unit 2 entrepeneurship 3rd sem mba

7/30/2019 Unit 2 Entrepeneurship 3rd Sem MBA

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UNIT2

ENTREPRENEURSHIP


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SYLLABUS

Business Planning: From idea generation to

preparation of detailed business plans.

Exercises in preparation of business plans.


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BUSINESS PLAN

A business plan is a formal statement of a set

of business goals, the reasons they are

believed attainable, and the plan for reaching

those goals. It may also contain background

information about the organization or team

attempting to reach those goals.


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Typical structure for a business plan

for a start up venture1. Cover page and table of contents

2. Executive summary

3. Business description

4. Business environment analysis

5. Industry background

6. Competitor analysis

7. Market analysis

8. Marketing plan9. Operations plan

10. Management summary

11. Financial plan

12. Attachments and milestones


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Typical questions addressed by a business

plan for a start up venture

1. What problem does the company's product or service solve? What nichewill it fill?

2. What is the company's solution to the problem?

3. Who are the company's customers, and how will the company market andsell its products to them?

4. What is the size of the market for this solution?

5. What is the business model for the business (how will it make money)?

6. Who are the competitors and how will the company maintain acompetitive advantage?

7. How does the company plan to manage its' operations as it grows?

8. Who will run the company and what makes them qualified to do so?

9. What are the risks and threats confronting the business, and what can bedone to mitigate them?

10. What are the company's capital and resource requirements?

11. What are the company's historical and projected financial statements?


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SEARCH FOR BUSINESS IDEA


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DEVELOPMENT OF BUSINESS IDEA


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CREATIVE PROCESS

Eg: Eureka, benzene etc.


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COMPONENTS OF THE CREATIVE PROCESS

1. Motivation : Initial motivation which provides stimulusfor processing information and exploring alternativesolutions.

2. Skills in the task domain: The extent of the knowledge,talents and technical skills of the entrepreneur willhelp in his search for solutions, pin pointing an ideaand verifying the idea.

3. Skills in Creative thinking: These will help him tovisualize different solutions generating a number ofalternatives, see divergent uses of single idea etc, tocome up with a workable idea or plan.


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Why a Business Plan?

Strategic Guide

Lenders

Investors


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Strategic Guide

Where Do You Want To Go?

How Are You Going to Get There?

What Market Niches?

How Much is it Going to Cost?

Greatest Profit Opportunity?


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Lender Expectations

Good Business Track Record

Ability to Repay

Staying Power

Collateral


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Exit Strategies

Selling the Business

Transferring the Business to a Family Member

Taking the Company Public

Being Acquired by a Larger Company


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Funding Sources:

Savings

Friends and Family

Financial Institutions / Banks

Angel Investors

Venture Capital


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Business Plan Content

Customers

Marketing and Sales Plans

Development

Operations

Management


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Business Plan Content

Personnel

Financial Summary

Financials

Offering

Appendices


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Executive Summary

A mini-business plan in one or two pages

Highlights the most important points of your

business plan

It is NOT an introduction to the plan

It must grab your reader, and entice him/her to

read further


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Executive Summary

Identify the company, its background, structure and

location

Describe what the company does, and the market it

serves Describe the market potential for the companys

products and services, market trends, etc.


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Executive Summary

Outline the backgrounds and experience of the

top management team

Describe the funding required, the purposes for

which it will be used, the collateral available (if for

a lender), and the expected outcomes


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Company Overview

Brief Company Introduction

Mission statement

Location, size, history

Market and products

Overview of company capabilities

Objectives


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Products/Services

Products / Services

What does it do?

Uniqueness

Competitive Advantage Technology

Brief description

Applications

Commercialization Status Brief overview


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Industry Overview

Set The Stage

Industry Definition and Description

Major players within the industry

Factors driving dynamics

New products and developments

Legislation and Policies Driving the Industry

Historical and Future Trends


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Market Analysis

Market Definition

Primary Market

Secondary Markets

Market Size and Trends

Current total revenues

Predicted annual growth rate


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Competitors

Direct Competitors

Who are they?

Size and product breadth

Revenues and profitability

Strengths and weaknesses

Market shares

Indirect Competitors


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Customers

Customer Characteristics

Who are they?

Why do they buy?

Need satisfied by the product/service

How is the need currently filled?

What are the alternatives?

Who makes the decision to buy? How frequently do they purchase?


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Statement of Opportunity

Marketing and Sales Objectives

Existing Customers

Potential Customers

Prospects targeted

How prospects will be targeted and qualified


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Marketing Strategies

Product/Service Strategy

Pricing Strategy

Distribution Strategy

Advertising and Promotion Strategy

Sales Strategy

Marketing and Sales Forecasts


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Marketing Programs

Direct Mail

Trade Shows

Advertising

Internet

Publicity/Public Relations

Marketing Budget

Pricing

Basis for targeted price point

Margins and profitability by volume levels


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Sales Plan

Sales force structure (direct or reps)

Sales expectations/quotas

Margins given to intermediaries

Service and warranties

Sales Budget

Organizational chart indicating planned growth


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Development

R & D Plan

Objectives

Milestones and current status

Difficulties and risks

Staffing

R & D Budget and assumptions


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Operations

Manufacturing/Production Plan

Objectives

Facilities

Staffing

Subcontractors

Quality Control

Budget / Operating Expenses


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Management

Company Organization

Management Team

Administrative Expenses


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Management Team

President

VP Finance

VP Sales

VP Marketing

VP Manufacturing

Board of Advisors


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Summary of Financials

Financial Objectives

Time to Cash Flow Positive

Time to profitability

Financial Assumptions

Capital Requirements

Exit Scenario


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Financials

Pro-forma Cash Flow Projections

Pro-forma Profit & Loss Statements Pro-forma Balance Sheet


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Offering

Investment Requirements

Pro-forma Valuation of Business Offer


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Appendices

Resumes of Key Management

Patent Information

Customer List

Testimonials

Supplemental Financial Spreadsheets

References

unit 2 entrepeneurship 3rd sem mba

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