Tools used by Entrepreneurs for Venture PlanningEntrepreneurship 12.09 B

Uses of Business Plans• Help attain business goals• Target changes in perception and branding by the customer,

client, or larger community.• Enables investors to make knowledgeable decisions.

Importance of a Mission statement

• The Mission Statement is best described as the intended strategy and business philosophy for making the entrepreneur's vision a reality.

• Examples Google's mission is to organize the world's information and make it universally accessible and useful.

Mission Statement examples

• To make, distribute & sell the finest quality all natural ice cream & euphoric concoctions with a continued commitment to incorporating wholesome, natural ingredients and promoting business practices that respect the Earth and the Environment.

• Snap-on's mission is to delight our customers - professional tool and equipment users worldwide - by creating innovative, productivity-enhancing products, services and solutions.

Financial Forecasting and Budgeting

• What is Financial Forecasting? The process of estimating future business performance (sales forecasting, costs, earnings)

• Why is it important? • To determine future financial needs• Forecasting also is important for production planning, human

resource planning, etc.• Used by outsiders to value companies and their securities.• Give overall perspective of the whole firm, rather than looking at

individual projects.• Sales Forecasting – used to project sales for a new business

venture.

Financial Forecasting and Budgeting (cont.)• After financial forecasting has been completed it is easier

to Budget money• What is Budgeting? A budget represents a detailed plan of

how a company expects to spend money in future time periods. Many companies create budgets on an annual basis. Examples: Creating a promotional budget for advertising your product/service.

• Why Budgeting is important? • limits how much money is spent on certain operations• plan for future business growth and expansion

Internal and External tools used for Venture Planning• SWOT analysis• Strengths (inside the business) examples: patent, strong brand name, good

reputation with customers.• Weaknesses (inside the business) examples: lack of marketing expertise, location,

poor quality goods• Opportunities (outside the business) examples: availability of expanding using the Internet,

selling to new markets, competitor goes out of business

• Threats (outside the business) examples: new regulations, new substitute product, more

competitors.

Internal and External tools used for Venture Planning• Market Analysis ~ It identifies every relevant aspect of the

market in which you will market your product or service. A good market analysis summary is rooted in careful, thorough research. • A market analysis must include an industry description and

outlook, information about your company's target market, market test results, and a competitive comparison

Internal and External tools used for Venture Planning• Environmental Scan ~ an environmental scan involves

considering the factors that will influence the direction and goals of your organization.

Examples• an environmental scan might project that in the next ten years,

the number of people (potential customers) between the ages of 18-24 will increase from 30% to 40%.

• looking at the present capabilities of the organization (infrastructure, hardware, personnel, abilities, structure, etc) and that information can be compared to what the organization WILL need in the future to achieve its strategic goals.

Internal and External tools used for Venture Planning• Competitive analysis ~ a process of gathering and analyzing

information about your competitors, their practices, products, strengths and weaknesses and business trends.

Used to: • know what your competitors are doing and what to do to stay

ahead of the competition.• have reliable information showing how customers perceive their

product or how it compares to the competition.

Internal and External tools used for Venture Planning• Sensitivity Analysis ~ A what-if analysis. What if analysis is

often used to compare different scenarios and their potential outcomes based on changing conditions.

Types of Planning Approaches• Opportunity Management Approach ~

- (OMS) A system that stores sales opportunities and related information. Each sales leadcan be tracked with information such as source, type, worth, status, likelihood of closure etc.

• Includes ideas, recognizing opportunities, and driving opportunities

Milestone planning Approach• Milestones are the small steps that lead to the ultimate goal

whether it be developing of new product or service or advancing the exploration of space to the far reaches of the universe.

• A milestone is an important event marked on a timeline and recognized when successfully reached.

Entrepreneurial Strategy Matrix• Strategy Matrix - A model appropriate for both

entrepreneurial ventures involving high innovation and often corresponding high risk, and traditional small business ventures, which are generally low in innovation

Multistage Contingency Approach• The contingency approach believes that it is impossible to

select one way of managing that works best in all situations• An example of this is the never ending problem of increasing

productivity. There may be several different ways to handle and look at that situation.

Technology used for Venture Planning

• Business Planning software• Bookkeeping software• Budgeting software• Financial Analysis software