Entrepreneurial Development Module: Lean Start-up Report Analysis

This report presents a detailed analysis of a lean start-up venture focused on providing eco-friendly alternatives to plastic products. The report begins with an introduction to the concept of lean start-ups and the increasing demand for sustainable products. It describes the start-up's business model, which involves offering a range of products made from sustainable materials like paper, wood, glass, and bamboo through an app. The report outlines the products offered, including cups, straws, plates, cutlery, and packaging materials, targeting both wholesale and retail markets. It further discusses the initial investment from the founding members. Key financial concepts are explored, including cost structure, revenue streams, break-even analysis, cash flow statements, balance sheets, and sources and uses of finance. A cash flow budget and a discussion of income and expense statements are also included. The report concludes by emphasizing the crucial steps entrepreneurs must take when starting a business, such as gathering information, identifying financial aspects, and considering income statements and balance sheets. References to relevant literature on crowdfunding, venture capital, and entrepreneurial teams are also provided.

Entrepreneurial Development

Table of Contents
• Introduction
• About Start-up
• Products and services offered
• Investments
• Financial concepts
• Conclusion
• References

INTRODUCTION
Various start-ups are has been started with the concept of
providing environment friendly products as the demand for such
products are increasing day by day because it is growing concern.
The presentation is about a lean start-up which offers various
products that are alternative to the plastic products.

About Start-up
Lean Start-up is a method of starting up a new business which is
based on the belief of the entrepreneur. This aims to reduce the life
cycle of the product development and helps in identification of
whether any business model is viable or not. This is a Lean start-
up in which the eco-friendly products will be provided from an
App.

Products offered
The app will offer the plastic free
products which will help to reduce
the pollution caused by plastic
products. The products which are
offered are made from paper, wood,
glass and bamboo as all these are
environment products.

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Various products offered by the
start-up are cups, straws, plates,
cutlery, wrapping papers,
bottles, bags and boxes. These
products are made available
through the app. The products
are sold for wholesale and retail
market such as restaurants, pubs,
shops, super markets etc.

Investment
For every business it is necessary to invest adequate funds so that
the assets can be arranged. This business has been started by four
members who have invested £40,000 and everyone has contributed
10,000 each.

Financial concepts
Before starting the business it is necessary to have an understanding of
various instruments related to finance. As a chief financial officer it is
necessary to understand the following:
 Cost structure which helps to determine the types and the proportion of
various types such as fixed and variable. In this structure the total cost is
divided into smaller units i.e., products, services, division wise, geography
wise.
 Revenue Streams are the sources from where the company will generate
revenue. It is generally from the sales made by selling the products and
services of the organisation.

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 Break even analysis is a technique used by the production
management and management accountant to identify the units of the
goods that they have to produce and sell so that they can recover their
fixed and variable cost.
 Cash flow statement is a financial statement which helps to determine
the inflow and outflow of the cash in the organisation for a specific
period of time. It identifies all the sources from where the business
will have inflow of the cash and from where they have make
payments. Cash flow helps in maintain the balance in the payments
and the cash inflow.

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Cash Flow Budget
Particulars 2019
Cash inflows
Investment 8000
Credit sales 2000
Total inflows 10000
Cash outflows
Fixed : Equipment’s 2000
Variable : Direct material 300
Total outflows 2300
Net cash flow 7700
Opening balance 0
closing balance 7700

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Balance sheet is a financial statement that helps to analyse the financial position of
the organisation by assessing the assets and the liabilities of the organisation.

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 Sources of finance can be equity, debts, debentures, loans, venture
funding etc. through which the funds are arranged by the organisation in
order to start the business or to carry out the activities o the business. The
sources such as equity provides a large capital but it reduces the share of
the existing shareholders while loans, debentures etc. increasing the
requirement o cash flow as the interest has to be paid on regular basis.
 Uses of finance can be various as initially it is being used for arranging
the assets of the company and them to carry out the operations. The
funds so invested are used for allocating to different functions so that
they can perform their operations such as of manufacturing etc.