ICT302 – Entrepreneurship

and Innovation
Week 6
Lectorial – Financing Entrepreneurship

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 Agenda

Previous Topics For

Introduction
Week’s Topic This Week

Review
Keywords
Questions

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 Previous Week’s Topics

After completing this chapter you will be able to:

• Describe the purposes of business planning
• Describe common business planning principles
• List and explain the elements of the business plan development process
outlined in this book
• Explain the purposes of each of the elements of the business plan
development process outlined in this book
• Explain how applying the business plan development process outlined in
this book can aid in developing a business plan that will meet
entrepreneurs’ goals
• Describe general business planning guidelines and format

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 Business Planning Principles
• Translation of your vision of the venture

Expectations • Communicate key success factors and risks

• Anchoring key events in the plan

Milestones • Communicate that major plan objectives

• Nothing lasts forever and changes can impact the

Opportunities opportunities
• Communicate the business concept, distinctive
competencies and sustainable advantage

• Describe context within which new venture is

Context intended to function (internal or external
environment)

• Brief and clear statement of how an idea actually

Business Model
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becomes a business that creates value
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 Business Plan Credibility Principles

• Business plan writers must strive to project credibility

(Hindle & Mainprize, 2006), so there must be a match
between what the entrepreneurship team (resource seekers)
needs and what the investors (resource providers) expect
based on their criteria.
• A take it or leave it approach (i.e. financial forecasts set in
concrete) by the entrepreneurship team has a high likelihood
of failure in terms of securing resources.
• Hindle and Mainprize (2006) outline five principles to help
entrepreneurs project credibility:

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 Business Plan Credibility Principles cont.

Team

Elaboratio
The Deal
n

Financial Scenario
Link Integration

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 Developing a High-Power Business Plan

• The business plan development process described next has been extensively tested with
entrepreneurship students and has proven to provide the guidance entrepreneurs need to
develop a business plan appropriate for their needs; a high-power business plan.

• Stages of Development
• There are six stages involved with developing a higher power business plan.
1. Essential Initial Research Stage
2. Business Model stage
3. Initial Business Plan Draft
4. Making the Business Plan Realistic Stage
5. Making a Plan to Appeal to Stakeholders
6. The Final Stage – Finishing the Business Plan

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 General Business Plan Format
• Title Page
• Executive Summary
• Table of Content
• List of tables
• List of figures
• Introduction
• Business Idea
• Vision
• Mission
• Values
• Major Goals
• Operating Environment
• Trend Analysis e.g. PESTLE
• Industry Analysis e.g. Porter’s Five Forces
• Operational Plan
• Operations Timeline
• Business Structure and other set-up Elements
• Start-up

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 General Business Plan Format cont.
• Fixed capital requirements
• Working capital requirements
• Risk Management Strategies
• Operating Processes
• Facilities
• Organisational Structure
• Human Resources Plan
• Recruitment and Retention Strategies
- Leadership and management strategies
• Training
• Performance Analysis
• Health and Safety
• - Compensation, Key Personnel, Marketing Plan, Market Analysis, Competition & Marketing strategy
• Organisational analysis
• Product Strategy
• Pricing Strategy
• Distribution Strategy
• Promotions Strategy

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 General Business Plan Format cont.

• Financial Plan
• Pro Forma Cash Flow Statements
• Pro Forma Income Statements
• Pro Forma Balance Sheets
• Investment Analysis
• Projected Financial Ratios and Industry Standard Ratios
• Critical Success Factors (Sensitivity Analysis)
• References
• Appendices

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 Topics for this week

After completing this chapter you will be able to:

• Describe the financing considerations for entrepreneurs
• Describe the advantages and disadvantages of debt
financing and of equity financing
• List and describe the forms of financing appropriate for the
different phases of business development

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 Week 6: Financing Entrepreneurship

• Money is like gasoline during a road trip. You don’t want to

run out of gas on your trip, but you’re not doing a tour of gas
stations. – Tim O’Reilly, founder and CEO of O’Reilly Media
• Chase the vision, not the money; the money will end up
following you. – Tony Hsieh, CEO of Zappos

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 Start-up financing

• https://www.youtube.com/watch?v=677ZtSMr4-
4&ab_channel=TheRestOfUs

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 Keywords / Concepts

Starting Personal Debt

Grants
capital Money financing

Equity Public Private Venture

financing Offering Offering Capital

Angel Equity Crowd Due

Startup
investors Funding Diligence

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 Preparation For Your Webinar

• Read chapter 6
• Describe the financing considerations for entrepreneurs?
• Describe the advantages and disadvantages of debt
financing and of equity financing?
• List and describe the forms of financing appropriate for the
different phases of business development?

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 1st assessment questions

HIGH TURNITIN SCORE - FAIL !

GROUPS – MAKE SURE YOU ARE IN YOUR GROUPS soon

KNOW WHO YOUR TEAM MEMBERS ARE !

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 Any questions?

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