Upload
md-faisal
View
221
Download
1
Embed Size (px)
Citation preview
7/31/2019 Entrepreneurship Management -1
1/75
1
Entrepreneurial Opportunity Recognition Process
EducationPrior knowledgeof market &Consumer Problems
Experience EntrepreneurialAlertnessOUTCOMESuccessfulOpportunityRecognition
PersonalExperience
WorkExperience
Networks
7/31/2019 Entrepreneurship Management -1
2/75
2
SuccessfulOpportunityRecognition
Feasibility
AnalysisStudy
ProductPlanning &Development
7/31/2019 Entrepreneurship Management -1
3/75
3
7/31/2019 Entrepreneurship Management -1
4/75
4
7/31/2019 Entrepreneurship Management -1
5/75
5
Generate your idea
7/31/2019 Entrepreneurship Management -1
6/75
6
Product InnovationProcess InnovationInnovation Life Cycle
Detailed Discussion
7/31/2019 Entrepreneurship Management -1
7/75
7
C1 Concept StageC2 Procurement StageC3 Pilot Product/ Service development StageC4 Test Marketing StageC5 Production StageC6 Introduction to Market Stage
A : Opportunity OccursB : Idea GenerationC : Commencement of Project
D : First group of customers issatisfiedE : Huge PublicityF : Entry of CompetitorsG : Break Even PointH : Market LeaderI : Starting of MaturityJ : Retrenchment or Reviving
Net Cash
flow
+ve
_ve
A B C
D E F G E F G
7/31/2019 Entrepreneurship Management -1
8/75
8
Role of Business Incubator
1. What is Business Incubator?2. Why we need them?
7/31/2019 Entrepreneurship Management -1
9/75
9
Role of Business Incubator
1. What is Business Incubator?2. Why we need them?
7/31/2019 Entrepreneurship Management -1
10/75
10
Just born Baby IncubatorJust born Baby
Entrepreneur Business Incubator
Incubator Incubatee
7/31/2019 Entrepreneurship Management -1
11/75
11
Objectives of these IncubatorsNature of these Incubators
Developing Profitable Enterprises.
Create Jobs
Raise the awareness of Potential Entrepreneurs.
Create ecosystem conducive for entrepreneurship.
Success measures number of companies incubatedand their being successful.
NGO Government financedPrivate Self financed
7/31/2019 Entrepreneurship Management -1
12/75
12
ICT(Information and Communication Technology ) servicesOffice spaceShared workshopsFinancial management/accounting servicesLinkages to financiers, Loan and Loan guaranteeIncubation and Business Development: Business informationBusiness management and development advisory servicesIncubation program for non-resident clients (virtual incubation)Incubation program for resident clientsMentoring/coaching and mentoring
Pre-incubation servicesInternational Business Services: Help entering particular marketsNetworks and Synergy: Networking eventsReferrals to business professionalsTechnology Transfer: Help with commercializing technologyHelp with intellectual property/patent advice
Other: Facilities also includes shared resources.Strong support for access to business network, Angel/ VC/ Loan funding.
7/31/2019 Entrepreneurship Management -1
13/75
13
Some Business Incubators in India
Name Place Web siteSociety for Innovation andEntrepreneurship (SINE)
IIT Bombay www.sineiitb.org
Technology Business Incubator (TBI) IIT Delhi www.fitt-iitd.org
Rural Technology and Business Incubator(RTBI)
Science and TechnologyEntrepreneurship Park (STEP)
JSSATENoida
www.jssstepnoida.org
IndiaCo Centre (for profit) Pune www.indiaco.com
7/31/2019 Entrepreneurship Management -1
14/75
14
CFC (Common facility Centre)GOI- --- Sfurti Scheme --- To Develop ClusterThrough
NIESBUD, NoidaNIMSME, HydrabadIIE, GuwahatiEDI, AhemdabadVarious NGOs
Example Firozabad Bangles
Muradabad BrassPilakhwa TextileMeerut Sport goodsSaharanpur WoodenKhurja CeramicAgra PethaChamoli Bee Keeping
7/31/2019 Entrepreneurship Management -1
15/75
15
Case Study and Discussion
7/31/2019 Entrepreneurship Management -1
16/75
16
Feasibility AnalysisBusiness PlanFeasibility of your business plan
7/31/2019 Entrepreneurship Management -1
17/75
17
Idea Generation
Feasibility Study
Business Plan
Final Project Report
7/31/2019 Entrepreneurship Management -1
18/75
18
What is a Feasibility Study?
A feasibility study is an analysis of the viability of an IDEA
through a disciplined and documented process of thinkingthrough the idea from its logical beginning to its logical end.
A feasibility study provides an INVESTIGATING function thathelps answerShould we proceed with the proposed project idea? Is it a
viable business venture?A feasibility study should be conducted to determine theviability of an idea
BEFORE proceeding with the development of a business .
7/31/2019 Entrepreneurship Management -1
19/75
19
What is a Business Plan?
A Business Plan summarizes the PLAN OF ACTION after acourse of action has been determined through theFeasibility Study A Business Plan provides a Planning function A Business Plan outlines the actions needed to take the
proposal from
idea to reality A Business Plan tells How your business will be created and Why it will be successful?
A Business Plan provides a road map for strategicplanning
7/31/2019 Entrepreneurship Management -1
20/75
20
Why do a Feasibility Study?
Provide a thorough examination of all issues and assessment of probability of business success
Give focus to the project and outline alternatives Narrow business alternatives
Surface new opportunities through the investigative process
Identify reasons NOT to proceed
Enhance the probability of success by addressing and mitigating factors early on that couldaffect the projectProvide quality information for decision making
Help to increase investment in the company
Provide documentation that the business venture was thoroughly investigated
Help in securing funding from lending institutions and other monetary sources
7/31/2019 Entrepreneurship Management -1
21/75
21
Why to make a Business Plan?
Put the Pieces Together Do the pieces fit together in a logical manner?
Create a Blueprint for Action
Focus Founders and/or Management Team
Obtain Financing
Attract Equity Investment
Attract Key Managers and Employees
Obtain Contracts
Create Joint Ventures, Mergers, Acquisitions
7/31/2019 Entrepreneurship Management -1
22/75
22
What is included in a Feasibility Study Report?
A feasibility study report should be completed in all respectivemanners, containing detailed analysis of all best possible factors ondate.
Operational FeasibilityWill it work? how?
Technical FeasibilityCan it be built? how?
Marketing FeasibilityCan we market the product? how?
Economic Feasibility Will it make economic sense if it works and is built? how? Will it generate profits? how?
Financial FeasibilityHow to arrange required fund?
7/31/2019 Entrepreneurship Management -1
23/75
23
What is included in a Business Plan?
A Business Plan should be brief, concise & straight to the point. MainRequirements May Include
Industry Description Market Size Customer Base
Competitive Advantage Business Location Three years of Financial Projections Monthly Tracking of First Year Financials Management Experience and Profile Personal Statement of Affairs Other Sources of Cash, if any
7/31/2019 Entrepreneurship Management -1
24/75
24
Feasibility Study Vs. Business Plan
Feasibility study (after idea generation) answers the bottom line questionIs this venture going to make money?
Feasibility study outlines and analyzes several alternatives or methods of achieving business success.
Feasibility study is conducted before a business plan.
Business plan is prepared only after the venture has been deemed to befeasible.
Business plan deals with only one alternative or scenario that isdetermined to be the best alternative.
Business plan considers the management side goals and objectives of the planned business venture.
7/31/2019 Entrepreneurship Management -1
25/75
25
7/31/2019 Entrepreneurship Management -1
26/75
26
Technical Feasibility
Crucial technical specifications Engineering requirements
Design Machines
Durability Tools
Reliability and standardization Instruments
Product safety Work flow
Product development Product testing
Blueprints Lab testing
Models Field testing
Plant locationDesirable characteristics of plant site (proximity to suppliers, customers),environmental regulations
7/31/2019 Entrepreneurship Management -1
27/75
27
Marketing FeasibilityMarket potentialIdentification of potential customers and their dominant characteristics(e.g., age, income level, buying habits)
Potential market share (as affected by competitive situation)Potential sales volumeSales price projections
Market testingSelection of testActual market testAnalysis of market
Marketing planning issues
Preferred channels of distribution, impact of promotional efforts, requireddistribution points (warehouses), packaging considerations, price differentiation
7/31/2019 Entrepreneurship Management -1
28/75
28
Financial Feasibility
Required financial resources
Fixed assetsCurrent assetsNecessary working capital
Available financial resources
Required borrowingPotential sources for fundsCosts of borrowingRepayment conditions
Operation cost analysisFixed costsVariable costsProjected profitability
7/31/2019 Entrepreneurship Management -1
29/75
29
Operational Feasibility
Required skill levels and other personal characteristics of potentialemployees
Managerial requirements
Determination of individual responsibilities
Determination of required organizational relationshipsPotential organizational developmentCompetitive analysis
7/31/2019 Entrepreneurship Management -1
30/75
30
Summary of feasibility study
Questions to be answered after study
7/31/2019 Entrepreneurship Management -1
31/75
31
Summary of Feasibility StudyBasic Feasibility of the Venture
1. Can the product or service work?2. Is it legal?
Competitive Advantages of the Venture1. What specific competitive advantages will the product or service offer?2. What are the competitive advantages of the companies already in
business?3. How are the competitors likely to respond?4. How will the initial competitive advantage be maintained?
Buyer Decisions in the Venture1. Who are the customers likely to be?2. How much will each customer buy, and how many customers are there?3. Where are these customers located, and how will they be serviced?
7/31/2019 Entrepreneurship Management -1
32/75
32
Summary of Feasibility Study (Contd.)
Marketing of the Goods and Services
1. How much will be spent on advertising and selling?
2. What share of market will the company capture? By when?
3. Who will perform the selling functions?
4. How will prices be set? How will they compare with the competitions prices?
5. How important is location, and how will it be determined?
6. What distribution channels will be used wholesale, retail, agents, direct mail?
7. What are the sales targets? By when should they be met?
8. Can any orders be obtained before starting the business? How many? For what totalamount?
7/31/2019 Entrepreneurship Management -1
33/75
33
Summary of Feasibility Study (Contd.)
Production of the Goods and Services
1. Will the company make or buy what it sells? Or will it use a combination of thesetwo strategies?2. Are sources of supplies available at reasonable prices?3. How long will delivery take?4. Have adequate lease arrangements for premises been made?
5. Will the needed equipment be available on time?6. Do any special problems with plant setup, clearances, or insurance exist?
How will they be resolved?7. How will quality be controlled?8. How will returns and servicing be handled?
9. How will pilferage, waste, spoilage, and scrap be controlled?
7/31/2019 Entrepreneurship Management -1
34/75
34
Summary of Feasibility Study (Contd.)
Staffing Decisions in the Venture
1. How will competence in each area of the business be ensured?2. Who will have to be hired? By when? How will they be found and recruited?3. Will a banker, lawyer, accountant, or other advisers be needed?4. How will replacements be obtained if key people leave?
5. Will special benefit plans have to be arranged?
Control of the Venture
1. What records will be needed? When?2. Will any special controls be required? What are they? Who will be
responsible for them?
7/31/2019 Entrepreneurship Management -1
35/75
35
Financing the Venture
1. How much will be needed for development of the product or service?
2. How much will be needed for setting up operations?
3. How much will be needed for working capital?
4. Where will the money come from? What if more is needed?
5. Which assumptions in the financial forecasts are most uncertain?
6. What will be the return on equity, or sales, and how does it comparewith the rest of the industry?
7. When and how will investors get their money back?
8. What will be needed from the bank, and what is the banks response?
7/31/2019 Entrepreneurship Management -1
36/75
36
Data required for a feasibility study can come from primary or secondary sources,
Primary data can include formal interviews and surveys. Collection of primary data can be expensive and time consuming,
Secondary data can include industry and trade publications, statistics of
industry associations, and government agency reports
Data Sources for a Feasibility Assessment
7/31/2019 Entrepreneurship Management -1
37/75
37
Feasibility Study
Business Plan
Starting the Venture
Success Failure
Quality work of feasibility study andbusiness plan
good bad
7/31/2019 Entrepreneurship Management -1
38/75
38
Quality work of feasibility study andbusiness plan
poor
good
success
7/31/2019 Entrepreneurship Management -1
39/75
39
Feasibility of your business plan
7/31/2019 Entrepreneurship Management -1
40/75
Legal Issues for a Entrepreneur
40
7/31/2019 Entrepreneurship Management -1
41/75
Intellectual property rights
Patents , Trademark, Copy rights, Trade secrets.
41
7/31/2019 Entrepreneurship Management -1
42/75
Lawyer
For legal advice. Check legal expertise for new venture. Fee to be paid.( one time or retainer ship) Option to be an employee
42
7/31/2019 Entrepreneurship Management -1
43/75
Patents
Utility patents. Design patents. Plants patents. International patents. Documentations. (Application, description,
claims etc)
43
7/31/2019 Entrepreneurship Management -1
44/75
Licensing.
An arrangement between 2 parties where-inone party has proprietary & the other overinformation , process, technology rights.
Product safety & liability. Insurance. Contracts (conditions)
44
7/31/2019 Entrepreneurship Management -1
45/75
Patent documentation.
45
7/31/2019 Entrepreneurship Management -1
46/75
Legal Environment & Entrepreneurship
Entrepreneurs are not supposed to be lawyers orhave legal expertise but be sufficientlyknowledgeable about legal concepts that impact
businesses Review laws that relate to
Inception of the venture Growth & continuity of the venture
46
7/31/2019 Entrepreneurship Management -1
47/75
Legal Environment & Entrepreneurship
Patents Processes, machines, plants, products, plants, chemical compounds, &
improvements in already existing items Protection for 14 years Temporary monopoly to encourage creation of new ideas Can sell, license etc.
Copyright Protection of literary & artistic productions (60 years, proposed for 70
years, might have already been done) Books, periodicals, dramas, music, art, motion pictures,
lectures, sound recording , computer programs
47
7/31/2019 Entrepreneurship Management -1
48/75
Legal Environment & Entrepreneurship
Trademarks A distinctive name, mark, symbol, motto identified with a
companys product (s)
48
7/31/2019 Entrepreneurship Management -1
49/75
Entrepreneurial Organizations & LegalForms
Three primary legal forms
Sole Proprietorship Partnership Corporation (Pvt Ltd, Public Ltd)
49
7/31/2019 Entrepreneurship Management -1
50/75
Entrepreneurial Organizations & LegalForms
Sole Proprietorships Advantages ???
50
l l
7/31/2019 Entrepreneurship Management -1
51/75
Entrepreneurial Organizations & LegalForms
Sole Proprietorships Advantages
Ease of formation Sole Ownership of profits Decision making & control Flexibility Relative Freedom from Govt. control Freedom from Corporate business taxes (taxed as individual tax payers)
51
l & l
7/31/2019 Entrepreneurship Management -1
52/75
Entrepreneurial Organizations & LegalForms
Sole Proprietorships Disadvantages???
52
E i l O i i & L l
7/31/2019 Entrepreneurship Management -1
53/75
Entrepreneurial Organizations & LegalForms
Sole Proprietorships Disadvantages
Unlimited Liability including personal assets
Lack of continuity Less Available capital Obtaining long term debt relatively difficult Relatively limited viewpoint & experience
53
E i l O i i & L l
7/31/2019 Entrepreneurship Management -1
54/75
Entrepreneurial Organizations & LegalForms
Partnerships Articles of partnership are usually executed and contain
Name, purpose, Duration of agreement Character of partners (general or limited, active or silent)
Contributions of partner Division of profits and losses Draws or salaries Death of a partner clauses Release of debts
Business expenses handling Arbitration Etc.
54
E i l O i i & L l
7/31/2019 Entrepreneurship Management -1
55/75
Entrepreneurial Organizations & LegalForms
Partnerships Advantages ???
55
E i l O i i & L l
7/31/2019 Entrepreneurship Management -1
56/75
Entrepreneurial Organizations & LegalForms
Partnerships Advantages
Ease of Formation
Direct Rewards Growth & Performance facilitated (more capital & skills) Flexibility Relative freedom from Governmental control
56
E i l O i i & L l
7/31/2019 Entrepreneurship Management -1
57/75
Entrepreneurial Organizations & LegalForms
Partnerships Disadvantages??
57
E t i l O i ti & L l
7/31/2019 Entrepreneurship Management -1
58/75
Entrepreneurial Organizations & LegalForms
Partnerships Disadvantages
Unlimited liability at least of one partner
Lack of continuity Relative difficulty in getting large sums of capital Bound by the acts of just one partner (general, can sign any contracts and
obligations)
58
E t i l O i ti & L l
7/31/2019 Entrepreneurship Management -1
59/75
Entrepreneurial Organizations & LegalForms
Partnership Success
Partnership Attributes Commitment
Coordination Trust & Interdependence
Communication Behavior Quality Information Sharing & Participation
Conflict Resolution Techniques Persuasion & Smoothing Arbitration & Joint Problem solving
59
E t i l O g i ti & L g l
7/31/2019 Entrepreneurship Management -1
60/75
Entrepreneurial Organizations & LegalForms
Corporations A separate legal entity apart from the individuals
who own it Advantages ????
60
E t i l O g i ti & L g l
7/31/2019 Entrepreneurship Management -1
61/75
Entrepreneurial Organizations & LegalForms
Advantages Limited Liability Easy Transfer of ownership
Unlimited life Relative ease of securing capital Increased ability & Expertise
61
E t i l O g i ti & L g l
7/31/2019 Entrepreneurship Management -1
62/75
Entrepreneurial Organizations & LegalForms
Corporations Disadvantages ???
62
Entrepreneurial Organizations & Legal
7/31/2019 Entrepreneurship Management -1
63/75
Entrepreneurial Organizations & LegalForms
Corporations Disadvantages
Activity Restrictions (Limited by Charter)
Lack of participation for minority stockholders Regulation Organizing expenses Double taxation (on corporate profits as well as individual income)
63
Entrepreneurial Organizations & Legal
7/31/2019 Entrepreneurship Management -1
64/75
Entrepreneurial Organizations & LegalForms
Franchising (Franchisee & Franchisor, being shared for its uniqueness,will be one of the earlier discussed forms)
Advantages Training & Guidance Brand Name Appeal Proven Track Record Financial Assistance
64
Entrepreneurial Organizations & Legal
7/31/2019 Entrepreneurship Management -1
65/75
Entrepreneurial Organizations & LegalForms
Franchising Disadvantages
Franchisee Fees
Control exercised by the franchisor Unfulfilled promises by some franchisors
65
7/31/2019 Entrepreneurship Management -1
66/75
Legal Environment & Entrepreneurship
Entrepreneurs are not supposed to be lawyers orhave legal expertise but be sufficientlyknowledgeable about legal concepts that impactbusinesses
Review laws that relate to Inception of the venture Growth & continuity of the venture
66
7/31/2019 Entrepreneurship Management -1
67/75
Legal Environment & Entrepreneurship
Patents Processes, machines, plants, products, plants, chemical compounds, &
improvements in already existing items Protection for 14 years Temporary monopoly to encourage creation of new ideas Can sell, license etc.
Copyright Protection of literary & artistic productions (60 years, proposed for 70
years, might have already been done) Books, periodicals, dramas, music, art, motion pictures,
lectures, sound recording , computer programs HANDOUT: Post Internet Copyright protection
67
7/31/2019 Entrepreneurship Management -1
68/75
Legal Environment & Entrepreneurship
Trademarks A distinctive name, mark, symbol, motto identified with a
companys product (s) HANDOUT:
68
Entrepreneurial Organizations & Legal
7/31/2019 Entrepreneurship Management -1
69/75
Entrepreneurial Organizations & LegalForms
Franchising Disadvantages
Franchisee Fees
Control exercised by the franchisor Unfulfilled promises by some franchisors
Case 12.2
69
7/31/2019 Entrepreneurship Management -1
70/75
Entrepreneurial
Marketing Research
70
7/31/2019 Entrepreneurship Management -1
71/75
Entrepreneurial - Marketing Research
Marketing Research questions that you need answersfor
Market Do you know about the buying habits of your target market Do you know about the repeat purchase behavior Can you plot your sales month by month
Product Have you tested the market acceptability of your offering Have you tested the price elasticity of your offering
Advertising Is your advertising reaching the right target Is it more effective in comparison to your competitors
71
7/31/2019 Entrepreneurship Management -1
72/75
Entrepreneurial - Marketing Research
Inhibitors to marketing research
Cost
Complexity Irrelevancy (in the mind of entrepreneur)
72
7/31/2019 Entrepreneurship Management -1
73/75
Entrepreneurial - Marketing Research
3 Marketing philosophies of entrepreneurs
Production driven Sales driven Consumer driven
Depends on
Competitive pressure Entrepreneurs background Short term focus
73
7/31/2019 Entrepreneurship Management -1
74/75
Entrepreneurial -Marketing Research
Entrepreneurs need to know distinctly their offeringtype
Convenience Goods Staple goods (food etc.) & Impulse goods
Shopping goods (spend time on comparing prices & specs) Specialty Goods (customers make a special effort to find & purchase) Unsought Goods (encyclopedias etc.)
New Products
74
7/31/2019 Entrepreneurship Management -1
75/75
Entrepreneurial Marketing Research
Marketing Stages for Growing Ventures Entrepreneurial Marketing Opportunistic Marketing
Responsive marketing Diversified marketing