2 - 1ch. 2: inside the entrepreneurial mind protecting your ideas utility patent – a grant from...
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2 - 1Ch. 2: Inside the Entrepreneurial Mind
Protecting Your Ideas
• Utility Patent – a grant from the Patent and Trademark Office to the inventor of product, giving the exclusive right to make, use, or sell the invention for 20 years from the date of filing the patent application.
2 - 2Ch. 2: Inside the Entrepreneurial Mind
Protecting Your Ideas
• Design Patent – a grant from the Patent and Trademark Office to the inventor of a new, original, or ornamental change to an existing product that enhances it sales, the right to make, use, or sell the product for 14 years from the date of filing the patent application.
2 - 5Ch. 2: Inside the Entrepreneurial Mind
The Six Steps to a Patent
1. Establish the invention’s novelty
2. Document the device
3. Search existing patents
5. Complete the patent application
6. File the patent application
4. Study search results
2 - 6Ch. 2: Inside the Entrepreneurial Mind
Protecting Your Ideas
• Trademark – any distinctive word, symbol, design, name, logo, slogan, or trade dress a company uses to identify the origin of a product or to distinguish it from other goods
on the market. ™ ®• Servicemark – the same as a trademark except
that it identifies the source of a service rather than a product. ℠ ®
2 - 7Ch. 2: Inside the Entrepreneurial Mind
Protecting Your Ideas
• Copyright – an exclusive right that protects the creators of original works of authorship such as literary, dramatic, musical, and artistic works.
• Copyrighted material is denoted by the symbol ©.
Protecting Intellectual Property
• The primary weapon an entrepreneur has to protect patents, trademarks, and copyrights is the legal system.
• Before engaging in a legal battle consider:►Can the opponent afford to pay if you win?►Do you expect to win enough to cover your legal
costs?►Can you afford the loss of time, money, and
privacy involved?
2 - 8Ch. 2: Inside the Entrepreneurial Mind
Conclusion• The creative process is a tenant of the
entrepreneurial experience. • Success, and even survival itself, requires
entrepreneurs to tap their creativity.
• Creativity results in value, and value provides a competitive advantage.
• Entrepreneurs protect their creative ideas with patents, trademarks, servicemarks, and copyrights to sustain a competitive edge.
2 - 10Ch. 2: Inside the Entrepreneurial Mind
MANA 3325 – ThurburnLecture #4 Slides
Intellectual Capital Components
Human Capital – External1. The people you know through networking.2. Who you can call upon to provide resources from outside.Human Capital – Internal3. The people you have inside your company.4. Their Creativity, Processes, Etc.Structural Capital5. Patents, Intellectual Property, Systems, Controls.Customer Capital6. Goodwill 7. Customers perception of Corporate Citizenship
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Vision vs Mission
Vision: 1. Why do we do what we do.2. What will we be when we are a mature company.
Mission:3. What business we are in.4. Who we serve.5. Where we are going.
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Competitive Advantages
Any aspect of how you operate your business that is difficult for your competitors to copy and which customers appreciate and respond to.
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Any unique technology or process that is either protected by a patent, copyright, or trademark or which is difficult or impossible for a competitor to duplicate.
Competitive Advantages
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Barriers to entry that restrict new competitors from gaining a similar advantage.
Competitive Advantages
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Relationships with suppliers or distributors that competitors are unable to duplicate, including spokespersons and celebrity endorsements
Competitive Advantages
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Strategic Management
Is crucial to building a successful business.
Involves developing a game plan to guide a company as it strives to accomplish its mission, goals, and objectives, and to keep it on its desired course.
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Strategic Management and Competitive Advantage
Developing a strategic plan is crucial to creating a sustainable competitive advantage, the aggregation of factors that sets a company apart from its competitors and gives it a unique position in the market that is superior to its competition. Example: Whole Foods
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Building a Competitive AdvantageConsider five aspects of a small company:
1. Products they sell
2. Service they provide
3. Pricing they offer
4. Way they sell
5. Values to which they are committed
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Key: Core Competencies
Unique set of capabilities a company develops in key areas, such as superior quality, customer service, innovation, team-building, flexibility, responsiveness, and others that allow it to vault past competitors.
They are what a company does best. Best to rely on a natural advantage (often linked to a company’s “smallness”).
Example: Pizza Fusion
MANA 3325 – ThurburnLecture #4 Slides
Building a Sustainable Competitive Advantage
Superior value for customers
Sustainable competitive advantage
Capabilities
Core competencies
Skills
Lessons learned
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Strategic Management Process
Step 1 Develop a vision and translate it into a mission statement
Step 2 Assess strengths and weaknessesStep 3 Scan environment for opportunities
and threatsStep 4 Identify key success factors
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Strategic Management Process
Step 5 Analyze competition Step 6 Create goals & objectives Step 7 Formulate strategies Step 8 Translate plans into actions Step 9 Establish accurate controls
(continued)
MANA 3325 – ThurburnLecture #4 Slides
Step 1: Develop a Vision and Create a Mission Statement
Addresses question: “What business are we in?”The mission is a written expression of how the company will reflect an entrepreneur’s values, beliefs, and vision – more than just “making money.”
• Serves as a “strategic compass.” Examples: Chick-fil-A, Google
MANA 3325 – ThurburnLecture #4 Slides
Step 1: Develop a Vision and Create a Mission Statement
Elements of a mission statement:Purpose of the company: What are we in business to accomplish?Business we are in: How are we going to accomplish that purpose?Values of the company: What principles and beliefs form the foundation of the way we do business?
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Step 2: Assess Company Strengths and Weaknesses
StrengthsPositive internal factors a company can draw on to accomplish its mission, goals, and objectives.
WeaknessesNegative internal factors that inhibit a company’s ability to accomplish its mission, goals, and objectives.
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Strengths
1. Loyal Customers2. Special Skills3. Special Knowledge4. Superior Products5. Positive Public Image6. Employee Experience7. Unique Suppliers
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Weaknesses
1. Poor Location2. Lack of Capital3. Lack of Skilled Workers4. Lack of Enough Workers5. Business Model Obsolescence
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Step 3: Scan for Opportunities and Threats
OpportunitiesPositive external factors the company can exploit to accomplish its mission, goals, and objectives.
ThreatsNegative external factors that inhibit the firm's ability to accomplish its mission, goals, and objectives.
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Threats
All of those that are listed in the book…… also
1. Law Suits2. Environmental Disasters3. Loss of Key Individuals4. Failure to Secure Funding in Future
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The Power of External Market Forces
Competitive
Competitive
EconomicEconomic
Political and
Regulatory
Political and
Regulatory
Technological
Technological
Social and Demographi
c
Social and Demographi
c
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Step 4: Identify Key Success Factors
Key success factors (KSFs): factors that determine the relative success of market participants. The keys to unlocking the secrets of competing
successfully in a particular market segment.Example: Five Guys Burgers and Fries
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Key Success Factors
• Industry Experience• Experienced Management• Sufficient Capital• Good Location• Quality Products• Superior Customer Service• Liberal Return Policy for Retailers• Distribution Systems• Internal Processes – tight controls over costs and quality
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Identifying Key Success FactorsList the skills, characteristics, and core competencies that
your business must possess to be successful in its market segment.
Key Success Factor How Your Company Rates
1. Low 1 2 3 4 5 6 7 8 9 10 High
2. Low 1 2 3 4 5 6 7 8 9 10 High
3. Low 1 2 3 4 5 6 7 8 9 10 High
4. Low 1 2 3 4 5 6 7 8 9 10 High
5. Low 1 2 3 4 5 6 7 8 9 10 High
Conclusions:
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Step 5: Analyze Competitors
NFIB study: Small business owners believe they operate in a highly competitive environment and the level of competition is increasing.
Yet, 97 percent of all U.S. businesses do not systematically track the progress of their key competitors.
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Competitor AnalysisDirect competitors
1. Offer the same products and services2. Customers often compare prices, features and deals among
these competitors when they shop
Significant competitors3. Offer some of the same or similar products or services4. Product or service lines overlap but not completely
Indirect competitors5. Offer same or similar products in only a small number of
areas
MANA 3325 – ThurburnLecture #4 Slides
Step 5: Analyze CompetitorsAnalyzing key competitors allows an entrepreneur to:
1. Avoid surprises from existing competitors’ new strategies and tactics.
2. Identify potential new competitors and the threats they pose.
3. Improve reaction time to competitors’ actions.4. Anticipate rivals’ next strategic moves.
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Step 5: Analyze CompetitorsTechniques do not require unethical behavior:1. Monitor industry and trade publications.2. Talk to customers and suppliers.3. Debrief employees, especially sales representatives and purchasing
agents.4. Attend trade shows and conferences and study competitors’ sales
literature.5. Watch for competitor’s employment ads.6. Conduct patent searches for patents competitors have filed. 7. Get EPA reports for the factories of competing manufacturers.8. Monitor direct competitors via social media
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Step 5: Analyze Competitors
Techniques do not require unethical behavior:1. Learn about the kinds of equipment and raw materials
competitors are importing from the Journal of Commerce Port Import Export Reporting Service.
2. Buy competitors’ products and “benchmark” them. 3. Get competitors’ credit reports.4. Check out the reports publicly-held competitors must file
with the SEC. 5. Investigate UCC reports. 6. Check out the resources in your local library.7. Use the Internet to learn more about competitors.8. Visit competing businesses to observe their operations.
(continued)
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Is Setting Goals & ObjectivesReally Important?
“Would you tell me, please, which way I ought to go from here?” said Alice.
“That depends a good deal on where you want to get to,” said the Cheshire cat.
“I don’t much care where.…” said Alice.‘Then it doesn’t matter which way you go,” said the cat.
- Lewis Carroll’s Alice in Wonderland
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Goals vs ObjectivesGoals:• Long range … lets go to Miami• General and/or Abstract… Lofty
Objectives:• Specific targets… what route and where do we stay at night?• Measurable… how many miles per day?• Assignable… who drives which legs of the trip?• Realistic/Challenging… make progress vs time to sleep.• Timely… project the arrival in Miami accurately.• Written… get everyone on board.
GO… SMART-W
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Step 7: Formulate Strategies
Strategy - a road map of the actions an entrepreneur draws up to achieve a company’s mission, goals, and objectives. It is the company’s game plan for gaining a competitive advantage.
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Strategic OptionsRoad Map… Route to take to Miami
Strategic Options:1. Cost Leadership… Low Cost Leader…
• Walmart - Target2. Differentiation… Unique Selection, Better Service, etc…
• Whole Foods3. Focus… Niche Markets… smaller… specific…
• Natural Foods Grocery
Road Map – Walmart vs Whole Foods vs Natural Foods
Road Map – WWN
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Step 8 – Implement Action Plans1. Purpose: Why are we going to Miami?2. Scope: Who is going?3. Contribution: What is the benefit of going?4. Resources: How many bags of potato chips will it take?5. Timing: When do we leave?
PSCRT
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Step 9 - Establish Controls• Financial: Does this make enough money to justify efforts?• Internal Business: Are we implementing the right processes?• Customers: Is our perception improving?• Innovation: Are we innovating?• Citizenship: Are we adding to society?
F-IB-C-I-C
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Business Models
Mo. 1 2 3 4 5 6 7 8 9 10 11 12 Tot
A 2 6 3 7 3 2 5 7 3 4 3 5 50
B 2 2 3 3 4 4 4 5 5 5 6 7 50
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Business Models
Mo. 1 2 3 4 5 6 7 8 9 10 11 12 Tot
A 2 6 3 7 3 2 5 7 3 4 3 5 50
B 2 2 3 3 4 4 4 5 5 5 6 7 50
@ 6 monthsA = 23B = 18
A = 28% more than B
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Business Models
1 2 3 4 5 6 7 8 9 10 11 120
2
4
6
8
10
12
14
Series2Series1
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Business Models
Recurring Revenue
Non-Recurring Revenue
Rev. Frequency Mo. / Qtr. / Yr. > Yr.
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Business Models
Recurring Revenue
Non-Recurring Revenue
Frequency MagazinesGrocery
Fuel
AttorneysMortgageRealtors
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Business ModelsRecurring Revenue
HybridRecurring &
Non-Recurring
Non-Recurring Revenue
Frequency MagazinesGrocery
Fuel
Recurring for a Short Period of
Time or
Periodic Fees +Recurring
AttorneysMortgageRealtors
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Business ModelsRecurring Revenue
HybridRecurring &
Non-Recurring
Non-Recurring Revenue
Frequency MagazinesGrocery
FuelInsurance
Bus. Attorney - Retainer
orStock Broker
Business Coaches
AttorneysMortgageRealtors
Furniture
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Business Models
Clothing
Restaurants
Security Services
Home Theater & Electronics
Appliances
Home Improvements
Roofing Plumbing Electrical Repair
MANA 3325 – ThurburnLecture #4 Slides
Business ModelsRecurring Revenue
Non-Recurring Revenue
Rev. Frequency Mo. / Qtr. / Yr. > Yr.
Customer Profile
Value Proposition
Differentiation
Pricing
Selling Process
Distribution
Support
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Feasibility Analysis
Industry & Market
Product & Service
Financial
MANA 3325 – ThurburnLecture #4 Slides
Bargaining PowerOf Customers
Bargaining PowerOf Suppliers
Intensity ofRivalry
Threat of NewCompetitors
Threat of SubstituteProducts
Low
High
0
0
0
0
0
55
55
5
Industry &Market Feasibility
Five Forces Circle
Bargaining PowerOf Customers
Bargaining PowerOf Suppliers
Intensity ofRivalry
Threat of NewCompetitors
Threat of SubstituteProducts
Low
High
0
0
0
0
0
55
55
5
Industry &Market Feasibility
Five Forces Circle
FOOD TRUCK EXAMPLE
Bargaining PowerOf Customers
Bargaining PowerOf Suppliers
Intensity ofRivalry
Threat of NewCompetitors
Threat of SubstituteProducts
Low
High
0
0
0
0
0
55
55
5
Industry &Market Feasibility
Five Forces Circle
Consignment Clothing Retailer
Industry &Market Feasibility
Five Forces Circle
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Five Forces Analysis
Food Truck
Neighborhood Style Mexican Restaurant
Pizza Franchise – Dominos
Steak House – High End
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Five Forces Analysis
Commercial Lawn Care Business
Moving Company
Clothing Store
Roofing Company
MANA 3325 – ThurburnLecture #4 Slides Product or Service Feasibility
Primary Research – Most Valuable & Expensive:• Customer Surveys• Focus Groups• Prototypes• In-Home Trials
Secondary Research – Less Pertinent & Less Expensive:• Trade Associations• Direct Mail Lists• Demographic Data• Census Data• Market Research by Others• Articles• Local Data• Internet
MANA 3325 – ThurburnLecture #4 SlidesStart here
Financial Feasibility
• Capital Requirements Do we have enough cash to do it? If not… can we raise the cash needed?
• Estimated Earnings Does it generate enough cash to sustain itself?
• Return on Investment Can we get a better return doing something else for a lower risk?
MANA 3325 – ThurburnLecture #4 Slides
Should We?Does it fit our Vision and Mission?
Can We?Do we have adequate resources?
Perform a Feasibility Analysis
How Do We?Develop a Business Plan
Specify Objectives
Did We Achieve our Goals?Implement the Business Plan
Measure Results
Would We Do It Again?Do we pull the plug?
If so… When?
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The Business Plan
Good Planning Improves Results
Increase Probability of Successful Financing
Helps Prevent Mistakes… I wish we hadn’t !
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The Business Plan
Who is the Plan for?
• Yourself… essentials may be enough.
• Partners… more extensive
• Investors… most extensive
The More $$$ the More EXTENSIVE
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The Business Plan
• Company• Strategy• Marketing• Implementation• Projections• Financing
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The Business Plan
• Company• Title Page• Table of Contents• Exec Summary• Vision & Missions• History• Industry Profile• Products & Services
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The Business Plan
• Strategy• Goals• Objectives• Business Strategy
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The Business Plan
• Marketing• Marketing Strategy• Marketing Research• Customer Research• Competitors Analysis
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The Business Plan
•Implementation• Management Team• Plan of Operations
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The Business Plan
•Projections• Assumptions• Projections
• Summary & Cash Flow• Income Sources• COG• Expenses• Payroll Detail
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The Business Plan
•Financing• Loan Details if applicable• Investor Details if applicable
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The Business Plan
The 5 Cs
Capital
Capacity
Collateral
Character
Conditions