2 - 1ch. 2: inside the entrepreneurial mind protecting your ideas utility patent – a grant from...

2 - 1Ch. 2: Inside the Entrepreneurial Mind

Protecting Your Ideas

• Utility Patent – a grant from the Patent and Trademark Office to the inventor of product, giving the exclusive right to make, use, or sell the invention for 20 years from the date of filing the patent application.



• Design Patent – a grant from the Patent and Trademark Office to the inventor of a new, original, or ornamental change to an existing product that enhances it sales, the right to make, use, or sell the product for 14 years from the date of filing the patent application.


Utility Patents

are superior to

Design Patents


Patent Applications and Patents Issued


The Six Steps to a Patent

1. Establish the invention’s novelty

2. Document the device

3. Search existing patents

5. Complete the patent application

6. File the patent application

4. Study search results



• Trademark – any distinctive word, symbol, design, name, logo, slogan, or trade dress a company uses to identify the origin of a product or to distinguish it from other goods

on the market. ™ ®• Servicemark – the same as a trademark except

that it identifies the source of a service rather than a product. ℠ ®



• Copyright – an exclusive right that protects the creators of original works of authorship such as literary, dramatic, musical, and artistic works.

• Copyrighted material is denoted by the symbol ©.

Protecting Intellectual Property

• The primary weapon an entrepreneur has to protect patents, trademarks, and copyrights is the legal system.

• Before engaging in a legal battle consider:►Can the opponent afford to pay if you win?►Do you expect to win enough to cover your legal

costs?►Can you afford the loss of time, money, and

privacy involved?



Characteristics of Patents, Trademarks, and Copyrights

Conclusion• The creative process is a tenant of the

entrepreneurial experience. • Success, and even survival itself, requires

entrepreneurs to tap their creativity.

• Creativity results in value, and value provides a competitive advantage.

• Entrepreneurs protect their creative ideas with patents, trademarks, servicemarks, and copyrights to sustain a competitive edge.


MANA 3325 – ThurburnLecture #4 Slides

Intellectual Capital Components

Human Capital – External1. The people you know through networking.2. Who you can call upon to provide resources from outside.Human Capital – Internal3. The people you have inside your company.4. Their Creativity, Processes, Etc.Structural Capital5. Patents, Intellectual Property, Systems, Controls.Customer Capital6. Goodwill 7. Customers perception of Corporate Citizenship


Vision vs Mission

Vision: 1. Why do we do what we do.2. What will we be when we are a mature company.

Mission:3. What business we are in.4. Who we serve.5. Where we are going.


Competitive Advantages

Any aspect of how you operate your business that is difficult for your competitors to copy and which customers appreciate and respond to.


Any unique technology or process that is either protected by a patent, copyright, or trademark or which is difficult or impossible for a competitor to duplicate.



Barriers to entry that restrict new competitors from gaining a similar advantage.



Relationships with suppliers or distributors that competitors are unable to duplicate, including spokespersons and celebrity endorsements



Strategic Management

Is crucial to building a successful business.

Involves developing a game plan to guide a company as it strives to accomplish its mission, goals, and objectives, and to keep it on its desired course.


Strategic Management and Competitive Advantage

Developing a strategic plan is crucial to creating a sustainable competitive advantage, the aggregation of factors that sets a company apart from its competitors and gives it a unique position in the market that is superior to its competition. Example: Whole Foods


Building a Competitive AdvantageConsider five aspects of a small company:

1. Products they sell

2. Service they provide

3. Pricing they offer

4. Way they sell

5. Values to which they are committed


Key: Core Competencies

Unique set of capabilities a company develops in key areas, such as superior quality, customer service, innovation, team-building, flexibility, responsiveness, and others that allow it to vault past competitors.

They are what a company does best. Best to rely on a natural advantage (often linked to a company’s “smallness”).

Example: Pizza Fusion


Building a Sustainable Competitive Advantage

Superior value for customers

Sustainable competitive advantage

Capabilities

Core competencies

Skills

Lessons learned


Strategic Management Process

Step 1 Develop a vision and translate it into a mission statement

Step 2 Assess strengths and weaknessesStep 3 Scan environment for opportunities

and threatsStep 4 Identify key success factors


Strategic Management Process

Step 5 Analyze competition Step 6 Create goals & objectives Step 7 Formulate strategies Step 8 Translate plans into actions Step 9 Establish accurate controls

(continued)


Step 1: Develop a Vision and Create a Mission Statement

Addresses question: “What business are we in?”The mission is a written expression of how the company will reflect an entrepreneur’s values, beliefs, and vision – more than just “making money.”

• Serves as a “strategic compass.” Examples: Chick-fil-A, Google


Step 1: Develop a Vision and Create a Mission Statement

Elements of a mission statement:Purpose of the company: What are we in business to accomplish?Business we are in: How are we going to accomplish that purpose?Values of the company: What principles and beliefs form the foundation of the way we do business?


Step 2: Assess Company Strengths and Weaknesses

StrengthsPositive internal factors a company can draw on to accomplish its mission, goals, and objectives.

WeaknessesNegative internal factors that inhibit a company’s ability to accomplish its mission, goals, and objectives.


Strengths

1. Loyal Customers2. Special Skills3. Special Knowledge4. Superior Products5. Positive Public Image6. Employee Experience7. Unique Suppliers


Weaknesses

1. Poor Location2. Lack of Capital3. Lack of Skilled Workers4. Lack of Enough Workers5. Business Model Obsolescence


Step 3: Scan for Opportunities and Threats

OpportunitiesPositive external factors the company can exploit to accomplish its mission, goals, and objectives.

ThreatsNegative external factors that inhibit the firm's ability to accomplish its mission, goals, and objectives.


Threats

All of those that are listed in the book…… also

1. Law Suits2. Environmental Disasters3. Loss of Key Individuals4. Failure to Secure Funding in Future


The Power of External Market Forces

Competitive

Competitive

EconomicEconomic

Political and

Regulatory

Political and

Regulatory

Technological

Technological

Social and Demographi

c

Social and Demographi

c


Step 4: Identify Key Success Factors

Key success factors (KSFs): factors that determine the relative success of market participants. The keys to unlocking the secrets of competing

successfully in a particular market segment.Example: Five Guys Burgers and Fries


Key Success Factors

• Industry Experience• Experienced Management• Sufficient Capital• Good Location• Quality Products• Superior Customer Service• Liberal Return Policy for Retailers• Distribution Systems• Internal Processes – tight controls over costs and quality


Identifying Key Success FactorsList the skills, characteristics, and core competencies that

your business must possess to be successful in its market segment.

Key Success Factor How Your Company Rates

1. Low 1 2 3 4 5 6 7 8 9 10 High

2. Low 1 2 3 4 5 6 7 8 9 10 High

3. Low 1 2 3 4 5 6 7 8 9 10 High

4. Low 1 2 3 4 5 6 7 8 9 10 High

5. Low 1 2 3 4 5 6 7 8 9 10 High

Conclusions:


Step 5: Analyze Competitors

NFIB study: Small business owners believe they operate in a highly competitive environment and the level of competition is increasing.

Yet, 97 percent of all U.S. businesses do not systematically track the progress of their key competitors.


Competitor AnalysisDirect competitors

1. Offer the same products and services2. Customers often compare prices, features and deals among

these competitors when they shop

Significant competitors3. Offer some of the same or similar products or services4. Product or service lines overlap but not completely

Indirect competitors5. Offer same or similar products in only a small number of

areas


Step 5: Analyze CompetitorsAnalyzing key competitors allows an entrepreneur to:

1. Avoid surprises from existing competitors’ new strategies and tactics.

2. Identify potential new competitors and the threats they pose.

3. Improve reaction time to competitors’ actions.4. Anticipate rivals’ next strategic moves.


Step 5: Analyze CompetitorsTechniques do not require unethical behavior:1. Monitor industry and trade publications.2. Talk to customers and suppliers.3. Debrief employees, especially sales representatives and purchasing

agents.4. Attend trade shows and conferences and study competitors’ sales

literature.5. Watch for competitor’s employment ads.6. Conduct patent searches for patents competitors have filed. 7. Get EPA reports for the factories of competing manufacturers.8. Monitor direct competitors via social media


Step 5: Analyze Competitors

Techniques do not require unethical behavior:1. Learn about the kinds of equipment and raw materials

competitors are importing from the Journal of Commerce Port Import Export Reporting Service.

2. Buy competitors’ products and “benchmark” them. 3. Get competitors’ credit reports.4. Check out the reports publicly-held competitors must file

with the SEC. 5. Investigate UCC reports. 6. Check out the resources in your local library.7. Use the Internet to learn more about competitors.8. Visit competing businesses to observe their operations.

(continued)


Competitive Profile Matrix


Is Setting Goals & ObjectivesReally Important?

“Would you tell me, please, which way I ought to go from here?” said Alice.

“That depends a good deal on where you want to get to,” said the Cheshire cat.

“I don’t much care where.…” said Alice.‘Then it doesn’t matter which way you go,” said the cat.

- Lewis Carroll’s Alice in Wonderland


Goals vs ObjectivesGoals:• Long range … lets go to Miami• General and/or Abstract… Lofty

Objectives:• Specific targets… what route and where do we stay at night?• Measurable… how many miles per day?• Assignable… who drives which legs of the trip?• Realistic/Challenging… make progress vs time to sleep.• Timely… project the arrival in Miami accurately.• Written… get everyone on board.

GO… SMART-W


Step 7: Formulate Strategies

Strategy - a road map of the actions an entrepreneur draws up to achieve a company’s mission, goals, and objectives. It is the company’s game plan for gaining a competitive advantage.


Strategic OptionsRoad Map… Route to take to Miami

Strategic Options:1. Cost Leadership… Low Cost Leader…

• Walmart - Target2. Differentiation… Unique Selection, Better Service, etc…

• Whole Foods3. Focus… Niche Markets… smaller… specific…

• Natural Foods Grocery

Road Map – Walmart vs Whole Foods vs Natural Foods

Road Map – WWN


Step 8 – Implement Action Plans1. Purpose: Why are we going to Miami?2. Scope: Who is going?3. Contribution: What is the benefit of going?4. Resources: How many bags of potato chips will it take?5. Timing: When do we leave?

PSCRT


Step 9 - Establish Controls• Financial: Does this make enough money to justify efforts?• Internal Business: Are we implementing the right processes?• Customers: Is our perception improving?• Innovation: Are we innovating?• Citizenship: Are we adding to society?

F-IB-C-I-C


Business Models

Mo. 1 2 3 4 5 6 7 8 9 10 11 12 Tot

A 2 6 3 7 3 2 5 7 3 4 3 5 50

B 2 2 3 3 4 4 4 5 5 5 6 7 50


Business Models

Mo. 1 2 3 4 5 6 7 8 9 10 11 12 Tot

A 2 6 3 7 3 2 5 7 3 4 3 5 50

B 2 2 3 3 4 4 4 5 5 5 6 7 50

@ 6 monthsA = 23B = 18

A = 28% more than B


Business Models

1 2 3 4 5 6 7 8 9 10 11 120

2

4

6

8

10

12

14

Series2Series1


Business Models

1 2 3 4 5 6 7 8 9 10 11 120

2

4

6

8

10

12

14


Business Models

Recurring Revenue

Non-Recurring Revenue

Rev. Frequency Mo. / Qtr. / Yr. > Yr.


Business Models

Recurring Revenue


Frequency MagazinesGrocery

Fuel

AttorneysMortgageRealtors


Business ModelsRecurring Revenue

HybridRecurring &

Non-Recurring



Fuel

Recurring for a Short Period of

Time or

Periodic Fees +Recurring




HybridRecurring &

Non-Recurring



FuelInsurance

Bus. Attorney - Retainer

orStock Broker

Business Coaches


Furniture


Business Models

Clothing

Restaurants

Security Services

Home Theater & Electronics

Appliances

Home Improvements

Roofing Plumbing Electrical Repair




Rev. Frequency Mo. / Qtr. / Yr. > Yr.

Customer Profile

Value Proposition

Differentiation

Pricing

Selling Process

Distribution

Support


Feasibility Analysis

Industry & Market

Product & Service

Financial


Bargaining PowerOf Customers

Bargaining PowerOf Suppliers

Intensity ofRivalry

Threat of NewCompetitors

Threat of SubstituteProducts

Low

High

0

0

0

0

0

55

55

5

Industry &Market Feasibility

Five Forces Circle



Intensity ofRivalry



Low

High

0

0

0

0

0

55

55

5


Five Forces Circle

FOOD TRUCK EXAMPLE



Intensity ofRivalry



Low

High

0

0

0

0

0

55

55

5


Five Forces Circle

Consignment Clothing Retailer


Five Forces Circle


Five Forces Analysis

Food Truck

Neighborhood Style Mexican Restaurant

Pizza Franchise – Dominos

Steak House – High End


Five Forces Analysis

Commercial Lawn Care Business

Moving Company

Clothing Store

Roofing Company

MANA 3325 – ThurburnLecture #4 Slides Product or Service Feasibility

Primary Research – Most Valuable & Expensive:• Customer Surveys• Focus Groups• Prototypes• In-Home Trials

Secondary Research – Less Pertinent & Less Expensive:• Trade Associations• Direct Mail Lists• Demographic Data• Census Data• Market Research by Others• Articles• Local Data• Internet

MANA 3325 – ThurburnLecture #4 SlidesStart here

Financial Feasibility

• Capital Requirements Do we have enough cash to do it? If not… can we raise the cash needed?

• Estimated Earnings Does it generate enough cash to sustain itself?

• Return on Investment Can we get a better return doing something else for a lower risk?


Should We?

Can We?

How Do We?

Did We?

Would We?


Should We?Does it fit our Vision and Mission?

Can We?Do we have adequate resources?

Perform a Feasibility Analysis

How Do We?Develop a Business Plan

Specify Objectives

Did We Achieve our Goals?Implement the Business Plan

Measure Results

Would We Do It Again?Do we pull the plug?

If so… When?


The Business Plan

Why Make a Business Plan?


The Business Plan

Good Planning Improves Results

Increase Probability of Successful Financing

Helps Prevent Mistakes… I wish we hadn’t !


The Business Plan

Who is the Plan for?

• Yourself… essentials may be enough.

• Partners… more extensive

• Investors… most extensive

The More $$$ the More EXTENSIVE


The Business Plan

• Company• Strategy• Marketing• Implementation• Projections• Financing


The Business Plan

• Company• Title Page• Table of Contents• Exec Summary• Vision & Missions• History• Industry Profile• Products & Services


The Business Plan

• Strategy• Goals• Objectives• Business Strategy


The Business Plan

• Marketing• Marketing Strategy• Marketing Research• Customer Research• Competitors Analysis


The Business Plan

•Implementation• Management Team• Plan of Operations


The Business Plan

•Projections• Assumptions• Projections

• Summary & Cash Flow• Income Sources• COG• Expenses• Payroll Detail


The Business Plan

•Financing• Loan Details if applicable• Investor Details if applicable


The Business Plan

The 5 Cs

Capital

Capacity

Collateral

Character

Conditions


The Business Plan

The 5 Cs of Capital

Capital – Enough? and Balance of Debt vs Equity

Capacity – Cash Flow

Collateral – Liquid or Fixed Assets

Character – Creditor History

Conditions – Terms of Loan

2 - 1ch. 2: inside the entrepreneurial mind protecting your ideas utility patent – a grant from...

Documents

entrepreneurial mind

ideas design patent

design patents

entrepreneurial experience

ideas utility patents

existing patents

creative ideas

inventor of product