1. Ch. 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.
Ch. 2: Inside the Entrepreneurial Mind

2. Ch. 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.
Ch. 2: Inside the Entrepreneurial Mind

3. Protecting Your Ideas
Utility Patents
are superior to
Design Patents

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

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

6. Ch. 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. ℠ ®
Ch. 2: Inside the Entrepreneurial Mind

7. Ch. 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 ©.
Ch. 2: Inside the Entrepreneurial Mind

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?
Ch. 2: Inside the Entrepreneurial Mind

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

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
2 - 10

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

12. Vision vs Mission Vision: Mission: Why do we do what we do.
MANA 3325 – Thurburn
Lecture #4 Slides
Vision vs Mission
Vision:
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.

13. Competitive Advantages
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. Competitive Advantages
MANA 3325 – Thurburn
Lecture #4 Slides
Competitive Advantages
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.

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

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

17. Strategic Management Is crucial to building a successful business.
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. Strategic Management and Competitive Advantage
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. Building a Competitive Advantage
MANA 3325 – Thurburn
Lecture #4 Slides
Building a Competitive Advantage
Consider five aspects of a small company:
Products they sell
Service they provide
Pricing they offer
Way they sell
Values to which they are committed

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

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

24. Step 1: Develop a Vision and Create a Mission Statement
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. Step 1: Develop a Vision and Create a Mission Statement
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. Step 2: Assess Company Strengths and Weaknesses
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. Strengths Loyal Customers Special Skills Special Knowledge
MANA 3325 – Thurburn
Lecture #4 Slides
Strengths
Loyal Customers
Special Skills
Special Knowledge
Superior Products
Positive Public Image
Employee Experience
Unique Suppliers

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

29. Step 3: Scan for Opportunities and Threats
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. Threats All of those that are listed in the book… … also Law Suits
MANA 3325 – Thurburn
Lecture #4 Slides
Threats
All of those that are listed in the book…
… also
Law Suits
Environmental Disasters
Loss of Key Individuals
Failure to Secure Funding in Future

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

32. MANA 3325 – Thurburn
Lecture #4 Slides

33. Step 4: Identify Key Success Factors
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. Key Success Factors Industry Experience Experienced Management
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. Identifying Key Success Factors
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 Factor
How Your Company Rates 1.
Low High 2. 3. 4. 5.
Conclusions:

36. Step 5: Analyze Competitors
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. Competitor Analysis Direct competitors Significant competitors
MANA 3325 – Thurburn
Lecture #4 Slides
Competitor Analysis
Direct competitors
Offer the same products and services
Customers often compare prices, features and deals among these competitors when they shop
Significant competitors
Offer some of the same or similar products or services
Product or service lines overlap but not completely
Indirect competitors
Offer same or similar products in only a small number of areas

38. Step 5: Analyze Competitors
MANA 3325 – Thurburn
Lecture #4 Slides
Step 5: Analyze Competitors
Analyzing 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.

39. Step 5: Analyze Competitors
MANA 3325 – Thurburn
Lecture #4 Slides
Step 5: Analyze Competitors
Techniques 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

40. Step 5: Analyze Competitors
MANA 3325 – Thurburn
Lecture #4 Slides
Step 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.

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

42. Is Setting Goals & Objectives Really Important?
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

43. Goals: Objectives: Goals vs Objectives Long range … lets go to Miami
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. Step 7: Formulate Strategies
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. Strategic Options Road Map… Route to take to Miami Strategic Options:
MANA 3325 – Thurburn
Lecture #4 Slides
Strategic Options
Road Map… Route to take to Miami
Strategic Options:
Cost Leadership… Low Cost Leader…
Walmart - Target
Differentiation… Unique Selection, Better Service, etc…
Whole Foods
Focus… Niche Markets… smaller… specific…
Natural Foods Grocery
Road Map – Walmart vs Whole Foods vs Natural Foods
Road Map – WWN

46. Step 8 – Implement Action Plans
MANA 3325 – Thurburn
Lecture #4 Slides
Step 8 – Implement Action Plans
Purpose: 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

47. Step 9 - Establish Controls
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. Business Models MANA 3325 – Thurburn Lecture #4 Slides Mo. 1 2 3 4 5 67 8 9 10 11 12
Tot A 50 B

49. Business Models MANA 3325 – Thurburn Lecture #4 Slides Mo. 1 2 3 4 5 67 8 9 10 11 12
Tot A 50 B
@ 6 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. Non-Recurring Revenue
MANA 3325 – Thurburn
Lecture #4 Slides
Business Models
Recurring
Revenue
Non-Recurring Revenue
Rev. Frequency
Mo. / Qtr. / Yr.
> Yr.

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

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

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

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

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

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

59. Low Industry & Market Feasibility Five Forces Circle High
MANA 3325 – Thurburn
Lecture #4 Slides
Intensity of
Rivalry
Low
Industry &
Market Feasibility
Five Forces Circle
Bargaining Power
Of Customers 5 5
High 5
Threat of New
Competitors 5 5
Bargaining Power
Of Suppliers
Threat of Substitute
Products

60. Industry & Market Feasibility Five Forces Circle Low High
Intensity of
Rivalry
Low
Bargaining Power
Of Customers 5 5
High 5
Threat of New
Competitors 5 5
Bargaining Power
Of Suppliers
FOOD TRUCK EXAMPLE
Threat of Substitute
Products

61. Consignment Clothing Retailer Industry & Market Feasibility
Five Forces Circle
Intensity of
Rivalry
Low
Industry &
Market Feasibility
Five Forces Circle
Bargaining Power
Of Customers 5 5
High 5
Threat of New
Competitors 5 5
Bargaining Power
Of Suppliers
Consignment
Clothing Retailer
Threat of Substitute
Products

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

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

64. Product or Service Feasibility
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. Financial Feasibility
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. Did We Achieve our Goals?
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. The Business Plan Why Make a Business Plan? MANA 3325 – Thurburn
Lecture #4 Slides
The Business Plan
Why Make a Business Plan?

69. The Business Plan Good Planning Improves Results
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. The Business Plan Who is the Plan for?
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. The Business Plan Company Strategy Marketing Implementation
MANA 3325 – Thurburn
Lecture #4 Slides
The Business Plan
Company
Strategy
Marketing
Implementation
Projections
Financing

72. The Business Plan Company Title Page Table of Contents Exec Summary
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. The Business Plan Strategy Goals Objectives Business Strategy
MANA 3325 – Thurburn
Lecture #4 Slides
The Business Plan
Strategy
Goals
Objectives
Business Strategy

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

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

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

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

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

79. The Business Plan The 5 Cs of Capital
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