Ch.10 Using Data to Make Business Decisions

Explain the business model validation phase of the entrepreneurial process.

• It involves creating a business plan.

• It means proving through ongoing market research and data analysis that your business idea is truly a business opportunity.

• It is the final step in launching a business.

• It focuses on hiring employees.

Why is it important to know that a business opportunity will not work as early in the process as possible?

• To save time, money, and energy and avoid making costly mistakes.

• To ensure immediate success.

• To avoid competition.

• To increase the number of employees.

Describe what the NFTE Entrepreneurial Mindset characteristic of Flexibility & Adaptability involves.

• Sticking to the original business idea no matter what.

• Modifying your business idea if market research indicates it is unlikely to be a valid business opportunity.

• Ignoring market research.

• Focusing only on profits.

What is a research objective? How does it support validating the business opportunity?

• A random question about the market.

• A carefully worded question used to conduct market research about a prospective business opportunity.

• A question about employee satisfaction.

• A question about product pricing.

What are the six basic steps of market research?

• Identify Research Objectives, Determine Methods and Sources, Gather the Data, Organize the Data, Analyze the Data, Draw Conclusions.

• Create a Business Plan, Hire Employees, Launch Product, Advertise, Sell, Profit.

• Design a Logo, Choose a Name, Register the Business, Open a Bank Account, Start Marketing, Make Sales.

• Develop a Website, Set Up Social Media, Create Content, Engage Audience, Monitor Feedback, Adjust Strategy.

Explain why the market research process is described as a 'cycle'.

• Because it ends after one question is answered.

• Because gathering data often leads to new questions that require more research.

• Because it is a one-time process.

• Because it focuses only on financial data.

Describe what is meant by following lean startup methodologies.

• Conducting extensive market research before launching

• Acting before you plan

• Ignoring customer feedback

• Selling only fully developed products

What is a benefit of putting together a minimum viable product (MVP) to test?

• High start-up costs

• Ignoring customer feedback

• Seeing how customers interact with the product

What is a con of using a minimum viable product (MVP)?

• Customers may not like MVP

• High start-up costs

• Immediate profitability