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Learning Outcomes
Describe the new venture creation process Compare and contrast business life cycles with industry life cycles Explain how opportunity recognition occurs Discuss the critical components of a business concept Describe the feasibility analysis process Explain bootstrapping as an entrepreneurial strategy
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Outline
Start-Up Resources The New Venture Creation Process Launching a New Business Feasibility Analysis Manage a Business
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Feasibility Analysis
The entrepreneur develops an idea into a business opportunity or business concept that is then tested in the market through a process of feasibility analysis. Feasibility analysis is used to inform the entrepreneur about the conditions required to move forward and develop the business. This may involve market research. Once the entrepreneur has determined that the concept is feasible, a business plan is developed to detail how the company will be structured and to describe its operation
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Viability
Testing the business concept in the real world is what actually determines if the business has viability. Thus, the business must actually be launched and operated in the environment to determine viability. In a business, the term viability is the point when the company is able to generate sufficient cash flows to allow the business to survive on its own without cash infusions from outside sources such as the entrepreneur's own resources, investors, or a bank loan.
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Opportunity Creation
Developing a product, service, process, or niche that has not existed before. Opportunity recognition requires high levels of creativity.
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Opportunity Creation
Typically, opportunity creation involves an invention process that is characterized by four activities: connection, discovery, invention, and application
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Opportunity Creation
Connection occurs when two ideas are brought together that normally are not juxtaposed, such as nature and machines, which produced the field of nanotechnology or microscopic machines that copy nature in the way that they operate. Discovery happens once a connection has been made. It is actually the result of the connection in the form of an idea. Inventions are the product of turning an idea into a product or service. Application comes about when the inventor is able to apply the invention to a number of different uses or applications in a variety of industries and situations.
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Opportunity Recognition
The process of using creative skills to identify a new innovation --- (a product, service, process, or marketing method) --which is often based on something already existing in the marketplace.
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Feasibility Analysis
The business concept (which is essentially a specific product or service) is tested through a process of feasibility analysis that answers three fundamental questions:
1. Are there customers and a market of sufficient size to make the concept feasible? 2. Do the capital requirements to start, based on estimates of sales and expenses, make sense? 3. Can an appropriate start-up team be put together to make it happen?
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Bootstrappers
Bootstrappers are start-up entrepreneurs who have no financial resources beyond their own savings. They realize that to get what they need to start their businesses location, equipment, money, and perhaps employeesthey must possess a double dose of ingenuity and supreme selfassuredness.
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Successful Bootstrappers
Bill Gates and Paul Allen started Microsoft in a cheap apartment in Albuquerque with virtually no overhead, a borrowed computer, and very little capital.
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Lease a portion of a larger companys space and take advantage of its reception area and conference room.
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START-UP RESOURCES
Putting together sufficient resources to start a business requires enormous creativity and persistence, with the ultimate reward being a company that is able to reach critical mass and take advantage of significantly more choices for growth capital.
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Leadership is important because many small firms have a hard time hiring qualified employees
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THANK YOU
Any Queries?
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