RESOURCE REQUIREMENTS AND THE BUSINESS PLAN by BudCrain

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									RESOURCE REQUIREMENTS
 AND THE BUSINESS PLAN
          Business Strategy
          Dr. Richard C. Becherer
          Faculty of Economics and
          Management
          Czech University of Life Sciences
          Prague
Resource Requirements
“When it comes to control of resources… all I
  need from a source is the ability to use [the
  resource]. These are people who describe
  the idea business as a post office box to
  which people send cash.”
                 Howard Stevenson
   Seize an opportunity regardless of resources
    currently controlled.
   Entrepreneurs seek to control rather than
    own resources. They want to use the
    minimum that they need to get the job done.
1.   Capital – minimum to reduce financial
     exposure
2.   Flexibility – by not owning resources, you
     can commit and decommit quickly.
3.   Low sunk costs
4.   Costs – quicker breakeven since fixed
     costs are less
5.   Reduced risks of obsolescence, etc.
   Generally, we want to think about multi-stage
    employment of resources
Using Other People’s Resources (OPR)

   People
   Space
   Equipment
   Free booklets
   Software
   Loans
Issues in Assembling Resources

1.    How much money do you need?
2.    When will you need cash?
3.    Need good forecasts of:
           Start-up costs
           Working capital
           Sales/revenue/costs
     Can you internally finance growth?
   Most entrepreneurs get rejected by venture
    capitalists
   Too often:
    –   Not large scale
    –   No proprietary advantage
    –   No well defined plans
    –   No well regarded founders.
   Venture capitalists are not interested in niche
    markets.
   Entrepreneurs are often long on energy,
    ideas, and enthusiasm but short on
    credentials.

								
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