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Entrepreneurship

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Entrepreneurship ­ MGT602
VU
Lesson 22
CREATING AND STARTING THE VENTURE (Continued....)
LEARNING OBJECTIVES
1.
To identify information needs and sources for business planning.
2.
To enhance awareness of the ability of the Internet as an information resource and marketing tool
3.
To present helpful questions for the entrepreneur at each stage of the planning process.
4.
To understand how to monitor the business plan
INFORMATION NEEDS
Before preparing a business plan, the entrepreneur should do a quick feasibility study to see if there are
possible barriers to success. The entrepreneur should clearly define the venture's goals, which provide a
framework for the business plan. The business plan must reflect reasonable goals.
Market Information
It is important to know the market potential for the product or service. The first step is to define the
market. A well-defined target market makes it easier to project market size and market goals. To assess the
total market potential, the entrepreneur can use trade associations, government reports, and published
studies.
Operations Information Needs
The entrepreneur may need information on:
Location
Manufacturing operations
Raw materials
Equipment
Labor skills
Space
Overhead
Each item may require some research but is needed by those who will assess the business plan.
Financial Information Needs
Before preparing the plan, the entrepreneur must evaluate the profitability of the venture through the
following:
Expected sales and expense figures for the first three years
Cash flow figures for the first three years
Current balance sheets and pro forma balance sheets for the next three years
Determination of expected sales and expenses is based on the market information gathered earlier.
Estimates of cash flow will consider the ability of the new venture to meet expenses at designated times.
Current balance sheet figures show the assets, liabilities, and investments made by the owner.
USING THE INTERNET AS A RESOURCE TOOL
Thanks to technology, entrepreneurs are able to access information efficiently, expediently, and at very little
cost. The Internet can serve as an important source of information in preparing the business plan.
Information on industry analysis, competitor analysis, and measurement of market potential can be located.
In addition, the Internet also provides opportunities for actually marketing the new venture's products. A
web site, or home page, typically describes a firm's history, existing products, background of the founders,
and other information to create a favorable image. The web site can be a vehicle for advertising or for
direct marketing. Many new ventures use web pages to increase sales contacts and reach potential
customers. An entrepreneur can also access competitors' web sites to gain knowledge of their strategy in
the marketplace. To gather information anonymously the entrepreneur can also investigate newsgroups. All
that is needed to use these sources is a small investment in hardware and software.
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Entrepreneurship ­ MGT602
VU
WRITING THE BUSINESS PLAN
The business plan should be comprehensive enough to give a potential investor a complete understanding
of the venture.
Introductory Page
The title page provides a brief summary of the business plan's contents, and should include:
The name and address of the company
The name of the entrepreneur and a telephone number
A paragraph describing the company and the nature of the business
The amount of financing needed
A statement of the confidentiality of the report
It also sets out the basic concept that the entrepreneur is attempting to develop.
Executive Summary
This is prepared after the total plan is written. It should be three to four pages in length and should
highlight the key points in the business plan. The summary should highlight in a concise manner the key
points in the business plan.
Issues that should be addressed include:
Brief description of the business concept
Any data that support the opportunity for the venture.
Statement of you this opportunity will be pursued.
Highlight some key financial results that can be achieved
Because of the limited scope of the summary, the entrepreneur should ascertain what is important to the
audience to whom the plan is directed.
Environmental and Industry Analysis
The entrepreneur should first conduct an environmental analysis to identify trends and changes
occurring on a national and international level that may impact the new venture.
Examples of environmental factors are:
Economy
Culture
Technology
Legal concerns
All of the above external factors are generally uncontrollable
Next the entrepreneur should conduct an industry analysis that focuses on specific industry trends
Some examples of industry factors include:
Industry demand
Competition
The last part of this section should focus on the specific market. This would include such information as
who the customer is and what the business environment is like. The market should be segmented and the
target market identified.
Description of the Venture
The description of the venture should be detailed in this section. This should begin with the mission
statement or company mission, which describes the nature of the business and what the entrepreneur
hopes to accomplish. The new venture should be described in detail, including the product, location,
personnel, background of entrepreneur, and history of the venture. The emphasis placed on location is a
function of the type of business. Maps that locate customers, competitors, and alternative locations can be
helpful. If the building or site decision involves legal issues, the entrepreneur should hire a lawyer.
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Table of Contents:
  1. THE NATURE AND IMPORTANCE OF ENTREPRENEURSHIP:DEFINITION OF ENTREPRENEUR
  2. THE NATURE AND IMPORTANCE OF ENTREPRENEURSHIP:Possibility of New Venture Formation
  3. ENTREPRENEURIAL PROCESS/START UPS:GOVERNMENT AS AN INNOVATOR
  4. THE ENTREPRENEURIAL AND ENTREPRENEURIAL MIND:ENTREPRENEURIAL PROCESS
  5. THE ENTREPRENEURIAL AND ENTREPRENEURIAL MIND (continued…)
  6. THE ENTREPRENEURIAL AND ENTREPRENEURIAL MIND (continued…):CLIMATE FOR ENTREPRENEURSHIP
  7. THE ENTREPRENEURIAL AND ENTREPRENEURIAL MIND (continued…):PROBLEMS AND SUCCESSFUL EFFORTS
  8. THE INDIVIDUAL ENTREPRENEUR:ENTREPRENEURIAL BACKGROUND AND CHARACTERISTICS
  9. THE INDIVIDUAL ENTREPRENEUR (continued…):Personal Values, Work History, MOTIVATION
  10. THE INDIVIDUAL ENTREPRENEUR (continued…):ROLE MODELS AND SUPPORT SYSTEMS
  11. INTERNATIONAL ENTREPRENEURIAL OPPORTUNITIES:INTERNATIONAL ENTREPRENEURIAL OPPORTUNITIES, Minority interests
  12. INTERNATIONAL ENTREPRENEURIAL OPPORTUNITIES (continued…):DIRECT FOREIGN INVESTMENT
  13. INTERNATIONAL ENTREPRENEURIAL OPPORTUNITIES (continued…):BARRIERS TO INTERNATIONAL TRADE
  14. INTERNATIONAL ENTREPRENEURIAL OPPORTUNITIES (continued…):ENTREPRENEURIAL PARTNERING
  15. INTERNATIONAL ENTREPRENEURIAL OPPORTUNITIES (continued…):SOURCES OF NEW IDEAS
  16. CREATIVITY AND THE BUSINESS IDEA:METHODS OF GENERATING NEW IDEAS, CREATIVE PROBLEM SOLVING
  17. CREATIVITY AND THE BUSINESS IDEA:PRODUCT PLANNING AND DEVELOPMENT PROCESS
  18. LEGAL ISSUES FOR THE ENTREPRENEUR:NEED FOR A LAWYER, PATENTS
  19. LEGAL ISSUES FOR THE ENTREPRENEUR:TRADEMARKS, LICENSING
  20. LEGAL ISSUES FOR THE ENTREPRENEURS:PRODUCT SAFETY AND LIABILITY, INSURANCE
  21. CREATING AND STARTING THE VENTURE:WHAT IS THE BUSINESS PLAN, PRESENTING THE PLAN
  22. CREATING AND STARTING THE VENTURE (Continued….):WRITING THE BUSINESS PLAN
  23. CREATING AND STARTING THE VENTURE (Continued….):
  24. CREATING AND STARTING THE VENTURE (Continued….):WHY SOME BUSINESS PLANS FAIL, MARKETING PLAN
  25. THE MARKETING PLAN:MARKET RESEARCH FOR THE NEW VENTURE
  26. THE MARKETING MIX:STEPS IN PREPARING THE MARKETING PLAN
  27. THE ORGANIZATIONAL PLAN:DEVELOPING THE MANAGEMENT TEAM, LEGAL FORMS OF BUSINESS
  28. THE ORGANIZATIONAL PLAN (Continued….)
  29. THE ORGANIZATIONAL PLAN (Continued….):THE LIMITED LIABILITY COMPANY
  30. THE FINANCIAL PLAN:OPERATING AND CAPITAL BUDGETS
  31. THE FINANCIAL PLAN (Continued….):PRO FORMA INCOME STATEMENTS, PRO FORMA CASH FLOW
  32. PRO FORMA SOURCES AND USES OF FUNDS:PERSONAL FUNDS, FAMILY AND FRIENDS
  33. PRO FORMA SOURCES AND USES OF FUNDS:COMMERCIAL BANKS
  34. BANK LENDING DECISIONS:SMALL BUSINESS ADMINISTRATION LOANS
  35. SOURCES OF CAPITAL:GOVERNMENT GRANTS
  36. SOURCES OF CAPITAL:PRIVATE PLACEMENT, BOOTSTRAP FINANCING
  37. CAPITAL SOURCES IN PAKISTAN:PROVINCIAL LEVEL INSTITUTIONS, FINANCIAL INSTITUTIONS
  38. PREPARING FOR THE NEW VENTURE LAUNCH: EARLY MANAGEMENT DECISIONS (Continued….)
  39. PREPARING FOR THE NEW VENTURE LAUNCH: EARLY MANAGEMENT DECISIONS (Continued….)
  40. PREPARING FOR THE NEW VENTURE LAUNCH: EARLY MANAGEMENT DECISIONS (Continued….)
  41. PREPARING FOR THE NEW VENTURE LAUNCH: EARLY MANAGEMENT DECISIONS (Continued….)
  42. PREPARING FOR THE NEW VENTURE LAUNCH: EARLY MANAGEMENT DECISIONS (Continued….)
  43. NEW VENTURE EXPANSION STRATEGIES AND ISSUES:JOINT VENTURES, ACQUISITIONS
  44. NEW VENTURE EXPANSION STRATEGIES AND ISSUES (Continued….):DETERMINING THE PRICE FOR AN ACQUISITION
  45. ENTREPRENEURSHIP & PAKISTAN:GENDER DEVELOPMENT STATUS WOMAN AS AN ENTREPRENEUR IN PAKISTAN