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Resource Requirements

Resource Requirements. Venture Planning Chapter 11 Dowling Fall 2005. Resource Requirements. The Entrepreneurial Approach to Resources People Financial resources Assets (plant, equipment, etc.) A business plan. Resource Requirements. Entrepreneurship

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Resource Requirements

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  1. Resource Requirements Venture Planning Chapter 11 Dowling Fall 2005

  2. Resource Requirements • The Entrepreneurial Approach to Resources • People • Financial resources • Assets (plant, equipment, etc.) • A business plan

  3. Resource Requirements • Entrepreneurship • The process of creating or seizing an opportunity and pursuing it regardless of the resources currently controlled. • Entrepreneurs seek to use the minimal possible amount of all types of resources at each stage in their venture’s growth. • Don’t own resources – control resources.

  4. Resource Requirements • Entrepreneurs reduce some risk by… • Capital • Amount required is smaller, reducing dilution of founder’s equity • Flexibility • Without ownership of resources, entrepreneurs can commit and de-commit quickly

  5. Resource Requirements • Entrepreneurs reduce some risk by… • Low sunk cost • Sunk costs are lower if firm exercises option to abort • Costs • Fixed costs are lowered, favorably affecting breakeven • Reduced risk • Reduce total exposure, and avoid problems such as obsolescence of hard assets

  6. Resource Requirements • Bootstrapping • Entrepreneurs ask at every step how they can accomplish more with less. • “For the great majority of would-be founders, the biggest challenge is not raising money but having the wits and hustle to do without it.” – Amar Bhide

  7. Resource Requirements • OPR • Using OPR (‘Other People’s Resources’) is an important approach for entrepreneurs. • The key is to have use of the resource and being able to control or influence the deployment of the resource.

  8. Resource Requirements • Outside people resources • Boards of directors • The decision • Selection criteria • Reasons appointees decline: • Liability • Harassment • Time and risk • Consider alternatives to boards

  9. Resource Requirements • Analyzing financial requirements • Last step of the process • Determine what financial resources are required only after the: • Opportunity has been assessed, • A new venture team has been formed, and • All resource needs have been identified.

  10. Resource Requirements • Key points summary • Successful entrepreneurs bootstrap to marshal and minimize resources. • Control, not necessarily ownership, of resources is key to the “less is more” resource strategy. • Entrepreneurs are creative at winning OPR. • Must you find outside advisors? Only if they add value through know-how and networks. • Access to resources is better today than ever before.

  11. Resource Requirements • Discussion question • Think of the interview you conducted with an entrepreneur. Did your subject provide insights as to how she or he “bootstrapped” their own ventures?

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