Chapter Review
Chapter 1: The Entrepreneurial Process
What are the five stages for the entrepreneurial process?
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Stage I – Opportunity Analysis
The basic objective is to define the criteria that would make a business opportunity worthwhile to pursue. In this stage the founder identifies the opportunity and prepares and focuses on a vision and marketing for the company. If there is no vision for the venture, the new idea is just a dream
Stage 2 – Developing the Plan and Setting Up the Company
This is where ideas are discarded; strategies are documented and converted to a business plan. The focus at this stage is on writing a well-conceived business plan. It is a written plan that details how the vision and market analysis will become a sustainable competitive advantage.
Stage 3 – Acquiring Financial Partners - Sources of Funding
Armed with a well- conceived plan, the next challenge is to focus on acquiring financial investors and partners. In most cases, students and the entrepreneur may not be aware of the many financing options available that would best meet the needs of the business. Therefore, it is important to know the expectations and requirements of funding sources as well as the options available for financing.
Stage 4– Determine the Resources Required and Implementation
• This stage focuses on how the entrepreneur must learn to build the management team, organize the company, develop a human resource capability and create the spirit, culture and incentives for growth.
• The stage also examines the value of intellectual property for patents, trademarks and copyrights to gain competitive advantage in the marketplace and guides you toward effectively developing, protecting and promoting your own IP.
• Entrepreneurs are asked to plan operations and evaluate decisions using financial accounting information. An understanding of “Managing Financial Operations” is designed to analyze and to prepare budgets, ratios and cash flow forecasts will contribute to optimize learning of these skills
Stage 5 – Scaling and Harvesting the Venture
• A number of techniques and strategies can assist the entrepreneur in effectively developing an exit plan. This stage highlights the procedures and options available for entrepreneurs to scale the venture or consider an exit strategy. Described are the most common, sell an equity stake to a partner, sell the business, merge with another company or implement a leverage buy-out.
• Also discussed is the planning for a public offering that offers an option to sell a portion of the venture and scale the business for growth. The objective is to provide the knowledge to identify the best exit