Build an effective entrepreneur quick takes

Quick Overview
Participants will learn to develop and articulate their ideas into a well-structured proposal to ultimately
achieve the strategic objectives of the company, be it revenue generating, cost saving or process-
improvement plans through
a. actually working through a hands-on, interactive model simulation framework to develop winning actual
business plans, financial statements and
b. understand key issues and pitfalls to watch out for when assessing or approving business plans through
the pitching process themselves.
Participants will:
q Develop an idea for a new business
q Create a professional-level business plan and investor presentation
q Present the business plan to a panel of evaluators and financiers
The Quick Take Playbook is designed to be both:
1. A learning aid to be used in class
2. A resource to be used after class
1
BUILD AN EFFECTIVE ENTREPRENEUR PROGRAMMEQuickTakes
2-Nov-18

Prerequisites:
No prerequisites - This course suitable for both novices and experienced people who need to develop and
justify their business case.
Creating a new business is a challenging and complex task. The road to entrepreneurial success is long,
winding and strewn with pitfalls, obstacles and blind turns. The risks of starting a new business are high, as
illustrated by the high failure rates for new ventures. However, as is always the case, the rewards are
commensurate with the risk: in addition to the psychic rewards of starting a business, witness the dominance
of entrepreneurs in the Forbes 400 list.
The purpose of this course is to:
q Help leaders understand the process, challenges,risks and rewards of starting up a new business
q Equip them with the tools required to start their own business
q Improve their chances of successfully starting their own business
4
QuickTakesBUILD AN EFFECTIVE ENTREPRENEUR PROGRAMME
2-Nov-18

Learning objectives are:
q Ability to create and assess business ideas
q Develop creative problem-solving skills required in entrepreneurial businesses
q Ability to create a business plan, including:
q Ability to analyse market opportunities
1. Develop a business model and strategy
2. Form and work successfully in a team
3. Make a professional presentation
Learn the steps to effective business case development and support your strategic business
recommendations with sound budgeting and financial back-up. The one course you need to make high-
impact recommendations and receive full management support for your ideas.
Intended Audience:
This skills-intensive workshop is ideal for experienced managers, directors and corporate officers who
regularly develop and present budgets, business plans and recommendations.
Modes
Workshop will consist of both lectures and interactive workshops, both of which are compulsory. The
lectures and workshops will facilitate the construction of the business plan. Relevant topics will be covered
as the plans are developed and workshops will be used at planned milestones. Both lectures and workshops
will include discussions with active participation.
Experiential in-class exercises will also be included.
5
2-Nov-18

Participants are expected to:
q Make several in-class presentations.
q Participate actively in class,
q Engage in problem solving and group discussions.
q Read and solve problems as part of preparation for class.
q Meet with their project teams outside of class
q Work in a team to prepare a written business plan and investor presentation
6
2-Nov-18

Are you ready to be an entrepreneur?
To determine whether or not you should invest in a company or buy its bonds, taking a look at the financial
statements of the company in question is a must.
7
2-Nov-18

Today, these financial statements have been explained in one minute: the balance sheet, the income
statement (also known as the profit and loss statement or P&L statement) and the cash flow statement.
8
2-Nov-18

Note annotations on them and discuss how the Profit & Loss Statement feeds into the balance sheet
Cash or Accrual?
A. Cash accounting
q The practice of recording sales and expenses only when cash is actually received or paid out
B. Accrual accounting
q The practice of reporting income when earned and expenses when incurred
q Businesses with inventory (e.g. retailers) must use this method
Most businesses opt for accrual method of accounting.
At any given time, gives a more realistic picture of the health of the business.
QuickTakes
9
BUILD AN EFFECTIVE ENTREPRENEUR PROGRAMME
2-Nov-18

Accountants use “debits and credits” to describe how transactions are recorded in the general ledger.
Each transaction increases one account and decreases another.
System balances itself.
QuickTakes
10
2-Nov-18

How businesses can optimise their liquidity. The video explains what Working Capital Management is and
how businesses can successfully use it to leverage hidden liquidity reserves within the value chain.
11
2-Nov-18

Expenditures creating future benefits
To buy a fixed asset.
Add value to existing asset.
Restoring a property.
Starting a new business!
Costs usually over a number of years, not just for a particular month.
QuickTakes
12
2-Nov-18

Section 1: Introduction
14
2-Nov-18

q How Entrepreneurial Are You individual assessment test
q Purpose of a business case
q Who is involved
q What to look out for
q Define the business case elements
15
2-Nov-18

16
Number your paper 1-22
Answer questions 1-22 with a “yes” or “no”
2-Nov-18

Add the scores!
17
2-Nov-18

Determining your EQ.
18
2-Nov-18

Ideally you have two separate decks
Create a narration deck, and include your notes in the note section, if the slides don’t tell the story
on their own
19
2-Nov-18

Provide an understandable, practical example of how your product/ service works or what it does.
An effective business plan has to include at least three important "pro forma" statements (pro forma in this
context means projected). They're based on the three main accounting statements:
1. The profit or loss, also called income, statement shows sales, cost of sales, operating
expenses, interest and taxes. The statement shows performance over some specific time
period, like a month, a year or a quarter.
2. The balance sheet shows assets, liabilities and capital (assets less liabilities). This statement
shows a company's financial position at a specific time.
3. The cash flow statement projects how much money is in the bank and will be in the bank.
These three critical statements are so well linked that you could prepare the balance sheet automatically if
you had already prepared your income and cash flow statements.
20
2-Nov-18

A balance sheet is a statement of the assets, liabilities, and equity of a business or other
organisation at a particular point in time
A balance sheet can also be described as a snapshot of a company's financial condition.
A balance sheet is broken up into 3 sections. Assets, liabilities and equity. The difference between the
assets and the liabilities is the equity of the company also known as net assets, net worth or capital.
So, you're starting a business. You go to the bank and get a loan. On your balance sheet this loan shows as
a liability as it has to be repaid to the bank. It also shows as an asset for the same amount as you have the
cash to spend. Thus the balance sheet is balanced.
You need to buy a computer for your new business. The cash in your assets decreases but your new
computer asset helps balance this.
As you sell to your customers your profits are recorded as retained earnings in the equity section. The cash
from these profits is recorded in the assets section and the sheet remains balanced. Every month you make
a loan payment to the bank. Your liabilities reduce by the amount of the payment and your cash is reduced
by the same amount.
If at any point you need to find out your businesses worth go back to the formula from before.
Assets minus liabilities equals equity.
QuickTakes
21
2-Nov-18

Key Accounting Principles Relating To Balance Sheets
q A snapshot at a point in time, the last day of the period under review - “Balance Sheet at…”
q Current means within twelve months
q Fixed or long term means beyond twelve months
q Historical values or fair value
q Prudence – don’t overvalue an asset or undervalue a liability
q Going concern
QuickTakes
22
2-Nov-18

A snap-shot of finances at any moment in time
q Shows: Assets and Liabilities
showing in summary everything owed and owned
q Tells you about past performance and potential for the future
q The difference between assets and liabilities is known as equity
q The sheet should balance!
i.e. like a bank statement
23
2-Nov-18

“Use of Proceeds” statement is just a simple summary to help give readers a fast appreciation of how or
where you intend to spend investor funds. Most often you will see this information in the front section of
business plans for later stage private equity transactions.
This type of presentation can be helpful to both start-up and early-stage entrepreneurs because it provides a
clear picture of management’s spending priorities before reading other sections of a business plan. Another
benefit of this simple presentation is to help first-time entrepreneurs seem less like rookies. The presentation
says that the founding entrepreneur is “financially-sophisticated” and attuned to the jargon and information
needs of time-strapped business plan readers. Perhaps most important, a Use of Proceeds statement
provides clear notice of spending intent to prospectiveinvestors. If an entrepreneur’s intent is to use a
sizable portion of investment funds to pay off debt, buy a building or enter into a joint venture deal with a
partner, then disgruntled shareholders can’t complain in coming years that they were misled or not
adequately informed about your plans. A Use of Proceeds statement is usually presented in a simple
summary chart plus some optional commentary. The section is rarely more than two pages. Notice in the
example below that the spending categories are quite broad and the amounts of projected spending are
rounded off to the nearest thousand. If your business plan states your intent to raise funds within a range –
say between $500,000 and $750,000, use the lower amount for your Use of Proceeds chart.
To develop your Use of Proceeds statement, turn to your financial projections to identify four to six areas of
primary cash expenditures.Most start-ups allocate funds to research and development, website
development, intellectual property filings, equipment purchases, advertising campaigns, staff salaries and
benefits, debt repayments and inventory build-up.
Big Idea, Inc. SummaryUse of Proceeds: $1,000,000
Equity InvestmentProduct development$ 350,000
Product testing$ 85,000
Product launch marketing$200,000
Content management software investment$75,000
Patent filings$ 45,000
General working capital and administration$200,000
$1,000,000
24
2-Nov-18

I also recommend that you add at least two additional tables highlighting specific portions of the main tables:
a sales forecast and a personnel plan. In addition, I'd suggest you start the balance sheet with either starting
costs or past performance, depending on whether you're creating a business plan for a start-up or an
existing company.
You don't have to know the subject of finance inside and out to create a business plan. You do have to
understand that if you don't know how to prepare the main financial projections, you should get help. If
you've got the budget, you can hire somebody to do this for you, but then that makes it their plan, not yours.
The better way is to get help from books, websites, software, or friends and family so that you can do it
yourself. High finance is a career, but projecting your own business finances is something you can do
yourself as long as you have the patience to take it step by step. (You may have to learn at each step, but
it's good for you.)
If you have the budget to hire consultants, take advantage of that and bring some experts on board, but be
sure you have them show you how to prepare the projections rather than just have them do it for you. You
want to understand your business numbers when questions come up. Ideally--consultants or not--you should
be able to review and revise your numbers at any time, day or night.
25
2-Nov-18

Despite all the differences among companies, there are only a few sources of funds available to all firms.
1. They make profit by selling a product for more than it costs to produce. This is the most basic source of
funds for any company and hopefully the method that brings in the most money.
2. Like individuals,companies can borrow money. This can be done privately through bank loans, or it can
be done publicly through a debt issue. The drawback of borrowing money is the interest that must be
paid to the lender.
3. A company can generate money by selling part of itself in the form of shares to investors, which is known
as equity funding. The benefit of this is that investors do not require interest payments
like bondholders do. The drawback is that further profits are divided among all shareholders.
In an ideal world, a company would bring in all of its cash simply by selling goods and services for a profit.
But, as the old saying goes, "you have to spend money to make money," and just about every company has
to raise funds at some point to develop products and expand into new markets.
When evaluating companies, it is most important to look at the balance of the major sources of funding. For
example, too much debt can get a company into trouble. On the other hand, a company might be missing
growth prospects if it doesn't use money that it can borrow.
26
2-Nov-18

So What:
You need to have a plan about how you are going to get your business out to the public so people know
about and you make money.
Think about…
Who is the audience you are selling your product to?
29
2-Nov-18

What ways are you going to market your product? (social media, email, flyers
30
2-Nov-18

The P&L statement is the best tool for knowing if your business is profitable. A P&L statement measures
revenue (also called sales or income) and expenses over a month, quarter or year. With it you know if you
have made a profit (and how much) or if you have incurred a loss.
31
2-Nov-18

The Profit & Loss Statement is laid out in a precise fashion.
1. At the top is a section called Revenues.
2. The Revenues section lists gross receipts at the very top (sometimes by category or division). For
example, a service business may generate revenues from consulting fees, ongoing license fees, and
other fees. A company may break out the sources of its income in the way that best helps management
make decisions.
3. Below the gross revenue lines are any adjustments to gross revenues for discounts granted.
4. Next, COGS is subtracted out to arrive at the company’s gross profit.
5. On the bottom of the Profit & Loss Statement, expenses are added up and subtracted from the gross
income amount to arrive at the net profit. The net profit figure from the Profit & Loss Statement feeds to
the net profit for the period shown on the balance sheet. Profit contributes to the balance sheet category
of stockholder’s equity and is either a positive or negative figure.
6. Like other components of your financial statements, your balance sheet helps you track which assets and
liabilities are being used to create income, enabling you to better manage your business.
QuickTakes
32
2-Nov-18

Departmental Accounting
Companies can be divided into departments for more effective management and control.
This presentation provides a simplified discussion of departmental accounting and departmental Profit &
Loss Statements. You are probably familiar with some of the departments of discount retail superstores such
as clothing, groceries, electronics, auto supplies, and the list continues.
Departments also include the accounting department, purchasing, administration, human resources, and the
list goes on.
33
2-Nov-18

34
QuickTakes
Direct or visible costs are costs that are specifically linked to a project, product or process.
2-Nov-18

35
QuickTakes
They are some of the easiest costs to identify and measure
2-Nov-18

36
QuickTakes
A profit and loss statement or P&L is an account compiled to show gross and net profit or loss during a
specific time period.
Profit or loss is equal to your income minus your expenses. For example. You manufacture widgets and sell
them to your customers over the internet. During the month of June your income was RM10,000.
The first expense you need to subtract is direct expenses. A direct expense is any cost directly related to the
production and sale of your product such as raw materials, shipping costs and labour for assembling the
widgets. For this example your direct expenses are RM4,000.
This gives you a gross profit figure of RM6,000 or 60% gross profit. Next you need to remove your operating
expenses from your business during the month of June. This can include advertising, accountancy fees,
heating, lighting, rent, salaries not directly related to sale and more. For this example your operating
expenses are RM4,500.
So, if we take the income, remove the direct costs and operating costs this gives you a net profit of
RM1,500. If your figure is a negative then you have made a loss during this period. Profit and loss
statements show you how much money you are making or losing in a specific time period.
2-Nov-18

They allow you to compare past performance and detect any issues with sales margins and expenses.
Net Profit is what remains to pay for expansion, equipment, loan repayment, income taxes and
owner’s draw.
37
2-Nov-18

Roots of Opportunity
1. Problems
2. Changes
3. Inventions
4. Competition
5. Technological advances
38
2-Nov-18

Where others see problems, entrepreneurs recognise opportunities.
Expect to have to make some educated guesses. Don't waste your time complaining that you can't possibly
know how much sales or expenses will be because yours is a new business--every business that ever
started was a new business, and the good ones had estimates to work with. You can do this--everybody else
does, and you're no different. Nobody likes to forecast, but nobody is more qualified than you to forecast
your own business.
39
2-Nov-18

Regardless of how you do it, don't expect to go through the numbers once, from step one to step whatever, and be
finished. It doesn't work like that. Any revisions you make in one table will affect the others. And as you develop
your plan, your numbers will change.
Whatever tools you use (obviously we're talking about software and a computer), make sure it all flows together.
Here's some of the interdependence you need to deal with:
q Starting balances affect cash flow and all other balances.
q The sales forecast affects profits, cash flow and the balance sheet.
q The personnel expense forecast affects profits and loss, cash flow and the balance sheet.
q Many of the things you do in cash flow directly change the balance sheet, such as taking out a loan,
taking in investment or paying dividends.
q The balance sheet can affect the cash flow. For example, increasing accounts receivable or inventory
decreasesthe cash balance while increasing accounts payable increases the cash balance.
When it comes to timeframes, do your numbers for the first 12 months of the plan in monthly detail, then by year
for the following two to five years. Normally, three years is long enough, but some plans involving longer cycles will
require five years total. You can add highlights for 10 years, and you can talk about time periods even longer than
that in the text.
Although there's no fixed sequence in a process like this, because the statements are so interdependent, I
recommend you order the tables in a way that leads toward the final results and builds on the source tables:
1. Starting balances and start-up costs
2. Sales forecast
3. Personnel expenses
4. Profit and loss
5. Cash flow
6. Balance sheet
Understand that you can't get to the last step without a lot of revision of earlier steps. What you discover in the
profit and loss will change your personnelexpenses, for example, which will further change your profit and loss
statement, which affects your cash flow and balance sheet. Just keep adjusting until it seems right.
40
2-Nov-18

To determine the neutral (0) line of both axes it is necessary to determine the ‘common practice’ of the
market as objectively as possible. Subsequently, the competing brands are placed in relation to that
average. The position of your competitors in the matrix is solely decided by the market’s perception, nothing
else, because you have a (very) limited knowledge of their aspired positioning. You might even add a third
value to the matrix (e.g. market share, budget or quality) in order to determine the size of the displayed
competitors. That way you can be sure that your most important competitors are prominently featured.
Your final act is placing you brand/organisation in the matrix twice:
1. The position that’s a direct result of your positioning
2. The positioning corresponding with the market’s perception of your brand
Using the Competitive matrix results, as you can see, in a clear view of the market. Giving you insight in how
your behaviour, message and positioning are best adjusted to more clearly distinguish yourself from the
competition.
In this case, a remarkable direction would be to switch to a much more progressive attitude towards
marketing while only changing the message in a gradual way. Only when the employees are comfortable
with the new expected behaviour you can elect to change the message you communicate. This keeps you
from implementing two huge changes simultaneously, and maintains your organisation’s composure.
But for many organisations the exercise of ranking the market according to these two axes will be sufficiently
enlightening, because you and your organisation are more aware of the market situation than anyone. This
matrix just allows you to look at the market with is much objectiveness as possible and reflect on your
choices from that perspective.
41
2-Nov-18

IP is an additional security blanket for investors. Does not apply to every presentation
What intellectual property do you have?
Do you have a proprietary and defensible position?
Mention licensing arrangements, patents filed and what type.
Trade secrets, copyrights, trademarks, etc..
43
2-Nov-18

How will you reach target customers and drive revenues?
How will you make money (revenue model)?
q Sell product or service direct to customer
q License technology
q Develop product then sell to competitor
q Merger-acquisition
What are the key messages for your target market segments?
q Describe marketing and sales plan
What partnerships or alliances are necessary?
44
2-Nov-18

Owners of a copyright have the exclusive rights to reproduce, sell, perform, or display the work.
It is the fixed expression, not the idea that is protected.
For example “Kodak” is a trade mark.
An inventor will sometimes improve the patent which will extend the practical life of the initial patent.
QuickTakes
45
2-Nov-18

Be specific sooner. No one is rooting for you to fail. The audience wants to be edified and entertained. But
sometimes we make it almost impossiblefor them by going into corporate speak. “The smarter we are and
the more we think we know,” says Anderson, “the less likely we are to start with something relevant,
actionable, and interesting.” She praises entrepreneurs Richard Branson and Chip Conley for their concrete
stories and real world approach: “It’s surprising to me that more people who are the face of their company
don’t speak like human beings,” says Anderson.
Make a connection. Anderson calls this her “connected to what?” dictum. It’s hard for people to process
numbers outside our day-to-day experience – trillions of dollars, or nanoseconds, or light years. Instead,
make it relevant to the human experience and have some fun with your comparisons.One possible example,
says Anderson, is “Put on this medical patch and you’ll feel the effect faster than a Porsche can go from 0-
90.”
Watch what works. You may be surprised by what audiences respond to, says Anderson: “We often don’t
know what resonates. When I first started speaking, I’d say something offhand and people cracked up – but I
didn’t think it was an important point, and I’d be startled.” But what you think is important or funny is a lot less
important than what the audience thinks. If you’re consistently getting a response, either positive or negative,
learn from it and adapt.
Stick to three points. “Our mind can’t hold more than three points,” says Anderson – so don’t push your
luck by citing endless reams of data. Instead, be clear on your overall theme and create sub-groupings of
key points, and your audience will be far more likely to enjoy and remember your talk.
46
2-Nov-18

What is Go-to-Market Strategy
48
2-Nov-18

Go-to-Market Strategy is focused on how the organization will put offerings into the market to reach market
penetration, revenue and profitability expectations. This charter is a superset of marketing strategy as it
impacts all functions within an organization with the goal of preparing the entire company for market
success. Another key point to stress is that Go-to-Market Strategy is not an event, i.e., a product launch.
GTM strategy is focused on the entire product lifecycle—from concept to grave.
The Go-to-Market Strategy can be overwhelming if not managed properly. The key is not to try to do
everything but to focus on the core issues and to nail them. For example, here is a checklist that one
company used:
49
2-Nov-18

Go-to-Market Strategy Checklist
q Solve a compelling business problem in a differentiated manner that demands a premium
q Determine the market opportunity.
q Decide upon the beach head target for initial market penetration.
q Understand the buying process: Identify the decision makers, approvers, recommenders, influencers and
snipers.
q Understand the business issues for decision makers and develop a value proposition that resonates with
them. Tie them to a compelling event.
q Establish a differentiated position from substitutes and alternatives.
q Prepare a product road and complete product life cycle.
q Document the distribution strategy and corresponding sales process.
q Create an integrated demand creation plan to create qualified opportunity.
q Develop a comprehensive and methodical demand management plan to follow-up on qualified
opportunities.
q Prepare an implementation plan to ensure the offering is set-up to perform properly.
q Train the support organization to handle implementation and end user inquiries.
q Identify partners for creating awareness, interest, consideration, purchases, implementations and
supporting customers.
QuickTakes
50
2-Nov-18

Step 1. Identify the firm’s primary and support activities. All the activities (from receiving and
storing materials to marketing, selling and after sales support) that are undertaken to produce
goods or services have to be clearly identified and separated from each other. This requires an
adequate knowledge of company’s operations because value chain activities are not organized in
the same way as the company itself. The managers who identify value chain activities have to look
into how work is done to deliver customer value.
Step 2. Establish the relative importance of each activity in the total cost of the product. The
total costs of producing a product or service must be broken down and assigned to each activity.
Activity based costing is used to calculate costs for each process. Activities that are the major
sources of cost or done inefficiently (when benchmarked against competitors) must be addressed
first.
Step 3. Identify cost drivers for each activity. Only by understanding what factors drive the
costs, managers can focus on improving them. Costs for labour-intensive activities will be driven by
work hours, work speed, wage rate, etc. Different activities will have different cost drivers.
Step 4. Identify links between activities. Reduction of costs in one activity may lead to further
cost reductions in subsequent activities. For example, fewer components in the product design may
lead to less faulty parts and lower service costs. Therefore identifying the links between activities
will lead to better understanding how cost improvements would affect he whole value chain.
Sometimes, cost reductions in one activity lead to higher costs for other activities.
Step 5. Identify opportunities for reducing costs. When the company knows its inefficient
activities and cost drivers, it can plan on how to improve them. Too high wage rates can be dealt
with by increasing production speed, outsourcing jobs to low wage countries or installing more
automated processes.
QuickTakes
51
2-Nov-18

Differentiation advantage
VCA is done differently when a firm competes on differentiation rather than costs. This is because
the source of differentiation advantage comes from creating superior products, adding more
features and satisfying varying customer needs, which results in higher cost structure.
Step 1. Identify the customers’ value-creating activities. After identifying all value chain
activities, managers have to focus on those activities that contribute the most to creating customer
value. For example, Apple products’ success mainly comes not from great product features (other
companies have high-quality offerings too) but from successful marketing activities.
Step 2. Evaluate the differentiation strategies for improving customer value. Managers can
use the following strategies to increase product differentiation and customer value:
Add more product features;
Focus on customer service and responsiveness;
Increase customization;
Offer complementary products.
Step 3. Identify the best sustainable differentiation. Usually, superior differentiation and
customer value will be the result of many interrelated activities and strategies used. The best
combination of them should be used to pursue sustainable differentiation advantage.
QuickTakes
52
2-Nov-18

Step 1: Prepare and Create a Business Plan
Creating a business plan isn’t something that can (or should) be done alone. Make it a group activity so everyone on the team is
involved and has a voice in the process. Your plan will be more robust and actionable with multiple perspectives and buy in from
stakeholders.
Your business plan begins with your vision statement. Everything that follows is about how you make that vision happen. Typically,
you keep your business plan high level, and your team aligns to it by providing details on how they’ll contribute to meeting goals.
The biggest thing to remember when building your plan is that it’s all about the customer, always. Give your team a single point of
reference as questions arise — post customer personas on a wall, write reminders on the whiteboards. Keeping the customer centre
stage allows you to “just say no” when you’re figuring out what is and isn’t in your business plan and your offering.
Step 2: Build a Go-to-Market Plan
Your go-to-market plan helps you with everything from ensuring that you’re building the right product for the right customer, to
supporting that product after it’s launched.
There are many templates available online that include some version of the following:
q Target market segment
q Key customers attributes
q Value proposition
q Offering
q Sales and customer service channels
q Financial model and budgeting
q Marketing and awareness plan with a complete sales kit
Step 3: Create Your Value Proposition
How would you like to be identified in the market? How does your offering stand out from your competitors? Your value proposition
articulates the answers to those questions. Create a simple and direct statement that describes what you’re offering to the market.
Don’t get caught up in business lingo — the simpler, the better.
Step 4: Develop a Distribution Strategy
Where will customers go to purchase your offering? Will you go to market with other app companies or system integrators? And how
will you provide support to them after they’ve purchased it? The answers to these questions define your distribution strategy.
Step 5: Build and Execute Your Marketing Plan
The last item in your go-to-market strategy is your marketing plan. Let’s look at the key parts.
Create Brand Awareness: this isn’t just about official colours or a fancy logo. It’s about articulating your value proposition and
company vision into memorable words or phrases for your target audience.
Build a Marketing Calendar: your marketing calendar is a great way to organize all the events, campaigns and social activities you
want to pursue to get your offering in front of customers.
Sales Kit: create a sales kit so that everyone knows how to engage your customers at events. The kit ensures best practices and a
consistent message every time.
Step 6: Don’t Forget to Align Your Teams
Great plans, but can you pull them off? A common mistake is not taking the time to build alignment with your team. Discuss your
plans with the team and get their feedback. This exercise provides invaluable feedback on how to reach your goals.
QuickTakes
53
2-Nov-18

Break Even Analysis
In simple words, the break-even point can be defined as a point where total costs (expenses) and total
sales (revenue) are equal. Break-even point can be described as a point where there is no net profit or loss.
The firm just “breaks even.” Any company which wants to make abnormal profit, desires to have a break-
even point. Graphically, it is the point where the total cost and the total revenue curves meet.
Calculation (formula)
Break-even point is the number of units (N) produced which make zero profit.
Revenue – Total costs = 0
Total costs = Variable costs * N + Fixed costs
Revenue = Price per unit * N
Price per unit * N – (Variable costs * N + Fixed costs) = 0
So, break-even point (N) is equal
N = Fixed costs / (Price per unit - Variable costs)
54
2-Nov-18

Build investor confidence with team
q Credentials, proven track record, domain experience (do not include weak credentials )
q Describe skill and experience gaps to be filled
56
2-Nov-18

List the company’s leadership team
q Include name, position, experience (abbrev.)
q These are credentialed experts
List of company Directors and Advisors
q Include name, summary of experience
57
2-Nov-18

Pivoting like a Pro
The Sharks, particularly Robert, love samples. If you are pitching a product, it can never hurt to pass out
some samples or give a quick demonstration. Unless of course the Sharks dislike the product.
58
2-Nov-18

Cash flow statement explained in 3 minutes (… cont)
What does it really mean when we say a company is "earning a lot?" If a company gets RM100 this year and
has costs and expense of RM60, then we can easily say that it "earned" RM40, right? But what if...
The company makes RM100 in sales this year, only collects RM80 in cash this year, and then will collect the
remaining RM20 next year?
This year's Cash Flow Statement would only record the actual collected RM80... and not the total sales of
RM100
QuickTakes
60
2-Nov-18

Cash flow statement explained in 3 minutes (… cont’d)
And what if... the company had RM60 in costs, expenses, capital expenditures, and taxes but only paid
RM50 in cash this year, and will pay the RM10 balance next year? This year's Cash Flow statement would
only record the paid RM50, and not the total costs/expenses of RM60
In a Cash Flow statement, the only thing that matters is how much a business gets in cash... and how much
it pays in cash.
This year's Cash Flow Statement also includes cash collected for previous years' sales or even future years'
sales... as long as it's collected THIS YEAR.
This year's Cash Flow Statement also includes cash PAID for previous years or even future years' costs,
expenses, capital expenditures, and taxes... as long as it's paid THIS YEAR.
Note that a Cash Flow statement can be for any time period, and not only a 1-year time period like we used
in this simple example. See?
So that's the super simplified explanation of a Cash Flow Statement.
Would you like to learn how to make your own Cash Flow Statement?
QuickTakes
61
2-Nov-18

Examining the ways a business raises and uses funds is also revealing so we also have a “third” financial
statement.
But making sure that the business has enough money to meet its obligations is the key focus for managers
and entrepreneurs so we simply focus on the overall cash movements and position.
Cash flow can be defined two ways:
1. Balance of cash received less the amount of cash paid out over a period of time
2. Moving cash in or out of a business
QuickTakes
62
2-Nov-18

The main sources of funding to businesses
1. Share capital
2. Retained profits (once it is in a position to generate them)
3. Grants
4. Loans – banks, friends, family
5. Leases on vehicles and equipment
6. Credit from suppliers
Let’s look at a sample cash flow projection. The first set of rows, titled Sources of Cash, document all
sources of incoming cash, including cash from customer sales, interest earned, loan funds, and current
checking and savings account balances.
The second section, Operating Uses of Cash, contains all those expenditures associated with the day-to-day
buying and selling process. Most of these expenses show up on the P&L statement.
The third section, Non-Operating Uses of Cash, show expenses that normally show up on your Balance
Sheet: equipment purchases, the principle portion of loan payments, inventory, taxes, and owner’s draw.
Subtract your Uses of Cash from your Total Cash Available, and you have Ending Cash for the month.
Ending Cash for one month becomes Opening Cash for the next month.
QuickTakes
63
2-Nov-18

QuickTakes
64
Lack of planning
q Use of cash flow forecasting
q A lack of planning makes problems more likely
Poor credit control
q If credit control is badly managed then debtors will not be chased up for payment and bad debts
(never be paid) will not be identified
Allowing customers too long to pay debts
q May reduce short-term cash inflows leading to long term difficulties
Overtrading
q When a business expands rapidly and has to pay for expansion months before it receives cash
from additional sales.
Unexpected events
q A new delivery van needed, competitors lower prices, a dip in sales – could all negatively affect
cash flow.
2-Nov-18

q May reduce any discount offered with future purchases.
q Delay payments to suppliers
q Expansion become very difficult.
q Delay spending on capital equipment.
q Future demand may be reduced by failing to promote the products effectively.
q Cut overhead spending that does not directly affect output.
q The asset is not owned by the business.
q Use leasing.
q They may insist on cash on delivery or refuse to supply at all.
q Delay payments to suppliers.
q Efficiency of the business may fall if outdated equipment is not replaced.
q Delay spending on capital equipment.
QuickTakes
65
2-Nov-18

Here are some strategies for creating a positive cash flow:
q Increase the number of items sold
q Increase the price of items
q Reduce expenses
q Change the timing of expenses
q Save money to have sufficient Opening Cash to get through the “start-up” period
QuickTakes
66
2-Nov-18

A cash flow projection is a financial statement that tries show how cash is expected to flow in and out of a
business over a future specified period of time. A cash flow projection is used to see if projected cash
receipts (in flows) will be sufficient to cover projected cash disbursements (out flows). A business can be
profitable and still run out of cash. As an investment banker might say, “Cash flow projections provide the
visibility needed to avoid liquidity problems.” In other words, a cash flow projection is a tool to help you
manage your cash so you can pay your bills on a timely basis and keep the doors of your business open.
A cash flow projection is a great tool for setting sales goals and for planning for expenses to support those
sales. A related use for a projection is to determine your breakeven point during a start-up or expansion
phase. If you need to plan for a large expenditure, such as an equipment purchase or moving to a new
location, a cash flow projection is the perfect tool. Similarly, if you have a seasonal business with large
inventory purchases, a projection can help you have the cash on hand to make a large inventory investment
when you need it.
QuickTakes
67
2-Nov-18

There are several Aayahs in the Holy Quran which declare the ‘usool’ or principles in doing business
transactions:
Allah Says in the Holy Quran Chapter 2 Surah Baqarah verse 188:Do not usurp one another’s property
by unjust means, nor offer it to the judges (as bribe) so that you may devour knowingly and unjustly a
portion of the goods of others.
Allah Says in the Holy Quran Chapter 4 Surah Nisaa verse 29:O you who have believed! Do not devour
one another’s property by unlawful ways; but do business with mutual consent.
Allah Says in the Holy Quran Chapter 11 Surah Hud verse 85:(Prophet Shuaib said ): “And O my
people! Give just measure and weight, nor withhold from the people the things that are their due:
commit not evil in the land with intent to do mischief.
Allah Says in the Holy Quran Chapter 83 Surah Mutaffefeen verses 1-6:
1. Woe to those that deal in fraud
2. Those who, when they have to receive by measure from men, exact full measure.
3. But when they have to give by measure or weight to men, give less than due.
4. Do they not think that they will be called to account?
5. On a Mighty Day
6. A Day when (all) mankind will stand before the Lord of the Worlds?
Allah Says in the Holy Quran Chapter 17 Surah Israa verse 35:34 Come not nigh to the orphan's
property, except to improve it until he attains the age of full strength; and fulfill (every) pledge, for
(every) pledge will be enquired into (on the Day of Reckoning).
69
2-Nov-18

There are several Aayahs in the Holy Quran which declare the ‘usool’ or principles in doing business
transactions:
Allah Says in the Holy Quran Chapter 2 Surah Baqarah verse 188:Do not usurp one another’s property
by unjust means, nor offer it to the judges (as bribe) so that you may devour knowingly and unjustly a
portion of the goods of others.
Allah Says in the Holy Quran Chapter 4 Surah Nisaa verse 29:O you who have believed! Do not devour
one another’s property by unlawful ways; but do business with mutual consent.
Allah Says in the Holy Quran Chapter 11 Surah Hud verse 85:(Prophet Shuaib said ): “And O my
people! Give just measure and weight, nor withhold from the people the things that are their due:
commit not evil in the land with intent to do mischief.
Allah Says in the Holy Quran Chapter 83 Surah Mutaffefeen verses 1-6:
1. Woe to those that deal in fraud
2. Those who, when they have to receive by measure from men, exact full measure.
3. But when they have to give by measure or weight to men, give less than due.
4. Do they not think that they will be called to account?
5. On a Mighty Day
6. A Day when (all) mankind will stand before the Lord of the Worlds?
Allah Says in the Holy Quran Chapter 17 Surah Israa verse 35:34 Come not nigh to the orphan's
property, except to improve it until he attains the age of full strength; and fulfill (every) pledge, for
(every) pledge will be enquired into (on the Day of Reckoning).
70
2-Nov-18

The iPod-iPhone-iPad Niche
The Substitution Model
The three products have coexisted and despite differentiations competed with one another. Before the
introduction of the iPad there were only two competitors the iPod Touch and the iPhone; afterward all three
are present. In the third period when the iPod has practically phased out the substitution is essentially one-
to-one with the iPhone substituting for the iPad. In the first and the last periods we have one-to-one
substitutions. In the middle period we have a three-way substitution.
It is obvious that in the first period the iPhone substituted for the iPod Touch along a straight line (S-curve in
linear scale). In the last period again the iPhone substitutes for the iPad. In the middle period the iPhone
substituted for the iPod Touch more slowly while the iPad saturated and entered a decline.
Clearly if another similar product is introduced in the future, the red straight-line trajectory of the iPhone must
bend downward. In the absence of such a product, this model dictates that the iPhone share will keep
increasing at the expense of the iPad share.
Discussion
The story of the iPod Touch, the iPhone, and the iPad is one of successive competitive substitutions with
iPhone the overall winner. Each product had its own niche, which was filled along an S-curve corroborating
the naturalness of each one of these growth processes. The lifecycle of the iPod Touch is practically
completed, while the lifecycle of the iPad is well advanced on its declining phase. The only product with
significant remaining growth potential is the iPhone.
The iPhone substituted for the iPod Touch from the very beginning and continued all the way to the end. The
entry of the iPad only slowed down temporarily the rate of this substitution. When the iPod Touch ran out of
steam, the iPhone substituted for the iPad.
71
2-Nov-18

1. Valuation
Watch how the sharks deal with valuation. Every Shark Tank pitch starts with contestants asking for a specific amount of money in
exchange for a specific percentage of ownership in their business. That establishes their proposed valuation. So for example, if they
want to give 10 percent of the company for $100,000, that’s a valuation of $1 million; and 30 percent for $150,000 is a valuation of
$500,000. It’s simple math.
Investors like valuation to relate to actual business numbers, such as sales, gross margin (price less direct costs), and burn rate or
fixed costs. On the show, the sharks frequently object to unrealistically high valuations; sometimes they make their own offers based
on much lower valuations. That’s a simple matter of making offers and counter offers. Very rarely, they’ll accept a valuation based
on the value of proprietary technology, or brand impact, aside from actual business numbers.
2. Market Size
The sharks want businesses that appeal to interesting numbers of possible buyers. They want interesting niches that can grow, not
very focused niches that look like they’ll remain small forever. In a recent episode, for example, they rejected a $500 gaming device
that gamers climb on to ride because they thought it would appeal to a very small percentage of gamers.
3. Defensibility
Sharks often ask: “What do you have that I can’t just do myself? I can take the money you want, hire some people, and become your
competitor.” That’s about defensibility. The sharks want to invest in a company that isn’t going to be blown away by competition in
the near future.
Defensibility comes in different ways for different businesses. Occasionally it’s a matter of a strong patent. More often, it’s secret
formulas, secret ingredients, trade secrets, and relationships with channels of distribution. Sometimes it’s progress made in
branding. Without defensibility, the investment is not attractive.
4. Scalability or Leverage
Scalability or leverage is easy to understand when you think about products compared to services. If you sell products it’s easy to
imagine gearing up to make a whole lot more of them if sales grow. A product business is scalable. Some service businesses—web
services are a great example—are also scalable, even though they sell services. But a service delivered by humans, that requires
adding payroll and fixed costs in proportion to sales increases, is not scalable.
5. Industry Bias
The sharks frequently prefer industries and businesses that match their experience and previous investments. Shark Lorie Grenier
tends to like businesses that would work on the QVC channel she knows well. Shark Daymond John knows retail and especially
clothing business. Several sharks have high tech businesses. And that works both ways: Sharks are more likely to invest in types of
business they know, and the contestants, when it turns out they have a choice, value certain sharks more for certain kinds of
businesses.
72
2-Nov-18

Angel Investor: A more heavenly term for Sharks.
Break-even: A quick way to measure a business’s sustainability and potential for future success.
Equity: Every entrepreneur comes into the tank seeking a Shark that is willing to pay for equity, or partial
ownership, of the company.
Liquidity: The more liquid a company’s assets are, they more easily they can be converted into cash.
Sharks love that.
Margin: Wondering what the Sharks are scrawling on their notepads all the time? Chances are they’re
calculating margins, which measure a business’s efficiency.
Market Value: The price a product would fetch on the market.
Overhead: Costs that a business must pay regardless of its performance. Think rent, office supplies, and
utilities, for example.
Patent: A government license that protects original ideas. Shark Lori Greiner has over one hundred of them
for her inventions.
Profit: A business’s total revenue less its expenses. The bigger the profit, the more likely the Sharks will
bite.
Proprietary: Ideas and processes that are usually protected by patents. It’s a favourite term of Kevin
O’Leary, also known as “Mr. Wonderful.”
Royalty: If you have a patent, you’re entitled to future royalties.
73
2-Nov-18

Closing the Deal
The fact that you got the chance to pitch to the Sharks is almost miraculous. Thousands of applicants try out,
and so few are chosen to be featured. If you get to the point where you receive offers from the Sharks, don’t
let the opportunity slip through your fingers because you are nervous to proceed.
74
2-Nov-18

Take Away:
Reassure the investor that they will make money on your opportunity
Questions to answer:
When will investors receive back their money?
What multiples are likely? Are there comparable exits?
q Provide examples where possible
What will be the scenario?
q Acquisition by competitor or market leader
q IPO (proceed w/ caution!)
78
2-Nov-18

The Islamic ethical system has its own distinctive guidelines which are derived from two fundamental
notions: halal (lawful and permitted), and haram (unlawful and prohibited). In order to understand fully the
Islamic philosophy,it is necessary to be familiar with this categorization. Halal designates any object or
action that is permissible to use or engage in; haram designates any object or action that is prohibited to use
or engage in. Since the Islamic ethical system permeates every aspect of a Muslim’s life, including business
and commerce, classifications of things as halal and haram also apply to the economic aspect of a Muslim’s
life.
Islamic Tenets of Business Transactions
80
2-Nov-18

Summary
What do you want your audience to remember about the company?
q Unique and Sizeable Opportunity
q Unique product or service
q Competitive Advantage, Strengths
q Marketing Approach, Customers, Sales Pipeline
q Intellectual property
q Management team
q Other…
81
2-Nov-18

What Is ON The Poster?
How do you make Money and how much?
q Break even
q Pricing
How much capital are you seeking?
What are some key milestones?
Your logo?
Your location?
What do you or your team bring?
QuickTakes
83
2-Nov-18

QuickTakes
84
What is the best idea you gained today that you will take action on in the next 30 days?
Your action plan
What you will:
1. Start doing?
2. Stop doing?
3. Continue doing?
2-Nov-18

A professionally qualified accountant he was awarded with:
1988 Degree from the Institute of Chartered Secretaries and Administrators
(United Kingdom)
1991 Post Graduate Diploma in Hospital Administration from MPC International Houston,
Texas
2000 Awarded Associate member of Institute of Financial Accountants (United Kingdom)
2001 Certified Financial Planner (Financial Planning Association of Malaysia)
Next steps & implementation
Our programmes are completely customized and affordable. We coordinate your desired outcomes and
always exceed the client’s expectation by providing succinct, sustainabletake home value.
Programmes & offerings include:
One on One’s
Corporate Retreats
Strategic Talent Triage
Organisational Development
Selection of new employees
360° Leadership Surveys
Employee Engagement or Climate Surveys
QuickTakes
85
2-Nov-18

QuickTakes
86
2-Nov-18
Other topics of interest
Course Date Name

Build an effective entrepreneur quick takes

Recommended

Recommended

More Related Content

What's hot

What's hot (20)

Similar to Build an effective entrepreneur quick takes

Similar to Build an effective entrepreneur quick takes (20)

More from Ghazali Md. Noor

More from Ghazali Md. Noor (20)

Recently uploaded

Recently uploaded (20)

Build an effective entrepreneur quick takes