:idea:I think when we talk about entrepreneurship developement. We are looking at the steps we need to take to become an entrepreneur. According to me the first step would be to put your core idea into a sound business plan. I am just posting this sample business plan outline, I also have some more formats and related info. If any of you guys have a better format or any document related to business plans plz let me know.
Thanx & regards
Sample Business Plan Outline
Name of company, date, contact information, etc.
Table of Contents
- Business Concept
- Market Potential
- Management Team
- Distinct Competencies
- Required Funding and its Use
- Exit Strategy
I. Company Description
- Mission Statement
- Summary of Activity to Date
- Current Stage of Development
- Product or Service
- Benefits to customer
- Differences from current offerings
- Keys to Success
- Location and Facilities
II. Industry Analysis
- Entry Barriers
- Supply and Distribution
- Technological Factors
- Economic Influences
- Regulatory Issues
III. Market Analysis
- Definition of Overall Market
- Market Size and Growth
- Market Trends
- Market Segments
- Targeted Segments
- Customer Characteristics
- Customer Needs
- Purchasing Decision Process
- Product Positioning
- Profiles of Primary Competitors
- Competitors' Products/Services & Market Share
- Competitive Evaluation of Product
- Distinct Competitive Advantage
- Competitive Weaknesses
- Future Competitors
V. Marketing and Sales
- Products Offered
- Advertising and Publicity
- Trade Shows
- Discounts and Incentives
- Sales Force
- Sales Forecasts
- Product Development
- Development Team
- Development Costs
- Development Risks
- Manufacturing (if applicable)
- Production Processes
- Production Equipment
- Quality Assurance
- Key Suppliers
- Product / Service Delivery
- Customer Service and Support
- Human Resource Plan
VII. Management and Organization
- Management Team
- Open Positions
- Board of Directors
- Key Personnel
- Organizational Chart
VIII. Capitalization and Structure
- Legal Structure of Company
- Present Equity Positions
- Deal Structure
- Exit Strategy
IX. Development and Milestones
Time may be specified on a relative scale rather than specific calendar dates. Milestones may include some or all of the following:
- Financing Commitments
- Product Development Milestones
- Signing of Significant Contracts
- Achievment of Break-even Performance
- Additional Funding
- Any other significant milestones
X. Risks and Contingencies
Some common risks include:
- Increased competition
- Loss of a key employee
- Suppliers' failure to meet deadlines
- Regulatory changes
- Change in business conditions
XI. Financial Projections
- Assumptions (Start date, commissions, tax rates, average inventory, sales forecasts, etc.)
- Financial Statements (Balance Sheet, Income Statement, Cash Flow Statement)
- Break Even Analysis
- Key Ratio Projections (quick ratio, current ratio, D/E, D/A, ROE, ROA, working capital)
- Financial Resources
- Financial Strategy
XII. Summary and Conclusions
- Management Resumes
- Competitive Analysis
- Sales Projections
- Any other supporting documents
The Business Model
To extract value from an innovation, a start-up (or any firm for that matter) needs an appropriate business model. Business models convert new technology to economic value.
For some start-ups, familiar business models cannot be applied, so a new model must be devised. Not only is the business model important, in some cases the innovation rests not in the product or service but in the business model itself.
In their paper, The Role of the Business Model in Capturing Value from Innovation, Henry Chesbrough and Richard S. Rosenbloom present a basic framework describing the elements of a business model.
Given the complexities of products, markets, and the environment in which the firm operates, very few individuals, if any, fully understand the organization's tasks in their entirety. The technical experts know their domain and the business experts know theirs. The business model serves to connect these two domains.
A business model draws on a multitude of business subjects, including economics, entrepreneurship, finance, marketing, operations, and strategy. The business model itself is an important determinant of the profits to be made from an innovation. A mediocre innovation with a great business model may be more profitable than a great innovation with a mediocre business model.
In their research, Chesbrough and Rosenbloom searched literature from both the academic and the business press and identified some common themes. They list the following six components of the business model:
- Value proposition - a description the customer problem, the product that addresses the problem, and the value of the product from the customer's perspective.
- Market segment - the group of customers to target, recognizing that different market segments have different needs. Sometimes the potential of an innovation is unlocked only when a different market segment is targeted.
- Value chain structure - the firm's position and activities in the value chain and how the firm will capture part of the value that it creates in the chain.
- Revenue generation and margins - how revenue is generated (sales, leasing, subscription, support, etc.), the cost structure, and target profit margins.
- Position in value network - identification of competitors, complementors, and any network effects that can be utilized to deliver more value to the customer.
- Competitive strategy - how the company will attempt to develop a sustainable competitive advantage, for example, by means of a cost, differentiation, or niche strategy.
Business Model vs. Strategy
Chesbrough and Rosenbloom contrast the concept of the business model to that of strategy, identifying the following three differences:
- Creating value vs. capturing value - the business model focus is on value creation. While the business model also addresses how that value will be captured by the firm, strategy goes further by focusing on building a sustainable competitive advantage.
- Business value vs. shareholder value - the business model is an architecture for converting innovation to economic value for the business. However, the business model does not focus on delivering that business value to the shareholder. For example, financing methods are not considered by the business model but nonetheless impact shareholder value.
- Assumed knowledge levels - the business model assumes a limited environmental knowledge, whereas strategy depends on a more complex analysis that requires more certainty in the knowledge of the environment.
Business Model for the Xerox Copier
Chesbrough and Rosenbloom illustrate the importance of the business model with a case study of Xerox Corporation's early days in the copy machine business with its Xerox Model 914 copier. (Before changing its name to Xerox Corporation, the company was known as the Haloid Company and then Haloid Xerox Inc.)
The Model 914 used the relatively new electrophotography process, which is a dry process that avoids the use of wet chemicals. In seeking potential marketing partners, Haloid repeatedly was turned down by the likes of Kodak, GE, and IBM, who had concluded that there was no future in the technology as seen through the lens of the then-prevalent business model. While the technology was superior to earlier copy methods, the cost of the machine was six to seven times more expensive than alternative technologies. The model of selling the equipment below cost and making up the difference by large margins in the sale of supplies was not viable because the cost of the supplies was about the same as that of the alternatives, so there was little room to maneuver.
Xerox then decided to market the new product itself and developed a new business model to do so. The new model leased the equipment to the customer at a relatively low cost and then charged a per copy fee for copies in excess of 2000 copies per month. At that time, the average business copier produced an average of only 15-20 copies per day. For this model to be profitable to Xerox, the use of copies would have to increase substantially.
Fortunately for Xerox, the quality and convenience of the new copy technology proved itself and companies began to make thousands of copies per day. As a result, Xerox sustained a compound annual growth rate of 41% over a 12 year period. Without this business model, Xerox might not have been successful in commercializing the innovation.
The Entrepreneurial Advantage
Chesbrough and Rosenbloom observe that a successful business model such as that of Xerox tends to build momentum and the company becomes confined to its successful model. However, new technologies often require new business models.
Because start-up companies are free to choose or develop a new business model, in this regard start-ups have an advantage over more established firms. In addition to the risk incurred in the technological and the economic domains, an unproven business model adds additional risk, and entrepreneurial ventures usually are more prepared to accept this risk than would be a large, well-entrenched firm.
In fact, many venture capitalists see themselves as investing in a business model. Consequently, it often is the VC that pushes for a change in the business model when it becomes apparent that the original model is not working.
24th June 2008 From India , Madras
Many thanx for all the replies.....very interesting info is posted...rinaz
What is entrepreneurial training, how women entrepreneurs are trained? What are the problems faced by them? How they need to cope up with such situations?
What is Entrepreneurship Development Program, the different phases, main objectives?
Expecting valuable discussions and info...
26th June 2008 From India , Bangalore
3rd July 2008 From India , Lucknow
Good one Rinaz! if any one of you could help me in preparing a ppt presentation or handouts for attracting a investor or Banker.
Some points I have in my mind like future vision, Aim, market niche, management, experience, SWOT analysis. please let me know to make it more attract what else I should add it
5th July 2008 From India , Hyderabad
If you need any practical Inputs on Entrepreneurship , feel free to ask. Have spent about 11 years being one myself.
FYI there are some places where there is encouragement given to Women Entrepreneurs especially in State Govt Financial Institutions. Otherwise the basic issues they need to tackle remain the same.
Entrepreneurs need to remember that running a Business does not mean being able to do a Good Job . It means they need to learn to get other people to do a Good job for them.
One of the Typical mistakes that an Entrepreneur can make is being unable to let others do the Job - Because often the one person that you can always depend on under every Circumstances is YOUR OWN SELF only.
The key elements would be having a , Market Analysis , Good Product/service offering , Sufficient Financial backing ( Backup plan in case things go wrong and it takes longer to Breakeven ) , A Good marketing Plan , A good Operations Model , and more importantly being able to get a team together to do a great job.
The Challenge on Manpower is always there for any Entrepreneur - since today the challenge that every single person involved in recruitment is - not to find people - they are dime a dozen , but on finding the good persons competent enough for the Job. Most Competent people prefer the Charm of a MNC to the struggles associated with an Entrepreneur.
Do hope this was of use to you.
5th July 2008 From India , Mumbai
feel free to ask if some data required.
7th July 2008 From India , Delhi
Recently, I attended a network meeting in Sydney. At this meeting, a highly successful businessman spoke. He said two things that captured my attention. He started to learn about creating business plans and created what he thought was a highly successful business plan and model. When he went to operate in the market, his business model an plan was not worth the paper it was written on. He is now so successful that he has millions of dollars.
The second thing he said was that all management theories he learnt would not have been successful if he had not built effective networks as a part of his business.
I have remembered these two things as they are closely to my heart. I believe that these are important for people who want to build a business as there can be lessons learnt from these. I thought I should share this with you.
8th July 2008 From Australia , Sydney