Technopreneurship 101

Idea to Business
Writing the Business Plan
Creativity
• Creativity (ability to produce valued outcomes in a novel way)
• Creativity (or "creativeness") is a mental process involving the
generation of new ideas or concepts, or new associations between
existing ideas or concepts.
• Creativity initiates a product, service or process that is useful, correct,
appropriate and valuable.

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Types of Creative Behavior
• Creation; act of pure invention, that is making something out of
nothing
• Synthesis; creative act of joining two previously unrelated things, e.g
bringing together the telephone and the computer
• Modification; this occurs when a thing or process is improved or
gains new application e.g. a change in design etc.

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Stages in the Creative Process
Idea Germination: : Conscious search Incubation:
The seeding stage for knowledge Subconscious
of a new idea - new Rationalization assimilation of
information
idea Recognition Fantasizing

Illumination: Application or test

Recognition of ideas to prove ideas has
as being feasible value Validation
Realization

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Creativity
•Divergent thinking (ability to produce many
alternatives or ideas) is linked to creativity (e.g.,
reordering these letters “grevenidt” to form
many new words).

•Convergent thinking (attempting to find one

correct answer) is linked to conventional, non-
creative thinking (e.g., 2 + 2 = ?).
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Methods of Generating Business Ideas/Techniques
for Improving the Creative Process
Brainstorming
• A creativity technique used by groups to generate a large number of
ideas for solving a problem.
• Some basic rules:
a. All members must contribute
b. No criticism
c. All ideas are captured
d. There should be a facilitator who writes ideas in brief.
e. No repetition of ideas
f. No idea is discarded – all ideas are written down

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Methods of Generating Business Ideas/Techniques
for Improving the Creative Process
Focus Group Discussion
• It involves an open and in-depth discussion of ideas led by a
facilitator.
• The group could have between 8 and 14 participants

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Methods of Generating Business Ideas/Techniques
for Improving the Creative Process
Mind Mapping
• It is diagram that is developed to show how ideas, words, tasks,
activities, objects are linked.
• It is used in generating ideas, analysing a problem, classifying objects,
or stimulating thinking about somthing.

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Creativity Enhancers
• Elevating creativity importance throughout the organizations
• Offering tangible rewards to those generating ideas
• Protecting people who make honest mistakes and are willing to learn
from them
• Investing in resources that help employees to sharpen their creative
skills
• Listening attentively in order to acknowledge and provide early
support to ideas

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Creativity Detractors
• Not attempting to hire creative people
• Searching for 1 correct answer
• Focusing on ‘being logical ‘.
• Being pessimistic, judgmental and critical
• Punishing mistakes or failed ideas; Fearing mistakes and failures.
• Pigeonholing employees
• Maintaining a stiff organizational culture with no room for different behaviors
• Being inattentive, acting distant and remaining silent when employees want to
discuss new ideas

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Creativity and Innovation
• Relationship between creativity and innovation

Creativity Screening Innovation

INPUTS Criteria OUTPUTS

of evaluation
•Ideas Results
•Daydreaming •Better
•Observing •Faster
•Brainstorming •Cheaper
•Aesthetic

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Innovation
• Innovation - is the process of doing new things.
• Innovation, therefore, is the transformation of
creative ideas into useful applications, but
creativity is a prerequisite to innovation.

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Innovation vs Invention
Invention - is the creation of new products,
processes, and technologies not previously
known to exist.
Innovation - is the transformation of creative
ideas into useful applications by combining
resources in new or unusual ways to provide
value to society for or improved products,
technology, or services.
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Innovation Value Chain

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Elements in the Innovation Process
• Analytical Planning - to identify: product design,
market strategy, financial need
• Organizing Resources - to obtain: materials,
technology, human resources, capital
• Implementation - to accomplish: organization,
product design, manufacturing, services
• Commercial Application - to provide: value to
customers, reward of employees, revenues for
investors, satisfaction for founders
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Types of Innovation
Services
Supply Chain

Product
Business Model

Substancial
Types of
Innovation Marketing

Financial

Organisational
Process

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Product Innovation
• Involves the introduction of a
new good or service that is new
or substantially improved.

• Might include improvements in

functional characteristics,
technical abilities, ease of use,
or any other dimension.

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Business Model Innovation
• A method of doing business by
which a company can generate
revenue to sustain itself.

• Informal and formal models that

are used by enterprises to
represent various aspects of
business.

• Involves changing the way

business is done in terms of
creating values.
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Marketing Innovation
• Development of new
marketing methods
with improvement in
product design or
packaging, product
promotion or pricing.
attracts people to buy

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Types of Innovations (4P’s of Innovation)
• PRODUCT INNOVATION:
- changes in the things (products or services) which an organization offers
• PROCESS INNOVATION:
- changes in the ways in which they are created an delivered
• POSITION INNOVATION:
- changes in the context in which the product or services are introduced,
coffee as premium product
• PARADIGM INNOVATION:
- changes in the underlying mental modes which frame what an
organization does, Ford cars

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Types of Innovations (Core concepts and
System) – Henderson and Clark

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Types of Innovations (Core concepts and
System) – Henderson and Clark
INCREMENTAL INNOVATION:
- Incremental innovation refines and improves an existing design, through improvements in the components.
However it is important to stress these are improvements not changes, the components are not radically
altered. Christensen (1997) defines incremental innovation in terms of ‘a change that builds on a firm’s
expertise in component technology within an established architecture.’
- Most common type of innovation (Ex. Washing Machine, Ballpens, etc.)
RADICAL INNOVATION:
- calls for a whole new design, ideally using new components configured (i.e. integrated into the design) in a new
way. In Henderson and Clark’s (1990) terms,
‘Radical innovation establishes a new dominant design, and hence a new set of core design concepts embodied
in components that are linked together in a new architecture.
- comparatively rare (Ex: Computers, Airplanes, Televisions, etc.)
- Radical innovation is often associated with the introduction of a new technology. In some cases this will be a
transforming technology, perhaps even one associated with the transforming effect of a Kondratiev long wave.

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Types of Innovations (Core concepts and
System) – Henderson and Clark
MODULAR INNOVATION:
- doesn’t involve a whole new design, but involve new or at least significantly different components.
- function remains the same (Clockwork radio, Smart walking sticks, etc)
ARCHITECHTURAL INNOVATION:
- Reconfiguration of established system to link together components in a new way
- The function changes dramatically
- There could be improved components, but they are not essential . (Ex. Walkmans, Aircons, etc)

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Definition/Meaning of an Entrepreneur
• HISTORY –The word ‘entrepreneur' is derived from the French word
‘entreprendre’ which means ‘to undertake’. In the early 16th century the
French men who organized and led military expeditions were referred to
as ‘entrepreneur'. After 1700,the term was applied to other types of
adventures, mainly civil engineering like constructions of roads etc.

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Definition/Meaning of an Entrepreneur
• J.B.SAY: Is another Frenchman, expanded Cantillon’s ideas and
conceptualized the entrepreneur as an organizer of the business firm,
central to its distributive and productive functions.
• E.E.HAGEN: The entrepreneur is an economic man, who tries to
maximize his profits by innovations.
• GALBRAITH: ‘People are poor because they prefer in that way’. An
entrepreneur must accept the challenge and should be willing hard to
achieve something.

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Characteristics of an Entrepreneur
1. Calculated Risk-taker 11. Blessed with Mental Ability
2. Innovator 12. Human Relations Ability
3. Organizer 13. Communication Ability
4. Creative 14. Decision-Making
5. Achievement Motivated 15. Business Planning
6. Technically Competent 16. A venture Capitalist
7. Self-confident 17. Visionary
8. Socially Responsible 18. Entrepreneur make significant differences
9. Optimistic 19. Ability to Spot and Exploit Opportunities
10. Equipped with Capability to drive 20. Courage to Face Adversities
21. Leadership –An essential trait of the
entrepreneur

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Manager vs Leader
Manager Characteristics Leader Characteristics
• Administers • Innovates
• A copy • An original
• Maintain • Develops
• Focus and systems and structure • Focuses on people
• Relies on control • Inspires trust
• Short-range view • Long-range perspective
• Asks how and when • Asks what and why
• Eye on the bottom-line • Eye on the horizon
• Imitates • Originates
• Accepts the status quo • Challenges the status quo
• Classic good soldier • Own person
• Does things right • Does the right thing

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Working Profile of Entrepreneur
Characteristics Traits
• Self-confidence • Confidence, Independence, Optimism,
Individuality.
• Drive • Responsibility, Vigor, Initiative, persistence,
Ambition.
• Task-result oriented • Need for achievement, Profit-oriented, Energy.

• Risk-taker • Risk taking ability, Likes challenges.

• Mental Ability • Overall intelligence(IQ), Creative thinking,

Analytical thinking ability.
• Leadership • Leadership behavior, Gets along with others,
Responsive to situations, Criticism.

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Working Profile of Entrepreneur
Characteristics Traits
• Human Relations Ability • Emotional stability, Healthy personal
relations, Sociability, Tactfulness, Consideration.
• Originality • Innovative, Creative, Resourceful, knowledge.

• Communication Ability • Perceptive, Foresight, Future oriented.

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Classification Given by Danhof
I. Innovating entrepreneur: Innovative entrepreneurs are generally aggressive and possess the
art of cleverly putting the attractive possibilities into practice.
II. Imitative entrepreneurs: Imitative entrepreneurs are characterized by readiness to adopt
successful innovations inaugurated by successful innovating entrepreneurs.
III. Fabian entrepreneur: Fabian entrepreneurs are cautions and skeptical in experimenting
change in their enterprises. Such entrepreneurs are shy, lazy and lethargic.
IV. Drone entrepreneur: Drone entrepreneurs are characterized by a refusal to adopt
opportunities to make changes in production formulae even at the cost of severely reduced
returns.

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Types of Entrepreneur
1. According to the Type of Business
I. Business entrepreneur: Business entrepreneurs are those entrepreneurs who conceive
the idea of a new product or service and then translate their ideas into reality.
II. Trading entrepreneur: As the very name indicates trading entrepreneur is concerned
with trading activities and not manufacturing.
III. Industrial entrepreneur: As the very name indicates, an industrial entrepreneur is one
who sets up an industrial unit.
IV. Corporate entrepreneur: Corporate entrepreneur is the one who plans,develops and
manages a corporate body.
V. Agricultural entrepreneur: Agricultural entrepreneur is the one who is engaged in the
agricultural activities.

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 Types of Entrepreneur
2. According to Motivation
I. Pure entrepreneur: Pure entrepreneur is one who may or may not possess an aptitude for
money driven
entrepreneurship but is tempted by the monetary rewards or profits to be earned from
the business venture.
governmental II. Induced entrepreneur: Induced entrepreneur is attracted by the various incentives,
attraction
subsidies and facilities offered by the government.

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Types of Entrepreneur
3. According to the Use of Technology
I. Technical entrepreneur: The strength of a technical entrepreneur is in his skill in
production techniques. He concentrates more on production than on marketing.
II. Non-technical entrepreneur: Unlike technical entrepreneur, non-technical entrepreneur is
not concerned with the technical aspect of the product rather he spends more time in
developing alternative strategies of the marketing and distribution to promote his
business.
III. Professional entrepreneur: Professional entrepreneur means an entrepreneur who is
interested in floating a business but does not want to manage or operate it.

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Types of Entrepreneur
4. According to stages of Development
I. First generation entrepreneur: First generation entrepreneur are those entrepreneur who
do not possess any entrepreneurial background.
II. Second generation entrepreneur: Second generation entrepreneur are those
entrepreneurs who inherit the family business firms and pass it from one generation to
another.
III. Classical entrepreneur: A classical entrepreneur is a stereotype entrepreneur whose aim is
to maximize his economic returns at a level consistent with the survival of the unit but
with or without an element of growth.

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Types of Entrepreneur
5. According to Capital ownership
I. Private entrepreneur: When an individual or a group of individuals set up an enterprise,
arrange finance, bear the risk and adopt the latest techniques in the business with the
intention to earn profits, he or the group is called as private entrepreneur/entrepreneurs.
II. State entrepreneur: As the name indicates, state entrepreneur means the trading or
industrial venture undertaken by the state or the government itself.
III. Joint entrepreneur: Joint entrepreneur means the combination of private entrepreneur
and state entrepreneur who join hands.

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Types of Entrepreneur
6. According to Gender and Age
I. Man entrepreneur
II. Woman entrepreneur
III. Young entrepreneur
IV. Old entrepreneur
V. Middle-aged entrepreneur

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Types of Entrepreneur
7. According to Area
I. Urban entrepreneur: Is “someone who starts with no resources and builds a company or
brand into a success; and someone who uses the perfect blend of book and street smarts
to run their business well.”
II. Rural entrepreneur: Can be defined as all forms of entrepreneurship that take place in
areas characterized by large open spaces and small population settlements relative to the
national context.

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Types of Entrepreneur
8. According to Scale
I. Large scale industry entrepreneur
II. Medium scale industry entrepreneur
III. Small scale industry entrepreneur
IV. Tiny industry entrepreneur

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Intrapreneur
• The term ‘intrapreneur’ was coined in the United States of America in the
late seventies.
• Gifford Pinchot defined intrapreneurs as the persons who resigned from
their well paid executive positions to launch their own ventures. Gifford
devised the way by which such executives could be retained in the
industry and their entrepreneurial urge was also satisfied by their bosses.
• So a system was devised whereby such executives would operate as
entrepreneurs with full independence and autonomy but with in the
organization.

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Difference between Entrepreneur and Intrapreneur
1. An entrepreneur is an independence person who starts his venture and bears full risk of his
failure and enjoys the fruit of his success whereas intrapreneur is partially independent and is
sponsored by the corporation in which he is working. He is also not liable to bear the losses in
case of his failure.
2. An entrepreneur raises the finance from various sources and also guarantees their return
whereas an intrapreneur does not own responsibility to raise the capital or to return it.
3. An entrepreneur has no relation with any organization whereas an intrapreneur operates
within the organization where he is working.

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Functions of an Entrepreneur
• There has been a great deal of confusion and contradiction in literature on the functions of an
entrepreneur.

FUNCTIONS
1. Innovations: J. Schumpeter has made substantial contribution to the literature of
entrepreneurship. The process of innovations may be in the form of:
a. Introduction of a new product.
b. Use of new methods of production.
c. Opening of a new market.
d. The conquest of new source of supply of raw material.
e. A new form of organization.

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Functions of an Entrepreneur
2. Risk-taking: Richard Cantillon states that entrepreneur is an agent who buys means of
production at certain prices and sells them at uncertain prices. The entrepreneur performs the
function of reducing uncertainty in his plan of investment and expansion of the enterprise. J.b.
Say also stresses risk-taking as the specific function of an entrepreneur.

3. Decision Maker: Entrepreneur as a decision maker describes the following functions of an

entrepreneur.
a. The determination of objectives of an enterprise and the change of those objectives as
conditions required or made advantageous,
b. The development of an organisation including efficient relations with subordinates and all
employees,

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Functions of an Entrepreneur
c. Securing adequate financial resources, the relations with existing and potential Investors,
d. The acquisition of efficient technological equipment and the revision of it as new
machinery appears,
e. The development of a market for the products and the devising of new products to meet or
anticipate consumer’s demand,
f. The maintenance of good relations with public authorities and with society at large.

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Functions of an Entrepreneur
4. Organization and Management: Marshall recognized organization and management of the
enterprise as the important functions of an entrepreneur.
When the organization grows bigger, the entrepreneur effectively delegates authority and finds
responsibility at various levels of management. The network of decision making becomes more
complex.

The functions of organization and management includes:

a. Planning of an enterprise,
b. Co-ordination, administration and control,
c. Routine type of supervision.

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Stages of Entrepreneurial Process
There are Five Stages
1. Identification of opportunity
2. Evaluation of opportunity
3. Preparation/Development of business plan
4. Determination & organizing the resources
5. Management of enterprise

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1. Identification of Opportunity
Consumers & business association, members of distribution system,
independent technical organizations consult entry etc. government
organizations & R&D centers also provide new ideas.

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2. Evaluation of Opportunity
It involves length of opportunity, its real perceived value its risks &
resources, with personal skills goals of entrepreneur & its uniqueness
or differential advantages in its competitive environment.

The length of opportunity and size & share are two main aspects for
deciding the risk & gains or profits.

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2. Evaluation of Opportunity
SWOT (Strength, Weakness, Opportunities & Threats) analysis.
This plan includes:
a. Description of product
b. Agreement of opportunity
c. Assessment of the entrepreneur
d. Resources needed
e. Amount & sources of capital
f. Profit expected

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2. Evaluation of Opportunity
SWOT ANALYSIS
• Strengths are expressed as inherent advantages in the organization’s product or operation in relation
to competitors. For example, products with increasing shares of growing markets, location,
architectural style, professional skills of the working people etc. Once identified, strengths can be
promoted to potential customers.
• Weaknesses are opposite the strengths. For example, it may range from old fashioned products in
declining markets to impolite customer contact staff. Weaknesses and strengths are often matters of
perception rather than “fact” and may be identified with consumer research only.
• Opportunities may arise from elements of the business under direct control such as particular
product. In addition, they may arise from shifts in the external environment that a firm may exploit.
For example, Club Med seized an opportunity to develop its particular holiday concepts (freedom,
activities) with an image in a way no other operator matched in the 70s.
• Threats may also be presented by internal elements within the businesses control or by external
events such as exchange rate changes, rising oil prices or acts of international terrorism.

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2. Evaluation of Opportunity
SWOT ANALYSIS
Competitive Business Assessment
• SWOT Matrix

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3. Preparation/Development of Business Plan
The Business Plan - A SUPPORTED VISION

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3. Preparation/Development of Business Plan
Business Plan Basics
• Why Write a Business Plan?
Because I need to understand my Business.
The Business Plan is a result of a PLANNING PROCESS
• Who are your customers?
• Why will the buy your service or product?
• What will they pay?
• How will you make and deliver the service/product
• What resources (people, money, technology) will you need?
• Can you make money/create value?

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3. Preparation/Development of Business Plan
Development of a Business Plan
1. Title of project, table of contents.
2. Description of business & industry.
3. Technology plan.
4. Financial plan.
5. Organization plan.
6. Production & operation plan.
7. Marketing & distribution plan.
8. Summary of the plan.

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4. Determination and Organizing the Resources
• This process begins with assessment of present resources.
• Enough care must be taken not to underestimate the amount and
nature of resources required.
• The risk involved with insufficient or incorrect resources should be
calculated.
• Alternate source of supply , process of manufacture are to be
planned.

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5. Management of Enterprise
• After resources are acquired, the entrepreneur must use them to
implement the business plan Increased administrative expenses.
Some times it could result in heated arguments.

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Role of Entrepreneurship in Economic Development
• Increasing the output of product and Income of the product.
• Initiating and changing in the structure of business or society.
• Innovation helps in growth of the both product and service.
• Bridges Gap between Science & Market.
• Entrepreneurship promotes capital formation by mobilizing the idle
saving of the public.
• It provides immediate large-scale employment. Thus, it helps reduce the
unemployment problem in the country, i.e., the root of all socio-
economic problems.

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Role of Entrepreneurship in Economic Development
• It promotes balanced regional development.
• It helps reduce the concentration of economic power.
• It stimulates the equitable redistribution of wealth, income and even
political power in the interest of the country.
• It encourages effective resource mobilization of capital and skill which
might otherwise remain unutilized and idle.
• It also induces backward and forward linkages which stimulate the
process of economic development in the country.
• It also promotes country’s export trade i.e., an important ingredient to
economic development.

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Barriers of Entrepreneurship
• Lack of Capital
• Lack of Technical Knowledge
• Economic Business Cycles
• Non-Availability of Raw Materials and Resources
• Government Regulations
• No idea about Technology
• Unstable and unpredictable material
• Globalization and entry of foreign goods
• Risks

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Identification of Business
Business opportunities can be obtained from different sources. For this
one has to evaluate the following areas and understand the gap
between supply and demand.
• Study of government rules
• Extensive and in-depth study of opportunities
• SWOT Analysis
• Market Feasibility Study
• Technical Feasibility Study
• Financial Feasibility Study
• Social Feasibility Study

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Sources of Business Idea
• Unfulfilled demands provided on the new product
• Our own creative idea
• Social and economic trends
• Magazine, journal, research etc.
• Emerging new technology
• Changes in Customer needs
• Trade, fares, and exhibitions
• Band and government agencies

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BUSINESS PLAN BASICS
• What Should Be In A Business Plan?
• Cover Page
• Name of Company
• Address
• Telephone/fax/email
• Confidentiality legend
• Securities law legend
• Control numbering of copies
• Table of Contents
• Put one in
• Include page numbers

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BUSINESS PLAN BASICS
• What Should Be In A Business Plan?
• Executive Summary
• An Executive Summary is
• NOT an abstract of the plan
• NOT an introduction
• NOT a preface
• NOT a random collection of highlights
• An Executive Summary IS the Business Plan in miniature
• Size
• Two pages (preferable) to five pages (max)
• The Executive Summary must be
• Logical
• Clear
• Interesting/Exciting
• The Executive Summary is like a RESUME
• If it gets the reader’s attention, the rest gets read
• The Elevator Speech is to the Exec Summary as the Exec Summary is to the Full Plan

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BUSINESS PLAN BASICS
• What Should Be In A Business Plan?
• Executive Summary
• The Executive Summary tells
• Who you are
• What your strategy/vision is
• What you are doing and/or propose to do
• What is the market
• How many $$$$ do you need and what will you do with them
• What your SUSTAINABLE COMPETITIVE ADVANTAGE is
• When the reader is finished he or she should be able to tell someone what you are up to.
• The Executive Summary Should Contain:
• Description of the Business Concept and the Business
• The Opportunity and Strategy
• The Target Market and Projections
• The Competitive Advantages
• The Economics, Profitability and Harvest Potential
• The Team

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Market Feasibility Study
Includes the following:
I. Native of Market –a perfect computation is to be studied.
II. Cost of Production –it is essential to study and control cost of production
to decide the selling price.
III. Selling price and profit –selling price plays a vital role in profit.
IV. Demand –demand will decide the facility planning.
V. Market Share –estimated Market share is to be made in order to
compare with other products.
VI. Target Market –study is made with regard to Target Market.

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Technical Feasibility Study
Includes the following:
I. Location of the project –location of the project is very important. It may be located in the
rural, urban or semi-urban area.
II. Construction of factory, building and its size –construction details depending on size are
analyzed.
III. Availability of raw materials –availability of raw materials are studied.
IV. Selection of machinery –selection of machinery is required for production.
V. Utilities –the detailed availability of utilities like water, gas, electricity etc. are studied.
VI. Production capacity –establishment of production capacity are analyzed.
VII. Staff requirement –study of staff requirement is analyzed.
VIII. Technical Viability –technical viability is studied.

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Financial Feasibility Study
Includes the following:
I. Total capital cost of project
II. Source of capital
III. Subsidiary sources for additional finance
IV. Financing for future development of business
V. Break even analysis
VI. Estimation of cast and fund flow
VII. Return of investment
VIII. Proposed balance sheet
IX. Cost of labor and technology

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Social Feasibility Study
Includes the following:
I. Location
II. Social Problem
III. Pollution
IV. Other Problems

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BUSINESS PLAN BASICS
• What Should Be In A Business Plan?
• Appendices
• Separately Bound Volume
• Resumes of Principals
• Product Literature
• Trade Press/Business Press
• Patents (front page)
• Testimonials Letters
• Technical Information
• Confidentiality
• Technical person to technical person discussion

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BUSINESS PLAN BASICS
• Fine Tuning/Targeting the Plan
• Have an Independent Reader Review the Plan
• One or more independent readers for feedback:
• Retired industry pro?
• Customer(?)
• Consultant?
• Professor?
• Accountant- yes definitely
• Lawyer- yes definitely

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BUSINESS PLAN BASICS
The Business Plan As A Financing Document
(Excerpts From Materials Prepared By Lita Nelsen, Director of MIT Technology Licensing Office)

A. First Reading: Like a Resume

Make The Cut, So That You Get An Opportunity To Tell Your Story.
B. Second Reading: Justify The Investment
C. Third Reading: Commit To A Plan
That You And The Investors Can Live With.
REMEMBER: If you don’t make the FIRST CUT, B and C never happen.

The Nuts and Bolts of Business Plans

Joe Hadzima
BUSINESS PLAN BASICS
The Business Plan As A Financing Document
(Excerpts From Materials Prepared By Lita Nelsen, Director of MIT Technology Licensing Office)

MAKING THE FIRST CUT

• An Idea Too Good To Ignore
• A Financial Promise Too Good To Turn Down
• A Team Good Enough To Believe In
• An Action Plan That’s
• Credible
• Focused
• Details That Give Assurance of Insight, Commitment and Follow Through
• Format and Style That Show
• Passion
• Sanity

The Nuts and Bolts of Business Plans

Joe Hadzima
BUSINESS PLAN BASICS
The Business Plan As A Financing Document
(Excerpts From Materials Prepared By Lita Nelsen, Director of MIT Technology Licensing Office)

WHY PLANS FAIL THE FIRST CUT

• Insufficient Market
• Non-Credible Technology
• Too Wild
• Too Blue-Sky (Unproven)
• Not Protectible
• Too Mundane
• Investment Too Large For The Promise
• Failure to Understand The Market

The Nuts and Bolts of Business Plans

Joe Hadzima
BUSINESS PLAN BASICS
The Business Plan As A Financing Document
(Excerpts From Materials Prepared By Lita Nelsen, Director of MIT Technology Licensing Office)

WHY PLANS FAIL THE FIRST CUT (cont.)

• Action Plan Not Credible
• Too Optimistic
• Naïve About The Hurdles
• Runs Off In All Directions
• Not Ambitious Enough
• Regulatory Barriers Insufficiently Addressed
• Gaps Filled By Handwaving
• No Promises At All
• Team Not Credible

The Nuts and Bolts of Business Plans

Joe Hadzima
BUSINESS PLAN BASICS
The Business Plan As A Financing Document
(Excerpts From Materials Prepared By Lita Nelsen, Director of MIT Technology Licensing Office)

COSMETIC” REASONS FOR FAILING THE FIRST CUT

• I Can’t Understand It.
• Filled With Market Or Technology-Specific Jargon
• i.e., WHAT IS THE BUSINESS?
• Naïve Projections
• Sloppy: Misspellings, Poor Grammar, Poor Quality Printing
• Too Damn Long
• Ignores The Basics
• “Forget Marketing, My Technology Is Best”
• Naïve (or Terrible) Writing

The Nuts and Bolts of Business Plans

Joe Hadzima
Reference:
• Psychology in Action (8e)
• Entrepreneurship-theory and practice by Raj Shankar
• Essentials of Entrepreneurship and Small Business Management by
Thomas Zimmer, Norman Scarborough
• Entrepreneurship by Robert Hisrich, Mathew Manimala, Michael
Peters and Dean Sheperr
• Nuts and Bolts of Business Plan by Hadzima, Bonsen, Chero and
Somervuo, entrepreneurship.mit..edu

For Educational Purposes only