Entrepreneurship...

Turning Your Business Idea into Reality!

The theme……….
 Many of business graduates dream to become
business idols …………
 Reality is many business giants of today started their
business at small level
 The approach thus is to start your own business and
strive hard to become successful entrepreneur
 Important requirement in addition to business
wisdom is your consistency and patience management
 Dreaming high is not a problem rather dreaming high
helps to set your direction but you should be in line
with your aptitude………
Risks of Owning a Business
 Working long hours
 Having an uncertain income
 Being fully responsible
 Risking one’s investment
Rewards of Owning a Business
 Being your own boss
 Doing something you enjoy
 Having the opportunity to be creative
 Freedom to set your own schedule
 Controlling your salary
 Contributing to the community
How many of you intent to start their
own business?????
 What are the reasons?
 1.
 2.
 3.
Reality Check–Starting a Business!!
If it was easy everyone would do it!!!
 70% of start ups close down within 3 years but
remember not all closures are because of business
failure. People often sell businesses or take up
paid employment.
 Running your own business provides you with
great learning experience in terms of:
Leadership and Team Working
Communication and Networking Skills
Commercial Awareness
Planning and Organisation
Adaptability, Flexibility and Resilience
Independence
Business Success Depends On ?
 Seriously considering your motivation
(including appetite for risk!)
 Being aware of your own ability, skills and
capabilities!
 Realistically thinking through the business idea
and start-up options
 And, if you are starting straight from university,
perhaps at the outset, not having too complex a
business model!
The MAIR Model

Motivation Research the

market &
plan
marketing Write
Ability Your
Potential Gather team & Business
plan
for operations Plan
Success
Idea Explore
funding Negotiate
& plan Yourself
finances
Into
Resources Take lots of Business
advice &
network
Serious Questions to Ask Yourself
 How committed are you? What are your driving forces?
 Are you prepared to work hard and to take risks? What are your goals?
 Does self-employment match with personal/family needs? (it’s definitely
not a 9-5 job)
 Have you the right skills?
 Do you know your own strengths/weaknesses?
 Are you really good at the core skill required?
 Have you a feasible idea or can you find one? (maybe a franchise would
be a low entry cost option
 Does the idea fill a gap in the market: will it sell???
 Can you find premises, tools/suppliers, staff required ?
 Have you a funding need (not easy to get for start-ups!!)?
 Can you survive initially on what may be a low income?
 Can you build networks for support and development?
Check Your Own Potential to Run a
Business
 Go to:
www.potentielentrepreneur.ca/client
(A Canadian site)

 40 questions, scoring 1-4

 Receive a print out to show your responses against

a typical entrepreneurs profile !
Idea-Generation Methods
 Library resources can help you examine different
opportunities
 Small Business Administration is a government
organization that exists to help small businesses and
their owners
 Talk to entrepreneurs and attend trade shows
 Start “people watching”
 Watch for demographic changes
 Become an insatiable reader
Feasibility of Ideas
Once you’ve got an idea for your new business,
you need to turn it into a business concept

Business Concept: Idea for a new business that

can be tested.

1. What is the product or service being offered?

2. Who is the customer?
3. What is the benefit you are providing?
4. How will you get the product or service to the
customer?
Feasibility of Ideas
Feasibility Analysis: The process used to test a
business concept

1. Are there customers who want what you have to

offer?
2. What conditions must be present for you to
decide to go forward with the business?

The analysis will show if there is enough demand for

your product or service.
Feasibility of Ideas
Ways of testing the business concept in the market
are:
 Testing product or service requirements
 Talking to customers
 Studying the competition

A feasibility study will help you determine a business

idea’s potential and profitability.
Write a Business Plan ???
WHY:

 Makes you think through the idea in some depth!

 It is a test to see if your idea will stand up to scrutiny!

 Usually essential if you want to borrow money !

 Provides an ongoing reference point for when you

are in business!
 Business Plan Tips
 Before you start writing, think where you want to be in 3
to 5 years time, outline your vision
 Address it to the appropriate audience, be that financial or
technical: it must be readable and understandable
 Many people start with the ‘back of an envelope’ approach
and develop that into a marketing/funding feasibility
study and ultimately a full blown business plan
 Most important areas are management, sales generation
and cash flow: you must understand your numbers!!!!!
 Be clear and concise, between 10 – 15 pages, 20 max
 Your Business Plan –
should cover these broad areas:
 Business description and vision.
 Outline of your/your team’s background, skills and
experience
 Product or service detail
 Marketing analysis including competitor detail and your
strategy
 Operational requirements
 Detailed financial requirements
 Risk evaluation
 All of the above are usually précised in an Executive
Summary which forms the first section of the completed
plan.
 Some More General Points !!
 If you need funding then your knowledge and experience
(and that of other members of your team) are key:
Management/Management/Management is the
investor mantra!!!
 If you have no experience think about getting it first!!
 Choosing the right legal status needs careful thought.
 I would recommend Sole Trader or Limited Company.
Funding
 It is better to have 70% of something than 100% of
nothing. People will not invest risk capital without
a reasonable stake and return.
 Commercial lenders like to see you invest some
real money into a project before they will lend.
That ties you into the business and means you are
less likely to give up if the going gets tough.
 Don’t try and fund long-term purchases
(property/equipment/cars etc.) with short-term
money (Overdraft/Credit Card)
Customers are King!!
 Customers can be difficult and sometimes
expensive to find, make sure you look after the
ones you have!
 Just printing a few leaflets or having a website is
not enough. People have to find that website and
you need to know about internet search engines.
 If you are planning to sell to large companies such
as the major supermarket chains there is a long
and rigorous process that has to be followed.
Products are often trialled in a small number of
outlets before being sold across all outlets. Can you
gear up production?
 Remember your customers are your best sales
brochure!!
Business Description & Background
 Business Aims and Objectives incorporating what you
are seeking by way of investment and other funding

 History of Development and any Trading to date

 Current or proposed Legal Status

(E.G. Sole Trader, Partnership, Limited Company)

 Details of You and other key personnel. Your

experience in the industry/sector and professional or
other qualifications
Product or Service and Marketing
 Provide full detail of your product or service.
 What specific market are you targeting?
 Details of any major customers/target customers
groups
 What market research have you undertaken, why
will people buy your product/service?
 How will you cost/price your product/service?
 Who are your competitors?
 What makes your product/service better, faster,
cheaper or nicer than the competition? Effectively
what is your USP!!
Operational Requirements
 How will the product be made and sold or how
will the service be delivered?

 What premises and equipment will be needed at

the outset and as the business develops?

 What staff will be needed both initially and as the

business builds up?

 Can those staff of the right quality be found and

trained?
Financial Information
 Monthly profit and loss, balance sheets and cash flows
are usually required for 3 years
 You must fully understand these figures even if you
get specialist help in their preparation
 Detail the assumptions made in the preparation of the
figures (E.G. in sales growth, in profit margins, in
payment terms)
 You must understand those assumptions
 If you need to borrow to fund asset purchases then
assume that borrowing is available and bring the
finance costs and repayment projections into the
plan/forecasts
Risk Evaluation – SWOT Analysis
 Outline Strengths and Weaknesses of the business
and yourself.

 How can any known weaknesses be overcome?

 What opportunities exist and how can they be

exploited?

 What are the threats, including the competition,

and how can they be overcome or mitigated?
Executive Summary
(Comes first in the plan document but usually written
last!)
 Brief Overview of the business/proposed business outline your
vision 3/5 years out from start up
 Say who you are, role in business, background and qualifications.
Also detail other key members of team
 Summarise how you will trade and why there is a market for your
product or service (and justify claims if you can)
 Summarise current financial position
 Summary of Forecast P&L, Balance Sheets, Cash Flows
 Outline funding needs in terms of:
 Asset finance (Capital purchases)
 Working capital

(Funding sales costs and day to day expenses, pending invoicing

sales & then the receipts from those sales actually being received)
Final Message!!!
If at first you don’t
succeed,

don’t give up!!!!

Good Luck!