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ENTREPRENEURIAL FINANCE

ENTREPRENEURIAL FINANCE. CH3: Case Study Go-Figure, Inc. Task # 3 Prepared by YI-JU CHEN CHIEN-CHING LIN. Case Study Go-Figure, Inc. Go-Figure, a newly formed corporation, has developed a proprietary circuit board inspection system.

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ENTREPRENEURIAL FINANCE

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  1. ENTREPRENEURIAL FINANCE CH3: Case StudyGo-Figure, Inc. Task # 3 Prepared by YI-JU CHEN CHIEN-CHING LIN

  2. Case Study Go-Figure, Inc. • Go-Figure, a newly formed corporation, has developed a proprietary circuit board inspection system. • It uses a unique technology for circuit boars inspection and has for a patent on technology. • Product testing shows success and the technology is much less costly than alternative methods of inspection and visual inspection. • According to market research, there are 30,000 manufacturing lines that could be served using this technology

  3. Case Study Go-Figure, Inc. • The firm is seeking an addition $l million from outside investor by issuing business angel common stock at $1 per share. • Minimum investment is $25,000. • The entrepreneur and members of board own existing equity. • The management team is looking for additional expertise and is willing to consider board membership for a well-qualified investor.

  4. Assignments As an employee of Go-Figure, Inc.and been deputed with the job of putting a draft business plan that will be circulate to prospective investors. • Develop a brief outline of the major part of the Go-Figure business plan should be. • Prepare a list of questions any out side investors would want to have answered before investing. • After developed the outline, explain in which sections of plan each of following might be address.

  5. Sections of Plan Might be Address A. Commitment of the entrepreneur B. Present and future financial needs C. Specifics of opportunity D. Competition E. Sources of competitive advantage F. Capabilities of management G. Harvesting

  6. First Assignment (1) • A brief outline of the major part of the Go-Figure business plan • COVERSHEET • TABLE OF CONTENTS • EXECUTIVE SUMMARY • BUSINESS DEVELOPMENT • MARKET ANALYSIS • MARKETING AND SALES ACTIIVITIES Source:@ 1997 Inland Empire Small Business Development Center

  7. First Assignment (2) • A brief outline of the major part of the Go-Figure business plan • OPERATIONS PLAN • ORGANIZATION PLAN • CRITICAL RISKS AND PROBLEMS • FINANCIAL PLAN • OVERALL SCHEDULE Source:@ 1997 Inland Empire Small Business Development Center

  8. Second Assignment (1) • A list of questions any out side investors would want to have answered before investing. • TOP 20 QUESTIONS, this template as an initial summary for bankers or investors • Q1. What type of business does Go-Figure Inc. have? • Q2. What is the purpose of this business? • Q3. What is the key message or phrase to describe the • business of Go-Figure Inc. in one sentence? • Q4. What is the reason for starting this business? • Q5. What is the products or services of Go-Figure Inc.? Sources: BizPlan Express , South-Western College Publishing 1998

  9. Second Assignment (2) • TOP 20 QUESTIONS • Q6. What are three unique benefits of Go-Figure Inc. • products? • Q7. Does Go-Figure Inc. have data sheets, brochures, • diagrams,sketches, photographs, related press releases • or other documentation about company’s products/ • services? • Q8. What are the products applications? • Q9. What’s the motivation to develop the products? • Q10 Are this products or services used in connection with • other products? Sources: BizPlan Express , South-Western College Publishing 1998

  10. Second Assignment (3) • TOP 20 QUESTIONS • Q11. List the top three objections to buying Go-Figure • Inc.’s product or service immediately? • Q12 When will Go-Figure Inc.’s products be available? • Q13 Who are Go-Figure Inc.’s target audiences? • Q14 Who are Go-Figure Inc.’s competitors? • Q15 How are Go-Figure Inc.’s products differentiated • from that of the competitors? Sources: BizPlan Express , South-Western College Publishing 1998

  11. Second Assignment (4) • TOP 20 QUESTIONS • Q16. What is the pricing of Go-Figure Inc.’s products versus • the competitors? • Q17 Is Go-Figure Inc.’s making any special offers? • Q18. What plans does Go-Figure Inc.’s have for advertising • & promotions? • Q19. How will Go-Figure Inc.’s finance Company growth? • Q20. Does Go-Figure Inc. have the management team • needed to achieve the goals? Sources: BizPlan Express , South-Western College Publishing 1998

  12. Third Assignment (1) • Explain in which sections of plan each of following might be • address. • Commitment of the entrepreneur • 1. ORGANIZATION PLAN --- • A.Management • 1.Management structure • 2. List key managers • 3. Duties and responsibilities of key managers

  13. Third Assignment (2) • Present and future financial needs It might be addressed in: 1.EXECUTIVE SUMMARY ---- Financial projections & Amount of money being sought, in what form, and for what purpose 2.FINANCIAL PLAN --- A. Funding Requirements----Now $1 million. B. Long Range Financial Strategy C. Exit Strategy for Investor(s) D. Historical Financial Data E. Financial Projections F. Supporting Financial Data

  14. Third Assignment (3) • Specifics of opportunity • It might be addressed in: • 1.EXECUTIVE SUMMARY ---- • 2. BUSINESS DEVELOPMENT ---- • A. Description & history of the business • B. Product/Service---- The unique technology for circuit boars inspection. • 1. Proprietary position/competitive advantage • 2. Present status of Product or Service • 3. Product potential • 4. Specific benefits of the Product or Service • 5. Stage of Product life cycle • 6. Research and Development efforts -current and ongoing

  15. Third Assignment (4) 6. Barriers to Entry - cost, time, brand loyalty, technology, personnel,proprietary product, regulatory requirements, staying power of competition 7. Estimated market share and sales B.Market Test Results -Customer reactions, feedback, willingness to purchase

  16. Third Assignment (5) • Significant Risk • It might be addressed in: • 1.CRITICAL RISKS AND PROBLEM ---. Identify and Discuss • "What If. .." scenario • A. Risks involved with venture and/or assumptions • B. Plans for minimizing impact of risks or unfavorable developments

  17. Third Assignment (6) • Competition & Sources of competitive advantage • It might be addressed in: • 1. EXECUTIVE SUMMARY--- Marketing strategy and attractiveness • of market &Management strengths • 2. BUSINESS DEVELOPMENT --- • A.Product/Service ---The unique technology for circuit boars inspection. • 1. Proprietary position/competitive advantage • 2. Product potential • 3. Specific benefits of the Product or Service • 4. Stage of Product life cycle • 5. Research and Development efforts - • current and ongoing

  18. Third Assignment (7) • Competition & Sources of competitive advantage • It might be addressed in: • 3. MARKET ANALYSIS--- • C. Competition • 1. List of competitors indirect and direct • 2. Potential new competitors • 3. Similarities/dissimilarities of competitors to your company • 4. Internal and external strengths/weaknesses • 5. Market share - current and projected • 6. Competitors' public image • 7. Growth potential

  19. Third Assignment (8) • Competition & Sources of competitive advantage • It might be addressed in: • 4. OPERATIONS PLAN -- • C. Operating Competitive Advantages • 1. Various factors -geography, techniques, technology, • economies of scale,experience of personnel and processes

  20. Third Assignment (9) • Capabilities of management • It might be addressed in: • 1. EXECUTIVE SUMMARY --- Management strengths • 2. ORGANIZATION PLAN --- • A.Management • 1.Management structure 2. List key managers 3. Duties and responsibilities of key managers 4. Compensation and benefits 5. Qualifications and experience 6. Planned management additions

  21. Third Assignment (10) • Harvesting • It might be addressed in: • 1. EXECUTIVE SUMMARY --- Management strengths • 2. FINANCIAL PLAN--- • A. Exit Strategy for Investor(s) • B.Financial Projections • 3. OVERALL SCHEDULE --- Realistic schedule that shows the • timing of major events of the plan

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