This document discusses various topics related to starting a new business venture and managing its growth. It covers recruiting key employees, identifying lenders and investors, determining funding requirements and sources. It also discusses selecting a target market and positioning strategy, the 4Ps of marketing, and planning and managing business growth. The nature of growth, reasons for pursuing it, and managing growth at different stages are also addressed. Key challenges of growing a business like cash flow, quality control and strategic planning are also mentioned.

1. Chapter 7
Start-up New Business Venture,
Marketing Issues & Growth

2. Contents……..
• Recruiting and selecting key employees,
• lenders and investors,
• funding requirements,
• sources of personal financing, venture capital,
commercial banks,
• sources of debt financing; selecting a market and
establishing a position, key market issues for new
ventures, the 4 Ps of marketing for new ventures;
Nature of business growth, planning for growth,
reasons for growth and managing growth, knowing
and managing the stages of growth, managing
capacity, day-to-day challenges of growing a firm.

3. Recruiting and selecting key
employees,
• Improve Your Candidate Pool When Recruiting
Employees
• Hire the Sure Thing When Recruiting Employees
• Look First at In-House Candidates
• Involve Your Employees in the Hiring Process
• Pay Better Than Your Competition
• Social Media may be the main source for hiring
employees Facebook, linkedin, Twitter……

4. Lenders and Investors
• Help to identify & recruit key management
personnel
• Provide insight into the industry
• Help to make good business Model
• Help to arrange business partnerships
• Help to search customers

5. Funding Requirements
The fundamental financial building blocks for an
entrepreneur are recognizing
• What assets are required to open the Business
• What expenses will be required
• Which expenses cannot be changed and must
be paid ( Fixed Cost )
• Knowing how these costs will be financed.

6. Why start-ups Need funds
• To meet regular operational expenses
(WC)
• Capital Investments
• Lengthy Product Development Cycles

7. Source of Personal Financing
• Personal Fund ( Sweat Equity )
• Friends and Family
• Bootstrapping ( minimizing start up expenses )
i. Buy used equipment instead of new
ii. Lease equipment instead of buying
iii. Share office space with other business
iv. Hire interns
v. Obtain payments in advance from customers

9. Venture Capital
Venture Capital is money provided by
professionals who invest alongside with owners
and management, in young stage or rapidly
growing businesses , with the potential to
generate a high returns on investment .
(Angel Capital )

10. Venture Capital Funding Stages
A. Early Stage
1. Seed Funding : Investment is made very early in a venture’s life
to fund the development of a prototype and feasibility
analysis.
B. Expansion stage
2. Start- up Funding: Funding Generally supports product
development and initial marketing . It is the investment made to
firms exhibiting few if any commercial sales but in which product
development and market research is reasonably complete.
3. First Stage Funding: Capital is provided to initiate commercial
manufacturing and sales . Funding that occurs when the firm has
started commercial production and sales but requires financing to
ramp up its production capacity.
4. Second-stage Funding : Funding that occurs , when a firm is
successfully selling a product but needs to expand both its
capacity and its markets.

11. Venture Capital Funding Stages ……
C. Late Stage
5. Mezzanine financing: The investment is made
in a firm to provide for further expansion or to
bridge its financing needs before launching IPO
or before a Buyout
6. Buyout: It is to provide funding to help one
company to acquire another.

12. Commercial Bank
• Commercial banks provides 50-70 percent of
the value of all loans to businesses.
• Banks are lenders of the first resort
• Banks normally make loans to established
businesses rather than to high risk start up

13. Source Of Debt Financing
1. Bank Overdraft
2. Trade credit ( Goods are received from the
suppliers before payment is made .
3. Term Loan (it is a loan that is repaid through
regular periodic payments, usually over a
period of one to ten years )
a. Single purpose loan
b. Line of Credits

14. Source Of Debt Financing ……
4. Leasing
a. Finance Lease
b. Operating lease
5. Peer to Peer( Individual loan) amortized over a period (Dukuti )
6.Crowd Funding :
Is the process of raising funding online. Crowdfunding is the use of
small amounts of capital from a large number of individuals to
finance a new business venture. Crowdfunding makes use of the
easy accessibility of vast networks of people through social
media and crowdfunding websites to bring investors and
entrepreneurs together, and has the potential to increase
entrepreneurship by expanding the pool of investors from whom
funds can be raised beyond the traditional circle of owners,
relatives and venture capitalists

15. Key Market Issue for New ventures
• How firms define and select their target
markets
• How firm establishes a brand
• How firm made expenses on Marketing
• What firm hire sales team (Soldiers or
Gladiator )

16. Selecting a Market and Establishing
Positioning Strategy
• STP
• Segmentation : What groups of customers in
my market are similar enough that same
product or service will appeal to all of them?
• Target :Which specific group of customers
have I decided to target?
• Positioning: What position will my firm occupy
in the minds of my customers , that will
differentiate it from all of my competitors?
• Branding

17. 4Ps of Marketing for new Venture
Marketing Mix
• Product
• Place
• Price
• Promotion

18. Promotional Mix
• Advertisement
• Direct Marketing
• Personal Selling
• Publicity/ Public Relation
• Sales Promotion
• Interactive Marketing

19. Nature Of Business Growth
1. Not all Businesses have the Potential to Be
Aggressive Growth Firms
2. A business Can grow Too Fast
3. Business Success Doesn’t always scale

20. Planning For Growth
If there is no plan for business
growth, it said to be dead .

21. Reasons for Growth
1. Capturing Economies of Scale
2. Capturing Economies of Scope
3. Market Leadership
4. Influence, Power, and Survivability
5. Need to accommodate the Growth of key
Customer
6. Ability to Attract and retain Talented
Employees

22. Managing Growth
• Several firms grow rapidly but they are not
able to manage the growing challenge.
• This will make the firm sick rather to the path
of growth .
• Every business wants grow, but managing
growth is utmost important towards the
sustainability.

23. Knowing the stages of growth
There are 5 stages of start up growth stage
1. Introduction (Start-up /birth)
2. Early Growth ( Fast growth)
3. Continuous growth (Slow Growth)
4. Maturity (No growth)
5. Decline ( renewal or death)

24. Managing Capacity
• Entrepreneurial service and Managerial
Service

25. Day-to-Day Challenges of Growing a
firm
• Cash flow Management
• Price stability
• Technology advancement
• Quality Control
• Seavey Customer
• Capital Constraints
• Strategic and succession planning
• Organizational culture
• Trained and skill resource person
• Organizational structure

26. Growth Strategies
Fill in the blanks: You have just two words:
Existing or New
-Penetration :
……Product: ……….Market
-Product Development :
......... Product: ......... Market
-Market development:
.......... Product: ......... Market
-Diversification :
……….Product: ………. Market

27. Growth Strategies
Fill in the blanks: You have just two words:
Existing or New
Existing ……Product: Existing ……….Market
Penetration :
New......... Product: existing......... Market
Product Development :
existing.......... Product: New ......... Market
Market development
NEW……….Product: NEW ………. Market
Diversification

28. Growth strategy

29. BMC
• The Business Model Canvas (BMC) is a
strategic management tool to quickly and
easily define and communicate
a business idea or concept. It is a one page
document which works through the
fundamental elements of a business or
product, structuring an idea in a coherent way.

30. BMC

31. BMC food truck