New Venture Challenge Exercises1
Here are some examples of practical exercises or “New Venture Challenges” that
students can complete during the course. These exercises are intended to give them some
hands-on experience in dealing with several of the conceptual issues raised in the course
and to think about some additional elements of entrepreneurial activity beyond the
requirements of the business plan. You can select the specific Challenges you would like
to include in your course from these examples or develop your own exercises. Here is a
general idea of how they relate to the various Stages in Building a Dream. There is at
least one exercise for each Stage in the book.
Stage 1 What is Entrepreneurship?
New Venture Challenge #1, #2
Stage 2 Assessing Your Potential for an Entrepreneurial Career
New Venture Challenge #3, #4
Stage 3 Exploring New Business Ideas and Opportunities
New Venture Challenge #5, #6, #7
Stage 4 Starting a New Business or Buying an Existing One
New Venture Challenge #8
Stage 5 Considering a Franchise
New Venture Challenge #9
Stage 6 Conducting a Feasibility Study Part 1: Market and Technical Assessment
New Venture Challenge #10, #11, #12, #13
Stage 7 Conducting a Feasibility Study Part 2: Cost and Profitability Assessment
New Venture Challenge #13
Stage 8 Organizing Your Business
New Venture Challenge #14, #15
I would like to thank Robert Warren, the Director of the Asper Centre for Entrepreneurship of the Asper
School of Business at the University of Manitoba for letting me use many of the exercises he has developed
for use in his New Venture Analysis course.
Stage 9 Protecting Your Idea
New Venture Challenge #16
Stage 10 Arranging Financing
New Venture Challenge #17, #18
Stage 11 Preparing Your Business Plan
New Venture Challenge #19
Examples of “New Venture Challenge” Exercises
New Venture Challenge #1
Visit with an Entrepreneur
Contact some local individual who you consider to be a real entrepreneur. Arrange to
meet with them so that you can ask them about their experiences. In arranging this
interview, be certain to explain to the entrepreneur that you are asking for the interview
as part of a class assignment and that you will require approximately one hour of their
To facilitate the interview process, you should script it out in advance of your meeting.
Develop a series of open and closed-ended questions you wish to pose to this individual
during your interview. Open-ended questions can be used to cover such areas as how they
got started, the sequence of events involved in growing their business to its present state,
and the general conclusions they can draw from their experiences. You should use
closed-end questions when asking them about specific issues such as where and how they
obtained the financing to start the business and their need to find partners or partners to
get their business off the ground.
To help in the preparation of your report, it’s a good idea to record the interview so you
can use direct quotes from the entrepreneur in your paper to reinforce particular points. If
you don’t have access to a tape recorder, keep a written verbatim record of any pertinent
comments. Using this information, write a report detailing what you learned about
entrepreneurs and entrepreneurship from this individual. Discuss any ideas the
entrepreneur did not raise that you feel are important. Try to offer any possible
explanations as to why the entrepreneur may not have covered these points.
As a courtesy, be sure to send your entrepreneur a brief note thanking them for taking the
time to meet with you.
New Venture Challenge #2
Interview With an Entrepreneur
Congratulations, you’ve been hired as a cub reporter for a campus based weekly radio
program, “The Entrepreneur’s Show.” Your first assignment is to locate and interview an
entrepreneur of note and turn this into a script for a radio interview. For this assignment, an
entrepreneur of note is defined as someone that has been publicly recognized for his or her
entrepreneurial efforts. This recognition can take the form of press coverage or nomination
for an entrepreneurial award, for example one from the Chamber of Commerce, Ernst &
Young or the Women’s Enterprise Centre. You do not need to limit your search to your local
community. Entrepreneurs from other parts of Canada or countries are also viable options.
Your interview should cover the reasons why the person became an entrepreneur, a
description of their first venture and the most critical business decision they’ve made to date.
The final portion of your interview should concentrate on having the entrepreneur identify the
key lessons they’ve learned during their career.
Your paper should be written in a question and answer format with a brief introduction
that identifies who this person is and why this person is an entrepreneur of note. There is
no page length for this paper, but it must take no more than six minutes to read aloud –
remember it is a script for a radio interview.
New Venture Challenge #3
An important trait of successful entrepreneurs is their ability to set personal and
professional goals. Goals enable the entrepreneur to plan effectiveness and ensure they
are able to gather the resources necessary for their business. Entrepreneurs use short-term
goals as a stepping-stone toward their longer term ones. Foe this assignment you need to
identify your goals in each of the following areas:
1. Your Short-term business goals) goals you hope to attain in the next 12 months)
2. Your Long-term business goals (one to five years)
3. Your Educational and Training goals (one to five years)
4. Your Personal goals (for the rest of your life)
For each set of goals, you must provide a one-paragraph explanation for each indicated
goal describing how it fits within your other goals and builds on earlier ones. This
paragraph should also describe the resources you think you will need to achieve the goal.
Finally, this explanation must describe how the goal meets the criteria of being specific,
measurable and attainable.
New Venture Challenge #4
Personal Entrepreneurial Strategy
This assignment is a self-assessment to determine if you have the skills traditionally associated
with entrepreneurs. Be aware that no person has all the skills identified in this exercise.
Therefore, do not become discouraged if you feel you lack any of the skills identified in the
exercise. You should also be aware that even those possessing a majority of these skills might
not become successful entrepreneurs because of personal values and preferences.
The assessment consists of four sections beginning with a profile of your past and concluding
with a projection into the future. This assignment will take approximately 3 hours to complete
and requires active participation on your part. Although there are no right or wrong answers,
it is important that you carefully and honestly consider your answer to each question.
Step 1: Profile of the Past
Examine your personal preferences by listing those activities that give you the greatest
amount of personal satisfaction. Be sure to list the reasons why this activity gives you
satisfaction. Now list the activities that cause you the greatest personal dissatisfaction
and the reasons why they cause this dissatisfaction.
Think ahead 20 years and describe how you will spend an ideal month. This
description should include a look at your lifestyle, work style, income and friends.
What attracts you to this existence? Repels you?
Complete this sentence: “I would/would not like to start/acquire my own business
because . . . .”
Using a five point scale where 1 is very unimportant and 5 is very important, rank the
following in terms of importance to you:
1 2 3 4 5
Staying in Your Local Community
< 30 minutes
< 60 minutes
> 60 minutes
Size of business
< $1 million in sales or 20 employees
> $1 million in sales or 20 employees
> $10 million in sales and 200 employees
Rate of Growth
> 25% per year
10% to 15% per year
Less than 10%
Over 70 hours per week
55 to 60 hours
40 hours or less
Travel away from home
Standard of living
Become very rich
Utilization of skills and education
Opportunity for personal growth
Contribution to society
Positioning for opportunities
Status and prestige
STEP 2: Examine Your Personal History
List any activities you participated in that (a) provided financial support, (b)
contributed to your well-being, (c) you have done on your own.
Discuss why you became involved in these activities and the influences on your
For each of the activities listed, discuss what you learned about yourself, self-
employment, managing people and making money.
What lessons and insights can you take from your participation in sports and
hobby activities that you can apply to life as an entrepreneur?
Among those people who influenced you the most, do any own and operate their
own business or work as independent professionals?
How have the people listed above influenced you? What have they taught you
If you have ever started a business or worked in a small company, list the things
you liked least and those you liked most. Why? Do the same if you’ve only
worked in large companies.
Summarize those factors in your history you believe are entrepreneurial
strengths and weaknesses.
Step 3: Putting It All Together
How do the requirements of entrepreneurship fit with your aims, values and
What specific conflicts do you anticipate between your aims and values and the
demands of entrepreneurship?
What are the implications of this assessment of your entrepreneurial strategy in
terms of whether you would proceed with a venture activity developed in this
What is it about the specific opportunity you want to pursue that will provide
you with the sustained energy and motivation? How do you know this?
Step 4: Thinking Ahead
In three minutes, list the goals you intend to achieve by age 70.
In three minutes, list the goals you intend to accomplish in the next 7 years.
Rank your goals according to priority.
Using your top 3 goals, list any problems, obstacles and inconsistencies that you
will encounter in reaching these goals. How will you eliminate these?
For your top 3 goals, list the tasks necessary to achieve each goal. How will you
measure your results?
New Venture Challenge #5
Generating and Evaluating Business Ideas
Generating ideas for a prospective new business is a relatively simple procedure – the end
result of which is a number of potential business opportunities that may, or may not, have
a chance of becoming successful ventures.
Undoubtedly you have a few concepts in mind for prospective new businesses. List up to
ten (10) specific business ideas, or types of businesses that you think you might want to
own and operate.
Review the ideas you have generated. Turn to your textbook and take a look at the
description of Buskirk’s framework for the “Ideal” or “Model” business in Stage Three of
the book. Pick three (3) of the ideas you have generated and evaluate each of these ideas
against the factors described in the Buskirk model. This evaluation will illustrate how
well these ideas fit with the characteristics of the “ideal” business. Indicate how you
would rate each idea on each of Buskirk’s nineteen factors.
On the basis of this evaluation, which of the above ideas do you feel represents the most
significant new venture opportunity for you? Justify your response. Did the idea you
picked score Average or Poor on any of Buskirk’s factors? If so, can you think of any
way to overcome the situation or other solutions to the problem?
New Venture Challenge #6
Idea Generation Guide
Generate a list of as many New Venture ideas as possible. Thinking about any unmet or
poorly filled customer needs you know resulting from regulatory changes, technological
changes, knowledge and information gaps, lags, inconsistencies and so-forth will help
generate this list. You can also get a list of possible new ventures by identifying
weaknesses or vulnerabilities in existing businesses.
Expand your list by considering your personal interests, desired lifestyle, values, what
you feel you are likely to do very well and contributions you would like to make.
Show your list of ideas to at least three people for review and revise your list to reflect
any new ideas emerging from this review.
Discuss any insights, observations, and conclusions that emerged about your business
ideas or personal preferences.
New Venture Challenge #7
What’s Hot and What’s Not?
It’s time to put your accumulated knowledge of entrepreneurship and business to work and
analyze the future prospects of an emerging area of business. To accomplish this task you’ll
need to identify an emerging area of business, for example, e-commerce (choose either
business-to-business or consumer oriented opportunities), biotechnology, transportation,
communications, etc. For the area selected, explain why you see it as a hot growth prospect,
including any relevant statistics. Predict where you see this sector in 5 years, in terms of such
things as market size, growth rate, competitive level, profitability and any additional
opportunities it could generate and include your reasons for this prediction. Your analysis
should include a description of any environmental forces you believe could influence this
industry, for example government regulation, changing technology and demographic shifts in
the population. It should also include supporting information from the relevant industry trade
journals and other sources. DO NOT limit your research efforts to Internet sites alone.
For the growth prospect selected, describe the marketing, production/operations, human
resource and financial strategies you would use to take maximum advantage of the
opportunities presented. Identify and discuss any potential resource problems you feel would
hinder this industry’s development, for example, a skills shortage, capacity constraint, reduced
access to capital, etc.
Your paper can be a maximum of seven (7) typed double-spaced pages.
New Venture Challenge #8
Check the Yellow Pages for the name of a business broker in your community. Contact
the broker and arrange time for an interview. During the interview explore with the
broker a range of issues such as:
• Where and how does he look for potential buyers? How does he let the market
know about the business opportunities he has available for sale and what media
does he use to communicate this information?
• What services does he provide to the seller to facilitate the sale?
• What methods does he use to help the seller determine an appropriate value for
• What information do they typically provide to a potential buyer to enable them to
assess the potential opportunity?
• How are the sales he brokers typically financed? Do sellers play a significant role
in enabling buyers to acquire their business?
Your paper can be a maximum of five double-spaced, typewritten pages.
New Venture Challenge #9
Taking a Look at Franchising
Locate a copy of one of the following publications:
• The Franchise Annual published by Info Press Inc., St. Catherines, Ont.
• The Franchise Yearbook published by Entrepreneur magazine
• Opportunities Canada, Franchise and Dealership Guide, published by The Type
People, Inc. Mississauga, Ont.
Answer the following questions.
1. Briefly describe the contents of the publication. What type of businesses seem to
dominate their listings in terms of number of franchise opportunities? What appear to
be the “hot” new areas of franchising?
2. Choose any three franchises in the same line of business that appear to be somewhat
similar and compare them.
a. How many units do the have in the U.S.? Canada? How many of these units
are corporately owned? Franchised? What might account for some of the
differences in terms of ownership and growth rate?
b. What is the size of their franchise/dealership fee? What might account for
differences in these fees?
c. Do they require the franchisee to pay a royalty? On what is the royalty based?
Does the size of the royalty differ? If so, why do you suspect that is the case?
New Venture Challenge #10
Researching Your New Venture Idea on the Internet
The Internet may have information that will help you in researching the idea upon which
you have decided to develop your business plan. With a little practice you can skim the
Net’s millions of Web pages and thousands of Usenet groups both for topics of general
interest and also to home in on precise bits of specific data. What has simplified the job
of culling information from these Web pages and Usenet groups is the use of a variety of
“search engines”. These engines enable you to rapidly search through a variety of
searchable directories or the nooks and crannies of the Web itself to create indexes of
information related to a particular topic in seconds.
Use the Internet to address the following issues:
- Briefly describe the concept or idea you plan to investigate as a prospective
business opportunity. How would you describe the range of products or
services you plan to offer to the market? Who do you see as being the
principal target market for each of your offerings or your whole product line?
Where are they located geographically?
- Identify a few key words or phrases that describe some of the principal
aspects of the product/service you will investigate or the market(s) you plan to
- Use several of these words and phrases to see what information you may be
able to find on the Internet that could be helpful in determining the nature and
size of the potential market that may be available for your idea. Try several of
the more popular search engines and directories to see which seem to work
best for you. Indicate those in your paper and explain why. Play with your key
words and phrase combinations as a way of refining your searches.
- What information were you able to find on the Net that gave you some insight
into the nature and size of the potential market for your new product/service
idea? Be specific and illustrate some of the specific data that should be useful
in preparing your business plan. How about your competitors? Did you find
any information that could be useful in giving you a better understanding of
the competition you will face in the marketplace?
New Venture Challenge #11
Web Site Evaluation
More and more entrepreneurs are locating the information they need to evaluate their
ideas and prepare their business plan on the Internet. Your task in this assignment is to
evaluate Web sites targeted toward entrepreneurs.
Specifically, you will:
1. Identify a series of criteria (a minimum of five) i.e. quality of information provided,
links, site layout, ease of location, for evaluating Web sites. Assign a numerical
weighting to each criterion indicating the importance you feel should be placed on it
relative to the others, for example, quality of the information provided might account
for 50% of the total evaluation. Provide a brief description as to why you selected
these criteria and how you assigned the weightings.
2. Locate a minimum of ten (10) Web sites that appear to be aimed principally at
entrepreneurs or prospective entrepreneurs or that provides information useful to
someone starting a business. Indicate the URL for each site and describe the search
method you used to find it.
3. Using the criteria you developed in Step 1, rate the Web sites you have selected and
include this assessment as a chart in your paper. Identify which site you felt was the
best and why. Be sure to include a brief description of each site that explains how you
assigned its rating.
4. Do you think the sites you identified provide sufficient and adequate information?
Based on your research, describe what you think would be the ideal site for
New Venture Challenge #12
Developing a Market Research Study
How do you know if the product or service you have developed is just an idea or represents a
real opportunity? The answer is through a market research study involving your prospective
target market. The purpose of this assignment is to establish the guidelines for such a study.
Your proposed guidelines must contain the following information:
1. A brief description of your proposed product or service.
2. A description of the target market you intend to reach with this product.
3. A description of the secondary research information you would seek and a
list of the sources you would consult for this information.
4. The factors you would use to analyze and rate the primary and secondary
competitors for your product.
5. A description of the objectives of the primary marketing research you would
need to conduct to evaluate the potential of your idea. This section should
include the type of primary research proposed (quantitative or qualitative),
number of consumers you intend to question and justification for this number
and sample questions you intend to ask.
Your assignment can be a maximum of seven typed, double-spaced pages.
New Venture Challenge #13
Stock Car Challenge
This course is about starting a business. While the business plan allows you to do this on
paper there’s no substitute for the real thing. While some programs give students a start-
up loan of $1 to launch their business, we prefer even more realism. Specifically, your
group will join such well-known racing teams as Penske, Porsche and Petty by
developing a business that results in the construction and racing of a wooden Cub Car.
To build your car, you must raise capital from outside investors in the form of
sponsorship. Your grade for this assignment will be based on three things. First, is the
profitability of the venture based on the difference between your costs and the amount of
money you raise from corporate sponsors willing to put their logo on your vehicle. Ten
of the available 15 marks will be awarded for how successful you were at turning this
project into a profitable business, the bigger the profit, the better your mark. For judging
purposes, teams must submit all the financial records associated with the project detailing
the revenues raised and costs incurred. Two of the remaining 5 marks will be awarded
based upon your car’s artistic merit with the judging for this section being done by an
external party. The remaining 3 marks will be awarded based on how your car performs
in the New Venture Grand. Points will be awarded based on the number of rounds
New Venture Challenge #14
What to Name Your Business?
What name have you decided to call your business? Check with the Corporations Branch
or similar agency of your Provincial or state government. What are their requirements for
you to legally register the name that you have selected for your proprietorship or
corporation? How much does it cost? What reporting requirements are there for you to
maintain the name after it has been legally registered?
New Venture Challenge #15
Using your group project as the new venture in question and doing the assignment
individually indicate who will do what during the first two years of your venture. What
contributions each has made or will make in the creation of the business plan, the
commitment and risk involved for each, and what critical skills, experience, contacts, and
so forth, each brings to the venture. Be specific as possible and be sure to include
yourself. You may display this information in the form of a chart.
Describe the approximate salary and shares of stock (as a percent) or options each
member should receive upon closing the financing for your new venture.
Discuss the benefits you believe the company should provide each team member during
the first two years of operation. If these benefits differ by team member, explain why.
Benefits include such things as vacation time, health/life insurance and pension
List any other key contributors, such as members of the board of directors, and describe
how they will be rewarded.
The second portion of this assignment requires you meet with your fellow group
members to develop a consensus on the responsibilities/contributions and rewards for
each team member. You should repeat this process for the roles and rewards of other key
What patterns emerged in the approaches taken by each team member? What are the
differences and similarities?
How difficult or easy was it to reach agreement among the team members? Why? Did
any key issues bog your group down? Why?
How did you arrive at the decision concerning salaries and stock entitlement?
New Venture Challenge #16
Evaluating a Business Opportunity
At the back of your text is the business plans for the Alpha-B Pollination Co and
LifeLink Inc. For this assignment, assume you are an investment analyst for a venture
capital company and have been assigned to evaluate one of these plans for a possible
equity investment. As the first step in this process, select one of these plans, read it and
evaluate the opportunity described. Specifically, you want to examine the opportunity
using the following criteria:
1. The industry and market involved
2. Economics of the proposed business
3. Harvest issues
4. Competitive Advantage issues
5. Management team
6. Fatal-flaws identified
7. Strategic differentiation
To be effective, your paper must be a critical evaluation of the plan and any points made
in either support or rejection of the opportunity must be supported by external research,
and not simply your opinion, all sources of which must be cited. In addition, your paper
must outline the questions the founders of this company need to deal with to address any
deficiencies you identify in the plan.
Your paper can be a maximum of seven typed, double-spaced pages.
New Venture Challenge #17
How Entrepreneurs Turn Less Into More
Locate an entrepreneur whose company is less than 10 years old and has sales in excess of $1
million and who started their company on between $25,000 and $50,000 of seed capital.
Interview this person with a focus on the strategies and tactics they used to minimize and
control (not necessarily own) the necessary resources. Your report must include the answers
to the following questions.
1. What methods, sources, and techniques did they devise to acquire resources?
2. Why were they able to do so much with so little?
3. What assumptions, attitudes and mindsets enabled them to think and function in
4. What impact did these minimizing bootstrapping approaches have on their ability
to conserve cash and equity and to create future options or choices to pursue
5. How did they devise unique incentive structures in the deals and arrangements
with their people, suppliers and other resource providers?
6. In lieu of money, what other forms of currency did they use, such as bartering for
space or giving an extra day off or an extra weeks vacation?
7. Can they think of examples of how they acquired (gained control of) a resource
that they could afford to pay for with real money and did not?
8. Many experienced entrepreneurs say that for first-time entrepreneurs it can be
worse to start with too much money than too little. How do you see this and
9. Some of the strongest new companies start during an economic recession, among
tight capital and credit markets. It is invaluable to develop a lean-and-mean,
make-do, less-is-more philosophy and sense of frugality and budgetary
discipline. Can you think of any examples of this? Do you agree or disagree?
New Venture Challenge #18
Pretend you have the greatest business idea ever developed but lack the finances to
launch it. Now, pretend you’re visiting Las Vegas to attend the entrepreneurs’
convention and when you get on the elevator to return to your room you find yourself
alone with a well-known venture capitalist. In this exercise, one member of your team
will have the time it takes to get from the main floor of a typical office tower to the 31st
floor to pitch your idea, a time of approximately 2 minutes. Each team will have two
opportunities to present, once going up and another coming down, and will present to two
different venture capitalists. The venture capitalists are real and will come from local
firms. To make the exercise more realistic, every member of your team must be prepared
to present, as the elevator riders will be selected at random. The venture capitalists will
assign your grade based on both the feasibility of your idea, 10 marks, and how well it’s
presented, 5 marks.
New Venture Challenge #19
World Wide Web Search
Conduct a World Wide Web search for the phrase Business Plan using any search engine.
Link to a minimum of five entries from your search and prepare a paper discussing the
• How could you summarize the content and purpose of each site in a sentence or
• What, if anything, do you think each of these sites has to offer?
• How would you rate each site in terms of its usefulness to individuals looking at
going into business for themselves and having to develop a business plan?
• Which site do you think is the best and why?
• Based on this assessment, briefly describe what you think would be the ideal site
for this purpose.