Core competencies

Warehouses are filled with great commercial products that never got to store shelves. Founders of
promising start-ups wind up working for their investors, or worse, close their doors. All hopes are dashed
and they are back living with mom. Why? Because they failed to master the three core competencies of
any successful business.

1. Cash flow management

You’ve got to pay your bills. And when you can’t?

You have two obvious choices. Go out of
business, or raise more capital.

But that comes with a price;

diluted stock or loss of control.
So many companies try to get
financing to pay for staff
without sales. They may be
financed and even refinanced
before they make enough
sales to support their
overhead. In other words,
they are top-heavy and reliant
on multiple rounds of new
investment to stay afloat.

One different solution is to

make sales a priority, sell in a small territory, service the heck out of it, and use the proceeds to finance
growth. Another solution is to identify and forge strategic alliances with your vendors and your buyers.
Vendors who trust you will extend your credit and terms to help you make ends meet, especially when
they believe their business will grow if you succeed. Buyers will pay in cash for volume discounts, which
also help you pay the bills.

2. Personnel management
 You’ve got to get some help! And it
isn’t easy.

Probably the most important skill

successful entrepreneurs have
learned in their years of experience is
how to hire the right people. But
even if you hire well, you still have to
train, incentivize, and encourage your
people to do their best. It’s a tall order, but absolutely necessary.

Just discovering and implementing a productive compensation system can take years of trial and error.
We suggest you start with bonuses for sales, growth and profitability. Get everybody to agree on exactly
what the metrics are and how their jobs can contribute. Then offer a quarterly bonus to everyone,
regardless of their job, to put them all on the same team. This builds a positive company culture.

3. Distribution management

You’ve got to get your product to market. This requires satisfying several levels of distribution before it
gets to your ultimate customer.

This is perhaps the most important skill set new product producers overlook. They tend to focus on
production and think if their product is good enough and priced right, it will sell.

But you will run into distributors who want to know what the strategic advantage is of carrying your
product. Their sales managers want to know how you will help them make their numbers. Their
salespeople want to know what the incentive is. The retailer wants to know how fast it turns, and his
clerk wants to know why he should stock it on the shelf.
Nobody but your end-user customer cares about quality or price. Everyone has their own requirements,
and you’d better satisfy them or you simply won’t make it to market. Distribution is more important that
your product because nobody can buy it if it isn’t there.

Career opportunities

There are many other options and very few limitations. Rather than simply focusing on the
“entrepreneurial” aspect of your degree, consider all that you learned to get that degree. Most likely
there were courses that covered creativity, innovation, ethics, marketing, finance, and a wide variety of
other topics. Focus on those skills and concepts and see where you can use them in the Fortune 50 job
world.

This is only a small snapshot of what you can do with an entrepreneurial degree. All of these places will
help you gain valuable insight and hands-on experience that can either be used to further your career
working for someone else, or help you become a more effective leader, should you decide to go out on
your own.

1. Mid-level management

At big companies, the C-level folks develop ideas, the ground force does the work, and mid-level
management converts the idea into execution. Graduates with entrepreneurial degrees are well suited
for this opportunity.

2. Business consultant

The Fortune 500 is ripe with business consultants. They need people who can go to a client site, identify
problems and fix them. That is what an entrepreneur does, and that is why this job is perfect for you. You
have the training to help identify things that others may not pick up on and the training to know how to
fix them.

3. Sales

Someone who works in sales or runs the department needs to know how businesses run. They need to
know how to represent a company, manage accounts, and follow up on leads.
4. Research and development

To work in R&D, you need to understand business concepts, procedures, and practices. With all of the
training and education someone has received learning about entrepreneurship, they are well prepared
for this type of position.

5. Not-for-profit fundraiser

Being able to raise funds requires understanding the importance of business and networking
relationships. It is a great place for someone with this type of degree because you will have experience in
studying advanced concepts that can be used to your advantage on the job.

6. Teacher

Now here me out on this one. I am not suggesting that you go teach entrepreneurship. I suggest you
teach a core competency (e.g., math, history, literature, etc.), but teach students the entrepreneurial
side. Teach them the benefits of math to business, history to innovation, and literature to persuasive
advertising.

7. Recruiter

Having had courses that cover operations management, leadership, and a variety of others, you most
likely have a keen sense of what type of person is needed to fulfill a position. Companies who use
recruiters rely upon someone being not just people savvy, but having an in-depth business sense as well.

8. Business reporter

If you can write articles, or pick up a quick class to learn it, you are in a prime position to take the lead on
covering a local business beat. You will understand the field and concepts and can use your knowledge to
make the business section that much more interesting and telling.

BUSINESS PLAN
Business Plan

Every business owner needs a way to organize and present information about how he or she intends to
develop, grow, and manage his or her business. A business plan is the perfect tool. When well-crafted, a
plan will catch the attention of potential investors and customers while encouraging them to support the
business. When seen this way, a business plan becomes the foundation for any successful business.

A business plan can be constructed by building upon four essential cornerstones:

Business Idea

Market Analysis

Marketing Strategy

Financial Analysis

Business Idea

The Business Idea section sells the business’s vision and briefly outlines how that vision will be
accomplished. A basic idea can be expanded into a plan by including three key elements:

Business Summary – A simple description of the business, the need for its product or service, its
intended audience, and its competitive advantage. When shared with others, it shouldn’t take longer
than 30 seconds.

Keys to Success – A series of short statements that describe the value the business promises to deliver to
its potential customers.

Management and Staff Summary – Short statements that draw attention to the personal strengths of the
people who will be part of running the business.

Market Analysis

Before taking on the risks of a business, it is important for business owners to know general market
conditions, where the new business will fit inside a particular industry, who their customers will be, and
who will be the competition.
Sources for this information can be found through:

Local chambers of commerce

Networking contacts

Online resources

Universities

Competitor businesses

Marketing Strategy

Once market and industry information is obtained, and customer and competitor profiles have been
developed, the marketing strategy is written next. A good strategy should include these four P’s:

What specific Product or service does the business offer?

What Pricing structure will be used?

Where your business will be located (Place)?

What will be done to Promote the business?

A marketing strategy is about determining a proper balance between each of these elements. If the
business will be more successful in a high traffic area, then location has more importance. If the
competition is high, better advertising and pricing could help.

Financial Analysis

This is the section of the business plan for exact numbers and business costs. If a business is selling a lot
of product but still losing money in the long run, the business will fail. Based on the previous information
collected, the business owner can provide a fairly accurate estimate of the business’s costs and what will
affect them. The following suggestions will also help:

Start-Up Costs – All businesses need some starting capital (money invested in the business) to deal with
initial costs. These are the items that are one-time purchases.
Monthly Expenses – These are the ongoing costs like inventory, utilities, and insurance. Also included in
this section is a breakeven point analysis (what the business needs to make to cover costs and show a
profit). These numbers can help determine start-up costs and financing options.

Financing Options – These are the possible sources for the capital to start a business.

Sales Forecasts – This is an estimate on how much product the business will need to sell to cover
expenses, and what can reasonably be sold based on the market research conducted earlier.

The marketing concept is the strategy that firms implement to satisfy customers needs, increase sales,
maximize profit and beat the competition. There are 5 marketing concepts that organizations adopt and
execute.

Marketing is a department of management that tries to design strategies that will build profitable
relationships with target consumers.

But what philosophy is the best for a company in setting marketing strategies?

There are five alternative concepts under which organizations design and carry out their marketing
strategies.

5 Marketing Concepts are;

Production Concept,

Product Concept,

Selling Concept,

Marketing Concept,

Societal Marketing Concept.

Production Concept

The idea of production concept – “Consumers will favor products that are available and highly
affordable”. This concept is one of the oldest Marketing management orientations that guide sellers.

Companies adopting this orientation run a major risk of focusing too narrowly on their own operations
and losing sight of the real objective.

Most times; the production concept can lead to marketing myopia. Management focuses on improving
production and distribution efficiency.

Although;

in some situations; the production concept is still a useful philosophy.

Product Concept

The product concept holds that the consumers will favor products that offer the most in quality,
performance and innovative features.

Here; under this concept,

Marketing strategies are focused on making continuous product improvements.

Product quality and improvement are important parts of marketing strategies, sometimes the only part.
Targeting only on the company’s products could also lead to marketing myopia.
For example;

Suppose a company makes the best quality Floppy disk. But a customer does really need a floppy disk?

She or he needs something that can be used to store the data. It can be achieved by a USB Flash drive,
SD memory cards, portable hard disks, and etc.

Selling Concept

The selling concept holds the idea- “consumers will not buy enough of the firm’s products unless it
undertakes a large-scale selling and promotion effort”.

Here the management focuses on creating sales transactions rather than on building long-term,
profitable customer relationships.

In other words;

The aim is to sell what the company makes rather than making what the market wants. Such aggressive
selling program carries very high risks.

In selling concept the marketer assumes that customers will be coaxed into buying the product will like
it, if they don’t like it, they will possibly forget their disappointment and buy it again later. This is usually
very poor and costly assumption.

Typically the selling concept is practiced with unsought goods. Unsought goods are that buyers do not
normally think of buying, such as insurance or blood donations.

These industries must be good at tracking down prospects and selling them on a product’s benefits.
Marketing Concept

The marketing concept holds- “achieving organizational goals depends on knowing the needs and wants
of target markets and delivering the desired satisfactions better than competitors do”.

Here marketing management takes a “customer first” approach.

Under the marketing concept, customer focus and value are the routes to achieve sales and profits.

The marketing concept is a customer-centered “sense and responds” philosophy. The job is not to find
the right customers for your product but to find the right products for your customers.

The marketing concept and the selling concepts are two extreme concepts and totally different from
each other.

Societal marketing concept questions whether the pure marketing concept overlooks possible conflicts
between consumer short-run wants and consumer long-run welfare.

The societal marketing concept holds “marketing strategy should deliver value to customers in a way that
maintains or improves both the consumer’s and society’s well-being”.

It calls for sustainable marketing, socially and environmentally responsible marketing that meets the
present needs of consumers and businesses while also preserving or enhancing the ability of future
generations to meet their needs.

The Societal Marketing Concept puts Human welfare on top before profits and satisfying the wants.
The global warming panic button is pushed and a revelation is required in the way we use our resources.
So companies are slowly either fully or partially trying to implement the societal marketing concept.

Who are the Key Players in the Capital Markets?

In this article, we will provide a general overview of the key players and their respective roles in the
capital markets. The capital markets consist of two types of markets: primary and secondary. This guide
will provide an overview of all the major companies and careers across the capital markets.

key players in finance

Center: Jamie Dimon, CEO of J.P. Morgan Chase

Primary vs Secondary Markets

In the primary market, there are four key players: corporations, institutions, investment banks, and
public accounting firms. Institutions invest capital in corporations that seek to expand and grow their
businesses, while corporations issue debt or equity to institutions in return for their capital investment.
Investment banks are hired to match institutions and corporations based on their risk profile and
investment style. Finally, public accounting firms are responsible for the preparation, review, and
auditing of financial statements, tax work, consulting on accounting systems, M&A, and capital raising.
Hence, public accounting firms in the primary market not only assist corporations to raise capital but also
help prepare, review, and audit financial statements to ensure a fair representation of their financial
performance.
While issuance of new bonds and new shares in exchange for capital occurs in the primary market, the
secondary market is for the sale and trade of previously issued bonds and shares. Buyers and sellers
engage in transactions on an exchange, while investment banks facilitate this process by providing equity
research coverage. This ability to freely sell and trade securities significantly increases the market’s
liquidity.

To learn more, check out CFI’s FREE Corporate Finance 101 Course.

Four Key Players in the Primary Market

Below we outline the four key players and their roles in the capital markets: corporations, institutions,
banks, and public accounting.

Key Players in the Capital Markets

Screenshot from CFI’s FREE Corporate Finance 101 Course.

1. Corporations

In the capital markets, corporations behave as operating businesses that require capital to grow and run
their operations. These corporations can vary in industry, size, and geographical location. Careers at
corporations that relate to the markets include corporate development, investor relations, and financial
planning and analysis (FP&A).

Examples of publicly traded corporations:

Alphabet
Amazon

Apple

Exxon

Toyota

2. Institutions (“Buy Side” Fund Managers)

Institutions consist of fund managers, institutional investors, and retail investors. These investment
managers provide capital to corporations that need the money to grow and operate their businesses. In
return for their capital, corporations issue debt or equity to the institutions in the forms of bond and
shares, respectively. The exchange of capital and debt or equity completes the cycle of the two key
players in the capital markets.

Examples of top “Buy Side” Firms:

Bridgewater Associates

Blackstone

KKR

The Carlyle Group

Apollo Global Management

3. Investment Banks (“Sell Side”)

Acting as an intermediary, investment banks are hired to facilitate deals between corporations and
institutions. The job of investment banks is to connect institutional investors with corporionss, based on
risk and return expectations, and investment styles. Careers in investment banking involve extensive
financial modeling and valuation analysis.

Examples of top investment banks:

Goldman Sachs

JP Morgan
Credit Suisse

HSBC

Morgan Stanley

See a full list of investment banks

4. Public Accounting Firms

Depending on their divisions, public accounting firms can engage in multiple roles in the primary market.
These roles include financial reporting, auditing financial statements, taxes, consulting on accounting
systems, M&A advisory, and capital raising. Therefore, public accounting firms are usually hired by
corporations for their accounting and advisory services.

Examples of top public accounting firms:

Deloitte

PwC

Ernst & Young

KPMG

Grant Thornton

Key Players in the Secondary Market

Unlike the primary market, where there is an initial issuance of debt or equity in exchange for capital, the
secondary market allows for the sale and trade of issued bonds and shares. The secondary market allows
players to enter and exit securities easily, making the market liquid.
Key Players in the Capital Markets

Screenshot from CFI’s FREE Corporate Finance 101 Course.

1. Buyers and Sellers

In the secondary market, fund managers or any investors who wish to purchase securities or debts will
have to locate a seller. Transactions are facilitated through a central marketplace, including a stock
exchange or Over The Counter (OTC).

2. Investment Banks

While investment banks facilitate the issuance of bonds and shares in the primary market, they expedite
the sales and trading of issued debts and equities between buyers and sellers in the secondary market.
Investment banks provide equity research coverage on each stock’s upside potential, downside risk, and
rationale to help buyers and sellers make a judgment. Moreover, investment banks sell and trade
securities on behalf of the clients to maximize their profits.

Capital Markets Recap

In this article, we explored the key players in the capital market and their responsibilities. The capital
market can be broken down into two separate markets – primary and secondary. In the primary market,
institutions invest capital in corporations that seek to grow and operate, while corporations issue debt or
equity in return. Investment banks act as advisors for institutions and corporations on mergers and
acquisitions (M&A) and initial public offerings (IPO). Public accounting firms provide accounting and
advisory services to the key players.

The secondary market involves the sale and trading of issued bonds and shares in a centralized
marketplace. Investment banks offer their sales, trading and research services to help buyers and sellers
make decisions on their securities.
Additional Resources

Thank you for reading CFI’s guide to the key players in the capital markets. To expand your financial
knowledge, see the following CFI resources:

Types of Markets – Dealers, Brokers, Exchanges

Stock Market

Trading Mechanisms

Big Four Accounting Firms