Resource Requirements

1
Resource Requirements

• Venture Planning
• Chapter 11
• Dowling
• Fall 2005

2
Resource Requirements

• The Entrepreneurial
• Approach to Resources
• People
• Financial resources
• Assets (plant, equipment, etc.)
• A business plan

3
Resource Requirements

• Entrepreneurship
• The process of creating or seizing an opportunity
  and pursuing it regardless of the resources
  currently controlled.
• Entrepreneurs seek to use the minimal possible
  amount of all types of resources at each stage in
  their ventures growth.
• Dont own resources control resources.

4
Resource Requirements

• Entrepreneurs reduce some risk by
• Capital
• Amount required is smaller, reducing
• dilution of founders equity
• Flexibility
• Without ownership of resources, entrepreneurs can
  
• commit and de-commit quickly

5
Resource Requirements

• Entrepreneurs reduce some risk by
• Low sunk cost
• Sunk costs are lower if firm exercises
• option to abort
• Costs
• Fixed costs are lowered, favorably
• affecting breakeven
• Reduced risk
• Reduce total exposure, and avoid problems such as
  
• obsolescence of hard assets

6
Resource Requirements

• Bootstrapping
• Entrepreneurs ask at every step how they can
  accomplish more with less.
• For the great majority of would-be founders, the
  biggest challenge is not raising money but having
  the wits and hustle to do without it. Amar
  Bhide

7
Resource Requirements

• OPR
• Using OPR (Other Peoples Resources) is an
  important approach for entrepreneurs.
• The key is to have use of the resource and being
  able to control or influence the deployment of
  the resource.

8
Resource Requirements

• Outside people resources
• Boards of directors
• The decision
• Selection criteria
• Reasons appointees decline
• Liability
• Harassment
• Time and risk
• Consider alternatives to boards

9
Resource Requirements

• Analyzing financial requirements
• Last step of the process
• Determine what financial resources are
• required only after the
• Opportunity has been assessed,
• A new venture team has been formed, and
• All resource needs have been identified.

10
Resource Requirements

• Key points summary
• Successful entrepreneurs bootstrap to marshal and
  minimize resources.
• Control, not necessarily ownership, of resources
  is key to the less is more resource strategy.
• Entrepreneurs are creative at winning OPR.
• Must you find outside advisors? Only if they add
  value through know-how and networks.
• Access to resources is better today than ever
  before.

11
Resource Requirements

• Discussion question
• Think of the interview you conducted with an
  entrepreneur. Did your subject provide insights
  as to how she or he bootstrapped their own
  ventures?