Xavi Coll Esteve

Execution - Individual Course Report

Execution-Running your own company could not have been a better choice to solidify all my
knowledge about entrepreneurship. In this course, I have been able to analyse and learn the
process from finding the motivation to start a new project to making a business plan. As the
content is quite broad, I will talk about each of the learning objectives and what I have
learned from each of them detailing the key skills that I have learnt during the course and that
will be useful for my professional career, as a worker or as an entrepreneur.

1. Understand, manage, argue and demonstrate knowledge of important issues

faced when starting a new firm

Entrepreneurship is synonymous with continuous difficulties and challenges, but the first one
is to find the reason why you are willing to start your own business: more freedom, more
money, more power or to be able to contribute positively to society. This ambition is personal
and can be found at any age or time in your life and is essential to give meaning to the big
change you are willing to make.
The second difficulty is finding a business opportunity. From what I have learned during the
course and especially in the final group project, business ideas come from solving real
problems and inefficiencies in any sector no one has detected or decided to tackle. After
identification, the goal is to turn the problem solution into a potential business that creates
value for the customer.
To see the viability of the potential business it is important to make a business plan detailing
the product/service definition, the prototype, the market and competition analysis, the
marketing and sales strategy,the necessary team, the financial plan and the legal plan. A
business plan will reduce inconsistencies and provide a framework to build on. Although it is
debatable whether or not it is necessary to develop a business plan, I believe that it is a useful
tool for any new entrepreneur and that it can be modified throughout the life of the project.
Another alternative solution if you do not want to develop a detailed business plan and you
have full confidence in your idea is to develop a prototype and go out and sell it. After this,
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Execution - Individual Course Report

you will find the right customer segment that is most interested in your product and you can
define and position it in an effective way to face the competition.
A recurring problem when starting a business idea is finding the right team to execute the
business plan. Therefore, the definition of a company mission that all founding members
believe in and agree on is a fundamental tool for the cohesion of the founding members. The
company's mission plays an essential role in attracting talent to an organization. When a
company goes beyond the sole objective of generating wealth for its shareholders and wants
to solve problems for society, the chances of building a competitive workforce increase.
Finding the necessary funding to start the business can also be a problem when launching a
start-up. The best option is for the team to provide the necessary start-up capital, but in many
cases the infrastructure needed exceeds the capital that the team is willing to disburse to get
the project off the ground. If this is the case, a solution would be to develop a low-cost
prototype and a business plan and present it to investors called "Angel Investors" who will
invest in the project in exchange for a stake in the company. Such investors, together with
family and friends, will be the first to be willing to risk their money in order to take a stake in
the company.
Poor financial planning is one of the biggest reasons start-ups fail. You need to understand all
the costs your start-up will incur and make sure that your products or services are priced
appropriately to make a profit. One of the most useful tools to avoid running out of cash and
to manage all cash movements is the cash-flow statement with which you can analyse all the
capital that is coming in and the capital that is going out.
Occur in customer segmentation errors by tailoring the product and targeting the marketing
campaign to a certain group of customers who do not show the attention that was planned.
Mistakes in targeting customer segments can result in the company's sales not matching the
sales plan. This is one of the most common mistakes, taking for granted that the group of
customers defined in the business plan will be your best customers, losing sight of other
segments. The best solution is not to focus on a single segment of people but on several
segments to target and to focus the marketing strategy on each of them in a
personalized/individual way.
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Execution - Individual Course Report

2. Be aware and assemble of resources required when starting a new firm

In a start-up, resources are everything that is a useful asset for the entity. According to what
we have learned in class, the resource types of an organization are: physical, reputational,
organizational, financial, intellectual & human or technological. The main objective is that
the combination of all these resources allows the company to generate a sustainable
competitive advantage over its competitors. Their usefulness is measured by their ability to
be of value in achieving the entity's objectives and for each company or sector the usefulness
of these resources differs.
Knowing which resources can generate a competitive advantage, I will now discuss the basic
resources needed to start a business:

1. Financial resources: Financing:

This is one of the main resources, since without it it is impossible to start any project. As we
have already mentioned, ideally this resource should be provided by the founding team
without the need to seek an investor.

2. Human resources: Employees:

The success of the organization can be measured to a large extent by the talent that exists in
the workforce. Hiring experienced and highly skilled professionals is a great decision if you
have the opportunity to do so. Investment in human capital is extremely important and no
expense should be spared in the process. The competence of the organization depends on the
competence of its employees so it is a basic resource to start any project. As mentioned
above, it is important to recruit employees who share the company's mission and values and
who are motivated to work for the company.

3. Educational resources: Knowledge of the sector:

It would be a very wise decision to try to do an in-depth study of a sector before starting the
company. By gathering as much information as possible through market, competitor and
sector analysis, it is possible to avoid making mistakes due to lack of knowledge. By studying
the competition and learning about the industry, you will make smarter decisions about the
direction your company should take. There are a thousand ways of obtaining training
resources and the main tool nowadays is the internet, although it is also necessary to consult
professionals who have knowledge of the sector and are willing to share it, what we know as
a mentor.
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Execution - Individual Course Report

4. Legal resources: legal formalities

Before officially opening a business, an entrepreneur must complete all the legal formalities
required to set up a business. This includes registering your company name, applying for a
tax identification number and registering for state and local taxes. You may also be required
to obtain a license to practice your trade. This requirement, however, varies by sector and
location.

5. Physical resources: Premises and equipment

It is vital to acquire all the physical resources and infrastructure needed to develop the
necessary activity. The acquisition of these resources should be budgeted for in the initial
investment of the business plan and should be acquired through the financing discussed in the
first point. This includes appropriate workspace, a functioning telephone line, adequate
information systems and effective marketing materials. This aspect of business planning can
be one of the most costly. It is therefore important for the entrepreneur to realistically assess
his or her needs before making any purchases.

3. Conduct a market analysis

To begin with, a market analysis is an assessment that allows you to determine the size of a
particular market in your industry and identify factors such as market value, customer
segmentation, customer buying habits, competitor knowledge, economic environment,
current trends, legal and cultural regulations and many other factors. By conducting an
analysis of your market you can have a complete overview of the industries you are interested
in operating in and anticipate any risk factors.

If you want to succeed with a business idea, analysis is essential. A well-founded analysis is
the basis for the development of a business strategy. With an analysis of your market you can
back up your business idea with figures, data and facts and thus be convinced with your
business plan. You can recognise the market potential at an early stage and avoid making
wrong decisions. You can identify gaps and close them in time. A market analysis shows you
which of your competitors' products are already on the market. With an analysis of your
market you can identify the barrier to market entry and estimate the attractiveness of the
market. Market analysis includes different factors. Each of them is explained below:
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Execution - Individual Course Report

Market size: The larger your market, the greater the likelihood of success. Your job is to
ensure that your products and services stand out and to price them accordingly.
Market growth rate: Identify the duration of the market, analyse whether it is growing and the
time frame in which you will be able to see it.
Market trends: This will allow you to decide what product and service customers want or
need and how much they are willing to pay for it.
Market profitability: Analyse whether the market has a good profitability. If not, it is not
worth the investment. For this you should consider buyer power, supplier power, barriers to
entry, etc.
Key success factors: These are the elements that will help you succeed in the market and
make you stand out from the competition, such as the type of technology they use, the
resources you have and the efficient use of these resources.
Distribution channels: You need to assess whether your distribution channels are good and
sufficient to make your products and services known and ensure their success in the market.
Costs: You need to know how much you need to bring your products and services to the
market.
To sum up, with a market analysis you can obtain information about a specific market.
Whether you are setting up a business, want to research your current market or new markets,
an analysis helps you to identify and assess the opportunities and risks of a market. On the
basis of an analysis, you can develop concrete strategies and thus successfully implement
your business idea.

4. Present a business model

The mechanism by which an organization seeks to generate profit and revenue is known as a
business model. Its implementation is critical because it allows you to anticipate potential
setbacks, and helps to clarify ideas and define actions to be taken. A business model must
address areas of great importance, such as infrastructure, supply and economic viability. The
design of this model should include the following information:
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Execution - Individual Course Report

What are you going to sell and with what added value?
All business models are based on the idea of providing value to the customer. If you want to
set up a business, it is obvious that you are not going to make money for nothing. You have to
respond to a customer need, and provide a response that is at least minimally differentiated
from what the competition is offering today. You can provide value in many ways:
simplifying things for your client, reducing their costs, providing them with an image,
eliminating a problem or a risk, etc.
Who are you going to sell it to?
A successful business has to define the target customer segment (which can be several,
especially if you offer different value propositions). Even if your ultimate goal is to reach a
mass market, you will have to start with some segment. You will first go for those who are
most interested in buying your product or service, either because they are the most innovative
customers or those who most expected an answer to the problem you are going to solve.
How do you reach the customer?
You will have to define your communication, distribution and sales policy. Online or offline
approaches, personalised or automated services, advertising and marketing policy, etc. Many
entrepreneurs believe that because their concept responds to a market need they are going to
be very successful. However, it is essential that you get the message across to the customer
and that your way of distributing the product or service suits them. Both of these things are
not so simple.
Monetisation models
How do you convert the value proposition into hard cash? Are you going to sell once to the
customer or will you seek to create recurring revenue with a loyalty system? You can sell or
rent, you can design a subscription system, you can even have third parties finance the
service you offer free of charge to your users (advertising). Monetisation of your business is a
very important element. In particular you should make sure to create recurring revenue
streams with your potential buyers instead of making individual sales to different customers.
The cost of acquiring a customer is much higher than you think, so you have every interest in
making the most of the long-term relationship you establish with those who trust you.
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Execution - Individual Course Report

How are you going to organise yourself?

What are the resources you will need? What will be the most important processes in your
company to create value? And since you can't do it all on your own, who will be your key
partners to do it? It's all very well to design a value proposition, but often the requirements to
produce the product or service are far more complex than you might imagine. Pay special
attention to this part.
How will you react to change?
Any business project is pure theory until the moment it is confronted with the market. That's
why you have to anticipate the ways in which you can adapt to what you are going to find. It
is not a question of having a forecast of everything that might happen (it is impossible to
know and you would waste a lot of time trying to find out), but of defining flexibility factors
to adapt to what you are going to find.
Is it all cost-effective?
Once you have defined how you organise yourself (resources, partners, processes), you will
have a good idea of what it costs to produce your value proposition. If you compare that with
the revenue you can expect from the design of your monetisation model, you should have an
idea of whether your business model is viable or not. Actually, to assess viability in detail you
should make a business plan, but it doesn't hurt to have a rough idea already.

5. Conduct a basic financial analysis of a new venture

A financial plan allows you to:

- Know the short-term and long-term financing needs (investment financing).

- Know the economic viability of the project and calculate its returns.
- Analyze the minimum volume of sales necessary to start earning money, overcoming
the break even point.
- Study the possible factors that can affect the company both positively and negatively
by creating scenarios.

In the financial projections we can find the following financial statements: Profit and Loss
statement, Balance Sheet and Cash Flow. It is very common to also include the following
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Execution - Individual Course Report

projections: Investment plan, Break-even point analysis, Sensitivity analysis and Valuation of
the company.