in franchising, 535 identifying via social media, 50 industry, 152 political and regulatory changes and, 48–49 social forces and, 46–47 technological advances and, 47–48 triggering events, 25 Two Pesos, Inc., v Taco Cabana International Inc (1992), 418 U Uniform Trade Secrets Act, 426 utility patents, 410, 411t V value, 18 value-based pricing, 376 variable costs, 128, 197, 449 vendor credit, 345 venture capital, 338–340, 340t venture capitalists, 311 venture-leasing firms, 346 vesting ownership, 228–229 videoconferencing, 155 viral marketing, 385 virtual assistants, 306–307 virtual prototypes, 198 W weak-tie relationships, 57 window of opportunity, 43 Women Owned Business report, 20 WorkHappy.net (blog), 502 working capital, 269 The World Is Flat (Friedman), 291 Y young entrepreneurs, 21–22, 23t This page intentionally left blank This page intentionally left blank This page intentionally left blank This page intentionally left blank This page intentionally left blank The Entrepreneurial Process Decision to Become an Entrepreneur Introduction to entrepreneurship CHAPTER Developing Successful Developing Successful Business Ideas Business Ideas Recognizing opportunities and generating ideas CHAPTER Feasibility analysis CHAPTER Developing an effective business model CHAPTER Industry and competitor analysis CHAPTER Writing a business plan CHAPTER Passion plus Managing and Growing an Entrepreneurial Firm Moving from an Idea to an Entrepreneurial Firm CHAPTER 11 Unique marketing issues CHAPTER 12 The importance of intellectual property CHAPTER 13 Preparing for and evaluating the challenges of growth Preparing the proper ethical and legal foundation CHAPTER Assessing a new venture’s financial strength and viability CHAPTER CHAPTER 14 Building a newventure team CHAPTER Strategies for firm growth Getting financing or funding CHAPTER 15 Franchising CHAPTER 10 Where a great idea meets a great process ... licensees or distributors Library of Congress Cataloging-in-Publication Data Barringer, Bruce R Entrepreneurship : successfully launching new ventures/ Bruce Barringer, Oklahoma State University,... important? Learning ObjeCtive Describe entrepreneurship, corporate entrepreneurship, and the characteristics of entrepreneurial firms The word entrepreneur derives from the French words entre,... Entrepreneurial Firms’ Impact on Society Entrepreneurial Firms’ Impact on Larger Firms Part Decision to Become an Entrepreneur the Entrepreneurial Process introduction to Entrepreneurship What is Entrepreneurship