ENTMGT3960

Have you guys ever parked at a garage and come back to pick up the car to find that there is a scratch or dent on it? You swear you never had it when you came to drop off the car. My venture idea is auto parking. Many people do not like to valet or park in garages because they do not like other people driving their cars. Many of my friends are the same way, which is where I came up with my idea. My business venture is all automated with one person keeping an eye on making sure everything is running smoothly. All you have to do is come park your car, pay for the parking and press a button and BAM your done. From this point, you will slowly see your car go down and to the parking area and into a parking space.

My target market, will be all the people that drive out to the city. The city is a very cramped and busy area. As you notice that all the buildings in the city are very tall. My plan is to go the other way, underground. Many people travel these days by mass transit. But! Many people still drive out with their cars and nowhere to park. Families coming out to the city for events, or stopping in the city to run some errands. Another example is the people with nice cars, they tend not to drive out to the city is because it is a very dangerous place for such an expensive car.

As any parking garage, we charge by the hour for parking. Of course we will also have specials for early birds or people that would like to rent a space monthly. As we can guarantee that your car will be in the same shape as you left it, I believe this main fact will have plenty of people wanting to park here.

My team and I have been working on the most efficient way to get your car in and out as fast as possible. With technology booming the way it has, we can get the car to you within the minute. We have developed a way to prioritize the parking and making sure that people that go in and out most often will have their cars closer to the main gate.

As of currently, our main competition will be all the parking garage companies out in the city.

Our competitive advantage is the technology we have. As for parking cars in general, there has never been any technology put into this service. As we are in the 21^st century now, we will need to modernize this method.

There are two types of equity investments:

Public Stock: holding shares of publicly traded company. The company itself can sell more shares to raise further money.

Private Equity: covers a broad range of investments such as venture capital, leveraged buyout, growth capital and mezzanine capital

Guidelines that a entrepreneur should follow when selecting a venture capitalist are:

• Scrutinize your business with a critical eye
• Beef up management
• Keep a high profile so the VC’s will visit
• Target the search
• Keep a lookout
• Investigate possible venture partners

A single-hit is a business that does not last long in the market.

A home-run business is one that has a good foundation and starts off strong and continues to grow.

There are four factors that a banker looks for before providing a corporate loan, which is called the four C’s:

• Character – the person carries traits such as talent, reliability, and honesty.
• Cash Flow – to cover debt service must be available throughout the term of the loan.
• Collateral – must pledge a specific piece of property to secure the loan.
• Contribution – by the entrepreneur towards the funding requirement.

The funding’s that are available for entrepreneurs in the early stage of the company are:

• Self-Funding – This option is available to entrepreneurs who are highly motivated and committed to using personal resources to launch a company.
• Moonlight and Part-Time Consulting – this is a very important option where the entrepreneur may not want to quit their full time position, as the income from the job can help support the owner during negative or low cash flow and provide working capital to expand the business cash flow.
• Bootstrapping – is a self-funding often can be used by small businesses. It can reduce costs from the current operation and overhead.
• Friends and Family – this source of funding is very popular because they are not as worried about quick profits as professional investors are.
• Micro-equity and micro-loans – this is a new form of help organization for entrepreneurs. For a small percentage of ownership of your company, they will provide you with sufficient money to live for a few months near their offices.
• Bank loans – this source of funding allows the entrepreneur to not have to give up any part of ownership to receive the funds.
• Factory and Supplier Funding – if you are unable or willing to provide personal or asset-backed guarantees, but you have purchase orders from reputable customers, you maybe possible to use these orders to secure funding rom factors.
• Government funding – this funding is available to small businesses.

A virtual company is a company that has no offices and few employees loaded with benefis, no communication costs, low video conferencing. They allow the entrepreneurs to conserve cash and maintain flexibility in their plans, where monthly fixed costs are minimized.

The seven bootstrapping techniques are:

• No or Low Rent
• Bartering for Goods and Services
• Trading Intellectual Property Rights
• Renting or Leasing Equipment
• Used Equipment
• Cooperative Purchases
• Outsourcing

Bootstrapping is very important because it allows the entrepreneur to own the whole company without giving anything up. This method also allows them to show what determination they have to starting up a company with no outside help.

Factoring a purchase order is taking on a full loan from a bank, but they charge high interest.

Suppliers can help in providing working capital to an entrepreneur in ways where they see that the company will become a hit and may provide a line of credit to them as the company is starting up.

Financial measurements that need to be prepared to measure a company’s performance are:

• The balance sheet
• Income statements (profit-and- loss statement)
• Cash flow statements (source and use of funds)

There are 11 major categories in preparing a financial budget:

1. Sales
2. Cost of Goods Sold
3. Gross Profit
4. Operating Expenses
5. Operating Profit / Loss
6. Other Income and Expenses
7. Pretax Income
8. Income Taxes
9. Net Income
10. EBIT
11. EBITDA

The breakeven technique is a decision making model that helps entrepreneurs determine whether a certain size of production will result in a profit of loss. This technique shows the point at which breaking even occurs, when total revenues equals total costs. Total revenues are equal to the price from the sale of one unit times the amount of units sold. The total cost breaks down to two parts, fixed and variable. Fixed costs are expenses that do not change. Variable cost depends on the volume produced. The breakeven point is when total profit is zero.

Building a corporate culture to match a company’s mission is important because involving everyone everyday moving toward a clearly defined goal or goals makes the difference between success and failure. Building this corporate culture takes strong leadership skills and the ability to interact and bring everyone together for a single goal. As we know ourselves communicating with each other at work makes a big difference in accomplishing certain goals. If everyone did their own thing, the whole picture would not come together.

The 6 skills I feel are important for building a strong culture are:

• Honesty – This allows employees at work to be open to one another. This makes work environment feel more like home.
• Alignment – this makes the company goals easier to reach when everyone is going towards the same goals.
• Teams – If working by yourself is good, think of working as a team challenging each other to do better.
• Empowerment – This shows that you as a manager trusts the employees to make the right decisions that steers the company in the right direction.
• Engagement – This attribute is important because communication in between Managers and employees can help the company grow.
• Support – I always believed supporting others are a good thing. This way if one does not believe in themselves, others are there to help.

The three important factors one must consider when hiring key people are:

• Match values
• Use professional recruiter
• Work experience

There is a term for a new technological innovation that fits in an existing market and improves the company, it is called “going viral”. There are three factors that can have an impact on this.

The first are the early users experiences, they are usually satisfying and instantaneous. This makes the users to go back and repeat it.  They may also spread the word to friends and family, which leads to the friends and family spreading to others.

The second factor would be the users are member s of social clubs or online networks.  This allows users to share their experience and it does not constraint to location. This is another way how innovation can spread vastly.

The third factor would be getting the early users involved in the development of the product or service. This allows the company to get feedback.

There are two factors that impact the market window of opportunity.

The first factor will consist of conducting trials with the early adopters while you refine the marketing plan. This will allow you to find the needs of the users and create a better way of market.

The second factor includes the hype cycle, which is a graphic representation of the maturity and adoption and social application of specific technologies. Knowing where you are on this cycle can prevent you from setbacks.

A product that is currently being used by early adopters is Hoverboards.

There are many reasons as to why social entrepreneurs do what they do. In this modern age, everyone is exposed through global media about the major challenges that the under developed countries face and also people that are underprivileged in the developed world. Some of these challenges are global warming, pollution, epidemics, chronic diseases, famine and others. These are the reasons social entrepreneurs do what they do.

The Green or cleantech ventures should be classified as social enterprises is because that they are still concerned about making the world a better place. The only difference is that they will be making a profit. If they reinvest the profit back into the company is totally up to them.

Some of the negative effects of being a social venture for nonprofit are growth and management challenges, hard to sustain and finally hard to acquire investments from investors.

Stakeholders view social ventures more differently is because it is not where you start a company and the goal is to make profits. The company must stick with the aligned goal it started with. Many of social ventures fail due to the fact that the derail from the goal they started with and the people that volunteers and donates stop. Without these, the social venture would fall apart.

Some of the growth challenges social venture face are growing too fast, where instead of being a social venture, ends up being like any other business. When hiring employees for social ventures, they are usually more followers than employees. These people actually care for the cause and would work way harder than a regular employee that just gets paid by the hour. Additionally, when the venture grows, communication tends to fall through the cracks.

 

First I would like the mention that there is no one “best” form of ownership. All companies start small, but as to whether you want to start it yourself or with partners is your choice of course. To find out what type ownership suits you, there are a couple of factors one must consider before making a choice. The main factors I would definitely consider are:

How much capital is needed to start up the company?

How big can this business become later on?

Who would be liable for the debts if the business fails?

These are just some of the factor an entrepreneur must consider.

As I mentioned before, when starting up a business, would you consider starting up yourself(Sole Proprietorship) meaning you own the whole business yourself, or would you consider starting up with business partners(Partnership). This is very important choice, as there are advantages and disadvantages to both types or ownerships.

Sole Proprietorship(Advantages)

• Terminated at anytime.
• Keeps all profits.
• Has right to make all decisions.
• Least amount of regulations in owning a business.

Sole Proprietorship(Disadvantages)

• Take on all liability.
• Requires license.
• Due to there no difference between the owners personal and business debts, creditors can sue to collect personal assets.
• Limited skill set, if owner does not have required skills to make business succeed.

Partnership(Advantages)

• Easy to establish.
• Not limited to one persons skill set.
• More capital to invest.
• Attract limited partners to join in on the business.
• Taxes gets divided between the partners.

Partnership(Disadvantages)

• Unlimited liability
• If one of the partners dies, not transferrable through inheritance.
• Partnership requires more than one owner. There maybe conflicts between the two owners.

Compared to Sole Proprietorship and Partnerships, a corporation is a separate legal entity and may do business, issue contracts, sue and be sued, and pay taxes. A corporation can be formed by simply filing an application for a charter with the respective state. By filing this application, the incorporator will put on record facts, such as:

• the purpose of the intended corporation,
• the names and addresses of the incorporators,
• the amount and types of capital stock the corporation will be authorized to issue, and
• the rights and privileges of the holders of each class of stock.

The Main difference between S-Corporation and a Limited Liability Company are how they fill taxes differently. The S-Corp would have to file a business tax return, as where a LLC only files the business tax return if there are more than one owner.

To investors, finding a successful business plan is like trying to look for a needle in a haystack. Even if a good business plans come around, would you be willing to risk an investment just for the word “good”? Therefore, many investors look for the best, and if it is not intriguing enough for them, they are probably going to say no thanks.

Many business plans fail are due to many reasons and there are so many reasons is because these investors are looking for the best plans that will generate profit for them. As I mentioned, there are many reasons as to why business plans fail, I will just name a few I believe are important.

The proposal  you present to investors.

This proposal is pretty important, as it can either make you or break you. If your business summary is not clear, how do you expect the investors to feel?

Investors can check on status.

There is a saying, there others the same as you would like to be treated. If you lied on the proposal to get the investors to finance your business, how would you feel if someone did that to you. No one would invest in someones company if there is no trust.

Business concept not researched or validated.

Researching and making sure your business plans will succeed is a very important thing. If you cannot provide the person giving you money with a good enough reason, they might as well give the money to a stranger.

These are just a couple of broad reasons as to why many business plans fail.

 

A business model is most essential to entrepreneurs. My favorite description of a business model is that it provides framework, where entrepreneurs can analyze their business plans and look for other ways for their companies to function and grow profitably while building barriers to ward off competitors. Although this is a long a boring definition, I think this is most useful is because there are several parts.

1. Analyzing your business plans and look for ways to be more efficient, and other opportunities that can make your business even more profitable.
2. While analyzing the business plans, you can see if there are competitors that are a threat to your company and see how you can build barriers to prevent them from overpowering you.

I wanted to speak about the two tools that are used for designing business models, which are called “The Five Component Model” and “The Business Model Canvas”.  To me I believe these two are very similar. The Five Component Model, is mainly made up of five parts as the title of the tool suggests, which are product/service, audience, company structure, finances, and strategy.  Whereas the business model canvas is made of nine parts. I believe that the business model canvas goes more in depth about the audience in which your product or service is useful to.  They specify in who the customer is, and how does our product/service contribute to them, how the company as a whole relates to these customers.  The similarities between these two models is that they both include who the audiences are, how the company will be structured and also how the finances will be managed.  One difference that the business model canvas has is the complex supply chain. This part specifies who our key partners would be if the company started. This is very important because knowing the competition is one thing, but knowing your business partners, supplier, and other affiliates is most important as you will have to deal or answer to them often.

Greif packaging had was a very smart company. They reanalyzed their company and the industry they were in. They pretty much saw that they were putting more risk into the company then getting revenue out of it. So the smart thing they did was reanalyze their company and listened to their customer needs.  With the information they had collected, they were able to create a new company, that solved the problems and generate more revenue. Greif converted their business model into a trip leasing company.  Now, it solves all the problems their customers were having(supply, transportation, cleaning).

What is innovation? We use that word a lot, but does people know what it really means? According to the textbook, innovation is the use of new technological knowledge and or new market knowledge, employed within a business model that can deliver a new product and/or service to customer willing to buy. To innovate something new for people is difficult. Innovation within a company is so important, that it can make or break a company.  Within recent years, we have advanced in technology tremendously. These technological advancements has made running a company more simpler.  if a company cannot keep up with these advancements, it is not a good direction to go towards. What is the point if we do not put it into use to make a company succeed. Companies such as Google, Yahoo and the internet itself has brought majority of companies to a whole new level. This level I speak of is be able to promote, communicate and sell. From promoting, communicating and selling locally(Face to Face), innovation has made us be able to do this world wide. As innovations continue to evolve, it is how we apply it to the company which makes the difference.

Dell was just another computer brand that people bought to have a computer. What changed that made them successful and left the competition behind? Dell created a direct-to-customer business model. This model targeted 2nd or 3rd time computer buyers. Why this business model  took off for Dell was because it allowed the consumer to buy online, customize the computer to their needs and have it shipped to them within days. This model at the time created many problems for their competitions that could not keep up.  Besides this business model, Dell now sells printers that connect to the internet. These printer have a built in software which monitors the ink level and when almost depleted, it will automatically order a new set for you. This allowed Dell to save a huge amount, due to the fact that they did not need a retail store front to sell this merchandise. The order automatically goes into the warehouse. As I said before, innovations like I just mentioned, can make of break a computer, in this case Dell took and seized the opportunity and his company took off.