Today’s saying
Show up on time with a plan, a commitment to carry it out, and then execute
it – you will beat the competition 100% of the time.
-Harvey Mackay
Why you are here
I WANNA KNOW...
How to understand risk
The steps/procedures to start a biz
Whether I have what it takes/whether or
not it is the right thing for me -
the Entrepreneurial mind-set
How to use E skills in a corporate environment
How to analyze opportunities; methods to do so.
How to start a home based business
About the psychology of success
Whether to franchise or not
I WANNA KNOW...
The elements of a good business plan
The steps in getting the business plan funded
The sources of financing, what % must I have, how to estimate the amount
required
How to make the transition into an Entrepreneurial environment
What decision making tools are available
How to develop a niche
How to get the knowledge, confidence, and skills I need.
I WANNA KNOW...
How do I manage risk?
Personal strategy - The impact of starting a biz on my family and personal
life, etc.
Why would anyone want to be an Entrepreneur?
Should I be an Entrepreneur?
Recognizing Venture Opportunities
The difference between ideas and opportunities
Ways to screen opportunities
How to assess markets and risks of new ventures
Differences between start-ups, franchises, acquisitions, and mergers
Recognizing
Opportunity
In the early 1980s
AT&T asked McKinsey to estimate how many cellular phones would be in use
in the world at the turn of the century. Mckinsey noted that the handsets were
absurdly heavy, the batteries kept running out, the coverage was spotty, and
the cost per minute was exorbitant.
Mckinsey concluded that the
total world market for cellular phones in the year 2000 would be 900,000.
In 1999, 900,000 new
subscribers join the world’s mobile phone services every three days.
NTT DoCoMo estimates that
by 2010 only a third of its 360 million customers will be people: the rest will
be cars (100m), bicycles (60m), portable PCs (50m), motorcycles, boats, vending
machines, and even pets.
Who has an ideal opportunity?
?
An idea is only an opportunity if you can make money on it.
Opportunities are created using ideas and entrepreneurial creativity.
The decision to do something entrepreneurial normally precedes identification
of idea and evaluation of commercial value.
Every Opportunity has a Window
The "Window of Opportunity" is finite
Markets grow at different rates over time, and as a market quickly becomes
larger, more and more opportunities are possible. But when the market becomes
even larger-and established -conditions are not as favorable. Therefore the
window of opportunity is when the market is still growing but before the big
boys have come to totally dominate it.
A narrow window = higher risk
Failure is usually faster than success
VC winners take an average of 7 - 8 years to ripen and be harvested
VC losers take an average of 2 - 3 years to rot
Opportunities are attractive, durable, and timely. They are anchored in a
product or service which creates or adds value for its buyer or end user.
Key Question to Answer
Are you focused on what the customer / market wants, or on what you want to
do?
Definitions
An entrepreneur is someone who perceives an opportunity and
creates an organization to pursue it
The entrepreneurial process involves all of the functions, activities,
and actions associated with perceiving opportunities and creating
organizations to pursue them
An Opportunity is an economically viable idea
Opportunities can occur in any industry at any time
What factors give rise to opportunity?
Significant change deregulation
of airlines, telecommunications, etc.
Lags - leads computer
hardware outpacing software
Chaos, confusion, dissatisfaction
Japanese auto industry overtaking US manufacturers
Inconsistencies labor
cost differences - north / south, etc.
Vacuums, gaps knowledge
gap in computers created an industry of consultants and trainers
Finding Opportunities
Keep abreast of
demographic changes
Look for the unexpected
Study Problems
Be a people watcher.
Identify people’s needs.
Monitor society,
industry, and the market. Watch for new trends.
Read, read, read
Talk, talk, talk
Thoughts
In entrepreneurship, as in any other profession, luck is where
preparation and opportunity meet
The idea itself is not what is important. Developing the idea,
implementing, and building a successful business are the important things
Would-be entrepreneurs who are unable to name customers are not ready to
start a business
Many new ventures fail because they do not address an economically viable
opportunity
What makes an opportunity attractive?
?
Venture Screening Guide
Chapter 4 of Timmons is excellent
Venture screening criteria ex. 3.3 pg. 84
Factors in evaluating the market:
Need for the product
Customers
Pay back to the user
Value added or created
Product life
Market structure (the competition)
Market's size
Market growth rate
Gross margins
Attainable market share
Cost structure
Five steps to analyzing market opportunity
Identify the business environmental forces
Describe the industry and its outlook
Analyze the key competitors
Create a Target Market profile
Sales projections
A different way of evaluating opportunities
All opportunities are defined by risk
People get rich by getting paid risk premiums
No two people feel the same about risk. These differences give rise to
opportunity.
The biggest risk in any business venture can be the way that you feel about
risk.
The only excessive risk is risk that you don’t get paid for.
An
opportunity with a guaranteed return is not always a low risk opportunity
More on Risk
Much of the value you can provide can be in the form of bearing risk.
How do YOU assess risk?
?
What is riskier - buying a business or starting one?
?
Tips for buyers
Find an owner with a reason to sell
Do not rush to close on a mismanaged business
Pay only for what is there today
Whoever keeps the risk should get paid a risk premium for it
Keep the seller locked in for as long as possible
What is a franchise?
Why is it attractive?
Why is it ugly?
Other thoughts about opportunities
Pick your customers carefully
Having a good concept is essential
Listen to legitimate criticism and concerns before moving ahead
Most existing businesses do not want to deal with start-ups
Do not expect to be paid professional rates for undeveloped expertise
Know something about what you are doing
Sources of marketing information:
Published sources
Interviews with experts
Personal observation
Primary marketing research
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Michael Goldman & Associates, L.L.C. - Consulting
& CPA Services 
