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Road to Entrepreneurship
Understand Opportunity
4.01
Foods II
Enterprise
Bell ringer 3-16-2016
• What are you passionate about? (make a detailed list in your
notebook)
• What drives you?
• How can we take what your passions,those things that drive you
and create a product or service?
• Would you consider yourself an Entrepreneur? Let’s find out!
• Am I an Entrepreneur Worksheet
What is Entrepreneurship?
• Is taking on both the risk and responsibilities of starting a new
business.
• Learning about how to run a business and manage other people.
• Activities involved in entrepreneurship include deciding the type
of business to open, identifying customers, developing a marketing
plan, managing finances and firing qualified employees.
• He or she must be Motivated!!
Entrepreneurial Characteristics
The following are distinctive traits and qualities
entrepreneurs need to run and operate a successful
business:
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Persistent
Creative
Responsible
Inquisitive
Goal-Oriented
Independent
• Self-Demanding
• Self-Confident
• Risk-Taking
• Restless
• Action-Oriented
• Enthusiastic
What skills are needed?
• Interpersonal Skills
• Have you heard the phrase ‘people skills”?
They are considered interpersonal skills-ones
you use to Communicate with those around
you.
• Effective Leaders have good :
• Listening skills & Communication skills
Working in a Team
What Type of Team member /Leader Are You?
Worksheet
What is Needed?
• Problem-Solving Skills
• Leaders have many challenges that require
negotiation as well as problem-solving skills. Daily
business activities require the ability to take charge
and keep things running smoothly.
What is Needed?
• Business Skills
• In order to run a business, its important for a leader
to have basic business skills. Basic record keeping
skills, business letter writing skills and math skills.
• Planning Skills
• Know how to create a plan and engage others to follow
a plan and get the job done.
Entrepreneurial Skills
The following are foundational skills entrepreneurs need
to run and operate a successful business:
• Communication Skills
• Writing, Speaking & Listening
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Human Relations Skills
Math Skills
Problem Solving & Decision Making Skills
Technical Skills
Basic Business Skills
What’s needed?
• Leadership Skills
• Entrepreneurs take responsibility for leading their business and
their teams. Owners with good leadership skills have the ability to
support team members and grow the business.
5 P’s for Entrepreneurs
• Passion
• Problem-solving
• Planning
• Perseverance
• Persistence
Road to Entrepreneurship
• Research Famous Entrepreneur –completed
today
Library
•Research a famous Entrepreneur
Jamie Oliver-Celebrity Chef
known for his Italian CuisineKnown for his cookbooks and
television shows.
Ideas?
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Steve Jobs
Tyler Perry
Kevin Systrom and Mike Krieger Founders of Instagram
P Diddy
Mark Zuckerberg-CEO of Facebook
Bring your Ideas?
• What will be your product or service?
What is Risk?
• Running a business can be a dangerous occupation with many
different types of risk. Some of these potential hazards can
destroy a business, while others can cause serious damage that
can be costly and time consuming to repair. Despite the risks
implicit in doing business, CEOs and/or risk management officers –
no matter the size of the business, from small to corporate giant can prepare for them if they know what they are.
• If and when risk becomes reality, a well-prepared business can
moderate the risk's impact. Dollar losses, lost time and
productivity and the negative impact on customers can all be
minimized.
Key terms
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Behavioral Segmentation
Demographic segmentation
Corporation
Entrepreneur
Franchise
Geographic Segmentation
Marketing Objectives
Market Segmentation
Opportunity
Partnership
Psychographic Segmentation
Sole Proprietorship
Target Customers
Venture
Questions to consider? Mile marker 1
• What are you passionate about what drives you?
• What problems have you seen through personal experience?
• What products or services could you create within the food truck
business?
• What problem are you solving?
Mile marker 2
Take a second look at your chosen opportunity
Is it viable?
Does it satisfy an unmet need?
Who would be willing to buy it and what price would they pay?
Can you meet the market demand if demand meets your
expectations?
• What are the problems of taking this product service to scale?
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What is Marketing?
The definition that many marketers learn as they start out in the industry is:
Putting the right product in the right place, at the right price, at the right time.
It's simple! You just need to create a product that a particular group of people want, put it on sale
some place that those same people visit regularly, and price it at a level which matches the
value they feel they get out of it; and do all that at a time they want to buy. Then you've got it
made!
There's a lot of truth in this idea. However, a lot of hard work needs to go into finding out what
customers want, and identifying where they do their shopping. Then you need to figure out how to
produce the item at a price that represents value to them, and get it all to come together at the
critical time
4 P’s of Marketing
The marketing mix is a good place to start when you are thinking through your
plans for a product or service, and it helps you avoid these kinds of mistakes.
The 4Ps are:
The marketing mix is a business tool used in
•Product (or Service).
marketing and by marketers. The marketing mix often
crucial when determining a product or brand's offer, and
•Place.
is often associated with the four P's: price, product,
•Price.
promotion, and place
•Promotion.
A good way to understand the 4Ps is by the questions that
you need to ask to define your marketing mix. Here are
some questions that will help you understand and define
each of the four elements:
Product/Service
• What does the customer want from the product/service? What needs does it satisfy?
• What features does it have to meet these needs?
• Are there any features you've missed out?
• Are you including costly features that the customer won't actually use?
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How and where will the customer use it?
What does it look like? How will customers experience it?
What size(s), color(s), and so on, should it be?
What is it to be called?
How is it branded?
How is it differentiated versus your competitors?
What is the most it can cost to provide, and still be seen sufficiently profitably?
Place
•Where do buyers look for your product or service?
•If they look in a store, what kind? A specialist boutique or in a supermarket, or both? Or online? Or
direct, via a catalogue?
•How can you access the right distribution channels?
•Do you need to use a sales force? Or attend trade fairs? Or make online submissions? Or send
samples to catalogue companies?
•What do you competitors do, and how can you learn from that and/or differentiate?
Price
•What is the value of the product or service to the buyer?
•Are there established price points for products or services in this area?
•Is the customer price sensitive? Will a small decrease in price gain you extra market share?
•Or will a small increase be indiscernible, and so gain you extra profit margin?
•What discounts should be offered to trade customers, or to other specific segments of your market?
•How will your price compare with your competitors?
Promotion
• Where and when can you get across your marketing messages to your
target market?
• Will you reach your audience by advertising in the press, or on TV, or
radio, or on billboards? By using direct marketing mailshot? Through PR?
On the Internet?
• When is the best time to promote? Is there seasonality in the market?
Are there any wider environmental issues that suggest or dictate the
timing of your market launch, or the timing of subsequent promotions?
• How do your competitors do their promotions? And how does that
influence your choice of promotional activity?
Market Segmentation
• Dividing the total market into smaller, welldefined groups with similar wants and needs
and similar key characteristics.
4 Basic Marketing Strategies
• The four basic market segmentation-strategies are based on
• Behavioral-Dividing markets by identifying common responses to products and product features
• Demographic-Dividing markets by characteristics people have in common such as age, gender,
family size, income or occupation As a simple example of usage, a company that sells feminine
hygiene products will include "female" in its description of its primary market segment.
• Psychographic segmentation- dividing markets by identifying common interest, attitudes, values,
lifestyles or personality traits amount the individuals that constitute that market.
• Geographical segmentations-dividing markets by where customers are located. For example
certain food have very specific, geographic interest in the US. For ex. grits is common in the south
and southeastern regions.
http://smallbusiness.chron.com/examples-geographic-segmentation-61612.html
(Read this article)
What step BEST describes the development of a
marketing strategy?
a.Marketing mix
b.Pricing
c.Purchased product
d.Sharing ideas
Target Market
• a group of people whose needs and preferences match the product
range of a company and to whom those products are marketed
• A geographic target market can be consumers in a city, state, or country.
• A psychographic target market would be a market that has similar
attitudes, values, or lifestyle.
• The behavioral target market focuses on occasions and degree of loyalty.
• A psychographic target market would be a market that has similar
attitudes, values, or lifestyle.
• Determining a target market approach to sales has many benefits.
• target market a group of people whose needs and preferences match the
product range of a company and to whom those products are marketed
Three basic forms of business
ownership
•Sole proprietorship
•Partnership
•Corporation
Sole proprietorship
•A business owned and
operated by one
person.
•Approximately 76
percent of all
businesses in the U.S.
are sole
proprietorships.
Advantages of sole proprietorships
•Easy and inexpensive to create.
•Owner makes all business decisions.
•Owner receives all profits.
•Least regulated form of business
ownership.
•Business itself pays no taxes.
•Government assumes little control over sole
proprietorships
Disadvantages of sole proprietorships
•Owner has unlimited liability for all debts and
actions of the business. Unlimited liability:
The debts of the business may be paid from
the personal assets of the owner.
•Difficult to raise capital.
•Sole proprietorship is limited by his/her skills
and abilities.
•The death of the owner automatically
dissolves the business.
Partnership
A form of business
ownership in which two
or more people share
the assets, liabilities,
and profits.
Advantages of partnerships
•Shared decision making and management
responsibilities.
•Easier to raise capital than in a sole
proprietorship.
•Few government regulations.
•Business losses are shared by all partners.
Disadvantages of partnerships
•Partnerships may lead to disagreements.
•Some entrepreneurs are not willing to share
responsibilities and profits.
•Some entrepreneurs fear being held legally
liable for the error of their partners.
•Each owner has unlimited liability.
Corporation
A business that is chartered by a state
and legally operates apart from its
owners.
Advantages of corporations
•Can raise money by issuing shares of stock.
•Offers owners limited liability. Limited liability:
Owners are liable only up to the amount of
their investments.
•People can easily enter or leave the business
by buying or selling their shares of stock.
•The business can hire experts to
professionally manage each aspect of the
business.
Disadvantages of corporations
•Legal assistance is needed to start a
corporation.
•Start-up is costly.
•Corporations are subject to more
government regulations than partnerships
or sole proprietorships.
•A lot of paperwork is involved in running a
corporation.
•Income is taxed twice.
Quiz
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1. What is an Entrepreneur?
2. List 5 characteristics of a Entrepreneur?
3. What is Marketing? How can it help you to reach your goal?
4. What are the (4) P’s of marketing
5. What are 3 forms of Business Ownerships?
Remain quiet during the quiz. Remain quiet until everyone is
done.
Food for Thought?
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What are potential problems we may face?
Present Flyer..corrections?
How will this project be funded? (make a list of possible donors)
Where can we cut cost if possible?
Make a list to calculate your start up cost? Include initial inventory
(food on hand)/supplies needed equipment to make this project a
success. Each table group must work together to accomplish this
initial phase.
Mile marker 3
What’s included in the test of your product or service?
Where will you find materials and labor for your product/service?
Can you make a prototype for your product or service?
What are the TOTAL COST of making your prototype and samples
(including labor).
Where would you go to test the feasibility of your product/service?
Is there evidence or data supporting the long-term viability of your
idea?
Financing?
• What is Finance? The managing or science of managing money matters.
To supply money, credit or capital..
• It is really about the money side of business which is broken down into
the two key areas of accounting (keeping track of how the money is
used) and the financing which is the sourcing of money for the business
to purchase things.
• What is Financing?
• the act of providing money for a project
• Where is our money coming from?
• Sources:
Start Up cost
• What will it cost to start up your business?
Bear in mind that different small businesses will have different types of startup costs.
For example, a furniture retailer might need a storefront and staff to man it, while a toy
manufacturer might need manufacturing equipment, a warehouse and staff
that is trained to operate the equipment
Start up cost for a business can be divided into 6 categories:
Cost of sales: Product inventory, raw materials, manufacturing
equipment, shipping, packaging, shipping insurance, warehousing
http://www.legalzoom.com/business/start-yourbusiness.html
Objective 4.02 Understand test feasibility
and accessing information
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Bellringer- Food for thought? Quiz review
Student input: Complete Mile markers 1-2
Teacher input: Review for Midterms
Young Entrepreneur videos
Midterm October 27, 2015 Covers objective 1.01-4.02
Servsafe exam-October 28, 2015 from 9:30am-11:30am
https://www.youtube.com/watch?v=SqODOCPNEnk
Funcakes Rental
Young Entrepreneur's Video
https://www.youtube.com/watch?v=XJgD4j4r1pQ
https://www.youtube.com/watch?v=6anpCwPT9qA
Own a franchise business
Franchise: A legal agreement that
gives an
individual the right to market a company’s
products or services in a particular area.
Franchisee: A person who purchases a
franchise agreement.
Franchisor: The person or company who sells
a franchise.
Initial franchise fee: The fee the franchise
owner pays in return for the right to run the
business.
Advantages of purchasing a franchise business
An established product or service is being
provided.
Franchisors often offer management, technical,
and other assistance.
Equipment and supplies may be less
expensive.
A guarantee of consistency attracts customers.
Disadvantages of purchasing a franchise
business
The cost of franchises may be high, which can
reduce profits.
Franchise owners are limited in the decisions they
can make regarding the business.
The performance of other franchises impact on the
franchisee.
The franchise agreement may be terminated by the
franchisor.
Start up cost
• Professional fees: Setting up a legal structure for your business (e.g.
LLC, corporation), trademarks, copyrights, patents, drafting partnership
and non-disclosure agreements, attorney fees for ongoing consultation,
hiring an accountant.
• Technology costs-internet access, website cost, servers,computers
printer etc.
• Sales and marketing costs: Printing of stationery, marketing materials,
advertising, public relations, event or trade show attendance or
sponsorship, trade association or chamber of commerce membership
fees, travel and entertainment for client meetings, mailing or lead lists
• Wages & Benefits
Fixed Cost
• A cost that does not change with an increase or decrease in the
amount of goods or services produced. Fixed costs are expenses
that have to be paid by a company, independent of any business
activity
• Examples: Fix Cost includes rent, buildings, machinery etc.
• Variable Cost-may include wages, utilities, materials used in
production, etc.
Understanding Credit
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If you want to secure a loan, you need to show
them why you are a safe proposition.
First, you need to put together a loan or financing proposal.
This is a statement that includes:
• What you need (loan amount)
• Why you need it
• When you need it
• How you plan to repay it.
www.myfico.com 3 credit bureau’s Experian, TransUnion & Equifax
The six Cs of Credit
• Understanding exactly what bankers are looking for and what they
consider important can help you put a proper proposal together.
Character. Your personal character is incredibly important. All loans to
small businesses are essentially personal loans, which makes the bank’s
experience with you critical. Their judgment of your character is based
on past performance, which means both business and personal credit
histories will be reviewed.
The six Cs of Credit
• Capacity. Does it look like that can pay it back?
• use the debt-to-net-worth (debt/net worth) ratio to justify a credit
decision.
• Highly leveraged businesses are seen as less creditworthy than
• businesses with low leverage.
• Many lenders think first of checking for adequate cashflow and
liquidity.
The six Cs of Credit
• Conditions. What economic conditions are currently happening on
both a regional and national level? Don’t ignore these – they will
impact the bank’s decision. Rather evaluate them according to your
proposal and offer the bank solutions.
• http://www.mycorporation.com/
The six Cs of Credit
• Collateral. This is a secondary source of loan repayment. Banks
want a loan repaid from inventory and operating profits so that your
business grows, which means you become a better borrower and
depositor. What if they can’t repay it?
• However, there is always the possibility that things go sour.
Collateral is protection for your bank.
• Coverage-Have they spread Risk?
• Insurances
Sales
• Sales
• Total dollar amount collected for goods and services provided.
• Your sales forecast is the backbone of your business plan. People
measure a business and its growth by sales, and your sales
forecast sets the standard for expenses, profits and growth
The six Cs of Credit
• Credibility. This is a key point. A business plan (instead of just filling
in the bank’s form) will allow you to know your business inside and out,
which will allow you to answer any questions without hesitation. The
bank is looking at how credible your plans are, if you are level-headed
and can be counted on, how well you know your business and if you have
carefully reasoned and researched your business plan.
• Contingency plan. This is a useful financing tool because bankers like to
• know that you look ahead and don’t only live in the moment. It proves
• forethought.
Sales
• What are Sales?
• the exchange of a commodity for money; the action of selling
something.
• What are you selling?
• Sales Forecast -To get started, ask yourself how much can you
realistically sell within the next week, month or day and how
much will you charge for your goods or services?
• Educated Guess
Sales Forecast
• How do you sell?
• Do you sell through retail, wholesale, discount, mail order, phone order?
• Word of mouth
• Facebook
• Instagram
• Tritter
• Don’t confuse sales strategy with your marketing strategy, which goes
elsewhere. Sales should close the deals that marketing opens.
Contingency Fund
• A contingency fund is simply a reserve fund set aside to handle
unexpected debts that are outside the range of the usual
operating budget.
• A Contingency Fund (CF) is an emergency fund that you can get
your hands on at a moment’s notice
• antidote for your credit card habit
• pathetic feeling of being broke
Five Reasons for a Contengency Fund
• it gives you an alternative to hitting the panic button. When
you’re broke, you live on the edge of panic. And when even the
smallest thing happens, even if it is not a true emergency, it feels
like one because you press the panic button. Having money in the
bank allows you to calm down so you can think reasonably.
• it’s the lifesaver that keeps you afloat while going through deep
waters. If you can make it all the way from right now to paying off
your last debt without facing some unexpected expense (tires,
water heater, medical expense, car repair, and so on), you will be
fortunate indeed. And you’ll arrive with an intact CF.
5 Reasons for a Contingency Fund
• it’s your guarantee that you’ll make it to the finish line. I say this
on the basis of my own experience and that of countless readers
who are now debt-free—having a CF, whether fully funded or in
process, is the secret to your debt-free success. It’s that second
wind we all depend on when we’ve come to the end of our
endurance, but there’s still more journey ahead.