Start up ppt

BUSINESSBUSINESS
START-UPSTART-UP

SYLLABUSSYLLABUS
 11. THE BUSINESS ENVIRONMENT. THE BUSINESS ENVIRONMENT
Meaning – Scope and Characteristics – ImportanceMeaning – Scope and Characteristics – Importance
for economic policies and decisions in thefor economic policies and decisions in the
Organisation -Organisation - Types of business environmentTypes of business environment
 2. THE INDIVIDUAL AS AN2. THE INDIVIDUAL AS AN
ENTREPRENEURENTREPRENEUR
Definition- The qualities and skills of a successfulDefinition- The qualities and skills of a successful
entrepreneurentrepreneur
 3. STARTING AND RUNNING A3. STARTING AND RUNNING A
BUSINESS -BUSINESS - Business plan - definition- How toBusiness plan - definition- How to
write a business planwrite a business plan

 4. RISKS IN A NEW BUSINESS4. RISKS IN A NEW BUSINESS
Definition – TypesDefinition – Types
 5. BUSINESS ETHICS5. BUSINESS ETHICS
Meaning – Scope and Characteristics – Importance

Business EnvironmentBusiness Environment

What is Business..??What is Business..??
 Business may beBusiness may be
understood as the organisedunderstood as the organised
efforts of enterprises toefforts of enterprises to
supply consumers withsupply consumers with
goods and services for agoods and services for a
profitprofit

Purpose of a businessPurpose of a business
 All businesses share the sameAll businesses share the same
purpose: TO EARN PROFITSpurpose: TO EARN PROFITS
 But other purposes are:But other purposes are:
Supplying goods and servicesSupplying goods and services
to the society; creating jobto the society; creating job
opportunities; offer of betteropportunities; offer of better
quality of life; contributing to thequality of life; contributing to the
economiceconomic growth of the country.growth of the country.

Business objectivesBusiness objectives
Before we describe businessBefore we describe business
objectives, it is desirable to be clearobjectives, it is desirable to be clear
about related conceptsabout related concepts

VisionVision

Mission &ObjectivesMission &Objectives
VISION: A Vision is a broadVISION: A Vision is a broad
explanation of why the firm existsexplanation of why the firm exists
and where it is trying to lead.and where it is trying to lead.
A vision gives the organisation aA vision gives the organisation a
sense of purpose and a set ofsense of purpose and a set of
values that unite employees in avalues that unite employees in a
common destiny.common destiny.

Creating the VisionCreating the Vision
 Establishing GoalsEstablishing Goals
VisioningVisioning
One of the most important things to doOne of the most important things to do
in the preparation stage is toin the preparation stage is to
VISUALIZE things in your mindVISUALIZE things in your mind
Mayor Rudolph GiulianiMayor Rudolph Giuliani

Visioning vs PlanningVisioning vs Planning
VisioningVisioning
− proactive plan forproactive plan for
the futurethe future
− It is a view of theIt is a view of the
future thatfuture that
everyone caneveryone can
believe in.believe in.
PlanningPlanning
-
process thatprocess that
provides specificprovides specific
direction anddirection and
meaning to themeaning to the
day-to-dayday-to-day
activities.activities.
-
strategic planningstrategic planning
places theplaces the
strategic vision intostrategic vision into
motion.motion.

A Vision StatementA Vision Statement
-- Says what you want out of Business.Says what you want out of Business.
- Details principles and beliefs.- Details principles and beliefs.
- Gives you the power to create and- Gives you the power to create and
design your business around yourdesign your business around your
values.values.

In SummaryIn Summary
You have to have a plan for success !!!You have to have a plan for success !!!
It starts with a visionIt starts with a vision
You get the vision by reaching eachYou get the vision by reaching each
goal.goal.
You reach goals by hard work,You reach goals by hard work,
dedication, and perseverance.dedication, and perseverance.

ObjectivesObjectives
 Objectives render missionObjectives render mission
statements more concrete.statements more concrete.
 Mission statements seek to make aMission statements seek to make a
vision more specific and Objectivesvision more specific and Objectives
are attempts to make missionare attempts to make mission
statements more concrete.statements more concrete.
 Objectives therefore, represent theObjectives therefore, represent the
operational side of an organisation.operational side of an organisation.

 Profit:Profit: Profit is the main incentive,Profit is the main incentive,
motivator, strong sustainer, judiciousmotivator, strong sustainer, judicious
allocator of resources, objective indicator ofallocator of resources, objective indicator of
productivity and a solid basis for growth,productivity and a solid basis for growth,
expansion and survival.expansion and survival.
 Growth:Growth: Business should grow in allBusiness should grow in all
directions over a period of time. Thedirections over a period of time. The
strategies adopted to achieve growth are:strategies adopted to achieve growth are:
 (a) add more products/markets;(a) add more products/markets;
 (b) diversify into new areas;(b) diversify into new areas;
 (c) increase market share;(c) increase market share;
 (d) cut down costs and increase(d) cut down costs and increase
productivity.productivity.

Power:Power: Business houses have vastBusiness houses have vast
resources at its command. Theseresources at its command. These
resources confer enormous economic andresources confer enormous economic and
political power on owners and managers ofpolitical power on owners and managers of
business ventures.business ventures.
Employee satisfaction & DevelopmentEmployee satisfaction & Development::
Concern for employees continues to be anConcern for employees continues to be an
important aspect of managementimportant aspect of management
Quality products & servicesQuality products & services: Those who: Those who
insisted on and persisted in quality survivedinsisted on and persisted in quality survived
competition and stayed ahead of others incompetition and stayed ahead of others in
the market. Persistent quality of productsthe market. Persistent quality of products
earns brand loyalty, a vital ingredient ofearns brand loyalty, a vital ingredient of
success.success.

Market Leadership:Market Leadership: To earn marketTo earn market
leadership, innovation is the key factor.leadership, innovation is the key factor.
Innovation may be in product, advertising,Innovation may be in product, advertising,
distribution, finance or in any other field.distribution, finance or in any other field.
Challenging:Challenging: Business offers vast scopeBusiness offers vast scope
and poses formidable challenges.and poses formidable challenges.
Joy of creation:Joy of creation: It is through businessIt is through business
strategies new ideas and innovations arestrategies new ideas and innovations are
given a shape and are converted intogiven a shape and are converted into
useful products and services for the benefituseful products and services for the benefit
of customers.of customers.

Service to society:Service to society: Business is a part ofBusiness is a part of
society and has several obligations towardssociety and has several obligations towards
it.it.
Good Corporate citizenship:Good Corporate citizenship: It implies thatIt implies that
the business unit complies with the rules ofthe business unit complies with the rules of
the land, pays taxes to the governmentthe land, pays taxes to the government
regularly, discharges its obligations toregularly, discharges its obligations to
society and cares for its employees andsociety and cares for its employees and
customers.customers.

What is environment..??What is environment..??
 Circumstances, influences, stresses,Circumstances, influences, stresses,
and competitive, cultural,and competitive, cultural,
demographic, economic, natural, political,demographic, economic, natural, political,
regulatory, andregulatory, and
technological factors (called environmentaltechnological factors (called environmental
factors) that effect the survival, operations,factors) that effect the survival, operations,
and growth of an organization.and growth of an organization.

Business EnvironmentBusiness Environment
 Definition of Business environment byDefinition of Business environment by
Davis Keith “Davis Keith “ The Aggregate of allThe Aggregate of all
conditions events and influences thatconditions events and influences that
surround and affect business.”surround and affect business.”
 Business environment refers to all thoseBusiness environment refers to all those
internal and external factors that have ainternal and external factors that have a
bearing on the business.bearing on the business.

Characteristics ofCharacteristics of
Business environment.Business environment.
 Business is the surrounding situation thatBusiness is the surrounding situation that
affect the business.affect the business.
 Business environment is very Complex andBusiness environment is very Complex and
needs a deep study.needs a deep study.
 Dynamic nature is one of the part of businessDynamic nature is one of the part of business
environment. Study of changes is veryenvironment. Study of changes is very
important for the business.important for the business.
 Environment = Opportunities & ThreatsEnvironment = Opportunities & Threats
 Environment is very complicated and Hence itEnvironment is very complicated and Hence it
needs minute study.needs minute study.

 Changes in the environment cant be done byChanges in the environment cant be done by
one businessman. Businessman has toone businessman. Businessman has to
adjust to the environment.adjust to the environment.
 Creates framework for business.Creates framework for business.
 It’s a challenge and an opportunity for theIt’s a challenge and an opportunity for the
business man and its study can help make orbusiness man and its study can help make or
brake the business.brake the business.
 As the business environment is very complexAs the business environment is very complex
and cannot be changed hence It needsand cannot be changed hence It needs
adaptability.adaptability.
Business environment.Business environment.

Need & Importance ofNeed & Importance of
Business Environment.Business Environment.
 The study of Business Environment helpsThe study of Business Environment helps
keeping the business flexible.keeping the business flexible.
 To exploit business opportunities fully.To exploit business opportunities fully.

 To make business socially acceptable.To make business socially acceptable.
 To keep the business enterprise alert.To keep the business enterprise alert.
 To maintain adaptability to socio-economicTo maintain adaptability to socio-economic
changes.changes.
 To understand future problems and prospects.To understand future problems and prospects.
 To ensure optimum utilization of resources.To ensure optimum utilization of resources.
need & Importance ofneed & Importance of
Business Environment.Business Environment.

Types of BusinessTypes of Business
Environment.Environment.
Three different levels of BusinessThree different levels of Business
Environment are as follows:Environment are as follows:
 Internal EnvironmentInternal Environment
 Micro EnvironmentMicro Environment
 Macro EnvironmentMacro Environment

INTERNAL ENVIRONMENTINTERNAL ENVIRONMENT
The important internal factors which have aThe important internal factors which have a
bearing on the strategy and otherbearing on the strategy and other
decisions are:decisions are:
1.1. Value systemValue system
2.2. Mission & ObjectivesMission & Objectives
3.3. Management Structure & NatureManagement Structure & Nature
4.4. Internal Power relationshipInternal Power relationship
5.5. Human resourcesHuman resources
6.6. Company image & Brand equityCompany image & Brand equity

MICRO ENVIRONMENTMICRO ENVIRONMENT
The micro environment consists of the actors in theThe micro environment consists of the actors in the
company’s immediate environment that affect thecompany’s immediate environment that affect the
performance of the company.performance of the company.
 Suppliers:Suppliers: Suppliers are the important force in theSuppliers are the important force in the
task environment of a business. Multiple sources oftask environment of a business. Multiple sources of
supply often help to reduce risks.supply often help to reduce risks.
 Customers:Customers: To succeed in capturing customers, aTo succeed in capturing customers, a
business must try its best to know what people wantbusiness must try its best to know what people want
and will buy.and will buy.
 Labour:Labour: The labour force is organised in the formThe labour force is organised in the form
of trade unions. The trade unions interact with theof trade unions. The trade unions interact with the
management & pressurise the management for themanagement & pressurise the management for the
fulfilment of their demands.fulfilment of their demands.

Competitors:Competitors: Competitors play a vital role inCompetitors play a vital role in
running the business enterprise. There arerunning the business enterprise. There are
various types of competitions:various types of competitions:
 Desire competition: Under this type ofDesire competition: Under this type of
competition the primary task is to influencecompetition the primary task is to influence
the basic desire of the customer.the basic desire of the customer.
 Generic competition: The competitionGeneric competition: The competition
among alternatives which satisfy aamong alternatives which satisfy a
particular category of desire is calledparticular category of desire is called
generic competition.generic competition.
 Product form competition: In this type ofProduct form competition: In this type of
competition, the consumer has to choosecompetition, the consumer has to choose
between different forms of the product.between different forms of the product.

 Brand competition: The competitionBrand competition: The competition
between different brands of the samebetween different brands of the same
product.product.
Taking into consideration these differentTaking into consideration these different
factors every marketer should strive tofactors every marketer should strive to
create primary and relative demand for hiscreate primary and relative demand for his
product.product.
Regulating agencies: The regulators includeRegulating agencies: The regulators include
government departments and othergovernment departments and other
organizations which monitor the activitiesorganizations which monitor the activities
of business.of business.

MACRO ENVIRONMENTMACRO ENVIRONMENT

Types of BusinessTypes of Business
EnvironmentEnvironment
The macro forces are, generally, moreThe macro forces are, generally, more
uncontrollable than the micro forces.uncontrollable than the micro forces.
Important macro environment factorsImportant macro environment factors
includes:includes:
Political Environment.Political Environment.
Economic Environment.Economic Environment.
Social Environment.Social Environment.
Technological Environment.Technological Environment.
Natural Environment.Natural Environment.
International Environment.International Environment.
Demographic Environment.Demographic Environment.

ECONOMIC ENVIRONMENTECONOMIC ENVIRONMENT
The survival & success of a businessThe survival & success of a business
enterprise is finally decided by theenterprise is finally decided by the
economic environment & various marketeconomic environment & various market
conditions. The important externalconditions. The important external
factors that affect the economicfactors that affect the economic
environment of a business are asenvironment of a business are as
follows:follows:
 Economic conditionsEconomic conditions
 Economic policiesEconomic policies
 Economic growthEconomic growth
 Interest ratesInterest rates
 Currency exchange rates.Currency exchange rates.

SOCIO-CULTURALSOCIO-CULTURAL
ENVIRONMENTENVIRONMENT
It is very comprehensive because it mayIt is very comprehensive because it may
include the total social factors withininclude the total social factors within
which an organisation operates.which an organisation operates.
 Socio-cultural environment may includeSocio-cultural environment may include
expectations of the society fromexpectations of the society from
business, attitudes of society towardsbusiness, attitudes of society towards
business & its management, viewsbusiness & its management, views
towards achievement of work, viewstowards achievement of work, views
towards structure, responsibility &towards structure, responsibility &
organisational positions, views towardsorganisational positions, views towards
customs, & labour mobility & level ofcustoms, & labour mobility & level of
educationeducation..

NATURAL ENVIRONMENTNATURAL ENVIRONMENT
It includes geographical & ecological factors.It includes geographical & ecological factors.
Almost every aspect of businessAlmost every aspect of business
depends upon natural environment.depends upon natural environment.
 Manufacturing depends on physicalManufacturing depends on physical
inputs.inputs.
 Mining depends on natureMining depends on nature
 Agriculture depends on nature.Agriculture depends on nature.
 Trade between two regions depends onTrade between two regions depends on
geographical factors.geographical factors.
 Topographical factors may affect theTopographical factors may affect the
demand pattern.demand pattern.

DEMOGRAPHICDEMOGRAPHIC
It includes:It includes:
 Size, growth rate, age composition, sexSize, growth rate, age composition, sex
composition etc., of populationcomposition etc., of population
 Family sizeFamily size
 Caste, religion,Caste, religion,
 Educational level...etcEducational level...etc

TECHNOLOGICALTECHNOLOGICAL
Business has to adopt technological changesBusiness has to adopt technological changes
from time to time. Every businessfrom time to time. Every business
enterprise has two basic functions i.e.,enterprise has two basic functions i.e.,
 Marketing &Marketing &
 Innovation.Innovation.
Technological environment also includesTechnological environment also includes
research base decisions.research base decisions.
The fast changes in technology also createThe fast changes in technology also create
problems for enterprises as these renderproblems for enterprises as these render
plants and products obsolete quickly.plants and products obsolete quickly.

International EnvironmentInternational Environment
Implications of global or internationalImplications of global or international
environment are as follows:environment are as follows:
 Companies are forced to view businessCompanies are forced to view business
issues from a global perspective.issues from a global perspective.
 Safe & protected markets are no longerSafe & protected markets are no longer
there.there.
 Learning of foreign languages is a mustLearning of foreign languages is a must
for every business manager.for every business manager.
 Acquiring familiarity with foreignAcquiring familiarity with foreign
currencies is also a must.currencies is also a must.

THE INDIVIDUAL ASTHE INDIVIDUAL AS
AN ENTREPRENEURAN ENTREPRENEUR

 What is “entrepreneurship”?What is “entrepreneurship”?
 Why be an entrepreneur? Why not?Why be an entrepreneur? Why not?
 Categories of EntrepreneursCategories of Entrepreneurs
 Characteristics and Skills of anCharacteristics and Skills of an
EntrepreneurEntrepreneur

Entrepreneurship - SomeEntrepreneurship - Some
Modern DefinitionsModern Definitions
 Scott Shane (Case WesternScott Shane (Case Western) –) –
“Entrepreneurship is an activity that“Entrepreneurship is an activity that
involves the discovery, evaluation andinvolves the discovery, evaluation and
exploitation of opportunities to introduceexploitation of opportunities to introduce
new goods and services, ways ofnew goods and services, ways of
organizing, markets, processes, and neworganizing, markets, processes, and new
materials through organizing efforts thatmaterials through organizing efforts that
previously had not existed.”previously had not existed.”
 Howard Stevenson (Harvard)Howard Stevenson (Harvard) – “.. The– “.. The
pursuit of opportunity without regard topursuit of opportunity without regard to
resources currently controlled.”resources currently controlled.”

• AnAn entrepreneurentrepreneur is a person who seeks ais a person who seeks a
profitable opportunity and takes theprofitable opportunity and takes the
necessary risks to set up and operate anecessary risks to set up and operate a
business.business.
• Differ from many small-business owners inDiffer from many small-business owners in
their strongtheir strong desire to make theirdesire to make their
business grow.business grow.
• Differ from managers through theirDiffer from managers through their
overriding responsibility to use theoverriding responsibility to use the
resources of the organization toresources of the organization to
accomplish their goals.accomplish their goals.
• Willing to take risksWilling to take risks..

QUESTIONQUESTION
 Why be an entrepreneur?Why be an entrepreneur?
 What do you think?What do you think?

Why should you beWhy should you be
interested?interested?
 Many young people have succeeded:Many young people have succeeded:
 Michael Dell - Dell ComputersMichael Dell - Dell Computers
 Frank Carney - Pizza HutFrank Carney - Pizza Hut
 Fred De Luca - Subway.Fred De Luca - Subway.
 Kristy Taylor - SkinCareRx.comKristy Taylor - SkinCareRx.com
 Opportunity to reap large profitsOpportunity to reap large profits

 Invulnerability of YouthInvulnerability of Youth
 Confident, resilient, and ignorantConfident, resilient, and ignorant
 Minimum exposure to failureMinimum exposure to failure
 Limited ResponsibilityLimited Responsibility
 Marriage, children, car, home, etc.Marriage, children, car, home, etc.
suggest higher opportunity costs ifsuggest higher opportunity costs if
failurefailure
 Physical and Emotional StrengthPhysical and Emotional Strength
 Better ability to burn the candle at bothBetter ability to burn the candle at both
endsends

 Available ResourcesAvailable Resources
 Many are waiting for you to ask for help.Many are waiting for you to ask for help.
 Take advantage of your “harmless”Take advantage of your “harmless”
appearanceappearance
 Opportunity to control own destinyOpportunity to control own destiny
 Opportunity to reach your full potentialOpportunity to reach your full potential
 Opportunity to make a differenceOpportunity to make a difference

Why NOT to be anWhy NOT to be an
EntrepreneurEntrepreneur
 Uncertainty of incomeUncertainty of income
 Risk of losing entire invested capitalRisk of losing entire invested capital
 Lower quality of life until business getsLower quality of life until business gets
establishedestablished
 High levels of stressHigh levels of stress
 Complete responsibilityComplete responsibility

Why People BecomeWhy People Become
EntrepreneursEntrepreneurs

Why People BecomeWhy People Become
 Being your Own BossBeing your Own Boss
 Self-management is the motivation thatSelf-management is the motivation that
drives many entrepreneurs.drives many entrepreneurs.
 Financial SuccessFinancial Success
 Entrepreneurs are wealth creators.Entrepreneurs are wealth creators.
 Job SecurityJob Security
 Over the past ten years, largeOver the past ten years, large
companies have eliminated more jobscompanies have eliminated more jobs
than they have created.than they have created.
 Quality of LifeQuality of Life
 Starting a business gives the founderStarting a business gives the founder
some choice over when, where, andsome choice over when, where, and
how to work.how to work.

The Environment forThe Environment for
EntrepreneurshipEntrepreneurship

GlobalizationGlobalization
The rapid globalization of business
has created many

Not everyone wants to be an entrepreneurNot everyone wants to be an entrepreneur
and run their own business. Being anand run their own business. Being an
entrepreneur requires specific characteristicsentrepreneur requires specific characteristics
and skills that are often achieved throughand skills that are often achieved through
education, hard work, and planning.education, hard work, and planning.
Risk TakerRisk Taker - Businesses face risk.- Businesses face risk.
Entrepreneurs minimize risk throughEntrepreneurs minimize risk through
research, planning, and skill development.research, planning, and skill development.
PerceptivePerceptive - Entrepreneurs view problems as- Entrepreneurs view problems as
opportunities and challenges.opportunities and challenges.
CuriousCurious- Entrepreneurs like to know how- Entrepreneurs like to know how
things work. They take the time and initiativethings work. They take the time and initiative
to pursue the unknown.to pursue the unknown.

ImaginativeImaginative - Entrepreneurs are creative.- Entrepreneurs are creative.
They imagine solutions to problems thatThey imagine solutions to problems that
encourage them to create new products andencourage them to create new products and
generate ideas.generate ideas.
Persistent-Persistent- True entrepreneurs faceTrue entrepreneurs face
bureaucracy, make mistakes, receivebureaucracy, make mistakes, receive
criticism, and deal with money, family, orcriticism, and deal with money, family, or
stress problems. But they still stick to theirstress problems. But they still stick to their
dreams of seeing the venture succeed.dreams of seeing the venture succeed.
Goal-settingGoal-setting - Entrepreneurs are motivated- Entrepreneurs are motivated
by the excitement of staring a new business.by the excitement of staring a new business.
Once achieved, they seek out new goals orOnce achieved, they seek out new goals or
ventures to try.ventures to try.
HardworkingHardworking - Entrepreneurs need a great- Entrepreneurs need a great
deal of energy to see a venture start anddeal of energy to see a venture start and
succeed. Yet they are not deterred by thesucceed. Yet they are not deterred by the
long hours to achieve their goal.long hours to achieve their goal.

Self-confidentSelf-confident - Entrepreneurs believe in- Entrepreneurs believe in
themselves. Their self-confidence takes carethemselves. Their self-confidence takes care
of any doubts they may have.of any doubts they may have.
FlexibleFlexible - Entrepreneurs must be flexible in- Entrepreneurs must be flexible in
order to adapt to changing trends, markets,order to adapt to changing trends, markets,
technologies, rules, and economictechnologies, rules, and economic
environments.environments.
IndependentIndependent - An entrepreneur’s desire for- An entrepreneur’s desire for
control and the ability to make decisions oftencontrol and the ability to make decisions often
makes it difficult for them to work in amakes it difficult for them to work in a
controlled environment.controlled environment.

Entrepreneurial SkillsEntrepreneurial Skills
A skill is the ability to do something specific orA skill is the ability to do something specific or
to translate knowledge into action.to translate knowledge into action.
Research SkillsResearch Skills: Entrepreneurs need to: Entrepreneurs need to
identify what they need to know and useidentify what they need to know and use
research techniques to obtain it.research techniques to obtain it.
Gathering InformationGathering Information
• Reliable and relevant sources ofReliable and relevant sources of
information may include: books,information may include: books,
periodicals, indexes and databases, theperiodicals, indexes and databases, the
Internet, consultants, professionals,Internet, consultants, professionals,
schools.schools.

Relationship SkillsRelationship Skills: Running a business means: Running a business means
building good relationships with staff, suppliers,building good relationships with staff, suppliers,
and customers.and customers.
Staff RelationshipsStaff Relationships : Employees need to feel: Employees need to feel
that they are treated fairly, are rewarded for theirthat they are treated fairly, are rewarded for their
efforts, and have their needs met.efforts, and have their needs met.
Supplier RelationshipsSupplier Relationships: Communication is the: Communication is the
most important relationship skill required to dealmost important relationship skill required to deal
with suppliers. They act as sources ofwith suppliers. They act as sources of
information for the new business. Suppliers alsoinformation for the new business. Suppliers also
require feedback to know how to improve theirrequire feedback to know how to improve their
service.service.
Customer RelationshipsCustomer Relationships: In an entrepreneurial: In an entrepreneurial
business, the customer is the “boss” and the keybusiness, the customer is the “boss” and the key
to the business’ success. Therefore, theto the business’ success. Therefore, the
entrepreneur and his or her staff must develop aentrepreneur and his or her staff must develop a
positive relationship with the customerpositive relationship with the customer

STARTING ANDSTARTING AND
RUNNING ARUNNING A
BUSINESSBUSINESS

Entrepreneurs StartEntrepreneurs Start
Businesses:Businesses:
 To Capitalize on an InventionTo Capitalize on an Invention
 To Pursue a PassionTo Pursue a Passion
 To Be Their Own BossTo Be Their Own Boss
 To Get RichTo Get Rich
---All Need an Exit Strategy---All Need an Exit Strategy

Why develop aWhy develop a
Business Plan?Business Plan?
““All the work you do in thinking up your idea,All the work you do in thinking up your idea,
testing it, studying it, and producing it, hastesting it, studying it, and producing it, has
been for nothingbeen for nothing if you can’t sell itif you can’t sell it..
Whether you start you own business toWhether you start you own business to
produce and sell your invention,produce and sell your invention,
subcontract out the manufacturing part, orsubcontract out the manufacturing part, or
sell your rights in return for a percentage ofsell your rights in return for a percentage of
the proceeds, you need a business plan.”the proceeds, you need a business plan.”
- Pamela Riddle Bird, PhD, Inventing- Pamela Riddle Bird, PhD, Inventing
For DummiesFor Dummies

Why develop aWhy develop a
Business Plan?Business Plan?
““AA business planbusiness plan is vital for enterprisesis vital for enterprises
needing investment, grant funding orneeding investment, grant funding or
significant borrowing; more so forsignificant borrowing; more so for
innovation ventures, as the greater numberinnovation ventures, as the greater number
of ‘unknowns’ makes it even harder toof ‘unknowns’ makes it even harder to
attract backing. But don’t make theattract backing. But don’t make the
mistake of thinking that only other peoplemistake of thinking that only other people
need your business plan. It’s primarily aneed your business plan. It’s primarily a
tool to reveal possibly awkward truthstool to reveal possibly awkward truths
about your business to you.”about your business to you.”
-- a Creative Investora Creative Investor

Definition:Definition:
AA business planbusiness plan is a formal statement of ais a formal statement of a
set of business goals, the reasons youset of business goals, the reasons you
believed they are attainable, and the planbelieved they are attainable, and the plan
for reaching those goals. It may alsofor reaching those goals. It may also
contain background information about thecontain background information about the
organization or team attempting to reachorganization or team attempting to reach
those goals.those goals.

Types of PlansTypes of Plans
 Summary PlanSummary Plan
 10 pages, 3 important points10 pages, 3 important points
 Comprehensive PlanComprehensive Plan
 10-40 pages, seeking capital or10-40 pages, seeking capital or
alliancesalliances
 Operational PlanOperational Plan
 40+ pages, for going concerns, part of40+ pages, for going concerns, part of
an annual processan annual process

The Summary PlanThe Summary Plan
 The BusinessThe Business
 Legal Structure, Products or Services,Legal Structure, Products or Services,
Management, Personnel, RecordManagement, Personnel, Record
KeepingKeeping
 MarketingMarketing
 Target Market, Competition, AdvertisingTarget Market, Competition, Advertising
 FinancialsFinancials
 Summary of Needs, Use of Funds, 3Summary of Needs, Use of Funds, 3
Year Cash Flow Projections, IncomeYear Cash Flow Projections, Income
ProjectionsProjections

Business Plan ContentBusiness Plan Content
 Executive SummaryExecutive Summary
 Company DescriptionCompany Description
 Product/Services DescriptionProduct/Services Description
 Industry OverviewIndustry Overview
 Market AnalysisMarket Analysis
 CompetitorsCompetitors

 CustomersCustomers
 Marketing and Sales PlansMarketing and Sales Plans
 DevelopmentDevelopment
 OperationsOperations
 ManagementManagement

 PersonnelPersonnel
 Financial SummaryFinancial Summary
 FinancialsFinancials
 OfferingOffering
 AppendicesAppendices

Executive SummaryExecutive Summary
 A mini-business plan in one or two pagesA mini-business plan in one or two pages
 Highlights the most important points of yourHighlights the most important points of your
business planbusiness plan
 It is NOT an introduction to the planIt is NOT an introduction to the plan
 It must grab your reader, and enticeIt must grab your reader, and entice
him/her to read furtherhim/her to read further

 Identify the company, its background,Identify the company, its background,
structure and locationstructure and location
 Describe what the company does, and theDescribe what the company does, and the
market it servesmarket it serves
 Describe the market potential for theDescribe the market potential for the
company’s products and services, marketcompany’s products and services, market
trends, etc.trends, etc.

 Outline the backgrounds and experience ofOutline the backgrounds and experience of
the top management teamthe top management team
 Describe the funding required, theDescribe the funding required, the
purposes for which it will be used, thepurposes for which it will be used, the
collateral available (if for a lender), and thecollateral available (if for a lender), and the
expected outcomesexpected outcomes

Company OverviewCompany Overview
 Brief Company IntroductionBrief Company Introduction
 Mission statementMission statement
 Location, size, historyLocation, size, history
 Market and productsMarket and products
 Overview of company capabilitiesOverview of company capabilities
 ObjectivesObjectives

Products/ServicesProducts/Services
 Products / ServicesProducts / Services
 What does it do?What does it do?
 UniquenessUniqueness
 Competitive AdvantageCompetitive Advantage
 TechnologyTechnology
 Brief descriptionBrief description
 ApplicationsApplications
 Commercialization StatusCommercialization Status
 Brief overviewBrief overview

Industry OverviewIndustry Overview
 Set The StageSet The Stage
 Industry Definition and DescriptionIndustry Definition and Description
 Major players within the industryMajor players within the industry
 Factors driving dynamicsFactors driving dynamics
 New products and developmentsNew products and developments
 Legislation and Policies Driving theLegislation and Policies Driving the
IndustryIndustry
 Historical and Future TrendsHistorical and Future Trends

Market AnalysisMarket Analysis
 Market DefinitionMarket Definition
 Primary MarketPrimary Market
 Secondary MarketsSecondary Markets
 Market Size and TrendsMarket Size and Trends
 Current total revenuesCurrent total revenues
 Predicted annual growth ratePredicted annual growth rate

CompetitorsCompetitors
 Direct CompetitorsDirect Competitors
 Who are they?Who are they?
 Size and product breadthSize and product breadth
 Revenues and profitabilityRevenues and profitability
 Strengths and weaknessesStrengths and weaknesses
 Market sharesMarket shares
 Indirect CompetitorsIndirect Competitors

Marketing StrategiesMarketing Strategies
 Product/Service StrategyProduct/Service Strategy
 Pricing StrategyPricing Strategy
 Distribution StrategyDistribution Strategy
 Advertising and Promotion StrategyAdvertising and Promotion Strategy
 Sales StrategySales Strategy
 Marketing and Sales ForecastsMarketing and Sales Forecasts

Marketing and Sales PlansMarketing and Sales Plans
 Statement of OpportunityStatement of Opportunity
 Marketing and Sales ObjectivesMarketing and Sales Objectives
 Existing CustomersExisting Customers
 Potential CustomersPotential Customers
 Prospects targetedProspects targeted
 How prospects will be targeted andHow prospects will be targeted and
qualifiedqualified

 Marketing ProgramsMarketing Programs
 Direct MailDirect Mail
 Trade ShowsTrade Shows
 AdvertisingAdvertising
 InternetInternet
 Publicity/Public RelationsPublicity/Public Relations
 Marketing BudgetMarketing Budget
 PricingPricing
 Basis for targeted price pointBasis for targeted price point
 Margins and profitability by volumeMargins and profitability by volume
levelslevels

 Sales PlanSales Plan
 Sales force structure – (direct or reps)Sales force structure – (direct or reps)
 Sales expectations/quotasSales expectations/quotas
 Margins given to intermediariesMargins given to intermediaries
 Service and warrantiesService and warranties
 Sales BudgetSales Budget
 Organizational chart indicating plannedOrganizational chart indicating planned
growthgrowth

DevelopmentDevelopment
 R & D PlanR & D Plan
 ObjectivesObjectives
 Milestones and current statusMilestones and current status
 Difficulties and risksDifficulties and risks
 StaffingStaffing
 R & D Budget and assumptionsR & D Budget and assumptions

OperationsOperations
 Manufacturing/Production PlanManufacturing/Production Plan
 ObjectivesObjectives
 FacilitiesFacilities
 StaffingStaffing
 SubcontractorsSubcontractors
 Quality ControlQuality Control
 Budget / Operating ExpensesBudget / Operating Expenses

ManagementManagement
 Company OrganizationCompany Organization
 Management TeamManagement Team
 Administrative ExpensesAdministrative Expenses

PersonnelPersonnel
 Human Resource PlanHuman Resource Plan
 Staffing ObjectivesStaffing Objectives
 Organizational StructureOrganizational Structure
 3-5 year growth plan3-5 year growth plan
 BudgetBudget

Summary of FinancialsSummary of Financials
 Financial ObjectivesFinancial Objectives
 Time to Cash Flow PositiveTime to Cash Flow Positive
 Time to profitabilityTime to profitability
 Financial AssumptionsFinancial Assumptions
 Capital RequirementsCapital Requirements
 Exit ScenarioExit Scenario

AppendicesAppendices
 Resumes of Key ManagementResumes of Key Management
 Patent InformationPatent Information
 Customer ListCustomer List
 TestimonialsTestimonials
 Supplemental Financial SpreadsheetsSupplemental Financial Spreadsheets
 ReferencesReferences

Risks in a new businessRisks in a new business

Kinds of RisksKinds of Risks
3 Types3 Types
 EconomicEconomic
 NaturalNatural
 HumanHuman

Financial RisksFinancial Risks
 These risks occur from changes in overallThese risks occur from changes in overall
business conditions.business conditions.
 This can include:This can include:
 amount or type of competitor(s)amount or type of competitor(s)
 changing consumer lifestylechanging consumer lifestyle
 population changespopulation changes
 government regulationsgovernment regulations
 inflationinflation
 recessionrecession

Natural RisksNatural Risks
Natural risks are result from natural disastersNatural risks are result from natural disasters
or disruptionsor disruptions
 floodsfloods
 tornadoestornadoes
 hurricaneshurricanes
 firesfires
 droughtsdroughts
 lightninglightning
 earthquakesearthquakes
 even sudden abnormal weather conditionseven sudden abnormal weather conditions

Human RisksHuman Risks
These are caused by human mistakes andThese are caused by human mistakes and
errors, as well as the unpredictability oferrors, as well as the unpredictability of
customers, employees, or the workcustomers, employees, or the work
environmentenvironment
This could include:This could include:
 TheftTheft
 injury on the jobinjury on the job
 bad checksbad checks
 employee erroremployee error
 NegligenceNegligence
 IncompetenceIncompetence

BUSINESS ETHICSBUSINESS ETHICS

Ethics and EthosEthics and Ethos
 The word “ethics” is derived from the GreekThe word “ethics” is derived from the Greek
ethos, meaning “customary” orethos, meaning “customary” or
“conventional.”“conventional.”
 To be ethical in the sense of ethos is toTo be ethical in the sense of ethos is to
conform to what is typically done, to obeyconform to what is typically done, to obey
the conventions and rules of one’s societythe conventions and rules of one’s society
and religion.and religion.

What is ethics?What is ethics?
Ethics is the branch of philosophy thatEthics is the branch of philosophy that
focuses on morality and the way in whichfocuses on morality and the way in which
moral principles are applied to everydaymoral principles are applied to everyday
life. Ethics has to do with fundamentallife. Ethics has to do with fundamental
questions such as “What is fair?” “What isquestions such as “What is fair?” “What is
just?” “What is the right thing to do in thisjust?” “What is the right thing to do in this
situation?” Ethics involves an activesituation?” Ethics involves an active
process of applying values, which mayprocess of applying values, which may
range from religious principles to customsrange from religious principles to customs
and traditions.and traditions.

What is business ethics?What is business ethics?
 Business ethics focuses on whatBusiness ethics focuses on what
constitutes right or wrong behavior in theconstitutes right or wrong behavior in the
world of business. Corporate businessworld of business. Corporate business
executives have a responsibility to theirexecutives have a responsibility to their
shareholders and employees to makeshareholders and employees to make
decisions that will help their business makedecisions that will help their business make
a profit. But in doing so, businesspeoplea profit. But in doing so, businesspeople
also have a responsibility to the public andalso have a responsibility to the public and
themselves to maintain ethical principles.themselves to maintain ethical principles.

 Although ethics provides moral guidelines,Although ethics provides moral guidelines,
individuals must apply these guidelines inindividuals must apply these guidelines in
making decisions. Ethics that applies tomaking decisions. Ethics that applies to
business (business ethics) is not abusiness (business ethics) is not a
separate theory of ethics; rather, it is anseparate theory of ethics; rather, it is an
application of ethics to business situations.application of ethics to business situations.
Although all people have ethicalAlthough all people have ethical
responsibilities, higher ethical standardsresponsibilities, higher ethical standards
are imposed upon professionals who serveare imposed upon professionals who serve
as social models, such as physicians,as social models, such as physicians,
attorneys, and business people.attorneys, and business people.

The Nature & Goals ofThe Nature & Goals of
Business EthicsBusiness Ethics
 Business ethics refers to those values,Business ethics refers to those values,
standards and principles that operatestandards and principles that operate
within business.within business.
 Business ethics is also an academicBusiness ethics is also an academic
discipline that studies those standards,discipline that studies those standards,
values and principles while seeking tovalues and principles while seeking to
articulate and defend the ones that oughtarticulate and defend the ones that ought
or should operate in business.or should operate in business.

Ethical Judgment vs. BehaviorEthical Judgment vs. Behavior
 From the time of Aristotle we have noticedFrom the time of Aristotle we have noticed
a discontinuity between judging some acta discontinuity between judging some act
as right and behaving rightly.as right and behaving rightly.
 Knowing what is right is different fromKnowing what is right is different from
doing what is right.doing what is right.
 People vary in strength of character andPeople vary in strength of character and
motivation and fortitude.motivation and fortitude.

Reasoning and BusinessReasoning and Business
EthicsEthics
 The process of ethical reasoning must beThe process of ethical reasoning must be
emphasized.emphasized.
 Reasoning is distinct from answers.Reasoning is distinct from answers.
 Begin with an accurate and fair account ofBegin with an accurate and fair account of
the facts from all “sides”.the facts from all “sides”.
 Be objective and open-minded.Be objective and open-minded.
 Analyze each issue fully and rigorously.Analyze each issue fully and rigorously.

The Relationship BetweenThe Relationship Between
Law and EthicsLaw and Ethics
 The law is an expression of the ethicalThe law is an expression of the ethical
beliefs of our society.beliefs of our society.
 Law and ethics are not the same thing.Law and ethics are not the same thing.
The question, “Is an act legal?” is differentThe question, “Is an act legal?” is different
from the question, “Is an act ethical?” Thefrom the question, “Is an act ethical?” The
law cannot codify all ethical requirements.law cannot codify all ethical requirements.
Therefore, an action might be unethical, yetTherefore, an action might be unethical, yet
not necessarily illegal. For example, itnot necessarily illegal. For example, it
might be unethical to lie to your family, butmight be unethical to lie to your family, but
it is not necessary illegal.it is not necessary illegal.

Ethical perspectivesEthical perspectives
 Managerial ethics: What should a businessManagerial ethics: What should a business
manager do in various situations?manager do in various situations?
 The types of questions asked will vary fromThe types of questions asked will vary from
perspective to perspective.perspective to perspective.
 All decisions faced by business managers,All decisions faced by business managers,
from finance to marketing to ethics andfrom finance to marketing to ethics and
human resources, exist in a social andhuman resources, exist in a social and
legal context.legal context.

Ethics as Good BusinessEthics as Good Business
Unethical business practices include:Unethical business practices include:
 LyingLying
 Offering merchandise known to beOffering merchandise known to be
substandardsubstandard
 Treating customers or employees unfairlyTreating customers or employees unfairly

Conflicts of InterestConflicts of Interest
 Conflict of interest is a major ethicalConflict of interest is a major ethical
question that is generally not illegalquestion that is generally not illegal
conflict of interestconflict of interest
a conflict between self-interest anda conflict between self-interest and
professional obligationprofessional obligation

Ethical QuestionsEthical Questions
 Is it against the law? Does it violateIs it against the law? Does it violate
company or professional policies?company or professional policies?
 Even if everyone is doing it, how would IEven if everyone is doing it, how would I
feel if someone did this to me?feel if someone did this to me?
 Am I sacrificing long-term benefits forAm I sacrificing long-term benefits for
short-term gains?short-term gains?

Reflections on the chapterReflections on the chapter
 A wide range of people can be adverselyA wide range of people can be adversely
affected by the decision made withinaffected by the decision made within
contemporary business.contemporary business.
 There are many roles to play within theThere are many roles to play within the
economic system to insure integrity of thateconomic system to insure integrity of that
system and to prevent fraud and abuse.system and to prevent fraud and abuse.
 Business operates within a social contextBusiness operates within a social context
and has duties to a wide range of peopleand has duties to a wide range of people
beyond those people who own abeyond those people who own a
company’s stock.company’s stock.

Thank you!Thank you!
Multumesc!Multumesc!

Start up ppt

More Related Content

What's hot (20)

Similar to Start up ppt (20)

More from Ramalingam Chandrasekharan (20)

Recently uploaded (20)

Start up ppt

Editor's Notes