Explain the three mentioned reasons why it is necessary to have a business plan according to the lecture:

• Every major project needs a business plan. It is a roadmap and basis for funding decisions.
• Writing a business plan is an intensely focused activity. It requires honest thinking about your business concept.
• The more mature a business, the more you need a structured plan. Do not over plan in the first phases.

→ Needed for funding and writing down the business concept

What are the four key objectives and the three key instruments of EXIST according to the lecture?:

Objectives:

• Establish a culture of entrepreneurship in university
• Translate the findings of academic research into economic value
• Promote the huge potential for business ideas and entrepreneurs at universities and research institutions
• Increase the number of innovative business start ups and create new jobs

Instruments:

• Entrepreneurship Culture
• Start up Grant
• Research Transfer

Name a typical structure of a business plan:

• Cover page and table of content
• Executive summary
• Business description
• Business environment analysis
• Industry background
• Competitive analysis
• Market analysis
• Marketing plan
• Operations plan
• Management team
• Financial plan
• Attachments and milestones

What are the four sections of the EXIST business plan template? (Gründerstipendium):

• Executive Summary
• Business Idea: startup history, expertise, team skills, project planning
• Market/Competition: market situation, competitors
• Operational Planning: financing, organization, opportunities and risk.

What are the three definitions mentioned in the lecture for pricing (Simon, 2004; Piercy et al., 2010; Ingenbleek et al., 2003)?:

• The price is a key factor for profits
• It has high strategic impact.
• It can be determined in three ways (cost-based, competition-based, value-based)

Explain GbR, GmbH and UG according to the slides in the lecture:

• GbR: Unlimited personal liability, no capital required. Good for organizations without significant costs, like language school
• GmbH: Limited personal liability, 25 k€ minimum capital
• UG: Start a GmbH with 1 EUR, 25 k€ go to reserve from profits

What is the definition of Risk according to Vaughan (2008):

Risk is a condition in which there is a possibility of an adverse deviation from a desired outcome that is expected or hoped for.

Explain the Van Westendorp-Method using your own words and point out the four main questions:

• Too expensive to buy: At what price would you consider the product to be so expensive that you would not consider buying it?
• Too cheap to buy: At what price would you consider the product to be priced so low that you would feel the quality could not be very good?
• Upper comfort price limit: At what price would you consider the product starting to get expensive, so that it is not out of the question, but you would have to give some thought to buying it?
• Lower comfort price limit: At what price would you consider the product to be a bargain a great buy for the money?

The intersection of too cheap and too expensive is an optimal price

Name the five points of the Consequence Scale including the explanations:

• [1]. Irrelevant - the risk doesn’t impact changes in the company’s goals and objectives
• [2]. Minor - the risk can be treated with existing resources
• [3]. Moderate - the impact of risk can be treated, but additional resources are required
• [4]. Major - treatment of the risk will require significant additional resources from other sectors or sources
• [5]. Significant - the risk might cause the company to fail achieving its goals and in some cases can prove to be fatal to the company

Name the five points of the Likelihood Scale including the explanations:

• [1]. Rare - the risk might occur only in extraordinary circumstances. Such a risk has occurred somewhere else and might occur once in every 5+ years. Probability of occurrence is lower than 5%.
• [2]. Unlikely - the risk might occur at some point, for example, once in 5 years. Probability of occurrence is 5-30%.
• [3]. Possible - the risk might occur at some point, for example, once in 3 years. Probability of occurrence is 30-70%.
• [4]. Likely - the risk might occur, at least once during the year. Probability of occurrence is 70-95%.
• [5]. Almost certain - the risk is expected to occur in the majority of cases, occurs often during the relevant year. Probability of occurrence is 95-100%.

Name the three options to treat risks including the explanation, mentioned in the lecture:

• Risk avoidance: reduce the possibility of risk occurrence. Example: money first for problematic customers.
• Risk reduction: minimizing the consequences of a specific risk. Example: install alarm.
• Risk anticipation: create reserves to insure the risks. Example: buy insurance.

Name the steps of the Linear causation approach:

Analyze, plan, do, check, act

Name the steps of the Linear causation approach in an entrepreneurial context:

Market research, segmentation (find potential segments), positioning (choose a segment), business plan, financing, act.

Name and explain the five principle of effectuation according to Sarasvathy (2009)?:

• Bird in Hand Principle: means driven action, not goals driven action. Classical way: define a goal and use required means. Bird in hand: see what means do you have and define a goals from them.
• Affordable Loss Principle: entrepreneurs limit risk by defining what they can afford to lose at each step. Maximizing the returns for fixed risk.
• Crazy Quilt Principle: you have one great plan, but construct the solution from knowledge of available people.
• Lemonade Principle: interpret bad news as potential ideas to create new markets. Magnetron that melted the chocolate bar.
• Pilot in the Plane Principle: focus on activities within your control. The future is neither found nor predicted, but rather made.