In Class Exercise

A Framework for Enterprise Development and Entrepreneurship: In class exercises 1
A FRAMEWORK FOR ENTERPRISE DEVELOPMENT AND

ENTREPRENEURSHIP
In class exercises
The following are suggested short exercises intended for the student groups to be carried out in
class. These exercises will often require brief student presentations (a slide), a plenary and
feedback from the tutor.
1. Group Formation
Aim: To improve effectiveness of team working through icebreaker exercises
Tasks:
Students are required to form groups of no more than 4. These are self selected although other
methods can be used. This exercise can be carried out in conjunction with the extended exercise.
The following tasks are designed to introduce the various members of the group, to find out
personal details and to encourage team cooperation.
1. Introduce the person sitting next to you on the left in the group
sell their good points
identify what you have in common
explain something unusual about them
2. Put in order the members of your group according to:

Name length
Birth date
The distance their home is from the university
Number of siblings
Most unusual pet
Most likely to be prime minister/entrepreneur
3. Develop a logo for the group and briefly present the slide
4. Build a tent out of newspaper that can support itself
5. Each member is to identify 8 facts about themselves or their personal history and present this
to the group. However, this list must contain one lie. After presenting this information, group
members have to identify which fact was a deception.
enterprise-framework-class-exercise Dann & Gaskell, 2006

2. Self awareness
Aim: To build an awareness of the motivation, characteristics and background that have shaped
well known entrepreneurs.
Tasks:
Research/evaluate the characteristics of a well known entrepreneur. Readily available
information is available on:
Richard Branson
Alan Sugar
Anita Roddick
Stellios
Bioentrepreneurs biographies can be obtained through the Centre for Bioscience website:
www.bioscience.heacademy.ac.uk/issues/entrepreneurship/wellknown.htm
Sir Christopher Evans

Dr Andy Richards
Dr Jonathan Milner
Dr Keith McCullagh
Questions to ask:
What characteristics do they have?
What back ground and motivation do they have to be an entrepreneur?
Why do you think they have succeeded as entrepreneurs?
How do you think the characteristics/motivations/background of these well known
entrepreneurs would differ for Bioentrepreneurs?

3. Idea Generation/ Selection
Aim:
To practice exercises for creative thinking and evaluation
The purpose of this exercise is to use the principals of Wheelwrights product development
funnel; firstly to maximise the number of potential ideas through brainstorming, then to reduce
the number of ideas passing through the funnel by filtering using a formalised procedure.
Tasks:
1. Brainstorming and Creative thinking:
In groups take 5 minutes to brainstorm any of the following:
Means of getting from home to University

Ways in which to get a camel through the eye of the needle
Ways in which to find needle in a haystack
Situations when a cork/spoon/ice is useful
Ways of ending world poverty
Etc.
Participants are encouraged to be open, non-critical and spontaneous.

We are looking for number of ideas here.
No evaluation should take place at this point.
If there are dominant players in the group, consider asking participants to write down some ideas
before the thought shower.
2. Evaluation/Selection
Now you need to reduce your ideas and select one or two most original and feasible:
1. Rate each idea on the three point scale first originality and then for the feasibility of being
able to carry out your proposed idea.
2. Mark them on the matrix overleaf.
3. State your choice (highest score on feasibility and originality) for your particular group.
4. Would you have made the same choice if you had
worked on your own
used a gut feel approach to selection

Evaluation Matrix
High Medium Low
High
Medium
Low

4. Project management
Aim: To practice techniques of project management
Tasks:
Choose an event with which your group are all familiar. The following are some suggestions:
A wedding
A concert
A play
A holiday
1. Set aims and objectives for your task i.e. overall achievement and how it should be achieved
2. Break down the activities into tasks, sub tasks and determine mile stones
3. Draw a Gantt chart and responsibility chart for your event
The learning points here

being able to scope the project effectively i.e. what is the boundary of the project
that you are about to undertake. Is it clearly specified or will it have to be
negotiated?
including all stakeholders in the responsibility matrix especially customers if you
are imaging yourself as a business
identifying appropriate association of activity

5. Intellectual property rights
Aim: To explore what is patentable in the biosciences
Tasks:
The following questions allow the discussion of what is a patentable and are based on an
excellent guide produced by the Australian Department of Foreign Affairs and Trade (2005).
(See References)
Q. 1
After several years of activity in the laboratory, inventor Jacky Right has developed a means of
genetically manipulating the gene structure of a tulip to create a new variety of flower.
Could the Jacky patent this invention?

Why?
What conditions must be passed to allow the invention to be patentable?
Q. 2
Princey has discovered a naturally occurring herb that is found in the jungle of south America
that can reduced inflammation from mosquito bites.
Could Princey patent the herb or this discovery?

What kind of work would Pricey have to carry out in order to make this eligible?
What kind of exceptions to patents might apply?
Q. 3
Han has developed a new variety of rice with greater yield and pest resistance to common rice
plants. He believes it would solve many of the problems of food shortages and malnutrition in
the world, increasing the amount of high quality rice quality that his country can support and
reducing the need and expenditure for chemical herbicides. Han wants to protect the intellectual
property of the discovery.
What are the various options that are available?

If patent protection is available, what would it have to say to cover the requirements of
novelty, inventive step and utility?
Answers:
1. Novelty potentially yes if it has not been done before. Inventive step yes it appears non-
obvious. Utility is questionable here. Consider using plant breeders rights.
2. Not patentable there is no inventive step. The reactive agents need to be isolated through an
inventive discovery process.
3. Plant breeders rights, patents, trade mark for name. Needs to state prior art. Specify, draw
new invention explaining application and benefits

6. Market and competitor analysis
Aim: To assist in identifying competitors and market trends
Tasks:
In groups work consider the following:
You are setting up a dating agency/ funeral service/ better mouse trap company
Segment the market and determine your target market

How is your product differentiated from the competition?
Key questions to ask here are:
1. What is the best way to segment each of these markets?

2. Which is the most attractive segment?
3. How can they be better than the competition Differentiation?

7. Business Strategy
Aim: To guide students through a SWOT analysis
Tasks:
Use the resource material to take the students through an example SWOT analysis. It would be
worth providing background material about rheumatoid arthritis.
Case Study: Bioburp Limited
Bioburp Ltd were set up in 1995 as a 'spin off SME' from Cambridge University and are now
situated in one the larger units on the Biotechnology Business Cluster on the outskirts of the city.
Through his research at the University, Dr James Bradshaw has developed a range of treatments
for rheumatoid arthritis. Having worked in research at the University since graduation James felt
there was an opportunity to commercialise his ideas and set up a business with fellow researcher
Chuck Keeble.
The company currently has 35 employees many of whom they have directly recruited from
Cambridge University. The company has a three strong management team comprising James as
CEO, Chuck heading up R&D and Jude Marsh who they recruited from a local therapeutics
Biotech firm to lead their new sales and marketing team of 4 people.
Although the company has a number of UK patents for their products only one of them is on the
market and generating a moderate sales income although this has not superseded their initial
setup costs for the project and the business. Their leading product Exactosis is a new Non
Steroidal Anti-Inflammatory Drug (NSAID), was launched three years ago and is not widely
recognized by the medical profession, although is has been accepted by the FDA. It is
manufactured by Klumps Ltd., a small, local tablet pressing firm, and they are currently
marketing it under their own brand name Bioburp through the Rheumatoid Arthritis Foundation
and key London Hospitals.
The 25 personnel work in the laboratory developing a range of new products to combat arthritis
based on COX-2 blocker principle. Their two most successful formulations are in the early
stages of clinical trials and are being tested on animals.
Use this and the supporting data on Rheumatoid arthritis:
1. Identify the strengths and weaknesses of the organisation, now and in the future.
2. Identify the opportunities and threats in the environment.
3. Draw up a SWOT analysis matrix and determine key strategies in each of the four quadrants.

Bioburp Case Study - SWOT Analysis
Opportunities Threats
1. Good supply of well trained graduates in locality 1. Many competing drugs are available on
2. High demand for products for arthritis the market
3. Total market size for NSAID large 2. COX2-blocker are now more selective
4. Many types of arthritis that can be remedies 3. Other local Biotech companies may
5. COX2 blocker may have broader application than arthritis poach staff
e.g. Alzheimer's, asthma, cancer 4. Competition promote their drugs using
6. Market likely to grow with aging population the web
7. Cox-2 Blocker reduce pain and inflammation without 5. Development time for products is long
gastric and renal side-effects and costly
8. Possible synergy with cluster cos. 6. Potential new entrants into market
Strengths
1. Technically capable CEO Use technical capability and employ new graduates to develop Use technical capability to speed up
2. Have survived and grown over COX2 blocker for alternative applications development of products in pipeline
period of 7 years Market Exactosis at ageing population Promote COX-2 blocker patents and license
3. Technically capable work force to exploit current development
4. Holds a number of patents Promote NSAID using web and encourage
5. Exactosis approved by the FDA expansion
6. New NSAID on market
7. Two products in pipeline
Weaknesses
1. Managerial capability poor Use synergy with cluster co's to form strategic alliance, merger Develop marketing team to market NSAID
2. Unrecognized brand name or purchase to exploit NSAID market more effectively to increase number of outlets
3. Small marketing sales/marketing Expand marketing/sales team to further penetrate market for Expand product range to include 'more
team Exactosis selective' COX2 blocker
4. Major product has not broken even Employ more graduates to ensure that COX-2 blocker products Merge/purchase/Strategic alliance to speed
5. Only marketed to a small number reaches market before patent expires COX2 blocker to market
of outlets Expand product range to address alternative types of arthritis
6. Patents may expire before products
launched
7. Limited product range

8. Marketing Strategy
Aim: To practice creating a marketing strategy for a small business
Tasks:
You are setting up a dating agency/ funeral service/ better mouse trap company.
Determine the key element of the marketing mix organisation based on its position. You will
need to refer to your finding in topic 6
Discuss how they differ for each organisation e.g. Service v manufacturing
9. Operational requirements
Aim: To consider the operational requirements
Task:
Consider the operational requirements of setting up a brewery.
The resource pack contains an example operational strategy for a brewery. Discuss how this
might differ for your business and present on slides.
10. Building the Team
Aim: To explore the options available for building a credible team
Task:
The following is a discussion topic that is useful before any delivery of any lecture material.
Case Study: Amman Co.
Amy and Manfred and are two students who are setting up their own business - a paternity
identification clinic. The two students have an understanding of the technology involved in its
development as they have studied Biotechnology to a Masters standard. However they wish to
secure funds for the first stage of their service development as it requires obtaining licenses to
proprietary practices. One of their key concerns is ensuring that likely funders will take them
seriously.
Questions to ask:

Discuss how they might build credibility to their team as they have no track record in
business?
What skills do you think they will need?
How might bring these skills develop the team?

11. Financial planning
Aim: To practice the process of developing a cash flow forecast.
Task:
Students can work through this aspect in class.
Dick Branston the Plumber: Cash Flow Exercise
After many years working for an employer, Dick has decided to take the plunge, take control of
his destiny, become self employed and cash in on the shortage of qualified skilled tradesmen.
He has a wide range of contacts in the trade supply industry and an excellent reputation for the
quality of his work.
Many domestic and business customers have indicated that he would be their first call and
certainly recommend his services to friends and colleagues.
Dick plans to start trading on April 1 2006.

He has already done some extensive market research, developed a marketing strategy and has
contracts in place that will cover the first 12 months of trading.
He has also done work on his business plan and prepared the following:-
1. A personal survival budget
2. A sales forecast based on the market research effort.
3. Costings calculations to establish his charge out rates
4. A break even analysis
5. A cash flow forecast
Personal Survival Budget

Dick needs to draw at least 800 out of the business each month to cover his personal living
expenses and Class 2 National Insurance contributions.

Sales Forecast
Dick has prepared conservative estimates of the income he anticipates his business could
generate per month during Year 1.
These are:
April 2000
May 2000
June 2500
July 2500
August 1000
September 2500
October 2500
November 3000
December 2000
January 2500
February 3000
March 3000
Total Income 28500
Costings
Dick anticipates working five days per week and carrying out six hours paid work per day. He
will take four weeks holiday per year, two weeks in August and two in December.
The number of chargeable hours per year is:-

6 (hours per day) x 5 (days per week) x 48 (weeks per year) = 1440
If Dick anticipates his first year income to be: 28500
His minimum hourly charge rate is: 19.79 (20.00)
Funding the Business

To finance the establishment of the business Dick intends to:
Introduce 4000 of his own money
Introduce 1000 (current value) of tools and equipment
Borrow 1000 from a bank, paid back over 24 months
Dick's personal survival budget has indicated that he needs to draw 800 from the business each
month to cover basic living expenses and Class 2 National Insurance contributions.
Capital Equipment Expenditure

A low mileage diesel van costing 3000 will be required for the business and purchased
immediately before start up

A job booked with a business customer for July will require the purchase of a special tool
costing 120
A new PC and business administration software costing 800
Business Accommodation
Dick will be renting a secure managed workshop from a local enterprise agency on an,
easy in easy out license
Other Assumptions
Dick will not be offering credit to any trade or domestic customers. His terms and
conditions of trade are for immediate payment on completion of jobs
The interest on the 1000 loan over the first year is expected to be 10 per month
Dick knows that the average cost of materials and other consumables used for plumbing
jobs represent 10% of the price charged
Additional Cash Flow Construction Information

Anticipated Business Payments
Materials Apr: 200, May: 200, Jun: 250

(Per Month) Jul: 250, Aug: 100, Sep: 250
Oct: 250, Nov: 300, Dec: 200
Jan: 250, Feb: 300, Mar: 300
Rental and Rates 400 Payable in advance on the first day of
(Per Quarter) each quarter starting April.
Power, Heat & Light 120 Payable in arrears in the last month of
(Per Quarter) every quarter.
Insurance Premiums (Vehicle & Trade 480 Paid in full before the start of trading.
related)
(Annually)
Fixed Telephone 120 for connection charge to workshop in
(Per Quarter) March (Pre Start) then 70 per quarter in
arrears.
Mobile
(Per Month) 30 / month mobile contract.
Travel / Vehicle Costs 155 Road Tax paid in March plus 120 per
(Per Month) month on fuel.
Advertising / Publicity Apr: 500, May: 150, Jun: 150
(Per Month) Jul : 500, Aug: 150, Sep: 150
Oct: 500, Nov: 150, Dec: 150
Jan: 500, Feb: 150, Mar: 150
Legal Fees 120 Pre Start: For the negotiation and transfer
(One payment) of workshop license.
Bank Loan Repayments 41 per month, each month. Plus
(Monthly) 10 per month interest.

Break Even Point
Fixed Costs [Drawings + Overheads (not loan)]

Selling Price (Per Unit) - Unit Variable Costs
9600 + 12110
19.79 - 1.98
21710 = 1219 hours per year

17.81

ITEM AMOUNT
The minimum amount of money you need to draw
out of the business to contribute towards personal
household expenditure.
Rent or Mortgage Payments

Water Rates
Council Tax
Gas
Electricity
Telephone (Fixed , Mobile, Comms.)
House and Personal Insurance
Housekeeping (Food, Materials etc)
TV License
Travel Costs
Car (Tax, Insure, MoT, Maintenance)
Credit agreement Payments
Clothes ( Self and Family)
Entertainment
Alcohol and Tobacco
Other Items
Other
Other
Other
Other
TOTAL
Survival Budget

Pre Start Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Total Line
1 Cash Sales 1
2 Loans 2
3 Grants 3
4 Capital Introduced 4
5 5
6 Total Income 6
7 Materials 7
8 Capital Equipment 8
9 Rent and Rates 9
10 Power, Heat and Light 10
11 Insurance 11
12 Phone (Fixed & Mobe) 12
13 Travel/Vehicle Cost 13
14 Advertising /Publicity 14
15 Legal Fee's 15
16 Bank Loan 16
17 Bank Loan Interest 17
18 Drawings and Class 2 NI 18
19 19
20 20
21 21
22 22
23 Total Expenditure 23
24 Net cash flow 24
25 Opening balance 25
26 Closing balance 26

Pre Start Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Total Line
1 Cash Sales 2000 2000 2500 2500 1000 2500 2500 3000 2000 2500 3000 3000 28500 1
2 Loans 1000 1000 2
3 Grants 0 3
4 Capital Introduced 4000 4000 4
5 0 5
6 Total Income 5000 2000 2000 2500 2500 1000 2500 2500 3000 2000 2500 3000 3000 33500 6 Totals
7 Materials 200 200 250 250 100 250 250 300 200 250 300 300 2850 7 Direct Costs
8 Capital Equipment 3800 120 3920 8
9 Rent and Rates 400 400 400 400 1600 9
10 Power, Heat and Light 120 120 120 120 480 10
11 Insurance 480 480 960 11
12 Phone (Fixed & Mobe) 120 30 30 100 30 30 100 30 30 100 30 30 100 760 12
13 Travel /Vehicle Costs 155 120 120 120 120 120 120 120 120 120 120 120 275 1750 13
14 Advertising/Publicity 500 150 150 500 150 150 500 150 150 500 150 150 3200 14 Indirect Costs
15 Legal Fee's 120 120 15 (Overheads)
16 Bank Loan 41 41 43 41 41 43 41 41 43 41 41 43 500 16
17 Bank Loan Interest 10 10 10 10 10 10 10 10 10 10 10 10 120 17
18 Drawings and Class 2 NI 800 800 800 800 800 800 800 800 800 800 800 800 9600 18
19 0 19
20 0 20
21 0 21
22 0 22
23 Total Expenditure 4675 2101 1351 1593 2271 1251 1593 2151 1451 1543 2151 1451 2278 25860 23 Totals
24 Net cash flow 325 -101 649 907 229 -251 907 349 1549 457 349 1549 722 7640 24
25 Opening balance 0 325 224 873 1780 2009 1758 2665 3014 4563 5020 5369 6918 25
26 Closing balance 325 224 873 1780 2009 1758 2665 3014 4563 5020 5369 6918 7640 26

12. Pitching the idea
Aim: Prepare a framework for a presentation - summarise
The purpose here is to aid students ability to perform summary tasks and structure findings.
Task:
Choose an article from the newspaper provided and prepare a 5 minute presentation on the
subject for an audience with little knowledge of your chosen topic.
You will need to:
Produce at least 5 slides including title, contents, summary

Break down the information in the article into digestible chunks in sequential order
Use diagrams where possible

In Class Exercise

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A Framework for Enterprise Development and Entrepreneurship: In class exercises 1

A FRAMEWORK FOR ENTERPRISE DEVELOPMENT AND

Aim: To improve effectiveness of team working through icebreaker exercises

2. Put in order the members of your group according to:

4. Build a tent out of newspaper that can support itself

enterprise-framework-class-exercise Dann & Gaskell, 2006

Sir Christopher Evans

enterprise-framework-class-exercise Dann & Gaskell, 2006

3. Idea Generation/ Selection

1. Brainstorming and Creative thinking:

In groups take 5 minutes to brainstorm any of the following:

Means of getting from home to University

Participants are encouraged to be open, non-critical and spontaneous.

enterprise-framework-class-exercise Dann & Gaskell, 2006

High Medium Low

enterprise-framework-class-exercise Dann & Gaskell, 2006

Aim: To practice techniques of project management

The learning points here

enterprise-framework-class-exercise Dann & Gaskell, 2006

5. Intellectual property rights

Aim: To explore what is patentable in the biosciences

Could the Jacky patent this invention?

Could Princey patent the herb or this discovery?

What are the various options that are available?

enterprise-framework-class-exercise Dann & Gaskell, 2006

6. Market and competitor analysis

Aim: To assist in identifying competitors and market trends

In groups work consider the following:

Segment the market and determine your target market

Key questions to ask here are:

1. What is the best way to segment each of these markets?

enterprise-framework-class-exercise Dann & Gaskell, 2006

Aim: To guide students through a SWOT analysis

Case Study: Bioburp Limited

Use this and the supporting data on Rheumatoid arthritis:

enterprise-framework-class-exercise Dann & Gaskell, 2006

Bioburp Case Study - SWOT Analysis

enterprise-framework-class-exercise Dann & Gaskell, 2006

Aim: To practice creating a marketing strategy for a small business

Aim: To consider the operational requirements

Consider the operational requirements of setting up a brewery.

10. Building the Team

Aim: To explore the options available for building a credible team

Case Study: Amman Co.

enterprise-framework-class-exercise Dann & Gaskell, 2006

enterprise-framework-class-exercise Dann & Gaskell, 2006

11. Financial planning

Aim: To practice the process of developing a cash flow forecast.

Students can work through this aspect in class.

Dick Branston the Plumber: Cash Flow Exercise

Dick plans to start trading on April 1 2006.

Personal Survival Budget

enterprise-framework-class-exercise Dann & Gaskell, 2006

The number of chargeable hours per year is:-

Funding the Business

Capital Equipment Expenditure

enterprise-framework-class-exercise Dann & Gaskell, 2006

Additional Cash Flow Construction Information

Materials Apr: 200, May: 200, Jun: 250

enterprise-framework-class-exercise Dann & Gaskell, 2006

Break Even Point

Fixed Costs [Drawings + Overheads (not loan)]

21710 = 1219 hours per year

enterprise-framework-class-exercise Dann & Gaskell, 2006