Entrepreneurship

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Entrepreneurship

• Frances Jørgensen
• Frances_at_plan.aau.dk

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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

3
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

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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
  businessfrom 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.

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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
• ?

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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

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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

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Executive Summary

• Most important component, especially for the
  marginally involved
• A brief and precise picture of your future that
• Doesnt 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)!

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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)

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Vision

• Vision Statements
• Dont 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)

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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

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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 cant? Product positioning!
• What is involved in production? Patents? Govt
  approval?

13
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?

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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)

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Operations Plan

• Demonstrate that what you promised in the
  executive summary is DOABLE!
• Provides the nuts and bolts of running the
  businessthe practical details
• Location, organizational structure, equipment,
  labor requirements, HR plans, customer
  service/support, etc.

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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!

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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 hornsno time for modesty!

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Exit Strategy

• Provides investors with a sense of security, that
  you wont always be dependent and that this is a
  potential maker for him/her.
• Usually describes plans for 3-10 years in the
  future

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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!

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Tips

• Know your audience!
• Be dramatic, creativebut careful!
• Explain the WHY (the product, the market, the
  pricing, the partners, the location)
• Take advantage of your research background! Dont
  make unfounded claims or guesses

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More Tips

• Include possible barriers, drawbacks, potential
  weaknesses, risksas well as your plans for
  managing these!
• Stress your USP (unique selling proposition)
• Be realistic (higher quality for lower price
  wont fool anyone!)
• Remember to proofread and spell check! Then do it
  again! Then have some one else do it!

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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).