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Entrepreneurial Business – a New Venture:

1. Structure

The new business has to be organized separately from existing one,

There has to be special focus for the new venture within the organization, &

Keep away the new venture from the burden it can not carry (traditional ROI analysis)

• New venture has FOUR requirements

Focus on market – ready for unexpected success & unexpected failure, your product or service may find a new market for itself, be ready to accept what market demands.

Financial foresight (cash flow, capital need planning)  

• Lack of financial foresight is greatest threat in stage of growth for a new venture,
  • Fall of rapidly growing venture has same reason of failure – lack of cash, inability to raise    capital needed, loss of control (expenses, inventories, receivables).
  • Cash flow, Capital & Control should be priority rather than focus on profit. Growth needs to come through cash and capital infusion. Profit at an early stage is a liability.
  • A successful new venture should outgrow it capital structure by every increase in sales.
• Building top management team –

Management of people and management of money are only two common activities in organization, rest team needs to discuss and identify key areas.

Start early building a team, informally or formally but need a top management like structure from the beginning. 

• Role of founders in the new venture – founder needs to identify his/her strength and take up role accordingly, otherwise he may destroy the business and himself.

Need for an outside advice – if not board of directors then someone from outside to counsel and advice on the problems he/she is not a part of. It needs an independent, objective outside advice. 

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