Starting a new business takes careful consideration, determined preparation and a well-developed plan. Robert Calvin, president of an international consulting firm for startups and a business professor at the University of Chicago, has compiled the strategies, tools, techniques, models and methodologies for starting a new business on the right track into a comprehensive guidebook. Along with organizing the interrelated aspects of launching a business, Calvin's informative textbook offers numerous hands-on business skills and the motivation to help new business owners move toward success while conquering the entrepreneurial challenges along the way.
Entrepreneurial Management begins with a sound justification of why people should set out on the road to entrepreneurship, despite the fact that 60 percent of all new businesses fail within their first two years, and 70 percent fail within the first five years of their existence. By thoroughly describing the rewards and risks entrepreneurs must face and the strengths and weaknesses of many kinds of ventures, Calvin prepares the new entrepreneur with the lessons others have learned through hard work and difficult odds. "This book attempts to bridge the old and new economy with a proven strategic and tactical formula for entrepreneurial success," he explains.
How To Avoid the 'Growth Busters'
The first step to creating a new business venture is writing a plan. Calvin's first chapter describes the steps involved in writing an effective business or strategic plan, and explains what should be included. His proven formula for success involves ways to avoid the "growth busters" that can holda company back, including using target marketing to focus resources; dealing with change; using market segmentation to differentiate and customize the offering; and having a cost-efficient sales organization and marketing approach.
Once the plan is set, the proper financing will be necessary to launch the business. According to Calvin, this starts with engaging a qualified attorney to help in raising cash. To avoid extra later-stage expenses and restrictions, he writes that it is crucial to prepare correctly during this early stage. Asking other entrepreneurs and conducting several interviews can help new business owners find the right attorney. Calvin offers additional advice that can help entrepreneurs get a loan, set up a workable loan structure, and find equity financing.
Chapter 3 describes the financial controls that must be set in place before a business can take shape. These deal with accounts receivable aging, inventory, capital expenditures, balance sheet ratios, sales forecasts, critical operating margins and line-item expense budgets.
The second part of Entrepreneurial Management is dedicated to keeping the money flowing through the business, and includes chapters that describe differentiation, segmentation, target marketing and target customers. By placing his ideas into the context of real-world examples, including a North Dakota trash removal service and a Virginia lawn care service, Calvin develops numbers which help his readers understand "the strong relationship between profitability, customer loyalty and employee satisfaction, retention and productivity."
Next, Calvin delves into ways to create a cost-efficient, effective sales organization and marketing approach; how to inexpensively develop a demand for your products and services through advertising and packaging; and how to properly price offerings by looking at competitive advantage in terms of features, benefits and image.
Risks and Rewards
The final chapters of Calvin's book delve into the options that entrepreneurs have when they have decided to start a new business. Calvin explains the reasons for, the ways to go about, and the options to consider when buying an existing business. Since the average sale price of an existing business is less than $200,000, he writes that most entrepreneurs can afford this inroad to a new business venture. Calvin offers proven advice about how to look at the price of a new business; the rewards and risks of buying an existing business; and ways to find and evaluate a business to buy. The last chapter of his book describes the risks and rewards of developing and introducing new products and services.
Why Soundview Likes This Book
Entrepreneurial Management is a valuable source book for new business owners, and delivers an MBA-level course on developing, launching and growing a new business venture. By focusing on the step-by-step process that entrepreneurs must undergo on the road to success, Calvin plots out the entire journey by detailing the business knowledge and tactics that can turn a great vision into a success story. Calvin's useful examples of successful and failed startups, along with his insightful commentary and analysis, reveal the secrets of entrepreneurial management in a well-organized, easy-to-reference manual that can help anyone improve his or her chances of success amid the tough challenges of entrepreneurship. Copyright (c) 2002 Soundview Executive Book Summaries