Enrepreneurship:

aaEntrepreneurship is a truly global phenomenon, and, coupled with Internet, is flattening

and democratizing the world.
aaEntrepreneurs are the creators, the innovators, and the leaders who give back to society
as philanthropists, directors, and trustees, and who, mora than any others, change how
people live, work, learn, play, and lead.
c)Entrepreneurs create new technologies, products, processes, and services that become
the next wave of new industries, and these in turn drive the economy.
) Entrepreneurs create value with high-potential, high rowth companies, which are the
!ob creation engines of the world economy.
e)"enture capital and angel investors #bunisess angels) provides the fuel for high-
potential, high-growth companies.
f)Entrepreneurs can realize the value they have created. $ormally they get money going
public by an I%& #Initial %ublic &ffering) or even selling all the company.
'he entrepreneurial mind-set can benefit large, established compannies today !ust as
much as smaller firms #intra-entrepreneurship).
i)(any myths and realities about entrepreneurship provide insights for aspiring
entrepreneurs. #(yths and )ealirties about Entrepreneurs )
*hen asked an open-ended uestion about what entrepreneurs believe are the most
critical concepts ,skills, and know-how for running business, their answers were very
revealing.
(ost mencioned mental attitudes and philosophies based on entrepreneurial
attributes , rather than specific skills or organizational concepts
) +elf-assessment is the hardest thing for entrepreneurs to do, but if you don-t do
it, you will really get into trouble. If you don-t do it, who will..
o) 'he 'immons (odel is at the heart of spotting and building the higher-potential
venture and understanding its three driving forces / opportunity, the team, and resources.
'he concept of fit and balance is crucial

) +elf-assessment is the hardest thing for entrepreneurs to do, but if you don-t do it,
you will really get into trouble. If you don-t do it, who will
aa0n idea is not an opportunity, but what is an opportunity.
aa+uperior business opportunities have the following four funfamentals anchors/

i) 'hey create or add significant value to a customer or end user.

ii) 'hey do so by solving a significant problem, removing a serious pain point, or
meeting a significant want or need-for which someone is willing to pay a premium
#transforming needs into real demand).
iii) 'hey have robust market, margin, and money-making characteristicis that will allow
the entrepreneur to estimate and comunicate sustainable value to potencial
shareholders.
iv) 'hey are good fit with the founder#s) and management team at the time and
market-place-along with an attractive risk-reward balance

WHERE TO LOOK AT to find out opportunities:
innovation, worked there before, look at other arkets, te!hnolo"ies
#uild a "reat tea:
$diversit%, stron" and e&!ellent relationships
The Business Plan (Why do a Business Plan?)..
aaIt is a great way for you and your current and/or prospective partnerts to learn
aout the usiness and to gain critical insights into each other!s style " strengths
and wea#nesses" an how you will wor# together.
) It will give you inti$ate #nowledge" including #ey ingredients such as
opportunity" the uyer and user" the $ar#et and co$petition" the econo$ics and
financial characteristics of the usiness" and the li#ely entry strategy.
c) It is a great tool with which to co$unicate and persuade sta#eholders"
including potential ac#ers" tea$ $e$ers" #ey new hires" directors" rain trust
prospects" and strategic partners.
d) It will prevent (or at least $ini$i%e) any te$ptation to &u$p ahead
pre$aturely" as well as li$it sloppiness with regard to the hard thin#ing" the
necessary research" and creative prole$ solving.
It will help you create the est'ut not perfect'road $ap and lueprint for you
and your tea$ to $ove ahead. (nd it can e changed.
f) It is a $ediu$ for discussion with prospective investors" and it can reveal
who a$ong the$ is $ost #nowledgeale" creative" suited for" and li#ely to add
significant value to your venture.
1usiness &pportunity2Excellent 'eam
introdu!tion'e&e!utive suar%:
$3escribing and introducing the company/
4 activities #to stock, to design, to manufacture, to distribute, to market, etc)
4 #what) products and services produced and or sold
4 #to whom)/ customers#clients), buyers, users((strategic segments.
4 #how)/ distribution channels, geographic markets, etc
4 competitive advantages #competitive edges) over the )statu uo*/ competition, how they
do things, etc
$ 'he key drivers of differentiation and positioning
$ $eeds will satisfy and the benefits you will get with the products5services
$ (ision
$ "ision
$ 6orporate "alues
$ %artners and strategic alliances.
'he Executive +ummary is a 758 pages document which it will be written at the end of the
pro!ect but it will be put !ust at the beginning
E&ternal Anal%sis:
$ 0nalyzing the industry and the market #the reference market and the relevant market for
the venture)
+9ow big is, uantitative analysis #real data/ past and current data).
+%royections #estimate) for the near future. :uantitative data.
+%E+' 0nalysis/ impact of the political, economical,social and technological trends in our
venture.
$)egulatory and ;egal Issues
$ %itfalls and )isks.
$ Is a concentrated industry or fragmented..........the 6n index
$ 0nalyzing the offer #competition)/ frontal and lateral
+*ho they are..
+$aming exactly who they are, where they are #domestic and global competition).
+ +tudying their strategy/ business model, strategic segments, .
+ 'heir (arketing +trategy/ product5service portfolio, prices, distribution channels,
communication strategy, people strategy. *eb information
$*hich are the key success factors #<+=) of the industry .....price, uality service, after
sale service, finance conditions, location, variety of the portfolio, warranties, distribution
channles, convenience, patents, brand image, product variety, )>3, etc
-0nalyzing the demand #customers5clients)/
+ in some businesses it-s not easy to identify the customer, there could be/ users, buyers,
prescripteurs(..?who is the customer.....are there more than one.
+ studying their consumption habits, trends, .
+are there strategic segments.@@who are our target segments..
+do we know their patterns and behaviors.......have they changed recently. @@.are they
going to change in the near future..
Internal 0nalysis/
$'ype of commercial corporation
$'he most common companies are/
$;imited ;iability 6ompany
$ $ew Enterprise ;imited 6ompany
%ublic ;imited 6ompany
-Type of co$$ercial corporation
+ types /
public limited company #A<)
incorporated company, public corporation #A+)
sociedad anBnima #+pain)
private limited company #A<)
limited company, limited corporation #A+)
sociedad limitada #+pain)
+ 0lso the articles of association #memorandum of association)
+ 0nd the corporate governance rules, shareholders-s agreement.
$)esources and 6apabilities
+ the industry knowledge, experience and performance of the founders.
+ write all the 6"-s founders #6urriculum "itae)
+ also if there is an 0dvisory 6ommittee.
,WOT anal%sis:
0 +*&' analysis could be viewed as bringing together the outputs from the prior points, in
particular/
the market analysis #internal and external elements).
the analysis of the general environment #external elements)
the analysis of the firm #internal elements)
the value proposition #product-price) and competition #internal and external elements).
- stren"hts, weaknesses, opportunities, threats
,trate"i! plan . strate"i! ob/e!tives:
'he strategic options
a) 'he tools
the growth-share matrix #the 16C box D 1oston 6onsulting Croup)/ the purpose of the
matrix is to analyse a firm-s product portfolio or porfolio of +1A+ #strategic business unit).
'he matrix relates market growth #the key variable in the product life cycle stage analysis)
to relative market share.
the business5industry attractiveness screen #the (ckinsey > 6o matrix developped with CE
D the matrix is commonly known as the CE business5industry attractiveness screen)/ the
competitive position of the A+1+ to be analyzed is plotted on the horizontal axis and the
industry attractiveness on the vertical axis
b) 'he options
i) Ceneric strategies/ (ichael %orter identified three generic strategies/ cost leadership,
differentiation and focus.
ii) 3evelopment stategies. 'he alternative strategic directions for a business are to grow
the business #that is, embark on a deveolpment strategy), do nothing or withdraw.
'ha 0nsoff-s (atrix/ a business can be developed in four possible directions/
market penetration
product development
market development
diversification.
iii) market segmentation strategy/ competing in all the market or in specific segments.
0 market segment is defined as a suffiently large group of buyers with a differentiated set
of needs and preferences that cab be targeted with a differentiated strategy and marketing
mix. =ine-tunning the strategy and the marketing mix to address the segments needs will
lead to increased sales .
c) 'he strategic ob!ectives
i0+ales5)evenues and (arket share
-+ales5revenues at 8th year(.#put the number when it will be calculated).
- (arket share at 8th year
ii) %rofitability #at 8th year)
E1I'
- Economic(.)&$0 E ---------------
$et 0ssets
#return on net assests)
ii) %rofitability
E1I'
- Economic( .)&6E E -----------------
6apital Employed
#return on capital employed)
$et %rofit #Income)
- =inancial((.)&E E ------------------------
Euity
iii) (arket %ositioning
$to become the sector leader company
. market share
. profitability
. spontaneous well known
'he (arketing and +ales %lan/
a03escribe in a deep way the marketing-mix of the company
i) 0ll the products5services and their functionalities.
ii) 'he pricing strategy/ discuss pricing strategy, including the prices to be charged for your
product and service, and compare your pricing policy/
discuss the gross profit margin between manufacturing and ultimate sales costs,
'he distribution/ describe the methods and channels of distribution you will employ. Ih
there is a multi-channel strategy / wholesalers, distributors, retailers, own sales force,
sales representatives, direct mail, Internet, etc@discuss the availability and capacity of
these channels.
iv) 'he promotion and communication policy/ write the complete promotion plan@
budget, media, A$I:AE +E;;I$C %)&%&+I'I&$, communication claim, sales promotions,
b) Estimating the +ales5revenues for the 8 years. 44critical point of business plan
-'he Fretail methodG/
+alesE %%40+4HI4$%
%%/ percentage of people that they-ll buy #market research)
0+/ average sales per month#market research)
$%/ number of potential people
&perational %lan
'he manufacturing and operations plan needs to include such factors as plant location,
the type of facilities needed, space reuirements, and labor force #both full- and part-
time)reuirements . =or a manufacturing business, the manufacturing an d operations
plan needs to include policies on inventory control, purchaising, production control, and
which parts of the product will be purchased and which operations will be performed b
your workforce #called make-or-buy decisions).
0 service business may reuire particular attention to location #proximity to customers is
generally a must), minimizing overhead, and obtaining competitive productivity from a
labor force. &C=+)--- &h get friendly sir
a)&perating cycle
b0Ceographical location
!0=acilities and improvements
d0+trategy and plans
e0)egulatory and legal issues.
'he 9uman )esources %lan/
'his section of the business plan includes a description of the functions that will need to be
filled, a description of the key management personnel and their primary duties, an outline
of the organizational structure for the venture, a description of the boards of directors, a
description of the owership position of nay others investors, an so forth. Jou need to
present indications of commitment, such as the willingness of team members to inicially
accept modest salaries, and of the existence of the proper balance technical, managerial,
and business skilss and experience in doing what is propossed.
&<(1
a)&rganization with an &rganization 6hart
b0<ey management personnel
!0(anagement compensation #also neccesary for the financial plan).
d01oard of 3irectors.
I)'he =inancial %lan/06+%II1= 0wesome cows swim privately ii bf
'his nalysis needs to cover five years
'he =inancial planning process/
a00nalizing the costs
$gross margins #i.e. selling price less variable costs)
$operating margins for each product#s) and5or service#s) #i.e. gross margin less fixed costs
without interests and taxes).
b06ollections and payables periods
0mortization period of each asset
c) +ales forecasts/ they have been estimated before #at the (arketing %lan)
d)%ro!ect cash flows monthly for the first year #the treasury5cash account)@then we-ll
determine the need for and timing of additional cash #difference between cash inflows
and outflows)@.this difference will be the cash operating needs #6&$).
e0'he Investment %lan for to start-up the business
- =ixed assets
- 6ash operating needs #6&$) plus a minimum cash #security minimum cash)
f0'he =inancing %lan/ the Investment %lan will be financed by...
- euity from the founders
- a bank loan
"0Income statements #%rofit and ;oss =orecasts)/ as we have calculated before the +ales =
orecasts and the accompanying production or operations costs . 0lso we know the financial
needs.
It suppose a I8 K tax rate
h0'he 1alance +heets for the next 8 years.
i0'he =inantial )atios.
L,,,1,2
;iuidity ratios
- the acid liuidity ratio
- the working capital and the operating working capital
+olvency ratios
- the shareholders euity5total liabilities ratio
%rofitability ratios
- the economic profitability #the )&$0 or )&6E ratio).
- the financial profitability #)&E ratio)
'he Investor ratios
- $%" #net present value)
- I)' ratio #internal rate of return)
L) 1alanced +corecard and <%I,s
$'he thing is to design the balance scorecard to manage and control the business.
$
$ 'he easiest would be to design the <%I,s #key performance indicators) to manage the
business daily
$
$=rom the three perspectives/
$a) commercial and marketing
$b) financial
$c) operational
<) 'he 6ontingency %lans
a0+cenarios/ *hat would it happen if(..
+ales fell down by IM K....#pessimistic)
+ales fell down by 7M K #very pessimistic)
first(..to calculate the new %rofit and ;oss 0ccount and 1alance +heet.
b) *hat corrective actions #specially marketing and commercial actions) could we to turn
on.
e&e!utive suar%
laun!h venture