n.imanipour,fall2008 the successful business it is not enough merely to survive; the goal is to...

n.imanipour,fall2008

The Successful Business

It is not enough merely to survive;

The goal is to succeed

n.imanipour,fall2008

Factors of a successful BusinessThe Business ConceptUnderstanding the market Industry Health and TrendsConsistent Business Focus and clear

strategic positionAbility to attract, motivate and retain

employees

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Factors of a successful BusinessFinancial controlAnticipating and adapting to changeCompany's value and integrity

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The business concept

Thomas Edison:“Anything that won’t sell, I don’t want to

inventSource of Business Idea:

Previous work experienceEducation or trainingHobbies, talent or other personnel interestsRecognition of an unanswered need or

market opprtunity

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The business concept

The successful business has at least one of these elements:Something newSomething betterAn underserved or new marketNew delivery system or distribution channel Increased Integration

ŹŚƧƹŜƀƧƾƬƇřƭƺƸƠƯ

ƵŵźųƕƺƳŻřŚưƃŹŚƧƹŜƀƧŚƿōƾƯƾŤƳźŤƴƿřŚƿƹƖ ƿŻƺţ Ŷǀƫƺţ ƾţŚƯŶų ƾƃƹźƟ� � �ŶƃŚŝ�

ƾƯƍƺŝźƯƾŤƘƴƇƶģƶŝŶƃŚŝ�

ƾƯƾţŚƯŶųŚƿƹšLJƺƈŰƯƶģŶǀƃƹźƟ�

ŶƴŤƀƷƾƳŚƀƧƶģŚưƃƵƺƤƫŚŝƱŚƿźŤƄƯ�

ƽĦţřźŤſ ř .ŶǀŗŚưƳŮƿźƄţřŹŵƺųƁƹźƟƾŝŚƿŹřŻŚŝƾƬƧƽŚƷ

ƾƯŵƺųŜǀƣŹƱřƺƴƗƶŝřŹŚƸŤƧźƃŻřƕƺƳƭřŶƧŚƿƹŚƸŤƧźƃƶģŶǀƴǀŝ�

ƶƴǀƯŻŻřƭřŶƧźƷŹŵřŹŵƺųƾŤŝŚƣŹƽŚƿřżƯ :ŶƿŹŚưƄŝŵƺūƹšŹƺƇŹŵźƿŻƽŚƷ

:ŶƿŶūšŚƯŶų /šLJƺƈŰƯ

:ƵŵƹżƟřƁŻŹřƹšŚƯŶų /ƶŤƟŚƿŵƺŞƸŝƽŚƸǀĭĦƿƹ

ŶƿŶūƽŚƷŹřŻŚŝ :ƵŶƄƳƲǀƯŚţƾƟŚƧƵŻřŶƳřƶŝŚƿ

:Ɩ ƿŻƺţŚƿƩŚƜŤƃřƶŤƟŚƿŵƺŞƸŝŚƿŶƿŶūƽŚƸƃƹŹ

źŤƄǀŝƾĮģŹŚĜƨƿƽŚƸƃƹŹ :

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Understanding the market

A great idea or new invention is not enough, you need a market that is:LargeaccessibleResponsive

e.g. ATM machine

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Industry Health and trends

Your business does not operate in a vacuum!

If your business is in a healthy and expanding industry, investors are likely to be more receptive.

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Clear strategic position and consistent business focus

A crucial factor is development of a clear strategic position that differentiate you from your competition, and then maintaining focus on that position

E.g. 4 companies are making jeans:Company A: selling work clothesCompany B: a sportswear manufactureCompany C: selling youth clothesCompany D: just selling jean!!!!

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Clear strategic position and consistent business focus

A second aspect: developing a company style or corporate culture

E.g.: two restaurants with the same business mission: “providing good , fast food, priced at only a few dollars a meal”The A restaurant: a national burger chain.The B restaurant is a diner

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Capable Management

Some of the common traits by successful managers:ExperienceRealismFlexibilityAbility to work well with people.

Do the key members of management team posses these characteristics?

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Ability to attract , motivate and retain employees

A company is as good as its people!Unhappy employees are less motivated

to do excellent work.

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Financial control

Key to any business is how it handles money! Make sure you have the information to

understand your financial picture on an ongoing basis. What does it take to open your doors each month? Where is your real profit center? How much expansion do you need to maintain

growth? What are the consequences of your credit policies? ….

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Anticipating change and adaptability

The sources of change:Technological changesSociological changesCompetitive changes

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What motivates you?

4 C:ControlchallengeCreativityCash

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n.imanipour,fall2008

Getting your plan started

5 steps of the business plan process:Laying out your basic business conceptGathering data on the feasibility and

specifics of your conceptFocusing and refining the concept based on

the data you compile.Outline the specifics of your business.Putting your plan in compelling form

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Start your research by asking questions

How much information is enough?Suppose you are planning to open a dry

cleaning, what information do you need?What are the basic questions you have to

answer?

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How many dry cleaners now serve the neighborhood? How profitable are the current dry cleaners in the

neighborhood? Are the residents satisfied with the current dry

cleaners? Is there more business than current dry cleaners can

handle? What are the trends in the dry cleaning industry

nationally? What are the demographic trends in this area? …

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Suppose you recognize an opportunity to provide a family counseling services via the internet, what are the key questions you have to answer?

The research questions

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Historical performance of your companyPast sales records, broken down by product

line, time period, region,..Past trends in costs of sales.Overhead expense patterns.Profit margins on product linesVariation from budget projections…..

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How to conduct your own market research

Personal observationInterviewsSurveyFocus groupLearn from other businessTalk to your competitionGetting help

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Evaluating the data you’ve collected

Use the most recent data you can findTranslate data into units rather than

dollars.Give the most reliable source Integrate data from one source to

another in order to draw conclusion.Use the most conservative figures!!!

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Now is the time to ask yourself some hard questions:Can the business be viable?Does a real market exist? Is there too much competition already?How does the financial picture look?

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n.imanipour,fall2008

HOW YOUR BUSINESS PLAN IS READ

The most asked question: Is the business idea solid? Is there a sufficient market? Are the financial projections healthy, realistic,

and in line with the investor’s or lender’s patterns?

Is the key management described in the plan experienced and capable?

Does the plan clearly describe how the investors or lenders will their get money back?

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Getting your facts right. Length of the plan What period of time should the plan cover? The language of the plan:

Be careful with superlative? E.g. not to have say: “our service will be the best on

the market, clearly superior to all others” instead say “ our service will not only handle all the functions of existing services, but will also add features x, y and z and sell for at least w $ less than our closest competitor’ s services”

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Use positive comments from third party sources :“ ترشه من ماست گه نمی بقالی “هیچ

Use business termsPoints of style:

Use numbers for impactUse bullet pointsUsing visual in your planavoid repeating a matter with in the same

section