long term grwoth depends on ability to get long term financing

once u have the growth strategy, determine how to finance the growth

two ways:
internally generated funds
funds obtained from external financial sources


gross and net sources
dont use too much net internal finances.

growth calculations may be expanded to include a return on investment ( roi) analysis.

u acquire /deploy assets to produce product/service....investment mayb efixed the amt of dollars in current asset shud be considered.

reveneu growth is most important factor in profit growth.

if profit is dereasing even then an epterprise can do better in roi by reducing the volume of assets needed to keep the sales.

increase the sale for each dollar of asset investment or increase the profit margin

simple growth cals are easy to make

shud be focal point of a enterpreneurs

useful for future business plans

their is no requirement that the business should grow.

maybe becoz u dont want managerial kind of responsiblities.

but ppl get bored of repeating thesame thing,

growth n change go together,

their is generally a monetary incentive to grow

also needed to retain cool emplyees since otherwise they tend to move to other companies

their is an old saying that to survive an enterprise must grow.

it maybe come lethargic

so think about growth strategies carfully.

growth -> bigger risk

larger company -> cost of mistake more, but can tolerate more.

as u grow bankers, stake holders etc. gain incfluence so entrepreneur may lose control

differenet skills are needed to run the big company
entrepreneur may become dterimetnal even and shud give up to management guy
think if it is worth it.

avoid growth for the sake of growth but grow when the finance, oppurtunities, business conditions permit.

The first 15 keys are published but these are not very great, i think it will probably make sense to have this knowledge to bring someone down from the hype of his idea for enterprenurship but it doesnt look good at this stage for me .

maybe it will be some good knowledge 5 years down the line

i think that idea of the software editor is not that great...
it looks less relevant to me.

growth strategies maybe effected by the goals and objectives of the business

dont pursue strategies that tend to acheive exclusive goals ... conflicting goals is fine ( public service and highly profitable)

pick a growth strategy based on external and internal factors

aint much impressed by this series....it feels so so to me

first year of ops is imp time

work diligently so that plans -> reality

revenues may be less than forecasted amounts and company may have just enuf money to support a few months of operations.

if revenues grow too mcch u may have difficulty controlling things ( e.g. inventories).
u may be profitable only on paper/ due to accounting standards....
u sold $million worth stuff to enron a day beofre it went bankrupt

cash in the bank is what u shud focus on not on other things

must do a lot of detail planning for first year

op and financial surprises can doom u.
dont wait till end of first qurter to ascertain state of business..depends osmewhat on type of company ( automobile dealership vs restaurant)

kinds of budgets u wanna write

• marketing /sales budget
• production budget
• purchases budget
• personnel budget
• overhead budget
• operating income budget
• cash flow budget
• cash balance budget
• financing budget
• may be some of these arent needed
• maybe u need some more types too

op plan be made to determine how to run the business effectively.

specifies:

• how it will develop in months ahead
• marketing n sales plans
• manufacturing plan
• cash flow and cash balance plan
• various expense plans
• operating income plan
• planned balance sheet
• financial plan
• planned operating and financial ratios

example given in lecture

strategic plan to determine what product or servces the bus is going to offer and to which customers
geographic areas shud be specified.

several years ia typical planning horizon
follwoing things are contained
mission stmt
listing of goals for enterprise
strategies need to be developed to accomlish the goals
stmt of planning premises

havent understood it much

financial stmts are heart...
the contain the numbers to which one must commit if he is to be successful.

• what is ur situation at the day u begin ops
• what r ur assets
• where are the funds obtained
• how do u allocate money into various categories
• income , cash flow etc.
• detailed projection of revenues
• expense items
• expected profits
• debt repayment
• assets
• liabilities
• foot notes to explain assumptions

u will probably need an accountant for all this .

bus plan shud be specific and well written

begin exec summary answering

• what is bus all about
• key people involved in the venture
• why company needs to exist
• where is it located --if relevant
• stmt of enterprise mission and def of nature of business
• what financing is needed and how funds will be utilized
• outline of primary characteristics of business field in which it will operate
• disucssion of salient features of the venture

focus on

• imp ext factors that may influence,
• keyfeatures of business venture and
• financing of the enterprise

Section 2:
a complete analysis of the industry in which the business operates

• requires an in depth research and analysis effort.
• include principal industry characteristics...economic, social, political and demographics
• and a summary of this info.

---irs requries every bus to adopt a principal bus activity code ---naics code.
---trade associations, library research projects are also good for data gathering other than aforementioned sources (key 2, i think)

Section 3:
next section is outline of form and org struct of bus venture

• to find employess needed in planning period ...
• potential investors wud be interested
• ppl in bus venture are very imp in determining success /failure of business
• bankers and vcs provide funding based on confidence in ppl involved rather than industry outlook and financial stmts

good business ideas are important but must have specific form and executed well.

good idea to include resumes of bus principals

more fundas given on balance sheets etc.

keep plans in a loose binder format so that they can be easily updated whenever needed....they will change since markets change etc.........

for investors etc..put htem in atractive stuff so that they cause the reader to find out more about the oppurtunity

make complete business plan which includes:

• description of industry
• form and organizational structure of company
• proforma financial statements
• strategic and operational plan of comapny
• write things down

book : entrepeuship and prductivity -5 ,6 chapters : by authors of these lectures.

outline of bus plan is :

• 1: exec summary
• 1: para business nature
• 2: para rational for business existence
• 3: brief statement for financing required
• 4: struct and important features of comapny
• 5:key characteristics of industry
• 2:complete analysis of industry
• 3: form and org struct of company
• 4: profroma financial stmts
• 1: balance sheet at inception
• 2: income, cash flow and balance sheet profroma stmts over planning horizon
• 5: the strategic plan
• 1 : stmt of enterprise mission
• 2: def of business
• 3: specific enterprise goals
• 4:enterprise strategies
• 5: stmt of planning premises
• 6: strategic long range planning objectives
• 1:sales caused and profit projections
• 2: Major capital additions plants, equipments etc.
• 3:cash flow and financing
• 4:personnel requirements
• 6: operating plan
• marketing or sales plan
• production plan
• various expense plans
• operating income plan
• cash flow and cash balance plan
• planned balance set
• planned operating and financial ratios
• 7:appendices
• pertinent contracts
• tech info
• other supporting data

find your weaknesses:

• why: usually one of these will cause you to fail
• it is reverse of specfying your strengths.
• good questions to ask are:
• is the product or service really very different from that available in market--lack of differentiation maybe a fatal problem
• so much competition that niche is too hard to create-- this maybe a important weakness
• is it possible to find a good location --very bad for retailer, company selling to public
• ur newness itself maybe a problem --agressive marketing strategy can be helpful but costly and time consuming, potential consumers maynot know u r in business.
• try to establish relations with suppliers/consumers etc. so that they can become evangelists and u get preferred treatment ( from suppliers).
• employess maybe able to keep up with production, distribution and selling problems at acceptable level due to experience levels.
• maynot be able to keep going financially while improvements are being made in processes, products etc.
• lack of enuf capital is a big problem
• underestimation of financial operations
• interest on debt maybe a issue
• credit from suppliers -- u may have to Cash on delivery

i think may be i can do it better sometime

outline primary strengths of bus

• creation of a new product for which there is not competiteive options
• better service
• lower price
• higher quality product
• entreprenue is a key assest -- his knowledge, energy, expertise --important very
• george ballas : burning desire of entere to succedd.
• avoidance of slack of established company.willingness to go extra mile
• marketing strategy , outstanding ad compaigning
• unique niche in highly specialized market
• larger distributor networks.
• business location
• supersales person
• financial capacity of enterprise
• ability to grant credit terms to customers
• lack of fixed obligation
• cost effectiveness and efficiency of plant and equipment
• age of plant and equipment
• employess
• lack of union
• eixsiting contract or promise of contracts from customers
• general economic climate
• financial condition of clients of business
• predictability of business revenues
• can u forecast revenues with some accuracy for several years
• accuracy imp to avoid financial embarrassment
• atleast understand volatility to incorporate it.

business idea is key factor for succ.
every business has its set of key internal factors

Identifty key internal factors affecting successful peformance e.g.

• sales growth rate if u have market control
• agressive sales promotion and advertising program in this case is probably good
• companies may have prices dictated to them by monoploy competitiors or big customers
• key factors is cost control, efficiency of operations in this case
• predictability of business revenues is a very important factor
• the right question is can u forecast revenues with some accuracy for several years, it is important to avoid financial embarrassment and problems etc.
• if ucannt do u understand volatileness of it and incorporate that into your plans

examples:

• manufacturing : inventory turnover, prod rejection rate , plant capacity, down time of equipment
• retail : markup %ages ,inventory management , promotional activites costs
• serivce:control of overhead expenses , accounts receiveable management, labor expenses

for succ:

• find most significant external factors and understanding them
• analyze nature of business,
• contemplate future of business
• if possible get data on these factors and utilize projections made by experts on them
• adjust them based on her assessment ( not too much)
• do u realize labor price isnt under ur control

experts forecasts arent competely irrelevant ....doesnt matter even if they vary and are disputed.

• local area economic variables shud be analyzed --local banks and chambers of commerce, in large cities can be consulted ---they create and maintain datafiles and projections, for imp demographic economic and competitive conditions in their communities.
• dont reinvent wheels to create a business...consider using existing consulting and data anlysis type companies ....that assemble info and make projections
• even if u have expertise consider hiring since they will take probably less time
• hire a business school professor--there overhead expenses are covered

key3:

Business must know:

• external factors that may have impact
• after market analysis:
• list the external factors that you maynot have any control over
• where do i get info on these factors
• gather data on these and analyze

lots of data at little cost for most of these factors e.g.:

• numerous govt publications--us govt bookstores
• statistical abstract of govt -- facts, general stats, references (indicating source of their info ) for use in extensive research and anlysis
• about 50 $ annual ,
• every five years census taken gathers data on sales. employess, payroll etc. for every business category
• collection of all of these censuses is 'census of business' are available.
• use it to determine long term chance of the various business you are interested in.
• census tracks if people age etc are important
• local chambers of commerce
• economics dept of many large banks
• us industry and trade outlook --dept of commerce annual pub book info on every industry and forecasts
• eceonomic report of president -- if u wanna know :gdp, economic data , cpi, interest rates
• small business adminstration(sba) --sba booklet on accounting system establishment, administration, product pricing
• taxes --irs, state controllers provide tax assistance and guide materials
• wall street journal and new york time --national and internation business event and trans news
• economist -- global economy understanding
• business week , forbes -- other bus pubs

international dislocations (energy production reduction) are costly now .

u cant know and analyze everything but
informed business owner must know what to read and how to read it quickly and effectively.

a business :

• must define what it does and
• identify market oppurtunity ( i think the oppurtunity that it wants to exploit).
• Above two look simple but isnt
• business definition of what it does shud be comprehensive enuf to encourage for creative thinking but
• it(bus def) shud be constricted enuf to provide direction for company
• over time business definition can be changed due to changing market ( enregy companies compared to petrol refineries etc.)
• business environment is more complex and competitive now....forcing firms to braoden business defs.

bansk, stock brokerages -> general financial services companies
nesapapers --- commnications business
steel -- not being imaginative.....bot great growth

in defining the business mission u must:

• ascertain if there is a need for the business:
• why shud company be started
• what unique niche it will fill
• why hasnt another business filled the niche
• if it has....
• why was that company started
• what niche is it flling
• what competition exists and why it exists
• is that firm a startup
• must prepare a market analysis
• key economic geographic , demographic data will be needed
• do the analysis yourself or hire a marketing firm to do it for you

reading of the 25 business plans book

business planning keys :

key 1:
Business:

• must have mission,
• is hard
• must have a reason
• systematic way will maximize probability of success.
• it must have a reason to exist.
• economic explanation for the firm to thrive.
• must make money. else it will go out soon
• if u cant deliver on time u wont endure.
• why shud it come into being
• must produce good and services that people will buy in sufficient quantities
• offer them at a price people can afford
• cost structure of making it makes the investment( money,time etc) worthwhile for investors etc.
• price , quality, what else is on market are few factors....
• a few lines in enterprise mission...no more ( read in art of start too)

businesses are started for :

• freedom and independence from workpalce. ---marketplace maybe more demanding than meticulous boss --probably disappointing
• creative oppurtunity, business is self expression to them
• just desire to have a business , or desire to make profit is not enuf.

business survives becoz real demand and services are identifed and selling them at a price people can afford.
cost structure will yield a sufficient profit and justify investment of time etc.

tactics for winning without intimidation looks like a good book

wondering if we have a editor where your code is in multiple levels...

where in the first stage you just deisgned it, in the second one probably made the function descriptions in english then. detailed them at a compter level in the third step and then each of those degenerate into code.


i think this shall automatically get rid of the roblem of lack of docs.
maybe someday i shud make this software if it doesnt exist.

in microsoft visual something i know u can collapse functions etc. and just see their definitions....though i wonder if it has been taken into some editor at the next level.

i think this idea has ocured in my mind several times before too, though this time it is much clearer....

it will increase productivity too hopefully.

for couple of days i am feeling that what i want to do in life is to get into the business of helping entrepreneurs get funding from vc's...
that is one good place to use all the grumpy books that i have been reading for sometime now.

wonder what else is a possible choice...

the idea os sachin also looks good.

seth godin book --all marketer;s are liars maybe worth reading

kiva.org

looks like ok...but all businesses are african it seems
how do u know it is not a junk poseer..

• It's great to be able to attach hard numbers to a business idea; it's even better if those numbers are your own, rather than a nationally sydicated report written with another company's interest in mind.---firepoll bloghttp://firepoll.typepad.com/fireblog/2005/10/marketing_resea.html

---i am not sure if the second part fo the claim is the right one because then someone will say that u r modifying numbers to suit your needs....

• They plan to use the data in marketing and promotional materials, forecasting, and most importantly fundraising
• Market validation is the ultimate determinant, but marketing research is an insurance policy against findout out the hard way