What types of tangible, intangible, and funding resources exist? Give examples of each.
Tangible resources include facilities, equipment, and goods, and intangible resources include intellectual property. Funding sources include personal savings, credit cards, crowdsourcing, and bank loans.
What is an example of a tangible resource and an intangible resource?
Tangible resources for the small business can include machinery, equipment, inventory, buildings, vehicles, and other items designated as fixed assets such as land. Intangible resources can include patents, trademarks, and copyrights.
What is the PEST tool? How can entrepreneurs use it to their advantage before launching a business?
PEST stands for political, economic, sociocultural, and technological factors. This is a tool that business owners can use to figure out the external factors that influence business resources. The advantage lies in looking at the outside environment that can affect, negatively or positively, how the business gets set up and how it is managed.
Why is it important to figure out costs before launching a business?
Figuring out the costs before launching a business helps the entrepreneur evaluate the feasibility of starting and running a business. Costs such as rent, utilities, equipment, salaries, and marketing need to be included to know how much money is needed before the business opens and how much might be needed to run it. Knowing costs beforehand allows the entrepreneur to know how much money is needed before starting and how much will be needed to keep the business solvent until it generates enough sales to sustain itself.
What are examples of costs that must be taken into consideration before opening a business?
These include purchasing or leasing facilities, equipment, furniture, or fixtures. Fixed costs that must be paid include utilities, vehicles, rent, insurance, salaries, professional services, and marketing costs, and they differ based on the type of business.
What is the difference between one-time costs and monthly costs? How much should an entrepreneur have of monthly costs in advance?
One-time costs are expenses that are used at the beginning of a business and are typically not repeated. One-time costs could include legal fees, organizational costs of starting a business, accounting or bookkeeping account setup costs, software purchases or some equipment costs. Startup costs are sometimes paid for through capital or long-term loans. Monthly costs are recurring expenses that take place most months throughout the year and are paid for from revenue generated from operations. A good amount of funds to have in reserve is eighteen to twenty-four months of operating expenses.
Define the resource dependence theory.
Resource dependence theory is a theory used to define how external resources affect the business operation. At the forefront of this theory is analyzing how companies acquire resources and deploy them tactically and strategically to improve the organization’s productivity and efficiency.
What is the life cycle of a business and how do resource needs and their associate costs shift over time?
The life cycle of a business takes into account its start up phase, its growth, maturity, and rebirth or decline. Resource needs and their costs shift from phase to phase to support the cycle. During the startup phase, costs cover the basics such as initial capital, initial equipment, inventory, few employees (if any), set-up costs discussed earlier, and initial marketing/promotion. During growth, costs may increase as cash flow will be needed to expand production and the hiring of employees. This is a time of great demand, so keeping up with producing the goods/services can become difficult. Having the cash flow to expand capacity is key to making the business reach peak profits. During maturity, marketing becomes more important, as branding is what distinguishes products on the market. Outsourcing can also be required to focus only on production and tasks that create the best gains. Cutting costs becomes important in this stage. During the last stage, adapting or changing to new trends is key. In this case the costs may increase again because new equipment, ingredients, technology, or people may be needed.]