U2. THE IDEA OF A BUSINESS PLAN.

2.2 The advantages and disadvantages of entrepreneurship.

Advantages of being an entrepreneur

The main advantages of being an entrepreneur are:

Staff selection: you are in charge of forming the team that you want to work for you.
Personal satisfaction: entrepreneurs often feel a great sense of satisfaction.
when they have developed their work and it is well done.

You are your own boss: every single decision that is made depends on you and your ideas.
without having to reach agreement with bosses or superiors.

You work in what you like: entrepreneurship allows you to dedicate all your time to the activity that you
I like expanding expectations and new horizons.
Disadvantages of being an entrepreneur

Among the main disadvantages of being an entrepreneur are:

Daily struggle: being an entrepreneur entails a daily fight to overcome the challenges and obstacles that each
day can hinder work.
Bureaucracy: depending on the cases, there are many entrepreneurs who must carry out
numerous bureaucratic procedures to start operating.
There is no social life: the entrepreneur often loses the social life they enjoyed until that point.
moment given that the dedication to her project is absolute.
Economic risk: the entrepreneur finds themselves in a situation of economic uncertainty already.
that income can vary drastically from one month to another.
Investment: to undertake, it is necessary to carry out numerous financial operations to
check the feasibility since success depends on the benefits that we ourselves generate.
Bad habits: in most cases and especially at the beginning, the entrepreneurial person
he wants to work so hard to launch his project that he forgets about good habits,
eat correctly, do sports, etc.

2.3 From Entrepreneur to Businessman: How to Start a Business?

Visible differences between these two business profiles.

o The entrepreneur works a lot, the businessman thinks and elaborates a lot.

o The entrepreneur does things himself or personally oversees them, while the businessman delegates and controls results.

o Entrepreneurs are very good at solving problems, while businesspeople are very good at defining strategies and objectives.
he/she anticipates problems.

o The entrepreneur makes sure that their people are working all day, the business owner measures the results of their work.
people.
o The entrepreneur does many things, the businessman generates a lot of value.

o The entrepreneur is surrounded by hardworking and submissive people, he has no time to argue.

o The entrepreneur surrounds himself with capable people, thoroughly debates every decision.

o The entrepreneur controls the functioning of the operational wheel of the company, the businessman is looking at the company.
the changes in the market and the evolution of the environment.

o The entrepreneur rewards effort, the businessman rewards results.

o The entrepreneur knows the machines of his company, the businessman knows the numbers of his company.

o The essential entrepreneurs at the moment ofstart a business and get it rolling, the entrepreneur

essential for growing the company once it started to roll.

o Despite this, it is worth saying that there are manytypes of entrepreneursaccording to the attitudes and functions that it has in the

project they are developing. Sometimes, entrepreneurs work more with their heart than with their head and make mistakes.

some mistakes in your management.

This happens, especially, in people who start a business for the first time, as they do not have the experience.

necessary to allow them to know what to do at every moment. Although making mistakes is not bad because

it helps us to learn, it is better to knowthe most common mistakes of entrepreneurs, so you know what not to do

you must act in specific situations and always choose the best decision.

What is clear is thatto be an entrepreneurit's something that comes from within. However, it can be worked on with sacrifice to

acquire skills and learn from other people who have started businesses.

How to start a business?

1. Protect the idea. Do not tell it toThe search for investors takes time and should not be rushed.

to run out of "cash" to do it. Everyone should not keep it under seven keys. Find the balance
To share it when necessary without running the risks of premature disclosure.
2. Partners or friends? Partnering with friends can be a lot of fun. Or a huge headache if
they do not establish, in writing, objective guidelines to form a TEAM.

3. How to assign shares. The contribution of each partner has a value and must be measured. It is not an easy task.

but they need to take the time for participation to be determined by added value and not
due to subjective guidelines.

4. Team. Human resources are the soul of the company. Investing time and money in attracting them,
hiring them or retaining them must be a priority. Most investors look more at
team that brings the idea.

5. Understand the regulatory framework. It is essential to investigate which regulations govern the industry in

where they want to insert themselves and incorporate them into the business plan. Failing to do this can lead to greater

costs, delay the startup or sink the project.

 6. Seducing the Investor. There is no second chance to make a good first impression. To
visit the investor, sign a confidentiality agreement, prepare an executive summary, and present it
the business plan in no more than twenty minutes.

7. How much to ask for. The valuation of the project is always a topic of discussion, especially considering

It accounts that in most cases future projections are sold. Establish mechanisms.
flexible, adjustable against concrete results, to avoid short circuits in the relationship with the
inverter.

8. Plan the search for investors. It is a process that takes time - between three and eight months - and

You shouldn't wait until you run out of cash to do it, as you will lose bargaining power.

9. Attention to taxes. When structuring the business, one of the factors that is generally not taken into account

The tax issue is analyzed in depth. A miscalculation in this matter can leave them out.
of the business or, at best, of the business they hoped to have.

10. Not staying still. Many entrepreneurs go crazy trying to protect what they have already created and
fortunes are invested in doing it. If there is no permanent innovation alongside that, competition will be
closer every day.

MY SUCCESSFUL COMPANY: HOW TO START IT?

What are the reasons why you want to start your business?
Many people are eager to start a business. Some believe that their only option is to start
their own business, as the economic situation or the state of unemployment leaves them with no other alternative; there are
who have a great idea or product and would like to start their business; and they are also
those who are not satisfied with their current job or boss and think they could do a better job
on their side.

The steps to follow to start your business.

But whatever their reason or motivation for starting a business, there are certain steps that should be taken.
to follow
First and very importantly, they need to understand and learn what a company is with all its components.
like the advantages and disadvantages of being an entrepreneur, and the procedures to follow.
It is also very important that you research and learn everything you can about the business you want.
entrepreneurship, starting by defining your market, in other words, who are the potential customers and why
they would buy products or services from you instead of from the competition, also research about
all the paperwork, licenses, and requirements to establish your business, sometimes a
Deficient investigation can cause big problems.

This reminds me of two cases of clients who came to my office for advice:
The first was that of an entrepreneur who opened her beauty salon in a small shopping mall, there was
I have worked very hard to modify and decorate the place I rent, and a few days after having
They opened the doors, closed the street to break the pavement and make some changes to the pipes.
drainage, as you can imagine after this beginning with no traffic of cars or a lot of people it is very
It's difficult to start a business.
The other case I remember is of another person who also made very strong investments to install a
special equipment for your business, and when he wanted to obtain his business license, the city denied it to him until
that met certain requirements that he had not considered or that he did not consider necessary, these
The changes and plans that I had to present cost a lot of money, which I no longer had, in the end and after
several months and having even considered declaring bankruptcy before opening his business, he managed to
A lot of effort to get borrowed money to pay for the plans and make the modifications.
The only thing I want to point out with these examples is the importance of research before even
sign or invest in something for our business, of course not all cases are like this, but I do wish
highlight that they should ask and plan their businesses to avoid headaches and loss of money due to
having poor planning at the start.
 WHO SHOULD NOT START A BUSINESS

On one occasion, I was asked if anyone could start a business.

This was my answer: NO. Well, the truth is YES, anyone can start a business, now that
si me preguntas “cualquiera puede tener éxito en un negocio”, mi respuesta sería otra vez NO.
But before I continue, I want to apologize for sounding a bit negative, but in my several years of
experience as a small business consultant and especially teaching classes, seminars, and courses
for entrepreneurs, I have observed that many people start their businesses and fail before
finish the first year.

A statistic from the United States government

A statistic from the government agency 'Small Business Administration' (SBA) says:

2.7 The most common mistakes of the entrepreneur.

EIGHT out of every TEN people who start a business FAIL in the first year.

The reasons why people who start businesses fail

After gathering information from the SBA agency, reading books on how to start a business and
Talking with other small business consultants and in my own experience, I have found that they are
Many are the reasons why people fail. Here I mention some of them, the most general ones,
that there are also specific causes for each type of business and even personal causes.
Among the most common causes we have:
People have no idea what it truly means to have a business.
No tienen la suficiente experiencia en el ramo del negocio que comienzan. A veces comienzan un tipo de
business because the uncle or the friend is doing well.
They are advised by people who lack knowledge and experience, or better said, they are 'misadvised.'
They rush to start because they let themselves be pressured by someone, like the one who is going to lease them the premises or

who is selling them the team or a franchise

They do not have and do not calculate the necessary money to start and sustain the business.

They do not have money to live personally.

They do not believe or have the money for an advertising budget
They think that by opening the door people will snatch the products or services: they believe that with 1,000

flyers that say 300 people will arrive running

They overestimate sales and underestimate or miscalculate expenses.

They do not conduct a real investigation.

They do not want to pay accountants, lawyers, or business consultants, true tax experts (with

With all due respect, not even all accountants really know about taxes for businesses) and then they end up
In problems, have you heard the saying "The cheap becomes expensive"?

SOCIETIES, well what can I tell you, unfortunately the vast majority of these fail, it doesn't matter if it is

among family or friends, if they do not have the same values, beliefs, and the rules are clear, but very clear
of the game and they have not drawn up a contract among partners, sooner or later and almost always it is more

early on, problems and differences begin, and then the "divorce" comes.
And other causes...

These are some of the reasons why people should NOT start a business.
But don't worry, the solution is simple, create a GOOD business life plan and a plan for
businesses.
Because someone can prepare a bad business plan and everything will go wrong.

STEPS TO START A BUSINESS

First, the most important thing in the process of establishing a business, whatever it may be, is planning.
We should ideally develop a business plan before investing or signing any document or contract.

But what is a Business Plan?

The business plan is a document that contains all the information in an organized and detailed manner about the
steps we will follow to achieve our goals, our dreams.

Below I present to you the content of a business plan:

1. BUSINESS PURPOSE
2. TYPE OF BUSINESS
3. KNOWLEDGE OF YOUR CLIENTELE
4. LOCATION OF YOUR BUSINESS
5. THE COMPETITION
6. ORGANIZATION AND ADMINISTRATION
7. FINANCE
8. PROCESSES AND PROCEDURES
9. MARKETING
10. LICENSES AND PERMITS
[Link] INFORMATION

BUSINESS PURPOSE
When we talk about the PURPOSE OF THE BUSINESS, we should write a little about the dream we have.
of what we want to do or start, for example maybe we want to set up a clothing sales business
for children, from newborns to eight years old, etc. here we should continue describing everything that
queramos para nuestro negocio, con información en general.

TYPE OF BUSINESS
The second point to develop is the TYPE OF BUSINESS, now we will start to provide more information.
detailed about our business, such as:
The name we want to use
The products or services we want to offer
The experience and knowledge we have regarding this type of business
The trends of this industry in general
The existing opportunities and threats for these businesses

Some of these points may be answered by yourselves and others will need to be researched, such as
through the Internet, from libraries or through chambers of commerce, associations or
publications, preferably related to our type of business or industry.
Once these points have been investigated and analyzed, we should have a good idea of the overall situation.
our business within the economic, social, and political environment.

KNOWLEDGE OF CUSTOMERS
All the points contained in a business plan are very important, but one that you should pay more attention to
Attention is the knowledge of your clientele.
All the services and products offered exist because there is a demand for them in the market, and
those people who need and can acquire the products or services we want to offer are
our potential clients.
Without these clients (market) our business literally cannot exist: they are the ones who will bring it to life and
movement to our company; it is them who, with their purchases, will provide us with support.
economic to pay rent, salaries, expenses and something extra which will be our profit.
For these reasons, we must take special care of our clients and respect them so that they continue.
acquiring our products or services.
It is also very important to know who they are, where they are, what they do, why they need these services or
products, etc., since without this knowledge we will not be able to serve them well and be efficient in our
marketing processes and plans.
Now, you might wonder how you will get to know your customers if you haven't started your business yet.
The truth is that it is a bit difficult, but if they want to succeed in their new business, they are going to have to
research and try to understand your market before starting your business.
 An example of what one of my clients did:
He wanted to open a bakery, and to determine who his potential customers were, that is, consumers,
and above all estimate how large the market (possible consumption) is, he visited all the supermarkets in
the area where he wanted to set up his business, he talked and asked the employees, owners, and customers of the
places where the type of product he wanted to produce was sold, regarding quality, prices, and volume of
sale of existing products.
Perhaps he didn't always obtain the information he needed, but with what he did obtain, and by applying a little bit of
common sense, was able to project the possible sales throughout the year. Also that market study and of the
competition helped him create a list of prospects, who told him they were interested in trying his
products.
Another tool that we can also use is market trend information and statistics.
regarding your business, which can be found on the Internet, the census in the libraries,
publications from the chambers of commerce, and especially in the publications of the associations and
specialized magazines in the industry of your choice.
Also, the same competition is a source of information to give us a good idea of the size of
market.

LOCATION OF YOUR BUSINESS

Moving on to the next point, we have the location of the business. If you are thinking of starting a business in
retail (sales at retail) or services where their clientele has to come to their business, then this
the location of the business becomes extremely important and questions such as these must be asked:
Is it close to the consumers?
Will the place have to be bought or will it be rented?

What businesses will be nearby?

What is the pedestrian and vehicular traffic?
Is there sufficient parking?
Are there any restrictions or incentives from the city for that area?
What future developments are expected for that place?
What about the competition in that place?
etc.

Important to verify with local authorities

An important point to emphasize is that before signing any purchase or rental contract for a location,
you should check with the local authorities of that city (zoning) if there are any restrictions for
your business in the specific place that you have chosen.
Sometimes it happens that even when they are acquiring an existing business with all the installed equipment and
functioning, when they go to request their business license, it is denied to them, as the city has changed
his development plans and no longer wants that type of business in that place, so it is very important
they should investigate first to avoid problems in the future.

THE COMPETITION
As we mentioned in the previous section, competition can be a source of information for
determine the market size: But mainly we should study it and follow it closely because
this will help us understand our strengths and weaknesses with respect to the competition, which will
It will help to plan our internal processes, seek a competitive advantage that sets us apart from them.
and plan our promotions and advertising.
In summary, we can learn a lot by observing our competition, to imitate them in the good.
surpass her in what she is doing wrong.
But how can we investigate the competition to learn from it?
There are several techniques they can use, including: they can review their advertisements on TV, radio,
newspapers, flyers, directories, the Internet, etc.; they can go to their businesses and talk to their employees;
you can also ask your clients or send someone to buy or acquire their services; and in
on occasions, through chambers of commerce, associations or specialized magazines, they can obtain
information.
In the end, you will need to be creative to know everything that is possible about your competition.
After this analysis, you should have enough information to know where it is located.
size of your business, product or service lines, prices, number of employees, means of
marketing they use and get an idea of how much they invest in advertising and promotions, as well as knowing
Who are your main suppliers, etc.

ORGANIZATION AND ADMINISTRATION

Moving on to another point of the business plan, we have the one that refers to the organization and administration of the
business.
At this point, we should be able to describe how we plan to start our business, with which staff,
describing the activities that each one will carry out (job descriptions), schedules,
responsibilities, payment method, training, etc.
También deberíamos describir los procesos administrativos y establecer políticas y procedimientos para
our company.

The lack of good management is one of the biggest reasons for the failure of new ventures.
businesses
On many occasions, when people start a business, they are not experts in management; however,
The lack of good management is one of the biggest reasons for the failure of new businesses.
For this reason, if they are not good managers, I recommend that they take some accounting courses.
and management or hire an accounting firm to assist them with the calculation of their taxes and
of its cash flow in order to organize its payments, sales, expenses, inventory, collections,
etc.

FINANCE
Finance is one of the critical parts of starting a business, it has to do with how they are going to
raise enough money to; acquire the necessary equipment and materials to start, cover the expenses
and operational costs and support the family for the months or years needed until the business starts
to generate enough money to support themselves and to support you.
When starting a business, it is very difficult to obtain loans from banks or other institutions.
government, it is easier to obtain loans from our friends or family or sometimes from the same
suppliers of equipment or materials.
However, we must establish a good relationship with the bankers so that in the future they can...
support with credits.
It is of utmost importance to maintain good control of your income (inflows) and expenses (outflows) to avoid
financial problems during the existence of the business.

PROCESSES AND PROCEDURES

When we are developing our business plan, we must describe as much as possible the processes of
production, management, sales, customer service, collection, commissions, etc. as well as the policies and
business procedures.
These will help us organize our company more efficiently to better serve our
clients and to avoid problems and misunderstandings within the organization.

MARKETING
Don't start if you don't have a good marketing plan.
I could almost tell you that you shouldn't start your business without having written a marketing plan first.
This must be included in the business plan, and it must include an analysis of strengths and weaknesses of your
business, knowledge of its clientele, detailed description of its products and services, description of
its competition, analysis of its competitive advantage (what distinguishes them from the competition), budgets
a invertir en publicidad y promociones y métodos de medición y evaluación de su campaña publicitaria.
Here it is very important that we study all the marketing tools that we can apply in
our business, many times our guide on what we should do is the same competition.
Some of the instruments to consider are: television, radio, newspapers, a page on the Internet, e-
mails, flyers, coupons, organize and attend seminars, hire salespeople, send letters, prepare
demonstrations, putting up advertisements outside the business, or on buses, etc.
Apply a little common sense and above all research well before deciding which means of
advertising and promotion will be used.

Gross Domestic Product (GDP)

The Gross Domestic Product (GDP) is an economic indicator that reflects the monetary value of all
final goods and services produced by a country in a specific period of time, normally
one year. It is used to measure the wealth of a country. It is also known as Gross Domestic Product.
(PBI).
GDP measures the total production of goods and services of a country, so its calculation is quite complex.
We need to know all the final goods and services produced by the country and sum them up, that is, the
production of apples, milk, books, ships, machines, and all goods that have been produced in the
They hire the services of a taxi, a dentist, a lawyer or a teacher among others. There are some data that
they are not included simply because they cannot be accounted for or known, like the assets of
self-consumption or the so-called submerged economy, for example.

One of the problems for which GDP is criticized is that it does not measure the distribution of wealth within
a country nor the difference between countries. But for that, there are other indicators such as theindexof the gini,theindex of
human development and GDP per capita among others.

Just as the size of a country's production depends on the number of inhabitants it has, so does it
it is used to compare the wealth between countries theGDP per capita, that is, the total GDP of a country divided by the
inhabitants of that country, to know how much is produced per person.