Chapter 8

Planning and Failures of Entrepreneurs

 Objectives
• Express the importance of planning in
entrepreneurship
• Prepare several types of plans included in the
TRIM framework
• Justify failure in entrepreneurship
"Failure is simply the opportunity to begin again, this
time more intelligently.. business absolutely devoted
to service will have only one worry about profits.
They will be embarrassingly large."
Henry Ford, founder Ford Motor
Company
 Advantages of Planning
1. A plan is necessary to concentrate on goals
2. Planning helps keep track of finances
3. Planning helps to keep track of the business
progress
4. Planning conveys the risks of what to expect in
advance
5. Planning helps to understand deviations and
failure
 The TRIM Framework
• The TRIM framework is basically an acronym for
team, resources, idea and market.
Types of Plans Included in the TRIM Framework

1. Back of the Envelope/Napkin

• The back of the envelope/napkin plan is a quick
and rough estimation of a business or product idea
that is written on any accessible scrap of paper such
as an envelope or napkin.
2. Business Model Canvas
• Business model canvas is a visual chart with
elements describing a business' or product's value
proposition, infrastructure, customers, and
finances.
3. The Business Brief
• A business brief is a document that offers the
explanation on the reason why a particular model
leads to success in a given scenario.
 Suggestions for areas that should be emphasized in a
good quality business brief

• Describe completely the task or purpose

• Provide some background
• Explain fully what the target is
• Time
• Anyone who would be writing a business brief
ought to give time to himself in preparing it.
• Likewise, the targeted audience must also be
provided with a clear timeline of when and
where events contained in the brief will be put
into action.
4. Feasibility Study
• A feasibility study is an assessment of the viability
of a proposed project or system.
• It takes into account all of a project's significant
factors such as economic, technical, legal, and
scheduling concerns.
 Common Elements in a
Feasibility Study
1. Executive Summary - The most important page/s
of the study is a brief narrative describing details of
the project, product, service, plan, or business which
stakeholders read with interest.
2. The project description- allows these stakeholders
to be accustomed with the ideas presented in the
study.
3. Competitive Landscape - Basically, this is a review
of the strengths, weaknesses, opportunities, and
threats encountered by the venture under study.
4. Operating Requirements - Here the entrepreneurs
can use this point in the report to remain distinct,
concentrated, and balanced about a venture's real
needs.
a. Material Requirements
b. Labor Requirements
c. Transportation and Shipping Requirements
d. Marketing Requirements
e. Physical Location
f. Technology Requirements
g. Target Dates

5. Financial Projections
6. Recommendations and Findings
 The Pitch Deck
• A pitch deck, known also as an investor pitch deck
or a startup pitch deck is the first communication
instrument that provides an overview of the business
in order to raise funds.
• It is usually created using PowerPoint, Keynote or
Prezi to give audience a brief idea about the business
venture.
• This is usually presented to either on face-to-face
or online meetings to possible investors, customers,
partners, and co-founders.
• Unlike the business model canvas, a pitch deck is a
representative tool for the external audience which
is used to represent the business model and
structure for better understanding.
 Inclusions in a Pitch Deck

1. Elevator Pitch - An elevator pitch is a quick

synopsis of the idea, background, and experience. It
always starts with an introductory text which
provides an overview of the entire business strategy
and the rest of the pitch deck. This slide should be
able to express "who you are, what you do, and what
you want to do."
2. Problem - The second slide states the problem the
target audience faces. This makes it clear to the
investors that a clear opportunity has been found by
the entrepreneur and he has ready to capitalize on it.
3. Opportunity - A problem leads to an opportunity
which can be capitalized on. The entrepreneur may
use charts, graphs and numbers to validate his
statement.
4. Solution - This slide should discuss the likely
solutions to the identified problem and should move
on to the specific solution and the main reason for
planning to choose it. This part is an assurance that
the audience will clearly understand and will accept
the solution.
5. The Product - This slide showcases the product and its
numerous highlights. This highlights can be presented
into several slides. The entrepreneur should ensure that
he explains comprehensively the key highlights of the
product.
6. Business model - A business model is a theoretical
structure that supports the feasibility of a product or
company.
The model includes the purpose and goals of the
company and how it proposes to realize them. This is a
vital section of the pitch deck because here the
entrepreneur explains the economics of the business
structure to the investors. It is composed of the
operating structure, how to make money, the distribution
channels, the gross margins, and other important items.
7. Competition - This is a section where the
entrepreneur convinces his investors that he has
done his homework and knows about his
competitors. The slide should contain the list
competitors and include their positioning, strengths,
weaknesses and opportunities which are left
unattended for the entrepreneur to tap into.
Here a competitive landscape and position for the
entrepreneur's company mustb e created as his
customers see it among the competition.
8. The Key Highlight - This section is where the
entrepreneur compares himself with the competition
and prove how he is better than them. There must
be an explanation about the value proposition and
the USP which will give a valid reason to the
investors to buy the proposal.
9. Marketing and Sales- This section includes the list
of all the marketing and sales strategies to obtain,
overcome, and to serve the existing and prospective
customers of the product. The slide must describe
the marketing mix, and the various sales channel the
entrepreneur is using and is planning to use.
10. Management Team - This is one of the major
section in which the investors are truly interested in
is the management team section. Here the details of
the management team are presented in terms of
qualification, experiences, and dedication and how
far are these individuals are planning to go with the
entrepreneur. The directors, key stakeholders, key
advisers, other investors (if any) are part of this
section.
11. Key Metrics, Current Status and Future
Projections - This is where the entrepreneur boast
his current standings and provide a three-to-five-year
forecast of his business. In this section he states his
plans for future expenses, investments, and routes.
The Business Plan
 Importance of a Business Plan When Starting a
Business

1. Helps in getting finances

2. Helps anticipate possible problems
3. Helps remain on track
4. Helps in good management of the business
5.Budgeting is easier
6. Helps in the start or continue the business
decision
 Failure and Entrepreneurship
• Henry Ford became bankrupt five times and was
even given the advice to move out of the
automobile industry.
• Walt Disney was turned down by investors about
300 times when it was looking for finances.
• The popular Beatles group was not accepted by five
record companies before their success.
• Steve Jobs was one of the leading example of
coming back with a bang. Apple fired him from the
CEOs position because of terrible products. He
afterwards started NeXT which turned out to be a
huge success. It was because of this only that Steve
Jobs got back to Apple as a CEO.
• Thomas Alva Edison is someone who bounced back
after failing. He invented something which mankind
cannot persist without. He took nearly 1000
attempts to discover light. His words on failure are
a great source of inspiration for one and all.
 Truths about Failure in Entrepreneurship
Failure is a frightening, that no would-be
entrepreneurs would like to hear this word.
Here are some truths about failure among
entrepreneurs:
1. No success without failure - The road to recovery
is long and painful when someone failed. Although,
when heartbroken, entrepreneurs turn to
understand and appreciate more what happened.
2. Failure and success are similar - Without failing
occasionally, an entrepreneur cannot completely
understand what success really looks like.
3. Failure arises from curiosity - Usually a limitless
thirst for knowledge and longing to reach their full
potential is the reason why numerous entrepreneurs
venture out.
4. Failure is an asset - The important thing are the
learnings taken from the trials and for entrepreneurs
this is better than not having tried.
3. Nobody wants to fail - In business, all stakeholders
have their respective interest in the business and to its
success.
4. Failure does not mean quitting - Quitting is very
different with failure. Failure is a barrier, quitting is
not. Quitting is when the entrepreneur stops trying.
5. Each failure gets easier - Holistically the more
disappointment a person experienced makes him
better and is able to manage smoothly the process in
general. The same is true with an entrepreneur.
 Reasons for Failure
1. Lack of right vision
2. Proper selection of a business
3. Lack of appropriate planning
4. Having inadequate capital
5. Poor execution of the plan
6. The hiring of wrong people
7. Failure in marketing
8. Expanding too soon
9. Miscalculating competition
10. Giving up too soon