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EntrepreneurshipThe entrepreneurial process
… beyond the books!
ESCP-EAP - European Executive MBA
LONDON WORKSHOP - December'05, 16th and 17th
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Bienvenue !
Charles Fouché
MBA BabsonField Consultant Management in adversityEship ESCP-EAP
Unemployed people Ph D at Lille (France)
Entrepreneur Tisanes Fouché
Email : [email protected] : 00 33 1 30 59 60 05
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Traditional eship approach, hum…
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The Main Idea
Entrepreneurship is not like
in the books or in the magazines !
Only trust the “DOERS” !
Not the counselors
WE WILL TRY TO REMAIN AS CONCRETE AS POSSIBLE THROUGHOUT THIS WORKSHOP
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Workshop goals
• Break misconceptions• Hammer actual business creation issues• Provide concrete methodology to start up• Build up a short list of common mistakes
• Meet your expectations
• Fine tuning for next workshops
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By the way …
• Who are you ?• What are your expectations ?• Did you come with a project ?
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Day 1
Friday 6H
Intro and overview
Presentation and Business Model Game
Eship fundamentals IHow to approach business creationKey success factors of the new venture
Case – Beautiful Legs by PostInto the business planBusiness Model Team work
Day in a nutshell - Debriefing
Program13:30 to 20:00
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Eship fundamentals II From Dream to reality
Real Case : Start a distribution companyRound by round approach
Testimony : Innocent DrinksStart up storyEuropean subsidiaries set up
Tisanes Fouché’s story – if time allows
Final Debriefing
Day 2
Saturday 6H
Program8:30 to 16:30
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Presentations and BM game
I HOPE
YOU ARE PREPARED !
VOLUNTEERS ONLY OF COURSE !
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Presentations and BM game
5 minutes max.
HOW DOES YOUR ACTIVITY
MAKE MONEY ?
Convince us
to invest money in it
because of its profitability.
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Eship fundamentals 1
Breaking the myths …
Public press (Forbes, Fortune,…)
Media
Success stories
Some Consultants
Our own fantasies
The entrepreneurial path is polluted !
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Setting up your business is NOT
Eship fundamentals 1
Breaking the myths …
Finding the “unique” idea with no competitors
Writing the million $ winning Business Plan
Retiring as a millionaire in your mid 30’s
Doing great advertising
“Thinking global” !
Going public within 3 years
Organizing successive fund raisings
Networking
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Key Success factors are not
Eship fundamentals 1
Breaking the myths …
Comprehensive all inclusive business plan
Great intellectual reasoning skills
Natural capacities to speak in public
Expensive international consulting advices
Association with your college mates
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Let’s go back to
the basics
and let’s stick to them !
Eship fundamentals 1
Breaking the myths …
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Simplicity and
good common sense
Back to …
Eship fundamentals 1
Breaking the myths …
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Business organization …
Eship fundamentals 1
Back to the basics
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ENTREPRISE, … A COMPLEX SYSTEM
STATE AND COLLECTIVITY SOCIAL SERVICES
DIRECTION & ORGANIZATION
COMPONENTS
DYNAMIC IN SPACE AND TIME
JOB MARKET
CONSULTANTS
LOGISTICS
OPERATIONSSALES
ADMINISTRATIONInvoicing
RESEARCH&
DEVPT
HUMAN RESSOURCES
BOOK KEEPING
ACCOUNTING
LEGAL & ADMINI.
CLIENTS
AF
TE
R
SA
LE
SS
AL
E F
OR
CE
Social taxesTaxes
PDTS & SERVICES
SUPPLIERS
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ALWAYS
KEEP IN MIND
THAT YOU ARE SIMPLY
TRYING TO BUILD SUCH AN ORGANIZATION
Charles Fouché, ESCP-EAP
WHATEVER THE SIZE OF YOUR BUSINESS …
Eship fundamentals 1
Back to the basics
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Charles Fouché, ESCP-EAP
But where does it start ?
It starts with YOU
Eship fundamentals 1
Back to the basics
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Entrepreneur… hum … a way of life !
Working time
Break even
Salary evolve
Saving power
Stress level
35 to 60 H 50 to 75+ H
Average/ regular Potentially high
High but limited Extremely high
Step 1 is your choice !
Eship fundamentals 1
Back to the basics
Forecast over 10 years compare current trend vs. possible
Employee Self employed
immediate uncertain
steady irregular
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EXPOSURE ON MANY SKILLS
SURROUNDED BY « PREDATORS »
IN AN ENVIRONMENT
WHERE MONEY IS
“A KEY TOOL”
Charles Fouché, ESCP-EAP
Eship fundamentals 1
Back to the basics
Employees
-work load+ salary
European: volatility and versatility of the legal and fiscal framework
always more +++
State
Suppliers
+ charge- provide less
Customersbetter products- expensive
IN A PERMANENT TIME RACE LIFE IN
HOSTILITY
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WHAT IS THE WAY TOWARDS SUCCESS ?
Charles Fouché, ESCP-EAP
Eship fundamentals 1
Critical success factors
ONCE YOUR CHOICE IS MADE
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WHAT IS
BUT ?(SUCCESS?)Charles Fouché, ESCP-EAP
Eship fundamentals 1
Critical success factors
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SUCCESS IS
FOR MOST ENTREPRENEURS
TO EARN THEIR LIVING
Charles Fouché, ESCP-EAP
Eship fundamentals 1
Critical success factors
TO LEARN THEIR JOB
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IS BUSINESS CREATION
A PATH! Charles Fouché, ESCP-EAP
A LONG AND DIFFICULT PATH …
Eship fundamentals 1
Critical success factors
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« READY TO USE » RECIPIES
DO NOT WORK DO NOT EXIST
HOW TO PROCEED AND SUCCEED ?
Charles Fouché, ESCP-EAP
Eship fundamentals 1
Critical success factors
ONCE YOUR CHOICE IS MADE
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DO NOT FOCUS ON INCORPORATING
First thing to start,
Eship fundamentals 1
Critical success factors
(You will incorporate as late as possible)
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One of the biggest
misconception !
unique idea is nothingIdea “centered” project are terrible
most of the time !
Your idea !
Eship fundamentals 1
Critical success factors
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What is my personal break even ?
Is the business concept solid ?
Do I have the proper execution skills to do it ? Is it possible to find them ?
Your first concerns are:
Eship fundamentals 1
Critical success factors
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Viable business concept is identifiable :
Charles Fouché, ESCP-EAP
A new approach to existing business
Real, existing equivalent exist today
The existing market is large
The team has all the execution skills
Eship fundamentals 1
Critical success factors
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First, focus on
Eship fundamentals 1
Critical success factors
A) Finding benchmarks and competitors Understand their B.M. , their organization
B) Learning the industryMark the main trade shows, …
once for all, forget about the “no competitor project”
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Take your time …
- The idea …
- Formalization of the idea + 1st trials
- Trials development + structure
- Incorporation: “The wick is turned on !”
- 1st actual difficulties
writing
the BP
Take the time to find out how to make money
Eship fundamentals 1
Critical success factors
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Then, focus on validating !
Eship fundamentals 1
Critical success factors
A) Formalize : Business Plan writingHow the project generates money !
B) Define : Organize pilotsHow you can actually test you project with minimum investment
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Two basic questions to calibrate your project
How much money each unit sold generates?
Eship fundamentals 1
Critical success factors
Contribution =
Selling price* - Cost** Without VAT
How many units do I have to sell to survive?
REMINDER
How many units do I have to sell to live?How many units do I have to sell to grow ?
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How can I test my concept ?
Eship fundamentals 1
Critical success factors
CASH IS SCARCE !* With ot Without VAT
REMINDER
… at low costs
Conceive “smart” tests, even if you have money
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Take your time …
- The idea …
- Formalization of the idea + 1st trials
- Trials development + structure
- Incorporation: “The wick is turned on !”
- 1st actual difficulties
writing
the BP
Take the time to find out how to make money
Eship fundamentals 1
Critical success factors
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1) Use the Sahlman framework to evaluate this new venture.
2) Would you invest in this new venture ? List the reason for your decision.3) What are the purposes of this business plan ?
4) How well does the plan fulfill those purposes ?
5) Can you recommend any improvements to the BP ?
6) Are Elizabeth and Dickon realistic about fund raising ?What might happen if they fail to raise £ 110.000 in the next 30 days ?
Business Case
Beautiful Legs by PostLet’s go into a business plan
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Business Case
Beautiful Legs by PostTEAM WORK
You dig in the presented business model
Find the key variables of their business
Their relative sensitivity
What can you conclude ?
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The day in a nutshell
1. Do not dream
2. Do not rush
3. Define your personal break even
4. Then your burn rate
5. Focus on your Business Model
6. Organize unofficial series of tests
7. Only you can sell your products
8. Formalize as you go
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Suggestions for tomorrow