ENFB 4190 Corman Exam 1 with correct
Answers
Spawners & drivers of opportunity - Correct Answers -good idea
1. change in technology
2. changes in regulations or laws
3. voids in markets from the departure of a primary competitor
4. identify competitors that provide bad customer service
- people leave existing providers when customer service is bad
Keys to success in finding good opportunities - Correct Answers -1. solve a problem
2. start w/ the customer and never leave them
Good/bad ideas when people are giving a pitch - Correct Answers -Competitive
advantage
1. substantial/compelling
2. barrier to entry- sustainable (patent; something that takes a lot of money, intellectual
property)
3. High gross profit margins
4. Have they done this before/ do they know the market they are in
5. size of target market- look at growth rate
6. scalability- being able to reproduce itself elsewhere
7. capital incentives- yes= bad/ no= good
8. time to get to MVP (minimum value product)
Screening Criteria - Correct Answers -how to tell the good ideas from the bad
Screening Criteria- GOOD - Correct Answers -MARKETING:
*Size= 100 million +
*Growth= 30-50%
Competition= Very little
ECONOMICS:
*Gross profit margin= 40% +
Time to B/E= 2 years or less
Capture expenditures= low
, EXIT:
Valuation Multiple= High
Strategic value= High
COMPETITIVE ADVANTAGE:
Barriers to entry= High
*Sustainable= Long term
*Significant= highly significant
Economies of scale= none or little
Screening Criteria- BAD - Correct Answers -MARKET:
*Size= less than 20 million
*Growth= 10% or less
Competition= perfect competition
ECONOMIES:
*Gross profit margin= 10% or less
Time to B/E= 3 years +
Capture expenditures= high
EXIT:
Valuation Multiple= low
Strategic Value= low
COMPETITIVE ADVANTAGE:
*Barriers to entry= low
*Sustainable= short term
*Significant= marginally significant
Economies of scale= lots
Economies of scale - Correct Answers -Want to pick an idea that does not have this
Product - Correct Answers -Idea --> Evaluate ideas --> Feasibility study --> business
plan
Feasibility study - Correct Answers --30-40 hours
-4 parts= industry / market / product / service description
-financial analysis
-Can you do it?
-go or no go decision to develop a business plan
Business Plan - Correct Answers --300 hours
-20-40 pages
-competition
-target market
-organizational chart
Answers
Spawners & drivers of opportunity - Correct Answers -good idea
1. change in technology
2. changes in regulations or laws
3. voids in markets from the departure of a primary competitor
4. identify competitors that provide bad customer service
- people leave existing providers when customer service is bad
Keys to success in finding good opportunities - Correct Answers -1. solve a problem
2. start w/ the customer and never leave them
Good/bad ideas when people are giving a pitch - Correct Answers -Competitive
advantage
1. substantial/compelling
2. barrier to entry- sustainable (patent; something that takes a lot of money, intellectual
property)
3. High gross profit margins
4. Have they done this before/ do they know the market they are in
5. size of target market- look at growth rate
6. scalability- being able to reproduce itself elsewhere
7. capital incentives- yes= bad/ no= good
8. time to get to MVP (minimum value product)
Screening Criteria - Correct Answers -how to tell the good ideas from the bad
Screening Criteria- GOOD - Correct Answers -MARKETING:
*Size= 100 million +
*Growth= 30-50%
Competition= Very little
ECONOMICS:
*Gross profit margin= 40% +
Time to B/E= 2 years or less
Capture expenditures= low
, EXIT:
Valuation Multiple= High
Strategic value= High
COMPETITIVE ADVANTAGE:
Barriers to entry= High
*Sustainable= Long term
*Significant= highly significant
Economies of scale= none or little
Screening Criteria- BAD - Correct Answers -MARKET:
*Size= less than 20 million
*Growth= 10% or less
Competition= perfect competition
ECONOMIES:
*Gross profit margin= 10% or less
Time to B/E= 3 years +
Capture expenditures= high
EXIT:
Valuation Multiple= low
Strategic Value= low
COMPETITIVE ADVANTAGE:
*Barriers to entry= low
*Sustainable= short term
*Significant= marginally significant
Economies of scale= lots
Economies of scale - Correct Answers -Want to pick an idea that does not have this
Product - Correct Answers -Idea --> Evaluate ideas --> Feasibility study --> business
plan
Feasibility study - Correct Answers --30-40 hours
-4 parts= industry / market / product / service description
-financial analysis
-Can you do it?
-go or no go decision to develop a business plan
Business Plan - Correct Answers --300 hours
-20-40 pages
-competition
-target market
-organizational chart
