Protecting Your Ideas
• Utility Patent – a grant from the Patent and
Trademark Office to the inventor of
product, giving the exclusive right to make,
use, or sell the invention for 20 years from
the date of
filing the patent application.
2-1
Ch. 2: Inside the Entrepreneurial Mind
Protecting Your Ideas
• Design Patent – a grant from the Patent
and Trademark Office to the inventor of a
new, original, or ornamental change to an
existing product that enhances it sales, the
right to make, use, or sell the product for
14 years from the date of
filing the patent application.
2-2
Ch. 2: Inside the Entrepreneurial Mind
Protecting Your Ideas
Utility Patents
are superior to
Design Patents
Patent Applications and Patents Issued
2-4
Ch. 2: Inside the Entrepreneurial Mind
The Six Steps to a Patent
6. File the patent application
5. Complete the patent application
4. Study search results
3. Search existing patents
2. Document the device
1. Establish the invention’s novelty
2-5
Ch. 2: Inside the Entrepreneurial Mind
Protecting Your Ideas
• Trademark – any distinctive word, symbol,
design, name, logo, slogan, or trade dress a
company uses to identify the origin of a
product or to distinguish it from other goods
on the market. ™ ®
• Servicemark – the same as a trademark except
that it identifies the source of a service rather
than a product. ℠ ®
2-6
Ch. 2: Inside the Entrepreneurial Mind
Protecting Your Ideas
• Copyright – an exclusive right that protects the
creators of original works of authorship such
as literary, dramatic, musical, and artistic
works.
• Copyrighted material is denoted by
the symbol ©.
2-7
Ch. 2: Inside the Entrepreneurial Mind
Protecting Intellectual Property
• The primary weapon an entrepreneur has to
protect patents, trademarks, and copyrights is
the legal system.
• Before engaging in a legal battle consider:
►Can the opponent afford to pay if you win?
►Do you expect to win enough to cover your legal
costs?
►Can you afford the loss of time, money, and
privacy involved?
2-8
Ch. 2: Inside the Entrepreneurial Mind
Characteristics of Patents, Trademarks,
and Copyrights
Ch. 2: Inside the Entrepreneurial Mind
2-9
Conclusion
• The creative process is a tenant of the
entrepreneurial experience.
• Success, and even survival itself, requires
entrepreneurs to tap their creativity.
• Creativity results in value, and value provides a
competitive advantage.
• Entrepreneurs protect their creative ideas with
patents, trademarks, servicemarks, and copyrights to
sustain a competitive edge.
Ch. 2: Inside the Entrepreneurial Mind
2 - 10
MANA 3325 – Thurburn
Lecture #4 Slides
Intellectual Capital Components
Human Capital – External
1. The people you know through networking.
2. Who you can call upon to provide resources from outside.
Human Capital – Internal
1. The people you have inside your company.
2. Their Creativity, Processes, Etc.
Structural Capital
1. Patents, Intellectual Property, Systems, Controls.
Customer Capital
1. Goodwill
2. Customers perception of Corporate Citizenship
MANA 3325 – Thurburn
Lecture #4 Slides
Vision vs Mission
Vision:
1. Why do we do what we do.
2. What will we be when we are a mature company.
Mission:
1. What business we are in.
2. Who we serve.
3. Where we are going.
MANA 3325 – Thurburn
Lecture #4 Slides
Competitive Advantages
Any aspect of how you operate your business
that is difficult for your competitors to copy and
which customers appreciate and respond to.
MANA 3325 – Thurburn
Lecture #4 Slides
Competitive Advantages
Any unique technology or process that is either
protected by a patent, copyright, or trademark
or which is difficult or impossible for a
competitor to duplicate.
MANA 3325 – Thurburn
Lecture #4 Slides
Competitive Advantages
Barriers to entry that restrict new competitors
from gaining a similar advantage.
MANA 3325 – Thurburn
Lecture #4 Slides
Competitive Advantages
Relationships with suppliers or distributors that
competitors are unable to duplicate, including
spokespersons and celebrity endorsements
MANA 3325 – Thurburn
Lecture #4 Slides
Strategic Management
Is crucial to building a successful business.
Involves developing a game plan to guide a
company as it strives to accomplish its mission,
goals, and objectives, and to keep it on its
desired course.
MANA 3325 – Thurburn
Lecture #4 Slides
Strategic Management and
Competitive Advantage
Developing a strategic plan is crucial to creating a
sustainable competitive advantage, the
aggregation of factors that sets a company apart
from its competitors and gives it a unique
position in the market that is superior to its
competition.
Example: Whole Foods
MANA 3325 – Thurburn
Lecture #4 Slides
Building a Competitive Advantage
Consider five aspects of a small company:
1.
Products they sell
2.
Service they provide
3.
Pricing they offer
4.
Way they sell
5.
Values to which they are committed
MANA 3325 – Thurburn
Lecture #4 Slides
Key: Core Competencies
Unique set of capabilities a company develops in key areas, such
as superior quality, customer service, innovation, team-building,
flexibility, responsiveness, and others that allow it to vault past
competitors.
They are what a company does best.
Best to rely on a natural advantage (often linked to a
company’s “smallness”).
Example: Pizza Fusion
MANA 3325 – Thurburn
Lecture #4 Slides
Building a Sustainable
Competitive Advantage
Capabilities
Lessons
learned
Core
competencies
Skills
Sustainable
competitive
advantage
Superior value
for customers
MANA 3325 – Thurburn
Lecture #4 Slides
Strategic Management Process
Step 1
Develop a vision and translate it into a
mission statement
Step 2
Assess strengths and weaknesses
Step 3
Scan environment for opportunities
and threats
Step 4
Identify key success factors
MANA 3325 – Thurburn
Lecture #4 Slides
Strategic Management Process
(continued)
Step 5
Analyze competition
Step 6
Create goals & objectives
Step 7
Formulate strategies
Step 8
Translate plans into actions
Step 9
Establish accurate controls
MANA 3325 – Thurburn
Lecture #4 Slides
Step 1: Develop a Vision and
Create a Mission Statement
Addresses question: “What business are we in?”
The mission is a written expression of how the
company will reflect an entrepreneur’s values,
beliefs, and vision – more than just “making
money.”
• Serves as a “strategic compass.”
Examples: Chick-fil-A, Google
MANA 3325 – Thurburn
Lecture #4 Slides
Step 1: Develop a Vision and
Create a Mission Statement
Elements of a mission statement:
Purpose of the company: What are we in
business to accomplish?
Business we are in: How are we going to
accomplish that purpose?
Values of the company: What principles and
beliefs form the foundation of the way we do
business?
MANA 3325 – Thurburn
Lecture #4 Slides
Step 2: Assess Company Strengths
and Weaknesses
Strengths
Positive internal factors a company can draw on
to accomplish its mission, goals, and objectives.
Weaknesses
Negative internal factors that inhibit a
company’s ability to accomplish its mission,
goals, and objectives.
MANA 3325 – Thurburn
Lecture #4 Slides
Strengths
1.
2.
3.
4.
5.
6.
7.
Loyal Customers
Special Skills
Special Knowledge
Superior Products
Positive Public Image
Employee Experience
Unique Suppliers
MANA 3325 – Thurburn
Lecture #4 Slides
Weaknesses
1.
2.
3.
4.
5.
Poor Location
Lack of Capital
Lack of Skilled Workers
Lack of Enough Workers
Business Model Obsolescence
MANA 3325 – Thurburn
Lecture #4 Slides
Step 3: Scan for Opportunities
and Threats
Opportunities
Positive external factors the company can
exploit to accomplish its mission, goals, and
objectives.
Threats
Negative external factors that inhibit the firm's
ability to accomplish its mission, goals, and
objectives.
MANA 3325 – Thurburn
Lecture #4 Slides
Threats
All of those that are listed in the book…
… also
1.
2.
3.
4.
Law Suits
Environmental Disasters
Loss of Key Individuals
Failure to Secure Funding in Future
MANA 3325 – Thurburn
Lecture #4 Slides
The Power of External Market Forces
Technological
Economic
Competitive
Political and
Regulatory
Social and
Demographic
MANA 3325 – Thurburn
Lecture #4 Slides
MANA 3325 – Thurburn
Lecture #4 Slides
Step 4: Identify
Key Success Factors
Key success factors (KSFs): factors that determine the
relative success of market participants.
The keys to unlocking the secrets of competing
successfully in a particular market segment.
Example: Five Guys Burgers and Fries
MANA 3325 – Thurburn
Lecture #4 Slides
Key Success Factors
• Industry Experience
• Experienced Management
• Sufficient Capital
• Good Location
• Quality Products
• Superior Customer Service
• Liberal Return Policy for Retailers
• Distribution Systems
• Internal Processes – tight controls over costs and quality
MANA 3325 – Thurburn
Lecture #4 Slides
Identifying Key Success Factors
List the skills, characteristics, and core competencies that
your business must possess
to be successful in its market segment.
Key Success Factor
How Your Company Rates
1.
Low 1 2 3 4 5 6 7 8 9 10 High
2.
Low 1 2 3 4 5 6 7 8 9 10 High
3.
Low 1 2 3 4 5 6 7 8 9 10 High
4.
Low 1 2 3 4 5 6 7 8 9 10 High
5.
Low 1 2 3 4 5 6 7 8 9 10 High
Conclusions:
MANA 3325 – Thurburn
Lecture #4 Slides
Step 5: Analyze Competitors
NFIB study: Small business owners believe they
operate in a highly competitive environment and the
level of competition is increasing.
Yet, 97 percent of all U.S. businesses do not
systematically track the progress of their key
competitors.
MANA 3325 – Thurburn
Lecture #4 Slides
Competitor Analysis
Direct competitors
1. Offer the same products and services
2. Customers often compare prices, features and deals among
these competitors when they shop
Significant competitors
1. Offer some of the same or similar products or services
2. Product or service lines overlap but not completely
Indirect competitors
1. Offer same or similar products in only a small number of
areas
MANA 3325 – Thurburn
Lecture #4 Slides
Step 5: Analyze Competitors
Analyzing key competitors allows an entrepreneur to:
1. Avoid surprises from existing competitors’ new strategies
and tactics.
2. Identify potential new competitors and the threats they
pose.
3. Improve reaction time to competitors’ actions.
4. Anticipate rivals’ next strategic moves.
MANA 3325 – Thurburn
Lecture #4 Slides
Step 5: Analyze Competitors
Techniques do not require unethical behavior:
1.
2.
3.
4.
5.
6.
7.
8.
Monitor industry and trade publications.
Talk to customers and suppliers.
Debrief employees, especially sales representatives and purchasing
agents.
Attend trade shows and conferences and study competitors’ sales
literature.
Watch for competitor’s employment ads.
Conduct patent searches for patents competitors have filed.
Get EPA reports for the factories of competing manufacturers.
Monitor direct competitors via social media
MANA 3325 – Thurburn
Lecture #4 Slides
Step 5: Analyze Competitors
(continued)
Techniques do not require unethical behavior:
1. Learn about the kinds of equipment and raw materials
competitors are importing from the Journal of Commerce
Port Import Export Reporting Service.
2. Buy competitors’ products and “benchmark” them.
3. Get competitors’ credit reports.
4. Check out the reports publicly-held competitors must file
with the SEC.
5. Investigate UCC reports.
6. Check out the resources in your local library.
7. Use the Internet to learn more about competitors.
8. Visit competing businesses to observe their operations.
MANA 3325 – Thurburn
Lecture #4 Slides
Competitive Profile Matrix
MANA 3325 – Thurburn
Lecture #4 Slides
Is Setting Goals & Objectives
Really Important?
“Would you tell me, please, which way I ought to go from
here?” said Alice.
“That depends a good deal on where you want to get
to,” said the Cheshire cat.
“I don’t much care where.…” said Alice.
‘Then it doesn’t matter which way you go,” said the cat.
- Lewis Carroll’s
Alice in Wonderland
MANA 3325 – Thurburn
Lecture #4 Slides
Goals vs Objectives
Goals:
• Long range … lets go to Miami
• General and/or Abstract… Lofty
Objectives:
• Specific targets… what route and where do we stay at night?
• Measurable… how many miles per day?
• Assignable… who drives which legs of the trip?
• Realistic/Challenging… make progress vs time to sleep.
• Timely… project the arrival in Miami accurately.
• Written… get everyone on board.
GO… SMART-W
MANA 3325 – Thurburn
Lecture #4 Slides
Step 7: Formulate Strategies
Strategy - a road map of the actions an
entrepreneur draws up to achieve a company’s
mission, goals, and objectives.
It is the company’s game plan for gaining a
competitive advantage.
MANA 3325 – Thurburn
Lecture #4 Slides
Strategic Options
Road Map… Route to take to Miami
Strategic Options:
1. Cost Leadership… Low Cost Leader…
• Walmart - Target
2. Differentiation… Unique Selection, Better Service, etc…
• Whole Foods
3. Focus… Niche Markets… smaller… specific…
• Natural Foods Grocery
Road Map – Walmart vs Whole Foods vs Natural Foods
Road Map – WWN
MANA 3325 – Thurburn
Lecture #4 Slides
Step 8 – Implement Action Plans
1.
2.
3.
4.
5.
Purpose: Why are we going to Miami?
Scope: Who is going?
Contribution: What is the benefit of going?
Resources: How many bags of potato chips will it take?
Timing: When do we leave?
PSCRT
MANA 3325 – Thurburn
Lecture #4 Slides
Step 9 - Establish Controls
• Financial: Does this make enough money to justify efforts?
• Internal Business: Are we implementing the right processes?
• Customers: Is our perception improving?
• Innovation: Are we innovating?
• Citizenship: Are we adding to society?
F-IB-C-I-C
MANA 3325 – Thurburn
Lecture #4 Slides
Business Models
Mo. 1
2
3
4
5
6
7
8
9
10
11
12
Tot
A
2
6
3
7
3
2
5
7
3
4
3
5
50
B
2
2
3
3
4
4
4
5
5
5
6
7
50
MANA 3325 – Thurburn
Lecture #4 Slides
Business Models
Mo. 1
2
3
4
5
6
7
8
9
10
11
12
Tot
A
2
6
3
7
3
2
5
7
3
4
3
5
50
B
2
2
3
3
4
4
4
5
5
5
6
7
50
@ 6 months
A = 23
B = 18
A = 28% more than B
MANA 3325 – Thurburn
Lecture #4 Slides
Business Models
14
12
10
8
Series2
Series1
6
4
2
0
1
2
3
4
5
6
7
8
9
10
11
12
MANA 3325 – Thurburn
Lecture #4 Slides
Business Models
14
12
10
8
6
4
2
0
1
2
3
4
5
6
7
8
9
10
11
12
MANA 3325 – Thurburn
Lecture #4 Slides
Business Models
Rev. Frequency
Recurring
Revenue
Non-Recurring
Revenue
Mo. / Qtr. / Yr.
> Yr.
MANA 3325 – Thurburn
Lecture #4 Slides
Business Models
Frequency
Recurring
Revenue
Non-Recurring
Revenue
Magazines
Grocery
Fuel
Attorneys
Mortgage
Realtors
MANA 3325 – Thurburn
Lecture #4 Slides
Business Models
Frequency
Recurring
Revenue
Hybrid
Recurring &
Non-Recurring
Non-Recurring
Revenue
Magazines
Grocery
Fuel
Recurring for a
Short Period of
Time
or
Periodic Fees +
Recurring
Attorneys
Mortgage
Realtors
MANA 3325 – Thurburn
Lecture #4 Slides
Business Models
Frequency
Recurring
Revenue
Hybrid
Recurring &
Non-Recurring
Non-Recurring
Revenue
Magazines
Grocery
Fuel
Insurance
Bus. Attorney Retainer
or
Stock Broker
Business Coaches
Attorneys
Mortgage
Realtors
Furniture
MANA 3325 – Thurburn
Lecture #4 Slides
Business Models
Clothing
Restaurants
Security Services
Home Theater & Electronics
Appliances
Home Improvements
Roofing Plumbing Electrical Repair
MANA 3325 – Thurburn
Lecture #4 Slides
Business Models
Rev. Frequency
Customer Profile
Value Proposition
Differentiation
Pricing
Selling Process
Distribution
Support
Recurring
Revenue
Non-Recurring
Revenue
Mo. / Qtr. / Yr.
> Yr.
MANA 3325 – Thurburn
Lecture #4 Slides
Feasibility Analysis
Industry & Market
Product & Service
Financial
MANA 3325 – Thurburn
Lecture #4 Slides
Intensity of
Rivalry
0
Low
Bargaining Power
Of Customers
0
Industry &
Market Feasibility
Five Forces Circle
5
5
5
High
5
5
Bargaining Power
Of Suppliers
0
0
Threat of Substitute
Products
Threat of New
0 Competitors
Industry &
Market Feasibility
Intensity of
Rivalry
0
Low
Five Forces Circle
Bargaining Power 0
Of Customers
5
5
5
High
5
5
Bargaining Power
Of Suppliers
0
FOOD TRUCK EXAMPLE
0
Threat of Substitute
Products
Threat of New
0 Competitors
Industry &
Market Feasibility
Intensity of
Rivalry
0
Low
Five Forces Circle
Bargaining Power 0
Of Customers
Five Forces Circle
5
5
5
High
5
5
Bargaining Power
Of Suppliers
0
Consignment
Clothing Retailer
Industry &
Market Feasibility
0
Threat of Substitute
Products
Threat of New
0 Competitors
MANA 3325 – Thurburn
Lecture #4 Slides
Five Forces Analysis
Food Truck
Neighborhood Style Mexican Restaurant
Pizza Franchise – Dominos
Steak House – High End
MANA 3325 – Thurburn
Lecture #4 Slides
Five Forces Analysis
Commercial Lawn Care Business
Moving Company
Clothing Store
Roofing Company
MANA 3325 – Thurburn
Lecture #4 Slides
Product or Service Feasibility
Primary Research – Most Valuable & Expensive:
• Customer Surveys
• Focus Groups
• Prototypes
• In-Home Trials
Secondary Research – Less Pertinent & Less
Expensive:
• Trade Associations
• Direct Mail Lists
• Demographic Data
• Census Data
• Market Research by Others
• Articles
• Local Data
• Internet
MANA 3325 – Thurburn
Lecture #4 Slides
Start here
Financial Feasibility
• Capital Requirements
Do we have enough cash to do it?
If not… can we raise the cash needed?
• Estimated Earnings
Does it generate enough cash to sustain itself?
• Return on Investment
Can we get a better return doing something
else for a lower risk?
MANA 3325 – Thurburn
Lecture #4 Slides
Should We?
Can We?
How Do We?
Did We?
Would We?
MANA 3325 – Thurburn
Lecture #4 Slides
Should We?
Does it fit our Vision and Mission?
Can We?
Do we have adequate resources?
Perform a Feasibility Analysis
How Do We?
Develop a Business Plan
Specify Objectives
Did We Achieve our Goals?
Implement the Business Plan
Measure Results
Would We Do It Again?
Do we pull the plug?
If so… When?
MANA 3325 – Thurburn
Lecture #4 Slides
The Business Plan
Why Make a Business Plan?
MANA 3325 – Thurburn
Lecture #4 Slides
The Business Plan
Good Planning Improves Results
Increase Probability of Successful Financing
Helps Prevent Mistakes… I wish we hadn’t !
MANA 3325 – Thurburn
Lecture #4 Slides
The Business Plan
Who is the Plan for?
• Yourself… essentials may be enough.
• Partners… more extensive
• Investors… most extensive
The More $$$ the More EXTENSIVE
MANA 3325 – Thurburn
Lecture #4 Slides
The Business Plan
• Company
• Strategy
• Marketing
• Implementation
• Projections
• Financing
MANA 3325 – Thurburn
Lecture #4 Slides
The Business Plan
• Company
• Title Page
• Table of Contents
• Exec Summary
• Vision & Missions
• History
• Industry Profile
• Products & Services
MANA 3325 – Thurburn
Lecture #4 Slides
The Business Plan
• Strategy
• Goals
• Objectives
• Business Strategy
MANA 3325 – Thurburn
Lecture #4 Slides
The Business Plan
• Marketing
• Marketing Strategy
• Marketing Research
• Customer Research
• Competitors Analysis
MANA 3325 – Thurburn
Lecture #4 Slides
The Business Plan
•Implementation
• Management Team
• Plan of Operations
MANA 3325 – Thurburn
Lecture #4 Slides
The Business Plan
•Projections
• Assumptions
• Projections
• Summary & Cash Flow
• Income Sources
• COG
• Expenses
• Payroll Detail
MANA 3325 – Thurburn
Lecture #4 Slides
The Business Plan
•Financing
• Loan Details if applicable
• Investor Details if applicable
MANA 3325 – Thurburn
Lecture #4 Slides
The Business Plan
The 5 Cs
Capital
Capacity
Collateral
Character
Conditions
MANA 3325 – Thurburn
Lecture #4 Slides
The Business Plan
The 5 Cs of Capital
Capital – Enough? and Balance of Debt vs Equity
Capacity – Cash Flow
Collateral – Liquid or Fixed Assets
Character – Creditor History
Conditions – Terms of Loan