LDP Session 9: Risk Taking
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This document discusses risk taking and entrepreneurship. It explains that entrepreneurs perceive opportunities, take risks, mobilize capital, introduce innovation, organize production, make decisions, plan ahead, sell products for profit, and self-evaluate. The document provides tips for when is a good time to start a new idea, which includes gathering information through market research and financial projections. It also outlines the key components of a project study, including business model, technical, marketing, operations, financial aspects, and exit strategy. Entrepreneurs are advised to conduct a SWOT analysis and study these various factors when considering taking a risk on a new idea.
LDP Session 9: Risk Taking
- 4. Introduces INNOVATION 2 WHEN IS A GOOD TIME TO START ON A NEW IDEA??
- 5. Perceives Opportunities In the Environment Takes Risk Mobilizes Capital for Business Introduces Innovation Organizes Labor and Production Makes Decisions Plans Ahead Sells Product at A Profit Self Evaluation
- 6. Opportunities will be Bank Loan Rates: flashed and you will 10% interest; decide to buy or not Can Loan in to buy an multiples of $1000 opportunity; You are given your income profile Should you decide on an opportunity, the entrepreneur will have to update his or her financials;
- 15. Takes RISKS 2
- 17. Takes RISKS 2
- 18. Information Market research Project Study Financial skills Guestimation Network
- 19. Project Study Business Model Technical aspect Marketing aspect Operations aspect Financial Aspect Exit Strategy
- 20. Business Model – the purpose of this is to hilight how the business will generate cash to recover the investment How will the proposed project generate revenue? Retailing, Licensing, distribution Will there be recurring revenue? Are we offering a business or service?
- 21. Technical aspect- studies the technicalities the project may require. Required technology to deliver the service Raw materials availability Skills availability R&D requirement
- 22. Marketing aspect- the purpose it to find out if the business can fulfill an identified need. Market size Competition Target market Location Selling strategies R&D requirement Industry trends
- 23. Operations aspect- the purpose is to find out the most efficient way the product or service will be delivered. Capacity Management and Personnel Physical layout Equipment and Training Government and environmental regulations Plant expansion plans
- 24. Financial aspect- the purpose is to find out the capital requirement for the project and to determine the ROI. Capital requirement and sources Financial Projections (BS, CF & PNL) BE Analysis ROI CBA Plant expansion plans
- 25. Exit Strategy – the method by which an owner or investor can get out of the investment made. Recovery of investment via dividend pay outs Cashing Out IPO Closure or liquidation of asset
- 26. Gather some pertinent information regarding your idea; Perform a SWOT analysis of the idea Prerequisite: Your original idea (something that is challenging, medium scale undertaking)