CHAPTER 7

THE BUSINESS PLAN: CREATING AND STARTING THE VENTURE

OPENING PROFILE: STEVE HAFNER
WHO IS STEVE HAFNER?
- He’s an influential entrepreneur who made a significant contribution to the creation of
new internet technology that offers consumers a wonderful experience in the travel
sector.
- The developer of "Orbitz," a website that enables users to efficiently navigate and
compare a variety of airlines, hotel accommodations choices, and car rentals in order
to find the best deal.
- The founder and CEO of "Kayak," a multimillion-dollar company established in 2004.
It is a website that combines all of the pre-existing travel directories. The goal of it is
to facilitate consumer connection rather than engage in product sales.
- One of the factors that helped him become a multibillionaire was his ability to
recognize market opportunities, from which he established a profitable business
strategy and model that catered to the market.

EDUCATIONAL AND OCCUPATIONAL ATTAINMENT

- After graduating from Dartmouth College in 1991, he was contemplating between two
career opportunities: consulting and banking.
- Later, he decided to become a consultant and worked for the Marketing Corporation
of America for four years, where he primarily supported executive consultants. After
having this experience, he decided to go back to school.
- He majored in business management and marketing at Northwestern University and
earned his degree there in 1997, so he could use his newfound expertise in the
consulting industry.
- After receiving his degree, he began working as a strategy consultant for the Boston
Consulting Group. During his three years there, he was able to observe the
significant changes that were taking place in the e-commerce business sector.

HIS PURPOSE AND REASON

- Hafner grew up in several countries, including Peru, Guatemala, Costa Rica, and
Texas. As a result of his extensive travels, he manages to learn how challenging it
can be to purchase airline tickets, reserve lodging, or rent a car.
- To find the best deal and option at the time it was necessary to search through every
airline, hotel, and car rental website, which took a lot of time. Following this
encounter, he came up with the concept of a website where users could quickly and
easily find any travel service with one click.
THE MAKING OF HIS CREATION
- In November 1999, they were able to launch Orbitz after incorporating the ideas from
the business plan and model. As a result, the company's workforce increased from a
small number of people to 1,600, and in 2001 it went public with a market value of
$14 billion.
- After three years at Orbitz, despite his success and being an integral part of the
company's business strategy, as well as assuming responsibility for the company's
business development, advertising sales, and marketing, he decided to leave. It
disappoints him because the revenue earned on it was only 2 and 6 percent, as they
only receive a payment when a customer purchased from the site.
- One day, while having dinner with Web travel industry colleagues, they discussed the
shortcomings of the current travel sites, which gave him the idea that it would be nice
to have a site that provides leads to airlines and other travel services rather than just
selling tickets. It would be ideal if there was one website that incorporated all of the
current travel directories and collected data on a pay-per-click basis, similar to how
Google did. The objective would be to help customers connect to those travel
websites rather than selling any products.
- After carefully considering, planning, and developing with the assistance of key
engineers from the major technology sector, Hafner and his cofounder Paul English
were able to raise $15 million in additional funding (as AOL also became an investor)
to put "Kayak" into action, that was launched in 2004.

THE FRUIT OF HIS SUCCESS

- As a result of their brilliant idea and strategy, the business expanded quickly; by
2005, it had made $3.6 million in sales, and within 18 months, it had attracted more
than 10 million visitors to its website.
- In 2006, it established itself as a pioneer in the travel industry by being awarded the
best site for travel deals.
- In 2012, Hafner and his business partner decided to sell the enterprise to Priceline
for a significant amount. Although they sold it, Hafner is still the CEO of Kayak, and
the business retains its individuality because Priceline is more of a holding company
that owns several booking companies, which made the sale an excellent match for
Hafner and his partners.
- Furthermore, Hafner continues to seek new opportunities to achieve his goal of
consolidating all aspects of a consumer's travel under one domain, using the most
cutting-edge technology available.
PLANNING AS PART OF THE BUSINESS OPERATION
WHAT IS PLANNING?
- It is mentioned as a process that never ends for a business.
- It plays a crucial role in the early stages of new ventures as the entrepreneur
proposes a preliminary business plan that will finalize as the entrepreneur gains a
better understanding of the market, the product or services to be marketed, the
management team, and the financing needs of the enterprise.
- As the ventures expand, planning will be continuous as management works to
achieve its strategic or operational short-term or long-term business goals.
- There are many different types of plans in every organization, including financial,
marketing, human resource, production, sales, and others.
- The size and type of the business have an impact on the plan's scope. It all has a
single, crucial purpose, which is to give management direction and structure in a
market environment that is rapidly changing. 

IS BUSINESS PLAN IMPORTANT?

- Although, many entrepreneurs such as Steve Jobs, Bill Gates, and Michael Dell that
succeeded without a business plan. It is assumed that making a business plan can
be very beneficial for a starting entrepreneur, particularly when there are lots of
unknowns and variables involved in the venture launch.
- The process of creating a business plan is significant because it will serve as a
foundation for strategizing the next steps in the venture's growth. Consequently, a
good business plan should account for not only the initial start-up but also any future
changes in strategy and the expansion of the new business.