Positioning Yourself as an Entrepreneur for Market Opportunities

1. Positioning Yourself as an Entrepreneur for Market Opportunities Chapter 3

2. The Big Picture • You Must Know: • Where you are now • The conditions surrounding your enterprise • Where you intend to be • The “conditions” created by a successful business • How you intend to get there • You Must Never: • Lose sight of who you are and what you are doing • “If you don’t know where you are going…any road will do.”Peter Drucker Chapter 3

3. The Big Picture Today The Path Future Your Business Plan Where you are now. Where you want to be. ‘”A good business plan is a Road Map to success Chapter 3

4. Values and Philosophy • Strongly held beliefs to guide actions and decisions: • How you treat people? • Important aspects of your business? • What standards of practice or service or product you set? The business values are the strongly held beliefs about your business that underpin all your decisions and everything thing that you do. Chapter 3

5. “If we are not customer driven…our cars won’t be either” President Ford Motor Company Chapter 3

6. Vision Statement Long Version : a word picture of – the future, your business and the difference you are making Proverbs:“where there is no vision, people perish.” Dr. Martin Luther King Jr:“If you want to move people it has to be toward a vision that is positive for them, that taps important values and gets something they desire. It must be presented in a compelling way that they feel inspired to follow.” A Statement of where you would like to take your business Chapter 3

7. Business Vision An empowering business vision is: • Inspiring. • Connected to your values. • Inclusive • Represents the deepest and best within you. • Outlines the changes you will make in the lives of those you serve. Chapter 3

8. Mission Statement • statement of your company’s purpose and aims. • usually answers the 6 Ws: • What are the products and services? • Who is the expected target customer? • What industry is it in? • Which markets does it serve? • What is its major driving force? • Why will this business be successful? Chapter 3

9. What is a Mission This is a more matter of fact statement of purpose that drives the business decisions. For Whom? Who are You ? Product What? How? For Customer Chapter 3

10. Lead, develop, and promote positive hockey experiences Chapter 3

11. To be the best sports brand in the world. Chapter 3

12. The American Red Cross, a humanitarian organization led by volunteers and guided by its Congressional Charter and the Fundamental principles of the International Red Cross Movement, will provide relief victims of disasters and help people prevent, prepare for, and respond to emergencies Chapter 3

13. Bombardier’s mission is to be the leader in all the markets in which it operates. This will be achieved through excellence in the fields of aerospace, rail transportation equipment, recreational products and financial services. All Bombardier units must meet the needs of their customers and markets as well as reach and maintain world-class performance. They must also create added value in order to sustain their own growth and achieve a superior level of economic return to shareholders. Chapter 3

14. The York University Sport Administration Program prepares its students to enter and excel in the sport industry, developing essential skills through dynamic teaching strategies and in association with top sport administrators of leading edge organizations. Chapter 3

15. The Business Environment In a Business the Environment (external and internal) is the key source of information gathering – it’s critical to making good decisions and creating successful marketing plans. Economic Conditions Political-legal climate Environmental Scanning The Internal Environment Business Plan Natural Environment Technology Competition Socio-cultural Environment Customers (Market) Environmental Scanning: Process by which the marketing manager gathers and sorts information about the marketing environment. Chapter 3

16. Internal Organization Leadership (quality) Vision (known, shared) Strategy (results so far) Assess People (skills, mix,) Culture (personality) Work Process (how work gets done) Resources (availability , use) Chapter 3

17. Situational AnalysisInternal Analysis + Environmental Analysis • INTERNAL FACTORS: • Determinants of business strength and weakness: • Size/growth • Share/position • Profitability/margins • Technical advantages • Image • People • ENVIRONMENTAL FACTORS: • Suggests where the company can take advantage of trends. • Technology change • Competitive change • Social environment • Legal environment • Economic vulnerability • Consumers What SCA (sustainable competitive advantage) exists within the product portfolio? SWOT: Strengths, Weaknesses, Opportunities, Threats Chapter 3

18. SWOT Your Business Strategy • A Business Strategy • A broad program for achieving an organization’s objectives and implementing its vision. • Creates a unified organizational direction. • Helps determine the nature and direction of the organization. • SWOT • A business model which helps formulate a business strategy. • An analysis of a company’s: • Internal Strengths and Weakness • External Threats and Opportunities Chapter 3

19. Situational Analysis – (Internal and External) SWOT Analysis Everything that is currently and collectively part of your business Internal Strength “exploit” Weakness “overcome” Everything that is currently and collectively part of the market and environment of your business Opportunity “take advantage” Threat “minimize” External Chapter 3

20. A Strategic Framework Company Strengths and Weaknesses Industry Opportunity and Threats (Economic & Technical) Competitive Advantage Personal Values, Vision, Mission and the Business Strategy Broader Societal Expectations Chapter 3

21. How do we get There? Today Future Integrated “Functional” Planning Environment Where you are now. Where you want to be. Creating a good the Road Map to success Chapter 3

22. Goals • A product ofaS.W.O.T. (strategic questions) • Statements of outcome or result • “How will you know when you have reached targets?” • “What changes in state or circumstances will we accomplish?” • If you can describe these, then you can write a goal • Develop for different segments of your business (key strategic areas like HR, finance, distribution, customer service,product etc.) • based on a single priority (SWOT) • describes a result/outcome • easy to understand • is good for the business Chapter 3

23. Smart Goals • Specific – focus on one priority (from SWOT) • Measurable – must know when reached • Attainable – realistic for your enterprise/resources • Result Oriented – must be an outcome not an activity • Time – Bound – commit to when Chapter 3

24. Functional Areas Needed to Accomplish the Strategic Plan Examples… Business Expansion Product Development Finance People Promotions What “results” must we accomplish in these areas? GOALS By what “means” are we going to accomplish these “results” OBJECTIVES Chapter 3

25. Objectives • Provides a “yardstick” for each goal • Can be a milestone or a process step(time bound) • Measures progress • Provides a “Means” (how?) to measure directly • refers to one goal • easy to understand (for a lay-reader) SMART – Specific, Measurable, Action-based, Realistic, Time-framed Chapter 3

26. Plotting Your Future Checklist • How is your product or service addressing the needs of the target market and offering benefits? • What are your business and personal values? • Define your market niche. • Define the idea filters. • Complete your mission statement. • Revisit and update your business goals and objectives. • Identify market segments that have market potential. • List industry problems that your business may face, and how you would address them. Chapter 3

27. Legal Forms of Ownership The standard legal forms of ownership are: • Sole proprietorship. A business that is owned by one person. • Partnership. An association of two or more individuals carrying on a business to earn an income. • Corporation. A legal entity with the authority to act and have liability separate and apart from its owners. • Cooperative. An organization owned by the members who use its services. Chapter 3

28. Advantages It is relatively easy and inexpensive to set up. It is directly controlled by the owner or operator. It is flexible, with little paperwork. Business losses can be deducted from other income. Disadvantages The owner can be held personally liable for debts and obligations of the business. Opportunity for continuity is restricted. To some extent, the owner’s ability to raise capital is restricted. Income is taxed at a personal rate. Sole Proprietorship Chapter 3

29. General Partnership Each partner manages the business. Each partner assumes unlimited personal liability for debts and obligations. Limited Partnership This partnership is composed of one or more limited partners and at least one general partner. The general partner manages and assumes the downside risk. The limited partner does not manage and liability is limited to the amount of his or her original investment. Partnership Chapter 3

30. Advantages It is easy to set up New partners can be easily added It involves few legal requirements Risk is generally shared Disadvantages Tax and estate planning options are limited Partners, to a large extent, are personally liable Decision-making and dissolution can be difficult Partnership: Advantages and Disadvantages Chapter 3

31. Partnerships—Cautionary Notes • Get everything in writing • Each partner must have their own lawyer • Have a written partnership agreement. • Consider a shotgun clause— • One partner can make a buyout offer to the other partner for his or her share of the business. The receiving partner has the option of either accepting the offer or buying out the partner under the same terms. Chapter 3

32. Advantages There is greater potential for limited liability There are possible tax advantages It can upgrade image It offers ease of continuity Disadvantages There are potentially fewer tax write-offs at the beginning There are higher start-up costs There is increased paper work and complexity Corporation Chapter 3

33. Shareholders Agreement • A shareholders agreement is a legal document which establishes the rights of shareholders (owners) and the duties and powers of the board of directors. Chapter 3

34. Shareholders Agreement • A shareholders agreement is not legally required but it is strongly recommend you have one • Keep the agreement simple • Consult professional advisors—especially a lawyer and accountant—before you sign any agreement • Include a buy-sell option—as with partnerships, consider a shotgun provision Chapter 3

35. Cooperatives Seven Principles • All cooperatives are guided by the same seven principles: • Voluntary and open membership • Democratic member control • Member economic participation • Autonomy and independence • Education, training, and information • Cooperation among cooperatives • Concern for community Chapter 3

36. Advantages There are potentially more sources of start-up capital As owners, members are potentially more motivated than employees There is increased opportunity to network and share ideas There is limited liability Disadvantages It is sometimes difficult to get agreement There may be management conflicts External financing may be difficult Cooperatives Chapter 3

37. Get a Lawyer and Accountant Network your contacts Consider including a lawyer in your team of advisors Action Step 40 will help you get started Get a Will Don't do your own will Get a lawyer Make your lawyer aware of all your business arrangements Decide what you want to happen if you should die Choose an executor Don’t procrastinate. Do it now! Get a Lawyer, Accountant, and a Will Chapter 3

38. Your Business Name and “Red” Tape • Your Business Name • Protect your business name • Do a name search • Request a NUANS • Canada Revenue Agency—Major Start-Up Requirements • Business Number • GST or HST • Payroll deductions • Federal Income Taxes Provincial Sales Taxes • Provincial sales taxes (PST) differ for each province • Register to collect PST Chapter 3

39. Succession Planning • The process of establishing the procedures to change or transfer ownership or control of a business • Be proactive • Some key issues your must prepare to confront are: • Do you want a family member to continue the business? • Who should be included in the decision-making? • What is your vision for the family business? • What qualities should the next company leader have? • How can you make a graceful exit and not look back? • If you die, how should control and ownership be transferred? Chapter 3

40. Plotting Your Future Checklist • Explain why you selected your legal form of ownership. • What professionals have you referenced in your business plan, and did you allow for the appropriate cost? • What are the major legal risks for your industry, and how will you address them? • Are you prepared for the legal red tape? • Do you have a will and a succession plan? Chapter 3