BYU Merit Badge PowWow Entrepreneurship Merit Badge John Gilbert AddOptions.org

BYU Merit Badge PowWow

EntrepreneurshipEntrepreneurshipMerit BadgeMerit Badge

John Gilbert

AddOptions.org


The EntrepreneurThe Entrepreneur

• The entrepreneur is our visionary, the The entrepreneur is our visionary, the creator in each of us. We're born with that creator in each of us. We're born with that quality and it defines our lives as we quality and it defines our lives as we respond to what we see, hear, feel, and respond to what we see, hear, feel, and experience. It is developed, nurtured, and experience. It is developed, nurtured, and given space to flourish or is squelched, given space to flourish or is squelched, thwarted, without air or stimulation, and thwarted, without air or stimulation, and dies.dies. - Michael Gerber- Michael Gerber

Author of “The E-Myth Revisited” Author of “The E-Myth Revisited”

- Michael Gerber- Michael Gerber Author of “The E-Myth Revisited” Author of “The E-Myth Revisited”


EntrepreneurshipEntrepreneurship

• Entrepreneurship is Applied Scouting

• Know Yourself

• Opportunity Identification, Evaluation, and Execution: Ready – Fire – Aim

Requirement 1


Characteristics SkillsCharacteristics Skills

• Passionate• Faith

– In self– Others– Ideas

• Opportunity Focused• Want CONTROL• Innovative• Always Learning

– Reader

• Selling• Planning• Communication• Marketing• Interpersonal• Management• Personally Effective• Team Builder• Leadership

Requirement 1


Starting a BusinessStarting a Business

• Opportunity CostOpportunity Cost– Example: Quit your job to start your own Example: Quit your job to start your own

companycompany• Opportunity cost is your current salary Opportunity cost is your current salary

• RiskRisk– Financial lossFinancial loss– Livelihood of employeesLivelihood of employees

Requirement 1


• Entrepreneurship is not as RISKY as some would have you believe.– Myth – 90% of businesses fail in 5 years– Truth – 80% of Businesses Succeed

• You can systematically improve the probability of your succeeding as an entrepreneur

Requirement 1

Starting a BusinessStarting a Business


Roles and ContributionsRoles and Contributions

• Elephant, Mice, and Gazelles

• Economic Development– SME represent 99% of all employers and

provide 75% of all new jobs.

• Providing for People’s Needs & Wants

• Providing most innovations

Requirement 1


Opportunity IdentificationOpportunity Identification

• N-E-W-S

• Every Problem is an Opportunity– Find the angle– Pain, Pleasure

WOW

Requirement 3


Identifying OpportunitiesIdentifying Opportunities

• Opportunities exist all around us.Opportunities exist all around us.– Not all opportunities are worth pursuing.Not all opportunities are worth pursuing.

• Compile a list of possible opportunities.Compile a list of possible opportunities. • Do not evaluate opportunities until after Do not evaluate opportunities until after

compiling a list of possibilities.compiling a list of possibilities.

Requirement 3


Finding The OpportunitiesFinding The Opportunities& Reducing Pain& Reducing Pain

GettingGettingThrough & AroundThrough & Around

BarriersBarriers

New Ideas andCompetitive Angles

© 2002 COPYRIGHTGary K. Rhoads,

Steven Mack Covey Professor of Marketing

Entrepreneurship Entrepreneurship is building a new is building a new

boxbox

It’s not just thinking

outside the box

Requirement 3


Example

Royal Crown removedcaffeine

Adding fruit juice tosoda

“Locked my keys inmy car”

“Same old cereal”

Time-consumingoven cooking

Phone & MP3 player

Cereal substitute forcereal-avoiding teens

A healthy Popsicle

Healthy Breakfast

Nine methods for new product successNine methods for new product success

Method

1. Take something outof your product

2. Put something inyour product

3. Answer to consumergripes

4. Visible difference

5. Make the taskeasier

6. Use products in anew way

7. Productsubstitutability

8. Don’t be literal,be creative

9. Look overseas

Result

First decaffeinated cola

Slice

Warning bell, OnStar, Keyless Entry

Flavoring the O’s in Cheerios

Jet Stream Oven, Pre-cooked meals

iPhone

Total Breakfast Bars

Fruit Juice Bars / Longboard

Yoplait Yogurt© 2002 COPYRIGHT

Gary K. Rhoads, Steven Mack Covey Professor of Marketing

Requirement 3


How to Crap On Your Friends for $39.95(Plus Shipping and Handling)

With regard to time, here's the latest poop

© 2002 COPYRIGHTGary K. Rhoads,

Steven Mack Covey Professor of Marketing


Evaluating OpportunitiesEvaluating Opportunities

• Evaluate to determine whether an Evaluate to determine whether an opportunity is right for you.opportunity is right for you.– Have the interestHave the interest– Get the knowledgeGet the knowledge– Question yourselfQuestion yourself

Requirement 4


Feasibility StudiesFeasibility Studies

• Business– Technical (Good or Service)

– Market– Financial– Human Resources (Personnel)

Requirement 4


Technical FeasibilityTechnical Feasibility

• Good or Service– Simple– Observable– Understandable

Requirement 4


Target CustomerTarget Customer

• Who is the Perfect Client?

• How Many Clients Are There?

• Try to get a feel for…Try to get a feel for…– Whether they would be interested in your product.Whether they would be interested in your product.– How much they would pay for your product?How much they would pay for your product?– How much of your product are they willing to buy?How much of your product are they willing to buy?– Ideas that can improve your idea.Ideas that can improve your idea.

• If you have a prototype of your product If you have a prototype of your product you should show it to potential customers.you should show it to potential customers.


There are three levels of a product

1. Product or Service – What it is.

2. Features – What it has.

3. The Benefits – What does it do for my customer.

Product

Features

Benefits

Product/Service VisionProduct/Service Vision

What are we selling?What are we selling?

Requirement 4

Don’t Be A Feature CreatureDon’t Be A Feature Creature


CustomersCustomers

• Part of evaluating opportunities might include Part of evaluating opportunities might include interviewing potential customers.interviewing potential customers.

• Try to get a feel for…Try to get a feel for…– Whether they would be interested in your product.Whether they would be interested in your product.– How much they would pay for your product?How much they would pay for your product?– How much of your product are they willing to buy?How much of your product are they willing to buy?– Ideas that can improve your idea.Ideas that can improve your idea.

• If you have a prototype of your product you If you have a prototype of your product you should show it to potential customers.should show it to potential customers.

Requirement 4


Financial FeasibilityFinancial Feasibility

• Budget– Start-Up Costs & Operating Costs– Fixed Costs & Variable Costs

• Financial Model– Profit & Loss Statement - Am I going make money?– Cash Flows - When will I make money?

Requirement 4


600600

500500

400400

300300

200200

100100

1010 2020 3030 5050 6060

Fixed ExpensesFixed Expenses

Profit AreaProfit Area

Breakeven PointBreakeven Point

SalesSales

Total CostsTotal Costs

Loss AreaLoss Area

Unit SalesUnit Sales

Exp

ense

s (t

hou

san

ds

of d

olla

rs)

Exp

ense

s (t

hou

san

ds

of d

olla

rs)

Requirement 4

Break Even AnalysisBreak Even Analysis


Financial FeasibilityFinancial Feasibility

• Finding the Money– Personal Savings– Love Money– D &D– Angels

• Bootstrapping

Requirement 4


Human Resource FeasibilityHuman Resource Feasibility

• The Entrepreneur’s “SWOT”S – Strengths

W – Weaknesses

O – Opportunities

T - Threats

• Mentoring

• Outsource

Requirement 4


Interview an EntrepreneurInterview an EntrepreneurRequirement 2

ChapmanChapmanEnochEnoch


Start a BusinessStart a Business• Do a Good Turn Daily

– Any service can be turned into a business opportunity

• During the next two weeks do the following– Pick an idea & ask others about it

• Write about what you are going to do

– Do Feasibility Study on idea– Promote your Business

• Make promotional materials• Advertise your business

– Start your Business– Bring back Evidence

Requirement 6


Show Me The MoneyShow Me The Money• Option #1

– Sketch Prototype– Write Detailed Description

• Option #2– Create a Prototype– Write about Creation– Materials list

• Option #3– Design a Promotional Poster or Flier

• Option #4– Proforma Income Statement– Describe Assumptions

Choose 2

Requirement 5


HomeworkHomework

• Finish Requirement #3 d & e

• Do Requirement #4 – all four sections

• Do Requirement #5 – Do 2

• Do Requirement #6 – Start a business

• You can download files from

www.AddOptions.org/merit-badge


RememberRemember

If your mind can conceive it,

and your heart can believe it,

then you can achieve it!

&

An Opportunity is

Hard Work and Preparation

Mixed with

a Vision and Passion

Documents

BYU Merit Badge PowWow Entrepreneurship Merit Badge John Gilbert AddOptions.org