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Kawasaki on Positioning

Kawasaki on Positioning. Craft a good message Positioning states: Why founders started the organization Why customers should patronize it Why good people should work at it. Kawasaki on Positioning. What do you do?. Kawasaki on Positioning. Positive Customer-centric

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Kawasaki on Positioning

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  1. Kawasaki on Positioning • Craft a good message • Positioning states: • Why founders started the organization • Why customers should patronize it • Why good people should work at it

  2. Kawasaki on Positioning • What do you do?

  3. Kawasaki on Positioning • Positive • Customer-centric • Empowering (meaning for employees) • Self-explanatory • Specific • Core (competencies) • Relevant • Long-lasting • Differentiated

  4. Kawasaki on Positioning • The name of your business should : • Be first in the alphabet • Avoid numbers, trends, and similar sounding names • Sound logical • Does your name have verb potential ? • “________________ it.” • (E.g., Google it)

  5. Kawasaki on Positioning • Make your positioning personal (and don’t use jargon) • “We realize that it’s important that every customer has some control over personal information.” • V. • “We give you control over your personal information.”

  6. Kawasaki on Positioning • After you tell someone about your business idea – can they explain to you what the idea is without repeating your own wording? • When you test your product or service, listen carefully, this feedback is helping you to develop your position

  7. The Entrepreneurial Approach to Resources • Resources – Networks are everything to the entrepreneur • People, such as the management team, the board of directors, lawyers, accountants, and consultants • Financial resources • Assets, such as plant and equipment • Business plan

  8. Relationship with the Board of Directors • Simple rules for a productive relationship with the board of directors • Treat your directors as individual resources • Always be honest with your directors • Set up a compensation committee • Set up an audit committee • Never set up an executive committee • Also note use of accountants and lawyers

  9. Consultants • Why do startups hire consultants? • To compensate for a lower level of professional experience • To target a wide market segment (possibly to do market research for a consumer goods firm) • To undertake projects that require a large startup investment in equipment

  10. Consultants • Consider the Gap Analysis exercise and Building your Brain Trust exercises at the end of Chapter 10

  11. Hiring a Consultant • Considerations • Not geographically bound • Word of mouth • References • People skills • Professional affiliations

  12. Financial Resources • Cash is the lifeblood of the venture • Computers and spreadsheet programs are tools that save time and increase productivity and creativity. • Answer “what if” questions • Capital Requirements • Pro Forma Income Statements • Balance Sheets • BudgetingBreak-Even Calculations • Cash Flow Projections

  13. Franchising • An entrepreneurial alliance between two organizations, the franchisor and the franchisee • Franchisor – the concept innovator who grows by seeking partners or franchisees to operate the concept in local markets • A large-scale growth opportunity based on a partnership rather than an individual effort

  14. Assessing a Franchise • Multiple market presence • Outlet pro forma disclosed or discerned • Market share • National marketing program • National purchasing program • Margin characteristics

  15. Accessing a Franchise • Business format • Term of the license agreement • Site development • Capital required per unit • Franchise fee and royalties

  16. Exhibit 11.3

  17. Training and Operational Support • Promotes the standardized, consistent delivery of the product • Reinforces the brand’s value • Transfers knowledge of the service delivery system (SDS) to the franchisees, both managers and line workers

  18. Field Support • Two forms: • Franchisor’s representative visits the franchisee’s location in person • Resident experts available for consultation at the corporate headquarters

  19. Marketing, Advertising, and Promotion • Funded and implemented at three levels 1. National • Franchisee contributes a percentage of top-line sales to the fund and typically controlled by the franchisor 2. Regional • Stores within a set area contribute a percentage of top-line sales to the fund • Controlled by an area of dominant influence (ADI) advertising cooperative • 3. Local • Franchisee makes direct expenditures on advertising • Controlled by franchisee but must be within guidelines set by franchisor

  20. Exhibit 12.2

  21. Exhibit 12.3

  22. Entrepreneurial Finance • Three core principles of entrepreneurial finance • More cash is preferred to less cash • Cash sooner is preferred to cash later • Less risky cash is preferred to more risky cash

  23. Exhibit 12.4

  24. Exhibit 12.5

  25. Bargaining Power • Three vital corollaries determining bargaining power • Burn rate • Time to OOC (Out Of Cash) • TTC (Time To Close)

  26. Free Cash Flow • The cash flow generated by a company or project is defined as follows: • Earnings before interest and taxes (EBIT) • Less tax exposure (tax rate times EBIT) • Plus depreciations, amortization, and other non-cash charges • Less increase in operating working capital • Less capital expenditures

  27. Operating Working Capital • Operating working capital can be defined as follows: • Transactions cash balances • Plus accounts receivable • Plus inventory • Plus other operating current assets • Less accounts payable • Less taxes payable • Less other operating current liabilities

  28. Factors Affecting Financing • Accomplishments and performance to date • Investor’s perceived risk • Industry and technology • Venture upside potential and anticipated exit timing

  29. Factors Affecting Financing • Venture anticipated growth rate • Venture age and stage of development • Investor’s required rate of return or internal rate of return • Amount of capital required and prior valuations of the venture

  30. Factors Affecting Finance • Founders’ goals regarding growth, control, liquidity, and harvesting • Relative bargaining positions • Investor’s required terms and covenants

  31. Check out these resources • www.sba.gov • Financing information • Start-up kits/information • Search by zip code • www.score.org • Service Core of Retired Executives • Search by zip code • www.scorela.org • SCORE in Glendale

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