Opportunity-Centred Entrepreneurship

by David Rae

Entrepreneurship toolkit

Welcome to the entrepreneurship toolkit. This area of the website offers interactive versions of the tools in Entrepreneurship: from opportunity to action.

Simply click on the link below or use the navigation bar to the right of the screen to access the information you are looking for.

Assess your entrepreneurial capabilities

This section enables you to assess your own level of entrepreneurial capability. You can use the information you find to work out what your strengths are and use them to your best advantage, and to identify areas where you may need to build up your skills.

The self-assessment sets out the six clusters of personal, interpersonal and entrepreneurial capabilities. Look at each cluster in turn and ask yourself:
  • Have I ever demonstrated experience in doing this? How practised am I?
  • How capable am I? What example or evidence could I give of my capability?
  • How confident am I in my ability?

Based on your answers to these questions, assess your level of capability as follows:
  1. I have no experience of this and cannot claim capability, would need to develop – but everyone has to start somewhere!
  2. I have quite limited capability and experience and would need quite a lot of practice to become competent.
  3. I am quite capable with some successful experience which I could develop.
  4. I am highly capable in this; fully confident of my ability.
Enter your score for each statement in the relevant part of the form.

Click here to start the test

Assess your management capabilities

This section enables you to assess your own level of management capability. You can use the information you find to work out what your strengths are and use them to your best advantage, and to identify areas where you may need to build up your skills.

The self-assessment sets out the four clusters of management capabilities. Look at each cluster in turn and ask yourself:
  • Have I ever demonstrated experience in doing this? How practised am I?
  • How capable am I? What example or evidence could I give of my capability?
  • How confident am I in my ability?
Based on your answers to these questions, assess your level of capability as follows:
  1. I have no experience of this and cannot claim capability, would need to develop – but everyone has to start somewhere!
  2. I have quite limited capability and experience and would need quite a lot of practice to become competent.
  3. I am quite capable with some successful experience which I could develop.
  4. I am highly capable in this; fully confident of my ability.
Enter your score for each statement in the relevant part of the form.

Click here to start the test.

Assess a business opportunity

This part of the website enables you to assess a business opportunity by answering questions on each dimension.

First, download the opportunity assessment questionnaire , and fill it by placing an X in the box that best corresponds with the opportunity you are considering for each category. Where possible, base your answer on factual data.

Once you have filled the form in, download the opportunity assessment scoringsheet and work out your scores for each category. Plot these on the scoring pentagon that appears at the bottom of the questionnaire. This will enable you to analyse what the profile suggests about the potential for exploiting the opportunity.

Click here for tips on how to analyse the business profile you have created and how you might be able to develop the business in the light of this information.

Financial planner

Click on the links below to find out more about:
Cash flow projection

The cash flow projection is simply a forecast of when cash payments are expected to be received or paid out from the business. What actually takes place will be recorded in the cash flow statement and compared with the projection.

It is important to be realistic in your assumptions about timing of cash receipts and payments. New and small businesses live or die by their cash flow and m anaging cash flow is critical to business health, as the more positive the cash position is at the end of the month the less the business has to borrow or use an overdraft. A cash flow is different from a Profit & Loss statement, as it records accounting transactions when actually they occur.

Click here to download a typical format for a Cash Flow forecast.

Cash flow terms

  • Cash from sales: Cash for sales of products
  • Cash from debtors: Invoiced goods sold on terms
  • VAT: Value added tax collected on all sales
  • Other receipts: Any other income
  • Sale of assets: Proceeds from the sale of an asset
  • Capital: Amount of money invested in the business
  • Payment to suppliers: Goods or services bought in
  • Wages / drawings: PAYE system for wages
  • PAYE / NIC: National insurance contributions
  • VAT Net payment: Paid to VAT office each period
  • Tax payments: Corporation Tax on company profits
  • Rent: Cost of premises

Profit and loss forecast

A Profit & Loss (P&L) forecast shows the level of profit (or loss) which the business is expected to produce at the end of the accounting period.

A P&L forecast is different from a cash flow as it is drawn up on an accounting rather than cash basis.

Click here to download an example of a Profit and Loss statement for a business for a 12 month period broken down by months. It shows the sales income, cost of sales (direct costs), gross profit, expenses (overheads) and Net profits (before interest and tax).

Interpreting the figures is important. This takes time and experience, but understanding the P&L as a live accounting tool can help to manage the business much more effectively.

Profit & loss terms

  • Sales (A): Sum of all income from product sold
  • Cost of Sales Purchases (B): Costs of goods / services bought in
  • Cost of Sales Labour (B): Employment costs of people in the business
  • Cost of Sales Direct Costs (B): Costs incurred in production of product
  • Overheads Rent & Rates (D): Amortised over the year
  • Overheads Light / Power (D): Actual costs of services used
  • Overheads Phone (D): As above
  • Misc Income (E): Any other income received
  • Profit: A-B = C Gross Profit - D + E = F Net profit

Balance sheet forecast

A balance sheet for your business will show what the business is owed (debtors) and what it owes (creditors) on a specific day, for example a forecast at 12 months from the start of trading.

Click here to download an example of a balance sheet.

Balance sheet terms

  • Fixed Assets: Permanent assets (e.g. property, plant & equipment)
  • Current Assets: Cash / Debtors (money owing to business) / Stock
  • Capital: The shareholders funds invested in the business
  • Liabilities: Loans / Overdraft / Tax Payable / Creditors owed by the business