Unit 28 Launching a New Venture

Introduction

This unit provides students with a practical understanding of what is required to successfully launch a new venture. It gives students an opportunity to work within a small team to fully plan the launch of a specific new venture idea. They will learn about and work through the stages of planning to launch the venture culminating in a group presentation of a launch plan. This will include an explanation of the idea, how it will attract customers and have competitive advantage. Students will develop a promotional plan to get it started, preparing a budget for launch and a cash flow forecast for the first 12–18 months of operation for the chosen venture. Students will learn about the need for resourcefulness when starting a new venture, and will be able to identify and tap into personal networks which can offer a valuable source of knowledge, resources, advice and opportunities.

Learning outcomes

LO1 Investigate the range of resources that will be required to launch a new venture

Defining the idea and the target customer:

• The venture idea and how it represents a business/social enterprise opportunity.
• Analysis of the small business environment to support the venture idea.
• The characteristics of the target or ‘typical’ customer applying geographic, demographic and behavioural segmentation.
• Use of competitor and industry analysis techniques such as Porter’s Five Forces analysis.
• Identification of tangible and intangible features and benefits.
• Achieving competitive advantage.

Understanding and planning resources:

• The different types of resources that are needed to start a new venture: tangible, intangible and human.
• The three categories of ‘capital’: human, social and financial.
• Identifying and planning resources for a new venture, including tangible (premises, equipment, IT facilities) and intangible (skills and capabilities).

LO2 Assess the skills and capabilities required and how these might be acquired or developed

Understanding and acquiring skills and capabilities:

• Identifying the necessary skills and capabilities required
• The importance of building credibility in a start-up venture, addressing risk factors and responding to change.

The concept of ‘Bootstrapping’:

• making use of free or low cost sources of resources and skills, leasing and renting.
• Low cost/free marketing and promotion.
• The principles of the ‘Lean Start-up’ method.

The importance of networks:

• The importance of networks to new ventures as a source of ‘social capital’ that can bring access to knowledge, resources, advice and opportunities.
• Consideration of both formal and informal networks.
• Assessing and developing personal networks and ‘the strength of weak ties’.

LO3 Explain and justify appropriate promotional activities to support the launch

The marketing mix:

• The marketing mix in the context of a new venture/small business.
• The importance of pricing strategy for a new venture and the likely response of competitors.

Business identity and promotion:

• Developing an identity and the key promotional messages for the business.
• Choosing a name and registering a domain.
• Visual identity and website creation with e-commerce capabilities (e.g. virtual shopping cart and secure online payments).

Cost-effective promotional techniques, including use of social media and online promotion:

• blogs, Twitter, podcasts, video clips, virtual tours and image captions.
• The pros and cons of trademark registration.

LO4 Suggest an appropriate legal form and compile a budget for launch

Budgeting:

• Compilation of an initial budget for venture launch, including identification of pre-launch costs and then a forecast of income and costs over the first 12–18 months of trading.
• ‘What-if’/scenario analysis on the budget’
• Calculation of break-even point.

Legal forms of business:

• The different legal forms for a business, including sole-trader, limited company and partnership.
• Legal form options for a social enterprise, including Community Interest Companies (CiC).
• Franchising as a start-up opportunity.

Resources

• BURNS, P. (2011) Entrepreneurship and Small Business. 3rd Edition. Basingstoke: Palgrave MacMillan.
• BURNS, P. (2014) New Venture Creation: A Framework for Entrepreneurial Start-ups. Basingstoke: Palgrave MacMillan.
• RIES, E. (2011) The Lean Start-up. London: Penguin Books.

Journals

• Journal of Small Business Management.Oxford: Wiley-Blackwell http://onlinelibrary.wiley.com/journal/10.1111/(ISSN)1540-627X
• The Institute for Small Business and Entrepreneurship (ISBE) website: www.isbe.org.uk