ABSTRACT

This report is revolves around the topics that

an entrepreneur will face after he/she launches
the business plan. Under these are the
subheadings of:
IMPLEMENTING a. Reality Check
b. Managing

THE BUSINESS Growth

c. Expansion
d. Gong Public

PLAN e. Handling
Bankruptcy
Balaoro, Jiamari
LAUNCHING THE BUSINESS PLAN
Calilan, Mark Jayson
Hernan, Pialhen Marie
Jontilano, Marianne
Lazaro, Divine Grace
Paquitan, Andrea Jane
Salapate, Abegail

Entrepreneurial Management
HRDM 4-1
 Reality Check
In many ways, writing a business plan is a series of reality checks. By making you carefully think
through every aspect of your business — from the product or service you offer to the competitors you face
and the customers you serve — the business-planning process brings you face to face with the realities of
doing business.
To help determine whether or not you’re on solid ground, discuss your business idea and preliminary
plans with someone outside your company. What you’re really seeking is a mentor with most or all of the
following characteristics:
1. Someone who has experience in the business area you’re considering, or at least experience
in a similar business.
2. Someone with the courage to tell you the truth, whether it’s “That’s a great idea. Go for it!”
or “If I were you, I’d take a little more time to think this over.”
3. Someone you respect and admire and from whom you can take candid criticism without
feeling defensive.
Consider turning to colleagues you’ve worked with in the past, teachers or professors, friends from
college, or other associates. Friends and family members sometimes can offer the advice and perspective
you need, but emotional ties can get in the way of absolute honesty and objectivity. If you go this route, set
some ground rules in advance. Ask for suggestions, comments, and constructive criticism and be prepared
to hear both the good and the bad without taking what you hear personally.
In addition to a mentor, consider designating someone to act as the devil’s advocate to guarantee
that you address the flip side of every issue that you’re considering. This person’s task is to be critical of each
idea on the table — not in a destructive way, but in a skeptical, show-me-the-money, you’ll-believe-it-when-
you-see-it kind of way.
In larger companies, you can accomplish this goal by creating two teams — one to defend the idea
and the second to criticize it. Ask the opposing team members to think of themselves as a competing firm
looking to find weaknesses in the new venture.

Managing Growth
If only half of start-ups survive more than five years and only one-third make it to 10, what’s the one
thing you could do to ensure your company is sustainable? The answer is to create a growth strategy for
your business, of course.
 A growth strategy involves more than simply envisioning long-term success. If you don’t have a
tangible plan, you’re actually losing business -- or you’re increasing the chance of losing business to
competitors.
The key with any growth strategy is to be deliberate. Figure out the rate-limiting step in your growth,
and pour as much fuel on the fire as possible. But for this to be beneficial, you need to take the following
steps:

1. Establish a value proposition.

For your business to sustain long-term growth, you must understand what sets it apart from the
competition. Identify why customers come to you for a product or service. What makes you relevant,
differentiated and credible? Use your answer to explain to other consumers why they should do business
with you.

2. Identify your ideal customer.

You got into business to solve a problem for a certain audience. Who is that audience? Is that
audience your ideal customer? If not, who are you serving? Nail down your ideal customer, and revert back to
this audience as you adjust business to stimulate growth.

3. Define your key indicators.

Changes must be measurable. If you’re unable to measure a change, you have no way of knowing
whether it’s effective. Identify which key indicators affect the growth of your business, then dedicate time
and money to those areas. Also, A/B test properly -- making changes over time and comparing historical and
current results isn’t valid.

4. Verify your revenue streams.

What are your current revenue streams? What revenue streams could you add to make your business
more profitable? Once you identify the potential for new revenue streams, ask yourself if they’re sustainable
in the long run. Some great ideas or cool products don’t necessarily have revenue streams attached. Be
careful to isolate and understand the difference.

5. Look to your competition.

No matter your industry, your competition is likely excelling at something that your company is
struggling with. Look toward similar businesses that are growing in new, unique ways to inform your growth
strategy. Don’t be afraid to ask for advice. Ask yourself why your competitors have made alternate choices.
Are they wrong? Or are your businesses positioned differently? The assumption that you’re smarter is rarely
correct.
6. Focus on your strengths.
Sometimes, focusing on your strengths -- rather than trying to improve your weaknesses -- can help
you establish growth strategies. Reorient the playing field to suit your strengths, and build upon them to
grow your business.

7. Invest in talent.
Your employees have direct contact with your customers, so you need to hire people who are
motivated and inspired by your company’s value proposition. Be cheap with office furniture, marketing
budgets and holiday parties. Hire few employees, but pay them a ton. The best ones will usually stick around
if you need to cut back their compensation during a slow period.
You need to adapt your plan to smooth out your business’s inefficiencies, refine its strengths and
better suit your customers -- who could be completely different than those from a vague, one-size-fits-all
strategy.
Your company’s data should lend itself to all your strategic decisions. Specifically, you can use the
data from your key indicators and revenue streams to create a personalized growth plan. That way, you’ll
better understand your business and your customers’ nuances, which will naturally lead to growth.
Expansion
Your business market, like everything else, will change with time. As your business matures and your
market share steadily increases, you will probably begin to encounter the growth limits of your original
target market. Planning and implementing a growth strategy to develop new markets and expand your
business before your current market flattens will not only help your business survive through tough times, it
could also give you considerable edge on the competition.
Planning and achieving market growth, whether aggressive or conservative, requires the application
of some fundamental marketing activities and techniques. These activities and techniques are incorporated
in the following four steps needed to expand your business through new market development:
Step 1: Define your new target market(s)
The first thing you will need to do as you begin your market expansion effort is to determine the
demographics and the geographic location of the new target market. Determine which of the following
categories characterizes your expansion efforts:
 Same Target Group, New Geographic Area
 New Target Group, Same Geographic Area
 New Target Group, New Geographic Area
Step 2: Do your market research
 Once you have developed a customer profile and identified the extent of your new target market,
then you can do some basic market research to determine the following information:
 Interest in your product or service
 How to get your product/service to your customers
 The number and strength of competitors in the target area.
Step 3: Enter the market or look for another target market
After you complete your analysis, you should have a good sense of the growth potential for your
products or services and whether it is a sound financial decision. Your market analysis will help you make a
“go/no go” decision, but don’t be afraid to rely on your instincts. You may see something about the market
that isn’t easily identified with research data. Remember that the market analysis can only help you make a
well-informed decision. There is always some degree of risk in any business decision you make. Taking well
informed risks is an essential part of being a successful business owner.
Step 4: Create a plan to enter the market
After you have made the decision to enter a new market, your next step is to develop and implement
a good strategic plan for promoting and delivering your products or services to that market. This plan should
focus on three key areas:
a) Promoting your products or services.
Develop a marketing plan that details how you will introduce and promote your products or services
to the new target market. This plan should include any media, point of purchase, mailing, telemarketing
or other advertising you plan to use. If you market through a sales force, then you will need to develop
some sales strategies and prepare your sales people with all the promotional tools and information they
will need to solicit new customers. Since you are already in business, you should have some ideas of
what has worked for you in the past. If you use a marketing or advertising agency, then involve them in
this process after you have decided to enter the new market. They will be able to help you determine the
best marketing method for establishing and increasing market share.

b) Delivering your products or services to the customer

Supply and distribution are the logistics of doing business. If you are in retail and you are moving into
a new geographic area, then you will need to find a good location for your new store. You will also have
to establish a method of supplying the new store with products. If you deal with suppliers, then you will
need to involve them in the planning. If you are a mail order company, then you may need to contract
with a carrier who is well established in the target area. If your product delivery requires data transfer
 over telecommunication lines, then you will need to be able to establish the proper connections and
provide your new customers with some means of receiving and sending data. In short, create a detailed
plan addressing all the logistics of getting your supplies and delivering your products or services to the
new market.
c) Cultivating new market share and sustaining current business through customer satisfaction
As you begin to establish new customers in the target area, you must remember to stay focused on
meeting their needs. It is much easier to lose customers than it is to gain them. Conduct customer
surveys to find out what your customers like and dislike about your products. Talk to them personally
and ask them what they think. If your business is driven by a desire to meet your customers’ needs, then
you will always be successful in new, as well as established markets.
d) Finally, measure your success by applying standard business measures to your expansion venture.
You should be tracking your sales, market share, profit and loss, and all other key measures that
apply to your business. Use this information along with customer and employee feedback to design and
implement better ways of doing business. Learn from your expansion efforts so that as you continue to
grow your business by establishing new markets, you can translate what you have learned into good
business decisions.
Going Public
An IPO is short for an initial public offering. Like the name says, it's when a company initially offers
shares of stocks to the public. It's also called "going public." An IPO is the first time the owners of the
company give up part of their ownership to stockholders.

Advantages of an IPO for the Company

The IPO is an exciting time for a company. It means it has become successful enough to require much
more capital to continue to grow.
It's often the only way for the company to get enough cash to fund a massive expansion. For the owners, it's
finally time to cash in on all their hard work. They usually award themselves a significant percentage of the
stock. They stand to make millions the day it goes public.
The IPO allows the company to attract top talent because it can offer stock options. It can pay the
executives little wages up front. It promises they can cash out later with the IPO.

Disadvantages of an IPO to the Company

The IPO process requires a lot of work. It can distract the company leaders from their business. That can hurt
profits. They also must hire an investment bank, such as Goldman Sachs or Morgan Stanley. They help the
company go through the complexities of the process. These banks are expensive.
Second, the business owners may not be able to take many shares for themselves. Instead, their original
investors might require them to put all the money back into the enterprise.
Even if they take the shares, they make not be able to sell them for years. They could hurt the stock price if
they start selling large blocks. Investors would see it as a lack of confidence on their parts.
Third, they could lose ownership control of their business. A Board of Directors could even fire them.
Fourth, a public company faces intense scrutiny from regulators. They include the Securities and Exchange
Commission and the Sarbanes-Oxley Act. Many details of the company's business and its owners become
public. That could give valuable information to competitors. (Source: "How to Prepare for IPO,"
Inc, February 1, 2010.)

Advantages of an IPO to Investors

The IPO is also an exciting time. The initial shares of stock are only available to those who know about it.
Many investors prefer to get in "on the ground floor." That's because IPO shares can often skyrocket in
value when they are first sold on the stock market.

Disadvantages of an IPO to Investors

There is usually a clause that restricts IPO investors from selling for the first 30 days. That's frustrating when
an IPO's value rises, then plummets to earth a few days later.

What IPOs Mean to the Economy

The number of IPOs being issued is usually a sign of the stock market's, and economy's, health. During
a recession, IPOs drop because it's not worth the hassle when share prices are depressed. When IPOs
increase, it usually means the economy is getting back on its feet again.

Handling Bankruptcy
Why Start-ups Fail
Start-ups often fail because founders and investors neglect to look before they leap, surging forward with
plans without taking the time to realize that the base assumption of the business plan is wrong. They believe
they can predict the future, rather than try to create a future with their customers. Entrepreneurs tend to be
single-minded with their strategies—wanting the venture to be all about the technology or all about the
sales, without taking time to form a balanced plan.
Ten ways ailing companies can get started on the turnaround work they need.
1. Throw away your perceptions of a company in distress
It’s next to impossible to come up with one working definition of a company in distress—and
dangerous to think that you have one for your own company. Depending on the situation, there are
probably 25 different signs of potential distress (exhibit). The problem is seldom made up of just one or two
of these things, however. Rather, it is the result of a greater number of them interacting together and with
other external factors.
2. Force yourself to criticize your own plan
The biggest thing you can do to avoid distress is periodically review your business plans. When you’re
creating them, whether at the beginning of the year or the start of a three-year cycle, build in some trigger
points. A simple explicit reminder can be enough: “If we don’t have this type of performance by this date or
we haven’t gotten the following 12 things done by this date, we’ll step back and decide if we’re going down
the right path, given what’s happened since our last review.”
Such trigger points should be oriented both to operational and market performance as well as to
basic financial metrics and cash flow. Look at where you are as a company using basic financial and cash
milestones, and then look at where you are with respect to your industry and competitors. If you’re not
moving with the rest of the industry (or not outpacing it, if the industry is struggling), then your plan may be
obsolete. And don’t forget to look back at your performance over past cycles to identify any trends. If you
keep missing performance targets, ask why.
3. Expect more from your board
The beauty of a board is that it has enough distance from the company to see the forest for the
trees. Managers often treat their board as a necessary evil to placate so they can get on with their business,
but that undermines the board’s role as an early-warning system when a company is heading for distress.
Sometimes significant events happen that no one could have foreseen, of course. But in a typical
distress situation, a company has usually just had 18 to 24 months of poor performance, and the board hasn’t
been aware or hasn’t asked the right questions. Independent board members—truly independent ones—
can have a big impact here.
4. Focus on cash
 A successful turnaround really comes down to one thing, which is a focus on cash and cash returns.
That means bringing a business back to its basic element of success. Is it generating cash or burning it? And,
even more specifically, which investments in the business are generating or burning cash?
Keeping track of cash isn’t just about watching your bank balance. To avoid surprises, companies
also need a good forecast that keeps a midterm and longer view. For example, failing to pay attention to the
cash component of capital investments routinely gets companies in trouble. Project net present values can
look the same whether the return begins gradually at year two or jumps up dramatically at year five. But if
you’re not focusing on the cash that goes out the door while you’re waiting for that year-five infusion, you
can suddenly find yourself with very little cash left to run the business, sending you into a spiral you may not
recover from.
5. Create a great change story
Companies in distress don’t focus enough on creating a change story that everyone understands—
and that creates some sense of urgency. Here’s an example. I recently did a turnaround as chief
restructuring officer of a mining company. It was profitable, returned a decent margin, and was cash
positive. But the commodity price was dropping, and the board was worried about generating enough free
cash flow to drive the capital needs of the business. The change story we created said, “Yes, we are
profitable. But the whole point of profitability is to generate enough cash to expand, grow, and maintain
operations. If we can’t do that, then we’re headed for a long, slow decline where equipment breaks down
and lower production becomes the new reality.”
6. Treat every turnaround like a crisis
Without a crisis mind-set, you get a stable company’s response to change: risk is to be avoided, and
incrementalism takes over. Your workers are asked to do a little more (or the same) with less. More
aggressive ideas will be analyzed ad nauseam, and the implementation will be slow and methodical.
In contrast, a crisis demands significant action, now, which is what a distressed company needs.
Managers need to use words like crisis and urgency from the first moment they recognize the need for a
turnaround. A company that’s in true crisis will be willing to try some things that it normally wouldn’t
consider, and it’s those bold actions that change the trajectory of the company. Crisis drives people to action
and opens managers up to consider a full range of options.
7. Build traction for change with quick wins
The tendency of most managers is to put all of their focus and resources into three or four big bets
to turn a company around. That can be a high-risk approach. Even if big bets are sometimes necessary, they
take a lot of time and effort—and they don’t always pay off. For example, say you decide to change
suppliers of raw materials so you can source from a low-cost country, expecting 30 percent lower direct
costs. If you realize six months later that the material specifications don’t meet your needs, you’ll have spent
time you don’t have, perhaps interrupted your whole production schedule, and probably burned a bunch of
cash on something that didn’t pay off.
In addition to going after big bets, managers should focus on getting a series of quick wins to gain
traction within the organization. Such quick wins can be cost focused, cutting off demand for some external
service they don’t need. Or it could be policy focused, such as introducing a more stringent policy on travel

8. Throw out your old incentive plans

Management incentives are often the most overlooked tool in a turnaround. In stable companies,
short-term incentive plans can be a complex assortment of goals related to safety, financial and operational
performance, and personal development. Many are so complex that when you ask managers what they
need to do to earn their bonus, many just shrug their shoulders and say, “Someone will tell me at the end of
the year.”
In a turnaround, take a lesson from the private-equity industry and throw out your old plans. Instead,
offer managers incentives tied specifically to what you want them to do. Do you need $10 million of
improvement from pricing? Then make it a big part of your sales staff’s incentive plan. Need $150 million
from procurement? Give your chief purchasing officer a meet-or-beat target. Be willing to forgo bonus
payments for those that don’t achieve 100 percent of their target—and to pay out handsomely for those
whose results are beyond expectations.
9. Replace a top-team member—or two
Experience tells me that most successful turnarounds involve changing out one or two top-team
members. This isn’t about “bad” managers. In my 20 years of doing this, I’ve only seen a small handful of
managers I thought were truly incompetent. But it’s a practical reality that there are managers who must
own the decline. And more often than not, they are incapable of the shift in mind-set needed to make
fundamental changes to the operating philosophy they’ve believed in for years. Whether they realize it or
not, they block that change because they’re bent on defending what they believe to be true. Although it’s
difficult, removing those people sends another signal to your stakeholders that there will be changes and
you’re not afraid to make tough moves.
10. Find and retain talented people
Beyond the leadership team, there are two types of people I look for immediately. First are those
that have the institutional knowledge. They may not be your top performers, but they know all the ins and
outs of the company—and are vital to understanding the impact of potential changes on the business. Many
times they are the disgruntled ones, unhappy with the company’s performance. But you need people who
are willing to point out the uncomfortable truths.
A turnaround is also a real opportunity to find the next level of talent in an organization. I’ve been
through multiple crises where the people who added the most value and impact weren’t the ones sitting
around the table at the beginning. I have often found great leaders two and three levels down who are just
waiting for an opportunity—and the fact that they can be part of something bigger than themselves, saving
a company, is often enough to attract and retain them.
For both groups, it’s important to realize that retention isn’t always about money and bonuses. It’s
also about figuring out the individual’s needs. Good turnaround managers actively look for those people and
find a way to get them involved.