a Minimum profi it po market is Small, a py ¢ projected investors The E ; Entrepreneur must consider the stage of the economic cycle that the county ‘Ome Opportunities are best taken in a particular part of the cycle. An Entrepreney sina Country that is in a recession, could not think of offering ct ce return on investment. There must bers Prospect of And growth potential that are seen as aeceptable, jf y,. roduct or service that will bring ‘repeat sales’ would be fantastic Profit and growth potential must be sufficient to attract needeq Yisin iT Who ative investment plan, Management Issues * The Opportunity must be such that the ability to take advantage of them fits the avaiable competencies (i.e, managerial, physical etc.) of the business. Management must haye the requisite skills and competencies to take full advantage of the Opportunity The Business Concept The Business Concept + The Business Concept is a bridge between an idea and the Business Plan. It enables the Entrepreneur to consider some key details that will bring a clearer definition to the enactment of the idea. It forms the basis for a Business Pl > The business Concept clearly expresses an idea for a business that includes basic information such as the nature of the product or service that is to be offered, demography of target consumers and a unique selling proposition that will give a company an advantage over its competitors. The Business Concept may entail the provision of details for a new process, new market etc. and not only relate directly to a new product/service. +> The Business Concept must be precise, properly articulated and adjusted if influencing conditions in the market or economy change. If the Entrepreneur cannot clearly bring across the business idea, they will fail at producing a proper Business Model and Business Plan and will therefore not be able to have a successful start- up venture. Contents of the Business Concept The Business Concept provides information such as What is the product or service being offered? What benefit(s) will the product or service provide? Who are the expected consumers? Why will these customers buy the product or service? What distribution channels will be used? 54Shenae oe Slee rents iat have much debt. a firms may not be able ty a othe pest ._ Scare off” lenders. Lenders feel that + Lenco cn cat th bites nee panemensentaeean te “Sepang Mot properly managed, it can lead to an inabiley interest expenses in great losses that will negatively affect the wealte of shareholders. The business hopes : “tobe paid each period, P** 'M& the investment gains will exceed the interest that is Angel a Pe eis on who wish to invest in the business of others in exchange fi jin Start-up-Ventures, unlike ee MIN Angels are usually willing to eae that have outgrown the amount i - This type of funding is more suitable for Small to attract venture capitalists. invested by the Nascent Entrepreneur but are still too « Itis favoured by the Nascent Entrepreneur who needs more financing than that provided by him’ herself and family and friends, but is too small to attract funds eaueicens re eis a many an the other financial institutions. e . ividuals who provide Angel Funding ii i usually at the start-up stage eee ee Angels allow small businesses to grow, by ignoring the high risks and fill the economy that many others are not willing to fill. i f Venture Capitalists These are profitable businesses that put together pools of capital and use them businesses that have high profit potential. This is done in retum for Equity but som Debt Capital also. Evaluation ® The Venture Capitalists sce their investments as high risk. They provide capital and therefore they require very high returns ¢ They have stringent means of screening the busines pass the test. In a recent study that was done in the United found that only 1% of those secking funding are successful ¢ Venture capitalists seek businesses that have high growth potential and hi potential. They also want to see a clear Exit Strategy that should be executed in Therefore, they hardly fund start-ups. They focus on businesses that are in the ear! of growth and those in the rapid growth phase. * Due to the large amounts that are invested in businesses and the type of Equity, Venture Capitalists usually own a large percentage of each company’s shares which give them @ ‘lot of say’ in the decision making process. Sometimes together, they even own more shares than the founders. capital. Not many firms tes of America, it was es that de: ly stage