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ENFB 4190 - New Venture Creation - Week 2 notes

by: Ashley Watts

ENFB 4190 - New Venture Creation - Week 2 notes ENFB 4190

Marketplace > Auburn University > Entrepreneurship > ENFB 4190 > ENFB 4190 New Venture Creation Week 2 notes
Ashley Watts
GPA 3.85
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About this Document

Week 2 notes
New Venture Creation
James Franklin Corman
Class Notes




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This 3 page Class Notes was uploaded by Ashley Watts on Monday August 29, 2016. The Class Notes belongs to ENFB 4190 at Auburn University taught by James Franklin Corman in Fall 2016. Since its upload, it has received 6 views. For similar materials see New Venture Creation in Entrepreneurship at Auburn University.

Popular in Entrepreneurship


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Date Created: 08/29/16
● CL #3: Have fun! People rarely succeed unless they have fun in what they are doing ● CL #4: Enjoy what you are doing, and you will never have to work a day in your life ● CL #5: Run towards the burning building ●  Spawners or drivers of good ideas ○ Radical new technology ○ New market, abandoned existing market ○ Void created by departure of existing providers ○ Changes in laws ○ Bad customer service ■ 70% of people who change providers do so because of bad customer service ●  Screening criteria ­ to determine if an idea is good or bad ○ Market ■ Growth rate: ● 30% + is good ● 10% or less is bad ■ Size: ● $100m + is good ● Less than $20m is bad ■ Competition: ● Fragmented/nonexistent is good ● Perfectly competitive (no barriers to entry) is bad ○ Economics ■ Economies of Scale: ● Low levels are good ● High levels ­ bad ■ Time to breakeven ● Short ­ 18 months or less is good ● Long ­ More than 18 months ■ Profit Margin ● Good ­ 40% + ● Bad ­ 20% ­ ■ Net Profit ● Good ­ 10% or more ● Bad ­ 5% or less ■ Amount of Capital ● Low amount (needed) is good ○ ­ $500 k ● High amount (needed) is bad ○ $2 mil + ○ Competitive advantage ■ Barriers to entry ­ i.e patents/trade secrets/licensing/investment ­ capital expenditures/resources ● Significant Barriers are good ● No barriers to entry are bad ■ Sustainability ● Long term ­ good ● Short term ­ bad ■ Management Team ­  ● Good ­ understands the industry/have experience ( and complimentary skill sets ­ i.e. a  complete team ● Bad ­ team who can’t work together ­ overly dependent on one person ○ Exit ● CL # 6: Every business plan is fatally flawed ● CL #7: Plans are useless, but planning is indispensable  ● Ideas → idea assessment → feasibility studio → business model → business plan ○ Ideas ■ Create many, select one ○ Feasibility study ■ Less formal ● Short (napkin note) ● 2­3 pages ■ 20­30 hours ■ Is either a “go or no go” decision to build business model/business plan ■ 4 parts: ● Industry and market → how big and how fast? ● Description of product or service → how what is it? ● Financial Analysis → will it make money? ● Entrepreneur feasibility ­­­> can we do it? ○ Business model ■ 4 parts ● Target market ● Identify competitive advantage ● Distribution Channel?? ● Cost structure ○ Business Plan ■ Powerpoint/presentation ■ Historically ­ a written document (10­20 pages) ■ At least 300 hours put into it ○ Elements to a business plan: ■ Executive Summary ■ Description of product or services ■ Industry  ■ Competitive advantage ■ Competitive analysis ■ Market ■ Marketing and sales strategies ■ Management team resumes ■ Operations plan ■ Exit strategy ■ Terms of deals ■ Pro Forma income statement ● Projecting at least 3 years ● Report month by month until you break even, then you can report quarters or annual ○ Purpose of a business plan ■ Attract investors ■ Recruit management team ■ Validates concept/reality test ■ Plan for launching company ■ First budget ○ Presentation of Business Plan ■ 10/20/30 rule ● 10 minutes ● 20 minutes ● 30 font ■ Q & A: ● 15 minutes ■ Set the hook: not closing the deal!


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