Tools used by Entrepreneurs for Venture Planning Entrepreneurship 1 2.09 B

Uses of Business Plans Help attain business goals Target changes in perception and branding by the customer, client, taxpayer, or larger community. Enables investors to make knowledgeable decisions.

A Business Plan should answer the following Questions What problem does the company's product or service solve? What niche will it fill? What is the company's solution to the problem? Who are the company's customers, and how will the company market and sell its products to them? What is the size of the market for this solution? What is the business model for the business (how will it make money)?

A Business Plan should answer the following Questions (cont.) Who are the competitors and how will the company maintain a competitive advantage? How does the company plan to manage its' operations as it grows? Who will run the company and what makes them qualified to do so? What are the risks and threats confronting the business, and what can be done to mitigate them? What are the company's capital and resource requirements? What are the company's historical and projected financial statements?

Importance of a Mission statement The Mission Statement is best described as the intended strategy and business philosophy for making the entrepreneur's vision a reality. Examples Google's mission is to organize the world's information and make it universally accessible and useful.

Mission Statement examples To make, distribute & sell the finest quality all natural ice cream & euphoric concoctions with a continued commitment to incorporating wholesome, natural ingredients and promoting business practices that respect the Earth and the Environment. Snap-on's mission is to delight our customers - professional tool and equipment users worldwide - by creating innovative, productivity-enhancing products, services and solutions.

Financial Forecasting and Budgeting What is Financial Forecasting? The process of estimating future business performance (sales forecasting, costs, earnings) Why is it important? To determine future financial needs Forecasting also is important for production planning, human resource planning, etc. used by outsiders to value companies and their securities. Give overall perspective of the whole firm, rather than looking at individual projects. Sales Forecasting – used to project sales for a new business venture.

Financial Forecasting and Budgeting (cont.) After financial forecasting has been completed it is easier to Budget money What is Budgeting? A budget represents a detailed analysis of how a company expects to spend money in future time periods. Many companies create budgets on an annual basis so they can carefully outline the expected needs of each department in the business. Examples: Creating a promotional budget for advertising your product/service. Why Budgeting is important? limits how much money is spent on certain operations to have a financial roadmap for business operations plan for future business growth and expansion

Internal and External tools used for Venture Planning SWOT analysis Strengths (inside the business) examples: patent, strong brand name, good reputation with customers. Weaknesses (inside the business) examples: lack of marketing expertise, location, poor quality goods Opportunities (outside the business) examples: availability of expanding using the Internet, selling to new markets, competitor goes out of business Threats (outside the business) examples: new regulations, new substitute product, more competitors.

Internal and External tools used for Venture Planning Market Analysis ~ It identifies every relevant aspect of the market in which (and to which) you will market your product or service. A good market analysis summary is rooted in careful, thorough research. A market analysis must include an industry description and outlook, information about your company's target market, market test results, lead times, and a competitive comparison

Internal and External tools used for Venture Planning Environmental Scan ~ an environmental scan involves considering the factors that will influence the direction and goals of your organization. Examples an environmental scan might project that in the next ten years, the number of people (potential customers) between the ages of 18-24 will increase from 30% to 40%. looking at the present capabilities of the organization (infrastructure, hardware, personnel, abilities, structure, etc) and that information can be compared to what the organization WILL need in the future to achieve its strategic goals.

Internal and External tools used for Venture Planning Competitive analysis ~ a process of gathering and analyzing information about your competitors, their practices, products, strengths and weaknesses and business trends in order to assess your position in the market and improve your products and marketing strategies. Use to: know what your competitors are doing and what to do to stay ahead of the competition. have reliable information showing how customers perceive their product or how it compares to the competition.

Internal and External tools used for Venture Planning Sensitivity Analysis ~ helps to build confidence in the model by studying the uncertainties that are often associated with parameters in models.

Types of Planning Approaches Opportunity Management Approach ~ multi-stage process that has been defined as "a process to identify business and community development opportunities that could be implemented to sustain or improve the local economy. Includes ideas, recognizing opportunities, and driving opportunities

Milestone planning Approach Milestones are the small steps that lead to the ultimate goal whether it be developing of new product or service or advancing the exploration of space to the far reaches of the universe. A milestone is an important event marked on a timeline and recognized when successfully reached. Milestones are the building blocks for the project's schedule and often create forward momentum to propel the project along to completion.

Entrepreneurial Strategy Matrix A model appropriate for both entrepreneurial ventures involving high innovation and often corresponding high risk, and traditional small business ventures, which are generally low in innovation

Multistage Contingency Approach The contingency approach believes that it is impossible to select one way of managing that works best in all situations An example of this is the never ending problem of increasing productivity. There may be several different ways to handle and look at that situation.

Technology used for Venture Planning Business Planning software Bookkeeping software Budgeting software Financial Analysis software