What is an Entrepreneur? One who creates a new business in the face of risk and uncertainty for the purpose of achieving profit and growth by identifying opportunities and assembling the necessary resources to capitalize on them Ch. 1: The Foundations of Entrepreneurship

What is an Entrepreneur? Critical Concepts: Create… not ‘Start’… not ‘Buy or Purchase’… not ‘Takeover’… not ‘Sign-up as a Distributor’… New Business… ‘not existing before’

MANA 3325 – Thurburn Lecture #4 Slides Competitive Advantages Any aspect of how you operate your business that is difficult for your competitors to copy and which customers appreciate and respond to.

MANA 3325 – Thurburn Lecture #4 Slides Business Models Recurring Revenue Non-Recurring Revenue Rev. Model (Frequency of $) Mo. / Qtr. / Yr.> Yr. Customer Profile Value Proposition Differentiation Pricing Selling Process Distribution Support

MANA 3325 – Thurburn Lecture #4 Slides Business Models Revenue Model Recurring Revenue Non-Recurring Revenue Frequency & Predictability of Cash Flow Magazines Grocery Fuel Attorneys Mortgage Realtors

MANA 3325 – Thurburn Lecture #4 Slides The Business Plan Who is the Plan for? Yourself… essentials may be enough. Partners… more extensive Investors… most extensive The More $$$ the More EXTENSIVE

MANA 3325 – Thurburn Lecture #4 Slides Goals vs Objectives Goals: Long range … lets go to Miami General and/or Abstract… Lofty Objectives: Specific targets… what route and where do we stay at night? Measurable… how many miles per day? Assignable… who drives which legs of the trip? Realistic/Challenging… make progress vs time to sleep. Timely… project the arrival in Miami accurately. Written… get everyone on board. GO… SMART-W

MANA 3325 – Thurburn Lecture #4 Slides The Business Plan The 5 Cs of Capital and Financing Capital – Enough? and Balance of Debt vs Equity Capacity – Cash Flow Collateral – Liquid or Fixed Assets Character – Creditor History Conditions – Terms of Loan

The Business Plan MANA 3325 – Thurburn Lecture Slides A Business Plan Must Pass Three Tests 1.The Reality Test: 2.The Competitive Test: 3.The Value Test: Define Reality Test…?

The Business Plan MANA 3325 – Thurburn Lecture Slides The Reality Test – proving that: A market really does exist for your product or service. You can actually build or provide it for the cost estimates in the plan. Next… Define the Competitive Test

The Business Plan MANA 3325 – Thurburn Lecture Slides The Competitive Test – evaluates: 1. A company’s position relative to its competitors. 2. Management’s ability to create a company that will gain an edge over its rivals. Next define the Value Test

The Business Plan MANA 3325 – Thurburn Lecture Slides The Value Test – proving that: A venture offers investors or lenders an attractive rate of return or a high probability of repayment.