Entrepreneurship

1. Entrepreneurship The Importance of Business Planning for a Venture ELIB 203

2. The Importance of Business Planning for a Venture “A goal without a plan is just a wish”

3. The Importance of Business Planning for a Venture • When you decide on a brilliant business idea, the challenge is to provide a clear plan to get the idea executed. • It requires more than one person and people with different skills to plan well. • You can start writing your business plan (or drafts of it) while planning.

4. The Importance of Business Planning for a Venture • From each ten new startups, only one survives within the first two years (the rest fail to continue or go bankrupt).. • If you start your business with no clear plan, you do not know the future of your business.

5. The Importance of Business Planning for a Venture • You can set yourself aside from competition and gain a competitive advantage by planning well. • The business plan documents the plan your team is achieving.

6. How to Set a Good Plan for My Business? • Creating a business plan may seem boring, but you should not neglect it. • This is the plan that will guide your company and attract investors!

7. How to Start Planning? • Gather and provide documentation about your business • Every member in the organization should contribute to, read, and understand these documents

8. The Documentation you need

9. What is SWOT analysis • S.W.O.T. is an acronym that stands for Strengths, Weaknesses, Opportunities, and Threats. • A SWOT analysis is an organized list of your business’s greatest strengths, weaknesses, opportunities, and threats. • (See End of Class activity about SWOT analysis)

10. What is SWOT analysis • Opportunities and threats are external (suppliers, competitors, current prices of raw materials); they are out there in the market and you cannot change them • Strengths and weaknesses are internal to the company (such as reputation, patents, employees’ experience, location). You can change them over time

11. SWOT Analysis Internal External Positive Negative S W Weaknesses Internal limitations that may interfere with a company’s ability to achieve its objectives Strengths Internal capabilities that may help a company reach its objectives O T Threats Current and emerging external factors that may challenge the company’s performance Opportunities External factors that the company may be able to exploit to its advantage

13. Example of SWOT Analysis • Technological skills • Leading brands • Distribution channels • Customer loyalty/relationship • Production quality • Scale • Management • Absence of important skills • Week brands • Poor access to distribution • Low customer retention • Unreliable product/service • Sub-scale • Management • Changing customer base • Closing of geographic markets • Technological advances • Changes in government politics • Tax increases • Change in population age • New distribution channels • Changing customer tastes • Technological advances • Changes in government politics • Lower personal taxes • Change in population age • New distribution channels

14. Example of SWOT Analysis • Your specialist marketing expertise. • A new, innovative product or service. • Location of your business. • Quality processes and procedures. • Any other aspect of your business that adds value to your product or service. • Lack of marketing expertise. • Undifferentiated products or services (i.e. in relation to your competitors). • Location of your business. • Poor quality goods or services. • Damaged reputation. • A developing market such as the internet. • Mergers, joint ventures or strategic alliances. • Moving into new market segments that offer improved profits. • A new international market. • A market vacated by an ineffective competitor. • A new competitor in your home market. • Price wars with competitors. • A competitor has a new, innovative product or service. • Competitors have superior access to channels of distribution. • Taxation is introduced on your product or service.

15. Example of SWOT Analysis Experience: our execs have decades of experiences with plastics, engineering, and successful startups. Relationships: The company has excellent relationships with firms that collect and distribute PET bottles. Location: There are no other PET recycler than continue to export to China. High startup costs: The very high costs of opining a PET plant will require both investments and loans. Construction time: The recycling and extrusion facility must be built before we can begin processing plastic. Environmental protection standards: Whenever the government regulations are updated, we need to develop technically and economically feasible recycling solutions that meet the standards. Material scarcity: Our business model is PET-dependent. If use of PET bottles declines or becomes obsolete, we will lose our supply. Major facility expansion: The initial PET recycling facility will have a capacity of 46 million pounds, but the current annual stock of recyclable bottle material in California, Oregon and Washington is more than200 million pounds. R & D: Potential for other uses of PET-recycling by-product.

16. What Should Be Included in a Business Plan?

17. How to Draft a Business Plan • Activity: Refer to the “Writing a Business Plan: The Basics” document in the handouts on pages 2 to 4.

18. Group Activity • In a team, select an industry and a company within this industry; then provide a SWOT analysis • Refer and use the sheet of SWOT analysis in the (Business Modelling Workbook) document in the handouts. • Two teams will be asked to explain their analysis to the class at the end of session