3BA6

Computers and Society

Entrepreneurship & Business Plans

3BA6 Computers and Society

 Entrepreneurship

• “Organising, operating, and assuming the risk

for a new business venture”
• Origins: to “undertake”. An entrepreneur is a
“between-taker” or “go-between”.
• Traditional view of entrepreneurship?
– Starting and operating a small/medium-sized
business
– What about? Corporate; Public Sector; Not-for-profit
organisations
• New perspective emerging….
– Based on behaviour

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 Corporate Entrepreneurship

• Entrepreneurship exists when new combinations

are actually carried out (and ceases when they
stop)
• Organisational continuum:
– More entrepreneurial: risk taking, innovative, and
proactive
– Or “less entrepreneurial”: conservative, risk averse,
non-innovative, and reactive.

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 Corporate Entrepreneurship (cont.)

• Commitment to entrepreneurship
– Non-existent versus Total
• Not only creation of new business ventures,
– but also development of new products, services,
technologies, administrative techniques, strategies
and competitive postures.

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 Entrepreneurship – Case Study

• GlidePoint
• Carefully read the short case on the handout
• Briefly answer the questions at the end

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 The Business Plan

• Many businesses fail because their business

plan has not been thought out, written down and
developed.
• A business plan is essential to get funding as
this is where management convinces investors
that there is a real commercial opportunity for
the business and its products and services.

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 What is a Business Plan?

• A business plan is a written statement of a

business
– what the owner wants to achieve with it and how that
will be accomplished
• It outlines the structure of the new venture, the
product or service, the customer, the growth
potential and the financials.
– it can inspire for the future

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 Purpose of a Business Plan

• Crystallises ideas
• Sets milestones
• Establishes feasibility of the new venture
• Determines financial needs

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 Purpose of a Business Plan

• Helps to raise finance

– Generally, firms write plans to raise (more) money
– Selling document that gets in the door of venture
capitalists/ financiers/ bank managers
• It can help define strategy
– if properly used, will help involve and motivate key
members of staff.
– outlines realistic targets for how business success
can happen while remaining flexible enough to make
changes along the way

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 Preparation

• Should be a high standard

– should verifiable
– should be void of jargon or general position
statements.
• It should offer the reader a combination of clear
description and analysis

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 Preparation (contd.)

• Length depends on circumstances.

– it should be long enough to cover the subject
adequately and short enough to maintain interest.
– err on the side of brevity
• Professional-looking; aesthetic
– no typing, grammar, or spelling mistakes
– avoid expensive documentation, as this might
suggest unnecessary waste and extravagance

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 Who Reads the Business Plan?

• Target audience
– Banks: loans that have to be repaid. Business
stability, low risk important
– Venture capitalists & business angels: equity
investors. Repayments not necessary, but will desire
growth for profit-sharing or exit from investment.
• The Business Plan can be used over 3 phases
in the early stages of a venture: planning;
launch; post-launch.

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 The Planning Phase…

• In the planning phase, a business plan will:

• Force description and explanation of business idea
• Help structure plans
• Uncover any flaws that might be lurking
• Identify unforeseen opportunities
• Set out the financials in black and white
• Give an overview of the bigger picture
• Pull together all ideas
• Focus the mind
• And make businesses statistically more likely to succeed

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 The Launch Phase….

• In the launch phase, writing a business plan will:

• Summarise the entire business so other people
can quickly grasp what it's all about
• Act as a sales tool for raising investment and
support
• Give a professional edge
• Provide confidence to yourself and others in the
idea

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 Post-Launch…

• After launch, the business plan can:

• Be a guidebook to refer to time and again
• Keep focus on original goals
• Act as a marker for whether the business is
doing okay or not
• Bring order to the chaos

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 What goes in?

• No standard format. Choices depend on the

business focus & audience.
• Essentially, four main parts:
– the management team
– business operations
– sales and marketing
– Finance

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 Typical Contents

• Executive summary
• Description of the Business
• Key Personnel and their roles
• The Market and the Marketing plan
• Operation and production plan
• Human resources plan
• Capital resources plan
• Financial Plan

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 The Management team

• This section should outline all background and

experience of all the key members of the
management team
• CVs for each individual should be attached
• Strengths and weaknesses of the team as a
whole outlined.
– if there are any gaps in talent, important to identify
how these gaps will be addressed.

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 The Business Operations

• Basics of business: name, address, ownership

• Description of product or service
– Explain how products are made or services provided.
– Explain why product will be profitable
– Why people will buy it
– New product (unique?) or better product
• Include reference to patents or intellectual property
owned by business
• Breakdown of overall sector
– Industry size, no. of competitors, sales volume
• Tie in to overall goals & planning for the business

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 Sales and Marketing

• The key to marketing is understanding your

customers.
– profile target customer and their likes and dislikes
– helps with positioning of the product in the
marketplace and pricing product.
– also need to be aware of how your customer base is
likely to change over time, whether it is declining or
growing.

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 Finance

• Realistic financial projections should be outlined

– different scenarios for sales, costs and cash flows for
both the long and short term.
– gross and net margins
– capital investment v. expenditure
• Important not to dress up the figures.
– sales figures growing ever steadily will not impress a
seasoned investor.
– similarly, be realistic about costs
• Consumer products, particularly those on the internet, will
need to plan for a large upfront marketing budget.

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 Executive Summary

• The last thing written is the first thing that appears in the
business plan: the executive summary.
– Limit to one or two pages
• Company's mission statement – a few sentences
encapsulating what the business does for what type of
clients, aims for the company and what gives it its
competitive edge.
• Clearly written and powerfully persuasive
• Balance sales talk with realism in order to be convincing.

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 Pitching the Plan

• When the business plan has been prepared and it has

received input from a financial adviser, the next step may
be to put it in front of venture capital firms.
• Might be worth considering only sending a copy of the
executive summary.
– This has the advantage of saving costs and increasing the
chances of receiving attention.
• Protection of the idea
– May want to also include a confidentiality letter for the venture
capital firm
– Patents, trademarks, copyright

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 Pitching the Plan (contd.)

• A great business idea with the figures working

on paper is a good start
• However, presentation is very important
• The document
– check style, grammar, diagrams…
– length
• The presentation demonstration
– who is it being pitched at?
– practice
– adapt presentation (slightly) to different audiences

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 References

• Core Reading
– Dollinger, M.J. (1999), “Entrepreneurship: strategies
and resources”, Prentice-Hall, New Jersey. Chpt. 5.
[intro to business plans: textbook in Trinity Library]
• Further Reading and Resources
– http://www.bplans.com
• samples and advice
– http://www.bgateway.com/upload/documents/Busines
s_Plan_Template.doc
• Template of a business plan

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 Useful links and resources…

• www.enterprise-ireland.ie
– general
• http://www.startups.co.uk/default.aspx
– click Business Planning, Business Plan Guidelines, for steps to
follow in drafting a plan
• http://www.bizhelp24.com/business_start_up/business_p
lan.htm
– example of a business plan
• http://www.anbusiness.com/business_advice/start_up_a
dvice/take_first_steps.shtml
– advice on creating a business plan

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 Assignment #1A - Recap

• Create a Business Review

– a Business Review on an information technology
product/service used in the service sector in Ireland
– business strategy, organisation structure, operations
strategy, competitive environment, and key
technology.
• Clear roles for each group member
• Group reflection

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 Further References
(not required reading)
• Brazeal, D. V., & Herbert, T. (1999), “The
genesis of entrepreneurship”, Entrepreneurship
Theory and Practice, 23(3), 29-45.
• Bull, I., & Willard, G.E. (1993), “Towards a
theory of entrepreneurship”, Journal of Business
Venturing, 8(3), 183-195.
• Covin, J.G. & Slevin, O.P. (1989), “Strategic
management of small firms in hostile and benign
environments”, Strategic Management Journal,
lO (January), 75-87.

3BA6 Computers and Society