PRESENTATION

TOPIC : A Model for New Ventures

MEMBERS : Akash Hassan (36)

Fahad Rashid (38)
Ali Asghar(33)
Ali Azmat(20)

PRESENTED TO : Sir Kashif Ammar

PROGRAM : BS-COMMERCE 6th REG.

 OBJECTIVES

A planning paradigm for new ventures

Four stages of growth model.

Fundamentals of a good feasibility plan.

Major components of feasibility plan.

Planning responsibilities and ways in which entrepreneurs get

assistance.
 INTRODUCTION:

A paradigm, a general pattern of how to progress from an abstract idea to

achieving sustained sales. This chapter provides a paradigm in which the
sequence of activities starts with the initial idea and ends with an
established enterprise positioned for growth.

The model, or paradigm, encompasses a feasibility plan. This is a

pragmatic business plan reflecting the philosophy that entrepreneurs
should do the planning necessary to ensure the feasibility of a venture
without becoming overwhelmed in the process.
THE CONCEPT OF A PLANNING PARADIGM:

Karl H. Vesper, a prominent entrepreneurship educator, identifies roughly

six core models outlining the venture creation process, which collectively
suggest over 100 possible sequences for launching a business—each
adaptable to a venture’s specific context. He emphasizes that
entrepreneurs should view any model as a flexible framework, not a rigid
checklist, as illustrated by two founders who launched successful
businesses through entirely different steps.
 H ROSS PEROT:

H. Ross Perot, dubbed the "Cowboy Capitalist," founded Electronic Data

Systems (EDS) in 1962 with a visionary idea: integrating computer systems via
telecommunications for global operations. At the time, key technologies like
microcomputers and telecommunication software were undeveloped,
making his concept revolutionary. Starting with office systems, EDS expanded
incrementally to factory controls and enterprise-wide solutions. Perot
prioritized hiring top talent, strategic long-term planning, and market
research, ensuring EDS stayed ahead of trends. Sold to General Motors in
1984, EDS became a corporate powerhouse. Perot later launched Perot
Systems, again targeting future innovations with a century-spanning vision.
 MICHAEL DELL :

In contrast to Perot, Michael Dell began as a 20-year-old premed student

who transformed a hunch into Dell Computer Corporation, a billion-dollar
venture. While selling IBM PCs part-time, he noticed exorbitant price
markups and envisioned affordable clones. Testing his idea, he built a low-
cost PC in his dorm from mail-order parts, selling units to friends before
scaling via phone orders. Explosive demand turned his dorm operation into
a direct-sales organization. Initially reactive, planning later formalized to
manage purchasing and nationwide distribution, driven by rapid growth.
Despite evolving strategies, Dell retained its core: direct sales and budget-
friendly clones, reaching over $200 million in revenue.
 CONCLUSION

H. Ross Perot and Michael Dell built successful businesses in totally

different ways—Perot trusted his gut, while Dell tested ideas step by step.
There’s no “right” method: too much planning might have slowed Dell
down or sped him up, and relying only on instinct could have hurt Perot.
But both ended up following a natural flow of steps, now called the four-
step growth model. This model isn’t a strict rulebook—it just shows
common patterns that can lead to success, proving every business journey
is unique.
 THE FOUR-STAGE GROWTH MODEL

The four-stage growth model consists of categories of distinct activities

essential for a new venture to progress from an idea to a substantial
enterprise.
Pre-start-up stage

 Start-up stage

 Early growth stage

Later growth stage

Pre-start-up stage

The period during which entrepreneurs plan the venture and do the
preliminary work of obtaining resources and getting organized prior to
start-up.
Business concept defined ;

What is the purpose of the venture?

What does the entrepreneur want to accomplish with the business?

Example (Steve kirsch)

Develop the concept for his electronic mouse in 1982.

Kirsch was a student working in a computer lab where three expensive
machines were all crippled because of mechanical mouse each machine used
was broken . He said that it was sad situation , “like having a Ferrari with only
three wheels on it .”
He had no preconceived notion of becoming an entrepreneur , but the idea.

Product-market study ;

Product research: Is the product or service feasible? Realistic?

Market research: Who will buy? Where are they? What niche? What
competitors exist?
Financial planning ;

Financial projections: What cash is needed? How will income be

generated? What expenses are expected? What is invested? Borrowed?
What is needed to meet operating requirements?

Pre-start-up implementation ;
Getting ready to start: The entrepreneur must find resources, purchase
beginning inventory, hire those needed at start-up, and obtain necessary
licenses, permits, leases, facilities, and equipment.
Pre-start-up implementation
For Example : ( Olympic sprinter preparing for race)
the sprinter, like the entrepreneur , plans ,trains, develop strategies, and
get physically and mentally prepared for run. Like the sprinter , an
entrepreneur must commit to action and do certain things before the
event.

Start-up stage

The initial period of business when the entrepreneur must position the
venture in a market and make necessary adjustments to assure survival
Start-up Operating Objectives
 Sales;
• To attain monthly sales volume as projected at prices projected in
feasibility plan.
 Revenue;
• To achieve cash flow within budget based on sale volume and price
projections.
 Growth;
• To realize incremental growth within seasonal pattern of forecasts.
 Position;
• To solidity a long-term position in appropriate markets as a result of
adaptation during start-up.
 Early growth stage

A period of often rapid development and growth when the venture may undergo major
changes in markets. finances, and resource utilizations.
Early Growth Stage Continuum

 Very slow;
Sales increase slowly because of the nature of the product or the limited market
 Perceived comfort zone;
Incremental growth is within a comfort zone of the venture's resources and owner's
profit objectives
 Very rapid;
Sales increase rapidly as new products gain wide acceptance in new markets
Later growth stage
The evolution of a venture into a large company with active competitors in
an established industry when professional management may be more
important than entrepreneurial verve.
Example
A few ventures become large without losing control or going public .
One of the most interesting companies is Mrs. fields cookies , a company
started in 1978 by Debbi Fields at the age of 22 , and now jointly operated
by Debbi and randy fields . Their business has more than 500 stores
spanning five countries and grosses $100 million annually . The business is
not franchised ; all stores are owned by the company , which is managed
by the staff of about 120 people .
Fundamentals of a feasibility plan

A feasibility plan encompasses the full range of business planning

activities, but it seldom requires the depth of research or detail expected
for an established enterprise
Every new business is unique. Each will have something that sets it apart
from others, even if it is no more than the personality of an entrepreneur.
For that reason, no plan is going to provide an absolute prescription for
success. A feasibility plan is an outline of potential issues to address and a
set of guidelines to help.
Developing a Good Plan
A strong plan is concise, error-free, and fact-driven, clearly outlining products,
services, markets, and founders. Avoid hyperbole (e.g., “This can’t miss!”) or vague
claims (e.g., “We believe…”). Instead, use data to validate assertions. Focus on
readability and accuracy—eliminate typos, grammar issues, and flawed data.

Protecting the Business

Include a nondisclosure statement on the cover to safeguard sensitive information.
Number each copy and require signatures to track distribution. While not foolproof,
this deters idea theft and formalizes confidentiality expectations.

Making the Plan Readable

Keep plans concise—ideally under 20 pages for simple concepts, longer only if
necessary (e.g., complex ventures). Investors often skim, so prioritize clarity upfront.
Highlight compelling financials and key insights early to retain attention.
THE FEASIBILITY PLAN
The composite feasibility plan presented is this section was developed by
comparing 26 different published versions. All of the plans included right
common elements that are contained in the feasibility model
summarized as follows. This model is generally adaptable to most types
of new ventures.

1. Executive Summary
The opening section, called the executive summary, is a synopsis of the
proposed enterprise. It is the "tickler that either captures an investor's
interest or kills all incentive to read further. Usually no longer than three
pages, it addresses five subjects noted in
Six Key Elements in the Executive Summary

 Venture defined
Describe the purpose and nature of the business

Product or service
Describe the product or service to be sold

 Market characteristics
Describe market size and location, and customers
Entrepreneurial team
Describe the founders, key people, and their roles

 Financial summary
Describe estimates of revenue and expenses, founder's egory, debt, and capital
needed.

2. Business Description
Following the executive summary, the plan details each major topic, starting
with a comprehensive business description. This section expands on the
executive summary, offering deeper insights into the company’s origins, such as
its evolution from prior ventures or an individual’s long-term development of an
innovative product. For example, it goes beyond stating the business’s name and
founding purpose to outline key milestones that led to its establishment.
3. Products and Services
This section clarifies the product or service concept. While some plans
prioritize market analysis, the product/service must be clearly defined
first, particularly for complex offerings. Simpler concepts (e.g., a specialty
clothing store) may warrant a brief overview early in the plan. Regardless
of structure, ensure the description is thorough in both the executive
summary and business sections before addressing marketing strategies.
4. Market Research and Analysis
The objective of market research and analysis is to establish that a
market exists for the proposed venture. This may be the most difficult
part of the plan, but it also may be the most important. Entrepreneurs
must provide a credible summary of potential customers, markets,
competitors, and assumptions about pricing, promotion, and distribution.
 Market Research and Analysis Activities
• Identify potential customers
 Demographic profile of customers
Characteristics of customers, age, sex, income, etc.
Buying habits and relevant information for new venture

• Evaluate markets
Future markets and trends or changes
Window of business opportunity
Niche position information
• Analyze competitors
Existing competitors with similar products or services
Future competitors and ease of entry
Industry structure

• Describe assumptions
Market niche for positioning firm
Pricing approach used in plan
Distribution or method of making a market
5. The Market Plan
The market plan describes an entrepreneur's intended strategy. It builds on
market research and distinct characteristics of the business to explain how
the venture will succeed. Some issues addressed in the research section may
be reserved for the market plan, such as describing a market niche. This
section usually focuses on specific marketing activities. It describes pricing
policies, quality image, warranty policies, promotional programs,
distribution channels, and other issues such as service-after-sale and
marketing responsibility.
Elements of the Marketing Plan
 Product or service
Quality and reliability, and how the product or service will be positioned in
growth markets.
 Pricing system
Pricing methods discounts quantities and bulkprices, methods to set prices.
Promotional mix
Strategy of combining appropriate uses of public relations, advertising,
displays, events, demonstrations, personal sales.
 Distribution Channels
Use of martial channels including retail, wholesale ,telemarketing,
personal sales representatives, or other approaches.
 Services and warranties
description of service after sale policies, repair services, guarantees and
product warranties
 Marketing leadership
define leadership roles , persons responsible for marketing and sales .
6. Manufacturing or Operations Plan
Depending on the nature of the business or operations plan may not be
required. Many small businesses that offer personal services will have little
to say about operations and nothing to say about manufacturing. For
vestures that manufacture, design, or sell products.
Elements
Facilities
Inventory
Human resources
Operations
Other issues
7. Leadership – The Entrepreneurial Team

Investors prioritize the entrepreneurial team over the business concept,

often favoring an “A team with a B product” over the reverse. Highlight the
team’s strengths, past successes, and roles in the venture. Include brief
résumés of key members and clarify contributions, even for
advisors/investors not directly involved in operations.

8. Financial Documentation

Financial projections (pro formats) must align with earlier operational and
market assumptions. Inaccurate data complicates this process. Essential
documents include:
Income statement: Revenue, costs, and net income.

Cash-flow budget: Adjusted for credit terms, non-cash expenses (e.g.,

depreciation), and external capital.

Balance sheet: Assets vs. liabilities.

Break-even analysis: Timeline to profitability.

Ensure clarity : investors scrutinize these to assess viability.

Responsibility for Business Planning

Entrepreneurs hold ultimate responsibility for business planning, as they possess the
deepest knowledge and vision for their venture. While external support—such as
consulting firms (e.g., Ernst & Young), university entrepreneurship centers, or agencies
like the Small Business Administration—can aid in planning, outsiders cannot replicate
the founder’s motivation or strategic clarity.
Despite its value, many entrepreneurs avoid drafting a plan. Yet a well-crafted plan is
critical: it attracts investors, serves as a roadmap for success, and acts as a powerful
marketing tool to announce the venture’s launch. It also provides a structured
framework for decisions, goals, and key actions.
While entrepreneurs must lead the planning process, collaboration strengthens the final
product. Plans should remain adaptable, evolving as a practical, logical blueprint rather
than a rigid document. Flexibility ensures relevance as the venture grows and
circumstances shift.