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Entrepreneurship

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					Entrepreneurship

 Frances Jørgensen
Frances@plan.aau.dk
                Agenda
• The Entrepreneur
• The call for entrepreneurship
• The Business Plan
• Who should develop a business plan?
• What are the important elements of the
  BP?
• Tips and Examples
       The Entrepreneur is…
• The economists’ heffalump
• A coordinator, organizer, manager, leader.
• A gap filler
• An innovator, characterized by
  spontaneous undeliberate learning, or a
  creative imitator
• A risk bearer
• A highly demanded but seldom found
  commondity
          The Business Plan
• …describes a business in its developmental
  stages, that describes the most important
  elements of how the business will be run and
  developed.
• …justifies your basis for starting the business—
  from your good ideas to your experience and
  expertise to your financial and market
  considerations, to your long term dreams and
  goals.
• …is a continuously evolving and developing
  platform for your business.
  Who needs a business plan?
• Everyone considering the start of a new
  business venture
   – Smaller businesses
   – Highly technical business
   – Larger businesses
• Everyone in this class, as parts of the activity will
  be included in your final exam


                           
Objectives of the Business Plan
• To structure and define your visions (for self and
  others)
• To build a solid basis for your business, based on
  factual data
• To aid in important decision-making and
  short/long-term planning
• To convince others (banks, investors, family,
  friends, potential customers and suppliers) that
  your plans have merit
• To start development of a habit of professionalism
                  Main Elements
•   Cover Page
•   Executive Summary
•   Table of Contents
•   Company Description
•   Product/Services
•   Market Analysis
•   Marketing Plan
•   Operations Plan
•   Financial Plan
•   Management
•   Exit Strategy (not always)
•   Appendices
          Executive Summary
• Most important component, especially for the
  marginally involved
• A brief and precise picture of your future that:
  – Doesn’t tell too much, but just enough
  – Shows you are knowledgeable and prepared
  – Entices the reader to turn the page
• The LAST part of the BP to be completed
  (not started)!
  Executive Summary Content
• Description of all actors, emphasizing your
  (relevant) special talents, qualifications,
  resources
• Description of service or product
• Customer information, including current
  relationships
• Most important “figures” (projected
  income, budgets, profits)
                      Vision
• Vision Statements:
  – Don’t be short/narrow sighted: Where would Lego be,
    if their vision had been to sell small square
    interlocking building plastic blocks in many various
    sizes?
  – The 30 second elevator test
  – Focus on the customer
  – The good, the bad, and the ugly (SWOT + your USP)
• Milestones:
  – Put your project management skills to use! Set short
    term goals that are OBSERVABLE and
    CONSISTENT with long term goals (vision)
       Company Description
• History of your company (or project or
  idea)
• Focus on expansion and improvement
  (past, present, and planned)
• Be honest (include problems experienced
  and how they were overcome)
• Be clear about your present status and
  future (planned) needs
             Product/Service
• Avoid highly technical, expert-sounding, jargon.
• Describe the products/services so that they
  appeal to the (future) customer; be descriptive
  so they can ”see”, ”feel”, ”smell” it! What does it
  mean to ME?
• What makes yours better? What does it do that
  others can’t? Product positioning!
• What is involved in production? Patents? Gov’t
  approval?
           Market Analysis
• Describe industry characteristics, market
  segments, trends, projected growth, target
  market and customers, customer behavior,
  complementary products/ services,
  barriers of entry, etc.
• Focus in on gaps in your product/service
  area.
• Who do you expect will buy/use your
  product/service? Why them?
            Marketing Plan
• Tell how you will use the brilliantly
  composed market analysis to its fullest
  potential…
  – Detail how you will ensure that customers
    know about your product/service AND will
    choose it over the competition.
  – Provide more than one marketing tactic
    (cheapest to most expensive is usually wise)
            Operations Plan
• Demonstrate that what you promised in
  the executive summary is DOABLE!

• Provides the ”nuts and bolts” of running
  the business…the practical details:
  – Location, organizational structure, equipment,
    labor requirements, HR plans, customer
    service/support, etc.
            Financial Plan
• Includes sales forecasts, profit-and-loss
  statements, cash flow projections, balance
  sheets, standard business ratios.

• Even if you have a qualified accountant,
  you MUST be able to respond intelligently
  to questions in all of these areas!
             Management
• A great management team with a so-so
  business idea is a better risk than a so-so
  management team with a fantastic idea!

• Use contacts, networks, etc. to strengthen
  your management team, as necessary. Be
  sure to toot your own horns…no time for
  modesty!
              Exit Strategy
• Provides investors with a sense of
  security, that you won’t always be
  dependent and that this is a potential $
  maker for him/her.

• Usually describes plans for 3-10 years in
  the future
                Appendices
• Verification of education, experience, etc.
• Technical drawings, computer renditions of
  product
• Independent assessments of the
  product/services
• Reports drafted in your planning stages (e.g.
  from accountants, market researchers, etc)
• Throw out any documents that are not highly
  relevant!
                     Tips
• Know your audience!

• Be dramatic, creative…but careful!

• Explain the WHY (the product, the market, the
  pricing, the partners, the location…)

• Take advantage of your research background!
  Don’t make unfounded claims or guesses…
                  More Tips
• Include possible barriers, drawbacks, potential
  weaknesses, risks…as well as your plans for
  managing these!

• Stress your USP (unique selling proposition)

• Be realistic (higher quality for lower price won’t
  fool anyone!)

• Remember to proofread and spell check! Then
  do it again! Then have some one else do it!
             Group Activity
• Create a Business Plan for:
  – Your dream business enterprise (product or
    service-based)
  – An internal project in a company in which you
    might be employed in the future, to be
    presented to the Board of Directors
• Use the class slides as guidelines for
  content; OMIT the Financial Plan section
  (others may be omitted with GOOD
  reason).

				
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