Success formulas workbook_session2
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The document outlines the agenda for success formulas® session two, focusing on feedback for entrepreneurs' business concepts, including their 30-second descriptions, exit strategies, and executive summaries. It introduces key concepts for developing a viable business, such as identifying market needs, funding sources, and strategic operations through checklists and case studies. Additionally, the session includes discussions on venture capitalists, private investors, and the significance of aligning personal goals with business objectives.
Success formulas workbook_session2
- 1. Success Formulas® Session Two Focus
- 2. Session Two Agenda • Feedback Session On... – 30-Second Description – Exit Strategy – Executive Summary • Tests of a Winner • Product/Market Matrix • The Focus
- 3. Feedback Session • Entrepreneurs Present Information • Others Act as “Investors” • Comments & Feedback (“Yeah, buts…”) On: • 30-Second Description • Exit Strategy • Executive Summary
- 4. 30-Second Description Feedback • Introduction • Interest Generating Idea • Two Key Points • Probe for Need or Opportunity
- 5. Exit Strategy Ask Yourself... • Why Are You Getting Into Business? • Do You See Yourself Running the Company Twenty Years From Now? • Is Your Goal to Make A Lot of Money? • Or Running a Solid and Steadily Growing Family Business?
- 6. Exit Strategy Feedback Types… • Lifestyle • Inheritance-Bequest • Sell to Larger Corporation • IPO: Sell to the Public • Shut Down: Dissolve the Company
- 7. Executive Summary In 2-or-3 Pages, Briefly Describe the highlights of… • Elevator Speech • Industry • Vision • Mission • Corporate Legal Description • Product/Service - What it does, how much it sells for, proprietary position • Market - Who’s going to buy, what is the sales channel. • Operations • Management Team • Investment Required • Financial Proforma • Note: Develop each topic for five years
- 8. Funding • What are Your Funding Needs? • What are Your Sources of Funding?
- 9. Professional Investors • Venture Capitalist • Banks • Angels/Local Private Investors
- 10. Venture Capitalists Who are they? Which should you approach? • Role of “Lead Venture Capitalist” (should be close to you) • How many investors do you need • Specialty by Industry • Specialty by Stage of Investment • Specialty by Size of Investment • Other Criteria: – Co-investors – Value-added services – Active versus passive involvement – Et. al.
- 11. Venture Capitalist’’s Goal... • High Return on Investment • Managed Risk
- 12. Banks Will Give You a Loan If… • You have Assets--Get Money Back. • Earnings Within Company. • You Personally Guarantee Pay Back (Personal Assets) Debt.
- 13. Angels/Private Investors • Known as Informal Venture Capitalists • Typically Willing to Invest Earlier • One or More Angels May Be Used to Raise Money • Often Like to Get “Involved” in the Company’s Operations • Can Be Idiosyncratic
- 14. What Resources Do You Have to Draw On?
- 15. Break
- 16. Tests of a Winner • Team? • Market? • Operations? • Technology?
- 17. Technical • Do We Have a Proprietary Technology, and is it Proven? • Can We Make it in Volume? • Can We Protect It? (More Discussion on Technology in Session Four.)
- 18. The 2-Minute Opportunity Checklist for Entrepreneurs • Does your business idea soothe someone's pain, discomfort, frustration, or dissatisfaction? • Are there lots of those people out there? • Do these people (or companies, or governments) have money to pay for it? • Will they be able to decide quickly to buy your product or service?
- 19. The 2-Minute Opportunity Checklist for Entrepreneurs Cont’d • Does your idea exploit something about you that is outstanding or unique? • Can you think of at least two people who might join you? • Are there important assets you have that no one else has? (money, access to customers, technology, leadership skills, execution, location, salesmanship, etc.)
- 20. The 2-Minute Opportunity Checklist for Entrepreneurs Cont’d • Do their skills complement yours? • Do they have the same values as you do? • Do the majority of people whose opinion you highly respect think your idea is a good one?
- 21. The 2-Minute Opportunity Checklist for Entrepreneurs Cont’d • Does at least one person (and not more than three people), whose opinion you highly respect, think your idea is a bad one? • Is there something about the idea or its implementation, that compels you to really devote yourself to it?
- 22. The 2-Minute Opportunity Checklist for Entrepreneurs Cont’d • Can you sneak by the big competitors without them noticing you for awhile? • Can you start up without huge gobs of money? • Can you find a potential customer who will take your calls, give you feedback, try a pilot out? • Can you keep your fixed costs low during launch?
- 23. The 2-Minute Opportunity Checklist for Entrepreneurs Cont’d • Does your idea lend itself to small incremental steps that can inexpensively generate valuable information as well as at least a little cash? • Can you think of something else that Isenberg has forgotten? (and it is....)
- 24. Market • Who wants it? • What will they Pay? • How Do We Know Who Will Buy? • What Features/Functions will make them choose your product/service? • What is the best Channel to Market? • What is the Competition Doing?
- 25. Operations Ask Yourself: Do we have the... • Correct People Resources? – Now – Future • Financial Resources? – Cash-flow from sales – Equity Financing – Debt financing • Infrastructure? – Equipment & facilities – Out-sourcing versus in-house
- 26. Case Study: Jacobs’’ Hot Dog Stand • Donald • Hot Dogs • Secret Ingredient • Technology is...
- 27. The Product • The Product is…..
- 28. The Market • Front Yard • Nearby Park • The market is…..
- 29. Operations • A Hot Plate, Pots • Shopping at the grocery store • Loose change jar
- 30. Resources • Donald • Ruth, his wife • A Card Table • A Yard Sign • $5.00
- 31. Sales Channel • The Sales Channel is…..
- 32. Success • Success happens • The story is…..
- 33. Expansion • The next Product is….. • And the Product after that is….. • The next Market is….. • The Market after that is….. • The next Technology is….. • The next Sales Channel is…..
- 34. Ramifications • The Customer Base Grew….. • The Company brought in more Vendors…. • The Company brought in more People….. • The Story involves Money….. • Then the Government discovered Donald…..
- 35. The Competition Shows Up... Sales Take A Dive! What Should Donald Do?
- 36. Sales Take a Dive! • What to Do? – Create a new secret recipe – Upgrade the stand’s appearance – Advertise – Cut prices – Open a new stand – Move the stand – License the recipe – Sell the business
- 37. Product/Market Matrix 1 2 3 4 5 6 7 8 9 10 A B C D E F G
- 38. The Focus • Team • Market • Sales Channel • Technology • Product • Service • Resources
- 39. Technology • The Resource: Research, Patents, Trade Secrets • The Investment: New Technology • The Return: Licenses and Consulting Fees
- 40. Product • The Resource: Family of Related Products • The Investment: New Products • The Return: Sales of Products to Multiple Markets
- 41. Market • The Resource: Access to a Set of Customers with Common Needs • The Investment: The Right Range of Products • The Return: Sales of Multiple Products to a Single Market
- 42. Service • The Resource: A Skill Set • The Investment: People With a Skill • The Return: Selling Related Services to Multiple Markets
- 43. Sales Channel • The Resource: A Method of Sales • The Investment: Sales Tools, Access to Products and Markets • The Return: Sales of Many Products to Many Markets Through a Single Method of Sales
- 44. Resource • The Resource: Airplane Seats, Architects, Engineers • The Investment: People or Equipment • The Return: Selling the Resource to Multiple Markets
- 45. Pick Your Resource • Team • Market • Sales Channel • Technology • Product • Service • Resources
- 46. Ramifications of Your Choice • The Resource • The Investment • The Return Will the Business Take-Off?
- 47. Re-Cap Questions • What is Your Exit Strategy? • What is Your Focus? • What are Your Resources? • What are Your Sources of Funding? • Do You Have a Winning Business?
- 48. Homework Update Executive Summary • Based on Feedback • Include Focus
- 49. Preview Session Three: Marketing Strategy • Present Revised Executive Summaries • Product Life Cycle • Defining Your Product--Market & Niche • Low Price/Technology/Relationship Leaders • Distribution Channels
- 50. Success Formulas® Session Two Focus