- Identify and screen opportunities ... create a vision and concept statement; build an initial core entrepreneurial team; describe the initial ideas about the value proposition and the business model
- Refine the concept, determine feasibility, and prepare a mission statement ... research the business idea and prepare a set of scenarios; draft the outline of a business plan and an executive summary
- Prepare a complete business plan with a financial plan and the legal organization suitable for the venture
- Determine the amount of financial, physical, and human resources required ... prepare a financial model for the business and determine the necessary resources; prepare a plan for acquiring these resources
- Secure the necessary resources and capabilities from investors, as sell as new talent and alliances
- Launch the new venture!
Tips for Creating a New Venture
Basic Financial Statements
- Assumptions: a thing that is accepted as likely to happen ... the probability of a particular customer placing an order in the next 6 weeks, for example
- Budget: an estimate of income and expenditure for a set period of time
- Income Statement: provides performance information about a time period. It begins with sales and works down to net income and earnings per share (EPS)
- Cash Flow Statement: the total amount of money being transferred into and out of a business; a positive cash flow is good.
- Balance Sheet: a statement of the assets, liabilities, and capital of a business or other organization at a particular point in time.
Pain/Pleasure Spectrum: Needs, Wants, Desires ... (Tool O-5)
While the terms are often used interchangeably, human needs, wants, and desires represent distinct levels of necessity and motivation.
Needs are basic essentials for survival, wants are for improving one's quality of life, and desires are powerful emotional longings.
Needs
A need is a basic requirement necessary for survival and physical and psychological well-being. They are finite and their absence can lead to illness or death. The most famous model for this is Maslow's Hierarchy of Needs.
Examples:
Physiological: Air, food, water, shelter, clothing, and sleep.
Safety: Financial security, personal health, and protection from harm.
Love and Belonging: Friendship, intimacy, and a sense of connection to a group or family.
Esteem: Respect, self-confidence, and a sense of achievement.
Self-Actualization: The realization of one's full potential and purpose.
Wants
A want is a non-essential item or experience that improves your quality of life once your basic needs are met. Wants are heavily influenced by culture, personality, and marketing. They are unlimited and can change over time.
Examples:
You need food, but you want to eat at a five-star restaurant.
You need clothing for warmth and protection, but you want a designer-brand jacket.
You need transportation, but you want a new sports car.
You need social connection, but you want a specific person as a romantic partner.
Desires
A desire is an intense, powerful longing or craving. It is often driven by emotion and is a step beyond a want. Desires can be aspirational and are sometimes unaffordable, which can lead to debt if pursued irresponsibly.
Examples:
The desire for a life of luxury and social prestige.
The desire for fame or a specific kind of recognition.
The deep desire to have children, or to own a beautiful, large home.
The desire to achieve a state of personal fulfillment or self-expression.
Crucial Communication Channels (Tool D-9)
The "alphabetical" communication channels are external, between the key business venture teams and customers:
A] The Research & Development Team communicating with customers to determine what customer problems, needs, wants, and desire the venture should address
B] The Marketing Team communicating with customers to promote current venture solutions, product, services, and processes that solve current customer problems, and obtain feedback from customers relating to the performance of the venture in solving their problems
C] The Sales Team obtaining and processing orders from customers, and customer relationship management
Venture Hypothesis Outline
- Title slide or page ... venture concept name, team members, 3-word concept summary
- Opportunity ... the problem, market research and analysis, first customer(s) beachhead
- Solution and venture concept ... products and services, competitive advantage
- Business model ... how the venture will earn money (or self-sustain)
- Marketing and sales strategies ... how the venture will attract and retain customers, tactical marketing
- Product development and operations strategies ... how the venture will develop and deliver solutions to customers
- Team and organization ... the current team and what do they do, advisors, team members to be added
- Risks and variations ... downside and upside risks, timeline, and tolerances
- Financial model ... estimate of units sold, average selling price, revenue, expenses, and EBITDA for first 5 years; key assumptions; significant startup expenses
- Validation plan ... how the hypothesis will be validated
Tips for Promotion
Advertorials ... attention getters ... balloons ... billboards ... blog marketing ... brochures and pamphlets ... bulletin board signs ... bumper stickers ... bus and taxi ads ... bus bench/shelter signs ..
business breakfasts/lunches ... business cards ... business networking ... buttons ... calendars ... charitable contributions ... high profile ... charitable volunteerism ... city/regional magazine advertising ... classified advertising ... community involvement ... computer bulletin board ... computer data service ... consumer magazines ... contests ... co-op advertising ... customer newsletters ... decals ... demonstrations ... developing a sales slogan ... direct mail and sales letters ... direct mail with co-op advertising ... discount coupons ... discount premium books ... door hangers ... door-to-door canvassing ... drive-time radio ... employee events ... endorsements or promotion by famous personalities ... enthusiast magazines ... envelope stuffers ... envelope advertisement ... event sponsorship ... exterior building signs ... fliers and circulars ... folders and binders ... format radio ... free information ... free trials ... general business magazines ... gifts and premiums ... grand opening/anniversary celebrations ... greeting cards ... grocery store cart signs ... home parties ... hot air balloon ... Internet ... letterhead ... local business magazines ... local cable ... local newspapers ... local TV ... loudspeaker announcements ... magazine ... mailing labels ... major network TV ... membership in organizations ... messages pulled by airplane ... moving billboards on trucks ... mugs ... magnetic holders ... etc. ... multiple purchase offers ... national cable ... national newspapers ... news releases ... newsletters ... newspaper ad ... newspaper insert ... offer a reward for referrals ... on-line computer services ... package inserts ... packaging ... per-order/per-inquiry ads ... personal letters ... personal sales ... picket your establishment ... place mats ... point-of-purchase signs ... postcards ... price specials ... print advertising ... print on the box/container ... product exhibitions ... programs and yearbooks ... promotional plan chart ... proposals ... public relations and publicity ... radio advertising ... radio spots ... rebates ... referral incentives ... reminder advertising ... sales calls ... sales incentives ... sales tools ... samples of product ... search lights ... seminars ... free or low-cost ... send a thank you note after a new purchase ... share costs with event sponsors ... shopper classified newspapers ... sidewalk signs ... signs at sporting events ... signs on your building ... signs towed by airplanes ... skywriters ... special events ... special sales ... specialty items ... spokesperson ... sponsorship of charitable events sponsorships ... statement stuffers ... stickers ... symbols ... take-one racks ... talks and presentations ... tape or ribbon ... telemarketing ... telephone hold messages ... telephone pole signs ... television advertising ... television spots ... thank-you letters ... tie-ins with other products ... tours ... trade and technical magazines and newspapers ... trade fairs ... trade journal advertising ... t-shirts ... two-for-one offers ... vehicle signs ... video commercials in stores ... video tapes ... walking signs ... window signs ... and yellow page advertising ...
Bloom's Taxonomy
Bloom identified six levels within the cognitive domain, from the simple recall or recognition of facts, as the lowest level, through increasingly more complex and abstract mental levels, to the highest order which is classified as evaluation. Verb examples that represent intellectual activity on each level are listed here ...
- Knowledge: arrange, define, duplicate, label, list, memorize, name, order, recognize, relate, recall, repeat, reproduce state.
- Comprehension: classify, describe, discuss, explain, express, identify, indicate, locate, recognize, report, restate, review, select, translate,
- Application: apply, choose, demonstrate, dramatize, employ, illustrate, interpret, operate, practice, schedule, sketch, solve, use, write.
- Analysis: analyze, appraise, calculate, categorize, compare, contrast, criticize, differentiate, discriminate, distinguish, examine, experiment, question, test.
- Synthesis: arrange, assemble, collect, compose, construct, create, design, develop, formulate, manage, organize, plan, prepare, propose, set up, write.
- Evaluation: appraise, argue, assess, attach, choose compare, defend estimate, judge, predict, rate, core, select, support, value, evaluate.
Why Ventures Fail
high interest payments ... improper balance between major company functions ... improper control systems ... improper market segmentation ... improper market testing ... improper price setting ... inability of spouse to accept the entrepreneur's drives and values ... inadequate financial analysis ... inadequate marketing analysis ... incompetence ... incomplete homework of the venture capital avenues ... incorrect sales forecasting ... ineffective control procedures ... ineffective customer interface ... ineffective direction ... ineffective planning ... lack of experience in the business area ... lack of fiscal responsibilities ... lack of leadership ... lack of managerial experience ... lack of organization ... lack of realization of the necessity to turn cash immediately ... lack of understanding of venture capitalist's goals ... management weaknesses and gaps ... neglect ... operational over-complexity ... over-inflated organizational structures ... over-staffing ... personal and domestic problems ... personal specifications in conflict with start-up's goals and objectives ... poor communications ... poor financial projections ... poor market gap analysis ... poor psychological work environment ... poor retail locations ... poor self-discipline ... poor venture capital appetite-whetting techniques ... premature approach of venture capital avenues ... premature incorporation ... premature patents ... premature product releases ... security indiscretions ... speculative losses ... superior competition ... technical problems ... the lack of zest for life which sustains a start-up ... too many details ... too rapid expansion ... trading area changes ... unable to solve customer's problems ... unbalanced experience ... under-capitalization ... under-staffing ... unfavorable economic conditions ... weak business plans ... weak incentive systems ... weak key employees ... weak marketing tactics ... weak money-leveraging methods ... weak motivation ...
Traits of a Good Target Market
Walt Disney's Tips for Building a Good Corporate Culture
- Give every member of your organization a chance to dream, and tap into the creativity those dreams embody.
- Stand firm on your beliefs and principles.
- Treat your customers like guests.
- Support, empower, and reward employees.
- Build long-term relationships with key suppliers and partners.
- Dare to take calculated risks in order to bring innovative ideas to fruition.
- Train extensively and constantly reinforce the company's culture.
- Align long-term vision with short-term execution.
- Use the storyboarding technique to solve planning and communication problems.
- Pay close attention to detail.
Operations Planning Checklist
- Key operational objectives and strategies
- Location and facilities
- Equipment and technology
- Labor requirements
- Inventory management
- Supply channels
- Distribution channels
- Research and development
- Legal Requirements
- Order fulfillment and customer service
- Capacity utilization
- Critical processes
- Quality control
- Safety, health, and environmental concerns
- Management information systems
- Other operational concerns
- Start-up budget
- Operating budget
How to Write a Resume
Tips for Picking the Right Opportunity
- You and your team are passionate and persistent ...
- Your team has or can learn the skills needed ...
- Your team can collaborate and cooperate ...
- The problem is clear ...
- The customers are readily identified ...
- The market is significant ...
- You have a feasible solution ...
- The competition is identifiable ...
- Your solution has better and sustainable benefits ...
- Your solution can generate a sustainable profit ...
- Your venture is timely, important, legal ...
- Your venture can build barriers to entry ...
- Your concept is scalable ...
- You'll invest less time, money, and effort in the venture than it will be worth in a couple of years ...
- If the opportunity turns out to be less than favorable, you can exit with minor losses ...
- Risks can be mitigated ...
- The upside potential is significant and timely ...
- Your team has a clear plan for success ...
- Your team can find the resources needed ...
- You and your team are committed to success ...
- The opportunity has a potential for long-term success ...