Your Great Adventure: Exploring Your Options

Chapter 1 1-1Copyright © 2007 by Nelson, a division of Thomson Canada Limited.

Your Great Adventure: Your Great Adventure: Exploring Your OptionsExploring Your Options


Business Plan Building BlockBusiness Plan Building Block

Chances are, you will own your own business, or work for a smaller firm (less than 100 people)

“If you fail to plan……plan to fail”


Canada is an Entrepreneurial Hot BedCanada is an Entrepreneurial Hot Bed

• Women are leading the entrepreneurial charge.

• “Seniorpreneurs” (those 55+) are one of the fastest growing small business segments.

• Most of our self-employed (60%) have a post-secondary education.


Canada is an Entrepreneurial Hot BedCanada is an Entrepreneurial Hot Bed • About one third of our small

business owners are serial entrepreneurs—they own or have owned more than one business.

• 40% of Canadians think being your own boss is the most rewarding career decision.

• 80% of all entrepreneurs say that starting a business was their best career decision


Small BusinessSmall BusinessThe NumbersThe Numbers

• 2.5 million Canadians are self-employed • The vast majority of employer

businesses (98%) have fewer than 100 employees.

• Most employer business (57%) have only 1 to 4 employees—the so-called micro businesses.


Small BusinessSmall BusinessThe NumbersThe Numbers

• About 75% of small business employees work in the service sector.

• Almost one-half of our labour force work for small enterprises.

• Small businesses accounts for about 25% of our Gross Domestic Product—a key measure of economic production.


Business Establishments Business Establishments by Sector and Firm Sizeby Sector and Firm Size

Number of Business Establishments

Number of Employees Total

Goods-Producing

Sector

Service-Producing

Sector1-4 589,777 146,065 443,712

5-9 180,345 35,551 144,79410-19 125,561 24,483 101,078


Small Business Entrepreneurs Are...Small Business Entrepreneurs Are...

• The fuel of our private enterprise system.

• Visionary self-starters who love the adventure of a new enterprise.

• Agents of change with POP. They are Passionate, Opportunistic and Persistent

• Doers, who see a market need and satisfy that need by translating it into a successful business.


Successful Entrepreneurs Are…• Passionate• Opportunistic• Persistent• Visionaries• Goal-oriented (results)• Independent thinkers• Idea generators• People-oriented (service)• Sharing• Doers• Moderate risk-takers


Rev Up

We encourage you to: We encourage you to:

• Assess your interests and abilities • (Action Step 3 & Action Step 4)


Idea GeneratorMind Mapping

• A mind mapmind map is an idea-generating sketch that features circled words connected by lines to form units

• Mind mapping is a form of doodling—to generate ideas.

•Sample on page 13 Figure 1.2•Sample on Page 44 Figure 2.5


Idea GeneratorMind Mapping

Mind mapping works like this:Mind mapping works like this:

1. Write down your vision and goals (what do you want your 1. Write down your vision and goals (what do you want your business to be) in the centre of a page and draw a circle business to be) in the centre of a page and draw a circle around the key words.around the key words.

2. Every time you get an idea related to this vision or theme, 2. Every time you get an idea related to this vision or theme, write it down, circle it, and draw a line connecting it to the write it down, circle it, and draw a line connecting it to the theme. theme.

3. Keep adding new ideas to your mind map. Before you know 3. Keep adding new ideas to your mind map. Before you know it, you have a gigantic spider web or idea-tree full of it, you have a gigantic spider web or idea-tree full of opportunities (see Figure 1.5).opportunities (see Figure 1.5).


Inc. Yourself• What does success mean to you? What does success mean to you?

• Think of yourself as a product you want to Think of yourself as a product you want to create. create.

• Create your own mind map—one that Create your own mind map—one that depicts the life you want depicts the life you want (Personal Goals).(Personal Goals).

• Discover what success means to you. Discover what success means to you. (Action Step 5)(Action Step 5)


What is Small Business?What is Small Business?▪ A firm that is independently owned and operated and is

not dominant in its field of endeavour.

▪ Any venture with spirit, any business you want to start, or any idea you want to bring into the marketplace.

▪ A small business would normally employ anywhere from 1 to 20 employees—about 85 percent of all businesses in Canada today.

Canadian Federation of Independent Business


Your Chances of SuccessYour Chances of Success

• Some small businesses fail—just like some students fail a course.

• Failure is a part of life. • Slightly more than 80 percent of small businesses

survive their first year. • On average, a company will be in business about

6 years. • Only about 30 per cent make it for ten years.• A business plan and research will help you beat

the odds.


Three Main Research ApproachesThree Main Research Approaches

Market ResearchMarket ResearchCollection and analysis of data pertinent to anCollection and analysis of data pertinent to anexisting or potential marketexisting or potential market

1. Primary Research1. Primary ResearchInvolves interacting with the world through interviews, observation, etc. Involves interacting with the world through interviews, observation, etc. (Action (Action Step 6)Step 6)

2. “2. “New-Eyes” ResearchNew-Eyes” ResearchInvolves the use of intuition and observation to learn things about the Involves the use of intuition and observation to learn things about the marketplace. marketplace. (Action Step 7)(Action Step 7)

3.3. ““Secondary Secondary ResearchResearchInvolves referring to someone else’s primaryInvolves referring to someone else’s primaryresearch. research. (Action Step 8)(Action Step 8)


The Business Environment

Environmental Scanning: Process by which the marketing manager gathers and sorts information about the marketing environment.

The Internal

Environment

Business Plan

Economic Conditions

Political-legalclimate

Socio-culturalEnvironment Competition

Technology

In a Business the Environment (external and internal) is the key source of information gathering – it’s critical to making good decisions and creating successful marketing plans.

NaturalEnvironment

Customers


Newspapers, Banks, Planning Offices

People you know

The Internet

Industry Directories and Databases

Government Records – Stats Canada (census data)

General Industry Data Actual and Potential market Size Market Growth Rates Market Profitability Industry Costs Distribution Costs

Information Hunting Grounds


Checklist and Actions to Checklist and Actions to Develop Your Business PlanDevelop Your Business Plan

Are you organized? Do you have a central deposit for all you ideas? Do you have what it takes to be an entrepreneur? Have you assessed your interests, abilities, and weaknesses as they relate to

owning a business? Have you assessed your past accomplishments and shortcomings? Do you have a list and a plan of new skills you will have to work on? Is your family or those you live with “on board”? Are you prepared to take the time and do the research to write a business

plan? Have you interviewed entrepreneurs to see what it is really like to be in

business for yourself? Do you have any business ideas which you are passionate about?


Recognizing OpportunitiesRecognizing Opportunities Welcome to the entrepreneurial age Welcome to the entrepreneurial age

A new craft economy distinguished by A new craft economy distinguished by quality, small quality, small customized quantities, technology, and service.customized quantities, technology, and service.

Where change creates opportunities for fast, flexible, and Where change creates opportunities for fast, flexible, and focused firms.focused firms.

To be successful you will need to conduct market research and To be successful you will need to conduct market research and constantly respond to the changing needs of the marketplace.constantly respond to the changing needs of the marketplace.

The best business ventures to pursue are those which:The best business ventures to pursue are those which:• You enjoyYou enjoy• Make use of your unique experiences, skills and aptitudesMake use of your unique experiences, skills and aptitudes• Serve a market needServe a market need


Idea Generator—Brainstorming

Brainstorming is:Brainstorming is:

A free and open exchange of ideas. A free and open exchange of ideas.

A powerful technique used to help identify market trends and A powerful technique used to help identify market trends and opportunities.opportunities.

Used by many entrepreneurs who often record their Used by many entrepreneurs who often record their brainstorming ideas using mind maps.brainstorming ideas using mind maps.

Successful when generated through an open, non-threatening Successful when generated through an open, non-threatening environment that stimulates the creative juices. environment that stimulates the creative juices.


Market SegmentationMarket Segmentation

• Market segmentation involves:Market segmentation involves:

Breaking down potential markets into as many similar sub-segments as possible (do a mind map).

Identifying opportunity gaps and seeing combinations of gaps that may constitute markets. (Action Step 14 but use “Boomers” in the group)

A good example is shown in the mind map in Figure 2.5. – “In-Home Health Care” as one segment of the Health Care Industry


Trends Create Opportunity

•Page 38-40

•Change creates market trends that leads to Opportunity (Action Step 11, 12)

•Look at the opportunities created by the “Boomers” and seniors in today’s society


Develop Your PitchDevelop Your Pitch

Begin to formulate your elevator pitch.

What is the market? How does your business satisfy this market

need? How do you, the business and the target

market benefit from this venture?


Checklist and Actions to Checklist and Actions to Develop Your Business PlanDevelop Your Business Plan

What trends will influence your small business idea?

What business are you really in?

What segment of the market will be your niche?

What gaps will you fill within that segment?

Is it a growth segment in a growth market?

Initially define your target market and determine how large that customer base is.

Identify the secondary sources you will use as part of your market research.

Does this business fit your vision and values?

Other than making money, what are the goals of your proposed venture? (You should be able to establish four to six over the next three years.)

For your business, what objectives do you wish to achieve in the next year?


Culture and ValuesCulture and Values

CultureA company culture

and employee behaviour are a reflection of the owner’s personality and values.


Culture and ValuesCulture and Values

Values the things in life that are important to youserve as guideposts for your actionsonce crystallized, become the basis for your

mission statement and goals

The Bottom LineYour business must embody your values.


It’s All ConnectedIt’s All ConnectedYour Vision Your Vision (mine not theirs)(mine not theirs)

is based on

Your Values and Beliefs.It is spelled out in

Your Mission Statement,,fleshed out in

Your Goals and Objectivesand accomplished through

Your Strategy.Your Strategy.


Success


Selecting the Right Opportunity1. Identify your Personal Goals for your business.

2. Learn more about your favourite industry.

3. Identify promising industry segments.

4. Identify problems that need solutions.

5. Brainstorm for solutions.

6. Mesh possible solutions with opportunities in the marketplace—using a matrix grid.

7. Take stock and focus on the most promising opportunity – Opportunity Selection Filter pg59


Taking Stock—The Final Step

• What is your industry?What is your industry?

• What is your market gap?What is your market gap?

• What are yourWhat are your opportunities?opportunities?


Filling The Market Gap

Industry Segment and Problems that Need Solutions

Your Business Solutions for the Market

Your Business Plan

“A good business plan is a Road Map to success”

Today FutureThe Path

Market Industry


Customer Analysis

– Who are the actual and potential customers?

– Why do they buy our product (what value/benefit is attractive)?

– Why do non-customers not buy our product?

– Where do our customers buy our product?

– How do they buy it (what is the decision making process)?

– When do they buy it (what triggers the desire to purchase)?

– What do they do with our product (how is it used)?

Plays a key role in developing marketing strategy. The answers to the questions marketers should ask about their customers lead to a

consideration of segmentation and a positioning analysis.


Competitive Analysis

• Involves answering five questions:– Who are our competitors? What are their strengths and weaknesses?

(Both direct and indirect)– What is our competitors’ strategy? To have advantage, our business

strategy must be equal or ideally better than competition.– Should we compete? The answer should be based on

resources/objectives of the firm, and expected profit potential.– If so, in what markets should we compete? Resources must be

allocated to the areas of greatest opportunities.– How should we compete? Forces a focus on tactical decisions.

A major objective of business planning is to develop a sustainable competitive advantage.


Test Your Business IdeaTest Your Business IdeaTest your business idea by exploring these four themes.1. Personal considerations. Does your business idea

satisfy your personal goals and objectives?2. Marketing considerations. Is there a market need

for your product or service? 3. Production considerations. Will you be able to

produce the required volume and quality of products and services?

4. Financial considerations. Can your operation satisfy the required financial goals?


Plotting Your Future Plotting Your Future ChecklistChecklist

How is your product or service addressing the needs of the target market and offering benefits?

What are your business and personal values?

Define your market niche.

Define the idea filters.

Your Great Adventure: Exploring Your Options

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