Lessons 12 · 1 lessons · U. G‘afurov, Q. Sharipov. Basics of Entrepreneurship: textbook for Grade 11 of general secondary schools and for secondary specialised and vocational institutions. 1st edition. “O‘zbekiston” publishing house, Tashkent, 2018
12
Business projects and startups
Textbook: pp. 57–60
GoalExplain the difference between a business project and a business plan, the tasks of a business project, the concept of a startup, its financing sources and development stages.
New words
business project: a document describing all measures to realise a business idea and proving its efficiency · Biznes loyihastartup: a newly formed company or business project based on innovative ideas or technology · Startapbusiness angel: a private person investing in a business, usually from the idea stage · Biznes-angelventure fund: a fund that invests money of its contributors in startups, accepting high risk for possibly high return · Venchur fond
Explanation
A business project is close to a business plan but wider: it describes all measures for realising the idea and justifies the expediency and efficiency of spending money; the business plan is often one component of the project. The main tasks of a project are to find out whether there is enough demand for the product, to set the volume of production and sales, and to assess profit and profitability indicators. A startup is a new company or project based on an innovative idea or technology; its main resource is the new idea and its characteristic is a shortage of funds and a market position that is not yet firm. A startup may be financed by family and acquaintances, business angels (private persons who enter from the idea stage and do not interfere in the company’s work) and venture funds (funds investing their contributors’ money at high risk); taking part in industry forums, startup contests and events (“networking”) helps in the search for an investor. The stages are pre-startup (from idea to market), pre-seed (the need is clear, the technical solution is not), seed (studying the market, building a sample, first investors), startup (growth and expansion) and exit (investors leaving the business fully or partly, for example by selling the company). Many startups can fail; this section teaches concepts and is not investment or financial advice.
Worked examples
Project and plan: the “Sinfdosh” startup is an idea for an app for exchanging school notes. The business project covers all of it: demand survey, technical development, team, finance and social benefit; the business plan gives its market, marketing and money calculation.
Funding: 60 000 000 so‘m is needed at the start. If the team puts in 15 000 000, relatives 10 000 000 and a business angel 35 000 000 so‘m, the total is 15 000 000 + 10 000 000 + 35 000 000 = 60 000 000 so‘m. If monthly costs are 5 000 000 so‘m, this lasts 60 000 000 / 5 000 000 = 12 months.
Class activity
Startup pitch: groups of 3–4 prepare a 2-minute pitch of an imaginary startup (for example a neighbourhood bicycle-rental app): the problem, the solution, who the buyer is, how much funding is needed. The class plays “business angels” and asks 2 questions. Nobody stakes real money — this is only a learning exercise.
Practice
1
How does a business project differ from a business plan?
A project is wider: it justifies all measures and their efficiency; the plan is often one part of the project.
2
State the difference between a business angel and a venture fund.
A business angel is a private person investing his or her own money; a venture fund invests its contributors’ money.
3
Identify the stage: the team is studying the market, building a sample and looking for the first investors.
The seed stage.
4
A startup needs 48 000 000 so‘m and its monthly cost is 4 000 000 so‘m. For how many months does the money last?