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Managing the Five Risks you face at all stages of your business development:

1. growth risk

2. technology & production risk

3. marketability & competing risk

4. financial risk

5. team & management risk

Turn Risks into Opportunities

Click on your company growth stage:

Gestation

Start-Up    

Pilot Stage    

Roll Out  

Growth    

Expansion    

Maturity

1.

Gestation

- inventor has a technological idea with a good market potential, but has no or limited business expertise and resources to commercialize it

Organization: Virtual

Management:  Entrepreneurial

Technology: Idea

Funding Stage: Pre-seed

pp.

Problem

(Why worry?)

Solution

(What to do?)

Action

(How to do?)

1.1

Growth Risks

Every good business begins with a great idea, but not every great idea makes a good business

• Clarifying vision

• Developing your business skills

• Answer the questions of the venture planning checklist before starting your venture

• Make a reality check

• Make a Strength - Weaknesses - Opportunities - Threats (SWOT) analysis

• Screen all your ideas and narrow to selected few

• Prepare a milestone chart

• Explore opportunities for starting up your business in an enabling environment such as a technology business incubator or S&T park

• Buy professional advisory services that would keep you out of trouble later on

1.2

Technology & Production Risks

Technology idea may be unrealistic, not unique, or infringed

• Checking uniqueness for the technology idea in order to avoid possible problems in future

• Developing of effective intellectual property strategies

• Turning your inventions into profit-making assets

• Identify your intellectual property (IP) strategy and technology for commercialization

• Search for patent information

• Understand the technology commercialization processes

• Select the form for protection of your intellectual property rights and take the necessary steps to either protect it legally or to keep it as a trade secret

• Watch permanently technological developments by your competitors

1.3

Marketability & Competing Risks

Misjudging the size or growth of the overall market.

• Identification of the market niche - what makes a venture succeed is the ability to identify emerging attractive markets and to seize on unmet, unserved customer needs.

• Development of a business concept targeting this market niche

• Conduct preliminary market research and define your positioning strategy

• Design your product/service, develop a prototype and test market it; identify the price at what you could sell it

• Shortlist possible products

• Plan for considerable marketing and advertising expenses up front, i.e. prior to realization of sales

• Select a trade name and a Trademark for your company

1.4

Financial Risks

• Underestimating start-up costs for operations and capital expenditure

• High-risk pre-seed capital for design and development of a working prototype is hard to get.

• Good understanding of the venture financing process (see slide show)

• Identification of possible sources of pre-seed capital: founders, friends, family, business angels (see slide show), development funds

• Good understanding of of the investment opportunity selection criteria of different types of investors (see slide show)

• Introducing project to prospective investors

• Study the start-up capital formation process, the venture planning chart, and the guidelines for getting funding in today's market

• Try to personally finance and bootstrap your firm as long as possible, until the need for external growth finance becomes evident and unavoidable.

• Identify sources of financing for early-stage technology development; study their project evaluation criteria and procedures

• Define how your investors could realize financial returns on their investment

• Prepare a project presentation for investors

1.5

Team & Management Risks

• Lack of business skills

• Lack of relevant sectoral experience

• Understanding of the need to share company ownership and management with professionals (see slide show)

• Study the principles of venture management

• To be a successful entrepreneur, learn how to manage and lead people

• Study various options of company ownership and management; select the one that suits you best and start making preparations