ENT 4004 Chapter 8 Notes

1. ENT 4004 Chapter 8 Notes Planning should be the first step in developing a Small Business. Why is planning important?

2. Critical Actions • Create Critical Path • Select Location “ Location, Location, Location”….. • Financing “Show me the Money” sources … • Legitimacy • Production Management/Production Charting (as applicable) • Equipment

3. Critical Actions continued • Timing • Time Management ( how do I manage my time?) • Remember you can only give 100% probably 90% then burnout occurs.

4. Critical Point • The critical point of difference between an entrepreneur and someone with an idea, is ACTION. • You can lead, follow, or get out of the way…..I find it better to lead… • The efficient use of time for a new business is critical…Why? • If you do not set timetables and identify responsibilities you may drag out the opening process using up financial and emotional resources

5. Critical Path • A Critical Path is a control mechanism that will help ensure that critical tasks are identified and completed so that you open on time and within allocated budget (Time and Money). • The Critical Path should have: Steps 1 -??, each step should have a Task, each task a time to complete (hours/days/weeks) Time to complete states the actual time involved, Previous tasks required in order to complete the task, and key to success of the CP is the establishment of Responsibility by name for completing each task (see CP Table 8.1 page 157).

6. Location • Identification and purchase/lease of your business is critical. • Why?- L,L,L……. • Don’t let available capital or another convenience factor trap you into selecting a wrong location. • Why should you avoid a strip shopping center? • What’s an anchor store?

7. Financing • Chapter 9 covers Financing details you have to me able to cover initial payments for: • Security deposits, Utility set up fees, Purchase/lease of initial equipement and if required installation • Inspections/Licenses • Initial office supplies (don’t overlook the obvious) • Bank set up fees and initial ADVERTISING (Social Media)

8. Legitimacy • What’s Legitimacy? • Term used to discuss acceptance by stakeholders, that you are a genuine business that will still be in business next year. Who are the primary stakeholders?? C & S…….. • How do you establish Legitimacy for your new business?

9. Legitimacy support factors • Business checking account with your NAME. start with higher numbered checks. Why? • Business Credit Card • Line of Credit (Bank or Credit Union) • Business Cards –good quality correct information.. • Professional Letterhead, envelopes, and advertising material • Hopefully a prestigious address

10. Legitimacy support factors continued • Telephone answering support- QUALITY and professional • High Quality Web Page- “no under construction”. Should be primarily a SALES TOOL….. Why?????????????????????? • Board of Advisors ( how do I establish this, where are possible sources) • Develop a plan to commence and sustain legitimacy.

11. Production Management • Production Management System (what does this mean?) • It’s a name for defining the steps involved in moving from you product/service offering to the point where you actually receive $$$$ • The 2 most important to production management related to SB are Production Charting and Quality. • Production Charting is similar to a CP but it focuses on the production process.

12. Production Charting • Commences with an order being received and finishes with the final delivery to the customer. • All businesses must have a production process. Why? • What’s the production process for a Store, a Photo studio, a Clothing store, a Restaurant?

13. Quality • Why invest in Quality? • Why is quality an assumed standard? • Quality needs to be constantly and consistently improved. • There needs to a continuous set of measurements. • Why is recorded data required?

14. Equipment • Manufacturing will require a higher outlay die to the need for specialized equipment. • SB owners must accurately evaluate their equipment needs, sources, and ongoing maintenance and support. • Do you buy or lease new or used? What’s the upside of either? • How do you decide when faced with possible depreciation when purchasing equipment versus the high cost of leasing? • The new business owner should prepare a chart comparing the price and the positives and negatives of buying new, versus buying used, versus leasing. The chart should also include the impact on the firms quality and long-term impact if the firm grows.

15. Timing • The timing of your business starting should be based on when it provides the greatest competitive advantage to you. • Factors affecting your start are: • A. General environment • B. Competitors • Cycles affecting purchasing/supply patterns (production runs a year out) and ability to obtain critical supplies • Lifestyle issues

16. Time Management • Time is limited to 24 hours a day- so how do you make the most efficient use of your time? • Write down what has to be accomplished every day. • Prioritize which tasks are critical and which are helpful. Do the critical • Segment in terms of the time frame they need to be accomplished. Do short term first and then long term. Put out the fires or there may be no forest. • Allocate time to address operational issues and stick to the plan. Eliminate detractors to the extent you can.

17. Time Management continued • Write tasks down or enter them in your phone, tablet, etc. check them off as they are accomplished but don’t delete them. We take satisfaction in seeing what we’ve accomplished and it give us a record of what we’ve done against what we’ve established. • If you have a series of tasks planned and due to circumstances beyond your control you can’t address or accomplish them, go to the next item or items. • Leave time for yourself, you (and if applicable your family) needs a life17.