Research Activity 2:: Generation, Opportunity Evaluation, Planning, Company Formation/launch and Growth

NAME: Ramirez, Malou Maria Luciana B.
SECTION: HRRO 3-1

DATE: April 10, 2021
RESEARCH ACTIVITY 2:
1. Define start-up (5pts)
Answer:
According to the Forbes Advisor (2021), Startups are young companies founded
to develop a unique product or service, bring it to market and make it irresistible and
irreplaceable for customers.
Startups are rooted in innovation, addressing the deficiencies of existing
products or creating entirely new categories of goods and services, thereby disrupting
entrenched ways of thinking and doing business for entire industries.
You are starting a business from a scratch, from nothing to something.
2. List down the three phases in start-up (3)

Answer:
 Phase one is the Start-up Era
 Phase two is the Growth Era
 Phase three is the Expansion Era
3. What are the critical factors that are important for new-venture assessment? (5)
Answer:
Critical factors that are important for new-venture assessment are Idea
Generation, Opportunity Evaluation, Planning, Company formation/launch and
Growth.
4. Why is customer’s availability important? (7)

Answer:
Ensuring product is on the shelf is essential and its availability is a vital part to
any business. Lack of product availability will lead to customer dissatisfaction and losing
customer’s loyalty and somehow will affect the company’s financial performance over
the long term.
5. List five advantages and five disadvantages of start-up (10)

Answer:
Advantages
1. Agility
Startups are smaller and less structured. They are also innovative and keep improving their
business models, processes, and portfolio. These allow them to adapt to disruptive technologies
THC10 – ACTIVITY 2
and changes in market conditions. Established competitors face vested interests, a historic path,
and a strong team culture. This makes them resistant to change.
2. Efficiency (Lean and Mean)

Established companies have high administrative overheads. Startups offer their services in a
more efficient, cost-effective and competitive manner. They are likely to be aware of their
limitations and tend to focus on their core strengths. This causes them to partner with other
small organizations. Customers often benefit with a superior value proposition.
3. Team Culture
Employees of large corporations get attracted by prestige and big salaries. They easily lose sight
of the company’s vision, mission and values and the success of its customers. Startup employees
form a close-knit community that shares passion, beliefs, and values. They must work together
for the good of the company, its customers and the world at large.
4. Personalization
Startups deliver their products and services with a personal touch. This creates a uniquely
personal experience for their customers. Startups also take time to study and understand their
customers’ business requirements. This allows them to build lasting relationships with specific
offerings and responsive solutions.
5. Versatility
Startup employees multitask and the salesperson could double up as the relationship manager.
This adds continuity to customer relationships and enables startups to respond to emergencies.
Most startups support learning and have a higher tolerance for mistakes. Both factors enhance
the versatility of startup employees.
Disadvantages
1. Risk
Most startups fail within their first year of operations, so the risk of failure is high. Working
under such high risk can blur a startup’s strategic vision. So they either fail to seize market
opportunities or overestimate their sales projections. High risk also hinders a startup’s ability to
attract experienced and competent staff.
2. Compensation
It takes blood, sweat, and tears to build a company, and long working hours are the norm for
startups. The rewards might be low since it takes time to generate revenue and make profits.
Some startups give up since it’s demotivating to work without proper compensation.
3. Market Access
Many customers prefer a business that they have worked with over a new startup. Besides it is
more expensive to acquire new customers than to retain old ones. Without a customer base,
understanding market needs also becomes a real struggle. All these factors combined increase
the cost of business development for startups.
4. Team Composition
Some startups are born out of desperation since the founder could not find or hold on to a job.
Such founders often struggle to build a team that the business needs to succeed. A successful
startup requires founders/co-directors with complementary personalities and competencies.
Even then disagreements can creep in when the going gets tough.
5. Resources
Growth hacking, cloud computing, and venture capitalism allow startups to gain market entry.
Most startups operate on a shoestring budget, against competitors that are well-resourced. It
gives the competitors an edge in product development, sales, and marketing. They use that
edge to push startups out of the market when they become a threat. (W. Simons, 2019)
6. Define what is buying an existing business (5)

Answer:
Buying an existing business is easiest way to start a business. You are taking over
an existing business or already establish business by the means of buying it.
7. Give five advantages and disadvantages of buying an existing business. (10)

Answer:
Advantages of buying a business
 Buying an established business means immediate cash flow.
 The business will have a financial history, which gives you an idea of what to expect and
can make it easier to secure loans and attract investors.
 You will acquire existing customers, contacts, goodwill, suppliers, staff, plant, equipment
and stock.
 A market for your product or service is already established.
 Existing employees and managers will have experience they can share.
Disadvantages of buying a business

 The business might need major improvements to old plant and equipment.
 You often need to invest a large amount up front, and will also have to budget for
professional fees for solicitors and accountants.
 The business may be poorly located or badly managed, with low staff morale.
 External factors, such as increasing competition or a declining industry, can affect future
growth.
 Under-performing businesses can require a lot of investment to make them profitable.
(Business Queensland, 2017)
8. Juan is planning to run a Restaurant in Sta. Maria, Bulacan. Pedro who is Juan’s friend, asks
Juan to buy his existing stall. What are the benefits if he buys Pedro’s stall as compared to
setting up a new stall? (25pts)
Answer:
The benefits if he buys Pedro’s stall are a lot. Since you don’t have start from the scratch
and you won’t need to make a large investment because the stall is already established it is
easier the make finance if the stall has a good record. Then it is already known to the market
and there may be establish customers that tested or support the product. It has also an existing
relationship with the customers, vendors, and other business partners.

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NAME: Ramirez, Malou Maria Luciana B.

SECTION: HRRO 3-1

2. List down the three phases in start-up (3)

4. Why is customer’s availability important? (7)

5. List five advantages and five disadvantages of start-up (10)

2. Efficiency (Lean and Mean)

6. Define what is buying an existing business (5)

7. Give five advantages and disadvantages of buying an existing business. (10)

Disadvantages of buying a business

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