Free

Business Models and Planning - Essay Example

Comments (0) Cite this document
Summary
Often, most investors do not have sufficient funds to run their business ideas. Most small businesses are at high risk of failing during their early stages of inception because of…
Download full paperFile format: .doc, available for editing
GRAB THE BEST PAPER96.7% of users find it useful
Business Models and Planning
Read TextPreview

Extract of sample "Business Models and Planning"

How Venture Capitalists Evaluate Potential Venture Opportunities How Venture Capitalists (VCs) Evaluate Potential Venture Opportunities
An investor demands capital to start up a business or support the business for expansion. Often, most investors do not have sufficient funds to run their business ideas. Most small businesses are at high risk of failing during their early stages of inception because of inadequate funds. Venture Capitalists (VCs) are investors who would wish to provide capital to new businesses or support small companies that may want to expand but have few public funds. Venture capitalists invest in companies because they want to earn a massive return on their investments if the companies are successful. Remarkably, VCs consider diverse factors before deciding to invest their funds in various business opportunities. There are three major factors the VCS would evaluate to ascertain the viability of the business opportunities. The factors include market size, management team and technology, as outlined by Roberts and Barley (2004).
The first factor that VCs consider when investing in a new business is the management team. Regarding the management team, the VC must evaluate the ability to adapt to prevailing marketing environment. In essence, it is the ability of the business to cope with the dynamicity and complexity of the business environment. VCS would consider whether to continue with the existing marketing team or employ more workforces. The management team should consist mostly of a focused team of entrepreneurs whose primary objective is the success of the business (Roberts & Barley, 2004).
The second factor that VCs consider before venturing in the new business is the ‘market’. The market is the strength of every business. Either the market is the physical location of the business or any other platform where the exchange of goods and services take place. The entrepreneur should access the market size and formulate viable marketing strategies in order to evaluate the accessibility and the possibility of expansion and developing the market niche. The penetration of the business’ products is a great factor in marketing that is the ability of the products to compete in new markets.
The third critical factor considered by VCs when investing in a new market is technology. Notably, technology is a current trend in the world of business. Most business operations, today, require technology to enhance the efficiency and productivity of the company. Technology facilitates speed and accuracy in the production process. The application of the technology in various departments would enable the company to limit the chances of potential losses while increasing profitability.
The three major factors to consider before venturing into the new business are equally important. However, the market factor is the most vital for VCs to consider. Every business strives to ensure profitability, an objective that essentially depends on the market. Other factors depend on the market of the business.
There are two fundamental questions for VCs concerning investment evaluation. First, how can you ensure you conform to business ethics and values to outdo competitors in the market? Second, what can you do to realize a maximum return on investment (ROI) at a minimum cost in a highly competitive market?
Legal requirements are equally critical factors in the business venture. The legal requirements include knowing whether the business activity involved is lawful such as understanding the execution of the patent right.
References
Roberts, M. J., & Barley, L. (2004). How venture capitalists evaluate potential venture opportunities. Harvard Business Review vol. 9 (805-019). Read More
Cite this document
  • APA
  • MLA
  • CHICAGO
(“Business Models and Planning Essay Example | Topics and Well Written Essays - 500 words - 2”, n.d.)
Business Models and Planning Essay Example | Topics and Well Written Essays - 500 words - 2. Retrieved from https://studentshare.org/business/1693293-business-models-and-planning
(Business Models and Planning Essay Example | Topics and Well Written Essays - 500 Words - 2)
Business Models and Planning Essay Example | Topics and Well Written Essays - 500 Words - 2. https://studentshare.org/business/1693293-business-models-and-planning.
“Business Models and Planning Essay Example | Topics and Well Written Essays - 500 Words - 2”, n.d. https://studentshare.org/business/1693293-business-models-and-planning.
  • Cited: 0 times
Comments (0)
Click to create a comment or rate a document

CHECK THESE SAMPLES OF Business Models and Planning

Business Models and Planning

...? Business Models and Planning Business Models and Planning Introduction Business planning is the act of defining allthe goals, actions and the strategies – which a business is to take or put into account, so as to ensure that the venture survives and grows. Business planning may be slit into two major parts, these including profit-making venture planning and contingency venture planning. For profit-making venture planning, overall business planning must be carried out,...
4 Pages(1000 words)Essay

BUSINESS MODELS AND PLANNING

...Why was the e-business revolution so important to the rise in focus on business models? In the 1990s, business model was generally associated with e-business. However, this trend changed in the early 2000s with business models tending to explain how businesses work, mainly presenting who the business customer was and they valued. The establishment of the Internet, and therefore, e-business essentially created several new business models and organizations tended to shift toward business...
2 Pages(500 words)Essay

Business Models and Planning

...Business model and planning Question The e-business revolution was so important to the rise in focus on business models because it created the needfor development of new models. The connection between e-business and business models, through development of the internet established e-business as a basis of changes focus of business models. With the development of e-business, there was a transition in the perspective to business models. This is because focus shifted from...
1 Pages(250 words)Assignment

BUSINESS MODELS AND PLANNING

...Question Difference between a broad business model definition and a narrow business model definition A business model is thetechnique of undertaking a business venture by which an establishment can sustain and maintain itself thus generate proceeds. The business model influences how a company generates money by stipulating the position of the company in the value chain. A Broad Business Model Definition A broad business model incorporates exact proposals with high opinion to the elements and relationships that facilitate...
2 Pages(500 words)Essay

BUSINESS MODELS AND PLANNING

...Business Model and Planning Question According to the research conducted about company beta and company alpha, a business model is the whole process involved in how a company is able to create deliver and capture socio economic values and cultural values within the business. This is according to (Taran Yariv). However, the term business model is a general term adopted in business representing core aspects in a business like the strategies used to capture and retain the market share, trading practices, marketing techniques and business operational...
3 Pages(750 words)Essay

BUSINESS MODELS AND PLANNING

...Business models and planning Discuss why the supply of Strategic information might increase demand and vice versa? Supply of strategic information within a business model is controversial with reference to the quality of demand. At times the supply of strategic information might increase demand because it allows a business to create an open communication between all levels of employees enabling everyone to understand their roles in the production process. This triggers the need for supply of strategic information that would help in harmonizing the efforts of the stakeholders thereby increasing the productivity and thenceforth the demand....
5 Pages(1250 words)Essay

BUSINESS MODELS AND PLANNING

...Business models A business model refers to a of the main aspects of a business (Osterwalder 157). It is the rationale that describes how a business entity creates, captures and delivers value within its social, cultural and economic contexts. It is part of the construction of business strategy. Business models are composed of the following elements: target customers, purpose, offerings, infrastructure, strategies, trading practices, organizational structures, operational policies and processes. Craigslist’s is a company that applies a well-defined business...
3 Pages(750 words)Assignment

Business Models and Planning

...and mission at the best interest of the society. With the best motives for the society, they can either run a business or none-profit organizations that would quench their social quest. On the other hand, social media movement refers to the use of social networks to serve the society with all kinds of information. The networks transmit messages about the culture, traditions, politics, beliefs, education and bodies of the society. The messages reflect the values and the force for change of the society. The social media used are Facebook, twitter, YouTube, web pages, blogs, Myspace, newspaper, movies, television, radio, journals, books, magazines and billboards among others. All these social media serve to fuel and propel...
2 Pages(500 words)Essay

Business Models and Planning

...Business Models and Planning Canvas framework Compare the Business Models between Airbnb, Crosby Street Hotel and Motel 6 Airbnb Motel 6 Crosby Street Hotel Customer segment Segmented into personal and business travelers. Also segmented into personal and business travelers. Segmented into business travelers unlike the two. Channels Different channels are used to acquire customers. They are online ads, PR and word of mouth. Channels used to acquire customers are through different advertising campaigns in social media, ads and media houses. Uses advertising channels and word of mouth to...
1 Pages(250 words)Essay

Business Models and Planning

...Business Models and Planning Question It is a business idea that entails organized sharing of cars. It is different from renting cars in that ownership is shared, and one is not restricted to how long they should use the car so long as they meet the costs of mileage and other periodic costs. In brief, it is just analogous to owning a car in a more convenient and financially flexible way. The idea originated in Switzerland (Hart et al., 2005). Question #2 According to the early research that Chase conducted, the idea was still little recognized (had not taken shape) in Western Europe. Only 0.01% of drivers had embraced and paid for the shared-car ownership. Of course,...
2 Pages(500 words)Essay
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.

Let us find you another Essay on topic Business Models and Planning for FREE!

Contact Us