VENTURE CREATION

11 BED 303
MANAGING NEW VENTURES FOR GROWTH
Developing business models/
Frameworks

Business models define how a company creates, delivers, and captures

value.
•Subscription Model: Customers pay a recurring fee to access a product or service (e.g.,
Netflix, Spotify).
•Freemium Model: Basic services are offered for free, while premium features require payment
(e.g., LinkedIn, Dropbox).
•E-commerce Model: Selling products or services online directly to consumers (e.g., Amazon,
eBay).
•Marketplace Model: Facilitating transactions between buyers and sellers, often charging a
commission (e.g., Etsy, Airbnb).
•Advertising Model: Offering free content or services while generating revenue through
advertisements (e.g., Google, Facebook).
Developing business models/ Frameworks

•Licensing Model: Allowing others to use your intellectual property for

a fee (e.g., software companies licensing their products).
•Franchise Model: Allowing others to operate a business using your
brand and business model (e.g., McDonald's, Subway).
•Direct Sales Model: Selling products directly to consumers through
personal interactions (e.g., Tupperware, Avon).
•Razor and Blade Model: Selling a basic product at a low price while
charging high margins on complementary goods (e.g., printers and
ink).
•On-Demand Model: Providing goods or services as needed, often
via an app (e.g., Uber, DoorDash).
The business model canvas
 The business model canvas
The Business Model Canvas, is a strategic management tool that provides a visual framework for
developing, describing, and analyzing business models. It consists of nine building blocks that capture
the essential elements of a business. Here’s a summary of each component:

1.Customer Segments: Defines the different groups of people or organizations a business aims to
reach and serve.

2.Value Propositions: Describes the bundle of products and services that create value for a specific
customer segment.

3.Channels: Outlines how a company communicates with and reaches its customer segments to
deliver its value proposition.

4.Customer Relationships: Details the types of relationships a company establishes with its customers,
including acquisition, retention, and upselling.

5.Revenue Streams: Identifies how a business earns money from each customer segment, including
various pricing mechanisms.
The business model canvas

1.Key Resources: Lists the most important assets required to make the business model work, such as
physical, intellectual, human, and financial resources.
2.Key Activities: Describes the most important actions a company must take to operate successfully,
including production, problem-solving, and platform/network activities.
3.Key Partnerships: Identifies the external companies or suppliers that help the business model work,
including alliances and joint ventures.
4.Cost Structure: Outlines all major costs incurred in operating the business model, including fixed and
variable costs.

Benefits of the Canvas Business Model

•Visual Clarity: Provides a clear visual representation of a business model.
•Flexibility: Easy to adapt and iterate as business needs change.
•Collaborative Tool: Encourages teamwork and discussion among stakeholders.
The business model canvas
How to Use It
1.Fill Out the Canvas: Start with a large blank canvas and fill in
each section with sticky notes or markers.
2.Discuss and Iterate: Collaborate with your team to refine each
section.
3.Test and Validate: Use the canvas to test assumptions and
validate your business model with real-world feedback.
This framework is widely used by startups, established
businesses, and organizations to innovate and strategize
effectively.
BUILDING A PROTOTYPE
1. Define Your Concept
•Identify the Problem: What issue does your venture address?
•Target Audience: Who will benefit from your product or service?
•Unique Value Proposition: What makes your solution different from existing alternatives?

2. Research and Plan

•Market Research: Analyze competitors and market trends.
•User Interviews: Gather insights from potential users to refine your idea.
•Business Model: Outline how you will generate revenue.

3. Design the Prototype

•Sketch Ideas: Create initial sketches or wireframes of your product.
•Choose Tools: Decide whether you'll use software (like Figma or Sketch) or physical materials for a tangible prototype.
•Iterate on Design: Incorporate feedback to improve the design.

4. Build the Prototype

•MVP Approach: Focus on core features that demonstrate your concept.
•Use Resources Wisely: Consider using low-cost materials or digital tools initially.
•Collaboration: If applicable, involve team members or collaborators for div erse inputs.
BUILDING A PROTOTYPE
.5. Test and Validate
•User Testing: Conduct tests with real users to gather feedback.
•Analyze Results: Identify strengths and weaknesses based on user interactions.
•Refine the Product: Make necessary adjustments based on feedback.
6. Prepare for Launch
•Finalize Design: Polish the prototype for presentation or production.
•Create Marketing Materials: Develop a strategy for how you will promote your venture.
•Plan for Scale: Consider what it will take to scale your product post-launch.

7. Gather Feedback Post-Launch

•Collect User Feedback: Continuously gather insights to improve your product.
•Iterate and Evolve: Be prepared to make ongoing adjustments based on user needs.

Tools and Resources

•Design Tools: Figma, Sketch, Adobe XD
•Prototyping Tools: InVision, Marvel, Proto.io
•User Testing Platforms: UserTesting.com, Maze
By following these steps, you can effectively build a prototype that not only showcases your concept but also resonates
with your target audience.
Stages of Business venture growth/ Business life cycle

• According to Lawrence Steinmetz, business has three growth stages,

which he called
• “S” curve. But Dickson (1991:4) states that business life cycle has four
stages,
• namely:
• (a) Incubation stage,
• (b) Acceptance stage,
• (c) Maturity stage and
• (d) Decline stage.
Business life cycle
Business life cycle
Common growth challenges
1.Resource Management
•Financial Constraints: Securing funding for expansion can be difficult, especially for small and medium-
sized enterprises (SMEs).
•Human Resources: Attracting and retaining skilled employees is crucial, and rapid growth can strain
existing staff.
2.Market Competition
•Increased competition can arise as businesses grow, making it harder to maintain market share and
profitability.
•Competitors may respond aggressively to a company's expansion efforts, impacting customer acquisition.

3. Operational Efficiency
•Scaling operations while maintaining quality can be challenging. Inefficient processes can lead to increased
costs and customer dissatisfaction.
•Companies must often invest in new technologies or systems to handle larger volumes of business.
4. Customer Retention
•As a company grows, it may lose touch with its customer base, leading to declining customer loyalty.
•Maintaining high levels of customer service becomes more complex with increased demand.
 Common growth challenges
5. Market Saturation
•Entering a saturated market can limit growth opportunities. Identifying new markets or niches is essential but
can be risky.
6. Regulatory Challenges
•Navigating different regulations and compliance requirements can be particularly challenging for companies
expanding into new regions or countries.
•Changes in laws can also impact business operations and growth strategies.

7.Supply Chain Issues

•Expanding businesses may face difficulties in scaling their supply chains. Disruptions can lead to delays and
increased costs.
•Finding reliable suppliers and managing logistics becomes more complex as a company grows.

8. Cultural and Organizational Changes

•Rapid growth can lead to shifts in company culture, which may affect employee morale and productivity.
•Maintaining a cohesive company vision and values during expansion is crucial for long-term success.
Common growth challenges
9. Technology Integration
•Implementing new technologies to support growth can be costly and time-consuming.
There is also a learning curve for employees.
•Ensuring cybersecurity and data protection becomes increasingly important as
businesses expand.

10. Strategic Planning

•Developing effective growth strategies that align with the company’s vision and market
realities is essential.
•Companies must balance short-term gains with long-term sustainability, which can be
challenging.
Addressing these challenges requires careful planning, strategic decision-making, and a
willingness to adapt to changing circumstances. Companies that successfully navigate
these obstacles are better positioned to achieve sustainable growth.
HOW TO MITIGATE GROWTH
CHALLENGES
Conduct Thorough Market Research
1.
•Identify Opportunities: Understand market trends and customer needs to identify growth opportunities.
•Competitive Analysis: Regularly assess competitors to identify their strengths and weaknesses,
and adjust your strategies accordingly.

2. Strengthen Financial Management

•Budgeting and Forecasting: Create detailed budgets and financial forecasts to manage cash flow
effectively.
•Diversify Funding Sources: Explore various funding options such as loans, investors, or crowdfunding to
secure necessary capital for growth.

3. Enhance Operational Efficiency

•Process Optimization: Streamline processes to improve efficiency and reduce costs. Implement Lean or
Six Sigma methodologies.
•Invest in Technology: Utilize technology to automate tasks, improve productivity, and enhance
customer experience.
HOW TO MITIGATE GROWTH
CHALLENGES
4. Focus on Customer Retention
•Exceptional Customer Service: Prioritize customer satisfaction to build loyalty.
Regularly solicit feedback to improve services.
•Personalization: Tailor offerings to meet the specific needs of different customer segments.
5. Develop Scalable Systems
•Standard Operating Procedures (SOPs): Create SOPs to ensure consistency and quality as the business
scales.
•Modular Systems: Implement systems that can grow with the business, such as scalable software
solutions.
6. Build a Strong Company Culture
•Employee Engagement: Foster a positive work environment and encourage employee feedback to
maintain morale during growth.
•Training and Development: Invest in employee training to ensure the team is equipped to handle growth-
related challenges.
7. Establish Strategic Partnerships
•Collaborate with Other Businesses: Form partnerships or alliances to access new markets, share
resources, and leverage complementary strengths.
•Networking: Engage with industry networks to gain insights and support from peers.
HOW TO MITIGATE GROWTH
CHALLENGES
8. Plan for Regulatory Compliance
•Stay Informed: Keep abreast of regulatory changes that could impact your business. Develop a
compliance strategy to navigate these changes.
•Legal Counsel: Consult with legal experts to ensure all aspects of the business are compliant with local
and international laws.

9. Manage Supply Chain Risks

•Diversify Suppliers: Establish relationships with multiple suppliers to reduce dependency and mitigate
risks.
•Monitor Supply Chain Performance: Regularly assess supply chain efficiency and make adjustments as
needed.

10. Regularly Review Growth Strategies

•Performance Metrics: Establish key performance indicators (KPIs) to measure growth effectiveness and
adjust strategies based on performance.
•Adaptability: Be open to changing growth strategies in response to market conditions, customer feedback,
and internal assessments.
Theories of Business Growth

• 1. Gibrat's Law
• Suggests that the growth rate of a firm is random and independent of its size. Larger firms may grow faster,
but this is not guaranteed.
• *2. Penrose's Theory of the Growth of the Firm
• Argues that growth is constrained by the managerial resources available. As firms grow, they may face
difficulties in managing resources effectively.
• 3. *Product Life Cycle Theory
• Describes how products go through stages: introduction, growth, maturity, and decline. A company's growth
can be related to where its products are in this cycle.
• 4. Ansoff’s Matrix
• A strategic tool that outlines four growth strategies: market penetration, market development, product
development, and diversification.
• 5.* Resource-Based View (RBV)
• Focuses on a firm’s internal resources and capabilities as the key drivers of growth. Firms that leverage unique
resources can achieve competitive advantages.
Theories of Business Growth
• 6. *Porter’s Five Forces
• Analyzes the competitive environment of a business. Understanding these forces can help firms identify
opportunities for growth.
• 7.* Network Theory
• Emphasizes the importance of relationships and networks in business growth. Firms can leverage
partnerships and collaborations to expand.
• 8. Innovation Theory
• Highlights the role of innovation in driving growth. Companies that innovate are often able to capture
new markets and enhance their offerings.
• 9. *Ecological Theory of Business Growth
• Views business environments as ecosystems where firms must adapt and evolve to survive and grow.
• 10. *Stakeholder Theory
• Suggests that a company's growth is influenced by its relationships with various stakeholders, including
customers, employees, and the community.
Time management

• God teaches us to know the value of a minute

• The power of an hour The opportunity of a day
• Time is perishable and irreplaceable
• One of the most fundamental and indispensable resources under the sun is
TIME.
• Time is crucial to both individuals and organizations.
• Time is unique not only because it is scarce and irreplaceable resource but
also because it is one commodity that can neither be bought or sold.
• Effective Time Management is Sine qua non or Indispensable to successful
entrepreneurship. You can invest time or waste it. Time is elusive Time is
inelastic. Time is money. Time is wealth
Time management
Transition Management

• Transition management involves guiding organizations through

changes and transformations. It focuses on ensuring that the
transition from one state to another is smooth and effective.
• Audu, (2005) defined Business objectives as measurable statements
of the impact of
• an organization within a given period of time; the change it intends to
contribute in
• relation to an identified problem or need. The objectives answer the
question why?
Transition Management
• Many suggestions have been put forward in an attempt to identify the objectives
of the typical business organization. The most prevalent include the following:
• 1. Maximization of profit
• 2. Maximization of wealth
• 3. Achievement of satisfactory level of profits (sacrificing)
• 4. Survival
• 5. Sales maximization
• 6. Achievement of market share
• 7. Growth at different level
• 8. Stability
Transition Management
Qualities of objectives
1. acceptable,
2. flexible,
3. measurable,
4. motivating,
5. suitable,
6. understandable,
7. achievable
8. time-bound.
Management by Objective is a philosophy and a general approach to management, which is based on the
simple concept that objectives are the keys of management practice. The development of this idea into an
initial and coherent body of knowledge is generally attributed to the work of Drucker in the 1940s and 1950s.
The principles of MBO are sound and provide a basis for the establishment of objectives which is consistent
with the strategic management model. According to Odirone (1965), Management By Objectives is seen as a
―process whereby the supervisor and subordinate managers of an organization jointly identify its common
goals, define each individual‘s major areas of responsibility in terms of the results expected of him, and use
these measures as guides for operating the unit and assessing the contribution of each member.
The Basic Elements of
Management By Objectives
(MBO)
• 1. Ensuring the commitment of all managers at all levels to all objectives of their direct
concern.
• 2. The system starts with initial setting of organizational goals, although these should be
subjected to change following the participation of other managers.
• 3. Managers‘ goals are clearly explained and agreed so that they are able to see their
integration into the total hierarchy.
• 4. Although the degree of participation varies enormously each manager must be
allowed to participate and must be able to see that his participation is meaningful.
• 5. Once the objectives have been set, and responsibility has been agreed then the
managers must be given autonomy to achieve them.
• 6. Review of performance must also feature the teamwork that went into establishing
the objectives with the result of these reviews providing inputs to the next round of
objectives.
Quality Management

Quality management is crucial for the success of a new venture. It involves ensuring that products or services m
1. Define Quality Standards
•
: Understand what your target market values in terms of quality.
Customer Expectations

•Industry Standards: Research applicable regulations and standards in your industry.

2. Develop a Quality Management System (QMS)
•
: Create processes, procedures, and policies that guide your operations.
Documentation

•Quality Control: Implement checks at various stages of production or service delivery to ensure standards are
3. Employee Training and Engagement
•
Train employees on quality standards and the importance of quality in their roles.

•Foster a culture of quality where everyone is responsible for maintaining standards.

4. Continuous Improvement
•
: Establish mechanisms for receiving customer feedback and make adjustments accordingly.
Feedback Loops

•Quality Audits: Regularly review processes and outcomes to identify areas for improvement.
Quality Management
5. Performance Metrics
•
Define Key Performance Indicators (KPIs) related to quality.

•Monitor performance regularly to ensure goals are being met.

6. Supplier Quality Management
•
Evaluate and select suppliers based on their ability to meet quality standards.

•Develop partnerships with suppliers to continuously improve quality.

7. Risk Management
•
Identify potential risks to quality in processes and develop mitigation strategies.

8. Customer Focus
•
Engage with customers to understand their needs and expectations better.

•Use this information to guide product development and service offerings.

MARKET ANALYSIS
Conducting a market analysis for a new venture involves several key steps. Here's a structured
approach:
1. Define the Market
•
Industry Overview: Identify the industry your venture will enter. What are the current trends and growth
potential?
•Target Market: Define your ideal customer segment. Consider demographics, psychographics, and
buying behaviors.
2. Conduct Competitive Analysis
•
: List direct and indirect competitors in your market.
Identify Competitors

•SWOT Analysis: Analyze strengths, weaknesses, opportunities, and threats for each competitor.
3. Market Size and Growth Potential
•
: Estimate the current market size using available data or research.
Market Size

•Growth Rate: Look at market trends and project future growth. Consider factors influencing growth,
such as technological advancements or regulatory changes.
4. Customer Needs and Preferences
•
: Gather data on potential customers' needs and preferences.
Surveys and Interviews

•Market Trends: Identify any shifts in consumer behavior and preferences that could impact your
venture.
MARKET ANALYSIS
5. Regulatory Environment
•
: Research any regulations that may affect your business operations.
Compliance Requirements

•Industry Standards: Understand industry-specific standards you must adhere to.

6. Distribution Channels
•
: Determine how your product or service will reach your customers. Consider online, retail,
Identify Channels

and direct sales.

•Channel Strategy: Develop a strategy for each channel, considering costs and customer reach.
7. Financial Projections
•
: Identify potential revenue streams and pricing strategies.
Revenue Streams

•Cost Analysis: Estimate startup costs and ongoing operational costs.

8. Summary and Recommendations
•
: Summarize your findings and insights from the analysis.
Key Findings

•Strategic Recommendations: Provide actionable recommendations based on your analysis.

Conclusion
A thorough market analysis not only helps in understanding the competitive landscape but also informs strategic decisions for your new venture. Consider utilizing tools such as surveys, focus groups,
and market research reports to gather necessary data.
ENDING VENTURE STRATEGIES
Ending a venture can be a complex process that requires careful planning and execution. Here are some strateg
1. Evaluate the Reasons for Closure
•
Assess financial performance and market conditions.

•Consider personal motivations and long-term goals.

2. Inform Stakeholders
•
Communicate with employees, investors, and customers.

•Provide clear timelines and reasons for the closure.

3. Financial Management
•
Settle outstanding debts and obligations.

•Liquidate assets to pay off creditors and distribute remaining funds.

4. Legal Considerations
•
Follow local laws regarding business dissolution.

•Cancel permits, licenses, and registrations.

5. Employee Transition
•
Offer support for employees, such as severance packages or job placement assistance.

•Provide references and assistance with the job search.

ENDING VENTURE STRATEGIES
6. Customer Communication
•
Notify customers about the closure and any changes to services.

•Honor warranties or guarantees as necessary.

7. Document Everything
•
Keep records of all communications and transactions.

•Document the closure process for legal protection.

8. Reflect and Learn
•
Analyze what worked and what didn’t during the venture.

•Gather insights for future endeavors.

9. Consider Rebranding or Pivoting
•
If appropriate, consider rebranding or pivoting the business model instead of closing completely.
10. Seek Professional Advice
•Consult with legal and financial advisors to ensure compliance and optimal outcomes.