BSEH SS Entrepreneurship cheat sheet

An opportunity is a market gap with paying customers; an idea is a proposed solution. Venture viability requires desirability, feasibility, and viability to intersect.

PESTEL covers Political, Economic, Social, Technological, Environmental, and Legal macro forces; discontinuities in these forces can open opportunity gaps.

McClelland's need for achievement (nAch) is linked to entrepreneurial activity; high-nAch individuals prefer moderate risk with personal responsibility for outcomes.

Internal locus of control is the belief that outcomes depend on one's own actions; it is associated with proactive opportunity pursuit and persistence.

Effectuation principles: bird-in-hand (start with means), affordable loss, crazy quilt (partnerships), lemonade (exploit surprises), and pilot-in-the-plane (co-create the future).

Lean startup cycle: build-measure-learn; a minimum viable product tests critical assumptions with least resources, and a pivot follows validated learning that contradicts the model.

Opportunity screen: market size and growth, customer pain and willingness to pay, competitive intensity, founder fit, resource requirement, and regulatory risk.

Design thinking stages: empathize, define, ideate, prototype, and test; the cycle is iterative and user-centred.

Risk types: pure risk offers only loss or no loss; speculative risk offers gain or loss. Entrepreneurial risk is calculated, not gambling risk.

Business plan sections: executive summary, company description, market analysis, organisation and management, product or service, marketing and sales, operations, financial projections, risk assessment, and appendix.

The executive summary is written last but placed first; it must stand alone and summarise the venture, market, model, team, financials, and funding ask.

Feasibility study tests market, technical, financial, legal, and operational feasibility before full resource commitment.

Lean Canvas blocks: problem, customer segments, unique value proposition, solution, channels, revenue streams, cost structure, key metrics, and unfair advantage.

SMART goals are Specific, Measurable, Achievable, Relevant, and Time-bound; each goal needs an owner, deadline, and measurable indicator.

A value proposition states the customer segment, the pain relieved or gain created, and why the offering is better than available alternatives.

Legal form decision: sole proprietorship has unlimited liability; partnership has shared liability; LLP has limited liability and a separate legal entity; private limited company has limited liability and share-based ownership.

Financial projections require explicit revenue drivers, cost drivers, and timing assumptions; sensitivity analysis tests how profit changes when a key assumption moves.

Pitch deck order commonly runs: problem, solution, market, product, traction, business model, competition, team, financials, and funding ask.

Marketing mix 4Ps: Product, Price, Place, Promotion; the 7Ps for services adds People, Process, and Physical evidence.

STP: segmentation uses demographic, geographic, psychographic, and behavioural bases; targeting selects attractive segments; positioning creates a distinct place in the customer's mind, often through a USP.

Product levels: core benefit, actual product (features, design, quality, brand, packaging), and augmented product (warranty, delivery, after-sales service).

Product life cycle stages: introduction, growth, maturity, decline; sales, profit, competition, and marketing choices change at each stage.

Pricing strategies: cost-plus adds a markup to cost; penetration sets a low launch price to build share; skimming sets a high launch price to recover development cost; value-based pricing starts from perceived value.

Price floor at target volume = variable cost per unit + allocated fixed cost per unit; cost-plus price = total unit cost x (1 + markup).

Channel levels: zero-level (producer to consumer), one-level (retailer), two-level (wholesaler to retailer); longer channels reduce direct control and add margin layers.

Promotion mix: advertising, sales promotion, personal selling, public relations, and direct or digital marketing; each tool has different reach, cost, and persuasiveness.

AIDA model: Attention, Interest, Desire, Action; each stage requires different message content and media.

Ansoff matrix: market penetration (existing product, existing market), product development (new product, existing market), market development (existing product, new market), diversification (new product, new market).

Organic growth expands internally through sales, capacity, outlets, or customers; it is slower but retains ownership and control.

Inorganic growth uses mergers, acquisitions, alliances, or joint ventures; it is faster but carries valuation, integration, and culture risk.

Horizontal integration combines firms at the same industry stage; vertical integration combines stages, backward toward suppliers or forward toward customers.

Franchising: the franchisor licenses brand and system for a fee or royalty; the franchisee funds the outlet and bears operating risk.

Licensing grants IP rights for a royalty with less operational control than franchising; a joint venture creates a new shared-ownership entity.

Economies of scale lower unit cost as output rises through fixed-cost spreading, bulk purchasing, specialization, and learning; diseconomies arise when coordination and bureaucracy costs outweigh gains.

BCG matrix: stars (high growth, high share), cash cows (low growth, high share), question marks (high growth, low share), dogs (low growth, low share).

Growth strains: cash-flow gaps, quality dilution, loss of focus, integration failure, and regulatory exposure increase with rapid expansion.

Profit = Total Revenue - Total Cost; Total Cost = Fixed Cost + Variable Cost.

Contribution = Sales - Variable Cost; contribution per unit = Selling Price - Variable Cost per unit.

Break-even units = Fixed Cost / Contribution per unit; break-even sales = Fixed Cost / P/V ratio, where P/V ratio = Contribution / Sales.

Margin of safety = Actual Sales - Break-even Sales; margin of safety ratio = Margin of Safety / Actual Sales.

Gross profit = Sales - Cost of Goods Sold; gross margin = Gross Profit / Sales x 100; net profit = Operating Profit - Interest - Tax; net margin = Net Profit / Sales x 100.

Current ratio = Current Assets / Current Liabilities; quick ratio = (Current Assets - Inventory - Prepaid Expenses) / Current Liabilities; working capital = Current Assets - Current Liabilities.

Debt-equity ratio = Total Debt / Equity; ROI = Net Gain / Investment Cost x 100; payback period = Initial Investment / Annual Net Cash Inflow.

CAGR = (Ending Value / Beginning Value)^(1/n) - 1; simple interest = P x R x T / 100; compound amount = P(1 + R/100)^T.

Financial planning estimates the amount and timing of funds and matches long-term assets with long-term sources and working capital with short-term sources.

Equity finance gives ownership and discretionary dividends with no repayment; debt finance carries fixed interest and repayment and raises financial risk.

Retained earnings are internal accruals; they preserve ownership and avoid issue costs but are limited by accumulated profits.

Trade credit is a spontaneous short-term source where suppliers allow delayed payment; its cost may be a lost cash discount.

Factoring sells receivables to a factor at a discount, converting credit sales into cash but adding financing cost.

Lease gives use of an asset for periodic rent without ownership; hire purchase gives possession now and ownership after installments.

Angel investors are high-net-worth individuals funding early-stage ventures for equity; venture capital is professionally managed equity for high-growth firms.

Bootstrapping uses savings, customer prepayments, and operating revenue; government-backed channels include MUDRA and Startup India.

Capital structure mixes debt and equity; weighted average cost of capital balances interest tax shields against financial distress risk.