Presentation on theme: "Ch. 2: Inside the Entrepreneurial Mind"— Presentation transcript:
1Ch. 2: Inside the Entrepreneurial Mind Protecting Your IdeasUtility 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.Ch. 2: Inside the Entrepreneurial Mind
2Ch. 2: Inside the Entrepreneurial Mind Protecting Your IdeasDesign 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.Ch. 2: Inside the Entrepreneurial Mind
3Protecting Your IdeasUtility Patentsare superior toDesign Patents
4Patent Applications and Patents Issued Ch. 2: Inside the Entrepreneurial Mind
5The Six Steps to a Patent 6. File the patent application5. Complete the patent application4. Study search results3. Search existing patents2. Document the device1. Establish the invention’s noveltyCh. 2: Inside the Entrepreneurial Mind
6Ch. 2: Inside the Entrepreneurial Mind Protecting Your IdeasTrademark – 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. ℠ ®Ch. 2: Inside the Entrepreneurial Mind
8Protecting 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?Ch. 2: Inside the Entrepreneurial Mind
9Characteristics of Patents, Trademarks, and Copyrights Ch. 2: Inside the Entrepreneurial Mind
10ConclusionThe 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 Mind2 - 10
11Intellectual Capital Components MANA 3325 – ThurburnLecture #4 SlidesIntellectual Capital ComponentsHuman Capital – ExternalThe people you know through networking.Who you can call upon to provide resources from outside.Human Capital – InternalThe people you have inside your company.Their Creativity, Processes, Etc.Structural CapitalPatents, Intellectual Property, Systems, Controls.Customer CapitalGoodwillCustomers perception of Corporate Citizenship
12Vision vs Mission Vision: Mission: Why do we do what we do. MANA 3325 – ThurburnLecture #4 SlidesVision vs MissionVision:Why do we do what we do.What will we be when we are a mature company.Mission:What business we are in.Who we serve.Where we are going.
13Competitive Advantages MANA 3325 – ThurburnLecture #4 SlidesCompetitive AdvantagesAny aspect of how you operate your business that is difficult for your competitors to copy and which customers appreciate and respond to.
14Competitive Advantages MANA 3325 – ThurburnLecture #4 SlidesCompetitive AdvantagesAny 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.
15Competitive Advantages MANA 3325 – ThurburnLecture #4 SlidesCompetitive AdvantagesBarriers to entry that restrict new competitors from gaining a similar advantage.
16Competitive Advantages MANA 3325 – ThurburnLecture #4 SlidesCompetitive AdvantagesRelationships with suppliers or distributors that competitors are unable to duplicate, including spokespersons and celebrity endorsements
17Strategic Management Is crucial to building a successful business. MANA 3325 – ThurburnLecture #4 SlidesStrategic ManagementIs 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.
18Strategic Management and Competitive Advantage MANA 3325 – ThurburnLecture #4 SlidesStrategic Management and Competitive AdvantageDeveloping 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
19Building a Competitive Advantage MANA 3325 – ThurburnLecture #4 SlidesBuilding a Competitive AdvantageConsider five aspects of a small company:Products they sellService they providePricing they offerWay they sellValues to which they are committed
20Key: Core Competencies MANA 3325 – ThurburnLecture #4 SlidesKey: Core CompetenciesUnique 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
21Sustainable competitive advantage Superior value for customers MANA 3325 – ThurburnLecture #4 SlidesBuilding a Sustainable Competitive AdvantageCapabilitiesCore competenciesSustainable competitive advantageLessons learnedSuperior value for customersSkills
22Strategic Management Process MANA 3325 – ThurburnLecture #4 SlidesStrategic Management ProcessStep 1 Develop a vision and translate it into a mission statementStep 2 Assess strengths and weaknessesStep 3 Scan environment for opportunities and threatsStep 4 Identify key success factors
23Strategic Management Process MANA 3325 – ThurburnLecture #4 SlidesStrategic Management Process(continued)Step 5 Analyze competitionStep 6 Create goals & objectivesStep 7 Formulate strategiesStep 8 Translate plans into actionsStep 9 Establish accurate controls
24Step 1: Develop a Vision and Create a Mission Statement MANA 3325 – ThurburnLecture #4 SlidesStep 1: Develop a Vision and Create a Mission StatementAddresses 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
25Step 1: Develop a Vision and Create a Mission Statement MANA 3325 – ThurburnLecture #4 SlidesStep 1: Develop a Vision and Create a Mission StatementElements 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?
26Step 2: Assess Company Strengths and Weaknesses MANA 3325 – ThurburnLecture #4 SlidesStep 2: Assess Company Strengths and WeaknessesStrengthsPositive internal factors a company can draw on to accomplish its mission, goals, and objectives.WeaknessesNegative internal factors that inhibit a company’s ability to accomplish its mission, goals, and objectives.
27Strengths Loyal Customers Special Skills Special Knowledge MANA 3325 – ThurburnLecture #4 SlidesStrengthsLoyal CustomersSpecial SkillsSpecial KnowledgeSuperior ProductsPositive Public ImageEmployee ExperienceUnique Suppliers
28Weaknesses Poor Location Lack of Capital Lack of Skilled Workers MANA 3325 – ThurburnLecture #4 SlidesWeaknessesPoor LocationLack of CapitalLack of Skilled WorkersLack of Enough WorkersBusiness Model Obsolescence
29Step 3: Scan for Opportunities and Threats MANA 3325 – ThurburnLecture #4 SlidesStep 3: Scan for Opportunities and ThreatsOpportunitiesPositive external factors the company can exploit to accomplish its mission, goals, and objectives.ThreatsNegative external factors that inhibit the firm's ability to accomplish its mission, goals, and objectives.
30Threats All of those that are listed in the book… … also Law Suits MANA 3325 – ThurburnLecture #4 SlidesThreatsAll of those that are listed in the book…… alsoLaw SuitsEnvironmental DisastersLoss of Key IndividualsFailure to Secure Funding in Future
31The Power of External Market Forces MANA 3325 – ThurburnLecture #4 SlidesThe Power of External Market ForcesTechnologicalEconomicCompetitiveSocial and DemographicPolitical and Regulatory
33Step 4: Identify Key Success Factors MANA 3325 – ThurburnLecture #4 SlidesStep 4: Identify Key Success FactorsKey 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
34Key Success Factors Industry Experience Experienced Management MANA 3325 – ThurburnLecture #4 SlidesKey Success FactorsIndustry ExperienceExperienced ManagementSufficient CapitalGood LocationQuality ProductsSuperior Customer ServiceLiberal Return Policy for RetailersDistribution SystemsInternal Processes – tight controls over costs and quality
35Identifying Key Success Factors MANA 3325 – ThurburnLecture #4 SlidesIdentifying Key Success FactorsList the skills, characteristics, and core competencies that your business must possess to be successful in its market segment.Key Success FactorHow Your Company Rates1.Low High184.108.40.206.Conclusions:
36Step 5: Analyze Competitors MANA 3325 – ThurburnLecture #4 SlidesStep 5: Analyze CompetitorsNFIB 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.
37Competitor Analysis Direct competitors Significant competitors MANA 3325 – ThurburnLecture #4 SlidesCompetitor AnalysisDirect competitorsOffer the same products and servicesCustomers often compare prices, features and deals among these competitors when they shopSignificant competitorsOffer some of the same or similar products or servicesProduct or service lines overlap but not completelyIndirect competitorsOffer same or similar products in only a small number of areas
38Step 5: Analyze Competitors MANA 3325 – ThurburnLecture #4 SlidesStep 5: Analyze CompetitorsAnalyzing key competitors allows an entrepreneur to:Avoid surprises from existing competitors’ new strategies and tactics.Identify potential new competitors and the threats they pose.Improve reaction time to competitors’ actions.Anticipate rivals’ next strategic moves.
39Step 5: Analyze Competitors MANA 3325 – ThurburnLecture #4 SlidesStep 5: Analyze CompetitorsTechniques do not require unethical behavior:Monitor industry and trade publications.Talk to customers and suppliers.Debrief employees, especially sales representatives and purchasing agents.Attend trade shows and conferences and study competitors’ sales literature.Watch for competitor’s employment ads.Conduct patent searches for patents competitors have filed.Get EPA reports for the factories of competing manufacturers.Monitor direct competitors via social media
40Step 5: Analyze Competitors MANA 3325 – ThurburnLecture #4 SlidesStep 5: Analyze Competitors(continued)Techniques do not require unethical behavior:Learn about the kinds of equipment and raw materials competitors are importing from the Journal of Commerce Port Import Export Reporting Service.Buy competitors’ products and “benchmark” them.Get competitors’ credit reports.Check out the reports publicly-held competitors must file with the SEC.Investigate UCC reports.Check out the resources in your local library.Use the Internet to learn more about competitors.Visit competing businesses to observe their operations.
42Is Setting Goals & Objectives Really Important? MANA 3325 – ThurburnLecture #4 SlidesIs 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’sAlice in Wonderland
43Goals: Objectives: Goals vs Objectives Long range … lets go to Miami MANA 3325 – ThurburnLecture #4 SlidesGoals vs ObjectivesGoals:Long range … lets go to MiamiGeneral and/or Abstract… LoftyObjectives: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
44Step 7: Formulate Strategies MANA 3325 – ThurburnLecture #4 SlidesStep 7: Formulate StrategiesStrategy - 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.
45Strategic Options Road Map… Route to take to Miami Strategic Options: MANA 3325 – ThurburnLecture #4 SlidesStrategic OptionsRoad Map… Route to take to MiamiStrategic Options:Cost Leadership… Low Cost Leader…Walmart - TargetDifferentiation… Unique Selection, Better Service, etc…Whole FoodsFocus… Niche Markets… smaller… specific…Natural Foods GroceryRoad Map – Walmart vs Whole Foods vs Natural FoodsRoad Map – WWN
46Step 8 – Implement Action Plans MANA 3325 – ThurburnLecture #4 SlidesStep 8 – Implement Action PlansPurpose: Why are we going to Miami?Scope: Who is going?Contribution: What is the benefit of going?Resources: How many bags of potato chips will it take?Timing: When do we leave?PSCRT
47Step 9 - Establish Controls MANA 3325 – ThurburnLecture #4 SlidesStep 9 - Establish ControlsFinancial: 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
53Non-Recurring Revenue MANA 3325 – ThurburnLecture #4 SlidesBusiness ModelsRecurringRevenueNon-Recurring RevenueFrequencyMagazinesGroceryFuelAttorneysMortgageRealtors
54Non-Recurring Revenue MANA 3325 – ThurburnLecture #4 SlidesBusiness ModelsRecurringRevenueHybridRecurring &Non-RecurringNon-Recurring RevenueFrequencyMagazinesGroceryFuelRecurring for a Short Period of TimeorPeriodic Fees +AttorneysMortgageRealtors
58Feasibility Analysis MANA 3325 – Thurburn Lecture #4 Slides Industry & MarketProduct & ServiceFinancial
59Low Industry & Market Feasibility Five Forces Circle High MANA 3325 – ThurburnLecture #4 SlidesIntensity ofRivalryLowIndustry &Market FeasibilityFive Forces CircleBargaining PowerOf Customers55High5Threat of NewCompetitors55Bargaining PowerOf SuppliersThreat of SubstituteProducts
60Industry & Market Feasibility Five Forces Circle Low High Intensity ofRivalryLowBargaining PowerOf Customers55High5Threat of NewCompetitors55Bargaining PowerOf SuppliersFOOD TRUCK EXAMPLEThreat of SubstituteProducts
61Consignment Clothing Retailer Industry & Market Feasibility Five Forces CircleIntensity ofRivalryLowIndustry &Market FeasibilityFive Forces CircleBargaining PowerOf Customers55High5Threat of NewCompetitors55Bargaining PowerOf SuppliersConsignmentClothing RetailerThreat of SubstituteProducts
62Five Forces Analysis MANA 3325 – Thurburn Lecture #4 Slides Food Truck Neighborhood Style Mexican RestaurantPizza Franchise – DominosSteak House – High End
63Five Forces Analysis MANA 3325 – Thurburn Lecture #4 Slides Commercial Lawn Care BusinessMoving CompanyClothing StoreRoofing Company
64Product or Service Feasibility MANA 3325 – ThurburnLecture #4 SlidesProduct or Service FeasibilityPrimary Research – Most Valuable & Expensive:Customer SurveysFocus GroupsPrototypesIn-Home TrialsSecondary Research – Less Pertinent & Less Expensive:Trade AssociationsDirect Mail ListsDemographic DataCensus DataMarket Research by OthersArticlesLocal DataInternet
65Financial Feasibility MANA 3325 – ThurburnLecture #4 SlidesStart hereFinancial FeasibilityCapital RequirementsDo we have enough cash to do it?If not… can we raise the cash needed?Estimated EarningsDoes it generate enough cash to sustain itself?Return on InvestmentCan we get a better return doing somethingelse for a lower risk?
67Did We Achieve our Goals? MANA 3325 – ThurburnLecture #4 SlidesShould We?Does it fit our Vision and Mission?Can We?Do we have adequate resources?Perform a Feasibility AnalysisHow Do We?Develop a Business PlanSpecify ObjectivesDid We Achieve our Goals?Implement the Business PlanMeasure ResultsWould We Do It Again?Do we pull the plug?If so… When?
68The Business Plan Why Make a Business Plan? MANA 3325 – Thurburn Lecture #4 SlidesThe Business PlanWhy Make a Business Plan?
69The Business Plan Good Planning Improves Results MANA 3325 – ThurburnLecture #4 SlidesThe Business PlanGood Planning Improves ResultsIncrease Probability of Successful FinancingHelps Prevent Mistakes… I wish we hadn’t !
70The Business Plan Who is the Plan for? MANA 3325 – ThurburnLecture #4 SlidesThe Business PlanWho is the Plan for?Yourself… essentials may be enough.Partners… more extensiveInvestors… most extensiveThe More $$$ the More EXTENSIVE
71The Business Plan Company Strategy Marketing Implementation MANA 3325 – ThurburnLecture #4 SlidesThe Business PlanCompanyStrategyMarketingImplementationProjectionsFinancing
72The Business Plan Company Title Page Table of Contents Exec Summary MANA 3325 – ThurburnLecture #4 SlidesThe Business PlanCompanyTitle PageTable of ContentsExec SummaryVision & MissionsHistoryIndustry ProfileProducts & Services
73The Business Plan Strategy Goals Objectives Business Strategy MANA 3325 – ThurburnLecture #4 SlidesThe Business PlanStrategyGoalsObjectivesBusiness Strategy
74The Business Plan Marketing Marketing Strategy Marketing Research MANA 3325 – ThurburnLecture #4 SlidesThe Business PlanMarketingMarketing StrategyMarketing ResearchCustomer ResearchCompetitors Analysis
75The Business Plan Implementation Management Team Plan of Operations MANA 3325 – ThurburnLecture #4 SlidesThe Business PlanImplementationManagement TeamPlan of Operations
76The Business Plan Projections Assumptions Summary & Cash Flow MANA 3325 – ThurburnLecture #4 SlidesThe Business PlanProjectionsAssumptionsSummary & Cash FlowIncome SourcesCOGExpensesPayroll Detail
77The Business Plan Financing Loan Details if applicable MANA 3325 – ThurburnLecture #4 SlidesThe Business PlanFinancingLoan Details if applicableInvestor Details if applicable
78The Business Plan The 5 Cs Capital Capacity Collateral Character MANA 3325 – ThurburnLecture #4 SlidesThe Business PlanThe 5 CsCapitalCapacityCollateralCharacterConditions
79The Business Plan The 5 Cs of Capital MANA 3325 – ThurburnLecture #4 SlidesThe Business PlanThe 5 Cs of CapitalCapital – Enough? and Balance of Debt vs EquityCapacity – Cash FlowCollateral – Liquid or Fixed AssetsCharacter – Creditor HistoryConditions – Terms of Loan