Teaching entrepreneurship

Teaching Entrepreneurship“Building a Successful Business Plan”

N.A.F. Institute for Staff Development Orlando, FL., July 10th, 2008

Presenter:Stephen J. Rocco

Smithfield High School, Smithfield, RI

04/07/23 NAF Staff Dev. July, 08

2

Handouts

• Session Evaluation Forms

• Course Syllabus

• Presentation Handouts

• Career Cluster Survey

• Ethics Activity


3

Agenda

• Handouts

• Introductions – About Me

• About Our Academy

• Course Structure ActivityQuarter 1Quarter 2

• Closing/Questions

• Evaluation Forms

10:0010:0210:05

10:1010:1510:2510:55

11:00


4

About Me• Academy Director and Teacher. B.S.S. Degree in

Economics and Business from Cornell College in Iowa. Teaching Certificate in Business Education from Johnson & Wales University in Providence, RI. Self-Employed for 28 years, teaching for six. Father of three children, 17-23 years old. E-portfolio development is a hobby that I just turned into a business ezeport.com.

http://www.ezeport.com/


5

Agenda

• Handouts






10:0010:0210:05

10:1010:1510:2510:55

11:00


6

About Our Academy – http://www.shsaof.org • Smithfield High School is a comprehensive high

school of about 850 enrollment. Located 10 miles NW of Providence, RI. Home of Bryant University, and a regional Fidelity Investments Branch. We have 70-75 students in our program. *Goal of 80-85.

• Four Business Ed. Faculty Members.• Annual Budget

$2K Director’s Stipend - district $1K NAF License Fee – district $3K in P.D. Expense Funds - district $3K Citigroup Grant each February. Annual Golf Tournament in late June raises approx. $2,500-

$4,500.

http://www.shsaof.org/




7

About Our Academy • Support of School Committee, District and

Building Administrators back our program. Why? Publicity! Articulation Agreements. 100% Post-Secondary Enrollment. Networking.

• Active Advisory Board – Local politicians, business and community leaders, student member, and alumni. We also involve R.I. General Treasurer and State Auditor General.

• We Promote student leadership, community involvement, student accountability, responsibility, family, and life-long relationships.


8

About Our Academy • Success Comes from Extra Effort

1. Keep Class Enrollments High 2. Work Longer Hours after School 3. Faculty Work as a Team 4. “Promote-Promote-Promote”5. VITA, Junior Achievement, School Store6. Attend Bryant or Fidelity Functions7. Attend Community Functions8. Connect with Senior Citizens9. Attend School Committee Meetings

Entrepreneurial Actions Create Job Security . . .

…“Through the Back Door!”


9

Agenda

• Handouts






10:0010:0210:05

10:1010:1510:2510:55

11:00


10

Before We BeginWe Recognize Diversity

We recognize:• Differences in students.

Applied, Mixed, College Bound

• Differences in learning styles

• Differences in socio-economic standing

• Differences in available technology

• Differences in monetary resources

• Various district and school constraints


11

Before We BeginProficiencies Achieved• Reading• Writing• Math Computation• Math Problem Solving• Oral Presentation• Independent and Cooperative Learning • Technology

MS Word, Excel, PowerPoint Internet Research

• Global Awareness


12

Class Format Home - Syllabus

Quarter 1 – nine weeks

Startup-Pre-Assess, etc.Introduce the End – The Business PlanChapter/Unit 1 What is Entrepreneurship?

Chapter/Unit 2 Your Potential as an EntrepreneurChapter/Unit 3 Recognizing OpportunityChapter/Unit 4 Global Opportunities

Chapter/Unit 5 Feasibility and Business Planning

---------- More on Building the Business Plan Chapter/Unit 6 Market AnalysisChapter/Unit 7 Types of OwnershipChapter/Unit 8 Legal Environment


Build the Plan•Resume Writing•Understanding Taxes•Bank Accounts & Cash Control

•Accounting•Financial Statements

•Create PowerPoint Presentation• Present to Class

http://www.lemoineandjames.com/gaap/index.html


13

Startup / Introduction• Standards

• Course Syllabus

• Rubrics

• Research and the Internet PPT

• Career Education Primer

• Introduce Teaching Entrepreneurship Bibles – • Entrepreneurship Online Resources• www.entrepreneur.com • Small Business Administration (SBA)• Service Corp of Retired Executives (SCORE)

http://www.nbea.org/curriculum/s_entrep.html

http://owl.english.purdue.edu/workshops/pp/Internet.ppt

http://www.sjrbiz.com/CareerEducation.htm

http://www.entrepreneur.com/

http://www.sba.gov/index.html

http://www.score.org/


14

Pre-Assess Schema Building Activities • Business Ethics Activities• Business Math Activities • Career Cluster Interest Survey • Skills Assessment• Entrepreneur Scavenger Hunt

• Differentiated Instruction: Create Stagger, or Flap Books for Notes, Vocabulary, etc. Develop some Pre-Knowledge Quizzes

http://mvp.cfee.org/en/selfassessskills.html


15

Introduce the End Introduce the Business Plan – A Blueprint for your business.

A document that describes a new business. Initially created forlenders and Investors to explain why the new business deserves thefinancial support. Chance for success is greater with a plan.

Business Plan - Examples

Business Plan Parts - Read Instructions• Title Page• I. Table of Contents• II. Executive Summary• III. General Company Description• IV. Products and Services• V. Marketing Plan• VI. Operational Plan• VII. Management and Organization• VIII. Personal Financial Statement• IX. Startup Expenses and Capitalization• X. Financial Plan• XI. Appendices• XII. Refining the Plan

http://www.ezeport.com/Entrepreneurship/Resources.htm#Business_Plan_Examples_


16

Chapter/Unit 1 What is Entrepreneurship?

What is Entrepreneurship? – The act of organizing, managing, and assuming the risks of a business or enterprise.

Source -http://m-w.com

http://m-w.com/dictionary/entrepreneurship




17

• Entrepreneurship and the Economy. EconEdLink Economics - Making Choices, Needs and Wants Free Enterprise System Profit Motive Competition Goods and Services Factors of Production Scarcity Supply and Demand – EconEdLink Lesson –Babysitter Shortage in D.C. Factors of Production – Land, Labor, Entrepreneurship, Capital

• Contributions of Entrepreneurs? Video Biographies Articles Famous Entrepreneurs


http://www.econedlink.org/lessons

http://www.econedlink.org/lessons/index.cfm?lesson=EM8&page=teacher



18

• The Entrepreneurial Process. The Entrepreneur – Driving force The Environment - Variables The Opportunity – Idea + Market = Opportunity Start-Up Resources – Capital, Labor, Management

Expertise, Legal and Financial Advice, Facility, Equipment, and Customers

The New Venture Organization – All of the above come together to execute the new business.

• Success, Failure, Discontinuance



19

• Why be an Entrepreneur?• Case for Entrepreneurship - • In-Class Discussion Family Owned Businesses – Benefits,

Drawbacks

• Costs and Risks - EconEdLink

• Characteristics of Entrepreneurs Entrepreneur’s Dozen - Career Cluster Interest Survey - Skills Assessment

• Strengthening Characteristics –

• Developing Skills -

• SMART Goal Setting Checklist

• Group Project - “How to Start Your Own Business?”

Chapter/Unit 2 Your Potential as an Entrepreneur


http://mvp.cfee.org/en/selfassessskills.html

http://www.best-self-help-sites.com/smart-goals.html


20

Beginning the Entrepreneurial Process means…

…“taking the steps to recognize an opportunity and create a business for profit”.

1. Recognizing Opportunities Understanding Trends – Entrepreneur.com

• Home-based businesses• Technology focus• Fitness and Health• Ethnic Products• Indulgence (Specialty Goods)

Outsourcing – Private Label Packaging Strategic Alliances – Tape Producer/Tape Dispenser Manuf.

Chapter/Unit 3 Recognizing Opportunity

http://www.entrepreneur.com/


21

2. Learning to Recognize Opportunity Creativity is the activity that results in innovation Creativity requires you to be aware of your surroundings Look at the ordinary in a new way Find solutions for problems

3. Creative Sources of Ideas Watching People Watch for Demographic Changes – U.S. Census Bureau Read – Newspapers, Trade & Specialty magazines Consider your own experiences with work or hobbies Attend Trade Shows Internet Government Agencies


http://www.census.gov/econ/www


22

Starting vs. Buying a Business• Buying a Business

Family Business – Ups and Downs Franchises Others

• Where to Find a Business Networking Classifieds National Publications

• Questions to ask: Is the business interesting to me or others? Why is he selling? Is there potential for growth? Competition?



23

Starting vs. Buying a Business

• Starting a Business - Downside More Time and Effort to startup Prepare a Business Plan Initiate relationships with suppliers Set up distribution Establish name recognition

• Starting a Business - Upside Doing things your own way Avoid someone else’s mistakes Use your own fresh ideas and enthusiasm



24

Starting vs. Buying a Business

Questions to Ask Yourself Do I have the motivation to start from

nothing? Do I have sufficient knowledge of

operations? Do I have enough financial resources to

start from scratch?

* Entrepreneurs must constantly be on the lookout for opportunity - EconEdLink Lesson





25

Global EntrepreneurshipRecognizing our Global EconomyWhere are the Global Opportunities?

• Mini-Project on Imports and Exports - Respect for International Customs

• www.executiveplanet.comFinding the Foreign Markets

• EconEdLink Lesson• International Trade Data Network

Importing and Exporting

Chapter/Unit 4 Global Opportunities

http://www.executiveplanet.com/



http://www.itdn.net/newsfeed.html?d=newstop&f=finemkts


26

Feasibility and Business Planning

Got an Idea?• Feasibility Analysis: Testing an Opportunity

3 Step Process - • Idea > Business Concept (Statement) > Feasibility Analysis

• Developing a Business Concept Turn your Idea into a Business Concept, then test it by

asking four questions.1. What is the product of service being offered?2. Who is the customer?3. What is the benefit you would be providing?4. How will you get the product or service to the customer?

Using your answers write a Concept Statement.



27

• Testing the Concept in the Market

Feasibility Analysis: The process used to test a business concept. Is the business a practical idea?

Feasibility Analysis answers two questions.1. Are there customers who want what you have to

offer?2. What conditions must be present for you to go

forward with the business?

The analysis will show if there is enough demand for your product or service.



28

• Feasibility Analysis1. Testing Product or Service Requirements

• Uniqueness, Industry Trends, Barriers to Entry, Profit Margins

2. Talking to Customers• Determine your Target Market. Learn their needs.

3. Study the Competition• Create a Competitive Grid - . Organizes important

information about the competition. Read about them. Talk to their customers. Talk to them or their employees. Visit their place of business.

4. Look at Startup Resources – Calculate how much capital it will take to do the following:• Purchase or Lease Equipment and a Facility• Pay any employees you hire• Finish product development• Carry the company’s expenses until you have enough sales

for the business to be self- supporting and profitable.



29

• Feasibility Analysis Evaluating Results

• Information gathered from the feasibility study may not turn out to be favorable. If you determine that your idea cannot work, stop and pursue another idea.

• The MAIN advantage of conducting a feasibility study is that it allows you to test your idea with little risk.

• Simplified Analysis – SWOT Analysis

Will it work?... If so,



30

Let’s talk about The Business Plan!• A document that describes a new business. Initially

created for lenders and Investors to explain why the new business deserves financial support.

Why create a Business Plan? - Instructions• To obtain financing• To serve as a living guide to the business• To provide a startup blueprint

* 3 - C’s of Credit (Character, Capacity, Collateral)



31

The Business Plan conveys vision for the company• It forms The Main Concept you have for your business.

What it is, what it will become, and how you should run it.

Remember:1. Keep the vision broad enough to last through

changing times.2. If your vision changes when something happens,

then it’s not really a vision.3. Don’t confuse your vision with a mission. A mission

is an allotted or self- imposed duty or task.

Suggestions: Formulating a Business Plan involves a great deal of

research. Information from so many sources can be overwhelming.

There is no correct format. The plan can be long or short.

Anticipate your audience and accommodate them.



32

• Building the Business Plan


Gather information / data

Organize the data

Set up a notebook with a “chapter” for each feature

Write a draft

Revise, edit, correctGet feedback from others

Revise, edit, correct

Print the final draft


33

• Sources of Information / Data

Small Business Administration (SBA) Service Corp of Retired Executives (SCORE) Small Business Development Center U.S. Chamber of Commerce United States Census Bureau Our Entrepreneurship Site www.sjrbiz.info Personal Interview/Observations Local Chamber of Commerce Trade Associations (Industry Specific)

– Example: NRA


http://www.sba.gov/index.html

http://www.score.org/

http://www.risbdc.org/

http://www.uschamber.com/default

http://www.census.gov/econ/www

http://www.ezeport.com/NAF%20Institute/Resources.htm

http://www.sjrbiz.info/

http://www.restaurant.org/


34

Business Plan?... …Not Yet!There are a few more things

you need to know.

Ch./Unit 6 Market AnalysisCh./Unit 7 Types of Business OwnershipCh./Unit 8 Legal Environment -------- Cash Control


35

• Entrepreneurs must satisfy customers to be successful and make a profit. Performing a Market Analysis (Mind Map)

1. identifies customers and determines their buying habits (find out what they want)

2. Analyzes your field of endeavor or industry to rate your prospects for success

• Biz/Ed.co.uk - Market Analysis Lesson

• EconEdlink – What Does the Nation Consume

Chapter/Unit 6 Market Analysis

http://www.bized.co.uk/educators/16-19/business/marketing/presentation/analysismap.gif

http://www.bized.co.uk/educators/16-19/business/marketing/lesson/analysis.htm






36

• Identifying Customers

• Industry – collection of businesses with a common line of products or services Dow Jones

• Market – a group of people or companies with a demand for a product or service and an ability to buy it. A Target Market.

• Market Segmentation - break down customers into smaller groups by:– Geographics (region, state, country, city)– Demographics (age, gender, family size, income,

education, race, etc)– Psychographics (personality, opinions, lifestyle)– Buying Characteristics (knowledge of actual

goods or services) EconEdlink Lesson


http://averages.dowjones.com/mdsidx/index.cfm?event=showtotalMarketIndexData&perf=Historical%20Values

http://www.econedlink.org/lessons/index.cfm?lesson=EM58&page=activity3

http://www.econedlink.org/lessons/index.cfm?lesson=EM58&page=activity3


37

• Identifying Customers

Industrial Markets – Raw Materials Producers, Manufacturers, Wholesalers, etc.

Target Marketing - Specifies the market segment to which you will market your product or service

Create Customer Profiles – contain all the data about your potential customer• Who are my customers?• What do they generally buy and how do they hear about it?• How often do they buy it?• How can my business meet their needs?



38

• Market Research – Once you know who your customers are (your market), investigate the market to see what kind of products they will accept. 3 Types of Research

1. Exploratory – Government and Industry Publications, Interview experts in the field, focus groups.

2. Descriptive – Status of an item – characteristics of the potential customers through interviews, questionnaire, or observation

3. Historical – Trade Associations or Publications. Owners in similar businesses

• Eventually you will have another source of data from your own business operations if you are able to startup.



39

• Research Process – create a plan of attack in a five step process

1. Look at Information Needs – Survey your target market. Gather information about competitors. Do you provide a need they cannot meet?

2. Start with Secondary Resources - Information that has already been collected, easily obtained and inexpensive, Government and community organizations, trade publications, commercial research agencies

3. Collect Primary Data - Information collected and used for the first time, includes surveys, observations, and interviews



40

• Research Process – create a plan of attack in a five step process

4. Organize your data – After collection of primary and secondary data setup charts and record results in report form. Use the report for feasibility study and in your marketing plan

5. Analyze your data - Ask yourself some basic questions: 1. Is there a market for your product or service?2. How big is that market?3. Will the industry support a business like yours?

The answers to these questions will help you judge your potential for a successful business.

Lesson and Exercise – Marketing Research


http://www.bized.co.uk/educators/16-19/business/marketing/activity/research.htm


41

Industry Analysis Once you have identified your market analyze your

field of endeavor or industry to rate your prospects for success (Mind Map)

Those prospects for success will depend largely on two factors:1. Sales potential of your product2. Your competition

• Biz/Ed.co.uk - Market Analysis Lesson

• EconEdlink – What Does the Nation Consume









42

Your company and the industry• How will your product and service compare to others

in the industry? The answer, the projected or estimated figure is called SALES POTENTIAL.

• You can determine sales potential by considering three variables.

• The nature of your product• Industry Trends• Sources of supply



43

Your company and the industry• Barriers to entry. Keep new businesses from entering

an industry or succeeding in that industry. Examples of Barriers to entry:

– Economics of Scale– Brand Loyalty– Access to Distribution Channels– Proprietary Technology

• Study the competition – How can you capture your market share? Is there a “niche” for your product or service? What are their strengths and weaknesses? What do you have to offer that is unique?



44

3 Basic Business Organizations(Legal Forms of Ownership)

1. Sole-Proprietorship

2. Partnership

3. Corporation1. C-Corporation2. S-Corporation3. Non-Profit Corporation4. Limited Liability Partnership

Chapter/Unit 7 Types of Business Ownership


45

Sole-Proprietorship• Easiest• Most popular• Owner is the only one responsible for the

businesses activities• Nearly 76% of all businesses in the United States are

sole proprietorships Advantages of Sole-Proprietorship

• Does not need to share profits• Easy and inexpensive to create• Owner has complete authority

Disadvantages• Unlimited liability for all debts and actions of the

business• Debts must be paid from owners personal assets• Limited by its total reliance on the abilities and skills

of the owner• Death of the owner automatically dissolves the

business



46

Partnership Advantages

• Inexpensive to create• General partners have complete control• Partners care share ideas and secure investment capital

more easily Disadvantages

• Fragile entity• Difficult to dissolve one partner’s interest in the business

without dissolving the partnership• Partners are bound by the laws of agency meaning that

they can be held liable for each others actions

A partnership has the greatest chance of survival if you and your partner(s) do the following:• Share business responsibilities• Put things in writing• Always be honest about how the business is doing• Put together a well contrasted WRITTEN partnership

agreement



47

Corporation – creates a separate entity, investors own stock certificates to indicate shares owned and voting rights

Advantages• Limited liability protects owners from lawsuit• Protects owners from responsibility for

corporation’s debts (In small corporations banks will hold owners personally liable)

• Can set up pensions and retirement accounts and profit sharing

Disadvantages• Expensive and complex to setup• Higher corporate tax rates • Double taxation – investors must also pay income

tax on dividends when received



48

Patents, Trademarks & CopyrightsPermits and LicensesContractsBuilding Laws and Zoning CodesLeasingFDAOSHA Consumer Product Safety CommissionState or Local Health DepartmentDiscrimination and Fair Labor LawsUniform Commercial CodeTruth in LendingTruth in Advertising

Chapter/Unit 8 The Legal Environment


49

Agenda

• Handouts






10:0010:0210:05

10:1010:1510:2510:55

11:00


50

Business Plan?... …Now You’re Ready!

Let’s begin to create the Business Plan

Move on to 2nd Quarter


51

Class Format - Syllabus

Quarter 2 – nine weeks(Build the Plan)

Title PageI. Table of ContentsII. Executive SummaryIII. General Company DescriptionIV. Products and ServicesV. Marketing PlanVI. Operational PlanVII. Management and Organization• Resume WritingVIII. Personal Financial Statement


52

Class Format - Syllabus


IX. Startup Expenses and Capitalization X. Financial Plan

Understanding Taxes Bank Accounts & Cash Control Accounting Financial Statements

XI. AppendicesXII. Refining the Plan

XIII. Create PowerPoint PresentationXIV. Present to Class

•


53

• Parts of a Business Plan (Common)

1. Title Page - The Business Plan should convey an attractive, professional image to include:• Name of Company• The words “Business Plan”• The name of the contact person• Address and Phone number of the business

2. Table of Contents - Created by MS Word when using Headings

Constructing The Business Plan


54


3. Executive Summary – a brief recounting of key points. Investors and Lenders rely on the executive summary to help them decide if the concept interests them. It should be no more than 2 pages in length. *WRITE THIS LAST.

4. General Company Description – Mission Statement, Company Goals and Objectives, Company Philosophy, What is important to you. Describe your industry, your strengths and how you will be able to meet the challenges ahead. Discuss your legal form of organization. *This could be part of other sections.



55


5. Product / Service plan – Describe in depth your products or services. What factors will give you competitive advantages or disadvantages, like quality or proprietary features? Pricing structure?

6. Industry Market Analysis - (Mind Map)

7. Marketing plan – Most Comprehensive Piece. Discussion of Economy, Market Research, Product, Price, Place, Promotion (4P’s), Competitive Grid, Sales Forecasting




56


8. Operational Plan – Explain the daily operation of the business, its location, equipment, people, processes, and surrounding environment. Location, Legal Environment, Credit Policies, Inventory, Suppliers, Personnel Requirements, Managing A/R and A/P Accounting Tutorial

9. Management & Organization plan - Who will manage the business on a day-to-day basis? Create an organizational chart for key employees. List Professional or Advisory Support.

Resume Writing PPT - Resume Template


http://www.lemoineandjames.com/gaap/index.html


57


10.Personal Financial Statement - Include one (Example) for each owner and major stockholder, showing assets and liabilities and personal net worth. Bankers and investors usually want this information as well.

11.Startup Expenses and Capitalization - It’s important to estimate these expenses accurately and then to plan where you will get sufficient capital. This is a research project, and the more thorough your research efforts, the less chance that you will leave out important expenses or underestimate them.

*Expenses won’t stop even if you aren’t making a sale.



58

• Parts of a Business Plan (Common)12. Financial plan & Growth Plan - The financial plan consists

of a 12-month profit and loss projection, a four-year profit and loss projection (optional), a cash-flow projection, a projected balance sheet, and a break-even calculation. Together they constitute a reasonable estimate of your company's financial future. More important, the process of thinking through the financial plan will improve your insight into the inner financial workings of your company.

Financial Statement Overview PPT -Financial Statement Analysis PPT - Financial Statement Tutorial & Exercises - Cash Control Presentation - Understanding Taxes – IRS


http://www.irs.gov/app/understandingTaxes/index.jsp


59


13.Appendices /Supporting Documents - This is where brochures, diagrams, contracts, graphs, blueprints, maps, etc. would be inserted.

Variations, Extras & Options Refinements to Plan Specific to Individual Needs



60

Business Plan Finished?

“Go For It”!

Did you correct all errors? Did you let someone else review your work? Did you revise and edit? Do you know your business? Are you prepared to make your pitch to the loan committee? Did you Create a PowerPoint presentation?

PowerPoint Tutorial Do you know what you are wearing for the presentation?


61

Important Extras Cash Control, Sales Taxes, Employment Taxes

Cash Control PresentationUnderstanding Taxes – IRS

Personal Financial Statements• Completed Example - • Simple Blank – • Comprehensive Blank –

Financial Statement Overview PPTFinancial Statement Analysis PPTFinancial Statement Exercises


62

Business Plan Variations

• Small Business WebQuest – Simplified Plan

• Computer Literacy Business Startup Project – for PowerPoint Instruction

• Student Work Examples• Compuforce PPT - Web Site• Diesel Energy Drink PPT - Web Site

Monopoly 3.lnk

Snack Bar Sim.lnk

C:\Program Files\Infogrames\Monopoly 3\Monopoly.exe

C:\Program Files\Snack Bar Sim\Snack Bar Sim.exe


63

Agenda

• Handouts






10:0010:0210:05

10:1010:1510:2510:55

11:00


64

Remember… Without Consistent Practice – Anything We Learn Is Like This …

• “The Five Minute University” http://lazowska.cs.washington.edu/scienceforum/tsld085.htm


65

Visit us at: www.shsaof.org

• Our Teaching Entrepreneurship Web Site www.ezeport.com/NAFInstitute/entrepreneurship.htm

• E-Portfolio Company www.ezeport.com

• Excellent Business Education Resources www.sjrbiz.info