CH-7

Writing the business plan :- Sabroso

1. Introductory page: Title and cover page that will provide brief summary of the restaurant “Sabroso”
business plan.

 Name and address of the company

 Name of the entrepreneur(s), contact info
 Description of Business: This restaurant will provide healthy and fresh thai and Chinese food to
the customers.
 Statement of financing needed: loan will be paid off over five years and the debt will cover
restaurant’s place, advertising and selling cost.
 Statement of confidentiality of the report

2. Executive Summary: Executive summary will provide the Sabroso restaurant’s key factors and will
summarize the complete business plan. E.G: “Sabroso” will main the safety and provide the healthy and
fresh food to the customers. To maintain the hygiene we will set safety food vending machine and so on.

3. Environmental and Industry Analysis :

 The environmental analysis is the assessment of external uncontrollable variables that may
impact the business plan.
 Technology
 Legal concerns

We will go through the “Sabroso”s food sales over the past five years and will anticipate the growth of
the restaurants. And, will look through the technological advancement and legal concerns like: patent,
copy rights etc.

Will find out the strengths and weaknesse of each of competitors and will update the upcoming trends.

4. Describing the venture: For equipment we will provide table, chair with a social distance to maintain
the hygiene and there will be a food vending machine to collect the ordered foods.

5. Production plan

 Detail of how the product will be manufactured. If the manufacturing process is subcontracted,
need to describe the subcontractor (location, reason, cost)
 Equipment will be required for manufacturing
 Raw materials are needed
 Cost of manufacturing product

6. Operations plan
  Describe the flow of goods and services from production to the customers
 For service its intangible performances

7. Marketing plan: How the product/services will be distributed, priced and promoted

8. Organizational Plan:

 The corporate plan is the part of the business plan that describes the venture’s form of
ownership that is a proprietorship, partnership, or corporation.
 In case of a partnership, the terms of the organization should be included
 In the case of a corporation: shares of stock authorized and share options should mention.
 the members of the board of directors
 the members of the management team and what are their backgrounds
 the roles and responsibilities of each member of the management team
 the salaries, bonuses, or other forms of payment for each member of the management team

9. Assessment of risk:

 helps to identify potential hazards and alternative strategies to meet business plan goals and
objectives
 1st, the entrepreneur should indicate the potential threats to the new venture
 2nd, there should be a discussion of what might happen if the risks occur in reality
 Finally, the entrepreneur should discuss the strategy that will be employed to prevent,
minimize, or respond to the threats should they occur.

Significant risks can occur from – competitor’s reactions, weaknesses in

marketing/production/management team, new advances in technology.

10. Financial plan: helps to determine economic feasibility and necessary investment commitment. 3
financial areas should be focused on;

 The entrepreneur should summarize the forecasted sales and appropriate expenses for at least
three years, with the first year’s projections provided monthly
 Cash flow for at least 3years
 Balance sheet

11. Appendix: it contains backup material and references to any of the documents.

 Letters from customers, distributors, or subcontractors

 Secondary data or primary data used to support plan decision
 Leases, contracts, or other types of agreement
 Price list from suppliers and competitors
Business plan:

The business plan is a written document describing all the relevant internal and external elements and
strategies for starting a new venture. Marketing, finance, manufacturing, and human resource
management are integral functions included in the business plan. The business plan is also known as the
game plan or road map. Three questions need to be focused: Where am I now? Where am I going? How
will I get there? The entrepreneur should prepare the project in consultation with other sources. The
plan should be made of at least three years.

WHO READS THE PLAN?

Employees, investors, bankers, venture capitalists, suppliers, customers, advisors may read the business
plan.

Three perspectives are considered on preparing the business plan

1. Entrepreneur’s perspective: The entrepreneur who writes the plan understands better than anyone
else the creativity and technology involved in the new venture.

2. Marketing perspective: Entrepreneur tries to view their business through the eyes of their customers.

3.Investors’ perspective: Entrepreneur’s need to focus on financial projection on his/her business plan.
S/he has to go through the initial assumptions of benchmarks.

Potential investors are very particular about what should be included in the business plan. Cash flow and
Cash requirements are needed to add to the business plan.

CH-8

COMPETITOR ANALYSIS:

This is the main thing for the entrepreneur to analyze the competitor’s background. The strengths and
weaknesses of each competitor should find out. The information on competitors can be gathered
initially by using as much public information and then complementing this with a marketing research
project. Newspapers, articles, websites, catalogs can be the sources of gathering the competitor’s
market information. After gathering all the information, this can be summarized in the following context
to get the differences of individual competitors:

Product or service strategies,

Pricing strategies,
Distribution strategies,
Promotional strategies,
Strengths and weaknesses. This analysis will provide a solid basis for marketing decision making.

Marketing Research For The New Venture:

1. Defining the purpose or objectives:

Here the entrepreneur can make a list of the information that will be needed to prepare the marketing
plan. The entrepreneur needs to target the customers, then s/he can go for a survey questionnaire with
the customers to know the feedback of his/her products or services, if the pricing is okay for the
customers or not.

2.Gathering data from secondary sources:

Trade magazines, newspapers, articles, libraries, government agencies, websites, catalogs can provide
much information regarding the industry market and competitors. By reviewing secondary sources, the
entrepreneur can make the best decisions regarding the marketing of a product or service, can gather
information on customers, competitors, and market trends.

3. Gathering information from primary sources:

Gathering primary data involves a data collection procedure- observation, networking, interviewing,
focus groups, questionnaire. Interviewing or surveying is the most common approach used to gather
market information.

4. Analyzing and interpreting the result:

Comparing the results,

Summarizing the answers,

Can provide valuable insights

CH-2

The resistance against flexibility, growth, and diversification can overcome by developing a spirit of
entrepreneurship within the existing organization, called corporate entrepreneurship.

Corporate entrepreneurship is most strongly reflecting in the following endeavors:

1. New business venturing: refers to the formation of new business within an existing organization.
These entrepreneurial activities consist of creating something new of value either by redefining the
company’s current products or services, developing new markets, or forming more formally
autonomous or semiautonomous units or firms. Formations of new corporate endeavors are the most
remarkable appearances of corporate enterprise.

2. Innovativeness: refers to product and service innovation, with an emphasis on development and
innovation in technology. It incorporates new item improvement, item upgrades, and new creative
strategies and techniques.

3. Self-renewal: Self-renewal is the transformation of an organization through the renewal of the key
ideas on which it is built. It has strategic and organizational change a redefinition of the business idea,
rearrangement, and the presentation of framework wide changes to expand advancement.
.
4.Proactiveness: Proactiveness incorporates activity and risk-taking, just as competitive, aggressive, and
strength, which are especially reflected in the directions and exercises of top administration. A proactive
organization tends to take risks by conducting experiments; it also makes the initiative and is bold and
aggressive in pursuing opportunities. Organizations with this proactive spirit attempt to lead rather than
follow competitors in such key business areas as the introduction of new products or services,
operating technologies and administrative techniques.

Managerial VS Entrepreneurial Decision making:- 8 steps

1.Strategic orientation: A focus on those factors that are inputs into the formulation of the firm’s
strategy. The strategy of entrepreneurial management is driven by the presence or generation of
opportunities for a new entry. It is less concerned about the resources that may be required to pursue
such opportunities. Mainly, resources don’t constrain the strategic thinking of an entrepreneurial firm.
In contrast, the strategy of traditional management is to use the existing resources of the firm
effectively.

2. Commitment to opportunity: Entrepreneurial orientation toward opportunity is a commitment to

taking action on potential opportunities and therefore can pursue opportunities rapidly, making the
most of windows of opportunity.They also are able to withdraw their resources from a particular
opportunity and do so rapidly, such that if initial feedback from the pursuit of a potential opportunity
provides information suggesting that it might not be the right opportunity for the firm, then
management can minimizing losses from the initial pursuit. In contrast, traditionally managed firms tend
to place considerable emphasis on information; information is derived from data collection and analysis
of that information to determine, say, the return on resources to be deployed. If the traditionally
managed firm chooses to pursue the given opportunity, it would be with a much larger initial investment
and the intention of remaining in that line of business for a considerable time.

3. Commitment of resources: A focus on how to minimize the resources that would be required in the
pursuit of a particular opportunity. In contrast, when traditionally managed firms decide to commit
resources to an opportunity, they do so on a large scale. Therefore, a traditionally managed firm
uses in-depth analysis of available information.
4. Control of resources: A focus on how to access others’ resources. Entrepreneurially managed firms
are less concerned about the ownership of resources and more concerned about having access to
other’s resources including financial capital, intellectual capital etc. In contrast, traditionally
managed firms focus on the ownership of resources and the accumulation of further resources. They
believe that if they control their own resources then they are self-contained. For these firms, the control
that comes with ownership means that resources can be deployed more effectively for the benefit of
the firm.

5. Management structure:
More organic focus—has few layers of bureaucracy between top management and the customer and
typically has multiple informal networks. addition, entrepreneurially managed firms are more structured
to make use of both their internal networks (e.g., through informal communication channels at work)
and external networks (with buyers, suppliers, and financial institutions), which provide information and
other resources. The traditionally managed firm has a structure well suited for the internal efficiencies
of allocating controlled resources. There is a formalized hierarchy with clear roles and responsibilities,
highly routinized work, and layers of middle management to “manage” employees’ use of the firm’s
resources. Traditionally managed firms have structuresthat are typically inwardly focused on efficiency.

6. Reward philosophy: entrepreneurially managed firm is focused on pursuing opportunities for new
entry that represent new value for the firm. It is not surprising then that entrepreneurially managed
firms have an entrepreneurial philosophy toward rewards that compensates employees based on their
contribution toward the generation and exploitation of the opportunity. The traditionally managed firm
rewards management and employees based on their responsibilities, where responsibilities are typically
determined by the amount of resources (assets and/or people) that each manager or employee
controls.Promotion is a reward that provides a manager control of even more resources.

7.Growth Orientation:
In a firm that has an entrepreneurial orientation toward growth, there is a great desire to expand the
size of the firm at a rapid pace. Although traditionally managed firms may also desire to grow, they
prefer growth to be slow and at a steady pace .
8. Entrepreneurial culture:
Culture also can differ entrepreneurially and traditionally managed firms. Entrepreneurial firms
encourages employees to generate ideas, experiment, and engage in other tasks that might produce
opportunities. In contrast, the traditionally managed firms are interested in generating ideas too but it is
mostly interested in ideas that revolve around currently controlled resources.
ex: Nabisco.

Establishing the corporate entrepreneurship in the organization:

1.
 Secure a commitment to corporate entrepreneurship in the organization by top, upper,
and middle management levels.

 Establish initial framework and embrace the concept.

 Identify, select, and train corporate entrepreneurs.

2.

 Identify ideas and areas that top management is interested in supporting.

 Identify amount of risk money available to develop the concept.

 Establish overall program expectations and target results of each corporate venture.

 Establish mentor/sponsor system.

3. Use of technology to ensure organizational flexibility.

4. Identify interested managers to train employees and share their experiences.

5. Develop ways for the organization to get closer to its customers.

6. Learn to be more productive with fewer resources.

7. Establish a strong support structure for corporate entrepreneurship

8. Tie rewards for the performance of the entrepreneurial unit

9. Finally, implement an evaluation system that allows successful; entrepreneurial units to
expand and unsuccessful ones to be eliminated.

CH-3
First mover advantage:
 Cost advantages: Being a first mover in Bangladesh TESLA can begin movement down
the experience curve. Experience curve of TESLA will captures the firm’s greater volume
of a product (electronic car) and the cost of producing each unit of a car will go down.
The costs of electronic cars will reduced in the economies of scale.
 Opportunity to secure important supplier and distributor channels: Being a first mover
in Bangladesh TESLA have the opportunity to select and develop strong relationships
with the most important suppliers and distribution channels. TESLA showroom will be
the first electronic car’s showroom in Bangladesh and there is a high chance for them to
secure important supplier and distributor channels.
 A better position to satisfy customers
 The opportunity to gain expertise through participation: TESLA will have the opportunity
to go through other car’s design in Bangladesh and they will be able judge the
customer’s preferences in the point of customer’s view. By doing this they will be able
to make some changes in their cars design, improve in manufacturing, and marketing.
They will have the opportunity to monitor changes in the market that might be difficult
for other organization’s to participate in the market TESLA can easily capture the market
by monitoring the changes in the market. By participating in the market TESLA will easily
build up their networks which will provide early information about attractive
opportunities to get positioned in the market.
First mover’s disadvantage:
 Environmental instability:
Environmental istability is one of the first mover’s diadvantages. There need to be good fit
between its reasources and external environment to be rewarded with superior performance. If
the entrepreneur offers a new product that has attributes that the market does not value, then
there is a poor fit between the firm’s current product offerings and the external environment
and performance will be poor. To obtain a good fit with the external environment, the
entrepreneur must first determine the key success factors of the industry being targeted for
entry. Key success factors might be superior service, reliability,the lowest price, or having one’s
technology adopted as the industry standard.
 Demand uncertainty- makes difficulty to estimate future demand as first mover’s have
little information upon which to determine the potential market size of the market and
how fast it will grow.
 Technological uncertainty- difficulty in accurately assessing whether the technology will
perform and whether alternate technologies will emerge and leapfrog over current
technologies.
 Adaptation- difficulty in adapting to new environmental conditions.

 Customers uncertainty:
Customers may have considerable difficulty in accurately assessing whether the new product or
service provides value for them. As offering a superior product is not sufficient to enable a first
mover to make sales, the entrepreneur must also reduce customer uncertainties.
Overcome customer uncertainty by:
 Informational advertising.
 Highlighting product benefits over substitutions.
 Creating a frame of reference for potential customer.
 Educating customers through demonstration

 Lead time:
The grace period in which the first mover operates in the industry under conditions of limited
competition. Lead time can be extended if the first mover can erect barriers to entry by:
  Building customer loyalties.
 Building switching costs.
 Protecting product uniqueness.
 Securing access to important sources of supply and distribution.

Risk reduction strategies for new entry exploitation:

Risk is derived from uncertainties over market demand, technological development, and actions
of competitors.

Two strategies

a.Market scope strategies -Focus on which customer groups to serve and how to serve them.

b.Imitation strategies -Involves copying the practices of others.

Narrow-scope strategy- A narrow-scope strategy offers a small product range to a small number
of customer groups to satisfy a particular need.
 focuses the firm on producing customized products, localized business operations, and
high levels of product quality.

 By focusing on a specific group of customers, the entrepreneur can build up specialized

expertise
Broad-scope strategy- involves offering a range of products across many different market
segments. By offering a range of products across many different market segments, the
entrepreneur can gain an understanding of the whole market by determining which products
are the most profitable. A narrow-scope strategy offers a way of reducing some competition-
relate risks but increases the risks associated with market uncertainties. In contrast, a
broadscop strategy offers a way of reducing risks associated with market uncertainties but faces
increased exposure to competition.

Imitation Strategy:
Imitation is another strategy for minimizing the risk of downside loss associated with new entry.
Imitation involves copying the practices of other firms, whether those other firms are in the
industry being entered or from related industries. An imitation strategy cannot be rare or
inimitable.
 Imitating some of the practices of established successful firms can help the
entrepreneur develop the skills necessary to be successful in the industry
 Imitation strategy allows the entrepreneur to quickly acquire the skills that will be
rewarded by the industry
Types of imitation strategy:

 Franchising -A franchisee acquires the use of a “proven formula” for new entry from a
franchisor.
 “Me-too” strategy -Copying products that already exist and attempting to build an
advantage through minor variations.

Overall, an imitation strategy can potentially reduce the entrepreneur’s costs associated with
research and development, reduce customer uncertainty over the firm, and make the new
entry look legitimate from day one.