DZI Entrepreneurship (Bulgaria) cheat sheet

Entrepreneur (Schumpeter): an agent who introduces new combinations - new goods, methods, markets, input sources, or organizational forms - and thereby drives creative destruction.

Schumpeter's five innovation types: new product, new production method, new market, new source of supply, new organization of an industry.

Kirzner's alertness: the entrepreneur spots price and resource gaps that others overlook; profit arises from correcting disequilibrium, not only from innovation.

Say's law framing: the entrepreneur shifts resources from lower to higher productivity, acting as coordinator between capital, labour and demand.

Three production factors in classical economics (land, labour, capital) are joined by a fourth - entrepreneurship - which organizes and bears uncertainty.

Risk vs uncertainty (Knight): measurable, insurable probability is risk; non-measurable outcome dispersion is uncertainty, and only the latter earns pure entrepreneurial profit.

Business angel vs venture capitalist: angels invest own money, early stage, smaller tickets; VCs manage pooled funds, later stage, larger tickets, board seats.

Innovation vs invention: invention is a new technical idea; innovation is the first commercial application, which is the entrepreneur's function.

Divergent then convergent thinking: generate many options without evaluation, then screen with explicit criteria - never mix the two phases.

SCAMPER prompts: Substitute, Combine, Adapt, Modify/Magnify, Put to another use, Eliminate, Reverse - each prompt yields at least one candidate idea.

Opportunity vs idea: an idea is a thought; an opportunity is an idea that is attractive, durable, timely, and anchored to a market with paying customers.

Timmon's three-legged opportunity test: the idea must be attractive, the market must be viable, and the founding team must have the capability and resources.

Problem-first framing: define the customer's job-to-be-done and the current workaround before proposing a solution; the workaround reveals willingness to pay.

Pain–frequency matrix: score each candidate idea on intensity of pain and frequency of occurrence; high-pain, high-frequency problems rank first.

Creativity techniques by mechanism: brainstorming (free association), mind mapping (structure), TRIZ (contradiction resolution), lead-user analysis (extreme users as source).

Screening criteria for early ideas: market size, growth rate, competitive intensity, capital intensity, regulatory friction, and founder-market fit.

Business Model Canvas nine blocks: customer segments, value propositions, channels, customer relationships, revenue streams, key resources, key activities, key partners, cost structure.

Value proposition = customer job + pain relieved + gain created, stated in the customer's language, not in product features.

Business plan core sections: executive summary, problem/opportunity, solution, market analysis, marketing plan, operations, team, financial plan, risk, exit.

Break-even quantity = fixed costs ÷ (price − variable cost per unit); break-even revenue = break-even quantity × price.

Contribution margin ratio = (price − variable cost) ÷ price; it converts each extra currency unit of sales into contribution to fixed costs.

Three-statement logic: profit-and-loss drives net income into equity, cash flow reconciles cash, and the balance sheet must balance at every period end.

Lean start-up loop: build–measure–learn, with a minimum viable product as the cheapest experiment that tests the riskiest assumption.

Pivot types: customer segment, customer need, channel, revenue model, technology - a pivot keeps one foot in what is learned and changes the rest.

Primary vs secondary research: primary is collected first-hand for the current question; secondary already exists and is cheaper but less specific.

TAM, SAM, SOM: total addressable market, serviceable available market, and obtainable market share realistically winnable in the planning horizon.

Sampling: random sampling supports statistical inference; convenience sampling is fast but biased and cannot be generalized.

Marketing mix 4P: product, price, place, promotion; services extend to 7P with people, process and physical evidence.

Segmentation criteria must be measurable, accessible, substantial, differentiable and actionable (MASDA).

Price elasticity of demand = % change in quantity ÷ % change in price; demand is elastic when the absolute value exceeds 1.

Customer lifetime value = average purchase value × purchase frequency × retention period × gross margin %.

A/B test logic: change one variable, hold the rest constant, and require a pre-defined sample size before declaring a winner.

Sources ranked by cost and control loss: bootstrapping and retained earnings (no dilution), bank debt (interest, collateral), grants, equity (dilution, control).

Equity dilution: post-money founder share = pre-money founder value ÷ (pre-money valuation + new investment).

Net present value = sum of cash flows ÷ (1 + r)^t minus initial investment; accept projects with NPV above zero.

Internal rate of return is the discount rate at which NPV equals zero; compare it with the cost of capital or hurdle rate.

Payback period = time until cumulative cash inflows equal the initial outlay; it ignores cash flows after payback and the time value of money.

Working capital = current assets − current liabilities; a positive gap must be financed, often the main cause of early-stage insolvency.

Cash flow vs profit: profit records revenue when earned; cash records money received - a profitable firm can still fail on timing.

Bulgarian funding landscape: commercial banks, Bulgarian Development Bank, venture and angel networks, EU structural and Horizon funds, and the National Innovation Fund.

Sole trader (ET): registered in the Commercial Register, unlimited personal liability, no minimum capital, simplest formation.

Limited liability company (OOD): minimum capital 2 BGN, one or more partners, liability limited to contributed capital.

Single-member limited liability company (EOOD): one natural or legal person holds all shares; same 2 BGN minimum capital.

Joint-stock company (AD): minimum capital 50,000 BGN, shares, general meeting, board of directors; required for banks and insurers.

General partnership (SD) - all partners liable without limit; limited partnership (KD) - at least one general and one limited partner.

Cooperative (kooperatsiya): at least seven members, variable capital, one member one vote, registered in the Commercial Register.

Commercial Register (Targovski registar) at the Registry Agency: entry is constitutive for companies and is publicly accessible.

VAT registration threshold in Bulgaria is 100,000 BGN turnover over 12 consecutive months; voluntary registration is possible below it.

Span of control: the number of direct reports per manager; wider spans flatten hierarchy but raise supervisory load.

Line vs staff authority: line managers give orders down the chain of command; staff functions advise and support without command authority.

Tuckman stages: forming, storming, norming, performing, adjourning - conflict in storming is normal, not a failure.

Belbin team roles: plant, resource investigator, coordinator, shaper, monitor-evaluator, teamworker, implementer, completer-finisher, specialist.

Founding team equity split rules: split by contribution and role, vest over time, and document a founders' agreement before launch.

SMART goals: specific, measurable, achievable, relevant, time-bound - the standard test for an operational objective.

Motivation split (Herzberg): hygiene factors (pay, conditions) prevent dissatisfaction; motivators (achievement, recognition) create satisfaction.

Labour contract in Bulgaria must be in writing, registered with the National Revenue Agency, and specify position, remuneration and leave.

Risk treatment options: avoid, reduce, transfer (insurance, contracts), accept - chosen by likelihood × impact ranking.

Risk register fields: risk description, category, probability, impact, risk score, owner, mitigation action, residual risk.

Systemic vs idiosyncratic risk: systemic cannot be diversified away (regulation, macro cycles); idiosyncratic is firm-specific and diversifiable.

Regulatory compliance risks for Bulgarian firms: data protection under GDPR, consumer protection, anti-money-laundering, tax and social-security filing.

Triple bottom line: people, planet, profit - the CSR accounting frame beyond shareholder return.

Stakeholder map: owners, employees, customers, suppliers, creditors, community, state - each with a different claim and power level.

Code of ethics vs code of conduct: ethics states principles and values; conduct states specific required and prohibited behaviours.

Conflict of interest rule: disclose the interest, recuse from the decision, and record the recusal in the minutes.