POSSIBLE AGRC2023 Exam Questions

Common Characteristics of Entrepreneurs No. 1

Commitment, determination, and perseverance,

Independence, Vision, Initiative and responsibility
High energy level, Calculated risk taking, and Seeking feedback
Drive to achieve, Tolerance for ambiguity and failure
Opportunity orientation, Self-confidence and optimism
Persistent problem solving, Creativity and Innovativeness
Internal locus of control and team building

Stress and the Entrepreneur

1) Entrepreneurial Stress: The extent to which entrepreneurs work demands and expectations
exceed their abilities to perform as venture initiators, they are likely to experience stress.
2) Causes of Entrepreneurial Stress are: Loneliness AND Immersion in business. People problems
AND Need to achieve

Skills that Entrepreneurs lack No. 2

They are unique group of people, but behave in patterns. Their weaknesses are:

Empathy (want return on time & effort)

Self-management (too much on the go, need micromanagers)
Planning & organizing (minds elsewhere, big picture stuff)
Analytical problem solving (focus on dreams / vision, not detail)

Recognition of weaknesses equally important (balanced team)

15 Characteristics of an Entrepreneur No.3

1. Take an action
2. Youre insecure, crafty and obsessed with
cash flow
3. You get into hot water and cant sit still
4. Youre malleable and fearless
5. You work and play hard
6. You enjoy novel gazing and motivated by
challenges
7. You consider yourself an outsider and
recover quickly
8. You fulfill needs and surrounded yourself
with advisors

What Entrepreneurs get Wrong (typical for entrepreneur) Exam Question +/- No.4

Starting selling too late: Most develop fully before getting feedback; Dont make anything until
you sell it.

Many people fully developed their products before getting feedback from potential buyers. In
observation, most viewed this as a mistake. Lean start-up philosophy: Get in front of prospects
from day one. Youll learn more from talking to five customers than you will from hours of market
research at a computer.

The goal should be to measure customer reaction to the general concept you plan to build. Dont
make anything until you sell it, and Get people really interested in buying it before you invest too
much time and effort.

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 Failing to listen: They dont want to hear bad news; Passion and ego let you discount criticism

Some people who started selling early said they were too focused on convincing prospects
of the new products merits and not concerned enough with finding out what prospects
thought of the idea.
Some realized that their passion and ego made them respond negatively to criticism and
disregard ideas for changes that they later saw would have increased the marketability of
their offerings.
Listen to the feedback from the customers and reshape your idea and your product to fit
what they want
Offering discounts: Keen to close an early deal and Discounts unsustainable

Faced with pressure to make early sales, many founders offered price discounts in order to close
initial deals. This often establishing unsustainable pricing models with those customers.
Consequently, news of the discounts spread around small industries, destroying and ruining the
ventures long-term pricing power. Thus, the entrepreneurs wished they had found alternative ways
to close early deals such as free shipping, or a discount on orders placed before a certain date. As
entrepreneur, if youre going to offer temporary discounts, its smart to put the terms in writing

Selling to family and friends: Dont know why they are buying, pleasing you

Making early sales to family members was common among entrepreneurs outside the U.S. and in
different industries. But you never know why relatives are buying from you. Often their motivation
is love, pity, or a sense of obligation, and NOT a compelling product quality. Thus, those sales
created a false sense of validation. The entrepreneur would have been better off with customers
who would have given them honest feedback.

Failing to seek strategic buyers.

For entrepreneurs that are desperate for cash and have no sales record, the excitement of getting
the first yes can blind them to other considerations.

Can this customer open new doors or provide referrals?

Can the customer supply usage data that could make my value proposition more compelling?

Thus, it is important to conducted a strategic assessment of their first buyers. Choose the first
clients deliberately in order to get feedback, perform beta testing, get referrals, or guarantee repeat
business. These strategic first sales often led to long-term success

3 Roles of Great Entrepreneurs No.5

The 3 roles are: Innovator-Inspirer-Implementer

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1. The Architect: Big Picture Planning or the Innovator

The entrepreneurs set the vision, the romance, and culture around a big and daring goal. In doing
so, they must have a general plan for where they want to go, but they should not get hung up on
developing the perfect plan. They should act like architect in the concept and design development
phase. The details of every initiative should change with new customer and market feedback.
There is no doubt that its easier to adjust a plan than it is to adjust people. Plans should clear
purpose and the top few priorities for achieving it, but many other aspects, including product
development, must be viewed as a first direction.

2. The storyteller: Researching and selling or the Inspirer, the communicator

Great entrepreneurs need to be constantly selling the story of their vision, as well as researching
how it should evolve. An entrepreneur needs to constantly sound like a salesman and act as the
companys chief storyteller. By effective selling they can gain access to invaluable customer and
product research. These customer interactions help turn a directional vision into one with more
precise focus. Selling slightly ahead of the perfect product cycle early can help you test cheaply and
adjust as required.

3. The Disciplinarian: Executing or the operator

Excellent execution comes from bonding to a solid set of controls and operating principles. This
start by having the appropriate metrics to measure and planned the progress to achieve. Across the
company portfolio, work with the CEOs to establish the priorities and set up the appropriate
dashboard, to be reviewed regularly. This dashboard might include, for example, customer counts,
recurring customers, and online usage metrics. The key to delivering what you want to deliver is to
know how to pick the few customer and operating metrics that can serve as leading indicators for
financial indicator and outcomes.

Hard to be good at all 3 roles: Planning, selling, and executing sound straightforward, but playing
the three roles at once can be challenging for early-stage CEOs. Fortunately, you dont need to, if
you build a strong team.
Self-assess and match up with best talent: To assess your own entrepreneurial aptitude and
effectiveness, take a hard look at your recent tasks, meetings, and other activities. Once you
understand which of these areas you are strongest in, focus on the priorities that map your skills and
quickly fill the gaps with the best talent you can find.

Lean Strategy vs. Entrepreneurship (central planning vs. chaos) No.6

Strategy and entrepreneurship are often viewed as opposites. Strategy is the pursuit of a clearly
defined path that is identified in advance through a carefully chosen set of activities.
Entrepreneurship is the essence of opportunism that require ventures to pivot in new directions, as
information comes in and markets shift rapidly. Yet the two desperately need each other. Strategy
without entrepreneurship is central planning. Entrepreneurship without strategy leads to chaos.

The solution is lean strategy process, which guards against the extremes of both rigid planning and
unrestrained experimentation. In this framework, strategy provides overall direction and alignment.
It serves as both a screen that novel ideas must pass and a measure for evaluating the success of
experiments with them. Strategy inspires employees to be creative, ensure that they remain on the
same page with the rest of the organization and pursue only valuable opportunities.

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 Desperately need each other know what not to do

The opportunity cost of doing A is that you cannot do B. In a limited resource venture, choices are
mutually exclusive. No amount of experimentation will get around this problem. Lean promotes
efficiency in all aspects: time, capital, resources, etc. and continuous improvement / testing. The
single best piece of advice for entrepreneurs is to Know what not to do.

Every choice creates a unique path with a different outcome and unexpected implications.
Because circumstances will have changed, therefore, you cannot simply do A now and B later. The
key suppliers will have signed another contract that commit all their capacity to others. Every choice
is an irrevocable rejection of something else

Lean Strategy Process (combination of the two):

1) Vision (reason for existence):

The lean strategy process begins with the organizations vision or ultimate purpose; the reason for
its existence. A vision should be compelling, motivational and aspirational. Microsofts original
vision, for example, was to place a personal computer on every desk.

2) Analysis (SWOT): Deliberate strategy.

To deliver on the entrepreneurial vision, a deliberate strategy is need. It should be crafted with
involvement all over the organization, from a rigorous evaluation of the firms current strengths
and weaknesses, internal resources and capabilities, and external opportunities and threats. The
deliberate strategy will identify the broad market position where the firm can use its unique
capabilities to satisfy customer needs in a way that no competitor can.

3) Deliberate Strategy (agree on firms objective, scope and advantage)

The most critical strategic guide, scope identifies what business we are in and draws boundaries
around what the venture will and will not do. If the objective is to go public within three years, that
will have implications different from those of building a sustainable business. For each objective, the
strategy must establish the metrics that will maximize the firms market value when achieved

4) Learning (managers at all levels decisions and experiments): competitive advantage

Managers at all level make daily decisions and conduct experiment guided by the strategy. Any
venture needs clarity about how it will win and why customers will buy its products rather than
those of competitors. That advantage should help the company satisfy an underlying customer
need. This distinctive value proposition should align the firms activities and shape future
experiments.

5) Emergent Strategy (feedback and findings reshape strategy)

Managers at all levels in the organization make numerous decisions every day to implement the
strategy. The sum of all these independent choices gradually alters the companys position and
determines the exact form the strategy takes over time. This is the emergent dimension of
strategy.

Cash Flow Summary No. 7

Profit is how much money you have left after you get your revenue and pay your expenses.

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Cash flow is when you get and pay the cash. Incomings and outgoings of cash, representing the
operating activities of an organization.

Profitable companies can go bankrupt: Cash flow and profit dont always match up.

A company can be profitable and still go bankrupt from cash flow problems. If they must pay for
materials in January but dont get paid by their customers until June, they need a loan to survive
until June. If they dont get that loan, even if they have guaranteed sales in June, then they will go
out of business.

Relationship between: profitability, Cash Flow and Growth

Profit is how much money you have left after you get your revenue and pay your expenses.

In the short-term, even if youre profitable, you survive or fail based on whether you have cash to
pay the bills. Thats why they say Cash Flow is King. In the long-term, you must eventually get
profitable or find someone like stock investors to keep giving you cash to make up for your losses.

Banks: where is the peak, up and down, security / collateral, permanent brick?

How to fund the cash flow? Depending on how much money the firm makes as profit, the fund can
be available for expansion or to fund another project. The more money stay behind, the more the
firm can make more investment. Thats why the profit is crucial in how fast the firm can grow.
Thus, the profitability is crucial in funding the growth.

Cash flow is the difference between the amount of cash a company receives and pays, whereas
profitability is the difference between revenues and expenses. Companies report on both their cash
holdings and profitability. Profitability is an accounting concept and is not measured in terms of cash
received or paid

What is a 'Growth Company'

A growth of a firm is when their activity generates a positive cash flows or earnings, which increase
at significantly faster rates than the overall economy. A growth company tends to have very
profitable reinvestment opportunities for its own retained earnings.

Cash Flow When Starting a Business

Dealing with cash flow issues is most difficult when you are starting a business. You have many
expenses and money is going out fast. And you may have no sales or customers who are paying you.
You will need some other temporary sources of cash, like through a temporary line of credit, to get
you going and on to a positive cash flow situation