Entrepreneurship Merit Badge - BYU Powwow 2010
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Presentation used at the 2010 BYU Boy Scout Merit Badge Powwow
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Entrepreneurship Merit Badge - BYU Powwow 2010
- 1. BYU Merit Badge PowWow EntrepreneurshipEntrepreneurship Merit BadgeMerit Badge John Gilbert AddOptions.org
- 2. BYU Merit Badge PowWow The EntrepreneurThe Entrepreneur • The entrepreneur is our visionary, theThe entrepreneur is our visionary, the creator in each of us. We're born with thatcreator in each of us. We're born with that quality and it defines our lives as wequality and it defines our lives as we respond to what we see, hear, feel, andrespond to what we see, hear, feel, and experience. It is developed, nurtured, andexperience. It is developed, nurtured, and given space to flourish or is squelched,given space to flourish or is squelched, thwarted, without air or stimulation, andthwarted, without air or stimulation, and dies.dies. - Michael Gerber- Michael Gerber Author of “The E-Myth Revisited”Author of “The E-Myth Revisited”
- 3. BYU Merit Badge PowWow EntrepreneurshipEntrepreneurship • Entrepreneurship is Applied Scouting • Know Yourself • Opportunity Identification, Evaluation, and Execution: Ready – Fire – Aim Requirement 1
- 4. BYU Merit Badge PowWow Characteristics SkillsCharacteristics Skills • Passionate • Faith – In self – Others – Ideas • Opportunity Focused • Want CONTROL • Innovative • Always Learning – Reader • Selling • Planning • Communication • Marketing • Interpersonal • Management • Personally Effective • Team Builder • Leadership Requirement 1
- 5. BYU Merit Badge PowWow Starting a BusinessStarting a Business • Opportunity CostOpportunity Cost – Example: Quit your job to start your ownExample: Quit your job to start your own companycompany • Opportunity cost is your current salaryOpportunity cost is your current salary • RiskRisk – Financial lossFinancial loss – Livelihood of employeesLivelihood of employees Requirement 1
- 6. BYU Merit Badge PowWow • Entrepreneurship is not as RISKY as some would have you believe. – Myth – 90% of businesses fail in 5 years – Truth – 80% of Businesses Succeed • You can systematically improve the probability of your succeeding as an entrepreneur Requirement 1 Starting a BusinessStarting a Business
- 7. BYU Merit Badge PowWow Roles and ContributionsRoles and Contributions • Elephant, Mice, and Gazelles • Economic Development – SME represent 99% of all employers and provide 75% of all new jobs. • Providing for People’s Needs & Wants • Providing most innovations Requirement 1
- 8. BYU Merit Badge PowWow Opportunity IdentificationOpportunity Identification • N-E-W-S • Every Problem is an Opportunity – Find the angle – Pain, Pleasure WOW Requirement 3
- 9. BYU Merit Badge PowWow Identifying OpportunitiesIdentifying Opportunities • Opportunities exist all around us.Opportunities exist all around us. – Not all opportunities are worth pursuing.Not all opportunities are worth pursuing. • Compile a list of possible opportunities.Compile a list of possible opportunities. • Do not evaluate opportunities until afterDo not evaluate opportunities until after compiling a list of possibilities.compiling a list of possibilities. Requirement 3
- 10. BYU Merit Badge PowWow Finding The OpportunitiesFinding The Opportunities & Reducing Pain& Reducing Pain GettingGetting Through & AroundThrough & Around BarriersBarriers New Ideas and Competitive Angles © 2002 COPYRIGHT Gary K. Rhoads, Steven Mack Covey Professor of Marketing EntrepreneurshipEntrepreneurship is building a newis building a new boxbox It’s not just thinking outside the box Requirement 3
- 11. BYU Merit Badge PowWow Example Royal Crown removed caffeine Adding fruit juice to soda “Locked my keys in my car” “Same old cereal” Time-consuming oven cooking Phone & MP3 player Cereal substitute for cereal-avoiding teens A healthy Popsicle Healthy Breakfast Nine methods for new product successNine methods for new product success Method 1. Take something out of your product 2. Put something in your product 3. Answer to consumer gripes 4. Visible difference 5. Make the task easier 6. Use products in a new way 7. Product substitutability 8. Don’t be literal, be creative 9. Look overseas Result First decaffeinated cola Slice Warning bell, OnStar, Keyless Entry Flavoring the O’s in Cheerios Jet Stream Oven, Pre-cooked meals iPhone Total Breakfast Bars Fruit Juice Bars / Longboard Yoplait Yogurt © 2002 COPYRIGHT Gary K. Rhoads, Steven Mack Covey Professor of Marketing Requirement 3
- 12. BYU Merit Badge PowWow How to Crap On Your Friends for $39.95(Plus Shipping and Handling) With regard to time, here's the latest poop © 2002 COPYRIGHT Gary K. Rhoads, Steven Mack Covey Professor of Marketing
- 13. BYU Merit Badge PowWow Evaluating OpportunitiesEvaluating Opportunities • Evaluate to determine whether anEvaluate to determine whether an opportunity is right for you.opportunity is right for you. – Have the interestHave the interest – Get the knowledgeGet the knowledge – Question yourselfQuestion yourself Requirement 4
- 14. BYU Merit Badge PowWow Feasibility StudiesFeasibility Studies • Business – Technical (Good or Service) – Market – Financial – Human Resources (Personnel) Requirement 4
- 15. BYU Merit Badge PowWow Technical FeasibilityTechnical Feasibility • Good or Service – Simple – Observable – Understandable Requirement 4
- 16. BYU Merit Badge PowWow Target CustomerTarget Customer • Who is the Perfect Client? • How Many Clients Are There? • Try to get a feel for…Try to get a feel for… – Whether they would be interested in your product.Whether they would be interested in your product. – How much they would pay for your product?How much they would pay for your product? – How much of your product are they willing to buy?How much of your product are they willing to buy? – Ideas that can improve your idea.Ideas that can improve your idea. • If you have a prototype of your productIf you have a prototype of your product you should show it to potential customers.you should show it to potential customers.
- 17. BYU Merit Badge PowWow There are three levels of a product 1. Product or Service – What it is. 2. Features – What it has. 3. The Benefits – What does it do for my customer. Product Features Benefits Product/Service VisionProduct/Service Vision What are we selling?What are we selling? Requirement 4 Don’t Be A Feature CreatureDon’t Be A Feature Creature
- 18. BYU Merit Badge PowWow CustomersCustomers • Part of evaluating opportunities might includePart of evaluating opportunities might include interviewing potential customers.interviewing potential customers. • Try to get a feel for…Try to get a feel for… – Whether they would be interested in your product.Whether they would be interested in your product. – How much they would pay for your product?How much they would pay for your product? – How much of your product are they willing to buy?How much of your product are they willing to buy? – Ideas that can improve your idea.Ideas that can improve your idea. • If you have a prototype of your product youIf you have a prototype of your product you should show it to potential customers.should show it to potential customers. Requirement 4
- 19. BYU Merit Badge PowWow Financial FeasibilityFinancial Feasibility • Budget – Start-Up Costs & Operating Costs – Fixed Costs & Variable Costs • Financial Model – Profit & Loss Statement - Am I going make money? – Cash Flows - When will I make money? Requirement 4
- 20. BYU Merit Badge PowWow 600600 500500 400400 300300 200200 100100 1010 2020 3030 5050 6060 Fixed ExpensesFixed Expenses Profit AreaProfit Area Breakeven PointBreakeven Point SalesSales Total CostsTotal Costs Loss AreaLoss Area Unit SalesUnit Sales Expenses(thousandsofdollars)Expenses(thousandsofdollars) Requirement 4 Break Even AnalysisBreak Even Analysis
- 21. BYU Merit Badge PowWow Financial FeasibilityFinancial Feasibility • Finding the Money – Personal Savings – Love Money – D &D – Angels • Bootstrapping Requirement 4
- 22. BYU Merit Badge PowWow Human Resource FeasibilityHuman Resource Feasibility • The Entrepreneur’s “SWOT” S – Strengths W – Weaknesses O – Opportunities T - Threats • Mentoring • Outsource Requirement 4
- 23. BYU Merit Badge PowWow Interview an EntrepreneurInterview an Entrepreneur Requirement 2 ChapmanChapman EnochEnoch
- 24. BYU Merit Badge PowWow Start a BusinessStart a Business • Do a Good Turn Daily – Any service can be turned into a business opportunity • During the next two weeks do the following – Pick an idea & ask others about it • Write about what you are going to do – Do Feasibility Study on idea – Promote your Business • Make promotional materials • Advertise your business – Start your Business – Bring back Evidence Requirement 6
- 25. BYU Merit Badge PowWow Show Me The MoneyShow Me The Money • Option #1 – Sketch Prototype – Write Detailed Description • Option #2 – Create a Prototype – Write about Creation – Materials list • Option #3 – Design a Promotional Poster or Flier • Option #4 – Proforma Income Statement – Describe Assumptions Choose 2 Requirement 5
- 26. BYU Merit Badge PowWow HomeworkHomework • Finish Requirement #3 d & e • Do Requirement #4 – all four sections • Do Requirement #5 – Do 2 • Do Requirement #6 – Start a business • You can download files from www.AddOptions.org/merit-badge
- 27. BYU Merit Badge PowWow RememberRemember If your mind can conceive it, and your heart can believe it, then you can achieve it! & An Opportunity is Hard Work and Preparation Mixed with a Vision and Passion
Editor's Notes
- BYU/UVSC Merit Badge PowWow October 27 & November 10, 2007 UVSC Classroom – WB109
- Other Merit Badges – Communications, Personal Management, Public Speaking, Salesmanship Entrepreneurs always think they are very smart when they have money, but often they get cocky and need a disaster to remind them how “smart” they really are. Learn from others mistakes Know your strengths and weaknesses. Play to your strengths and team up on your weaknesses. Work Hard & Play Hard A Specialist always beats a Generalist Success and Failure are both highly overrated ADD – Focus is inconsistent, Successful because focus comes with passion, Need Balance to survive
- Know your strengths and weaknesses. Play to your strengths and team up on your weaknesses. Which horse should you buy? Depends on the purpose Quarter horse = short distance and quick turns Thoroughbred = strength for harder work Arabian = Stamina & Energy for long distances Do what you love, know what you love, so you can know what you do
- Opportunity cost: the opportunities not taken or given up in order to pursue a course of action. When quitting your current job in order to start your own company; Opportunity Cost = your current salary Most entrepreneurs are risking severe financial loss if their idea is unsuccessful. In many cases they are also risking the livelihood of their employees.
- Entrepreneur is spelled R-I-S-K
- Elephant = Big business (500+ employees) Mice = small owner managed business (less than 5 employees) Gazelles = fast growing (5-5000 employees) create more jobs than big business loses Utah has been ranked #1 for entrepreneurs starting businesses Provo/Orem is ranked first in the state Just released Inc500 – #2 uSight is in Orem & owned by 27 yr old Brandt Andersen with 2003 Revenue at $27.6 million and 65 Employees. Robert Bennett, a former Inc. 500 CEO who now serves as a senator from Utah, was easily re-elected to another term yesterday. But in New Hampshire, first-term Gov. Craig Benson, the founder of the now defunct Inc. 500 company Cabletron, was bounced out of office. The Associated Press quoted Benson as saying, "I believe in fate. What's meant to be is meant to be. I'm an entrepreneur. I see opportunities in everything." BOOKS – The E-Myth by Michael Gerber Love is the Killer App by Tim Saunders
- Surprise is the “WOW” factor Opportunity Costs – the next best alternative which you gave up The Challenge is to find solutions to what people want Book for ideas at ftp://ftp.business.uvsc.edu/ceoclub
- Before deciding on a specific opportunity an entrepreneur should compile a list of possible opportunities. Think of every problem, need, want, event, or new possibility that you can.
- 70% of new ideas come from ideas conceived at previous employment Entrepreneurs are Strategic Thinkers, Planners, and Analysts Adversity weeds out the fearful and refines entrepreneurs
- Slight variations are 94% successful as compared to 30% success for wildly new ideas
- Finding an opportunity does not mean you should automatically pursue it. Evaluate it to determine whether it is the right opportunity for you. Pick something that you are interested in personally. If you are not interested in what you are doing, you may be limiting how well you can or how long you want to do it. Do you know enough about it to pursue this opportunity? The more you know about the opportunity, the greater the chance of success. Learn all you can about your opportunity. Will your idea allow you to compete successfully? Would enough people actually be willing to purchase your product or service? What risks are there for competition? How expensive will it be to pursue this opportunity? Be honest with yourself. You may have a good idea, but if your research shows that you cannot be successful, change or abandon your idea.
- If your product depends on you educating people why they want it, then watch out
- Know Your Customer Not Everyone is your customer and Not all your customers are like yourself.
- Sell the sizzle not the steak
- Sample questions to ask potential customers: Do you like my business idea? Why or why not? Would you be willing to buy my business product? Why or why not? At what price would you be willing to buy one unit of my business product? How many units would you be willing to buy at alternative prices? (List possible alternative prices, from high to low.) Do you think my business product is better than that of my competitors? Why or why not? Do you think this product or service will be too expensive to produce or provide? What could I do to improve my business product that would encourage you to buy more or pay a higher price for the same product or service? Do you think the market for my business product will last long enough for it to be worth my starting a business?
- The biggest challenge for most entrepreneurs The devil is in the details Industry Ratios Excel templates at ftp://ftp.business.uvsc.edu/ceoclub
- The biggest challenge for most entrepreneurs The devil is in the details Industry Ratios Excel templates at ftp://ftp.business.uvsc.edu/ceoclub
- Who is going to do the work? You Employees Outsource NICE - Mentorship E-Myth Technician – Does the work Manager – Organizes the work Entrepreneur – Envisions the work Work in the Business or Work on the Business
- Raking Leaves Cleaning Gutters Pre-paid snow shoveling Tree trimming Paint house If you want a job or want to find out if a job is what you would want to do, work for free. You gain skills, experience, and insight to become better focused on your goals.
- Week 1 – Requirements 1, 2, 3 abc Introduce Feasibility Studies (4) Week 2 – Requirements 3de, 4, 5 (choose 2), 6 Week 3 – 10 Truths Entrepreneurs Violate at their own risk Basic Web Business Elements Business Planning (4, 5 – especially option 4) Report, Review, Sign Cards