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2 - 1Ch. 2: Inside the Entrepreneurial Mind Protecting Your Ideas Utility Patent – a grant from the Patent and Trademark Office to the inventor of product,

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Presentation on theme: "2 - 1Ch. 2: Inside the Entrepreneurial Mind Protecting Your Ideas Utility Patent – a grant from the Patent and Trademark Office to the inventor of product,"— Presentation transcript:

1 2 - 1Ch. 2: Inside the Entrepreneurial Mind Protecting Your Ideas Utility Patent – a grant from the Patent and Trademark Office to the inventor of product, giving the exclusive right to make, use, or sell the invention for 20 years from the date of filing the patent application.

2 2 - 2Ch. 2: Inside the Entrepreneurial Mind Protecting Your Ideas Design Patent – a grant from the Patent and Trademark Office to the inventor of a new, original, or ornamental change to an existing product that enhances it sales, the right to make, use, or sell the product for 14 years from the date of filing the patent application.

3 Protecting Your Ideas Utility Patents are superior to Design Patents

4 2 - 4Ch. 2: Inside the Entrepreneurial Mind Patent Applications and Patents Issued

5 2 - 5Ch. 2: Inside the Entrepreneurial Mind The Six Steps to a Patent 1. Establish the invention’s novelty 2. Document the device 3. Search existing patents 5. Complete the patent application 6. File the patent application 4. Study search results

6 2 - 6Ch. 2: Inside the Entrepreneurial Mind Protecting Your Ideas Trademark – any distinctive word, symbol, design, name, logo, slogan, or trade dress a company uses to identify the origin of a product or to distinguish it from other goods on the market. ™ ® Servicemark – the same as a trademark except that it identifies the source of a service rather than a product. ℠ ®

7 2 - 7Ch. 2: Inside the Entrepreneurial Mind Protecting Your Ideas Copyright – an exclusive right that protects the creators of original works of authorship such as literary, dramatic, musical, and artistic works. Copyrighted material is denoted by the symbol ©.

8 Protecting Intellectual Property The primary weapon an entrepreneur has to protect patents, trademarks, and copyrights is the legal system. Before engaging in a legal battle consider: ► Can the opponent afford to pay if you win? ► Do you expect to win enough to cover your legal costs? ► Can you afford the loss of time, money, and privacy involved? 2 - 8Ch. 2: Inside the Entrepreneurial Mind

9 2 - 9Ch. 2: Inside the Entrepreneurial Mind Characteristics of Patents, Trademarks, and Copyrights

10 Conclusion The creative process is a tenant of the entrepreneurial experience. Success, and even survival itself, requires entrepreneurs to tap their creativity. Creativity results in value, and value provides a competitive advantage. Entrepreneurs protect their creative ideas with patents, trademarks, servicemarks, and copyrights to sustain a competitive edge Ch. 2: Inside the Entrepreneurial Mind

11 MANA 3325 – Thurburn Lecture #4 Slides Intellectual Capital Components Human Capital – External 1. The people you know through networking. 2. Who you can call upon to provide resources from outside. Human Capital – Internal 1. The people you have inside your company. 2. Their Creativity, Processes, Etc. Structural Capital 1. Patents, Intellectual Property, Systems, Controls. Customer Capital 1. Goodwill 2. Customers perception of Corporate Citizenship

12 MANA 3325 – Thurburn Lecture #4 Slides Vision vs Mission Vision: 1. Why do we do what we do. 2. What will we be when we are a mature company. Mission: 1. What business we are in. 2. Who we serve. 3. Where we are going.

13 MANA 3325 – Thurburn Lecture #4 Slides Competitive Advantages Any aspect of how you operate your business that is difficult for your competitors to copy and which customers appreciate and respond to.

14 MANA 3325 – Thurburn Lecture #4 Slides Any unique technology or process that is either protected by a patent, copyright, or trademark or which is difficult or impossible for a competitor to duplicate. Competitive Advantages

15 MANA 3325 – Thurburn Lecture #4 Slides Barriers to entry that restrict new competitors from gaining a similar advantage. Competitive Advantages

16 MANA 3325 – Thurburn Lecture #4 Slides Relationships with suppliers or distributors that competitors are unable to duplicate, including spokespersons and celebrity endorsements Competitive Advantages

17 MANA 3325 – Thurburn Lecture #4 Slides Strategic Management Is crucial to building a successful business. Involves developing a game plan to guide a company as it strives to accomplish its mission, goals, and objectives, and to keep it on its desired course.

18 MANA 3325 – Thurburn Lecture #4 Slides Strategic Management and Competitive Advantage Developing a strategic plan is crucial to creating a sustainable competitive advantage, the aggregation of factors that sets a company apart from its competitors and gives it a unique position in the market that is superior to its competition. Example: Whole Foods

19 MANA 3325 – Thurburn Lecture #4 Slides Building a Competitive Advantage Consider five aspects of a small company: 1. Products they sell 2. Service they provide 3. Pricing they offer 4. Way they sell 5. Values to which they are committed

20 MANA 3325 – Thurburn Lecture #4 Slides Key: Core Competencies Unique set of capabilities a company develops in key areas, such as superior quality, customer service, innovation, team-building, flexibility, responsiveness, and others that allow it to vault past competitors. They are what a company does best. Best to rely on a natural advantage (often linked to a company’s “smallness”). Example: Pizza Fusion

21 MANA 3325 – Thurburn Lecture #4 Slides Building a Sustainable Competitive Advantage Superior value for customers Sustainable competitive advantage Capabilities Core competencies Skills Lessons learned

22 MANA 3325 – Thurburn Lecture #4 Slides Strategic Management Process Step 1 Develop a vision and translate it into a mission statement Step 2 Assess strengths and weaknesses Step 3 Scan environment for opportunities and threats Step 4 Identify key success factors

23 MANA 3325 – Thurburn Lecture #4 Slides Strategic Management Process Step 5Analyze competition Step 6Create goals & objectives Step 7Formulate strategies Step 8Translate plans into actions Step 9Establish accurate controls (continued)

24 MANA 3325 – Thurburn Lecture #4 Slides Step 1: Develop a Vision and Create a Mission Statement Addresses question: “What business are we in?” The mission is a written expression of how the company will reflect an entrepreneur’s values, beliefs, and vision – more than just “making money.” Serves as a “strategic compass.” Examples: Chick-fil-A, Google

25 MANA 3325 – Thurburn Lecture #4 Slides Step 1: Develop a Vision and Create a Mission Statement Elements of a mission statement: Purpose of the company: What are we in business to accomplish? Business we are in: How are we going to accomplish that purpose? Values of the company: What principles and beliefs form the foundation of the way we do business?

26 MANA 3325 – Thurburn Lecture #4 Slides Step 2: Assess Company Strengths and Weaknesses Strengths Positive internal factors a company can draw on to accomplish its mission, goals, and objectives. Weaknesses Negative internal factors that inhibit a company’s ability to accomplish its mission, goals, and objectives.

27 MANA 3325 – Thurburn Lecture #4 Slides Strengths 1. Loyal Customers 2. Special Skills 3. Special Knowledge 4. Superior Products 5. Positive Public Image 6. Employee Experience 7. Unique Suppliers

28 MANA 3325 – Thurburn Lecture #4 Slides Weaknesses 1. Poor Location 2. Lack of Capital 3. Lack of Skilled Workers 4. Lack of Enough Workers 5. Business Model Obsolescence

29 MANA 3325 – Thurburn Lecture #4 Slides Step 3: Scan for Opportunities and Threats Opportunities Positive external factors the company can exploit to accomplish its mission, goals, and objectives. Threats Negative external factors that inhibit the firm's ability to accomplish its mission, goals, and objectives.

30 MANA 3325 – Thurburn Lecture #4 Slides Threats All of those that are listed in the book… … also 1. Law Suits 2. Environmental Disasters 3. Loss of Key Individuals 4. Failure to Secure Funding in Future

31 MANA 3325 – Thurburn Lecture #4 Slides The Power of External Market Forces Competitive Economic Political and Regulatory Technological Social and Demographic

32 MANA 3325 – Thurburn Lecture #4 Slides

33 MANA 3325 – Thurburn Lecture #4 Slides Step 4: Identify Key Success Factors Key success factors (KSFs): factors that determine the relative success of market participants. The keys to unlocking the secrets of competing successfully in a particular market segment. Example: Five Guys Burgers and Fries

34 MANA 3325 – Thurburn Lecture #4 Slides Key Success Factors Industry Experience Experienced Management Sufficient Capital Good Location Quality Products Superior Customer Service Liberal Return Policy for Retailers Distribution Systems Internal Processes – tight controls over costs and quality

35 MANA 3325 – Thurburn Lecture #4 Slides Identifying Key Success Factors List the skills, characteristics, and core competencies that your business must possess to be successful in its market segment. Key Success FactorHow Your Company Rates 1. Low High 2. Low High 3. Low High 4. Low High 5. Low High Conclusions:

36 MANA 3325 – Thurburn Lecture #4 Slides Step 5: Analyze Competitors NFIB study: Small business owners believe they operate in a highly competitive environment and the level of competition is increasing. Yet, 97 percent of all U.S. businesses do not systematically track the progress of their key competitors.

37 MANA 3325 – Thurburn Lecture #4 Slides Competitor Analysis Direct competitors 1.Offer the same products and services 2.Customers often compare prices, features and deals among these competitors when they shop Significant competitors 1.Offer some of the same or similar products or services 2.Product or service lines overlap but not completely Indirect competitors 1.Offer same or similar products in only a small number of areas

38 MANA 3325 – Thurburn Lecture #4 Slides Step 5: Analyze Competitors Analyzing key competitors allows an entrepreneur to: 1.Avoid surprises from existing competitors’ new strategies and tactics. 2.Identify potential new competitors and the threats they pose. 3.Improve reaction time to competitors’ actions. 4.Anticipate rivals’ next strategic moves.

39 MANA 3325 – Thurburn Lecture #4 Slides Step 5: Analyze Competitors Techniques do not require unethical behavior: 1.Monitor industry and trade publications. 2.Talk to customers and suppliers. 3.Debrief employees, especially sales representatives and purchasing agents. 4.Attend trade shows and conferences and study competitors’ sales literature. 5.Watch for competitor’s employment ads. 6.Conduct patent searches for patents competitors have filed. 7.Get EPA reports for the factories of competing manufacturers. 8.Monitor direct competitors via social media

40 MANA 3325 – Thurburn Lecture #4 Slides Step 5: Analyze Competitors Techniques do not require unethical behavior: 1.Learn about the kinds of equipment and raw materials competitors are importing from the Journal of Commerce Port Import Export Reporting Service. 2.Buy competitors’ products and “benchmark” them. 3.Get competitors’ credit reports. 4.Check out the reports publicly-held competitors must file with the SEC. 5.Investigate UCC reports. 6.Check out the resources in your local library. 7.Use the Internet to learn more about competitors. 8.Visit competing businesses to observe their operations. (continued)

41 MANA 3325 – Thurburn Lecture #4 Slides Competitive Profile Matrix

42 MANA 3325 – Thurburn Lecture #4 Slides Is Setting Goals & Objectives Really Important? “Would you tell me, please, which way I ought to go from here?” said Alice. “That depends a good deal on where you want to get to,” said the Cheshire cat. “I don’t much care where.…” said Alice. ‘Then it doesn’t matter which way you go,” said the cat. - Lewis Carroll’s Alice in Wonderland Alice in Wonderland

43 MANA 3325 – Thurburn Lecture #4 Slides Goals vs Objectives Goals: Long range … lets go to Miami General and/or Abstract… Lofty Objectives: Specific targets… what route and where do we stay at night? Measurable… how many miles per day? Assignable… who drives which legs of the trip? Realistic/Challenging… make progress vs time to sleep. Timely… project the arrival in Miami accurately. Written… get everyone on board. GO… SMART-W

44 MANA 3325 – Thurburn Lecture #4 Slides Step 7: Formulate Strategies Strategy - a road map of the actions an entrepreneur draws up to achieve a company’s mission, goals, and objectives. It is the company’s game plan for gaining a competitive advantage.

45 MANA 3325 – Thurburn Lecture #4 Slides Strategic Options Road Map… Route to take to Miami Strategic Options: 1. Cost Leadership… Low Cost Leader… Walmart - Target 2. Differentiation… Unique Selection, Better Service, etc… Whole Foods 3. Focus… Niche Markets… smaller… specific… Natural Foods Grocery Road Map – Walmart vs Whole Foods vs Natural Foods Road Map – WWN

46 MANA 3325 – Thurburn Lecture #4 Slides Step 8 – Implement Action Plans 1. Purpose: Why are we going to Miami? 2. Scope: Who is going? 3. Contribution: What is the benefit of going? 4. Resources: How many bags of potato chips will it take? 5. Timing: When do we leave? PSCRT

47 MANA 3325 – Thurburn Lecture #4 Slides Step 9 - Establish Controls Financial: Does this make enough money to justify efforts? Internal Business: Are we implementing the right processes? Customers: Is our perception improving? Innovation: Are we innovating? Citizenship: Are we adding to society? F-IB-C-I-C

48 MANA 3325 – Thurburn Lecture #4 Slides Business Models Mo Tot A B

49 MANA 3325 – Thurburn Lecture #4 Slides Business Models Mo Tot A months A = 23 B = 18 A = 28% more than B

50 MANA 3325 – Thurburn Lecture #4 Slides Business Models

51 MANA 3325 – Thurburn Lecture #4 Slides Business Models

52 MANA 3325 – Thurburn Lecture #4 Slides Business Models Recurring Revenue Non-Recurring Revenue Rev. FrequencyMo. / Qtr. / Yr.> Yr.

53 MANA 3325 – Thurburn Lecture #4 Slides Business Models Recurring Revenue Non-Recurring Revenue FrequencyMagazines Grocery Fuel Attorneys Mortgage Realtors

54 MANA 3325 – Thurburn Lecture #4 Slides Business Models Recurring Revenue Hybrid Recurring & Non-Recurring Non-Recurring Revenue FrequencyMagazines Grocery Fuel Recurring for a Short Period of Time or Periodic Fees + Recurring Attorneys Mortgage Realtors

55 MANA 3325 – Thurburn Lecture #4 Slides Business Models Recurring Revenue Hybrid Recurring & Non-Recurring Non-Recurring Revenue FrequencyMagazines Grocery Fuel Insurance Bus. Attorney - Retainer or Stock Broker Business Coaches Attorneys Mortgage Realtors Furniture

56 MANA 3325 – Thurburn Lecture #4 Slides Business Models Clothing Restaurants Security Services Home Theater & Electronics Appliances Home Improvements Roofing Plumbing Electrical Repair

57 MANA 3325 – Thurburn Lecture #4 Slides Business Models Recurring Revenue Non-Recurring Revenue Rev. FrequencyMo. / Qtr. / Yr.> Yr. Customer Profile Value Proposition Differentiation Pricing Selling Process Distribution Support

58 MANA 3325 – Thurburn Lecture #4 Slides Feasibility Analysis Industry & Market Product & Service Financial

59 MANA 3325 – Thurburn Lecture #4 Slides Bargaining Power Of Customers Bargaining Power Of Suppliers Intensity of Rivalry Threat of New Competitors Threat of Substitute Products Low High Industry & Market Feasibility Five Forces Circle

60 Bargaining Power Of Customers Bargaining Power Of Suppliers Intensity of Rivalry Threat of New Competitors Threat of Substitute Products Low High Industry & Market Feasibility Five Forces Circle FOOD TRUCK EXAMPLE

61 Bargaining Power Of Customers Bargaining Power Of Suppliers Intensity of Rivalry Threat of New Competitors Threat of Substitute Products Low High Industry & Market Feasibility Five Forces Circle Consignment Clothing Retailer Industry & Market Feasibility Five Forces Circle

62 MANA 3325 – Thurburn Lecture #4 Slides Five Forces Analysis Food Truck Neighborhood Style Mexican Restaurant Pizza Franchise – Dominos Steak House – High End

63 MANA 3325 – Thurburn Lecture #4 Slides Five Forces Analysis Commercial Lawn Care Business Moving Company Clothing Store Roofing Company

64 MANA 3325 – Thurburn Lecture #4 Slides Product or Service Feasibility Primary Research – Most Valuable & Expensive: Customer Surveys Focus Groups Prototypes In-Home Trials Secondary Research – Less Pertinent & Less Expensive: Trade Associations Direct Mail Lists Demographic Data Census Data Market Research by Others Articles Local Data Internet

65 MANA 3325 – Thurburn Lecture #4 Slides Start here Financial Feasibility Capital Requirements Do we have enough cash to do it? If not… can we raise the cash needed? Estimated Earnings Does it generate enough cash to sustain itself? Return on Investment Can we get a better return doing something else for a lower risk?

66 MANA 3325 – Thurburn Lecture #4 Slides Should We? Can We? How Do We? Did We? Would We?

67 MANA 3325 – Thurburn Lecture #4 Slides Should We? Does it fit our Vision and Mission? Can We? Do we have adequate resources? Perform a Feasibility Analysis How Do We? Develop a Business Plan Specify Objectives Did We Achieve our Goals? Implement the Business Plan Measure Results Would We Do It Again? Do we pull the plug? If so… When?

68 MANA 3325 – Thurburn Lecture #4 Slides The Business Plan Why Make a Business Plan?

69 MANA 3325 – Thurburn Lecture #4 Slides The Business Plan Good Planning Improves Results Increase Probability of Successful Financing Helps Prevent Mistakes… I wish we hadn’t !

70 MANA 3325 – Thurburn Lecture #4 Slides The Business Plan Who is the Plan for? Yourself… essentials may be enough. Partners… more extensive Investors… most extensive The More $$$ the More EXTENSIVE

71 MANA 3325 – Thurburn Lecture #4 Slides The Business Plan Company Strategy Marketing Implementation Projections Financing

72 MANA 3325 – Thurburn Lecture #4 Slides The Business Plan Company Title Page Table of Contents Exec Summary Vision & Missions History Industry Profile Products & Services

73 MANA 3325 – Thurburn Lecture #4 Slides The Business Plan Strategy Goals Objectives Business Strategy

74 MANA 3325 – Thurburn Lecture #4 Slides The Business Plan Marketing Marketing Strategy Marketing Research Customer Research Competitors Analysis

75 MANA 3325 – Thurburn Lecture #4 Slides The Business Plan Implementation Management Team Plan of Operations

76 MANA 3325 – Thurburn Lecture #4 Slides The Business Plan Projections Assumptions Projections Summary & Cash Flow Income Sources COG Expenses Payroll Detail

77 MANA 3325 – Thurburn Lecture #4 Slides The Business Plan Financing Loan Details if applicable Investor Details if applicable

78 MANA 3325 – Thurburn Lecture #4 Slides The Business Plan The 5 Cs Capital Capacity Collateral Character Conditions

79 MANA 3325 – Thurburn Lecture #4 Slides The Business Plan The 5 Cs of Capital Capital – Enough? and Balance of Debt vs Equity Capacity – Cash Flow Collateral – Liquid or Fixed Assets Character – Creditor History Conditions – Terms of Loan


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