n.imanipour,fall2008 The Successful Business It is not enough merely to survive; The goal is to succeed

n.imanipour,fall2008 Factors of a successful Business The Business Concept Understanding the market Industry Health and Trends Consistent Business Focus and clear strategic position Ability to attract, motivate and retain employees

n.imanipour,fall2008 Factors of a successful Business Financial control Anticipating and adapting to change Company's value and integrity

n.imanipour,fall2008 The business concept Thomas Edison: “Anything that won’t sell, I don’t want to invent Source of Business Idea: Previous work experience Education or training Hobbies, talent or other personnel interests Recognition of an unanswered need or market opprtunity

n.imanipour,fall2008 The business concept The successful business has at least one of these elements: Something new Something better An underserved or new market New delivery system or distribution channel Increased Integration

n.imanipour,fall2008 Understanding the market A great idea or new invention is not enough, you need a market that is: Large accessible Responsive e.g. ATM machine

n.imanipour,fall2008 Industry Health and trends Your business does not operate in a vacuum! If your business is in a healthy and expanding industry, investors are likely to be more receptive.

n.imanipour,fall2008 Clear strategic position and consistent business focus A crucial factor is development of a clear strategic position that differentiate you from your competition, and then maintaining focus on that position E.g. 4 companies are making jeans: Company A: selling work clothes Company B: a sportswear manufacture Company C: selling youth clothes Company D: just selling jean!!!!

n.imanipour,fall2008 Clear strategic position and consistent business focus A second aspect: developing a company style or corporate culture E.g.: two restaurants with the same business mission: “providing good, fast food, priced at only a few dollars a meal” The A restaurant: a national burger chain. The B restaurant is a diner

n.imanipour,fall2008 Capable Management Some of the common traits by successful managers: Experience Realism Flexibility Ability to work well with people. Do the key members of management team posses these characteristics?

n.imanipour,fall2008 Ability to attract, motivate and retain employees A company is as good as its people! Unhappy employees are less motivated to do excellent work.

n.imanipour,fall2008 Financial control Key to any business is how it handles money! Make sure you have the information to understand your financial picture on an ongoing basis. What does it take to open your doors each month? Where is your real profit center? How much expansion do you need to maintain growth? What are the consequences of your credit policies? ….

n.imanipour,fall2008 Anticipating change and adaptability The sources of change: Technological changes Sociological changes Competitive changes

n.imanipour,fall2008 What motivates you? 4 C: Control challenge Creativity Cash

n.imanipour,fall2008 Getting your plan started 5 steps of the business plan process: Laying out your basic business concept Gathering data on the feasibility and specifics of your concept Focusing and refining the concept based on the data you compile. Outline the specifics of your business. Putting your plan in compelling form

n.imanipour,fall2008 Start your research by asking questions How much information is enough? Suppose you are planning to open a dry cleaning, what information do you need? What are the basic questions you have to answer?

n.imanipour,fall2008 How many dry cleaners now serve the neighborhood? How profitable are the current dry cleaners in the neighborhood? Are the residents satisfied with the current dry cleaners? Is there more business than current dry cleaners can handle? What are the trends in the dry cleaning industry nationally? What are the demographic trends in this area? …

n.imanipour,fall2008 Suppose you recognize an opportunity to provide a family counseling services via the internet, what are the key questions you have to answer?

The research questions

n.imanipour,fall2008 Historical performance of your company Past sales records, broken down by product line, time period, region,.. Past trends in costs of sales. Overhead expense patterns. Profit margins on product lines Variation from budget projections …..

n.imanipour,fall2008 How to conduct your own market research Personal observation Interviews Survey Focus group Learn from other business Talk to your competition Getting help

n.imanipour,fall2008 Evaluating the data you’ve collected Use the most recent data you can find Translate data into units rather than dollars. Give the most reliable source Integrate data from one source to another in order to draw conclusion. Use the most conservative figures!!!

n.imanipour,fall2008 Now is the time to ask yourself some hard questions: Can the business be viable? Does a real market exist? Is there too much competition already? How does the financial picture look?

n.imanipour,fall2008 HOW YOUR BUSINESS PLAN IS READ The most asked question: Is the business idea solid? Is there a sufficient market? Are the financial projections healthy, realistic, and in line with the investor’s or lender’s patterns? Is the key management described in the plan experienced and capable? Does the plan clearly describe how the investors or lenders will their get money back?

n.imanipour,fall2008 Getting your facts right. Length of the plan What period of time should the plan cover? The language of the plan: Be careful with superlative? E.g. not to have say: “our service will be the best on the market, clearly superior to all others” instead say “ our service will not only handle all the functions of existing services, but will also add features x, y and z and sell for at least w $ less than our closest competitor’ s services”

n.imanipour,fall2008 Use positive comments from third party sources :“هیچ بقالی نمی گه ماست من ترشه“ Use business terms Points of style: Use numbers for impact Use bullet points Using visual in your plan avoid repeating a matter with in the same section