Thinking like an Entrepreneur and Acquire Venture Capitalists Investments - Case Study Example

The paper "Thinking like an Entrepreneur and Acquire Venture Capitalists Investments" is a wonderful example of a case study on business. For an entrepreneur, starting a business, and acquiring venture capital has become a less boring and aggravating process. “Venture capital is a form of “risk capital”. In other words, capital that is invested in a project where there is a substantial element of risk relating to the future creation of profits and cash flows” (Introduction to Venture Capital 1998).

Analysis:

With the adoption of market strategy and an efficient management and sales team, the industry has gained a competitive advantage. They have grown continuously within five years' time.

In evaluating the opportunity, Steven Belkin has faced risks such as:

1) Lack of sophisticated management

2) Lack of technology, machinery, assets

3) Lack of financial controls

The industry is providing attractive packages to its customers. It includes meals, hotel facilities; etc. The sale is increasing year by year. The main goal of the industry is to attract more tourists. By adopting travel packages and effective marketing strategies, they can compete with the customer. Competition in the firm has not expanded the point of pricing of similar packages. Sales expansion is attained by contacting the correct groups. With a huge number of purposes, there is limited competition between tour operators in giving packages to similar places. The major risks of the investor are portfolio risks and taxation risks. Attainment of the fund will influence the expertise and skill of the manager and the sustained accessibility of the savings team. Tax benefits, tax allowances, and rates explained in the memorandum is found on present legislation and Customs practice & HM Revenue. These can vary from time to time and are not certain. The entrepreneur can reduce the risks through careful planning and decision-making, with allied activities such as the following:

Estimating present and future market and economic factors.
Considering the effects of alternative dealings
Creating reasonable choices in response to conditions, as they change and develop.
The industry employs sophisticated and experienced management skills. They have played an important role in increasing sales, attracting customers, and in the development of marketing programs. This can be seen from the financial statement of the firm. Managers in the global travel and tourism industry need to show financial capacity and understanding so that important decisions regarding the correctness of financial-based data can be made. Managers need these employability skills to go forward in the firm. The travel industry needs to employ more staff to achieve the goals in the near future. As an investment banker, one needs a reasonable financial statement which states clearly the profits and losses and other income in order to evaluate the business. The expected return is above 30% over a 5- 10 year period, in return for the capital provided to start the business. The cash flow analysis and the profit and loss statement help to project the sales and profits easily. The five-year projection plan helps to evaluate the plan better. Finance is needed to provide a salary to the management and sales team, to pay for credit cards, provide facilities for the travelers who keep increasing year by year, and to cover up travel and entertainment expenses.

Recommendation:

The travel industry has grown to a higher stage with the adoption of management and marketing strategies. Risk factors can be reduced by employing more sales team, and by acquiring adequate finance from venture capitals. By investing more in attractive tourist packages, they can take place in the international market. Read More