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    Unit II Methods To Initiate Ventures

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    Jatin Mandloi (Jatin Panwar)
    The document discusses three common methods for starting a new business venture: creating a new venture, acquiring an existing venture, and obtaining a franchise. It provides details on each method, including how to create a new venture by developing unique products or services, key questions to consider when acquiring an existing business, and important components to include in a franchise agreement such as financial terms, operations standards, and termination clauses.

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    Unit II Methods To Initiate Ventures

    Uploaded by

    Jatin Mandloi (Jatin Panwar)
    185 views28 pages
    The document discusses three common methods for starting a new business venture: creating a new venture, acquiring an existing venture, and obtaining a franchise. It provides details on each method, including how to create a new venture by developing unique products or services, key questions to consider when acquiring an existing business, and important components to include in a franchise agreement such as financial terms, operations standards, and termination clauses.

    Original Title

    Unit II Methods to Initiate ventures (1)

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    The document discusses three common methods for starting a new business venture: creating a new venture, acquiring an existing venture, and obtaining a franchise. It provides details on each method, including how to create a new venture by developing unique products or services, key questions to consider when acquiring an existing business, and important components to include in a franchise agreement such as financial terms, operations standards, and termination clauses.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    185 views28 pages

    Unit II Methods To Initiate Ventures

    Uploaded by

    Jatin Mandloi (Jatin Panwar)
    The document discusses three common methods for starting a new business venture: creating a new venture, acquiring an existing venture, and obtaining a franchise. It provides details on each method, including how to create a new venture by developing unique products or services, key questions to consider when acquiring an existing business, and important components to include in a franchise agreement such as financial terms, operations standards, and termination clauses.

    Copyright:

    © All Rights Reserved
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    Download as pdf or txt
    of 28

    Shri Vaishnav Institute of Management 1

    BBA II
    NEW VENTURE
    UNIT II: METHODS TO INITIATE VENTURE

    Faculty: Mrs. Sangeeta Rudra Atwe


    Methods to initiate ventures
    2

     The Pathways to New Ventures for


    Entrepreneurs
    Every potential entrepreneur wants to know the
    best methods for entering the business. There
    are 3 common methods.
    Creating the new venture
    Acquiring the existing venture
    Obtaining a franchise
    The Pathways to New Ventures for
    3
    Entrepreneurs
    Creating the New Acquiring an Existing
    Venture Venture

    Pathways to New Ventures

    Obtaining a Franchise
    1. Creating New Ventures
    4

    New – new Approaches to Creating New –old


    Approach a New Venture Approach
    01) Creating New Ventures
    5

    Most Effective way to approach- Create a unique


    product or service
    New-New Approach - New products or services
    frequently enter the market.
    E.g.: Smartphones, MP3 players, plasma TVs and
    GPS. All these products are introduced as a result
    of R&D efforts by major corporations. However,
    unique ideas are not produced by only large
    companies. One way to discover new products is
    to make a list of annoying experiences or hazards
    encountered with various products or services
    6

    Most business ideas tend to come from


    people’s experience. These are PITA
    products or ‘pain in the arse’ products
    E.g.: Facebook was founded by Mark
    Zuckerberg, a Harvard University student
    who was frustrated by a lack of networking
    facilities on campus. The company was
    founded in February 2004 and is now the
    largest source for photos and one of the
    most trafficked sites on the internet
    7

     New- Old Approach:


     Most small venture do not start with totally
    unique idea. Instead, an individual piggybacks
    on someone else’s idea by either improving a
    product or offering a service which is not
    currently available. E.g.: setting up
    restaurants, clothing stores in suburban areas
    that do not have an abundance of these
    stores. This is risky because competitors can
    move in easily.
    8

     The new-new approach is starting a business


    by creating a new and unique products or
    services. It is only based on the innovative
    idea and does not permit an adaptation.
     While the new-old approach is based on
    someone else’s idea by either improving a
    product or offering an existing service in an
    area in which it is not currently available.
    Trends Creating Business Opportunities
    9

     Emerging Opportunities
     Green Products - Organic foods, Organic
    fibers/textiles
     Alternative Energy – Solar, Biofuel, Fuel cells,
    Energy conservation
     Health Care - Healthy food, School and govt.-
    sponsored programs, Exercise, Yoga , Niche gyms
    Children, Nonmedical, Pre-assisted living, Assisted
    living transition services
    10

     Niche Consumables - Chocolate, Burgers, Coffee


    houses, Exotic salads
     Home Automation and Media Storage - Lighting
    control, Security systems, Energy management,
    Comfort management, Entertainment systems,
    Networked kitchen appliances
    Emerging Internet Opportunities
    11

     Educational Tutoring
     Human Resource services
     Matchmaking
     Virtual HR
     Online Staffing
    2. Acquisition of a Business Venture
    12

    Personal
    Preferences

    Acquiring an
    Examination of Established
    Entrepreneurial Evaluation of
    Opportunities the Venture
    Venture

    Asking Key
    Questions
    Advantages of Acquiring an Ongoing Venture
    13

    Buying an Ongoing Venture


    Less fear about successful future operation
    Reduced time and effort
    Purchasing at a good price
    14
    Key Questions to Ask
    15

     Why is this business being sold?


     What is the current physical condition of the business?
     What is the condition of the inventory?
     What is the state of the other assets of the business?
     How many employees will remain with the business?
     What type of competition does the business face?
     What does financial picture of the business look like?
    16
    17
    18
    19
    20
    21
    22
    What Should a Franchise Agreement
    Include?
    23

     An ideal franchise agreement should include the following


    clauses:
     Details of the Franchisor and the Franchisee
     The detailed relationship of both the members is included in
    this clause. It is the first detail included in the franchise
    agreement draft.
     Timeline and Validity
     This is the duration of the relationship between the
    franchisee and the franchisor. It is that period where the
    franchisee is allowed to see under the name and the mark of
    the franchisor. This duration can be extended if both have
    the agreement of the same.
    24

     Monetary Details to Be Included


    • Franchise Fee - This is the amount the franchisee
    has to pay to obtain the trademark and business
    name of the franchisor.
    • Royalty - This is a fixed percentage that the
    franchisee has to pay to the franchisor on a
    monthly basis.
     The amount and mode of payment for either is as
    per the discussions between the franchisee and
    the franchisor.
    25

     Site Selection
     It is the location or territory
    within which the
    franchisee is allowed to operate the business. The
    burden of finding the location is on the franchisee.
    This location is subject to the approval of the
    franchisor.
    26

     Business Operations
     This includes details as to how the franchisor
    expects the franchisee to run their business. Some
    of the areas they cover here will include:
    • The operation of the franchisee unit, as per the
    operating standards set by the franchisor.
    • The goods and/or services the franchisee is allowed
    to offer.
    • The goods and/or services the franchisee needs to
    purchase exclusively from the franchisor.
    27

     Advertising
     This section of the agreement gives the franchisee
    the responsibility to market, advertise and other
    promotional activities.
     Intellectual Property
     It includes the use of the trademarks and
    intellectual property that the franchisor owns that
    the franchisee is allowed to use for the business
    operations.
    28

     Training
     The franchisor is responsible to provide required support
    and supervision to the franchisee. It is done to make sure
    that uniformity is maintained among all franchised
    businesses.
     Termination Clauses
     It includes the terms that mention detailed provisions
    related to the termination of the franchise agreement. It is
    related to those where either party fails to perform as per
    the terms mentioned in the agreement. It also mentions
    penalties in the event of a franchise agreement is
    terminated.

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