Transcript Tools used by Entrepreneurs for Venture Planning

Tools used by
Entrepreneurs for
Venture Planning
Entrepreneurship 1
2.09 B
Uses of Business Plans
• Help attain business goals
• Target changes in perception and branding by the customer,
client, or larger community.
• Enables investors to make knowledgeable decisions.
Importance of a Mission statement
• The Mission Statement is best described as the intended
strategy and business philosophy for making the
entrepreneur's vision a reality.
• Examples
Google's mission is to organize the world's information and
make it universally accessible and useful.
Mission Statement examples
• To make, distribute & sell the finest quality all
natural ice cream & euphoric concoctions with a
continued commitment to incorporating wholesome,
natural ingredients and promoting business
practices that respect the Earth and the
Environment.
• Snap-on's mission is to delight our customers professional tool and equipment users worldwide by creating innovative, productivity-enhancing
products, services and solutions.
Financial Forecasting and
Budgeting
• What is Financial Forecasting? The process of estimating
future business performance (sales forecasting, costs,
earnings)
• Why is it important?
• To determine future financial needs
• Forecasting also is important for production planning, human
resource planning, etc.
• Used by outsiders to value companies and their securities.
• Give overall perspective of the whole firm, rather than looking at
individual projects.
• Sales Forecasting – used to project sales for a new business
venture.
Financial Forecasting and
Budgeting (cont.)
• After financial forecasting has been completed it is easier
to Budget money
• What is Budgeting? A budget represents a detailed plan of
how a company expects to spend money in future time
periods. Many companies create budgets on an annual basis.
Examples: Creating a promotional budget for advertising
your product/service.
• Why Budgeting is important?
• limits how much money is spent on certain operations
• plan for future business growth and expansion
Internal and External tools used for
Venture Planning
• SWOT analysis
• Strengths (inside the business)
examples: patent, strong brand name, good
reputation with customers.
• Weaknesses (inside the business)
examples: lack of marketing expertise, location,
poor quality goods
• Opportunities (outside the business)
examples: availability of expanding using the Internet,
selling to new markets, competitor goes out of
business
• Threats (outside the business)
examples: new regulations, new substitute product, more
competitors.
Internal and External tools used for
Venture Planning
• Market Analysis ~ It identifies every relevant aspect of the
market in which you will market your product or service. A
good market analysis summary is rooted in careful, thorough
research.
• A market analysis must include an industry description and
outlook, information about your company's target market,
market test results, and a competitive comparison
Internal and External tools used for
Venture Planning
• Environmental Scan ~ an environmental scan involves
considering the factors that will influence the direction and
goals of your organization.
Examples
• an environmental scan might project that in the next ten years,
the number of people (potential customers) between the ages of
18-24 will increase from 30% to 40%.
• looking at the present capabilities of the organization
(infrastructure, hardware, personnel, abilities, structure, etc) and
that information can be compared to what the organization WILL
need in the future to achieve its strategic goals.
Internal and External tools used for
Venture Planning
• Competitive analysis ~ a process of gathering and analyzing
information about your competitors, their practices, products,
strengths and weaknesses and business trends.
Use to:
• know what your competitors are doing and what to do to stay
ahead of the competition.
• have reliable information showing how customers perceive their
product or how it compares to the competition.
Internal and External tools used for
Venture Planning
• Sensitivity Analysis ~ A what-if analysis. What if analysis is
often used to compare different scenarios and their potential
outcomes based on changing conditions.
Types of Planning Approaches
• Opportunity Management Approach ~ (OMS) A system that stores sales opportunities and
related information. Each sales leadcan be tracked with
information such as source, type, worth, status, likelihood of
closure etc.
• Includes ideas, recognizing opportunities, and driving
opportunities
Milestone planning Approach
• Milestones are the small steps that lead to the ultimate goal
whether it be developing of new product or service or
advancing the exploration of space to the far reaches of the
universe.
• A milestone is an important event marked on a timeline and
recognized when successfully reached.
Entrepreneurial Strategy
Matrix
• Strategy Matrix - A model appropriate for both
entrepreneurial ventures involving high innovation and often
corresponding high risk, and traditional small business
ventures, which are generally low in innovation
Multistage Contingency
Approach
• The contingency approach believes that it is impossible to
select one way of managing that works best in all situations
• An example of this is the never ending problem of increasing
productivity. There may be several different ways to handle
and look at that situation.
Technology used for Venture
Planning
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Business Planning software
Bookkeeping software
Budgeting software
Financial Analysis software