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Entrepreneurs respond to attractive opportunities by forming new ventures. In this chapter, we consider the five-step process for establishing a new enterprise. One particularly noteworthy step in the process is the development of a business plan. We describe the task of creating and writing a business plan, which is a significant and challenging effort for most entrepreneurs. We also consider special topics in forming a new venture including the benefits of joining a cluster of interconnected enterprises operating within a geographic region. We describe the necessary tasks and subsequent benefits accrued by socially responsible firms.
Included in Chapter 7 is an annotated business plan that outlines the key sections and questions that should be included in a Business Plan. Download Table 7.4. |
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Vermeer Technologies (A): A Company Is Born
Charles Ferguson has just heard from a venture capital (VC) consortium that it is willing to finance Vermeer Technologies, a company he has co-founded for developing Internet software. The funds are sorely needed, but the VCs have imposed some onerous conditions, including a request that Vermeer's first CEO be an outsider. Teaching Purpose: Identifies several tasks that need to be performed before a business idea can be realized as a business entity. Highlights the process of early product definition and the key role of employee selection in building an organization.
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PacNet
Presents a full-scale business plan for the launch of an Internet service provider (ISP) for the Pacific Rim. Set in 1993, the case has a short introduction, followed by the business plan for PacNet. Dr. Kevin Wong, PacNet's founder, plans to take advantage of the exponential industry growth by becoming the dominant provider of Internet services to Pacific Rim businesses. PacNet's growth strategy depends on acquisition and consolidation of ISPs and the development of proprietary software through partnerships. Teaching Purpose: To consider a business proposal and evaluate the business opportunity, management team, financing strategy, and risks.
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Model E: An Incubated Enterprise
Provides a close-up view of an entrepreneurial search for opportunity, the role of incubators in the process, and the development of a viable business concept. Also depicts the changes made to the business concept as new people (with new expertise and experience) are added to the team. The challenge of blending "old economy" automotive veterans with "new economy" Internet employees is another important issue raised. Teaching Purpose: Developed to illustrate: 1) alternative paths to entrepreneurship (incubator route), 2) the development of an organizing idea (Internet auto delivery) into a business concept (high-end, one-touch subscription service), and 3) challenges of implementation.
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(DVD Section 7.2) Gordon Ringold: Change the Business Plan in Response to a Changing Environment
Surromed had to change the business plan due to two reasons: 1. External climate. 2. Lack of potential partner interest. All good startups will adapt the business plan in their life. For example, Surromed shifted to a product revenue generating model. They started to provide a service to make money which they could invest in their own discoveries. Some investments that were started in the beginning have had to wait for now. The company moved from generating equity capital to generating revenue. |
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Randy Adams: Make a Plan
Randy talks about how the creation of a plan with a logical set of steps is essential to creating a successful business. Within this plan are attainable milestones and the knowledge that as a small company, flexibility is still an option. |
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Business Plans that Work - Timmons, Zacharakis, & Spinelli
Plans That Work arms entrepreneurs and small business owners with an easy-to-follow template for writing persuasive business plans, along with proven models that can be used to analyze potential business opportunities from initial idea to viable venture. This value-packed book will show both entrepreneurs and current business owners how to:
- Determine what to include in each plan, why, and for whom
- Recognize and avoid common pitfalls in the process
- Use the renowned "Timmons Model" to analyze potential business opportunities
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How to Write a Great Business Plan
A great business plan is one that focuses on a series of questions which relate to the four critical factors critical to the succes of every new venture: the people, the opportunity, the context, and the possibilities for both risk and reward. This is a condensed version of Sahlman's longer article in book 'The Entrepreneurial Venture'
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Frank Moyes - Colorado Leeds School of Business
Professor Frank Moyes has a number of useful business plans templates and references available on his web site. There also many complete business plans from a breadth of different industries that can be leveraged as additional examples or case readings.
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