goals
- Understand and be in the possibility to develop a business, knowing the environment within which they operate and what aspects must be taken into consideration to create it. Know the aspects in the environment that decisively influence its permanence over time.
Thematic Content
- Nature or idea of the business project. Market study. Technical study. Economic and financial study. Risks and continence strategies.
Nature or idea of the business project.
- It is important to have a long-term vision of what you want to do in that business. Determine:
The objective of creating it or, if it were the case, the reason for trying to expand it.
Ask yourself the following questions:
- Do I have a well-defined product or service that I intend to generate? Do I know the niche that I intend to access? Do I have experience and knowledge on how to market and manage it? Have I analyzed its viability?
Nature or idea of the business project.
- Common causes that prevent success
- People have no idea what it really means to have a business. They do not have enough experience in the business field they are starting. Sometimes they do it because their uncle or friend is doing well, and they think that things will turn out well for them, even though they don't know anything about the product or service they are going to offer. knowledge and experience, or rather, they are "poorly advised" They rush to start because they allow themselves to be pressured by someone, such as the one who is going to lease the premises to them or who is selling them the equipment or a franchise. They do not have and do not calculate the money necessary to start and sustain the business.
Nature or idea of the business project.
- Common causes that prevent success
- They do not have money to live personally. They do not generate or have the money for an advertising budget. They believe that by opening the door people are going to snatch products or services; Or think that with 1,000 flyers that they distribute, 300 people will come running to request their services or buy their products. They overestimate sales and underestimate or miscalculate expenses. They do not do a real investigation. They look over the information related to the business and do not prepare for example, to make a market analysis regarding their good or service.
Nature or idea of the business project.
- Common causes that prevent success
- They don't want to pay accountants, lawyers or business consultants, true business and tax experts (with all due respect not even all accountants really know about business taxes) and then they end up in trouble. Have you heard about “Cheap is expensive?” Societies are underestimated. Unfortunately the vast majority of these do not work as expected; It does not matter if it is between family or friends, if they do not have the same values, beliefs and do not establish the rules of the game very clearly, and they have not drawn up a contract between partners, sooner or later the problems and differences will begin and then the final rupture will occur..
Source: SAPOROSI, Gerardo. Business clinic. A step-by-step methodology for developing and monitoring a business plan. Macchi Editions, 1997. Page 43
Market study.
- According to Porter's analysis, frequently used to study the microenvironment of the organization, there are 5 forces that influence a company's competitive strategy and determine the long-term profitability consequences of a market or industrial sector.
1. Threat of entry of new competitors.
2. The rivalry between the competitors. It will be more difficult for an organization to compete in a market where competitors are very well positioned, 3. Bargaining power of suppliers. A market or market segment will not be attractive when suppliers are very well organized by union.
4. Bargaining power of the buyers. A market will not be attractive when customers are very well organized
5. Threat of entry of substitute products. A market is not attractive if there are actual or potential substitute products.
Generic strategy matrix
The Michael Porter generic strategy matrix is one of the most used to determine the strategy to be followed by the organization for a specific business.
- Cost leadership: it is about staying competitive by outperforming the competition in cost. The cost advantage can be reflected in lower prices or it can be used to reinvest the additional income in the business. Differentiation: This is the most common strategy when the need to diversify the offer of products or services arises. It consists of creating a value on the product offered so that it is perceived in the market as unique. Approach: Currently, this is the most frequent strategy for creating new businesses. It recognizes that there are a lot of opportunities in the market for a specialized product and service offering. Developing a focus strategy involves identifying a market niche that has not yet been exploited.
Technical study.
- Intention of the study. Verify the technical possibility of producing the defined good or service. This implies defining the size of the business, its process, location, facilities and the organization of the business that we want to tackle. Developing a product requires materials, elements or parts, these are known as raw materials, you must calculate how much raw material you need to make certain amount of product and determine if you can access it. Determination of the size of the business.
Specify the real capacity to produce goods or services that the business must have per unit of time; also known as installed capacity.
- Geographic location. Commonly a business starts in premises available from the entrepreneur, either because he allocates part of his home to the company or because he has a premises. This occasionally constitutes a determining factor for the proper operation of the business.
Economic and Financial Study.
- Businesses can develop and survive only if they generate profits. It is therefore required from the projection stage of the same to establish the essential resources for it to function properly, estimate its expected income and productivity parameters that respond to the level of activity to be organized. The economic-financial analysis must evaluate both economic feasibility and the financial, and may even contain possible alternatives to exit the business in the event that it fails. In short, when we find ourselves without money in our pocket we are with a "financial problem" but we do not necessarily have an "economic problem" since we still have knowledge or physical strength that we can use to generate more income. Similarly,A company that finds itself with liquidity problems does not necessarily have “economic problems” since it could still have productive assets (machinery, human resources, product inventory, etc.) with which to generate more income in the future. In this study, the following information should be determined:
Balance and projected income statement.
Working capital required in the operation.
Economic balance point.
Available financing sources and interest rates. Currency to use.
Interest rate type (fixed, variable)
Inflationary and devaluation trends.
Contingency.
Risks; Risks can arise unexpectedly at any time, mainly interfering in the planning of activities, so everything possible must be done so that the impact of a certain negative event is minimal, being able to manage it appropriately through a contingency plan.
- Three types of risks could be differentiated:
The own of the market.
Technicians.
The intrinsics of the project itself.
- Own market risks:
Lower than expected growth in the economy.
Sector-specific uncertainty.
Higher costs than expected.
Devaluation, excessive inflation.
Increases in interest rates.
Others.
- Technical risks:
Lack or shortage of raw materials, including their cost.
Increases in labor, in the payment of taxes.
Damage to facilities, ecological disasters.
Strikes and social events.
Others.
- Own business risks:
Unexpected entry of substitute products.
Loss of customer interest in the business. - Family deaths, - Inadequate administration.
Others.
Contingency strategies.
- In every Business Plan it is necessary to include a chapter in which possible contingency strategies are included in case the business does not reach the planned objectives. Some of the most common contingency strategies may be:
Alliance with some other business to complement effectiveness.
Total or partial sale of the business.
Acquisition of franchises or patents to reinforce or reorient the business.
Selling the customer base.
Change of turn taking advantage of strategic location or new potential opportunities.
Others.
- The contingency plan must be aimed at detecting possible risks that could cause the project to fail if they are not faced correctly.
