1. 10 - 1 Kawasaki on Positioning Craft a good message Positioning states: Why founders started the organization Why customers should patronize it Why good people should work at it

2. 10 - 2 Kawasaki on Positioning What do you do?

3. 10 - 3 Kawasaki on Positioning Positive Customer-centric Empowering (meaning for employees) Self-explanatory Specific Core (competencies) Relevant Long-lasting Differentiated

4. 10 - 4 Kawasaki on Positioning The name of your business should : Be first in the alphabet Avoid numbers, trends, and similar sounding names Sound logical Does your name have verb potential ? “________________ it.” (E.g., Google it)

5. 10 - 5 Kawasaki on Positioning Make your positioning personal (and don’t use jargon) “We realize that it’s important that every customer has some control over personal information.” V. “We give you control over your personal information.”

6. 10 - 6 Kawasaki on Positioning After you tell someone about your business idea – can they explain to you what the idea is without repeating your own wording? When you test your product or service, listen carefully, this feedback is helping you to develop your position

7. 10 - 7 The Entrepreneurial Approach to Resources Resources – Networks are everything to the entrepreneur People, such as the management team, the board of directors, lawyers, accountants, and consultants Financial resources Assets, such as plant and equipment Business plan

8. 10 - 8 Relationship with the Board of Directors Simple rules for a productive relationship with the board of directors Treat your directors as individual resources Always be honest with your directors Set up a compensation committee Set up an audit committee Never set up an executive committee Also note use of accountants and lawyers

9. 10 - 9 Consultants Why do startups hire consultants? To compensate for a lower level of professional experience To target a wide market segment (possibly to do market research for a consumer goods firm) To undertake projects that require a large startup investment in equipment

10. 10 - 10 Consultants Consider the Gap Analysis exercise and Building your Brain Trust exercises at the end of Chapter 10

11. 10 - 11 Hiring a Consultant Considerations Not geographically bound Word of mouth References People skills Professional affiliations

12. 10 - 12 Financial Resources Cash is the lifeblood of the venture Computers and spreadsheet programs are tools that save time and increase productivity and creativity. Answer “what if” questions Capital Requirements Pro Forma Income Statements Balance Sheets Budgeting Break-Even Calculations Cash Flow Projections

13. 10 - 13 Franchising An entrepreneurial alliance between two organizations, the franchisor and the franchisee Franchisor – the concept innovator who grows by seeking partners or franchisees to operate the concept in local markets A large-scale growth opportunity based on a partnership rather than an individual effort

14. 10 - 14 Assessing a Franchise Multiple market presence Outlet pro forma disclosed or discerned Market share National marketing program National purchasing program Margin characteristics

15. 10 - 15 Accessing a Franchise Business format Term of the license agreement Site development Capital required per unit Franchise fee and royalties

16. 10 - 16 Exhibit 11.3

17. 10 - 17 Training and Operational Support Promotes the standardized, consistent delivery of the product Reinforces the brand’s value Transfers knowledge of the service delivery system (SDS) to the franchisees, both managers and line workers

18. 10 - 18 Field Support Two forms: Franchisor’s representative visits the franchisee’s location in person Resident experts available for consultation at the corporate headquarters

19. 10 - 19 Marketing, Advertising, and Promotion Funded and implemented at three levels 1. National Franchisee contributes a percentage of top-line sales to the fund and typically controlled by the franchisor 2. Regional Stores within a set area contribute a percentage of top-line sales to the fund Controlled by an area of dominant influence (ADI) advertising cooperative 3. Local Franchisee makes direct expenditures on advertising Controlled by franchisee but must be within guidelines set by franchisor

20. 10 - 20 Exhibit 12.2

21. 10 - 21 Exhibit 12.3

22. 10 - 22 Entrepreneurial Finance Three core principles of entrepreneurial finance More cash is preferred to less cash Cash sooner is preferred to cash later Less risky cash is preferred to more risky cash

23. 10 - 23 Exhibit 12.4

24. 10 - 24 Exhibit 12.5

25. 10 - 25 Bargaining Power Three vital corollaries determining bargaining power Burn rate Time to OOC (Out Of Cash) TTC (Time To Close)

26. 10 - 26 Free Cash Flow The cash flow generated by a company or project is defined as follows: Earnings before interest and taxes (EBIT) Less tax exposure (tax rate times EBIT) Plus depreciations, amortization, and other non-cash charges Less increase in operating working capital Less capital expenditures

27. 10 - 27 Operating Working Capital Operating working capital can be defined as follows: Transactions cash balances Plus accounts receivable Plus inventory Plus other operating current assets Less accounts payable Less taxes payable Less other operating current liabilities

28. 10 - 28 Factors Affecting Financing Accomplishments and performance to date Investor’s perceived risk Industry and technology Venture upside potential and anticipated exit timing

29. 10 - 29 Factors Affecting Financing Venture anticipated growth rate Venture age and stage of development Investor’s required rate of return or internal rate of return Amount of capital required and prior valuations of the venture

30. 10 - 30 Factors Affecting Finance Founders’ goals regarding growth, control, liquidity, and harvesting Relative bargaining positions Investor’s required terms and covenants

31. 10 - 31 Check out these resources www.sba.gov Financing information Start-up kits/information Search by zip code www.score.org Service Core of Retired Executives Search by zip code www.scorela.org SCORE in Glendale