Plan

Plan is a written description of the future you envision for your business, including what
you plan to do and how you plan to do it (Week 9, slide 2). A planning tool that identifies the
types of people needed for the team, resources available and needed, details of the idea, and
potential market for the product or service is called the TRIM (Team, Resources, Idea, Market)
Framework. Team is about who needs to be on the team, the role of each member and their
network. Resources are regarding to what you currently have to get started, the assets needed
to start, as well as your primary expenses. Idea relates to what is the clearest and most simple
description of the idea, how is it unique and differentiated and also the trends that supports the
idea. Lastly, market is about who your primary customers are, how you will reach them, and
their feedback.
There are seven types of plans used by entrepreneurs, the simplest of all is sketching
out the idea on the back of a napkin, this idea is named as Back of a Napkin. Sketching your
idea by hand on a blank paper or doing it electronically is the second type of plan, it is called
sketches on a page. Third is the business model canvas or the BMC as stated about, it is the
type of business plan that depicts the 9 blocks under the four parts of the business model. A
business brief, the fourth type of plan is a 2 to 3-page document outlining the company
overview, value proposition, customer and milestones, it is less visual than the two previous
types of plans. Fifth, feasibility study, created to assess the viability of a business concept. Next
is the pitch deck also known as the launch plan, a short presentation highlighting many of the
essential elements found in a feasibility study and a business plan. Lastly, the business plan,
supports the business model by outlining the steps necessary to attain the necessary goals
(Week 9, slide 11).
There are 10 types of revenue model, a revenue model explains how entrepreneurs will
make money and capture value from delivering on the customer value proposition. Unit Sales
Revenue Model, Advertising Revenue Model, Data Revenue Model, Intermediation Revenue
Model, Licensing Revenue Model, Franchising Revenue Model, Subscription Revenue Model,
Professional Revenue Model, Utility and Usage Revenue Model, and Freemium Revenue Model
are the types of Revenue Models. Further, there are four revenue drivers, these are: customer,
frequency, selling process and the price.
Finally, Price is one of the most important ways in which customers choose between
different products and services, and knowing the optimum price that you should charge to
maximize sales and profits is key to beating the competition (B2B International, 2015). The
reason why there are 11 types of Pricing Strategies, Competition-Led pricing, Customer-Led
pricing, Loss leader, Introductory Offer, Skimming, Psychological Pricing, Fair Pricing, Bundled
Pricing, Cost-Led Pricing, Target-Return Pricing, and the Value-Based Pricing.
Business failure is a situation in which a company or other business ceases operations
because it is unable to generate sufficient revenue to cover its expenses (The free dictionary,
n.d.). However, a failure is not all about failing, it is more about learning from your failures or
mistakes, instead of considering failure an unfortunate event, entrepreneurs should treat failures
as a motivation and lesson to improve in the future. The failure spectrum is the range of failures
from big to small consisting of deviance wherein entrepreneurs defies legal and ethical
boundaries leading to venture mismanagement. Inattention is where the entrepreneur gets side-
tracked from the core business. Lack of ability is where entrepreneurs lack of the necessary
skillset to get the job done. The wrong processes are set up in an organization and things start
to fall down because of miscommunication defines process inadequacy. Uncertain is when an
entrepreneur takes unreasonable actions due to lack of clarity regarding future events. Lastly,
exploratory experimentation is the process of conducting market tests to get early feedback ang
acquire important information (Week 10, slide 4).
“When mistakes happen, analyze what went wrong, and explore new approaches in
order to prevent the same thing from happening again.”
“Grit is the quality that enables people to work hard and sustain interest in their long-
term goals.”
Bootstrapping is the process of building or starting a business with very little funding or
capital or virtually nothing at all (Week 10, slide 10). While external funding is when you make
use of somebody else’s money as a business capital. Both have their own advantages and
disadvantages. Crowdfunding is a way of resourcing money, it is the process of raising funds for
a new business venture from large crowd, best example is the internet. Crowdsourcing on the
other hand is the process of attracting inexpensive or even free labours from enthusiastic
customers and people on the same wavelength. There are four contexts for crowdfunding,
Patronage model is the kind of funding given without expecting anything in return. Lending
model is the type where backers provide funding in a form of a loan. Reward-based model is
here backers receive gifts or experiences as thanks for their support. Investor Model is where
an investor buys a share of the company or business venture, called investment.
Week 11 talked about financing for start ups such as equity financing and its stages,
basics of valuations, and angel investors. While bootstrapping may be ideal in the beginning, as
the company begins to grow and show potential, many entrepreneurs begin to look at the
possibility of equity financing, which is the sale of shares of stock in exchange for cash (Week
11, slide 3). There are three initial stages of equity financing commonly given to young
companies, seed-stage financing is the first stage, it usually consists of small amounts of capital
provided to verify a concept. Second stage is startup financing, wherein money is provided to
fund product research and development, and implementation. Last stage is the early stage
financing, consisting large amounts of funds for company with established team and tested
product but have little or no revenue yet.
Valuation is needed so that both the entrepreneur and investor can negotiate with the
equity percentage and division of ownership, however, entrepreneurs should be careful with
valuation, not because a similar company is worth millions doesn’t mean yours worth the same
(Week 11, slide 5). Overvaluing apparently put investors off and puts the company or
entrepreneurs’ image at risk. Valuation factors that investors take into account includes, market
conditions, competition, market opportunity, value add, and market comparable.
Angels in the past are simply used to describe wealthy people who invested in Broadway
theatrical productions but over the years, angel has become anyone who uses personal capital
to invest in a business venture. Those who earn an income over $200,000 or has a net worth of
over $1 million also known as accredited investors are angels eligible of investing. Business
angels sometimes accept referrals but most of them consider unsolicited submission of ideas.
Angels can be of great help for entrepreneurs, they can provide entrepreneurs with mentoring,
monitoring, and guidance as well as connections and introductions to their wide networks and
angels can also contribute business strategies that are more relevant than funding. There are
five types of angel investors, entrepreneurial angels are experienced entrepreneurs that are
willing to provide mentorship, corporate angels are commonly former business executives that
looks for paid position in the venture. Professional angels are mostly doctors, lawyer,
accountants, consultants and the likes. Enthusiast angels rarely take a role in active venture
management. Micromanagement angels are entrepreneurs that are successful on their own but
wants to take charge in every company they invest in.
Social capital works through a wide range of channels (Week 11, slide 14). One of the
keys to success is a strong network as it shows that by making connections with people who
share our values, we are able to achieve more than if we had acted alone according to studies.
Career and psychological support, and role modeling are the types of support needed by a
business given by social networks that are relevant in order to succeed. As we build social
networks, maintaining it is equally as important, it encompasses staying in touch through
occasional interaction or virtual connection.

References:
 B2B International, (2015). The Importance of a Pricing Strategy in Optimizing Sales and
Profit. https://www.b2binternational.com/2015/07/03/the-importance-of-a-pricing-
strategy-in-optimising-sales-and-profit/#:~:text=This%20is%20where%20a
%20carefully,key%20to%20beating%20the%20competition.
 Business failure. (n.d.)  Financial Glossary. (2011). https://financial-
dictionary.thefreedictionary.com/Business+failure