Start-Up
Meyer—Abrams
Wk1—Accomplishment 1--1
Accomplishment #1: Clarify your Business Concept
Tasks
Identify you personal goals
Spell out your business values
Remind yourself of you source of inspiration
Describe your business concept
Decide whether you want partners
Decide whether you want investors
Consider potential exit strategies
Discuss the impact of starting a business with your
family
Identify your strategic position
You need a vision of what you hope you’ll achieve
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Identify you personal goals:
FOUR C’S:
CREATIVITY, CONTROL, CHALLENGE & CASH
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SPELL OUT YOUR BUSINESS VALUES—How our business will impact others: employees, customers,
the environment, our community (stakeholders).
Incorporate your own values into your business.
Do not impose your personal beliefs (especially religious or political beliefs on others.)
Remind yourself of your source of inspiration.
Thinking about your role models can help you clarify your own business vision.
My “Bright Idea”
What excites you about your business idea? If you have more than one idea, what do you like
best about each one?
Describe your business concept
Meeting needs is a basis of all business.
Thomas Edison said, “Anything that won’t sell, I won’t invent.”
A concepts success often hinges on whether it does something newer or better than anyone else.
Being new of better can take many forms:
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Something new
Something better
An underserved market—a market where there is a greater demand than competitors can
currently satisfy, and un-served location. Or a small part of an overall market…..
New delivery system or distribution channel—e-commerce, for example.
Increased integration—when a product is both manufactured and sold by the same company.
Or when a company offers more services or products in one location.
Identify your strategic plan
Strategic position can be based on:
 Serving a specific niche in the market
 Unique features of your product or service
 Exceptional customer service
 Price
Start-Up
Meyer—Abrams
Wk1—Accomplishment 1--2
Convenience, or
Anything that significantly distinguishes you from others who offer similar services or
products.
Decide whether you want partners
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Great partners often make good companies, but bad partnerships can destroy good companies.
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Sears & Roebuck
Hewlett & Packard
Ben & Jerry’s
Make certain your expectations of what you will get out of the partnership are realistic:
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Will they work as hard as you?
Do they bring the same level of talent and skill? (It may be in a different area)
Do they have the same long-term view of where they want to be?
Are they honest?
Examine their personal attitudes:
How do they handle stress?
How much money do they need to make and how soon?
What are their family and other demands on their time?
Any other issues that will affect you working relationship.
Decide whether you want investors
“It’s great to start a business using OPM—Other People’s money.”
They legally own a piece of your business and they have certain rights under the law.
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A right to share in profits
A right to share in losses for tax purposes
Having investors makes everything much more complicated….
When checking out prospective investors, what are their financial and business
motivations for investing?
 Are their goals a good fit with your own?
 How much control do they want?
Consider potential EXIT strategies
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Exit Plan – a long-term strategy for transferring you company to others.
Why do this? If you are looking for an investor, they’ll want to know your long-term goals and
will ask you to spell out an exit strategy. They will want to know how they will get their money
back.
Start-Up
Meyer—Abrams
Wk1—Accomplishment 1--3
Ways to exit your company or have the value become liquid:
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1—SELL—often the simplest way to get out.
2—BE ACQUIRED
3—MERGE—similar to being acquired but the assets of the merging companies form a new entity
4—GO PUBLIC—(IPO—Initial Public Offering)
5—Have family members take over—Example—Levi Strauss—You might like this to happen, but
family members might not wanto to or be capable of running the company.
6—EMPLOYEE BUY-OUT—ESOP—Employee Stock Ownership Plan—can help the employees
finance the purchase and give you the cash you need
7—GO OUT OF BUSINESS—Easiest exit; if you have not debt or major employee commitments;
but you get the least financial reward. Sometimes you just want to close up shop and get on with
the rest of your life.
Discuss the impact of starting a business with your family
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Financial sacrifices
Less time for them
More things on your mind
Legal/tax implications for spouse
Be careful of asking for loans and investments…Always have papers drawn up—loan or investment
papers.
Make an appointment with the SBDC (Small Business Development Center) counselor—over 1000
locations—primarily @ universities and community colleges.
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The offer free one-on-one counseling
Low cost training programs to small business and start-up entrepreneurs
Serve over 600,000 small businesses each year in face to face counseling and training
Another 750,000 businesses turn to them for information, resources and call-in
assistance each year.
Been in business for more then 20 years.