The creation of a plan for marketing and selling a product is based on clearly describing the target customer and how the product will be priced, communicated, delivered, and supported. An organizational plan that supports a collaborative, performance-based culture and a sound compensation scheme must be created to attract good talent. The acquisition of resources and capabilities and facilities will be planned for and initiated in order to build momentum for the venture. The management of operations, processes, and manufacturing will be described in an operations plan. A plan for outsourcing some activities and acquiring necessary assets and technologies will facilitate the early growth of the firm. Finally, the venture team will describe the potential for acquisitions, if any, and the plan for operating internationally in order to further stimulate growth.

What is the best way to attract, serve, and retain customers?

Marketing and sales are critical to the success of a new firm since the firm normally starts without any customers. A new business must create a marketing and sales plan, which describes its target customers for its product offering. A sound marketing plan is built on solid information obtained through market research. The new firm creates a product position and a mix of price, product, promotion, and distribution channels that will attract and satisfy the customer. Gaining recognition and acceptance in a target market requires the following steps in sequence:

How can entrepreneurs best organize and reward the people who will lead their venture to success?

After recognizing an opportunity and deciding it is attractive, usually one or two founders assemble a new venture team to build a plan and an organization to execute it. This initial team creates or designs an organizational arrangement to respond to the opportunity. The leaders of the venture are identified early in the organization's development. These leaders are able to inspire and motivate others to join the new venture and work on tasks of the venture. They build a team that is collaborative and possesses diverse competencies. As an organization grows, managers will be needed to carry out the tasks that keep the organization running well. A leader is a team's emotional guide and exhibits solid emotional intelligence.

As the organization grows, the firm works to build an organizational culture and trust among team members. Leaders and teams strive to build social relationships and networks to foster collaboration. One of the methods of creating an ownership culture is to facilitate ownership for all people in the firm through stock options or restricted stock. A new firm also builds a set of advisors and a board of directors to help it move forward.

How can entrepreneurs efficiently acquire and organize the resources needed to launch their venture?

To tap the required resources, they need to build credibility and legitimacy in the marketplace of resources and talent. Influence and persuasion can help entrepreneurs build their case for securing scarce resources for their venture.

A physical location and operating as a virtual organization are viable options for a firm today. We examine the benefits of joining a cluster of interconnected enterprises operating within a geographic region. Using the Internet and related technologies, new enterprises can build a powerful virtual organization. All firms need to create a plan for outsourcing functions while maintaining critical functions within the firm. As firms strive to be innovative and competitive, they seek to control costs by outsourcing functions to those who can do them better and cheaper. However, these firms are challenged to retain the cohesion and coordination required to effectively manage these supplier partners. Seeking financial resources will be discussed in Chapter 18.

How do new firms build a set of operational processes that serve to create, make, and provide the product to the customer?

Most businesses build a chain of activities that add value at each section of the chain. Each element of the value chain has a capability that provides value added to the product. A new venture manages its value chain to provide the ultimate product to the customer. The firm also moves, stores, and tracks parts and materials to its value-adding partners and strives to ensure timely, efficient production of the service or product. Information flow along the value chain enables the coordination of the distributed tasks. An effective enterprise manages for operational excellence by trying to develop and communicate measurements of efficiency and timeliness.

Another way to describe a set of interrelated tasks is as a network of activities. A value web (or network) can use an internet-based system to communicate with all the network participants. With a common schedule and associated tasks, the venture can manage the value web to achieve on-time production.

How can entrepreneurs best manage expansion via acquisitions and entry into new geographic markets?

Entrepreneurs often create a new business by acquiring an existing firm and then improving it. The acquirers attempt to create growth and new value for the firm. Another strategy is for entrepreneurs to start and build their own firm and then expand the company by acquiring other firms. A series of successful acquisitions can help build a firm into a powerful leader in an industry. The integration of the newly acquired firm within the existing firm is a large challenge, however, especially when the cultures of the two firms differ significantly.

Most new firms develop, at the appropriate time, a plan for building an international strategy for growth. The forces for globalization are powerful, and new business ventures need to plan for them.