Is cost of debt higher or cost of equity
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Is cost of debt higher or cost of equity? Explain why.
Entrepreneurship
Learning Engagement – Part 1 (14 pts, if submitted no later than Wednesday)
What are three of the pitfalls, individuals should avoid when seeking a trademark?
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Case StudyThe Business Model Canvas – 9 Steps to Creating a Successful Business Model – Startup Tips The Business Model Canvas, is strategic management and entrepreneurial tool. It allows you to describe, design, challenge, invent, and pivot your business model. The Business Model Canvas has comprised of 9 key segments: The left-hand section of the Business Model Canvas is the Infrastructure section and comprises three key areas:Key Activities: The most important activities in executing a company’s value proposition.Key Resources: The resources that are necessary to create value for the customer.Partner Network: In order to optimize operations and reduce risks of a business model, organizations usually cultivate buyer-supplier relationships so they can focus on their core activity.The middle section of the canvas describes the business offering and is the value proposition delivered to different customer segments.Value Propositions: The collection of products and services a business offers to meet the needs of its customers. According to Osterwalder, (2004), a company’s value proposition is what distinguishes itself from its competitors. The value proposition provides value through various elements such as newness, performance, customization, “getting the job done”, design, brand/status, price, cost reduction, risk reduction, accessibility, and convenience/usability. The value propositions may be: Quantitative – price and efficiency Qualitative – overall customer experience and outcomeThe right-hand side of the Business Model Canvas describes the customers, the channels through which you deliver services and the relationships you have with your customers.Customer Segments: To build an effective business model, a company must identify which customers it tries to serve. Various sets of customers can be segmented based on the different needs and attributes to ensure appropriate implementation of corporate strategy meets the characteristics of selected group of clients.Channels: A company can deliver its value proposition to its targeted customers through different channels. Effective channels will distribute a company’s value proposition in ways that are fast, efficient, and cost-effective. An organization can reach its clients either through its own channels (storefront), partner channels (major distributors), or a combination of both.Customer Relationships: To ensure the survival and success of any business, companies must identify the type of relationship they want to create with their customer segments. The bottom section of the canvas describes the finances.Cost Structure: This describes the most important monetary consequences while operating under different business models. A company’s DOC.Revenue Streams: The way a company makes income from each customer segment.
Question 3 – Fill out two more sections for the business of your business model canvas: Customer Relationship Types, and Define Your Channel Strategies. Just write down what you would actually write down for your business, in a way that your team will understand.· Customer Relationship TypesYour customer relationship will influence the experience that they will have with you and the frequency of engagement with them.Here are 5 commonly used customer relationships as part of your Business Model Canvas development:Self Service or Automated relationships where clients can conduct most or all of the service they need without assistance by anyone in your business. A lot of monthly subscription or online services follow this modelPersonal Relationships where your direct teams are involved in selling and servicing your clients. This is common in physical retail, high value and corporate sales.Creation Relationship where clients contribute to the growth of your business, such as the case with social media sitesTransactional Relationship where the client can use your product and service once and might never have the need to return to you and use it againSwitching Cost are sticky relationships where it becomes difficult for a client to change a service since they have invested so much time and effort into the relationship. First movers in this type of relationship have the most to gainDetermine which one of these relation types have the most value to your business and to your clients’ experience resulting in great customer service.Key Revenue StreamsRevenue streams or sales refer to how you generate cash from your clients. In the Business Model Canvas, different client segments could pay you in different ways. Without sales, a business can’t function, so this is the most important aspects of any business.7 most used revenue types include: Asset sales refer to cases where you sell a product to a client who then becomes the owner of that product. This is the most widely used model in business and takes place anytime we buy a car, computer or a buildingUsage fee refers to when a client uses your product or service but its ownership remains with you. This is common in the hotel or airline industrySubscription fee refers to when your clients subscribe on a monthly or weekly basis and can use your infrastructure. Examples of this include software as a service, gym memberships, etc..Leasing or renting or lending refer to allowing clients to use your assets for a period of time as if it is theirsLicensing revenue is earned when you give clients permission to use your intellectual property. This is common in content production and inventions.Brokerage fees are earned when you take a commission from facilitating a business transaction between two parties.Advertising results from fees for advertising a particular product or service or brandEnsuring which of the above revenue streams is most convenient for each of your target segments and in turn allowing you to generate the most business is an essential aspect of having your business survive and thrive.Question 4 – Fill out two more sections for the business of your business model canvas: Key Resource Types, and Key Activities. Just write down what you would actually write down for your business, in a way that your team will understand.Key Resource TypesKey resources reflect the most important assets of your business. Identifying them will help you in protecting these assets and making the most of them.Here are 3 common resource types:Physical resources include vehicles, offices or stores, data center, manufacturing equipmentIntellectual Property assets brands, copyrights, patents, platforms and even customer databases.Human Capital representing your team. In most businesses, this is your most important asset as the team helps in keeping innovations coming in and in providing your clients with a great experienceIdentifying your most important assets in your business and protecting them is essential to making your business function well.Key Activities your Business Engages inThere are many daily tasks that are done within the business, but it is always important to be clear about what are the key activities that need to be conducted within the business to deliver on the value proposition that you are promising your clients. By identifying these activities, it would help you to prioritize the efforts taking place in your business.As part of the Business Model Canvas template, some of the common activities in a business include:Production activities which focus on the design, manufacturing, and delivery of a product or service – common in manufacturingProblem-solving which covers a lot of services businesses that work on addressing customer problemsPlatforms bring together users and clients on a common space for them to interact – Credit card companies, Software platforms, and online merchants are examples that have platforms as a key activityReviewing your key activities and improving performance is an essential part of innovating a better product or service to your clients.Question 5 – Fill out another section for the business of your business model canvas: Key Partnerships. Just write down what you would actually write down for your business, in a way that your team will understand.Key PartnershipsForming strong partnerships with your ecosystem is a great tool to help in expanding your reach and making sure that your business is delivering its promise to clients.Some essential partnerships in business include:Alliances these are entities that can complement your offerings or your reach to your clients – these can include joint ventures or general partnership agreementSuppliers are essential in providing you non-core business elements that allow you to focus on your core areas of strengthContinuous evaluation of the available partnership options is essential to stay abreast of the latest developments.Question 6 – Fill out another section for the business of your business model canvas: Cost Structure Just write down what you would actually write down for your business, in a way that your team will understand. Important Cost StructuresCost structure refers to all the costs that you incur to deliver on your business model. Keeping your costs under control is essential to maintain a healthy business.2 Essential Cost Structure elements include:Fixed Costs – which refer to all costs that you need to incur whether you sell or not. These could include factory, general administration staff, rent, management staff costs etc..Variable Costs – which refer to costs that are associated with the sales of your products or services. The more you sell the more these costs would go up. Variable costs include things like the raw material for your products or cost of consultants that you would etc..When you are starting up a business keeping the fixed costs as low as possible is essential so that you don’t run out of cash too quickly before you start selling enough products and services to cover your costs.
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