Entrepreneurial Opportunities
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- April Barker
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2 Entrepreneurial Opportunities Opportunity Starting a business Buying a business Franchised business Family business Level of Risk High risk Medium risk Medium risk Variable risk
3 Starting a business Anticipation/Excitement What type of roller coaster do we want? We get our expectations from others... Perhaps less risk? A kiddie coaster OR, A thrill ride (higher risk)? Its an emotional issue Sometimes we get out of line at the last minute...
4 Components for Start-Up Success Passion Ability/Skill Market What am I passionate about? Not enough by itself e.g., I love painting, but it is not enough Can I become an expert? Not enough by itself e.g., I m a great painter, but no one wants my art Are there customers for my product/service? Not enough by iteself e.g., Lots of people buy art, but maybe not my type We Need to Answer Four Questions 1. Do we have passion, skill AND a market? 2. Who is the customer? 3. What need or problem are we solving? 4. How will we make money?
5 Startup Ideas Where Do They Come From? Have you ever thought of a start-up on your own? From where did you get your idea? Start-up Static: How hard could it be? Price Employees Products Marketing Advertising Two people can start the same type of firm with drastically different results its in the details
6 Types of Ideas That Develop into Startups Existing Product Not available in their market New Ideas/ products New Technology Improved Product Perform old function in new and improved way Most common source of business start-ups
7 3.2 New Product Ideas on exam Prior work experience 45% Personal interest/hobby 16% Most common source of new product ideas Chance happening 11% Suggestion 7% Education/ Family business 6% Friends/ relatives 5% Other 4%
8 Business Model Matrix to Generate Business Ideas Write: VIDEO (9 min) Steve Blank - Click on Startup Tools List and describe (in detail) each of the 9 components of the business model
9 Business Model Matrix How to Use Go to: Step 1: Understand the Business Model (examine each item 9 items) Step 2: Brainstorm and log results Process: - Create/Get log file - Morning brainstorm 15 minutes, then throughout the day - Rotate Day 1 item #1, day 2 item # 2, day 3 item # 3, Day 10 item # 1, day 11 item # 2, day 12 item # 3, etc. [90 days ideal (each 10x)] - Evening complete log (formally) Step 3: Putting it all together Read and familiarize with all log entries Starting point Which cell of the Items (9 of them) do we consider to be our starting point of strength? Complete preliminary competitive analysis (look for subtle differences, not similarities) Put together business model
10 Ten Rules for Entrepreneur Success Book: Finding Fertile Ground: Identifying Extraordinary Opportunities for New Ventures by Scott Shane #1 predictor of new business failure = the industry in which the firm is Retail businesses and restaurants have extremely high failure rates 1. Select the right industry 2. Identify valuable opportunities 3. Manage technological transitions 4. Identify and satisfy real market needs 5. Understand customer adoption 6. Exploit established company weaknesses 7. Manage intellectual property 8. Create barriers to imitation 9. Choose the right organizational form 10. Manage risk and uncertainty
11 SWOT Analysis for Start-up Opportunities Threats Outside In: Opportunities & Threats Look at trends: Competition, Economy, Industry, Social, Technology Inside Out: Strengths & Weaknesses Look at internal capabilities: Resources, Processes, Key Skills, Passion Strengths Weaknesses Put it all together Find where these intersect use Business Model Matrix results We will look at: - Feasibility Analysis when we talk about Business Planning (Chapter 6) - Strategy when we talk about Pricing (Chapter 16)
12 SWOT Analysis for On-Going Firm Strengths Weaknesses Opportunities Threats SWOT Modified SWOT Complete in 5 days: Day 1: Opportunities Day 2: Threats Day 3: Strengths Day 4: Weaknesses Day 5: Analysis 80% on S->O 20% on W->T
13 SWOT Putting it all together (example) I developed an Interactive SWOT Tool From my home page, 1. Click on Entrepreneurship Resources 2. Scroll to bottom of page 3. Click on SWOT Analysis
14 Practical SWOT Format External Environment = Social, Economic, Political, Technological, Competitive Trends What do these uncontrollables look like? Lets look at Opportunities first: 1.What are some new and emerging technologies that can help your business (explain)? 2.Which portion of the economy is growing that can help your business (industries)? 3.What are interest rate/inflation trends and how might your business gain by them? 4.What are new government regulations (certification requirements) that may benefit your particular business? 5.What are current demographic trends (income levels, employment) and how might they help your particular business?
15 Practical SWOT Format External Environment = Social, Economic, Political, Technological, Competitive Trends What do these uncontrollables look like? Lets look at Threats now: 1.What are some new and emerging technologies that can hurt your business (explain)? 2.Which portion of the economy is shrinking/contracting that can hurt your business (industries)? 3.What are interest rate/inflation trends and how might your business get hurt by them? 4.What are new government regulations (certification requirements) that may harm your particular business? 5.What are current demographic trends (income levels, employment) and how might they hurt your particular business?
16 Practical SWOT Format CSF = Critical Success Factors also called KSI What must we do, and do well, to survive and thrive in this business? Lets look at Strengths now: 1.What do you do well (that you must do well) in order to survive and thrive in your business? How do you measure each of these skills (if not currently measuring, how will you measure them)? 2.Describe the types of customers you match the best (the ones you can service the best)? 3.With which vendors do you have the best relationship? 4.Which results, that you measure each month, would you consider to be your greatest strengths?
17 Practical SWOT Format CSF = Critical Success Factors What must we do, and do well, to survive and thrive in this business? Lets look at Weaknesses now: 1.What do you NOT do well (but you must do well) in order to survive and thrive in your business? How do you measure each of these skills (if not currently measuring, how will you measure them)? 2.Describe the types of customers you match the least (the ones you can least service properly)? 3.With which vendors should you have a strong relationship, but don t? 4.Which results, that you measure each month, would you consider to be your greatest weaknesses?
18 SWOT Putting it all together (example) An example from my company
19 SWOT Putting it all together (example) An example from my company
20 Release Form for BUSM 66 Project Please complete the top of the Release Form Only put in your Last Name First Name Please sign at the bottom of the form AND sign on the reverse side
21 Entrepreneur Interview Project Handout on Entrepreneur Interview Project Review the steps for project completion (first page) Sign Release Form Access files for project completion: Entrepreneur Interview Instructions (txt) (Right click and "Save Target As...") Entrepreneur Interview On-Line Form Work on/ edit your content (paper then txt file) Complete the project by entering into on-line form
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