PROGRAM ON ENTREPRENEURSHIP
COURSE OUTLINE
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Session 1. INTRODUCTION OF ALL IN MBA CLASS !!!
Self Entrepreneurship story !!!
Nature and development of Entrepreneurship
Entrepreneurship Audit
The Value chain patterns
The three Key Assets
The top ten enterprises in India
The top ten global companies
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Session 2. ENTREPRENEURSHIP
Definition & Structure
Entrepreneurial Culture
Theories of Entrepreneurship
Classification and type of Entrepreneurs
Entrepreneurial traits and growth of Entrepreneurs
Nature and importance of Entrepreneurs
Entrepreneur versus Professional Managers
Development of Women Entrepreneurs
SEARCH FOR A BUSINESS IDEA
• PRODUCT PLANNING AND DEVELOPMENT
STRATEGY
EXISTING
PRODUCT
EXISTING MARKETS
MARKET PENETRATION
PRODUCT DEVELOPMENT
NEW
PRODUCT
NEW MARKET DEVELOPMENT
DIVERSIFICATION
PRODUCT PLANNING AND DEVELOPMENT
PROCESS
CONCEPT
IDEA STAGE
CONCEPT
STAGE
PRODUCT
DEVELOPMENT
STAGE
TESTMARKETING
STAGE
COMMERCIAL
STAGE
INTRODUCTION
EVALUATE
EVALUATE
EVALUATE
GROWTH
EVALUATE
MATURITY
IDEA
LAB
DEVELOP
MENT
PILOT
SEMICOMMERCIAL
PRODUCTION RUN
PLAN TRIALS
DE
DECLINE
PHASES OF PROJECT FORMULATION
CONCEPTION OF
A NEW IDEA
ANALYSIS OF
RELATED ASPECTS
FORMULATION OF A
PROJECT
DESIGN OF A PROJECT
SEQUENTIAL STAGES OF PROJECT
FORMULATION
PROJECT
DESIGN NETWORK FEASIBILITY TECHNO INPUT
SOCIAL
COST BENEFIT
PRE-INVESTMENT
FINANCE
RELATIONSHIP BETWEEN PROJECT
DESIGN AND NETWORK
STRATEGY
PROJECT DESIGN
SEQUENTIAL
NARRATION
PROJECT LOGIC
GRAPHIC
PRESENTATION
NETWORK
BASIC COMPONENTS OF A PROJECT
OBJECTIVE
RATE OF RETURN
ORGANISATION
SOCIAL BENEFITS
SIZE OF
PROJECT
CONCEPTUALISING THE PROJECT
Does your
Product
have a
Global
Market
Start
the
Project
Start
Financing
Have you
checked it
out
Abort the
Project
Have you set
a global
target data
Have you
factored the
export duty
Is your viable
project
viable?
Redesign the
Project
PHASES OF PROJECT MANAGEMENT
START
IDENTIFICATION
SELECTION
FORMULATION
IMPLEMENTATION
APPRAISAL
MANAGEMENT
PROJECT DESIGN AND NETWORK
ANALYSIS
STRATEGY
PROJECT DESIGN
SEQUENTIAL
NARRATION
PROJECT LOGIC
GRAPHICAL
PRESENTATION
NETWORK LOGIC
ASPECTS OF PROJECT APPRAISAL
PROJECT APPRAISAL
TECHNICAL
LEGAL
FINANCIAL
COMMERCIAL
SOCIAL
ECONOMIC
ECOLOGICAL
MANAGERIAL
ORGANISATIONAL
ECONOMIC ASPECTS OF A PROJECT
INCREASED OUTPUT
E
C
O
N
O
M
I
C
BETTER SERVICES
A
S
P
E
C
T
S
HIGHER EARNINGS
INCREASED
EMPLOYMENT
INCREASED NATIONAL
INCOME
ORGANISATIONAL ASPECTS
OF A PROJECT
SRTUCTRE
ORGANISATION
ORGANISATION
RECRUITMENT
TRAINING
FINANCIAL ASPECTS OF PROJECT
APPRAISAL
F
I
N
A
N
C
I
A
L
A
S
P
E
C
T
S
FINANCIAL SOUNDNESS
EFFICIENT OPERTION
COST OF PRODUCTION
RETURN OF INVESTMENT
CHARACTERISTICS OF AN
ENTREPRENEUR SESSION 2
ENTREPRENEUR
BUSINESS SECRECY
CREATIVITY
COMMMUNICATION SKILLS
CLEAR OBJECTIVE
PUBLIC RELATIONS
TECHNICAL KNOWLEDGE
EMOTIONAL STABILITY
INNOVATION
ORGANISATION
SKILLS
QUALITIES OF A SUCCESSFUL
ENTREPRENEUR SESSION 3
INSTINCT
PRIDE
TACTFUL
VISION
WILL
POWER
VALUES
KNOWLEDGE
RISKTAKING
APTITUDE
FLEXIBILITY
CREATIVITY
ORGANISING
SELF
CONFIDENCE
DYNAMISM
CHANGE
FLOW CHART OF AN INDUSTRIAL
ENTREPRENEUR SESSION 2
GENERATES PROFITS
MARKETING
INITIAL CAPITAL &
FINANCE
TECHNICAL KNOW HOW
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N
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P
R
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N
E
U
R
RISK TAKING
INNOVATION
PROFITABLE
INVESTMENT
INDUSTRIAL LICENCE
ENTREPRENEURIAL ENVIRONMENT
ENVIRONMENT
POLITITICAL
ECONOMIC
CULTURAL
LEGAL
TECHNOLOGICAL
ATMOSPHERE
POLICIES
VALUES
RULES
PRODUCTIVITY
CHARECTERISTICS OF
ENTREPRENEURSHIP SESSION 2
DECISION
MAKING
ACCEPTING
CHALLENGES
ORGANISATION
RISK
TAKING
INNOVATION
ENTREPRENEURSHIP
SKILLFUL L
MANAGEMENT
KEY ELEMENTS OF ENTREPRENEUR
SESSION 1
RISK – TAKING
INNOVATION
ETHICS
OPERATIONAL
EXCELLENCE
VALUES
CHARACTER
VISION
ORGANISING SKILL
HOW TO PREPARE A BUSINESS PLAN
SESSION 12
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OBJECTIVE: BUSINESS IDEA : WHAT EXACTLY YOU WANT TO DO : BRAIN STORMING SESSION:
DEFINE THE OBJECTIVE AS A SPECIFIC OBJECTIVE IN A WRITTEN DOWN FORM ONLY.
MARKET SEARCH FOR THE PRODUCT AFTER PRODUCT IDENTIFICATION AND SEGMENTATION.
DEVELOP THE MARKETING PLAN BASED ON THE FAVORABLE AND UNFAVORABLE VARIABLES.
DEVELOP THE STRATEGY FOR OBTAINING THE START UP CAPITAL ALSO CALLED SEED CAPITAL
DEVELOP A STRATEGIC PLAN AS TO WHERE YOU WANT TO BE IN 1/2/3/4/5 YEARS !!!
DEVELOP A PLAN AS TO WHEN YOU WANT TO REACH BREAK EVEN STATUS !!!
SPLIT THE COSTING OF THE PRODUCT INTO COMPONENTS TO ARRIVE AT COST/PROFIT
DEVELOP THE FINANCIAL PLAN TO OBTAINING THE NECESSARY FINANCING FOR PROJECT
DECIDE ON THE LOCATION OF YOUR BUSINESS LOCATION !!! LOCATION !!! LOCATION !!!
DEVELOP A PRODUCTION PLAN IF YOU WANT TO PRODUCE YOURSELF OR OUTSOURCE.
DEVELOP A MANPOWER/WOMAN POWER PLAN AS TO THE INITIAL NUMBER OF EMPLOYEES.
DEVELOP A MARKETING AND ADVERTISING STRATEGY FOR INTIAL LAUNCH OF PRODUCT.
PREPARE THE PROJECT REPORT USING ALL THE ABOVE POINTS IN YOUR REPORT
OBTAIN THE FINANCING FROM THE BANK AND THE INSTITUTIONS THAT HELP YOU !!!!
THANK YOU AND GOOD LUCK TO BECOME AN ENTREPRENEUR !!! DONT FORGET ATLEAST
TWO YEARS WORK EXPERIENCE IN THE PRODUCT/SERVICE YOU ARE PLANNING TO START TD !!!
ENTREPRENEURIAL STRUCTURE
SESSION 1
STRUCTURE
VALUES
EXTERNAL
ENVIRONMENT
SKILLS
PEOPLE
TECHNOLOGY
BASICS OF AN ENTREPRENEUR
SESSION 1
URGE
ORGANISATION
INNOVATION
SKILL
RISK
VISION
GROWTH
MANAGEMENT
ENTERPRISE
CONCEPT OF ENTREPRENEURSHIP
SESSION 1
ENTREPRENEUR
PERSON
ENTREPRENEURSHIP
ENTERPRISE
PROCESS OF ACTION
OBJECT
FAMILY BUSINESS SESSION 1
0
20 40 60 80 100
TATA
RELIANCE
ITC
H.LEVER
FAMILY BUSINESS ACCOUNT FOR ABOUT 70% OF
THE TOTAL SALES AND NET PROFITS OF THE
BIGGEST 250 PRIVATE SECTOR COMPANIES
BIRLA
THAPAR
SOURCE: CENTRE FOR MONITORING INDIAN ECONOMY
INNOVATION CENTRE SESSION 2
LICENSE TO
ANOTHER COMPANY
INVENTORS
ENTREPRENEURS
TECHNOLOGICAL
EVALUATION
ENTREPRENEURIAL
ASSESMENT
PRODUCT DEVELOPMENT
FEASIBILITY STUDIES
NEW CO. IN
INCUBATION CENTRE
NEW CO. IN
WORKPLACE
GOVT.EMPLOYEES
STUDENTS&FACULTY
NEW CO. IN
BUSINESS
METHODS OF MARKETING SESSION 8
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Entrepreneurs cannot compete with a new brand of detergent or soap with HL !!!
Entrepreneurs need to produce a product for the benefit of the consumer with good ASS !!
Marketing by Kotler Marketing is an organization function to market and sell a product to a
consumer for a profit for the benefit of the company and its shareholders !!!
SALIENT FEATURES OF MARKETING:1Creative function to promote business & employment.
2.Co-ordinates Finance, Production & HR !!!
3. Emphasis on what the customer needs and wants
4. Process of exchange between Seller & Buyer
5. Social benefits of increasing employment !!
DIRECT MARKETING: 1. Business to Business Marketing Ex Wholesaler to Retailer
2. Retailer to consumer or end user Ex Retail Stores
3. Company directly to consumer-Telemarketing !!
4. Internet Marketing !!! The future of Marketing !!!
METHODS OF MARKETING SESSION 8
TRADITIONAL MARKETING
MODERN MARKETING
SELLING AT ANY COST TO THE CONSUMER !!!
SELLING TO SATISFY CUSTOMER NEEDS !!!
PROFIT IS THE ONLY MOTIVE FOR SALES !!!
PROFIT MOTIVE IS SECOND TO SATISFACTION!!
APPROACH IS PRODUCT ORIENTED !!!!
APPROACH IS CONSUMER ORIENTED !!!
DOES NOT FIND ANY RELATIONSHIP WITH
OTHER MARKETING FUNCTIONS !!!
TAKES INTO ACCOUNT RELATIONSHIP WITH
ALL FUNCTIONS OF MARKETING !!!!
NO SOCIAL RESPONSIBILITY !!!
SATISFACTION OF CONSUMERS AS A SOCIAL
RESPONSIBILITY AND PAYS TAXES AND TAKES
PART IN WELFARE PROGRAMS !!!
R&D IS THE BASIS OF MARKETING WITH MR !!
NO RESEARCH AND DEVELOPMENT !!!
METHODS OF MARKETING SESSION 8
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THE PRINCIPAL MARKETING FUNCTIONS:
MARKET INFORMATION AND RESEARCH : The basis of all Marketing functions !!!
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PRODUCT PLANNING: Determine and develop the product mix to match all specifications of
packaging, pricing, service and after sales service !!!
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ADVERTISING & PROMOTION: Press, TV, Radio, Hoardings, Posters, Point of Sale & Internet !!
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SALES & DISTRIBUTION: Selling, Distribution, Warehousing, Transportation, Merchandising !!
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The Marketing Mix is a combination of all the above functions to develop an effective
Marketing Plan and Strategy for the Entrepreneur to market and sell the product !!!
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The Success of the Marketing in terms of Sales will be a measure of success of the
Entrepreneur.
METHODS OF MARKETING SESSION 8
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MARKET SEGMENTATION: Decide which segment of market you want to target !!!!!!
GEOGRAPHIC VARIABLES: Product determines the market as per region, state, nation !!!
DEMOGRAPHIC VARIABLES: Sex, age, family, size, occupation, religion, national origin !!!!
PSYCHOGRAPHIC VARIABLES: These variables depend on social status, life style & personality
BEHAVIORABLE VARIABLES: Consumers differ in knowledge, tastes, attitude and response !!
MARKET POSITIONING: Process of distinguishing a product from competition !!!!
THREE LOGICAL STEPS FOR MARKET POSITIONING:
1. ANALYZE MARKET OPPORTUNITIES FOR YOUR COMPANY !!!!
2.SELECT A MARKET AND TARGET A SPECIFIC SUB GROUP !!!!!
3.DEVISIVE A COMPETITIVE STRATEGY – Basically a SWOT analysis and KITA for competition !!
THE RIGHT TIME APPROACH !!! 1. Product Launch- To be launched after MR & Advertising !!!
2. Promotions- Advertising for Product promotions !!!!
3. Timing between Advertising and launching the product !!!
4. Exit the market with a new product to confuse competition
MARKET RESEARCH: It is the basis of all Marketing activities and don’t do anything without it
MARKETING CHANNELS SESSION 8
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CONCEPT OF MARKETING CHANNEL: Organized network of agencies and institutions !!!
PRODUCER- WHOLESALERS-RETAILERS-END CONSUMERS WHO USE THE PRODUCT/SERVICE !
CONNECTING LINK: Movement of Goods between POP !! and POC =Point of Consumption !!
DISTRIBUTION CHANNELS: Route through which goods flow from producer to consumer !!
DIRECT CHANNEL: No Middleman and the goods pass directly from producer to consumer.
INDIRECT CHANNEL: Middleman and Agent involved between Manufacturer and consumer.
IMPORTANCE OF MARKETING CHANNEL: Effective way for goods to reach consumer !!!
DIFFERENT MARKETING CHANNELS: 1. Manufacturer to Consumer-shortest channel !!
2. Mfg-Retailer-Consumer Ex. Supermarket !!
3. Mfg-Wholesaler-Retailer-Consumer Ex drugs !!!
4. Mfg-Agent-Wholesaler-Retailer-Consumer Voltas !!
5. Mfg-Wholesaler- Consumer Ex Hospitals ,Education !!
CONSUMER GOODS: 70% use the traditional wholesale outlets for some of their products !!
21% use wholesalers, 2% directly to consumer 18% through retailers.
INDUSTRIAL GOODS: 75% use wholesalers only 16% use direct selling !!!
MARKETING CHANNELS SESSION 8
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CHOICE OF CHANNELS: PRODUCT: 1.Product is perishable so few channels of distribution.
2. Longer channels for standardized goods Ex Automobile
3. Customer made product-direct Ex Computer by Dell !!
4. Technical Product direct to consumer-Cell phone
5. Jewelry sold directly to Retailer /Consumer High Value !!
MARKET: 1. Consumer goods market Retailers are needed but not so for industrial markets
2. Market is large we have many channels and small market for direct selling !!
3. Direct selling for highly concentrated marketing but channels for big markets !!
BROKERS: They bring Buyers and Seller together, negotiate terms of sale and get commision
COMMISSION AGENT: Like a Broker but has possession of the goods& sales commission.
BANKS&INSURANCE COs: Banks provide loans & insurance cos provide insurance for goods.
AUCTIONEERS: Arrange for Auction of goods and work on a percentage of sales !!!
COMMON CARRIERS: Responsible for movement of goods from one place to another !!!!
MARKETING IS THE MOST IMPORTANT FUNCTION FOR A BUSINESS TO SUCCEED !!!!!!!!!!!
MARKETING INSTITUTIONS AND
ASSISTANCE SESSION 9
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MARKETING depends on Marketing Assistance from Institutions to be successful !!!!
NATIONAL SMALL INDUSTRIES CORP. & STATE SMALL INDUSTRIES CORP: They assist small
scale industries sell their products to the Government
CENTRAL GOVERNMENT STORES PURCHASE PROGRAM: Central Govt. provides an outlet
for the production of industrial units in the country with incentives and tax benefits !!!
RESERVATION OF ITEMS FOREXCLUSIVE PURCHASE FROM SMALL SCALE SECTOR:
16 Products have been reserved to be produced for the Defence Department !!!
Now 40% have been reserved !!! 50% !!! Research has to be done to find the items !!!
TRADE CENTERS: Govt of India has trade centers to meet the marketing needs of SSS !!!
EXPORT PROMOTION COUNCILS: 11 EPCs perform both advisory and executive functions.
IIFT: Training in international trade by research, area surveys, market surveys for FT !!!
COMMODITY BOARDS: 5 for Rubber, Coffee, Tea, Tobacco & Spices for production & export.!!
EXPORT INSPECTION COUNCIL(EIC): Responsible for Q/C of items to be exported !!!
INDIAN INSTITUTE OF PACKAGING(IIP):Research into raw materials for the packaging industry
EXPORT CREDIT GUARANTEE CORP OF INDIA(ECGC): Provides insurance for Exporters/Credit
MARKETING INSTITUTIONS AND
ASSISTANCE SESSION 9
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EXPORT PROCESSING ZONES(EPZ): India has 7 EPZ SEEPZ in Mumbai for Gems & jewelry !!
EXPORT ORIENTED UNITS(EOU): Compliments the EPZ !! 502 units are in operation !!!
EXPORT PROMOTION INDUSTRIAL PARK SHEME(EPIP): created for export oriented items !!!
EXPORT HOUSES,TRADING HOUSES, STAR TRADING HOUSES : Export oriented !!!!
JUTE CORP. OF INDIA: Export, import and internal marketing and export of jute products !!!
STATE TRADING CORP OF INDIA(STC): Explore new markets to increase the exports !!!
PROJECTS & EQUIPMENT CORP. OF INDIA(PEC): Taken over the Railway Engg Div from STC !
HANDICRAFT& HANDLOOM EXPORTS CORP OF INDIA(HHEC): new markets for Handicraft !!
CASHEW CORP. OF INDIA(CCI): Subsidiary of STC to stabilize the import of cashew !!!
MMTC : To increase the exports of Indian minerals and import of raw materials for units here.
TEA TRADING CORP. OF INDIA(TTCI): To create a stable export for Indian packet/instant tea !!
THE SPICES TRADING CORP.LTD(STCL): To domestic and international trade in Spices !!!
SMALL INDUSTRIES DEVELOPMENT ORG.(SIDO): Has promotional activities in various areas
WORLD TRADE ORGANIZATION(WTO): is the legal and foundation of multilateral trading !!!
NAFTA: Free trade between US, Canada, Mexico for 15 years from 1989 No taxes !!!!
FREE AMERICAN FREE TRADE AREA OF THE AMERICAS(FTAA): Free trade with all Americas !!!
SETTING QUALITY STANDARDS
SESSION 9
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Liberalization of the industrial policy moved the economy into a market driven economy.
Quality Performance and Standards are very important for India to compete in the world.
ISO- Quality is total features of product/service to satisfy the implied needs of customer.
TOTAL QUALITY CONTROL (TQC): Quality Control is an integral part of Management !!!
Quality is no accident planned with no short cuts !!!
Use problems as sources of improvement in quality !!!
Quality is conformance to requirements and specs.
Quality is achieved by prevention and not by appraisal
Quality is zero defects and measured by non-conformance
STANDARDIZATION: Standardization and Quality Control are vital factors for industry
ADVANTAGES OF STANDARDIZATION: Provides economic and technical good solutions !!
Optimum utilization of available raw materials.!!!
Defining the quality levels of the product !!!!
Providing basis for Quality Control for the product !!!
SETTING QUALITY STANDARDS
SESSION 9
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INTERNATIONAL SATISFACTION: ISO 9000 is the International Standard for Quality Systems.
IS 14000 – The Indian Standard
EN 29000- The European Community Standard
BS- 5750 The UK Standard
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ISO 9001- Model for Quality Assurance in Design/development/production/instal/servicing.
ISO 9002- Model for Quality Assurance in Production and installation.
IS0 9003- Model for Quality Assurance in Final Inspection
ISO 9004-1 Quality Management and Quality System Elements
ISO 9004-2 Quality Management and Quality System guidelines for Services
ISO 9004-3 Guidelines for Processed Materials.
ISO 9004-4 Guidelines for Quality Improvement
ISO- 9004-5 Guidelines for Quality Plans
ISO-9004-6 Guidelines for Quality Assurance for Project Management
ISO-9004-7 Guidelines for Configuration Management
SETTING QUALITY STANDARDS
SESSION 9
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THE ELEMENTS OF THE QUALITY SYSTEM:
MANAGEMENT RESPONSIBILITY: To have a documented system of quality assurance.
QUALITY SYSTEM: To have a documented Quality System for all aspects of the Business.
CONTRACT REVIEW: To meet Customers stated requirements.
DESIGN CONTROL: To control and verify that the design of the product meets requirements.
DOCUMENT CONTROL: To ensure that the Staff doing the work have the right documents.
PURCHASING & SUB CONTRACTING: To ensure conformity of all quality requirements
PURCHASING SUPPLIES PRODUCT: To store the equipment belonging to customer properly.
PRODUCT IDENTIFICATION & TRACEABILITY: To identify and trace the product at all times.
PROCESS CONTROL: All work must be carried out under controlled conditions.
INSPECTION & TESTING: Product not to be shipped unless final inspection tests done
INSPECTION & TESTING EQUIPMENT: To ensure that the Testing Equipment is proper !!!
CONTROL OF A NON-CONFORMING PRODUCT: Separate defective products from good ones !
QUALITY RECORDS: All Quality records to be maintained for all aspects of the business
TRAINING: To ensure that competent people are trained to carry out the Q/C functions.
SETTING QUALITY STANDARDS
SESSION 9
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WHOM DOES ISO-9000 HELP: Companies Marketing & Selling to European Markets !!!
Vendors supplying to Companies that demand ISO 9000
Companies whose competitors are seeking this certification.
Companies with geographical and global operations
Companies whose parental companies need this certification.
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WHOM ISO DOES NOT HELP: Companies that see ISO-9000 certification as an end itself
Companies that already have a TQM system in place.
Companies that follow other world wide Systems
Companies that have quality problems from HR problems
Companies that are Struggling to survive in todays market !!!
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STANDARDIZATION IN INDIA: All Large, Medium & Small Industries conform to Standards.
BREAKEVEN ANALYSIS SESSION 5
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BREAK EVEN POINT-Establishes level of out put to break evenly cost & revenue for profit.
BEP = Fixed Cost÷ Total contribution X Total amount of Sales
( Total Sales-Total Variable costs= Total Contribution )
Example:
Sales
1000 units
Selling price per unit
60
Variable cost per unit
40
Fixed cost
1500
BEP(UNIT VOLUME) 1500÷20 (60-40) = 75 units
BEP in terms of sales 75x 60= 4500
BEP (in terms of capacity utilization)= Total fixed costs divided by TC X Production of units
Example if the unit is to achieve a capital utilization of 40% 45% 60% 80% BEP will be 80%
CALCULATION OF BEP in physical terms BEP= FC ÷ Contribution (SP-VC)
Example FC= 1,000,000 VC= Rs 2 per unit,SP=Rs 4 per unit Max capacity=1,00,000
BEP= 1,00,000 divided by 2(4-2) = 50,000 units= 50 % capacity
NET PROFIT RATIO= NET PROFIT ÷ SALES X 100
CAPITAL TURNOVER RATIO: SALES ÷ Net capital employed X 100
Multiply both to get ROI
Example Sales 5,000 Capital 20,00,000,Profit 5,00,000 5,00,000 ÷ 50,00,000X 50,00,000 divide by
20,00,00 X 100 or 10%x2.5=25%
SETTING UP & LOCATION OF AN
ENTERPRISE SESSION 11
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Small Scale industry and Entrepreneurs play an important role in the growth of an economy!!
After 7th Plan SSI accounted for 55% of mfg sector & 40% of total exports employing 245 lakh.
LOCATION ! LOCATION ! LOCATION ! Is very important in the setting up of an enterprise!!
STEPS IN ENTERPRISE LOCATION 1. Selection of the region. 2. Selection of the community
3. Selection of the optimum and exact site.
FACTORS AFFECTING LOCATION 1. Availability of raw materials, power labor & govt. policy
2. Banking and Finance and Research facilities available.
3. Religious and Education institutions in the area.
4. Price of land and disposal of waste and other amenities.
5. Technical know how and State Assistance in all areas.
SELECTING GENERAL AREA
1. Availability of raw materials and skilled/unskilled labor.
2. Nearness to the source of Power and Water.
3. Nuisance problems of noise, odor or smog
4. Suitability of climate. Ex Computers Bangalore.
LOCATION OF AN ENTERPRISE SESSION
11
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SELECTION OF ACTUAL SITE
FIXED CAPITAL
Land Acquisition cost
Building Construction cost
Equipment installation cost
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COST OF PRODUCTION AND DISTRIBUTION
MATERIALS COST
Direct Labor cost & indirect Labor cost
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OVERHEADS:
Factory insurance & taxes
Factory depreciation
Office salaries
Selling overheads
Distribution overheads
TOTAL
SITE A
SITE B
SITE C
LOCATION OF AN ENTERPRISE SESSION
11
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STATE INCENTIVES: Feasibility Study- 75% of cost of preparation of report-max Rs 5000 for
small scale industries, 50,000 for medium & large.
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INVESTMENT SUBSIDY: 10% of fixed assets upto 5 lakh for small scale & 10 lakhs for M&L
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DEVELOPMENT LOAN: 25% of fixed assets for small scale and 50 lakhs for M&L
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WORKING CAPITAL LOAN: 25% of fixed assets for small scale and upto 50 Lakhs for M&L
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PROCUREMENT OF KNOW HOW: Full upto Rs 25,000 for SCI and ceiling of I lakh for M&L
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STAMP DUTY EXEMPTION: Exemption of Stamp duty for agreements with KSFC for both !!
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SUBSIDY ON HOUSING: Rs 1500 per house not less than 300 sq ft for both SSI & M&L
METHODS OF TRAINING SESSION 3
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INDIVIDUAL INSTRUCTION- A single individual selected to be taught a complicated skill Pilot !!
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GROUP INSTRUCTION- This method for a group where general instructions are to be given.
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LECTURE METHOD- Instructor talks on theory followed by practice by the trainees
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DEMONSTRATION METHOD- Instructor performs followed by performance by trainees
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WRITTEN INSTRUCTION METHOD- Training is given with future written reference by trainees.
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CONFERENCE METHOD- Conferences and Workshops are organized to impart training
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MEETINGS METHOD- Meetings for groups to exchange ideas to discuss and get trained.
STAFF TRAINING SESSION 3
STAFF TRAINING
BASIC
KNOWLEDGE
SKILLS
EFFECTIVE
VISION
PRODUCTIVITY
GERMAN AND JAPANESE APPROACH
SESSION 3
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GERMAN EXPERIENCE:
Broad based training followed by specialization resulted in reduction of trades
Development of multi-craft skills and unique training modules .
Industry lead and role of initiative in restructuring and training.
Profile of workforce changed leading to more skilled workers
Retraining programs for skills improvement of the existing work force
Overall personality development of the work force to become entrepreneurs
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JAPANESE APPROACH- Opposite of German approach !!!
Little emphasis on formalized training but more emphasis on the job training !!!
Knowledge required to perform a set of activities efficiently and effectively
Skills refer to the technics required to translate knowledge into action and practice
Ability refers to the qualities required for the performance of the attained skill !!
AMERICAN APPROACH- Use a combination of the above two with initial formalized
theoretical knowledge followed by practical and emphasis on the job training !!!!
ENTREPREUNERSHIP DEVELOPMENT
ORGANIZATIONS SESSION 3
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STATE BANK OF INDIA
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IDB- ENTREPREUNEURIAL MOTIVATION TRAINING CENTER IN NORTH EAST REGION
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XAVIER INSTITUTE OF SOCIAL SERVICES- RANCHI
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CENTER FOR ENTREPRENEURSHIP DEVELOPMENT-AHMEDABAD
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STATE FINANCIAL CORPORATIONS
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CENTER FOR ENTREPRENEURSHIP DEVELOPMENT- HUBLI
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SMALL INDUSTRIES EXTENSION TRAINING INSTITUTE- HYDERABAD
INSTITUTIONS TO HELP
ENTREPRENEURS SESSION 3
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FOCUS OF EDP: To identify potential Entrepreneurs to train them with the knowledge, skills
and attitude required to become a successful entrepreneur !!!
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ENTREPRENEURSHIP DEVELOPMENT PROGRAM ORGANIZATIONS
Entrepreneurship Development Institute of India (EDI)- Ahmedabad-National Resource Ctr.
National Institute for Entrepreneurship and Small Business Development (NIESBUD)-Delhi
Rural Entrepreneurship Development Institute (RED) at Ranchi in 1983
Most States and Management Institutes have organizations and courses for entrepreneurs.
Management Development Institute-Gurgaon Delhi- a premier institute of India
Science and Technology Entrepreneurship Parks(STEPS) with the help for many universities.
Center for Entrepreneurship Development(CED),Ahmedabad by State Government and Cos
Xavier Institute of Social Service-Ranchi conducts Entrepreneurial training programs.
Role of Development Banks-Providing special capital and seed capital to start the project
SBI- 1.Liberalized financing 75%, 2.100% for technically qualified 3. Equity Fund Scheme for
interest free loan to meet the equity gap of 1 lakh
Role of NAYE-National Alliance of Young Entrepreneurs-development of Women Entrepreneurs.
AWAKE-Association of Women Entrepreneurs of Karnataka
WIMA-Women Entrepreneurs Association of Maharastra
SWWA-Self employed Women Association
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TEACHERS GUIDE TO
ENTREPRENEURSHIP SESSION 3
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COMPILED BY THE UNIVERSITY OF MARYLAND
INTRODUCTION TO BUSINESS AND ECONOMICS
Global economy ,wealth distribution and relationship between government and industry
Regulation in a free market economy with tax structure stocks bonds and banks.
BASIC CONCEPTS OF ENTREPRENEURSHIP
Dynamics of change with opportunities and resources
Entrepreneurial view point with risk/reward factors and case histories
VENTURING
Innovation, Objective analysis and creation of a team
FINANCIAL PLANNING FOR NEW VENTURES
Financial Statements and Financial projections to determine funding requirements.
Debt and equity financing for valuation of the company
WINNING BUSINESS PLAN
Business plan objectives with a guide to a preparation of a sound business plan
Presentation of business plan for financing with operations plan from business plan
RAISING CAPITAL
Fundraising tools with Financiers considerations
Sources of funding equity and debt capital to negotiate the deal !!!
ORGANIZATION FOR SUCCESS
Company name with Board of Directors by structuring the company to attract outstanding key employees
to create infrastructure without bureaucracy !!!
STRATEGY FOR ENTREPRENEURSHP
DEVELOPMENT SESSION 3
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The following strategies of Entrepreneurship is suggested for India
1. Public Entrepreneurship for those industries that private enterprise is not attracted Ex
Banks, Airlines, R&D wing of PSU to be streamlined to compete with private sector.
2.All possible efforts required to motivate the individual to become an Entrepreneur EX Tata
3.Need to develop Management Education to supplement their Entrepreneurship qualities.
4. Programs and incentives for Entrepreneurs to start business in back ward areas
5.Develop Entrepreneurial talent in India, In Japan, they come from the underprivileged class
6. Economic administration by the States to be more effective for the Entrepreneurs.
7. Greater emphasis on research relating to domestic technics against foreign collaboration.
8. Financial institutions should lend easily and make financing Entrepreneur friendly
9. New categories of Entrepreneurs like NRIs, Women, handicapped to be encouraged.
10 Management Institutes should have a cell for development of Entrepreneurs EX IIMA
11 Successful Professional Managers to be encouraged to become Entrepreneurs
12 Workshops and Seminars on Entrepreneurship to be conducted for awareness !!!
A-Z QUALITIES OF AN ENTREPRENEUR
BY TREVOR DEVAS SESSION 3
A= Ambition
B= Believer
C= Creative
D= Determined
E= Enthusiastic
F= Fearless
G=God fearing
H= High Esteem
I= Independent
J= Just
K= Kindness
L= Leader
M= Motivator
N= No politics
O=Organizer
P=Planner
Q= Questioning
R= Reliable
S= Studious
T= Team work
U= United
V= Voice
W= Workalcoholic
X= Execution
Y= Youthful
Z= Zeal
ENTREPRENEURIAL DEVELOPMENT
SESSION 3
APPROACHES TO ENTREPRENEURSHIP DEVELOPMENT
1. Develop and arrange the course content by analyzing needs and stating outcomes
2. Choose the appropriate training methods
3. Consider the topics, nature of learning ,trainee population, trainers and the time factor
4. Achieve training objectives
TRAINING OF ENTREPRENEURS
• Achievement Motivation sessions to induce positive behavior and learning from feedback
• Moderate risk taking is taught to take calculated risks based on all factors.
• Problem Solving attitude to solve the problems internally only-no consultants !!!!
• Develop the ability to define and set goals in life
• Train to learn by ones own actions and behavior based on experience
• Teach Management skills and technics to deal with the management problems
• Overall objective of the training program is to make the entrepreneur more professional
ENTREPRENEUR VS PROFESSIONAL
MANAGERS SESSION 3
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Entrepreneurs and Professional Managers are two sides of a coin
PROFESSIONAL MANAGEMENT
1. Body of Knowledge-Management of knowledge to enter the world of entrepreneurship
2. Management Tools- Tools of Management in specific functional areas
3. Specialization- Growing need to appoint specialists in each functional area
4. Separate Discipline-Management Studies is considered a separate discipline
5. Code of Conduct- Business Management is a social institution, responsible to customers,
employees and the society.
6. Professional Association- Business Management Associations have been formed to have
ethics in business and project a good image of the managerial profession.
ENTREPRENEURIAL MANAGEMENT
1. Creative and innovative instinct from childhood- dare to be different
2. Calculated risk taking attitude- venture into the unknown
3. Work with borrowed or very little capital
4. Pride of ownership of the business
5. No pay check to look forward to every month !!!
6. You are your own boss- you decide whatever you want to do-freedom & independence !!!
PROCESS OF ENTREPRENEURIAL
DEVELOPMENT SESSION 3
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ENTREPRENEURIAL DEVELOPMENT PROGRAM EDP-Designed to help a person to strengthen
and meet his entrepreneurial motive to acquire skills and capabilities to play his role well.
EDP meant for first generation entrepreneurs who need help to become successful.
MISCONCEPTIONS ABOUT EDP
Joining an EDP is a privilege, many programs give false hopes about entrepreneurship !!
EDP means only training potential entrepreneurs through class room training
Higher the number, better the EDP- Qualitative is better than quantitative !!
EDP Success is the Sole Responsibility of the Trainer-Motivator
Potential Entrepreneurs think that they will be successful by attending one EDP!!
Entrepreneurship is a process of development of an individual only
All cannot become Entrepreneurs since the success rate is low !!!
Professional Managers can become Entrepreneurs and vice versa
Entrepreneurship begins with childhood and can only be developed
EDP has become MDP- Executives have become Management !!!
SIMILARITIES BETWEEN MANAGERS
AND ENTREPRENEURS SESSION 3
ENTREPRENEURS
• Produce results-Long term
• Produce results through peopledeal with people who can
conceptualize like them
• Take decisions-strategic involving
expansion ,diversification
• To co operate under constraintsimport policy, licensing etc.
• Follow sound principles of
Management-macro aspects like
social responsibilty equal
opportunity to government
policies
MANAGERS
• Short and medium term
• Handle people in daily
management tasks
• Operational and administrative
decisions only-short &
medium term
• Constraints are within the
organization, plant, labor etc
• Principles are only related to
the company like delegation,
accountability etc
DISTINCTIVE FEATURES BETWEEN ENTREPRENEURS AND MANAGERS
SESSION 3
ENTREPRENEUR
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To see an opportunity
Risk taking
Tactical Planning
Interpersonal communication
Negotiating
Trouble Shooting
Making it a growing concern
Innovator
Motivator
Determined
Idealist
Committed
Visionary
Planner
MANAGERS
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Setting of Objectives
Policy formulation
Strategic Planning
Formal communication
Organizing
Motivating
Controlling
Administrator
Skills
Confident
Specialist
Loyal
Planner
Implementer
DISTINCTIVE FEATURES BETWEEN ENTREPRENEURS
AND MANAGERS SESSION 3
ENTREPRENEURS
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Primary motive-freedom,goal oriented, self reliant, selfmotivated
Time orientation-5-10 years
Action- whatever it takes to get the job done !!!
Skills-Knows business well
Courage-Self confident
Attention-Mainly on technology and market place
Risk-calculated-expects to succeed
Market Research-Creates products that cannot be tested
Status- don’t believe in it
Failure/Mistakes-Learning experience
Decisions-decisive and action oriented
Who they serve-pleases self and customers
Attitude towards the system- rapidly advance
or use own system if frustrated
Problem solving style-Solves problems or starting over
Family history-Small business,agri background
Relationship with parents – absent,poor relations with father
Socio-economic background-lower to middle class
Education-Less educated
Relationship with others- Deal making as basics !!
MANAGERS
Wants promotions and rewards
Responds to quotas, weekly,monthly quarterly,
Delegates action
Professional training-MBA
Sees others in charge of his destiny
Events in company only
Careful
Has MR done before launching product
Cares about status-corner office
Likes to avoid mistakes,pospones recognizing failures
Agrees with those in power, delays decisions to see what bosses
want
Please bosses
Seeks position in nurturing system
Works out problems within the system
Family members worked for large companies
Independent of mother, good relations with father slightly
dependent
Middle Class background
Highly educated
Hierarchy as basic relationship
OWNER VS PROFESSIONAL MANAGER
SESSION 3
OWNER MANAGER
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SOURCE OF AUTHORITYY-Personal
BASIS OF PHILOSOPHY-no diffusion between
ownership and control, no conflict between
personal and company objectives
Integration of work and
social values
Not a slave of economic goals
• CHARECTERISTIC SKILLS
Adoptive,diagnostic,change,tactical,pragmati
c, social skills,good independent decision
making
• ORGANIZATION-Informal,no difference
between planners and doers,rewards on
basis of results only,everyone prepared to do
whatever it takes !!!
Open system of communication
PROFESSIONAL MANAGER
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Expertise
Control without ownership
Conflict between individual
and organizational goals
clear distinction between
individual and the position
Values of work place
different from social values
Economic performance is
ultimate
Predictive,control of change
strategic facility, co-ordination
and control of specialists. Manipulative
skills applied on an impersonal basis
event shaping decision making,formal
relationship, difference between planning
and doing,technical qualifications only basis
for promotions, precise definition of rights and
duties and responsibilities,structural communication only
CLASSIFICATION AND TYPE OF
ENTREPRENEURS SESSION 2
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BUSINESS ENTREPRENEUR: They are individuals who conceive an idea for a new product or
service and then create a business to materialize their idea into reality.-small business
flourishes when the size is small !!!
TRADING ENTREPRENEUR- He is one who undertakes trading activity and not concerned
with manufacturing. He identifies a potential product and develops interest in people in
that product and explores domestic and international markets .
INDUSTRIAL ENTREPRENEUR- He is a manufacturer who identifies the potential need of a
customer and tailors a product or service to meet that marketing need.
CORPORATE ENTREPRENEUR- He is a person who shows his innovative skill in organizing
and managing a corporate undertaking. A Corporate undertaking is a company registered
either under the Trust Act or Companies Act .
AGRICULTURAL ENTREPRENEUR- He is a person who undertakes agricultural activities like
raising and marketing of crops, fertilizers and other inputs of agriculture.
The above all are Entrepreneurs according to classification of Business
CLASSIFICATION OF ENTREPRENEURS
SESSION 2
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TECHNICAL ENTREPRENEUR: He is like a craftsman to develop and manufacture a product.
He concentrates more on production than marketing since he has the skill in production only.
NON-TECHNICAL ENTREPRENEUR- He is a person who is not connected with the production
aspects of the product but only developing the marketing and selling of the product
PROFESSIONAL ENTREPRENEUR- He is a person who is interested in starting a business but
does not have interest in managing or operating it once it is established. A professional
Entrepreneur sells out his business and starts another venture.
ENTREPRENEURS AND MOTIVATION-Motivation is the driving force that makes the entrepreneur achieve
his objectives and influencing others by showing his business acumen.
PURE ENTREPRENEUR-A pure entrepreneur is a person who is motivated by psychological
and economic rewards. He becomes an entrepreneur for his own personal satisfaction in
work, ego or status.
INDUCED ENTREPRENEUR- An induced entrepreneur is one who is induced to become an
entrepreneur due to the assistance, incentives and rewards provided by the government to
start a new venture. A person with a sound project is provided complete assistance in India
and in the US !!
MOTIVATED ENTREPRENEUR-A person is a motivated entrepreneur by the desire for self-fulfilment
They become entrepreneurs for making and marketing a product for consumers. If the product is
successful they are further motivated by reward in terms of profit.
SPONTANEOUS ENTREPRENEUR- A person who starts his own business by his own natural talent.
They are persons with drive and the confidence in their own natural abilities, Ex Musicians, Sportsmen
ENTREPRENEURIAL TRAITS SESSION 2
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CHARACTERISTICS OF AN ENTREPRENEUR: A Successful entrepreneur must be a person with
technical competence, initiative, good judgment intelligence leadership qualities,
self confidence ,energy ,attitude ,creativeness ,fairness , honesty, tactfulness and emotional
stability
MENTAL ABILITY: An Entrepreneur should be intelligent and have creative thinking
CLEAR OBJECTIVES: He should be clear about his Objective-MBO !!
BUSINESS SECRECY: He should keep his business secrets confidential –competition
HUMAN RELATIONS : Good relations with customers, employees, suppliers & community
COMMUNICATION : He should have excellent communication skills-verbal & written
TECHNICAL KNOWLEDGE: An Entrepreneur must have technical knowledge of the product.
MOTIVATOR: He should build a team, keep them motivated for their career development.
SELF CONFIDENCE: He must believe in himself to achieve his goals.
LONG TERM INVOLVEMENT: Committed for 5 years – 2 years minimum in India & US
HIGH ENERGY LEVEL: Ability to work long hours- Whatever it takes attitude !!!
CHARACTERISTICS OF SMALL
ENTREPRENEURS SESSION 2
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1. They are young
2. They are energetic/enthusiastic
3. They have minimum basic education
4. They are pleasant mannered
5. They are hard working
6. They are determined
7. They are systematic and follow a planned approach
8. They are self made
9. They are self confident
10. They are disciplined
11 They are trained/experienced
12 They have entrepreneurial zeal
13 They have little capital
14 Their area of operation is small
15 They generally deal in one product
16 They employee a few people
17 Their turnover is small
18 They are flexible.
CHARECTERISTICS OF LARGE SCALE
ENTERPRISES SESSION 2
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1. Promoted and professionally managed through employed persons
2. Large capital
3. Capital by a large section of shareholders
4. Shares are registered on the Stock Market
5. Large Assets
6. Assets acquired by classified credit
7. Involved in diverse activities
8. Promotes the goods in the market
9. Huge turnover/sales/profit
10. Easy access to institutional finance
11. They have greater leverage for development
12. They are well connected politically
13. They are trend setters
14. They can create a demand for their products by powerful advertising
15. They are great visionaries to see the needs of the country
16. They are responsible and have a value driven corporate philosophy.
THEORIES OF ENTREPRENEURSHIP
SESSION 2
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CAPITALISM: Free market economy, freedom to operate within guidelines EX USA
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SOCIALISM: The private enterprise does not contribute to the economy and is entirely
controlled by the government!!! No scope for Entrepreneurship !!!
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MIXED ECONOMY- Private & Public Sector Ex India.
Public Sector Units take care of manufacture and sale of capital goods
Entrepreneurs take care of manufacture of consumer goods
Both are allowed to compete with each other within the rules laid down by each state
Government steps in to control the private sector when prices become too high
They regulate the industry EX Airline industry fares too high during festive season
Mixed economy is good because both Private and Public Sectors compete with each other.
Sick units are the fault of the government and become healthy when Private takes over
THEORIES OF ENTREPREUNERSHIP
SESSION 2
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Theories broadly classified into Economic Psychological, Social & Cultural
1.ECONOMIC THEORY-Mark Casson -The Entrepreneur-emphasized that the demand for
entrepreunership starts with need for change and imagination is an important factor
2.LIEBENSTEIN X THEORY-Basically X-efficiency is the degree of inefficiency in the use of
resources by the company and the Entrepreneur steps in to improve efficiency
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3. DYNAMICS ENTREPRENEURSHIP THEORY-Introduced by Schumpter
His theory considers Entrepreneurs as catalysts to change the stationary
flow of the economy to a dynamic one by a) introduction of a new good
b) introduction of a new method of production c) opening of a new market
d) a new source of supply of raw materials e) carrying out a new organization
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4. HARVARD SCHOOL THEORY- Harvard School(Cole,1949)Entrepreneurship is any activity that increases the profit in a business within the
guidelines of the economic, political and social setting of the business .
THEORIES OF ENTREPRENEURSHIP SESSION 2
5. THEORY OF ACHIEVEMENT -McClelland
Doing things in a better way and decisions under uncertainity
6. THEORY OF CHANGE-Young
People become entrepreneurs-low status recognition ,denied
access to social networks and when they have better resources
7. THEORY OF PROFIT- Knight
Entrepreneurs are only identified by the need for profit
8. THEORY OF ADJUSTMENT OF PRICE- Kirzner
Kirzner says that the adjustment of price is the only reason people
become entrepreneurs
THEORIES OF ENTREPRENEURSHIP
SESSION 2
7. THEORY OF MARKET EQUILIBRIUM: Hayeks says that entrepreneurship is due
to absence of market equilibrium which is a on going process to develop to
the sale of the equilibrium
8. HAGANS THEORY OF SOCIAL CHANGE-He views Entrepreneurs as a creative
problem solver interested in things in the practical and technology realm and
driven by a duty to achieve.
9. THEORY OF ENTREPRENEURSHIP SUPPLY-Behavioristic Model by John Kunkal
is concerned with the activities of individuals and their relations to both past
and present and surrounding social structures and physical conditions.
10 THEORY OF PERSONAL RESOURCEFULNESS- The concept relies mainly on the
initiative and innovation of the person who wants to become an Entrepreneur.
11 THEORY OF CULTURAL VALUES-Thomas Cochrans theory –cultural values,role
expectations and social sanctions-attitude towards work, role held by sanctioning
groups and operational requirements of the job
FACTORS INFLUENCING
ENTREPRENEURSHIP SESSION 3
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Peter Heydemann,Science Counsellor-US Embassy says as under in the US which should
happen in India !!!!
Entrepreneurs and small business is the backbone of the US economy !!!
INCUBATOR CONCEPT- mostly attached to universities to help the entrepreneur translate
the results of market research into a product and helped the Entrepreneur with business and
financial planning,market development and government regulations.
These organizations help the Entrepreneur cut the red tape to start a business which is
very much needed in India !!!
Incubator Technology- 5-6 years old- 600 plus national laboratories could not service 1.5
million entrepreneurs so the States took over.
Universities in the US play an important role in helping entrepreneurs and it is happening
In India too !! IIMA has a big Entrepreunerial Division and MIT will have it too !!!!
Last year the US government spent more than $2000 million helping small business
Incubators do not provide any decisions for the Entrepreneur, they just give their knowledge,
expertise, resources to help the Entrepreneur take his decision on his project !!!!!
Examples of Entrepreneurs that I like Bill Gates, Warren Buffet, Steve Jobs, Tatas, Narayan
Murthy,!!!
THE ENTREPRENEURIAL CULTURE
SESSION 2
ENTRENEPRENEURSHIP CULTURE-vision, values, traits and understanding customer needs
CULTURE: Members regulate their behavior in harmony with other groups in the group
BUSINESS ETHICS- Entrepreneurs should only do what is right in business
PRODUCTIVITY CULTURE- Not only doing things right but doing right things better
TOTAL QUALITY CARE- Introduction of all efforts for totally quality care
TOP PROGRAM- Integration of all factors of productivity, innovation, culture ,mobilizatiion
of employees and customer satisfaction at the TOP !!!
CORPORATE VALUES OF AN ENTREPRENEUR:
Be a Leader not just a Manager-Set examples of punctuality, honesty and fairness
Be a Facilitator- Be accessible and listen to all levels of employees in the company
Be Deliberate- Be result oriented and avoid unproductive meetings
Be Explicitin assigning responsibility both small and big tasks
Be Decisive
Break the relations if someone is not working out. Indecision is bad for everyone.
TOP PROGRAMME SESSION 2
TOP
CUSTOMER
PRODUCTIVITY
INNOVATION
CULTURE CHANGE
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NEW MARKETS
CONCEPT OF ENTREPRENEURSHIP
SESSION 1
ENTREPRENEUR
PERSON
ENTREPRENEURSHIP
PROCESS OF ACTION
ENTERPRISE
OBJECT
COMPARISON BETWEEN ENTREPRENEUR AND
ADMINISTRATIVE SESSION 3
ENTREPRENEUR
ADMINISTRATIVE
STRATEGIC ORIENTATION
Driven by perception of
opportunity
COMMITMENT TO SEIZE
OPPORTUNITIES
Revolutionary within short duration
COMMITMENT OF RESOURCES
Many stages with immediate decisions
CONTROL OF RESOURCES
Proper utilization of resources
MANAGEMENT STRUCTURE
Flat with multiple informal networks
STRATEGIC ORIENTATION
Driven by controlled resources
COMMITMENT TO SEIZE
OPPORTUNITIES
Evolutionary with long duration
COMMITMENT OF RESOURCES
Single stage with out of decision
CONTROL OF RESOURCES
Ownership or employment of
resources
MANAGEMENT STRUCTRE
Hierarchy
CREDO OF ENTREPRENEURS SESSION 2
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The world is looking for
Entrepreneurs that are honest !!!
Entrepreneurs that are innovative !!!
Entrepreneurs that are optimistic!!!
Entrepreneurs that stand for the right !!
Entrepreneurs that care for the society !!
Entrepreneurs who stand for values!!
Entrepreneurs with conscience!!
Entrepreneurs that neither brag or run!!
Entrepreneurs that neither flag nor flinch!!
Entrepreneurs who know their place and fill in!!
Entrepreneurs who know their business and attend to it !!
Entrepreneurs who are not too crazy !!!
Entrepreneurs who are not lazy to work !!
Entrepreneurs who will prosper with society
Entrepreneurs who will lead and motivate
Entrepreneurs who always dream for change
Entrepreneurs who live for their principles
DEFINITION AND STRUCTURE
SESSION 1 & 2
• Definition - derived from the French verb “Entreprende”- to
undertake or to start your own enterprise or business
• Peter Drucker “ Innovation is the tool of entrepreneurs by
which they exploit changes as an opportunity for a different
. Business or Service”
• Entrepreneurship-Innovation ,risktaking ,vision , organizing
skills-all four inter-related.
• Structure consists of External Environment, Value skills,
People and Technology which are all inter-related
PROJECT REPORT & APPRAISAL
SESSION 4
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PROJECT REPORT –Prepared by expert on analysis of all aspects and is the basis for financing.
SCOPE OF REPORT 1.Economic Aspects- should present economic justification for investment
2. Technical Aspects- should give the machinery and technology needed
3. Financial Aspects- Total investment required with entrepreneurs share.
4. Production Aspects- Description of product and reason for selection
5. Managerial Aspects- Entrepreneurs qualification and experience
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CONTENTS OF REPORT: 1.Objective and Product design and features with sample
2. Market position and trends with anticipated demands
3. Supply of raw materials and manufacturing process
4. Details of plant, machinery power and water supply
5. Financial implications of project cost and profitability
6. Manpower planning for the project
7. Social benefits and implications of the project .
ENTREPRENEURSHIP & PROJECT
MANAGEMENT COURSE OUTLINE
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Session 3- ENTREPRENEURIAL DEVELOPMENT
Entrepreneurial Environment
Process of Entrepreneurial Development
Entrepreneurial Development Training
Institutions to aid Entrepreneurs
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Session 4
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Session 5
PROJECTS MANAGEMENT
Search for a Business idea and concept of projects & classification
Project identification and formulation
Project Design and Network Analysis
Project Report and Appraisal
Factory Design and layout
FINANCIAL ANALYSIS
An input in financial appraisal
Ratio analysis and investment process
Break even and profitability analysis
Social Cost-Benefit analysis
Budget and Planning process
Applicability of various Acts of legislation
APPLICABILITY OF VAROUS ACTS
SESSION 7
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APPRENTICESHIP ACT 1961: Apprenticeship Advisor to give a notice in writing to employer.
CONTRACT LABOR ACT 1970: License required if 20 or more employees employed in 12 mts.
PROVIDENT FUND ACT 1952: 20 or more employees eligible if wages less than 1000 pm.
ESI ACT 1952: 20 or more employees except seasonal factories.
EMPLOYMENT EXCHANGES ACT: Vacancies to be notified within one week if 25 employed.
EMPLOYMENT OF CHILDREN ACT: Employment of children prohibited where 10 or more!!
EQUAL RENUMERATION ACT 1976: Employer to pay equal salary/wages to men & women
FACTORIES ACT : Permission for 10 or more with power or 20 or more without aid of power.
INDUSTRIAL DISPUTES ACT 1947: Settlement of disputes and compensation for layoff !!
INDUSTRIAL STANDING ORDERS ACT 1961:Standing orders for classification if 100 or more !!
MATERNITY BENEFIT ACT 1961: Women get 6 weeks before and 6 weeks after if worked 160
in prior twelve months
MINIMUM WAGES ACT: Govt has fixed certain minimum wages for all types of employees
PAYMENT OF BONUS ACT 1965: 8.33% of wages with a max of 20% of wages earned
PAYMENT OF GRATUITY ACT 1972: 15 days wages after 5 years service with 20 months max
PAYMENT OF WAGES ACT 1936: Timely payment of Wages to employees earning less than 1000
WORKMEN COMPENSATION ACT 1923: Compensation for workers with wages 1000 or less
BUDGET AND PLANNING PROCESS
SESSION 7
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BUDGET is a tool of Management used to plan and control the operations of the business.
BUDGET is more than accounting and helps to prepare the master budget for all functions.
BUDGETORY CONTROL is based on forecasting sales income and accounting for expenses.
CLASSIFICATION OF BUDGETS: 1. Revenue and expense budgets
2. Manpower budgets
3. Capital expenditure budgets
4. Cash Budgets 5. Master operating budgets.
ADVANTAGES OF BUDGETORY CONTROL: 1. Helps the process of planning
2. He can delegate without loosing control
3. Keeps expenditure in check to see performance.
STEPS IN BUDGETTORY CONTROL: 1.Preparation of the Budget
2. Publishing the Budget and measuring the Results.
3. Comparison of actuals with the Budget
4. Converting the variance to meet the Budget.
BUDGET AND PLANNING PROCESS
SESSION 7
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STEPS IN PREPARATION OF A BUDGET : 1. Objective or goal of the company in terms of sales
2. Planning to achieve this goal by MBO approach !!
3. Identify alternatives to achieve the objective.
4. Formulating Supporting Plans to achieve objective.
5. Numerize plans to make the Master Budget.
MANAGEMENT PLANNING: 1. Strategic Planning- Long term objectives of the company
2. Action Planning-Done to support the long term objective.
3. Operation Planning for day to day operations of the company
MANAGEMENT BUDGET: 1. Sales forecast and budget for expenses to achieve the target
2. Production budget to manufacture product to meet sales figure.
3. HR Budget for Manpower required to manufacture the product
4. Finance Budget required for funding all the above functions
5. Based on all of the above a Master Management Budget
BUDGETTING is important to work within the budget for the overall profitability !!!!!
SOCIAL COST BENEFIT ANALYSIS
SESSION 6
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INDIAN ECONOMY- Major changes since 1991 to reduce govt control for private enterprise.
ERR-Economic Rate of Return, ERP-Effective Rate of Protection, DRC-Domestic Resource cost
These factors help to decide whether a product to be produced domestically or imported?
SOCIAL COSTS- Means all consequences on the society as a result of the production process.
OBJECTIVE OF SOCIAL COST BENEFIT ANALYSIS:
1. Estimate costs and benefits gained due to the project implementation.
2. Estimate the costs and benefit to consumers and suppliers related to the project
3. Estimate the costs and benefits gained by the community.
4. Estimate the cost and benefits gained by the National Exchequer.
5. Estimate the costs and benefits over a period of time to see the feasibility of the project.
MAIN FEATURES OF COST BENEFIT ANALYSIS:
1. Assess the feasibility of the project in the public or private sector enterprise.
2.Identification and measurement of costs and benefits of implementing the project.
3. The effect of risk factor in the investment appraisal of the project.
4. Presentation of results of the cost benefit analysis to implement the project.
SOCIAL COST BENEFIT ANALYSIS
SESSION 6
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LM TECHNIQUE : Most widely used methods of Social/Cost Benefit Analysis.
Uses hypothetical instead of actual prices when evaluating a project.
Shadow prices are used since they reflect better than actual prices for benefit to society.
LM technique assumes a country can buy and sell any quantity of a product at a world price.
ELEMENTS OF COST 1. Materials – Direct or Indirect to manufacture the product
2. Labor- Direct & Indirect- Wages of carpenters, sweepers are indirect.
3. Expenses –Factory overheads, Administrative, Selling expenses.
• CLASSIFICATION OF COST: 1 Direct and Indirect cost Ex Materials & Labor are direct
2. Fixed & Variable costs Fixed not affected by level of production.
Variable depends on cost of raw materials which fluctuates.
• STANDARD COST= Standard Material Cost + Standard Labor Cost + Standard Overheads Cost
= Standard Quality x Price + Standard Wages and Time
Overheads
Volume of Production X Standard Man hours.
• AVERAGE & MARGINAL COST: Average cost is dividing total cost of production by no of units.
Marginal cost is the cost of marginal unit produced over lot.
EXAMPLE: Co produces 100 units at a cost of 2000, average cost is 2000 ÷100=20 units
PROFITABILITY ANALYSIS SESSION 5
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PROFIT- Reward for Entrepreneurship and main motive for running a business
FACTORS AFFECTING PROFIT: 1. Mix of product changes upon profits if a good system is in use
2. Volume of sales plays an important role for profit
3. A change in variable and selling prices affects the profit.
4. Marginal profit is after break even which is affected.
5.When both fixed and variable cost change it affects profit.
PROFIT PLANNING: Profit Planning is a role finance plays in the overall planning process
STEPS IN PREPARING APROFIT PLAN 1. Sales Budget showing revenue and projected sales
2. Production budget showing sales into units made
3. Direct Materials budget showing cost of materials
4. Purchase budget showing number of units purchased
5.Labor budget showing cost of labor in man hours.
6. Overhead budget is prepared for each department
7. The profit plan is put into operation
PROFIT PLANNING AND CONTROL
SESSION 5
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PROBE INTO THE FUTURE: Profit Planning indicates what the future holds for the company.
FLEXIBILITY: Attitude of flexibility and capacity to adjust to changes
SENSITIVITY: Sensitivity to change for an excellent profit performance
EXCELLENT DIRECTION & CONTROL: It requires both centralized/decentralized
direction/control
SUPPORT: Top Management must support or else profit planning will be a flop
ORGANIZATION: Profit Planning depends on clear cut lines of authority/responsibility
CONFIDENCE: Management should make sure all are putting their best for this planning.
TIMELINESS: There should be a Time limit specified for the Profit Planning Program
ADVANTAGES OF PROFIT MAXIMISATION:
1. Profit is the main reason for business No profit no Business !!!!
2. Profit maximization helps social and economic welfare.
3. Investors expect a positive return on their investment only by profit.
4. Profits help to create additional resources for expansion and diversification
5. Profit !! Profit !! Profit !! Is the main motive to be in Business !!!!
FIANCIAL ANALYSIS SESSION 4
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FINANCE: It is the most important component once your project is approved to start up !!!
SEED CAPITAL: Money borrowed from financial institutions or other sources to start !!
FIANCIAL ANALYSIS: Process of finding economic facts about a project by using financial data.
Helps to look at capital, operations cost and operating revenue for profit.
IMPORTANCE OF FA: Helps to evaluate the feasibility of investing in a project with risk factor.
USE OF FINANCIAL STATEMENTS 1. Govt regulations require maintaining financial records.
2. Income tax accounting to maintain all books of accounts
3. Executives decisions based on financial information
4. Bankers require accurate financial records for loans.
5. Investors and Shareholders need to know their money.
6. Credit from Suppliers and other agencies.
FIANCIAL TOOLS:
1. Trend Analysis
2. Variable Analysis
3. Ratio Analysis
4. Fund Flow Analysis
RATIO ANALYSIS SESSION 5
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RATIO ANALYSIS: Relationship between Profit and Loss according to the Balance Sheet.
50,000 profit over 500,000 investment gives a ratio of 10%
ADVANTAGES : 1.Produces financial ratios to give a financial picture of the company.
2. Ratio analysis helps to analyze company performance and failures.
LIMITATIONS: Financial Statements do not take the current economic conditions, inflation.
TYPES OF RATIOS 1.Liquidity Ratios –Cash to Sales ratio acid test for any business !!!
2. Profitability Ratio- Profit-Cost= Net operating profit !!!
3. Debt equity ratio- Amount of debt to be less than equity !!
4. Operating ratio-Net sales to net profit
5. Turnover ratio-Turnover of capital investment.
6. Miscellaneous-Receivables to working capital.
LIQUIDITY RATIOS: 1.Current Ratio – Current assets divided by current liabilities.
2. Acid test ratio- Quick assets divided by current liabilities.
LEVERAGE RATIOS: 1.Debt Equity ratio- lower the ratio the better 2: 1 is acceptable
2. Asset Coverage- Cost of fixed assets against borrowed funds.
3. Debt service coverage- Profit after tax(PAT) + Deprc+ Loan payments.
ACTIVITY RATIOS: Inventory turnover/net sales inventory-shows inventory efficiency management
Debtor-Velocity= ReceivablesX360 days –Higher the ratio higher the efficiency
Creditor/Velocity=CreditorsX360divide by Purchases-Ratio increases shows short term
liquidity problem or indicates that the company may get more credit from the market.
Fixed Asset-turnover rate-= Net Sales divided by Fixed Assets
Gross profit ratio percent= Gross Profit X 100 divided by Gross sales- Profit after mfg costs
RATIO ANALYSIS SESSION 5
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LIQUIDITY RATIOS: Current Assets Divided by Current Liabilities- Favorite for Bankers !!!
2:1 is an acceptable ratio and accepted by Banks and RBI guidelines.
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PROFITABILITY : Gross Profit Ratio(GDR)= Gross Profit X 100
Net Sales
Oldest and widely used to compare with similar industries to be favorable
Lower ratio indicates that the production expenses are on the high side.
Net Profit Ratio (NPR)= Net profit ÷by sales X 100-Net profit after
deducting expenses NPR used GPR gives the banks a good financials.
RETURN ON EQUITY: Net Profit divided by Shareholders Funds X 100
Important ratio for Shareholders because it covers all factors.
DEBT/EQUITY RATIO (DER)- Proportions of Debt and the Equity Capital in the investment
DER measures investor leverage, smaller the equity capital,higher
the income per unit share. Equity owners want high ratios to allow
equity owners to control projects with small amount of capital
Financial Institutions need a sound DER not less than 50% of total
capital investment.
DEBT SERVICE COVERAGE RATIO: (DSCR)= Net profit+ depreciation + interest on term loan divided
Amount repayable on loan+ interest on loan
This ratio shows the safety availability for the company to pay back
the installment loans. Banks accept a ratio of 2:1, not lower than 1.33:1
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PROJECT DESIGN & NETWORK
ANALYSIS SESSION 4
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PROJECT DESIGN- heart of the project involves planning scheduling and controlling.
IMPORTANCE OF NETWORK ANALYSIS:
1. Whole project is considered a sequence of activities and events
2. Each activity is different but all are inter-related in the overall project.
3.Whole project on network with separate networks to make up the overall network
4. Time estimates projected for new and based on past experience for old projects
5. Cost estimates depend on the time estimate & changes in all factors in production.
6. Physical progress of the project to take corrective action in time for the project.
PERT/CPM- Technics developed in the US and the main differences are as under
CPM-Critical Path method-activities only and the costs of each activity for completion.
PERT-Performance Evaluation Review Technic emphasizes events for completion of project.
STEPS IN PERT 1.Establishment of Objective and development of project network
2. Schedule work breakdown and time estimation for each task
3. Determination of critical path with event slacks and activity floats
4.Calculation of completion of the project in a specified time.
PERT- Time based- Optimistic time, pessimistic time and most likely time for completion
ADVANTAGES/LIMITATION OF
PERT/CPM SESSION 4
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PERT ADVANTAGES: 1.Best possible use of resources to achieve goals within the time
2. Helps to handle the concept where no time data is available
3. Right action, at the right point and at the right time !!!
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LIMITATIONS : 1. Hinders time estimates when activities are non repetitive
2. It does not consider resources required at various stages.
3. Frequent revision of PERT calculations which becomes costly
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CRITICAL PATH METHOD: 1. Helps to get the time schedule
2. Control by Management is good with CPM
3. Better and detailed planning
4. Standard method for communicating projects schedules
5. Helps to pay more attention to critical events.
LIMITATIONS: 1. Fails to use statistical analysis to determine time schedule
2. Assumes that there is a precise time for each activity but not true in reality
3. Difficult to use due to repeating entire evaluation when changes are made.
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PROJECT FORMULATION SESSION 4
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PROJECT FORMULATION: Taking a first look carefully and critically at a project idea for the
its feasibility after weighing all the components of the project.
PHASES OF PROJECT FORMULATION: 1. Conception of an idea 2.Analysis of all aspects
3. Formulation of a project 4. Design of a project.
STEPS IN PROJECT FORMULATION:
1. General Objective- States in broad terms the achievements expected from the project.
2. Operational Objective- Specific results expected from implementation of the project
STAGES OF PROJECT FORMULATION:
1.Feasibility Analysis-First stage to see if the project idea is feasible or not to continue.
2.Techno-Economic Analysis-Estimation of project demand and optimal technology is made.
3. Project Design & Network Analysis-Defines activities of the project and their interationship
4. Input Analysis-Step to know the inputs for the construction & operation of the project.
5. Financial Analysis- Estimates the project costs from funding to operation of the project.
6.Cost-Benefit Analysis-Overall worth of the project and project design is basis of evaluation.
7. Pre-investment Analysis-All previous stages are used to get a final form for approval
PROJECT IMPLEMENTATION- In preparing project implementation PERT & CPM technics used.
LEGAL ASPECTS-All land acquisitions, bank loans, licences to be done according to the laws..
CHECK LIST FOR FEASIBILITY REPORT
SESSION 4
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1. Examine public policy with respect to the industry
2.Specify outputs and alternate technics of production
3. List and describe alternate alternative location for operation of the enterprise.
4. Estimate sales revenue, capital and operating costs and profitability.
5. Market analysis and specify product pattern and prices.
6. Identify main source of supply of raw materials with alternative sources.
7.List major equipment and auxiliary equipment to be used for the project.
8. Specify sources of supply for equipment and process know how
9. Specify site and complete necessary investigations about the land and property.
10. Specify supply sources and connection costs for water supply, power & transportation.
11. Prepare layout and estimate working capital requirements
12. Phasing activities and expenditure during construction
13. Analysis of projected profitability based on a cost benefit analysis
14 . Determine measures for combating environmental problems
15. Be prepared to implement the project immediately.
PLANNING COMMISSION GUIDELINES
FOR PROJECT FEASIBILITY SESSION 4
1. GENERAL INFORMATION-information about the type of industry and past performance.
2. PRELIMINARY ANALYSIS-present data on the gap between demand and supply for the output.
- data on the capacity utilization of existing units in the industry
- Location of the project and implications on community.
- profitability and rate of return should be mentioned in the report.
3. PROJECT DESCRIPTION- Mention the technology to be used in the project
- Mention environmental issues arising from projects pollution
- Capital equipment used and operational requirements of the plant
- Manpower requirement and organization structure planned
- Mention the requirements of power and water to be used.
4. MARKETING PLAN- Demand and prospective supply and analysis of past trend in prices.
5. CAPITAL REQUIREMENT & COSTS- Information on all costs involved in the project.
6. OPERATING REQUIREMENTS & COSTS-Costs incurred after commercial production
7. FINANCIAL ANALYSIS-Present some data to gauge the financial viability of the project
8. ECONOMIC ANALYSIS- To be done if exports to reflect the true value of foreign exchange.
PROJECT INDETIFICATION SESSION 4
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PROJECT INDENTIFICATION : It is the first step in a new venture.
CRITERIA FOR SELECTING A PROJECT:
1. Investment size: 3-5 crores to get relatively easy financing from national institutions.
2. Location: New Entrepreneurs should choose a location near the States Capital
3. Technology: Use domestic technology without any foreign collaboration
4. Equipment: Entrepreneur should select the best technical advice for equipment
5. Marketing: Not advisable to get into a business with cut throat competition to consumer.
IMPORTANCE OF PROJECT IDENTIFICATION:
Development in terms of income and employment generation
Projects provide for the framework which involve finance for a long term nature.
Projects brings about changes in the society in due course of time.
ENTERPRISE DEVELOPMENT CENTER:
1.intrapreneurship center- provides research ,skills ,environment to set up the enterprise
2.Venture Capital Exchange – provides the necessary seed capital for the enterprise
3.Innovation Center- provides all assistance to the entrepreneur in planning, evaluation etc.
4. Incubation Center-provides the needed stimulus for the enterprises to succeed and grow.
FEASIBILITY REPORT: It is mandatory for new Entrepreneurs to consult the Director of Industries
Service Institute (SISI) in ones State who will guide the new Entrepreneur in all aspects.
CONCEPT OF PROJECTS & CLASSIFICATION
SESSION 4
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WORLD BANKS DEFINITION: Approval of capital investment to develop facilities to provide
goods and services.
ATTRIBUTES OF A PROJECT: 1.Objective 2. Course of Action 3. Definite time perspective.
CHARECTERISTICS OF A PROJECT: 1.Investment 2.Benefit 3. Time limit 4. Location.
PROJECT LEVELS: 1.National Level 2. Sector level Ex Hotel 3. Individual project level.
PROJECT CLASSIFICATION: Sector Projects-Agriculture ,Irrigation ,Power ,Industry,Transport,SS
TECHNO-ECONOMIC :1.Factor Intensity Oriented-capital intensive or labor intensive.
2. Causation Oriented-Demand for certain goods and services.
3. Magnitude- Large scale, medium scale and small scale.
FINANCIAL INSTITUTION CLASSIFICATION: 1.New Projects 2.Expansion 3.Modernization
4. Diversification
SERVICES PROJECTS: 1. Welfare 2. Service Projects 3.R&D 4. Educational projects
ASPECTS OF A PROJECT: 1.Product,marketing,technical,financial and economic aspects
2 Feasibility of the project based on the above factors.
PROJECT CYCLE: 1.Project Objective 2. Project Identification 3. Project Preparation
4. Project Implementation 5.Post Evaluation of the project as productive.
PROJECT PLANNING MATRIX: 1. Overall Goal 2.Project purpose 3.Results project must achieve
4. Activities necessary to achieve those results/outputs.
PROJECT MANAGEMENT: It is combination of all the above factors in developing a suitable project
PROJECTS MANAGEMENT SESSION 4
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PROJECT- Plan to achieve a specific objective and uses and authority to implement it.
PROJECT- Three attributes 1. input characteristics 2. output characteristics 3 social benefit
INPUT- Raw materials, energy, manpower, financial resources and an organization set up
OUTPUT-Production of goods, services, and quantitative, qualitative and financial aspects
SOCIAL BENEFIT- Input and output will determine the social benefit to the community.
SEARCH FOR A BUSINESS IDEA
CHOOSING AN IDEA- Choose many ideas and narrow down to one idea which is feasible on
the basis of your market research and the liking of the entrepreneur.
PRODUCT IDEA – Mansukhbai Patel man behind Paan Parag and Paan masala !!!
SANITARY NAPKIN/DIAPERS- Concept in the 80s- 30 crore and has potential for 840 crore
Market Leader is Johnson & Johnson, Huggies, Pampers
DATE SUPARI- Good profit for export to the US but banned item so dropped the project
FINAL SELECTION OF A PRODUCT- Depends on 1. Profitability 2. Not banned item
3. Import and export restriction, 4. experience in making
the product and 5. Market research and competition.
PROJECTS MANAGEMENT SESSION 4
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THE ADOPTION PROCESS:
1.AWARENESS : Learns about a new idea , product or practice but has limited knowledge.
2. INTEREST: Interested in the product so gets more information about the product or idea.
3. EVALUATION: Evaluates the cost benefit analysis and feasibility of product/idea to work.
4. TRIAL: The Entrepreneur is ready to put the idea into practice and test market the product.
5.ADOPTION: Based on results of test marketing he decides about the product /idea
PRODUCT INNOVATION: Drucker To create a customer only marketing and innovation !!!
METHODS OF OBTAINING PRODUCTS:
INTERNAL DEVELOPMENT: Best method to develop the product on your own
LICENSING: Getting the right to produce from patent holder, fees and royalty involved.
ACQUSITION: Buying the company that makes the product which is a costly project.
PRODUCT PLANNING AND DEVELOPMENT STATEGY:
1.MARKET PENETRATION- Selling more to existing and new customers to increase market
2.MARKET DEVELOPMENT-Creation of new markets for sale of existing products.
3.PRODUCT DEVELOPMENT- Introduction of a new product in existing established market
4.DIVERSIFICATION- A company enters a new market with a completely new product
PROJECT MANAGEMENT SESSION 4
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PRODUCT PLANNING AND DEVELOPMENT PROCESS:
1. NEW PRODUCT IDEA- Visualize new ideas to create and develop a new product-R&D
2. IDEA SCREENING- Poor or bad ideas are dropped and the best idea is evaluated and taken
3. CONCEPT TESTING- An idea screened studied in detail to develop mature product concepts
4. BUSINESS ANALYSIS-MR,C/B analysis, competition and most important profit from product.
5. PRODUCT DEVELOPMENT PROGRAM-1.Prototype2.Consumer testing 3. Branding/labelling.
6. TEST MARKETING-Test marketing for feasibility of a full national marketing program.
7. COMMERCIALIZATION- After test marketing launch national mass marketing program.
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Examples of ideas which have become multi million $ companies !!!
1. Microsoft 2. Warren Buffet-62 companies 3. Apple 4. Dell 5. Federal Express 6 Tennis bracelet 7.
Expandable ring/bracelet 8. Google 9 email 10 Cell phones 11 GPS system
12 Tiffin carrier deliver in Mumbai 13. Tatas Nano 14 Automatic transmission and cruise control in
cars. 15. Bathroom Tissue-Wipe him out-Saadam Hussein 16 Drive thru fast food,
and banking 17. ATM machines 18. Mall concept 19.Wedding Planners 20 Comedy clubs
21 Real Estate business-Donald Trump 22.Lease/buy option for cars 23 Discounted airfares
and free travel and benefits for gamblers to Vegas !!!!
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CHECK LIST FOR CHOOSING IDEAS
SESSION 4
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FIT YOUR SKILLS AND EXPERIENCE:
Do you believe in the product or service?
Does the need it fits means something to you personally?
Do you like and understand the potential customer?
Do you have experience in this type of business?
Does your skills fit the basic success factors of this business?
Are the tasks of the business you will enjoy doing yourself?
Do you enjoy working and supervising the people employed?
Has the idea begun to take over your imagination and spare time?
Does your idea have any social benefit?
Are you expecting a good profit and return on investment?
FIT WITH THE MARKET:
Is there a real customer need?
Can you get a price that gives you a good profit?
Will customers believe in the product coming from your company?
Does your product satisfy the need of the customer over competing products?
Is there a cost effective way to get the message and the product to the customer?
FIT WITH THE ENTERPRISE:
Is there reason to believe your enterprise could be a very good business?
Does it fit the enterprise culture?
Can you imagine who will sponsor it?
IF YOUR IDEA IS REJECTED:
Give up and select a new idea
Try and improve your idea , listen to others and try to get a sponsor for your idea so that your financial risk is low !!!
ENTREPRENEURIAL TRAINING
SESSION 3
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IMPORTANCE OF TRAINING
Availability of skilled workers at all levels of management and improves their performance.
Enables workers to perform more efficiently and reduces defective products in production.
Minimizes accidents between unskilled and semi-skilled workers and reduces fatigue.
Training increases the efficiency of the employee who earns more to avoid overtime
Training improves relations between employees and management to reduce turnover.
Standardization and new technics can be adopted in a factory with trained employees
Team Spirit and team work is promoted and trained need less or no supervision.
OBJECTIVES OF TRAINING:
Basic knowledge of the industry to build necessary skills for new entrepreneurs.
Assist the Entrepreneur to function more effectively and have a second line of workers
Expose the Entrepreneur to the latest developments with a vision for the future.
Training to be given systematically by trained instructors to develop the required skills
Training to include induction training, job training, promotion training and refresher training.
Training should not only be theory and to be supplemented by practical training !!!
ENTREPRENEURSHIP DEVELOPMENT
PROGRAM SESSION 3
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OBJECTIVES OF THE PROGRAM: To promote and develop small and medium industries in
India with the help of Industrial Service Institute(ISI),
and the Department of Industrial Promotion (DIP)
EDP launched as part of the industrial development policy under the 5 year Economic plan.
Promote the development of small/medium enterprises to encourage entrepreneurs
Provide special programs in rural areas to stimulate new ventures and existing expansions.
Generate employment potential for processing raw materials for domestic and export use.
Develop opportunities for potential entrepreneurs and upgrade existing managerial skills.
NINESBUD- expert group to select potential entrepreneurs as under
Develop and strengthen their entrepreneurial quality/motivation
Analyze environment related to small business and industry
Select product/project and formulate projects
Understand the process and procedure of setting up a small enterprise
Know and influence the source of help/support needed to launch the enterprise
Acquire basic management skills and to know the pros and cons of being an entrepreneur
Know the need of social responsibility of becoming an entrepreneur
To let the entrepreneur set the objectives of his business and work independently
To prepare him for unforeseen risks and help him take strategic decisions
To help him build and work with a team to meet the needs of tomorrow
To communicate fast, clearly and effectively.
To develop to a vision to integrate his function and see business as a whole applicable with honesty, integrity in the
environment and accept industrial democracy.
ENTREPRENEURIAL CYCLE SESSION 2
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Entrepreneurial education and publicity for entrepreneurial opportunities
Identification, motivation and training of potential new Entrepreneurs
Help in selecting products and projects based on techno-economic information.
Entrepreneurial counseling to create entrepreneurial skills and developing a forum
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Registration ,Arranging finance to provide land, power, water and other resources
Guidance for obtaining machinery and supply of raw materials for the enterprise.
Getting licenses and obtaining tax benefits and other subsidies from the State Government.
Management Consultancy for market research to market and sell the product
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Help modernization with diversification and expansion of the business
Additional financing for full capacity utilization and deferring repayment/interest
Diagnostic industrial extension for production units to create new avenues for marketing,
quality control in compliance with the current legislation applicable for the enterprise
PROGRAM ON ENTREPRENEURSHIP
COURSE OUTLINE
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Session 6
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Session 7
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Session 8
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Session 9
Problems of Entrepreneurship and Remedies & Case studies
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Session 10
PROJECT WORK
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SOURCES OF FINANCE
Sources of Development Finance
Project Financing
Institutional Finance to Entrepreneurs
Financial Institutions
Role of Consultancy organizations
MARKETING CHANNEL
Methods of Marketing
Marketing Channels
Marketing Institutions and Assistance
Setting Quality Standards
SETTING UP A SMALL INDUSTRY
Location of an enterprise and steps to start a small industry
Selection of Types of organization
Incentives and subsidies
Exploring exporting possibilities
METHODS OF MARKETING SESSION 8
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ELEMENTS OF THE MARKETING MIX :
MARKET RESEARCH: Field Surveys, Sales Analysis and use of outside agencies !!
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GENERAL PLANNING: Determine the size and extent of the market and the costs involved !!
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PRODUCT PLANNING: Determine the product features with service and ASS !!!!
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PRICING: Pricing of the product with suitable margin to break even and make a profit !!!
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ADVERISING & SALES PROMOTION: The program designed according to the needs !!!
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SALES FORCE/CHANNELS OF DISTRIBUTION: Salesmen/Wholesalers/Retailers/
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PHYSICAL HANDLING: Transportation/Warehousing/Inventory
ROLE OF CONSULTANTS SESSION 8
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Consultants help Entrepreneurs in all aspects of the Business for a Consultancy fee !!!
STRATEGIC PLAN: Identifying vision to determine Business portfolios and goals !!!
ORGANIZATIONAL STRUCTURE: Diagnosis of the Organization structure and functions !!!
PEOPLES SYSTEMS AND SYNERGIES: Evaluating peoples potential to achieve company goals !!
FRANCHISING: Franchiser provides privilege to conduct business for a fee from Franchisee !!
TYPES OF FRANCHISING: Product Franchising- Ex- Dealers from car manfacturers
Trade Name franchising-Use of name without using a product
Ex Marks & Spencers.
PRODUCTION: 1. Product Research-Study all aspects of the product for production process.
2. Equipment Research-Study all aspects for the equipment for production.
ROLE OF STATE: All States are encouraging by Small Industries Service Institute.
ROLE OF NID: National Institute of Design Ahmedabad has played a key role in consultancy.
ROLE OF TCO: Technical Consultancy Organizations set up in 70/80s to meet the need.
STEP: Science& Technology Entrepreneurship Parks developed by IDBI for consultancy.
CONSULTANTS are very useful for Entrepreneurs for information they need in areas where
they feel expertise is needed to supplement their Business Idea and goals !!!
MARKETING CHANNEL SESSION 8
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MARKETING is the main function after the product is developed and to be launched.
TEST MARKETING: to perceived customers to find out acceptability of the product
MARKET SEGMENTATION: Customers in that market are chosen to market & Sell !!
MARKET PENETRATION: Once the market is found it has to be penetrated for profit !!!
BRAND LOYALITY: After Market Penetration, Brand loyality to be established !!!
CUSTOMER RELATIONSHIP: Very important for repeat business and referrals.
ASSESS THE COMPETITION : Keep your friends close and your enemies closer !!!
FEED BACK : Feed back from customers very important to improve in any way !!!
CUSTOMER IS THE KING !!! The customer is the King even if wrong !!!
AFTER SALES SERVICE: Very important to call customer for satisfaction/disatisfaction
MARKET POTENTIAL: Assess the market potential of your product in the market !!
NEW CUSTOMERS: Always keep adding new customers and drop bad customers !!!
SALES &PROFIT: Always analyze sales against profit for Financial Analysis of the company !!
SOURCES OF FINANCE SESSION 7
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FINANCE is the basic requirement of the
project which includes short term and
long term.
SOURCES OF FINANCE: Commercial Banks,
Financial Institutions and Venture capital
states.
SHORT TERM FINANCE: Funds required by
the Entrepreneur for less than one year.
MID TERM FINANCE: one to five years to
be used mainly for working capital of the
project
LONG TERM FINACE: 5 years and above
for fixed assets, expansion, diversification.
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SHORT TERM: Bank /Trade Credit
Installment credit/advances
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MEDIUM TERM: Shares/Debentures
Loans from Banks.
Public Deposits for
existing enterprises.
Putting back profits.
for existing enterprises.
LONG TERM: Issue of Shares/Debentures
Loans from Finance companies.
Putting back profits
MID TERM & LONG TERM basically the same
except for the 1-5 years and 5 years & above
NATURE AND DEVELOPMENT OF
ENTREPRENEURSHIP SESSION 1
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Entrepreneurship- enterprendre-to undertake venture out on your own!!!
Contributing factors-labor, technology, capital, resources and entrepreneurship!!
All big companies started as entrepreneurs-Tata Birla Reliance UB group
Ranbaxy Microsoft, Hathaway Berkshire-Warren Buffet-62 companies-simplicity
Entrepreneurship is the life blood of the economy especially in the US !!
Entrepreneurs don’t like to work in a job !!! JOB=Just over Broke !!!
The economy in India and in the US depends a lot on small companies that grow
into big companies
Entrepreneurship is an Art and not a Science !!!
No two entrepreneurs style are the same
Entrepreneurs are born to think differently and not follow others
Entrepreneurs always question why and want to do the same thing differently
Entrepreneurs like to work smart and not only hard !!!
Entrepreneurs- When the going gets tough the tough gets going !!!
Entrepreneurs never take NO for an answer and always question why !!!
SOURCES OF FINANCE SESSION 7
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TECHNICAL SCHEME: Technically qualified or experienced professionals- 7.50 lakhs.
SPECIAL CAPITAL SCHEME: 4 lakhs on soft terms for technically/qualified persons.
SEED CAPITAL SCEME: 15 lakhs for technically qualified or experienced people.
COMPOSITE LOAN SHEME: Equipment finance and working capital -50,000 for artisians
DISABLED ENTREPRENEURS: 100% financing for disabled entrepreneurs
MODERNIZATION: 90 lakhs for replacement of equipment for units that are 5 years old
ELECTRO-MEDICAL EQUIPMENT: 90 Lakhs for qualified Doctors/Private Nursing Homes !!
NURSING HOMES/HOSPITALS: 90 Lakhs for full fledged Nursing Home/Hospitals
EQUIPMENT FINANCE: 90 Lakhs for purchase of new machinery for existing units.
QUALITY CONTROL EQUIPMENT: 7.50 Lakhs for quality control assistance for existing units.
ASSISTANCE TO EX SERVICEMEN: 9 Lakhs for Seed Capital and 1.80 Lakhs for self employment
SINGLE WINDOW SCHEME: 7.50 lakhs toward term loan and 3.75 Lakhs towards W Capital
TOURISIM RELATED: 90 Lakhs available for Tourism related Business Ventures
MAHILA UDYAM NIDHI SCHEME: Set up new projects in SSI sector by women entrepreneur
NATIONAL EQUITY FUND SCHEME: 75,000 assistance towards equity for new projects
ASSISTANCE FOR MARKETING: 3 Lakhs per sales van not more than 6 vehicles per borrower
7.50 lakhs for setting up new sales outlets.
SOURCES OF FINANCE SESSION 7
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SCIENTIFIC APPROACH TO WORKING CAPITAL:
Terms offered by the Suppliers and the terms offered to the customers 30/60/90/120
Average lead time needed to order the raw materials to complete the finished product.
The Production Cycle and level of Stock to be maintained for marketing & Selling.
Working Capital Model is used for effective financial analysis of the company.
EFFECTIVE FINANCIAL MANAGEMENT: 1. Analysis of past performance
2. Planning for future activities
3. Control of current activity
WORKING CAPITAL MANAGEMENT: Understanding cash requirements at design,development
Production and Marketing of the product of the co.
SMALL INDUSTRIES DEVELOPMENT BANK OF INDIA (SIDBI): provides support to small
companies in the area of finance.
FINANCE is the basis for funding a project and on the basis of funding alone can the
the Entrepreneur plan for the development of his idea into the design, production
and marketing of his product.
ENTREPRENEURSHIP AUDIT SESSION 1
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Do you enjoy taking calculated risks ? Y/N
Do you plan ahead on the things you do? Y/N
Do you have a head for numbers/finance? Y/N
Do you complete what you start ? Y/N
Can you survive a drop in living standards? Y/N
Can you take decisions without wavering? Y/N
Are you free of financial commitments? Y/N
Can you get along with different people? Y/N
Is your career path ending in your job? Y/N
Do you enjoy travelling on work ? Y/N
Are you capable of leading people? Y/N
Do you have a clear vision of your dreams ? Y/N
Do you have innovative ideas about projects? Y/N
Do you have acquired skills to run the new venture? Y/N
Do you plan to work methodically? Y/N
Are you adaptable and flexible? Y/N
Do you prefer to work alone or in teams ? Y/N
Do you find yourself envying entrepreneurs ? Y/N
Are you able to meet deadlines ? Y/N
Does your spouse support your plans? Y/N
THE VALUE CHAIN PATTERN
SESSION 1
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Value is everything-Enterprises that create value win !!Those that cannot loose !!!
Profit is part of value which should be sustained
Entrepreneurs should always strive to improve
their market share-higher than the competition
Key-spot and benefit from factors for profit
Change according to customers preferences
Entrepreneurs have to change according to the business environment
Prior to mid 1980s, the product was the main source of competitive power and
profit
The concept of profit and value have changed to brands and solutions
Knowledge is a form of energy-can be disorganized ,dissipated and squandered or
organized and profited from by supplier and customer
Organizational System can have a huge impact on the profitability
Value patterns are not rigid-each has variants but all lead to profit which is the
basis of business and entrepreneurship !!!!
TOP 10 ENTERPRISES IN INDIA
1998-1999 SESSION 1
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Market value Sales Revenue
Hind Lever (1)
34,210
10,448
ONGC (2)
27,157
15,005
ITC (2)
17998
7,739
IOC(2)
17077
61,086
Reliance (3)
13022
15,174
MTNL (3)
12353
4,768
WIPRO (4)
9724
1,853
SBI (4)
9328
18,698
GAS Authority (5)
7268
6,398
BAJAJ AUTO (5)
6898
3,845
All figures are in crores
TOP TEN GLOBAL COMPANIES
SESSION 1
Revenue in US Billion
 GM
US
161
 Daimler Germany
154
 Ford
US
144
 Walmart US
139
 Mitsui
Japan
109
 Itochu
Japan
108
 Mitsubishi Japan
107
 Exxon
US
100
 Gen Electric US
100
 Toyota
Japan
99
DEVELOPMENT OF WOMEN
ENTREPRENEURS SESSION 2
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In the US, women own 25% of all business
In Canada they own 1/3 of all business
In France they own 1/5 of all business
AREAS OF BUSINESS-Retail,restaurants,hotels, education, cultural, cleaning, insurance and
manufacturing
REASONS FOR STARTING THEIR OWN BUSINESS- 1. New challenges and opportunities for self
fulfilment 2.Prove themselves in innovative jobs 3. Change the control the balance between
family responsibility and business lives- micro business fits their life style to control
everything.
Rita Singh: Woman Entrepreneur who made it big !!-founder of Mescos-Mid East Shipping
company-1500 crore turnover employs more than 7000 employees
Jewelry Business in the US has many women owners who run their stores well
Women entrepreneurs account for only 4.5 % of the population of India
Motivation is the key for Women Entrepreneurs and are in all industries today
Success stories of Women Entrepreneurs-Roman Malkani, Jayalakshmi Devaraj,Kathy
Inamdar, Rupa Manhaty
PROFILE OF A WOMAN
ENTREPRENEUR SESSION 2
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First born child of middle class parents
Father and or Mother in independent business
College educated
Married
Early 30s for first venture
Previous experience in new venture
Desires freedom and independence
Motivated by desire for independence and job satisfaction
Small and young business
Self confident
Moderate risk taker
High tolerance for ambiguity
High energy level
Biggest problem in start up
Some negative points which I will delete and the women can decide !!!
LEADERSHIP QUALITIES OF WOMEN
ENTREPRENEURS SESSION 2
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Accept Challenges
Ambitious
Drive
Enthusiastic
Hard Work
Patience
Industrious
Motivator
Skillful
Unquenchable optimism
Adventurous
Conscious
Educated
Determined to excel
Keen to learn new ideas
Experienced
Intelligent
Perseverance
Studious
PSYCHO-SOCIAL BARRIERS FOR
WOMEN ENTREPRENEURS SESSION 2
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Poor self image of women
Inadequate motivation
Discrimination
Faulty socialization
Role conflict between family and business
Cultural values
Lack of courage and self confidence
Inadequate encouragement
Lack of social acceptance
Unjust social-economic and cultural system
Lack of freedom of expression
Afraid of failures and criticism
Susceptible to negative attitudes
Non-persistent attitudes
Low dignity of labor
Lack in leadership qualities-Planning, organizing, directing, controlling and motivating
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All above points debatable and will be points for group discussion and conclusion !!!
THE THREE KEY ASSETS
SESSION 1
 Concept driven communities search for new ideas ,and
have a knowledge intensive workforce
 Competence driven-develop centers of quality for
manufacturing using a combination of good
infrastructure ,customized job training and
commitment to world class standards
 Connection-driven combine their cultural knowledge of
the world with a healthy infrastructure to make deals
 A combination of each of these assets creates the basis
of an economy that attracts jobs, capital and customers
 An Entrepreneur needs to have these assets !!!