Opportunity & Ideal Business Review (pgs. 54-58)

The "ideal" business, according to Richard Buskirk, involves all of the following, except:

• Has a recognized, measurable market

• Is government regulated

• Provides 100 percent gross margin

• Requires no labour force

Using the Ideal Business Model will determine:

• If the opportunity is worth spending more time and money on

• the amount of startup money you require

• what your success rate will be after launching the business

The "ideal" business model consists of 3 distinct factors that affect the chances of success for any new business: independence, competitiveness, and sustainability.

• True

• False

Answer explanation

                                                               i.            The model includes 19 characteristics. See Table 2.1: Characteristics of the "Ideal" Business (pg 55)

For any new venture to be successful, you must evaluate the opportunity using the ideal business model.

• True

• False

Answer explanation

                                                               i.            You can go straight to a business as per Figure 2.2

A key factor in starting a high-growth venture/company is:

• Selecting the correct location.

• Choosing the right industry to enter and likely related to new technology.

• Retaining the best leadership.

• Attracting the most investors.

Answer explanation

                                                               i.            Note this is part of “Deciding How to Proceed” part of Hybrid in Week #2 content.

                                                             ii.            Page 60-62 cover the topic of “How to Proceed”.

                                                           iii.            The rate of growth of the overall industry can play a role. Tourism is not often in this type of venture (except maybe AirBnB when it started (not now))

Ideas are only useful for new ventures, not existing companies.

• True

• False

During the Opportunity Recognition Process (Figure 2.2, pg 43), elaboration involves moving the concept forward if it survives the evaluation stage.

• True

• False

Answer explanation

                                                               i.            Process: Preparation, Incubation, Insights, Evaluation and Elaboration (5 steps).

                                                             ii.            Pg 43-44

All of the following are basic elements in the Opportunity Recognition Process developed by Lumpkin, Hills and Shrader (Figure 2.2), except:

• Incubation

• Insight

• Aspiration

• Evaluation

Answer explanation

                                                               i.            Process/Steps: Preparation, Incubation, Insights, Evaluation and Elaboration.

The failure rate of franchised businesses is reported to be the same as that for independently established firms.

• True

• False

Answer explanation

                                                               i.            Pgs 60-62

                                                             ii.            From Hybrid in Week #2 content.