BAD TO   WORSE Why Some Start-ups Go Down  the Tubes … and Others Don't   GREG FISHER   #1 BESTSELLER
 
Top   10 Mistakes of Entrepreneurs
“ I don’t care about the product, I just want to make loads of money”  1 NO REAL PASSION FOR THE BUSINESS
Linking Market Demand with passion, skills and resources to create an entrepreneurial opportunity  Market Demand Passion S...
The Key Elements in Creating an Entrepreneurial Opportunity  Opportunity Market Demand Passion Skills Resources Entrepreneur
Key questions to sourcing the right opportunity <ul><li>What  do people need?  Who   will buy it?  Why  do they want it?  ...
“ We want one so everyone will want one ”   2 NO UNDERSTANDING OF THE MARKET
Researching an Idea <ul><li>Consider different revenue models:  </li></ul><ul><li>Evaluate the costs and the costs drivers...
“ We are going to be just like Amazon.com, only better”  3 NO DIFFERENTIATION
Assessing an Opportunity [VENTURE] Concept Attractiveness Competitive Advantage [ENTREPRENERIAL TEAM] Low Low High High Ma...
Response [VENTURE] Concept Attractiveness Competitive Advantage [ENTREPRENERIAL TEAM] Low Low High High Avoid / Wait & Rea...
Strategy Formulation Questions What are the threats for the business?  What are the opportunities for the business?  What ...
“ We are so unique that we have no competition in the market”  4 NO COMPETITORS
<ul><li>If no competitors … WHY? </li></ul>
<ul><li>Be REAL about your competition </li></ul>
Competitor Analysis Image Advertising Credit Policies Sales Method Appearance Location Company Reputation Expertise Stabil...
“ We will work out our revenue and cost model as we go along”  5 NO BUSINESS MODEL
Business Model   Critical Success Factors Investment  Costs Source of Revenue Income Stream 3 Income Stream 2 Income Strea...
Key questions for building a business model   <ul><li>What are the  sources of revenue  for the business?   </li></ul><ul>...
Business Model Diagram New Business Inputs Required (Cost Drivers)  People Product Premises Marketing  etc.  Buyers What t...
“ We are four CAs so all is okay”  6 NO BALANCE IN THE TEAM
0 Rands Revenue Investment Extremist Revolutionary Growth Entrepreneur Lifestyle  Entrepreneur Survivalist Breadline Time ...
The Entrepreneurial Team Creativity and Innovation General management skills, business know-how and networks Low High High...
Quality of the team <ul><li>Entrepreneurial Attributes </li></ul><ul><li>Commitment and Determination  </li></ul><ul><li>O...
“ Who cares about cash when you’ve got the profit margins we’ve got ”  7 NO CASHFLOW FORECAST
Financial Plan <ul><li>Sales forecast  </li></ul><ul><li>Startup expenses </li></ul><ul><li>12 Month profit and loss state...
Financial Plan <ul><li>Sales forecast  </li></ul><ul><li>Startup expenses </li></ul><ul><li>12 Month profit and loss state...
Cash Flow Forecast (NB) =  _ _ + + M5 Budget =  _ _ + + M6 Budget … Units Sold =  =  =  =  =  Closing Cash Balance _ _ _ _...
Sales Forecast * State the assumptions on which these numbers are based c Cat 2 Units Sold* d Sales Price Per Unit* cxd=Y ...
Start Up Expenses XXX Other loans XXX Working capital  XXX Reserve for contingencies XXXX TOTAL  XXX Other expenses  XXX A...
P & L Forecast _ _ _ _ _ _ _ Expenses = = = = = = = Profit before tax = = = = = = = Gross Profit _ _ _ _ _ _ _ Cost of Sal...
P & L Forecast EXAMPLES Salaries & wages  Other operating expenses  Interest payments  Depreciation  EXAMPLES Direct cost ...
Cash Flow Forecast (NB) =  _ _ + + M5 Budget =  _ _ + + M6 Budget … Units Sold =  =  =  =  =  Closing Cash Balance _ _ _ _...
Cash Flow Forecast EXAMPLES Cash sales of goods or services Collection of accounts receivable Interest earned Sales of fix...
Balance Sheets <ul><li>Owners Equity  </li></ul><ul><ul><li>Capital  </li></ul></ul><ul><ul><li>Retain earnings </li></ul>...
Balance Sheets Goods or resources owned by the business to be transformed utilized / realized in 1 year  Goods or resource...
“ We need R10m in venture capital and then we will get going”  8 NO MOMENTUM UNTIL CAPITAL IS RAISED
New venture financing and the equity gap Stage Source Demand Supply Pre-seed Seed / Start-Up Early Later Founders  Family ...
Sources of finance for a business  <ul><li>Loan must be paid back which can create strain on cash flow for the new busines...
The Art of Bootstrapping <ul><li>Focus on cash flow, not profitability </li></ul><ul><li>Forecast from the bottom up   </l...
Funding Realities <ul><li>More likely sources of funding for startup:  </li></ul><ul><ul><li>Bootstrapping  </li></ul></ul...
“ We have hired offices in Sandton, acquired Hummer’s for the directors and will pay the most to get the best”  9 NO FRUGA...
BUDGETING MONITORING REPORTING <ul><li>Budget for  CASH FLOW </li></ul><ul><li>Build your  OWN  models </li></ul><ul><li>I...
“ Our marketing plan will be a combination of print, TV and internet advertising”  10 MISGUIDED MARKETING PLAN
Simple Marketing Plan  List price  Discounts  Allowances  Payment period  Credit terms What does it cost us to produce the...
Simple Marketing Plan Advertising  Sales force Public relations  Direct marketing How will we make customers aware of the ...
New Venture Creation Model  OPPORTUNITY Demand Passion Skills Resources STRUCUTRE Business Model Legal Form Tools / Facili...
Focus points in a business plan <ul><li>The People .  The men and woman starting and running the venture, as well as outsi...
<ul><li>Go out and do it… </li></ul>Business In A Box www.biz-box.net Email – Slides   [email_address] Blog  –  Slides [em...
Upcoming SlideShare
Loading in …5
×

Bad To Worse

10,954 views

Published on

A The top 10 mistakes that entrepreneurs tend to make when building a business

Published in: Business
1 Comment
31 Likes
Statistics
Notes
No Downloads
Views
Total views
10,954
On SlideShare
0
From Embeds
0
Number of Embeds
108
Actions
Shares
0
Downloads
947
Comments
1
Likes
31
Embeds 0
No embeds

No notes for slide
  • Bad To Worse

    1. BAD TO WORSE Why Some Start-ups Go Down the Tubes … and Others Don't GREG FISHER #1 BESTSELLER
    2.  
    3. Top 10 Mistakes of Entrepreneurs
    4. “ I don’t care about the product, I just want to make loads of money” 1 NO REAL PASSION FOR THE BUSINESS
    5. Linking Market Demand with passion, skills and resources to create an entrepreneurial opportunity Market Demand Passion Skills Resources
    6. The Key Elements in Creating an Entrepreneurial Opportunity Opportunity Market Demand Passion Skills Resources Entrepreneur
    7. Key questions to sourcing the right opportunity <ul><li>What do people need? Who will buy it? Why do they want it? How can I reach them? </li></ul><ul><li>What am I (are we) deeply passionate about? </li></ul><ul><li>How can I leverage my (our) unique skills ? </li></ul><ul><li>Where can I (we) get the resources to make it happen? </li></ul>
    8. “ We want one so everyone will want one ” 2 NO UNDERSTANDING OF THE MARKET
    9. Researching an Idea <ul><li>Consider different revenue models: </li></ul><ul><li>Evaluate the costs and the costs drivers. Distinguish between fixed, variable and semi variable costs. Consider the source of costs: </li></ul><ul><li>Do cash flow projections </li></ul><ul><li>Speak to industry experts </li></ul><ul><li>Revenue </li></ul><ul><li>Cost drivers </li></ul><ul><li>Investment </li></ul><ul><li>Critical success factors </li></ul>The Company Model <ul><li>Visit suppliers </li></ul><ul><li>Discuss funding options with other entrepreneurs </li></ul><ul><li>Discuss funding options with the banks </li></ul><ul><li>Obtain and read the national venture capital association handbook </li></ul><ul><li>Search the web </li></ul><ul><li>Suppliers </li></ul><ul><li>Funders </li></ul><ul><li>Partners </li></ul>Collaborators <ul><li>Become a customer of the competition. </li></ul><ul><li>Visit competitor websites, stores and read their promotional material. </li></ul><ul><li>Interview competitors customers </li></ul><ul><li>Number of competitors </li></ul><ul><li>Product or service offerings of competitors </li></ul><ul><li>Where the competitors are situated. </li></ul><ul><li>The strengths and weaknesses of competitors </li></ul>Competitors <ul><li>Trade journals, market reports and industry associations. </li></ul><ul><li>Interviewing experts in the industry. </li></ul><ul><li>Interviewing, observing or surveying potential customers. </li></ul><ul><li>Market size. </li></ul><ul><li>Growth </li></ul><ul><li>The needs pf customers </li></ul><ul><li>The buying decision of customers </li></ul>Customers How can one gather the information? What needs to be researched?
    10. “ We are going to be just like Amazon.com, only better” 3 NO DIFFERENTIATION
    11. Assessing an Opportunity [VENTURE] Concept Attractiveness Competitive Advantage [ENTREPRENERIAL TEAM] Low Low High High Market Size Market Growth Differentiation Customer Need Skills Resources Passion / Energy Network 1 2 3 4 5 6 7 8 9 10 10 9 8 7 6 5 4 3 2 1
    12. Response [VENTURE] Concept Attractiveness Competitive Advantage [ENTREPRENERIAL TEAM] Low Low High High Avoid / Wait & Reassess in Future Build / hire / develop the required capabilities Identify / exploit a specific under served niche Revise product or business model Invest and pursue the opportunity 1 2 3 4 5 6 7 8 9 10 10 9 8 7 6 5 4 3 2 1
    13. Strategy Formulation Questions What are the threats for the business? What are the opportunities for the business? What are our weaknesses? What are our strengths? Current status Where are we at? Who is responsible? What needs to happen in the next 30 days? What are our 1 year goals? What are our 3 year goals? Goals, Action & Priorities What must we do and how will we make it happen? How do we behave? What is not negotiable? What turns us on? What assumptions guide us? Organis-ational Character What is our organizational character? How will we evolve as a business? What makes us different? What is our value proposition? What is our org sustainability model? Business Recipe How do we create value ? Why do we matter? What value do we deliver? Whom do we serve? What are our personal objectives Purpose Why do we exist?
    14. “ We are so unique that we have no competition in the market” 4 NO COMPETITORS
    15. <ul><li>If no competitors … WHY? </li></ul>
    16. <ul><li>Be REAL about your competition </li></ul>
    17. Competitor Analysis Image Advertising Credit Policies Sales Method Appearance Location Company Reputation Expertise Stability Reliability Service Selection Quality Price Products Importance to Customer Competitor C Competitor B Competitor A Weakness Strength My Business FACTOR
    18. “ We will work out our revenue and cost model as we go along” 5 NO BUSINESS MODEL
    19. Business Model Critical Success Factors Investment Costs Source of Revenue Income Stream 3 Income Stream 2 Income Stream 1
    20. Key questions for building a business model <ul><li>What are the sources of revenue for the business? </li></ul><ul><ul><li>Single or multiple revenue streams? </li></ul></ul><ul><ul><li>Payment terms – upfront, over a period of time or post delivery? </li></ul></ul><ul><li>What are the cost drivers for the new business? </li></ul><ul><ul><li>Major costs incurred to generate revenue? </li></ul></ul><ul><ul><li>Nature of costs – fixed, variable or semi-variable? </li></ul></ul><ul><ul><li>Payment terms – upfront, over a period of time or post delivery? </li></ul></ul><ul><li>What size capital investment is required to launch and sustain the business? </li></ul><ul><ul><li>To sustain a positive cash balance? </li></ul></ul><ul><ul><li>To make profit? </li></ul></ul><ul><li>What are the critical success factors for this business? </li></ul><ul><ul><li>Identify the issues that will determine the success or failure of the business? </li></ul></ul>
    21. Business Model Diagram New Business Inputs Required (Cost Drivers) People Product Premises Marketing etc. Buyers What they buying Range of products or services Volumes; Frequency How they pay Timing of payment Up Front Investment Equipment Premises Branding Training Working Capital Etc Input Output Input $ $ $ Critical Success Factors What are the factors that are required to ensure that this model works? Revenue Costs Investment
    22. “ We are four CAs so all is okay” 6 NO BALANCE IN THE TEAM
    23. 0 Rands Revenue Investment Extremist Revolutionary Growth Entrepreneur Lifestyle Entrepreneur Survivalist Breadline Time Types of Entrepreneurs
    24. The Entrepreneurial Team Creativity and Innovation General management skills, business know-how and networks Low High High Source: Timmons & Spinelli. New Venture Creation.2004. McGraw Hill. Manager, administrator Promoter Entrepreneurial Team Inventor
    25. Quality of the team <ul><li>Entrepreneurial Attributes </li></ul><ul><li>Commitment and Determination </li></ul><ul><li>Opportunity Obsession </li></ul><ul><li>Tolerance for Risk, Ambiguity and Uncertainty </li></ul><ul><li>Creativity, Self-Reliance and Ability to Adapt </li></ul><ul><li>Motivation to Excel </li></ul><ul><li>Leadership </li></ul><ul><li>Management Attributes </li></ul><ul><li>Marketing </li></ul><ul><li>Operations / Production </li></ul><ul><li>Finance </li></ul><ul><li>Administration </li></ul><ul><li>Interpersonal / Team </li></ul><ul><li>Law </li></ul>Source: Timmons & Spinelli. New Venture Creation.2004. McGraw Hill.
    26. “ Who cares about cash when you’ve got the profit margins we’ve got ” 7 NO CASHFLOW FORECAST
    27. Financial Plan <ul><li>Sales forecast </li></ul><ul><li>Startup expenses </li></ul><ul><li>12 Month profit and loss statement (monthly) </li></ul><ul><li>12 Month cash flow statement (monthly) </li></ul><ul><li>3 – 5 Year profit & loss (high level – quarterly) </li></ul><ul><li>3 – 5 Year cash flow (high level – quarterly) </li></ul><ul><li>Opening balance sheet </li></ul><ul><li>Projected balance sheet </li></ul><ul><li>Breakeven analysis </li></ul>
    28. Financial Plan <ul><li>Sales forecast </li></ul><ul><li>Startup expenses </li></ul><ul><li>12 Month profit and loss statement (monthly) </li></ul><ul><li>12 Month cash flow statement (monthly) </li></ul><ul><li>3 – 5 Year profit & loss (high level – quarterly) </li></ul><ul><li>3 – 5 Year cash flow (high level – quarterly) </li></ul><ul><li>Opening balance sheet </li></ul><ul><li>Projected balance sheet </li></ul><ul><li>Breakeven analysis </li></ul>
    29. Cash Flow Forecast (NB) = _ _ + + M5 Budget = _ _ + + M6 Budget … Units Sold = = = = = Closing Cash Balance _ _ _ _ _ Variable Cash Outflows _ _ _ _ _ Fixed Cash Outflows + + + + + Cash Inflows + + + + + Opening Cash Balance Total Budget M12 Budget M4 Budget M3 Budget M2 Budget M1 Budget
    30. Sales Forecast * State the assumptions on which these numbers are based c Cat 2 Units Sold* d Sales Price Per Unit* cxd=Y Category 2 TOTAL M5 Budget M6 Budget … Z + Y Monthly Total axb=Z Category 1 TOTAL b Sales Price Per Unit* a Cat 1 Units Sold* Total Budget M12 Budget M4 Budget M3 Budget M2 Budget M1 Budget
    31. Start Up Expenses XXX Other loans XXX Working capital XXX Reserve for contingencies XXXX TOTAL XXX Other expenses XXX Advertising and promotions XXXX TOTAL XXX Bank loans XXX Owners investment Sources of Capital XXX Opening inventory XXX Location and admin XXX Capital equipment XXX Real estate Start Up Expenses
    32. P & L Forecast _ _ _ _ _ _ _ Expenses = = = = = = = Profit before tax = = = = = = = Gross Profit _ _ _ _ _ _ _ Cost of Sales = _ + M5 Budget = _ + M6 Budget … = = = = = Profit after tax _ _ _ _ _ Tax Expense + + + + + Revenue Total Budget M12 Budget M4 Budget M3 Budget M2 Budget M1 Budget
    33. P & L Forecast EXAMPLES Salaries & wages Other operating expenses Interest payments Depreciation EXAMPLES Direct cost of goods sold _ _ _ _ _ _ _ Expenses = = = = = = = Profit before tax = = = = = = = Gross Profit _ _ _ _ _ _ _ Cost of Sales = _ + M5 Budget = _ + M6 Budget … = = = = = Profit after tax _ _ _ _ _ Tax Expense + + + + + Revenue Total Budget M12 Budget M4 Budget M3 Budget M2 Budget M1 Budget
    34. Cash Flow Forecast (NB) = _ _ + + M5 Budget = _ _ + + M6 Budget … Units Sold = = = = = Closing Cash Balance _ _ _ _ _ Variable Cash Outflows _ _ _ _ _ Fixed Cash Outflows + + + + + Cash Inflows + + + + + Opening Cash Balance Total Budget M12 Budget M4 Budget M3 Budget M2 Budget M1 Budget
    35. Cash Flow Forecast EXAMPLES Cash sales of goods or services Collection of accounts receivable Interest earned Sales of fixed assets or investments Capital from investor Loan received EXAMPLES Payment of cash expenses Payment to creditors Payment of salaries and wages Purchase of inventory for cash Purchase of fixed assets or investments Payback loans Payout dividends = _ _ + + M5 Budget = _ _ + + M6 Budget … Units Sold = = = = = Closing Cash Balance _ _ _ _ _ Variable Cash Outflows _ _ _ _ _ Fixed Cash Outflows + + + + + Cash Inflows + + + + + Opening Cash Balance Total Budget M12 Budget M4 Budget M3 Budget M2 Budget M1 Budget
    36. Balance Sheets <ul><li>Owners Equity </li></ul><ul><ul><li>Capital </li></ul></ul><ul><ul><li>Retain earnings </li></ul></ul>End Y2 TOTAL LIAB & EQUITY <ul><li>Long Term Liab. </li></ul><ul><ul><li>Loans </li></ul></ul><ul><li>Current Liabilities </li></ul><ul><ul><li>Accounts payable </li></ul></ul>Liabilities & Equity TOTAL ASSETS <ul><li>Fixed Assets </li></ul><ul><ul><li>Property </li></ul></ul><ul><ul><li>Equipment </li></ul></ul><ul><ul><li>Furniture </li></ul></ul><ul><ul><li>Vehicles </li></ul></ul><ul><li>Current Assets </li></ul><ul><ul><li>Cash </li></ul></ul><ul><ul><li>Inventory </li></ul></ul><ul><ul><li>Acc receivable </li></ul></ul>Assets End Y3 End Y1 Opening
    37. Balance Sheets Goods or resources owned by the business to be transformed utilized / realized in 1 year Goods or resources owned by the business that have a life span exceeding 1 year Amounts owed by the business to be paid back within 12 months Amounts owed by the business to be paid back after 12 months Portion of the business attributable to the owners Total amount OWNED by the business Total amount OWED by the business to lenders or owners <ul><li>Owners Equity </li></ul><ul><ul><li>Capital </li></ul></ul><ul><ul><li>Retain earnings </li></ul></ul>End Y2 TOTAL LIAB & EQUITY <ul><li>Long Term Liab. </li></ul><ul><ul><li>Loans </li></ul></ul><ul><li>Current Liabilities </li></ul><ul><ul><li>Accounts payable </li></ul></ul>Liabilities & Equity TOTAL ASSETS <ul><li>Fixed Assets </li></ul><ul><ul><li>Property </li></ul></ul><ul><ul><li>Equipment </li></ul></ul><ul><ul><li>Furniture </li></ul></ul><ul><ul><li>Vehicles </li></ul></ul><ul><li>Current Assets </li></ul><ul><ul><li>Cash </li></ul></ul><ul><ul><li>Inventory </li></ul></ul><ul><ul><li>Acc receivable </li></ul></ul>Assets End Y3 End Y1 Opening
    38. “ We need R10m in venture capital and then we will get going” 8 NO MOMENTUM UNTIL CAPITAL IS RAISED
    39. New venture financing and the equity gap Stage Source Demand Supply Pre-seed Seed / Start-Up Early Later Founders Family Friends Angels / Angel Alliances Venture Funds Private Equity 100k 500k R5-10 mil R20 mil Government Funds Equity Gap Adapted from a model proposed designed by Jeffery E Sohl – Center for Venture Research, University of New Hampshire
    40. Sources of finance for a business <ul><li>Loan must be paid back which can create strain on cash flow for the new business. </li></ul><ul><li>Bank is unlikely to assist in opening doors, giving advice or introducing founders to useful contacts. </li></ul><ul><li>Founder maintains full ownership of the business. </li></ul><ul><li>Founder can manage and run the business as he/she sees fit </li></ul><ul><li>Lose a portion of the ownership of the business. </li></ul><ul><li>Equity owners can be controlling which can cause friction with the founders </li></ul><ul><li>Difficult to value an entrepreneurial business when allocating shareholdings </li></ul><ul><li>Often comes with useful management input and advice. </li></ul><ul><li>Equity investors can give access to a network of useful contacts </li></ul><ul><li>No immediate strain on cash flow in terms of repayments of the capital </li></ul>Disadvantages Advantages Disadvantages Advantages <ul><li>Loans from family and friends </li></ul><ul><li>Loans from government agencies or NGO’s supporting entrepreneurs </li></ul><ul><li>Bank loans </li></ul><ul><li>Personal savings </li></ul><ul><li>Family and friends </li></ul><ul><li>Informal individual investors </li></ul><ul><li>Venture capitalists </li></ul><ul><li>Government agencies </li></ul><ul><li>Partnerships / strategic alliances with corporations </li></ul><ul><li>Private equity investors (for established businesses) </li></ul><ul><li>Listing on stock exchange </li></ul><ul><ul><li>Alt-X </li></ul></ul><ul><ul><li>Main Board </li></ul></ul>Debt Funding Sources Equity Funding Sources
    41. The Art of Bootstrapping <ul><li>Focus on cash flow, not profitability </li></ul><ul><li>Forecast from the bottom up </li></ul><ul><li>Ship, then test </li></ul><ul><li>Forget the “proven” team </li></ul><ul><li>Start as a service business </li></ul><ul><li>Focus on function, not form </li></ul><ul><li>Pick your battles </li></ul><ul><li>Understaff </li></ul><ul><li>Go direct </li></ul><ul><li>Position against the leader </li></ul><ul><li>Take the “red pill.” </li></ul>Source: Kawasaki, G. The Art of the Start. 2004. Portfolio.
    42. Funding Realities <ul><li>More likely sources of funding for startup: </li></ul><ul><ul><li>Bootstrapping </li></ul></ul><ul><ul><li>Personal funds </li></ul></ul><ul><ul><li>Close connections </li></ul></ul><ul><li>Some chance of getting funds for a startup: </li></ul><ul><ul><li>Corporate investor </li></ul></ul><ul><ul><li>Government enterprise creation funds </li></ul></ul><ul><li>Low chance of getting funds </li></ul><ul><ul><li>Bank loan </li></ul></ul><ul><ul><li>Venture capital </li></ul></ul>
    43. “ We have hired offices in Sandton, acquired Hummer’s for the directors and will pay the most to get the best” 9 NO FRUGALITY
    44. BUDGETING MONITORING REPORTING <ul><li>Budget for CASH FLOW </li></ul><ul><li>Build your OWN models </li></ul><ul><li>Its not just about HOW MUCH but also about WHEN . </li></ul><ul><li>Know the NATURE of different cash flows </li></ul><ul><li>SHORT TERM = DETAIL ; long term = big picture </li></ul><ul><li>Your BANK BALANCE is your truth </li></ul><ul><li>Know your BASELINE (breakeven) </li></ul><ul><li>Keep UP TO DATE </li></ul><ul><li>Balance off being overly PEDANTIC versus dangerously LACKADAISICAL </li></ul>10.Report results with PURPOSE Entrepreneurial Financial Management
    45. “ Our marketing plan will be a combination of print, TV and internet advertising” 10 MISGUIDED MARKETING PLAN
    46. Simple Marketing Plan List price Discounts Allowances Payment period Credit terms What does it cost us to produce the good or service? What are the competition charging for similar goods or services? Why are we charging more or less than the competition? How would revenue and profits be affected if we increased or decreased the price? You need to find a balance between attracting customers and making profits. Price Product variety Quality Design Features Packaging Services Warranties Returns Does it meet a specific need? What is that need? Must we customize our product or service? Do we deliver the appropriate quality for the customer? Good marketing begins with a good product or service. Product Considerations Key questions to be answered by the entrepreneur Description of the component Marketing mix component
    47. Simple Marketing Plan Advertising Sales force Public relations Direct marketing How will we make customers aware of the benefits of buying our product or service? Promotion is about communicating the merits of the product or service to target customers and persuading them to buy. Promotion Channels Coverage Transport Are we going to sell locally, regionally, nationally or globally? How will we reach the customer? Do we need more than one channel for reaching the customer? Should we create our own distribution channel or partner with an established distributor? This is about getting the product or service to the customer. Customers will only buy products or services that they have access to, thus it is critical to have distribution channels that reach the customer. Place Considerations Key questions to be answered by the entrepreneur Description of the component Marketing mix component
    48. New Venture Creation Model OPPORTUNITY Demand Passion Skills Resources STRUCUTRE Business Model Legal Form Tools / Facilities Team FUNDING Traditional financing Bootstrapping Cash flow SALES Product Price Promotion Place Word of mouth Growth Research BUSINESS PLAN
    49. Focus points in a business plan <ul><li>The People . The men and woman starting and running the venture, as well as outside parties providing key services or important resources for it such as suppliers, lawyers and advisors. </li></ul><ul><li>The Opportunity . The need in the market for the proposed product or service. The size and growth of the potential market and the attractiveness of the industry in which the business will operate. </li></ul><ul><li>The Business Model . A summation of the core business decisions and trade offs employed by a company to earn a profit. The decisions and trade offs include revenue sources, key expenses, investment size and critical success factors </li></ul><ul><li>The Strategy . The methods and means of creating sustainable competitive advantage for the new business. </li></ul><ul><li>The Context . The big picture – the regulatory environment, interest rates, demographic trends, inflation and the like – factors that inevitably change but cannot be controlled by the entrepreneur. </li></ul><ul><li>Risk and Reward . An assessment of everything that can go wrong and right, and a discussion of how the entrepreneurial team can respond. </li></ul>
    50. <ul><li>Go out and do it… </li></ul>Business In A Box www.biz-box.net Email – Slides [email_address] Blog – Slides [email_address]

    ×