1. Are you really entrepreneurial?
- Go to the electronic version of the GET test and answer the questions and review the analysis provided. Do you have the character traits of an entrepreneur? Append a print out of the analysis provided and outline why you agree or disagree with it giving concrete examples of your behaviour to support your views.
- List the advantages and disadvantages of:
- List the reasons you want to set-up your own business. Are they good enough to motivate you to succeed? List the reasons why you should not set up your own business. Can they be overcome or, if not, are you prepared to live with the risk?
Based on this information, write a report on whether or not you are the right sort of person to set up and run their own business. Make certain you are as objective as possible. You can append the results of exercises 1 to your report. Remember to make certain that you give examples to support any character traits or behaviours you claim to have otherwise it is just your opinion.
2. Generating the ideaFollow this four step guide to generating ideas for a start-up. The aim is to generate as many ideas as possible so while generating ideas it is important not to evaluate them or get bogged down in the detail of how they may or may not work.
- Step 1: List ideas. Think of unmet market needs, changes in technology or legislation or demographics, ideas you have seen in other regions or countries that you have not seen here, knowledge and information gaps.
- Step 2: Expand the list. Think about your personal interests, experiences, desired lifestyle, values and what you feel you are likely to do well or would like to do.
- Step 3: Get feedback on the list from at least three people who know you. Knowing you, they might be able to add to the list by interpreting it slightly differently.
- Step 4: Jot down insights, observations and conclusions about your ideas and personal preferences.
List the critical factors that you would need to make certain were right in taking the top scoring three or four ideas from the previous exercise further. Evaluate the ideas and select the one you want to take further. Be aware that the one you select may still prove not to be commercially viable and you may have to return to this list to research another idea.
Using the list generated from this exercise, evaluate each idea against the following eight criteria, using a score of 1 (very poor or very unattractive) to 5 (Very high or very attractive)
- Attractiveness of idea - Would you enjoy doing it?
- Ability to undertake - Do you have the skills needed to do it?
- Practicality - Is it something that really can be done?
- Potential market demand - Will customers buy it?
- Ability to combat competition - Is there competition and can you combat it in some way?
- Ability to differentiate - Can you differentiate it in some way that can be sustained over a long period?
- Price potential - Can you avoid competing simply on price
- Resource availability - Do you think you have, or can get, the resources you need to start-up this business.
Write a brief report justifying your selected business idea.
3. Evaluating the opportunityUsing the pro-forma, write a business plan for the selected business idea.
Some points to remember:
- Stress the benefits of your product or service to the chosen target market(s).
- Undertake the necessary market research. Estimates of the size and growth of the market.
- Name your major competitors and evaluate their strengths and weaknesses. Evaluate the degree of competition in the market, using Porter's Five Forces.
- Evaluate the strengths and weaknesses of your business.
- Be clear about the basis for your competitive advantage over these competitors.
- Be clear about the marketing strategy you aim to adopt, giving details of any basis for differentiating your product or service and the marketing mix you aim to adopt.
- Be clear about your channels of distribution, if appropriate.
- Be clear about the selling price you have decided to set for your product or service and how you have arrived at it.
- Be clear about any particular launch strategy.
- Be clear about the implications for the business of the cost structure. What is the contribution margin? What are the fixed costs? What, therefore, are he business imperatives?
- Are you certain you can at least make your breakeven point? How many units to you have to sell each day to achieve this?
- Are you certain you can survive on the cash flow generated by your business? Have you included necessary drawings?
- Keep your fixed costs and capital investment as low as possible. Can you borrow, rent or lease equipment, rather than buy it?
- What are he critical success factors and how will you make sure that you achieve them?
- Show the funding you will need for the business and where it might come from remember the business plan you prepare for yourself could look very different to one you prepare to raise finance.