Chapter 1:

Nature and development of Entrepreneurship/History of

Entrepreneurship
A French word Entrepreneur means Go between on Between Takes.

i. Earliest Period:
Marcopolo (Venice Italia) contract Money man
Merchant Adventurer Venture Capitalist

Having Ability of taking risk but no money Business having money but no
ability
Profit distributed 25% 75%

ii. Middle ages.

Entrepreneur-An actor who manages large govt. projects (buildings, castles etc)

Project was provided by Govt.

Resources provided by Govt.
No risks were involved.

iii. In the 17th century.

Risk was involved as contract price was fixed.
Royal bank was allowed to operate.
Richard Cantillon (father of Term Entrepreneurship)

Richard Cantillon defines: Entrepreneur is a person who buys at a certain prices and
sells at an uncertain price, thus operating at a risk

iv. In the 18th Century:

Capital user contract Capital Provider
(Having Ability but no capital) (Having capital but no ability)
Edison ------ Invention through R&D -------- (Commercialized)
Requires capital for (Lab, Buy equipment)
Era of industrialization.

v. In the 19th and 20th century ( 21st century)

Entrepreneurship was viewed from economic prospective.
Entrepreneur contributes his role in the economic development of the country (Job
opportunities, facilities, supplies profit)
-The Entrepreneur adopt and develop new technology in creation of projects.
-Innovation-Improvements
(Innovation in methodology, products, Innovation in business, in develop with the
customers) Ability to create and conceptualize and understand all forces at work.
Newness can be anything e.g. new product or new distribution system.
Definition of Entrepreneurship
Economic definition:
Entrepreneurship is a dynamic process of creating incremental wealth.

General Definition:
Entrepreneurship is a process of creating something new assuming risks and
rewards.

Business definition:
Entrepreneurship is a process of creating something new with value by devoting
necessary time and effort assuming the company financial psychic and social risk and
receiving the resulting rewards and personal satisfaction and independence

Components of definition
Basic Aspects.

i. Value creation (Benefit/utility to stake holders)

ii. Devotion of time and effort. (Active Participation)
iii. Risks (Financial, social and psychic)
iv. Rewards (Monetary, personal satisfaction and social acceptance)
(Society recognize and appreciate businessman)

Entrepreneur Vs Inventions:
Characteristics of Invention:

Highly driven (motivated)

Motivated by work
Highly Creative
Well educated
Free thinker
Problem solver
High self confidence
Risk taker
Able to tolerate ambiguity
Dont give much importance to money.

Differences:

Difference in education:
Inventor is supposed to be highly educated, entrepreneur may not be highly educated.
Money Orientation: Inventor does not give much importance to money whereas
Entrepreneur is concerned with money (profit).
Entrepreneurs love their organization whereas inventor loves his creation (invention)
ENTREPRENEURIAL PROCESS:
Entrepreneur process consists of four phases.

1. Identify and evaluate the opportunity.

Opportunity Identification:
It may result due to Entrepreneurs alertness to possibilities or by developing a
mechanisms of opportunities identification.

He is a Keen Observer, having meeting plans up and generates new ideas

Sources of Opportunity include.

i. Consumers
ii. Business Associates
iii. Distribution Channel
iv. Technical People
v. Research and Development

Opportunities Analysis.

Careful screening and evaluation of each opportunity in terms of returns, values, risks,
fit with personal skills, deferential advantages and window of opportunities.
Risks involved are competition, technology, market and amount of capital.
Prepare an Opportunity Analysis plan that includes product, assess opportunity, and
assess Entrepreneur and team, specification of activities and sources of capital

2. Develop a business plan:

It is a time consuming and most difficult phase of the process. (for making a business
plan a safe estimate of time required is 200 hrs)
Understand basic issues to develop the opportunity, determine the sources required
obtain the resources and manage the venture these things are spelled out in a written
document called as Business Plan.

3. Determine the resources required

Appraise the current resources.

Acquire the needed resources in time with giving little control and ownership.

4. Manage the Entrepreneur:

Use resources to implement the business plan.

Implement the management style and determine key variables for success.
Types of Start up

An Entrepreneur can start from any three types of Enterprise.

i. Life style firm: Goes from a similar pattern, privately held, low growth and less
research and development private ownership 30 to 40 employees after several
years start from 4 to 5. Annual revenue $ 2 million.

ii. Foundation company: 40 400 employees after 5 10 years. Annual revenue

$ 10 20 million. Attract private investors. Get investment from investors but
donot make share in market, dont go public.

iii. High potential venture: More than 500 employees after 5-10 years. Annual
revenue
$ 20-30 million, receives greatest interest and publicity.

ROLE OF ENTREPRENEUR IN ECONOMIC DEVELOPMENT.

1. Initiating and constituting change in structure of business and society.
2. Equal distribution of wealth
3. Creation of capital

Types of innovations include.

Ordinary innovation
Technological innovation
Break through innovation (Anything that changes the previous thing as a major change)

1) Government as an innovator:

Government bridges the gap between science and market place by providing resources
and consultancy, Commercialization, Technology transfer and R & D
Problems: include lack of business skills, bureaucratic approach and red tape-ism

2) Corporate Entrepreneurship

Corporate Entrepreneurship is Entrepreneurship within an existing organization usually

by creation by SBUs (Strategic Business unit)
Existing organization has resources but due to bureaucracy structured organizations
and short term orientation they prevent creativity.

3) Independent Entrepreneurship

Creation of new organization and most affected method of bridging the gap between
science and market place.
Problems: Problem includes lack of managerial knowledge, marketing or financial
resources, unrealistic inventions and improper interaction with stakeholder.
ETHICS AND SOCIAL RESPONSIBILITY OF ENTREPRENEUR:

Business Ethics is the study of behavior and morals in a business situation.

Entrepreneur is not only the money maker but also shows an ethical behavior.

Entrepreneur has to create a balance between ethics, economic expediency (profit) and
social responsibility differentiating him from a manager.

Entrepreneurs are sensitive to peer pressures and general social norms in community.

FUTURE OF ENTREPRENEURSHIP.
Common aspects are risks taking, creativity, independence and reward.

Entrepreneurship is expected to have a Bright Future

Universities are offering this subject more, even Entrepreneurial Sciences has been
taught.

Government encouragement and providing facilities roads, communications and tax

incentive.

Increased societal support that is honorable and prestigious pursuit.

Encouraging and constructive role of mass media e.g. article and media interviews.
 Chapter 2
Entrepreneurial Mind Set
How Entrepreneur think?
Perception of opportunity.
Keeps on going for new patterns.

They think differently and make decision in uncertain environment.

1) Effectuation:
Effectuation is a process that starts with what one has, who they are, what they know
and whom they know and select among possible outcomes.
What one has ------------- Select one possible outcome (Opportunities)

Casual process: Casual process starts with a desired outcome and focus on the
means to generate that outcome.
Desired outcome ---------- Means to generate.

Principles of Effectuation:

Patchwork Quilts Principle

Means driven actions that emphasize on creation of something new with existing
means, rather discovering new ways to achieve given goals.

Affordable Loss Principle:

What one is willing to loose rather than expected returns of project.

Bird in Hand Principle:

Negotiating with all stakeholders who are willing to make actual commitment to the
project and determine the goal in the enterprise.

The Lemonade Principle.

This prescribe leveraging surprise for benefit rather than to avoid them, overcome them,
and adopt to them.

The Pilot in the Plan Principle:

Relying on and working with people as the prime driver of opportunity and not limiting
Entrepreneurial efforts to exploit factors external to the individual.

Above principles help Entrepreneur to navigate the environment as well as shape it and
exploit the unexpected events.
2) Cognitive Adaptability:

dynamism
Extent to -- Flexibility -----Generate decisions - Environmental changes & actions
Self regulation
Engagement

Extent to dynamism, flexibility, self regulation, engagement that generate decision

about environmental changes & action

Ability of cognitive adoptability helps in learning new tasks, pursue the opportunities and
manage the firm in an uncertain environment.

Questions to assess cognitive adoptability includes,

1. Comprehension question
2. Connection tasks
3. Strategic tasks
4. Reflection tasks.

Benefits:

1. Adoption to new situation

2. Creativity
3. Communicate ones reasoning behind a response
4. Uncertain environments give birth to opportunities.

3) Learning From Business Failure:

Business failure occurs when a fall in revenue or rise in expense is of such magnitude
that firm become insolvent and unable to attract new debts and equity funding and
cannot operate under current ownership.

Most common reason is insufficient experience.

Loss of business may also generate negative emotional response i-e grief which is a
feeling of anger, disbelief, guilt, self blame, distress and anxiety.

Learning from failure occurs when feedback information generate Entrepreneurial

knowledge.

Grief affects information processing and ability to learn from negative events.
Grief Recovery Process:

Recovery: Recovery starts when there is no longer negative emotional response.

Process: There are two process involved.

1. Loss orientation:

An approach to grief recovery that involves working through and processing some
aspects of loss experience and as result of this breaking emotional bonds to the object
loss.

2. Restoration: (Try to buildup again)

An approach to grief recovery based on both avoidance and proactive ness towards
secondary sources of stress arising from a major loss.

A dual process for grief.

No one approach is best and it requires an oscillation.

Implications:

1. Reduces feeling of shame & embarrassment.

2. Speeds up recovery process.
3. Reduces stress and assist in treatment.
4. Gives comfort to Entrepreneur.
5. Makes Entrepreneur knowledge.
MANAGERIAL VS ENTREPRENEUR DECISION MAKING.
Managers are helping hands and are working under Entrepreneur.
Managerial
Strategic Orientation:
Efficient use of resources
Commitment to opportunity:
Information gathering & return on
resources (Long term commitment)
Commitment of Resources:
Commitment of resources to a large scale,
continental and having in depth analysis
first whether investment can be easily
reversed. (Full Commitment)
Control of resources:
Focus on ownership, accumulation of
further resources and effectiveness.
Management Structure:
Formulized hierarchical clear roles and
responsibilities and highly reutilized work.
Reward Philosophy:
Rewards are typically determined by
amount of resources that the manager or
employee contracts.
Growth Orientation:
Slow study and manageable growth.
Culture:
Interesting ideas, that revolves around
centrally controlled resources and limited
opportunity reorganization.
Entrepreneurial
Presence & generation of opportunity and
resources denote constraints strategic
thinking.
Opportunity and go for window of
opportunity and adjust resources
accordingly. (Short term commitment)
Commitment of small amount of resources
in a multistep manner with minimal risk at
each step. (Multi stage commitment)
Less concerned about ownership and
control of resources and more concern with
access to others resources.
Multiple informal networks, few lawyers of
bureaucracy, quick decision making.
Great desire to grow at rapid pace.
Great desire to grow at a rapid speed.
Encourage employees to generate ideas,
experimentation and creativity with focus
on opportunity.
 CHAPTER 3

ENTREPRENEURIAL INTENTIONS AND CORPORATE ENTREPRENEURSHIP

THE INTENTION TO ACT ENTREPRENIALLY

1. ENTREPRENEURIAL INTENTIONS:

The motivational factors that influence individuals to pursue entrepreneurial

outcomes.

Entrepreneurial Intentions Motivational Factors

2. ENTREPRENEURIAL SELF EFFICACY:

The conviction that one can successfully execute the entrepreneurial process.

Entrepreneurial Self Efficacy Friction of Process

3. PERCIVED DEIREABILITY:

The degree to which an individual has a favorable or unfavorable evaluation of

he potential entrepreneurial outcomes.

Perceived Desirability Evaluation of Outcome

ENTREPRENEUR BACKGROUND AND CHARACTERISITICS:
There are four important determinants of an entrepreneur background: Education, Age,
Personal Values, Work History

1. EDUCATION:

Education is important in upbringing of an entrepreneur and helps in

starting the venture and problem solving.
Importance to be given to finance, strategic planning, marketing, finance
and communication with people.
Education helps in opportunity identification and exploitation.

2. PERSONAL VALUES:

On the basis of personal values it is difficult to differentiate an

entrepreneur from a manger or even from general public.
The personal values include opportunistic, superior product quality, Quality
Services to customers, flexibility, adaptability, high caliber management,
honesty and ethical behavior.

3. AGE:

Chronological Age (Personal Age)

Entrepreneurial Age (Business Age)
(Age from 22-45 years is considered as an ideal age to start the business)
Male start in Early 30s whereas Female start in Mid 30s

4. WORK HISTORY:

The past work experience of individual

That may include dissatisfaction, lack of challenge, frustration and
boredom, as well as motivation and related work experience.
When venture starts growing managerial experience becomes more
important.
The previous start up experience is also helpful in prediction and
benchmarking.

Benchmarking:
Compare the performance with the best in the world
ROLE MODELS AND SUPPORT SYSTEMS:
Ideal is not in ur access but role model is in your access and you can share and discuss
with him when you want to.

ROLE MODEL:

Individual Influencing an entrepreneurs career choice and style.

They can be parents, brother or sister, other relatives or entrepreneur.
Act as a mentor through advice, information and guidance
Serves at a catalyst.
Later on network with similar prevalent is established depending on frequency,
depth, mutual benefits and reciprocity of relationships.

SUPPORT SYSTEM:

1. Moral support network:

A cheering squad providing psychological support.

Supporting wives, honest friends, children parents, grand-parents and
uncles who encourage and understand and relatives including.

2. Professional Support Networks:

Individuals helping the entrepreneur in business activities.

a) Mentors:

A coach, advocate and expert in the filed and provides HOW TO advise. A person with
which the entrepreneurs can share his problems and success.

b) Business Associates:

Self employed individuals, clients, consultant, suppliers, lawyers, accountants etc.

c) Trade Association:

Regional and national associations who keep the developments and provide industry
data and may include trade association of respective field e.g. APTMA and the Chamber
of Commerce.

d) Personal Affiliation:

This includes shared hobbies, supporting activities, clubs, civic involvement and school
alumni group. These above support system helps in resource identification and
acquisition and locates opportunities.
 Male Vs Female Entrepreneur

Male Female

i) Motivation
Achievement based on
Achievement that is striving to make accomplishment of goals and
things happen and personal independence to do it alone.
independence

ii). Departure Points

Dissatisfaction with current job Job frustration

iii) Sources of Funds:

Personal Assets, savings and
Personal Assets, savings, bank personal loans.
financing, investors and loans from
friends and family.

iv) Occupational Background:

Recognized specialist, high achiever and
experience in the line of work and
competent in a variety of business
functions
v) Personality Characteristics
Mid-level management experience,
service related occupational
background and experience in area of
work.

Opinionated, persuasive, goal oriented, Flexible, tolerant, goal oriented,

innovative, idealistic, high self confidence creative, realistic, medium level of
self confidence

vi) Background

Age 25 35, self employed father, first Age 35 45, self employed father,
born child first born child
vii) Support Group

Friends, professional acquaintances (e.g. Close friends, spouse, family, women

lawyers, accountants), business professional groups and trade
associates, spouses associations

viii) Type of Business Started

Manufacturing or Construction Service related - education service,

consulting or public relations
MINORITY ENTREPRENEURHIP
A typical minority entrepreneur belongs to a Blue Collar family, first born child, college
degree, related business experience, motivated by achievement, opportunity and job
satisfaction.

ENTREPRENEURIAL INTENTIONS WITH AN EXISTING

ORGANIZATION:
Environmental conditions are motivating people with an organization to act
entrepreneurially.
Characteristics include appropriate reward system, top management support, explicit
goals and appropriate organizational values.

CAUSES FOR INTEREST IN CORPORATE ENTREPRENEURSHIP:

1. Doing your own things and doing it in owns way.

2. Concept of self actualization.
3. Need for expression and freedom.
4. Stimulating and capitalizing on individual potential.
5. Overcoming resistance against flexibility, growth and diversification.
6. Social, cultural and business pressures.
7. New Business venturing: that is creation of new business within an existing
organization (SBU)
8. Innovation: that is constant improvement.
9. Pro-activeness: Initiative and risk taking.

TRADITIONAL CORPORATE CULTURE VS ENTREPRENEURIAL CULTURE:

Characteristics Of Corporate Culture Characteristics of Entrepreneurial

Culture:

1. Rational decisions based on large 1 Develop visions and goals.

data 2 Rewards for action.
2. No risky decisions. 3 Create and develop.
3. Sign offs and approvals required. 4 Take responsibility and ownership.
4. Adhere to instructions. 5 Flat organizational structure and close
5. No mistakes. working relationship.
6. Do not fail
7. No initiative.
8. Lack of creativity, flexibility and
independence.
9. Hierarchical and established
routines.
CLIMATE FOR CORPORATE ENTREPRENEURSHIP
Characteristics:

i) Organization Operates at frontiers of technology i.e. most modern technology.

Research and development and new ideas are encouraged.

ii) Experimentations: Trial and errors are encouraged. This culture allows mistakes
and failures in developing new and innovative products.

iii) No Initial Opportunity Parameter: Three are no barriers to new product

development and creation.

iv) Resources are available and access able.

v) Multi disciplined Team Approach: Existence of cross functional teams.

vi) Establish a long term horizon for evaluation.

vii) A volunteer involvement: Self motivated and self selected and every one is not
suitable for this activity.

viii) Reward system is based on attainment of established performance goals.

ix) Sponsors and Champions are available.

x) Whole hearted support by top-management physically and by providing

resources.
LEADERSHIP CHARACTERISTICS OF CORPORATE
ENTREPRENEUR
1. Understands environment:
Creativity and broad understanding of interval and external environment

2. Visionary and Flexible:

Dream great dreams and overcome obstacles.

3. Create Management Options:

Open, encourage changes and creates something new in organizational
structure.

4. Encourage the Teamwork:

Utilizing multi-disciplined teams and he is a good diplomat.

5. Builds a coalition of supporters:

Encourage team members, motivates them and makes everyone a hero.

6. Encourage Open Discussion:

Allow frankness, open discussion, disagreement and criticism.

7. Persistent:
He can deal with obstacles and frustration.

ESTABLISHING CORPORATE ENTREPRENEURSHIP IN

ORGANIZATION:
It can be done internally but outsider can be used to facilitate the process.

Step 1:

Commitment by top management in order to go through cultural changes, use of

seminars.
Identify initial framework, identify corporate entrepreneurs, selection and training them

Step 2:

Ideas and general areas that top management is interested in are identified along with
money,
risk, time, profitability and impact on organization.

Step 3:

Use state of the Art technology

Step 4:

Training sessions and general and specific areas of corporate entrepreneurship are
outlined

Step 5:

Get closer to customers (through Databases)

Step 6:

More productive with fewer resources (concept of lean and mean)

Step 7:

Establish a strong support structure for corporate entrepreneurship that is flexibility

innovative
behavior and sufficient funds.

Step 8:

Tye rewards to the performance of entrepreneurial units.

Step 9:

Implement evaluation system allowing successful entrepreneurial unit to expand and

unsuccessful to eliminate.

PROBLEMS AND SUCCESSFUL EFFORTS:

PROBLEMS:

1. Difficult to maintain long term commitment.

2. Lack of Freedom to make autonomous decision.
3. Constraint environment.
 CHAPTER 4

INTERNATIONAL ENTREPRENEURSHIP OPPORTUNITIES

Local Company

Regional Company

National Company

Multi-National / International / Transnational Company

Global Companies (e.g. Pepsi, Proctor & Gamble, Nestle)

Conglomerates (Mitsubishi, L.G.) (Multi Businesses/multi countries)

INTRODUCTION:

The challenges include geographical changes control over operations and adoptability.
International business is always changing.
Globalization is coming through all types of companies, the profit or no-profit, public or
private, small or large.
Need for physical and technological infra-structure is increasing.
Internationalization creates wealth and employment.

NATURE OF INTERNATIONAL ENTREPRENEURSHIP:

International Entrepreneurship is a process of conducting business across national
boundaries.

REASONS:

1. More profits.
2. More sales.
3. Expansion
4. To get international exposure.
5. To have more brand awareness.
6. As a result of cut throat local competition.
7. Encouraging host government policies.
8. Capitalize on natural and human resources of host country.
IMPORTANCE OF INTERNATIONAL BUSINESS TO FIRM:

GE = C1 + PL + E + D + C2 + C3

GE = Global Entrepreneurship
C1 = Culture
PL = Politics and Legal Environment
E = Economy and economic integration
DC = Distribution Channel
C2 = Change
C3 = Communication (Level of Technology)

INTENATIONAL VS. DOMESTIC ENTREPRENEURSHIP:

1. ECONOMICS:

Differences exist in level of economic development, currency valuation, Government

regulations, Interest, banking systems, Venture Capital Market, Marketing and
Distribution System and issues of raising capital.

2. STAGE OF ECONOMIC DEVELOPMENT:

Differences exist on Infra-structure e.g. roads, electricity, communications, banking

facilities,
educational system, legal system, business ethics and norms.

3. BALNCE OF PAYMENTS:

The difference between country value of export and import over time and effects
business
transactions and exchange rates among countries.

Export > Import (Surplus Balance)

Export < Import (Deficit Balance)

4. TYPE OF SYSTEM:

The socio-economic system existing in a country.

Various systems include capitalism, communism, imperialism, dictatorism, socialism
and social welfare.
5. POLITICAL ND LEGAL ENVIRONMENT:

Political system is law making i.e. system of parliament.

Legal system constitutes of law implementation i.e. system of courts.

Individualism Vs collectivism.
Individualism: A person is looking after him or his immediate family members and then
society
Collectivism: In collectivism it look it society first and then after his family members.

Democracy Vs Totalitarianism
Democracy: People have right to choose their representative.
Totalitarianism: No involvement of public.

Political Risk Analysis:

Risk includes operating risk, transfer risk, ownership risk, conflicts, gorilla war fare, civil
disturbance and terrorism.
Legal system covers property rights, contract laws, product safety and liability.

6. CULTURAL ENVIRONMENT:

Each element of business plan has some concurrency with local culture.
Collection of bellicose, norms, artifacts, symbols,.
Bribery and corruption issue.
Translation problems and errors.

7. TECHNOLOGICAL ENVIRONMENT:
(Production and Operational Technology)

Variations exist among countries.

Standardization and National responsiveness

Customers are interest in consistent technology.

New Product Development.
CULTURE:
Common ways of thinking and behavior that are passed on from generations or
transmitted by social organization, developed, reinforce and learnt.
Elements include language, social situations, religion, political philosophy, economic
philosophy, education, manners and customs.

i) Language:
Language is composed of verbal and non-verbal components whereas non-verbal
includes body position, eye contact, gestures and physical space.
Time is assumed differently in different cultures. E.g. in Arabs it is very common to say
Bukra Inshallah.
Business relationship is also important.

ii) Social Structure:

This affects life style, living standards, and consumption patterns. E.g. a family in USA
comprises of parents and children whereas in other countries grand parents and other
relatives are also part of family
Social classes that is upper class, middle class and lower class.
Reference Group that reflects individuals behavior.
Manager, Employees relationships.

iii) Religion:
The shared believes and attitudes e.g. Christianity, Islam, Hinduism, Buddhism and
non-religious.
Religion is reflected in values and attitudes of individual and society.

iv.) Political Philosophy:

The rules and regulation of a country impacting the global entrepreneur and the way he
conducts the business e.g. Embargos controls sanctions.

v) Economics and Economic Philosophy:

Whether the country is overall in favour of trade or impose trade restrictions e.g. Import
duties, Tariffs and subsides.

vi.) Education:
The formal and informal education that may include literacy rate, skills, career paths and
technology levels.

vii) Manners and Customs:

Negotiation:
One has to be careful before reaching on conclusion e.g. use of silence gaps
Gift Giving:
Whether to give a gift, what gift, how to wrap it and manner of giving it.
ECONOMIC SYSTEM AND DEVELOPMENT:
CATEGORIES OF ECONOMIC SYSTEM:

There are some categories of economic system:

i) Market Economy:

All or most of the activities are privately owners and services are not planned.
Production
depends on supply and demand factors, that determines price. No restriction on supply,
economic
efficiency and economic growth and development.

ii) Command Economy:

Type, quantity and price are planned by government and pre government owned.
Lack of efficiency as there is no competition.

iii) Mixed Economy:

Both market and command economy that is private and government ownership e.g.
France, Italy, Sweden, usually health care is controlled by government.

iv.) State Directed Economy:

Government has an established industrial policy and direct investments of private firms
e.g. Japan and Korea.

Economic, Political and Legal systems affect economic development and make a
country attractive to global entrepreneurs

AVAILABLE DISTRIBUTION SYSTEMS:

Logistics and transportation had improved allot.
Distribution channel differ considerably among countries and can affect, success of a
company a lot.
Factors include overall sales potential, amount and type of competition, cost of product,
geographic size of country, investment policies, exchange rates, political risks and
marketing plan.
BARRIERS TO INTERNATIONAL TRADE:

The problems that may come to international trade

i) General Agreement for Trade & Tariff (GATT):

WTO (World Trade Organization)

(The purpose of WTO is free trade among nations)

Barriers include duties, tariff, restrictions quota, subsidies and taxes.

Mutually agreed upon systems of reduction of above and violating country may be
pressurized to change its policies.

ii) Increasing Protectionist Attitude:

They results from events happening in the last decade. E.g. Trade deficit of USA,
emergence of
Japan and China and bilateral export restraints to avoid GATT.

iii) Trade Blocks and Free Trade Areas:

Groups of nation facilitating trade among themselves and excluding outsides.

NAFTA (North American Free Trade Agreement)
European Community based on the principle of Supra-nationality and the members
countries cannot enter into trade agreement on their own.

ENTREPRENEUR STRATEGY AND TRADE BARRIERS:

The problems include:

1. Increased cost of product.

2. Voluntary export restraint.
3. Conformance with the local content one.

IMPLICATION FOR GLOBAL ENTREPRENEUR:

The influence, attractiveness as the potential investment opportunities.

Careful analysis and determine the best country to enter.
 CHAPTER 5
CREATIVITY THE BUSINESSES IDEA, AND OPPORTUNITY ANALYSIS

SOURCES OF NEW IDEAS:

i) Consumer:

The potential customers and the idea can be developed through informal monitoring or
providing them a chance to express their ideas

ii) Existing Products And Services:

Arrange a formal method to monitor and evaluate competitive products and services.

iii) Distribution Channels:

They can help due to their familiarity with market needs and also help by a suggestion
in changes required in the products.

iv) Federal Government:

They are two ways of idea generation:

1) Files of patent office. Patient is an idea (PTO) Patent & Trademark office
2) Idea Coming in response to some government regulation

v) Research and Development:

This is the largest sources and can be formal or informal.

METHODS OF GENERATING IDEAS:
1) FOCUS GROUPS:

Group of 8-14 people having open in depth discussion in presence of a moderator and
discussion is stimulated by Comments of other group members to come up with an idea
It is also used for screening of ideas. (Evaluation)
Discussion is kept focused

2) BRAINSTORMIN

A self managed group without a moderator and based on the fact that people can
stimulate greater creativity by meeting with others and participate in organized
experience.

RULES:

Four rules should be followed

1: No Criticism.
2. Freewheeling is encouraged
3. Quantity of ideas is desired
4. Combinations and improvements of ideas are encouraged

3) PROBLEM INVENTORY ANALYSIS:

It is like focus group but the difference is that the focus is a problem and a list of
problems is provided.
A Careful analysis of results is required

CREATIVE PROBLEM SOLVING

i) BRAINSTORMING:

Most well known and widely used, unstructured, spontaneous contribution and generate
all possible ideas within limited time.
Process involves declaration of problem statement then selection of group, discuss and
record all possible ideas with no criticism.

ii) REVERSE BRAINSTORMING:

Criticism is allowed and focus is on negative.

Identify everything wrong with idea followed by discussion how to overcome it.
 iii) BRAINWRITING:

Written brainstorming that is a silent method of brainstorming. Also called as 635

method that is six group members each writing down three ideas in a five minutes time
period.

iv) GORDON METHOD:

Method for developing new ideas when the group members are unaware of the problem
Entrepreneur starts by a general concept related to the problem, the group responds,
concept developed, then actual problems is disclosed enabling suggestions for
implementation or refinement of solution.

v) CHECKLIST METHOD:

Developing the new idea through a list of related issues

vi) FREE ASSOCIATION:

A word or phase related to the problem is written then another, then another where each
new word attempting to add something new on going thought process (Creating a chain
of words)
(When we mind gets tired you start creative thinking)

vii) FORCED RELATIOSHIP:

Developing a new idea by looking at product combinations and forcing relationships

among them
Use of DFDs and ERDS
DFDs (Data Flow Diagram)
ERDs (Eutity relationship diagram)

viii) COLLECTIVE NOTEBOOY METHOD:

A small Notebook with blank papers and data, consider problems and its all possible
solutions and record ideas accordingly.
These notebooks are then handed over to a central coordinator who summarize the
material and summary becomes topic of final creative focus group discussion

xi) ATTRIBUTE LISTING:

List the attribute of items and look at each from a variety of view points i.e. positive and
negatives

x) BIG DREAM APPROACH:

Developing a new idea by thinking without constraints that is thinking big
 xi) PARAMETER ANALYSIS:

Two Aspects

a) Parameter identification that involves analyzing the variables and determine their
importance.

b) Creative Synthesis: Develop the relationship and evaluate parameter and

relationships and then develop solutions

xi) ROOT CAUSE ANALYSIS:

Keep on asking question why till you reach at the root of the problem.

INNOVATION:
Improvement in an existing product
Inventions and Innovation are building blocks to the future of any economic unit.

1) TYPES OF INNOVATION:

i) Break Through Innovation:

Extremely unique and provide basis for future innovation and should be protected
through patents, trade marks, and copy rights e.g. Pence line, computers, Airplane,
Internet etc.

ii) Technological Innovation:

More frequent and in the product/Market area e.g. Fly watch with pictures, voice and
text messaging and Jet Airplane.

iii) Ordinary Innovation:

Occurs most frequently a better product having market appeal based on market full and
non-technological

2) DEFINING A NEW INNOVATION: (Product / Service)

Newness is a dilemma
Newness can be in consumer concept e.g. decaffeinated coffee, new packing or a slight
change or modification in the products.
 3) CLASSIFICATION IF NEW PRODUCTS:

New products are classified either by view-point of a customer or company.

a) From a Consumers Viewpoint:

How much behavioral changes or new learning is required by consumer in order to use
product

b) From a firms view point:

From a firms view point it is defined in terms of amount of improved technology.
Requires carefully planned strategy e.g. replacements, extensions, product
improvements, reformulations and remerchandising (fig 5.3 pager 151) (fig 5.4 pager
152)

OPPORTUNITY RECOGNITION:

Business Opportunity represents a possibility for entrepreneur to successfully fill a large

enough unsatisfied need that may results in enough sales and profits.

Education and experience makes the entrepreneur knowledgeable who then becomes
alert and use networks resulting in successful opportunity reorganization
Fig 5.5 Page 153

OPPORTUNITY ANALYSIS PLAN:

Opportunity analysis plan focus on idea and market not the venture.

SELECTIONS:

THE IDEA AND ITS COMPETITION:

Description of product and service and identify and list all competitions
The product differentiation features find out after matching

THE MARKET AND THE OPPORTUNITY:

The size and characteristics of market (3 years data) from secondary data sources
Whether the market and opportunity are large enough and worth spending time and
effort

ENTREPRENEUR AND TEAM ASSESSMENT:

Assess entrepreneur and his team and have at least one person having experience in
industry area of new idea.

THE NEXT STEPS: Make the idea a reality in market place, Time and money required,
Sources of Capital
PRODUCT PLANNING AND DEVELOPMENT PROCESS

IDEA CONCEPT PRODUCT TEXT Commercialization

STAGE STAGE DEVELOPMENT MARKETING Stage
STAGE STAGE Product Life cycle
Idea Laboratory Pilot production SEMI Introduction
development Run COMMERCIAL Growth
Plan Maturity
Decline

Evaluate Evaluate Evaluate Evaluate

ESTABLISHING EVALUATION CTERIA:

Evaluation is needed at every stage and it shall be brought yet quantitative

i) Market Opportunity:

It is for most important and must exist.

Elements include characteristics and attitudes of potential buyers, size of potential
market in dollar and unit terms, nature of market with respect to product life cycle and
the market share it may get.

ii) Current Competition:

Evaluation of competitors, marketing mix, their market share and product differentiation
features.

iii) Marketing system:

Compatibility with existing system, degree of sales force adaptability, distribution and
promotion

iv) Financial Factors:

Manufacturing cost per unit, Sales cost per unit, capital and inventory required, Break-
even point and long term profit.

v) Production Factors.

In relation to existing plant, machinery and personnel

1) IDEA STAGE:

Prepare a systematic market evaluation checklist where new product idea is expressed
in terms of its chief values, merits and benefits
Elements for need assessment includes timing, satisfaction, alternatives, benefits and
risks, future expectations, price vs. Product performance, market structure and size and
economics condition
Fig 5.4 page 157

2) CONCEPT STAGE:

The defined product idea is tested to determine consumer acceptance without incurring
manufacturing cost.
Methods include conversational interviews, and questionnaires

3) PRODUCT DEVELOPMENT STAGE

Assess the consumer reaction to a physical product

Use of consumer panel and provide samples of yours and competing products

4) TEST MARKETING STAGE:

This increases certainly a limited production and sale activity of the new product e.g. 5-
8%

5) COMMERCIALIZATION STAGE:

The product goes through its natural life cycle stages that are introduction, growth,
maturity and decline. Where every stage requires different strategies
E.COMEERCE AND BUSINESS START UP:
E. Business:-

The business conduct with computer mediated networks

It can be B 2 B, B to C and within the company that is intranet e.g. Sales, purchase,
training sessions etc.

E-Commerce:

Transfer of ownership through computer mediated networks

FACTORS FOR GROWTH

Increased used for personal computers (PCs)

Wide Spread of Internet facilities
Acceptance of internet as a business communication platform
Access to broader customer base
Low cost of communication
Low transaction cost
Interactivity (Two way communication b/w buyer & Seller)

USING E-COMMERCE CREATIVITY:

IT Can be done by existing companies start ups and suitable for small, medium, large
companies.

STARTING

In House Out sourcing

IN HOUSE: Servers, Routers, telephone line, website, softwares

OUT SOURCING Through some web development and updating company

COMPONENTS:

Front end Operations:

Functionality, Search, shopping card and secure payments

Back End Operations:

Distribution Channels, Manufacturing capabilities, delivery
WEB SITES:-

Verifies:-
They provide authentication, validation and payment services e.g. Pay Pal , Verisign,
GTE Cybertrust

Search:-

It shall be easy, user friendly and have an email response system (3 click formula)
Use of subject browsing, site map and advance search tools
Secure Servers that is https:// and merchant Accounts.

Speed:

Dial up or broad band

Early download
Navigational clarity
Easy to use, customize and Compatibility with the browsers.
Website promotion can be done through search engines, banners, advertisement, email
and classified ads

TRACKING CUSTOMER INFORMATION:

Data base marketing or direct marketing through electronic data bases.

Customer information can be obtained through membership programs offering free
services, websites statistics and Internet cookies counters

DOING E.COMMERCE AS AN ENTREPRENEURAL COMPANY:

Decision shall be made on case to case basis

Economic delivery of products
Product shall get interests of large enough people
Online operations shall be cost efficient significantly
Attract customers through websites.
 CHAPTER 6
INTELLECTUAL PROPERTY AND OTHER LEGAL ISSUES FOR THE
ENTREPRENEUR.

INTELLECTUAL PROPERTY:
Intellectual property is any patents, trade marks, copy rights or trade secrets held by
the entrepreneur

NEED FOR A LAWYER

They have awareness about legal regulations.
They provide legal advice
They are experts
They are specialist in specific areas of Law

HOW TO SELECT A LAWYER

Hiring

1 Retainer Basis: A stated amount per year or per month excluding the court

2 One time fee: The lawyer is hired for the specific purpose and paid accordingly
e.g. registering a patent.
PATENT
Agreement
Inventor Government

discloses a unique idea that is Gives Exclusive right of making, using

beneficial for society or economy or selling that idea for a specific time period

TYPES OF PATENTS:

1. Utility Patent

These grants to owner protection from anyone else making using or selling identify
inventions and processes
Validity is 20years

2. Design Patent

This reflects the appearance of any object and protects ornamental design e.g Shoes
Validity is 14 years

3. Plant Patent:

This is applicable for new variety of plant and validity is 20years

Patents are issued by PTO (Patent and trademark office)

International Patents

The foreign companies and US Companies are treated equally as per WTO (World
Trade Organization) rules

The Concerned department of WTO are Patent Cooperation Treaty (PCT) which is
administrated by World Intellectual Property Organization (WIPO)

Disclosure Document

Establish a date of conception of invention and important to remove problems of two

companies claiming one patent

This includes description of invention, photo graphics, a cover Letter. The PTO Stamps
and return the duplicate.
The Patent Application:

This contains history and description of invention and claims for usefulness

SECTIONS

a) Introduction:-

The background and advantages and the problem it solves.

b) Description of Invention:

A brief description of drawings, accompanied complying with PTO requirements and the
detail description

c) Claims:

Heart of the patent Application

Explain the essential part of invention neither to general nor to specific

d) Declaration / oath by the inventor

Patent Infringement (Violation):

It important to check whether entrepreneur is infringing on someone else patent

The PTO office and internet can be consulted for that purpose (pg 177 table 6.1)

Business Method Patents:

A Particular method of doing business can also be patented e.g. amazon.com, that is
buying and Selling online.
TRADE MARKS:
A distinguishing word, name, symbol, combination, slogan, color or sound that identifies
a product

It is registered for ten years registration with 10year renewal terms and can last
indefinitely.

Types of Trademarks

1) Coined Mark: There is no relationship between the mark and the

good/services e.g. Kodak, Polariod

3) Arbitrary Mark: That has some other meanings in our language e.g. Apple

4) Suggestive Mark: They suggest features, qualities, ingredients etc e g Sunsilk

shampoo

5) Descriptive Mark: The mark that has gained consumer recognition and has
been distinctive over a period of time e.g. Rubberiod

Registration:

1) Fill the form

2) Drawing by the mark
3) Five Specimen showing actual use of demand
4) The fee

It is then examined by patent attorney who determines the suitability for registration and
if found suitable it is published in Trade Mark official Gazette to allow any party 30 days
to oppose or a request to oppose
COPY RIGHTS:
The Copy right protects original works of authorship

Examples include Music, Literary work, pictures, videos, soft wares, books, scripts,
article, poems, songs, sculpture, model, maps, printed material on board games and
data.

Copy rights are registered with Library of congress (in USA) and registration process
includes

1) Filing the application form

2) 2 Copies of work
3) The Fee

Terms of copy right is life of author + 50years and in case of institution life of author +
75yrs

TRADE SECRETS

Protection against others revealing or disclosing information that could be damaging to

the business
Employees may be asked to sign a non-disclosure agreement (NDA) pg 182
General Trade secrets may include employees data, sales data, customer data,
financial information, quotations and invoices, procedures
Information can leak through trade shows, transient employees, media interviews and
websites

Suggestions To Prevent Leakages of trade secrets :

1) Trained employees to refer sensitive questions to one person

2) Provide escorts to all office visitors
3) Avoid discussing business in public places
4) Keep important travel plans secret
5) Use simple security such as locked files, cabinets
6) Have password in comp & document shredder employees and consultant sign
Non disclosure agreement
7) Debrief the departing employees
8) Avoid faxing any sensitive information
9) Mark document confidential when needed
LICENSING
An agreement between Licensor and Licensee. Licensor gives the licensee to use
product or intellectual property and the licensee pays a royalty for using them

Benefits:

Important marketing tool

Increase revenue without taking risk
An easy way to expand interracial

Franchising

The use of trade mark or product by a Licensee who then pays the royalty based or a
fixed amount per year or percentage of sales

Licensing For Copy Rights

Rights to use books softwares, musics, photographs, computer, games, TV Shows,
and celebrates

Licensing For Sports Events e.g. Olympics, and world cup etc

Licensing For Figurines e.g. Mickey mouse, Walt Disney characters

PRODUCT SAFETY AND LIABILITY

Responsibility of the company to meet any legal specification regarding a new product,
covered by consumer product safety Act.

Tasks of the commission:

1- Setting standards for products

2- Finding hazardous and unsafe products for customers
3- Ensuring that all products all complying with product safety and Liability act

Claims

1. Negligence e.g. deficient labels or false advertising

2. Warranty overstated benefits or understated performance
3. Performance Strict Liability, the product is defected before its receipt
4. Miss-Representation Concerning characters or quality of products
INSURANCE:
Getting something precious or valuable insured by paying a premium and signing a
contract

TYPES:

i) Property Insurance Property Insurance Includes

a) Fire Insurance
Covering, exposures riots, vehicle, damage, windstorm, hail and smoke

b) Burglary and Robbery:

Burglary is a forced entry and robbery when threats of violence was involved

c) Business Interruption
Any damage caused to the business that is income and profits and expenses.

ii) Casualty Insurance

a) General Liability: Covers bodily injury, property damage and product liability
b) Automobile Liability: When employees use their personal cars for company
purpose

iii) Life Insurance: Protects the continuity of Business

iv) Workers Compensation: In case of work related injury

v) Bonding: Shifts the responsibility for employees for theft of funds or sub
contractors, who has failed to complete the task

Determine which type of insurance is required how much and from which company.

Advice can be obtained from specialists at universities or small business administration

CONTRACTS
Contracts with vendors, landlord and clients
Real Estate deals must be in writing

Contract Conditions

1. Names and specific roles of all parties in the transaction

2. Detailed description of transaction
3. Exact value of transaction
4. Signature of all person involved (pg 189 table 6.5)
 CHAPTER: 7

THE BUSINESS PLAN: CREATING AND STARTING THE VENTURE.

PLANING AS PART OF THE BUSINESS OPERATION:

Planning never ends

It can be short term or long terms, can be strategic or operation.
The important areas are

1) Financial Plan
2) Marketing Plan
3) HR Plan
4) Production plan
5) Operational Plan

What is Business Plan:-

Business plan is a written document describing all relevant internal and external
documents and strategies of starting a venture.

It is an integration of various functional plans e.g. marketing, finance, production, HR as

well as the environmental analysis that includes some uncontrollable environment like
economy, social, legal, enological and some controllable ones marketing, production
etc.

Who should write the Plan:-

The Entrepreneur
however he may consult various sources that includes lawyers, accountants, marketing
consultants, engineers, small business administration, services core of retired
executives (SCORE), small business development centers, universities, friends and
relatives.

One shall go for an objective assessment of his skills (pg.200 Table 7.1)

Scope and Value Of Business Plan Who Reads The Plan:

Any one of the stakeholders may demand. Bankers, ventures capitalist, suppliers,
customers, advisors and consultants.
The Business plan must try to satisfy needs of every one
Depth and detail depends or nature of product or business
Developing a business plan results in a self assessment exercise for an entrepreneur
who thinks from various scenarios
How Do Potential Lenders And Investors Evaluate The Plan

Entrepreneur shall prepare the plan without consulting the stakeholder and as he
becomes aware, who will read it, he shall make the changes.

E.g. Suppliers are interested and demand plan before supplying to the future.
The Suppliers of capital are interested in back period, return on investment and the time
period.
Typically Lenders focus on 4Cs of credit, i.e. Character, Cash flow, Collateral and
Equity Contribution

PRESENTING THE PLAN:

An oral presentation of 20-30 min by an entrepreneur or his managers before a

Potential investors or at a forum e.g. (MIT)

The Investors attend the presentation and ask questions and may decide instantly or
ask for further presentation
What to say. How opportunity is converted into reality and what will be the results

INFORMATION NEEDS:
What type of information required for making a business plan
The Entrepreneur shall look for the barriers in information like marketing, finance,
production
Clear definition of goals and objectives
Loop holes and flaws are to be checked and consulted.

Marketing Information

The Market Potential

Target Market
Trends of Market/Industry

To assess the total market potential and other information, sources include trade
association, Govt reports, Internet Published studies and the primary data

Operation Information:-

Information required for

1) Location
2) Manufacturing Operations
3) Raw Materials
4) Equipment (Machinery)
5) Labor Skills
6) Space
7) Overheads
Financial Information Needs:

This tells about profit, sources of capital and utilization of capital

Three Key Areas:

1) Expected sales and expenses

2) Expected Cash Flows
3) Current Balance sheet & Expected Balance sheet

USING THE INTERNET AS A RESOURCE TOOL:-

Important and Cost effective tool
It also helps in marketing through websites that also facilitates online buying and selling
The Competitors web sites shall also be check

Sources:
1) Alert Service by Google. www.google.com/alerts
2) Use net groups (Discussion Forum of Common Interest)
WRITING THE BUSINESS PLAN / COMPONENTS
1) Introductory Page:

Its the cover page and includes name and address of company, name and address of
entrepreneur, a paragraph describing company and nature of business and amount of
financing need.

2) Executive Summary:

It is prepared after total plan is written.

2-3 pages and determines the worth of plan
Important parts include brief description of business concept, data supporting
opportunity e.g. Trends, uniqueness of business concept, the entrepreneurs, how they
make money and how much and include that thing which is important to the audience to
which is important to the audience to which it is written.

3) Environmental & Industry Analysis:

1) Macro Environment:
Economy, culture, Technology and Legal Concerns

2) Industry Analysis:
Discussion pertains to specify industry and includes
a) Industry demand that is size and growth of the market and market
potential
b) Competitive threats from the large competitors

4) Description of Venture:

The size and the scope of brief description of product or service, location, personnel
and office equipment background of entrepreneur, History of venture and any legal
issues if applicable

5) Production Plan

The complete manufacturing process that can be self or sub-Contracted. The physical
plant details, the machinery and equipment (Model, make etc), Raw materials suppliers
names and addresses.

6) Operations Plan

The description of company operations, completion of business transaction,

procurement Activities (Purchase), shipping, transportation and technology utilization in
operation
7) Marketing Plan:

How you plan the selling or marketing activities

This includes the marketing mix that is product, pricing, distribution and Promotion
Marketing Budget
Controls. (Customer satisfaction, performance of sales person, personal selling.

8) Organization Plan

Form of ownership (Sole proprietorship, partnership, corporation)

Prepare Organization Chart.
Identification and roles of Entrepreneurs and their authority.
Management Team background and roles and responsibilities of middle management
(Job Description and Job Specification)
The reward systems, training, selection, criteria and planning measurement and
evaluation schemes

9: ASSESSMENT OF RISK

SWOT Analysis
Indicate the potential risks, what will happen if these risks become reality and strategies
to prevent, minimize and respond to these risks
Major risks include competition, weak marketing, production problems, poor
management and technological advancements.

10. FINANCIAL PLAN:

This declares the feasibility of the plan

Major Financial areas are
1) Projected income statements
2) Projected cash flows
3) Projected Balance Sheet
4) Break even analysis
5) Projected sources and uses of funds

11. APPENPIX

This contains backup materials e.g. letters from customers and suppliers secondary
data, leases, contracts, price list of competitors or suppliers.
USING AND IMPLEMENTING THE BUSINESS PLAN:

Importance of controls and contingency planning

It shall be consulted afterwards
Planning is a must to avoid big mistakes
Sources for planning include S&A, Bureau of Census, Banks, Chamber of Commerce,
Trade Association (Table 7.8 page:220)

Measuring the plan Progress:-

Whether goals and objectives are on schedule

In start business plan is business plan is consulted every month
Control elements include

i) Inventory Control
ii) Production Control
iii) Quality Control
iv) Sales Control
v) Disbursement (Payments)

UPDATING THE PLAN

The business plan can become out of date if situation changes and requires revision
Be Sensitive to Changes

WHY SOME BUSINESS PLAN FAILS

1. Unreasonable goals
2. Not Measurable goals
3. Lack of total commitment by entrepreneur
4. Entrepreneur has no experience in planned business
5. No sense of potential threats or weakness to the business
6. No customer need was established
 Chapter 8:
The Marketing Plan

Industry Analysis:
Market potential.
The overall market analysis.
Trend Analysis:
The changes in the product e.g changes in the car model, recreational tools.
Information can be obtained through secondary sources. (Fig 7.1 Pg:206)

Competitor Analysis:

1. Direct competitor
2. Indirect competitor

Direct competitor: which have similar marketing mix and dealing with same target
market
Indirect competitor: Fulfilling the same need but not have same product.

MARKETING RESEARCH FOR THE NEW VENTURE.

The information required for preparing the marketing plan e.g. consumer analysis, size of
potential market, evaluation of pricing, distributions patterns, promotional tools or competitors.
Usually a costly exercise.
It can be form entrepreneur or consultants or university students.

Step 1: Defining the purpose or objective:

Make a list of information that would be needed to prepare the marketing plan e.g. what people
think about companys product, whether they will buy it, how much they are willing to pay for it
etc.
Declare a very clear research problem statement that shall neither be too general nor too
specific.

Step 2: Gathering data from secondary resource:

Secondary data is already available but collected for some other purpose.
The sources includes trade magazine, libraries, Govt. agencies and departments, universities,
internet, Secondary research suppliers, Trade association.
Explore all secondary data sources first.
Step 3: Gathering data from primary source:
First hand collection of data and for the problem at hand.
This involves data collecting procedures and instruments.

Instruments:

1) Survey: Questioners that can be open ended, close ended, scale item and pictorial.
2) Observation: That can be human observation or mechanical observation and
expresses natural behaviors of people.
3) Interviewing: one to one or focus group interviews, more meaningful information.
Can be in person through telephone, mail order or internet.
4) Experimentation: Constitute of environment and variables where variables are
changed to find out their impact or environment. Can be Lab Experiments or field
experiments.

Step 4: Analyzing and Interpreting the result:

The use of statistical tools for analysis e.g. mean, median, mode, standards deviation, variance,
regression, correlation.
After the analysis, evaluation is carried out which declares recommendation by the researcher
and shall responds to the research problem.
Feedback and follow-up is the responsibility of researcher.

UNDERSTANDING THE MARKETING PLAN:

It provides answers of the following questions.

Where have we been? (Back grounding)

Where do we want to go? (Objective)
How do we get there? (Strategies)

Characteristic of Marketing Plan:

1. It shall be strategic.
2. It shall be factual i.e. based on the facts and valid assumptions.
3. It shall be organized.
4. It shall provide continuity for the next marketing plan (Long term Objective).
5. It shall be simple and short.
6. It shall be flexible to incorporate changes (what if).
7. It should specify performance criteria.

Definition Marketing plan is a written statement marketing objective strategies and

activities be followed in business plan.

Marketing System:
Interacting internal and external factors that affect ventures ability to provide goods and services
to meet customer needs.
Internal factors include financial resources, supplies, goods, objectives and management.
MARKETING MIX:
Marketing mix constitutes of 4 Ps that is combination of product, price, promotion and
distribution and other marketing activities needed to meet marketing objectives.

COMPONENTS OF MARKETING PLAN:

1) Defining the business situation.

Review of past performance or back grounding that is how product was developed, present
market condition and future opportunities.
Review some key elements of industry and competitive environment.

2) Defining the target market/opportunities.

Market Segmentation is a process of dividing a market into definable and measurable group
for purpose of targeting marketing strategy.
Target Market is specific group of potential customer towards which venture aims its marketing
plan. Pg: 247.
The process of segmentations and targeting customers by the entrepreneur should process as
follow.

I. Decide what general market or industry you wish to pursue.

II. Divide the market into smaller groups based on characteristic of the consumer or
buying situation.

A: Characteristics of customer:

1. Geographic (e.g state, community, city, region)

2. Demographic (e.g age, sex, occupation, education)
3. Psychographic.
B:

1. Desired benefits (product features)

2. Usage (rate of use)
3. Buying condition (Time available and product purpose)
4. Awareness of buying intention.

III. Select segment or segments to target.

IV. Develop a marketing plan integrating product, price, distribution and promotion.

3) Considering Strengths & Weakness:

Strength and weakness of the company in relation to target market.

Strength may include less competition, large market base and experienced staff.
Weaknesses may include lack of credibility and lack of liability.
4) Establishing Goal and objectives:

Between 6-8 shall be quantifiable and fulfilling the SMART criteria.

Examples may include market share, profit, sales, pricing, policies, awareness, brand loyalty.

5) Defining Marketing Strategy and action programs:

The specific activities outlined to meet the ventures business plan goals and objectives.

I. Product:

Tangible and intangible features.

Product differentiation features.

II. Pricing: this is the value of the product.

III. Distribution:

Adds convenience to consumer.

Usual distribution channel is: Manufacturer-- Wholesaler--- Retailer--- Consumer.
A company can sell directly to consumer.
User distribution strategy includes selective distribution, intensive distribution or exclusive
distribution.

IV. Promotion

This informs the customers about company and it customer. Various tools include
advertising, personal selling, sales promotion, public relation and direct marketing.

6) Marketing Strategy: B to C or B to B.

The decision to make whether to target the end user or the business market.

7) Budgeting the marketing strategy:

The cost involve in implementation, clearly mentioned in figures and numeric area.
Objective Cost

8) Implementation of Marketing Plan:

The execution and designating the responsibilities to marketing staff

Monitoring the progress of marketing actions. It is important to have a monitoring
system in form of feedback and comparing the actual results with the projected area.
Importance of contingency planning and adjustments.

Weaknesses in marketing planning includes unrealistic goals, poor analysis of market,

unanticipated competitive moves, poor implementation and acts of God.
 Chapter: 9
The Organizational Plan
Developing the Management Team:

Organization requires loyal and committed employees, able and creative management
team having full time commitment with organization

Legal Form of Business:

Decision about form of business is to be made before submitting business plan.
There are three usual forms.

1. Proprietary
2. Partnership
3. Cooperation (Pvt. or Public Ltd company)
Parameter Proprietary partnership Cooperation

Ownership One owner Some general Owners of share

partners and of stock
some limited
partners
Liability of owners Complete General Partners Least Liability
liability of
Proprietor
Cost of Starting a Least As per partnership It is created only
business expensive and agreement through statue and
only registered registering name,
article of in
cooperation, filing
fee and
organization taxes
Continuity of Business Death of general Max. continuity.
Business terminates partner results in
termination of
partnership
agreement where
as death of limited
partner has no
effect
Transferability of Proprietor can General partner Max. Freedom i.e.
Interest sell or transfer can not sell anytime.
anytime without consent of
other general
partner where as
limited partner can
sell
Capital Loan or Loans or partner Sale of stock,
requirements personal contributions bonds and
contribution borrowing
Management Complete General partner Board of Directors.
control control of and as per
Proprietor agreement

Distribution All profit and As per agreement Dividends to share

Loss towards and usually on the holders and
Proprietor basis of incase of loss, no
investment dividends.
Attractiveness for Personal Partners Abilities Bonds, shares and
raising capital Abilities debits
Tax Attributors of form of Business
Proprietorship

All income of business is treated as personal income of proprietor.

No double taxation
No capital stocks tax or penalty

Partnership

Similar to proprietorship however reporting income is important to determining the share

of each partner.

Corporation

Problem of double taxation i.e. cooperation and stock holder or tax separately
They can take many deduction that are exempted from tax i.e. not available for
proprietorship and partnership.
S-Corporation
A Special type of Corporation where profit is distributed to stock holders and taxed on
personal income basis

Advantages:

1. Single taxation
2. Share holders retain limited liability protection of Corporation.
3. S-Corporation is not subject to min. tax
4. Stock may be transferred to low income bracket family members
5. Stock may be voting or non voting
6. This form of business may use cash method of accounting.

Disadvantages

1. There are some restrictions regarding qualification for this form of business.
2. Corporation may be having a low tax rate if S-Corporation earns less then a
specified amount.
3. S-Corporation may not deduct most fringe benefits for share holders
4. S-Corporation must adopt a calendar year for tax purpose.
5. S-Corporation cant have more then hundred share holder

Limited Liability Company:

Characteristics

1. LLC has members

2. No unlimited liability
3. Members can transfers there interest with unanimous written consent of
remaining members
4. It is taxed as partnership
5. The standard acceptable terms of LLC is 30 years

Advantages

1. Partners can add their proportionate shares of LLC liabilities to their partnership
interest
2. States do not tax LLCs
3. One or more individuals, partnership, corporation, trust or other entities can join
to organize LLC
4. Members can share income, profit, expense deduction, Loss, credit and equity of
LLC among themselves.
Designing The Organizations:
In start there is a simple design where entrepreneur performs majority of functions, later
with expansion the organization design starts getting complex and expanded.
Part time employees can be hired.
Expansion requires need for more employees and effective interviewing procedure.
Design of organization indicates expectation of entrepreneurs with employees

Five Critical Areas

1. Organizational Structure that is job , communication and relationship

2. Planning, measurement and evaluation schemes i.e. goal setting and their
evaluation
3. Rewards i.e. promotions, bonuses increments, praise etc
4. Selection criteria, selection individuals for each position, trainings
5. Training On the job and off the job training.

Roles of entrepreneur included: assigning the responsibilities, allocating the resources

and negotiations.

Building the Mgt. Team and Effective Organizational Culture:

Organizational constitute of right mix of people that is age mix, gender mix, education
mix and experience mix.

Responsibilities of Management Team.

1. Executes the business Plan

2. Identifying the fundamental changes in business as they occur
3. Make adjustment to other plan base on the changes and maintain the profitability

Important Considerations

1. Leader Shall be leading as a role model as encourage open communication

2. Entrepreneur shall be flexible
3. Spend extra time on hiring process
4. It should be remembered that it is easier to change the person behavior then
to change his attitude
BOARD OF DIRECTOR
Function perform

1. Review budget
2. Develop long terms strategic plans
3. Support day to day activities
4. Resolves conflicts
5. Ensure proper use of assets
6. Develop a network of information resources

Criteria:

1. They can work with a diverse group

2. They shall understand the market position
3. They can show good judgment in business decisions making

7 to 10 members and requires a periodic evaluation.

Board of Advisors
They dont have any legal status and work in advisory capacity only
Useful in family business, compensated as per meeting basis.

Organizations and Use of Advisors

The outside advisors that includes the accountants, bankers, lawyers, advertising and
marketing research.
 The Financial Plan Chapter 10
Operating and Capital Budgets

In proprietorship, owner prepares that whereas in partnership/corporation, Managers

prepare it and owner approves it.

First find expected sales and from it, find the cost of these sales and ending inventory.

Important considerations are total production required and level of inventory

Second find Operating Costs that includes Fixed Expenses like rent, utilities, salaries
interest, deprecation and Variable Expenses like Adv. and Selling expenses etc.

Capital Budget provides the basis for expenditures impacting business for more than
one year e.g. new equipments, vehicles, computers or new factory etc.

Proforma Income Statement

Proforma income is the projected net profit calculated from projected revenues minus
projected costs and expenses

Preparing the Proforma Income Statement involves, calculate Sales by months, basis
nay be marketing research, industry sales and some trial experiences. Certain
forecasting techniques like survey of buyers intentions, sales force opinions, expert
opinions etc can be used to calculate the sales.

List down Projected Operating Expenses that shall have room for adjustment. E.g.
selling expenses increase with increase in business and they are usually high in start.

Finding cost of goods sold that can be either compute variable cost of production and
times number of units sold or by industry percentage of sale

Salaries and wages can be calculated by number of employees required and their roles.

Increased insurance costs, trade show participation or added space for warehousing
shall also be considered. Unusual expenses like Trade Show participation etc shall be
flagged at the bottom of Proforma Income Statement.

New machinery depreciation shall be added

Proforma Income statement shall be prepared First year month wise, and for the year 2
and 3, it shall also be prepared year wise. This can be done through calculating
percentages of cost of goods sold and operating expense in relation to the sales and
multiplying these percentages with the next year forecasted figures.
For projected expenses in year 2 and 3, first look at the expenses that remain stable
e.g. depreciation, utilities, rent, insurance etc. Be conservative for initial planning
purposes.

In case of an Internet Startup, purchase/lease computers, extensive advertising

expenses e.g. banner advertisement, Search Engine Listing etc, and inventory
expenses are more important.

Proforma Cash Flow

Cash flow is the difference between cash receipts and cash payments (not all sales are
made in cash and not all bills are paid in cash)

Deprecation expense dont account for cash outlay, similarly in an internet startup, fee
going as merchant charges through credit card transactions sales are not received by
the companies.

Using profit as the only measure of a success may mislead if there is a negative cash
flow

Mostly used method for calculating cash flow is Indirect method, objectives of which is
to understand that there are some adjustments that need to be made to the net income
based on the fact that actual cash may or may not have actually been received or
disbursed (figure 10.5)

Monthly projections of cash flow shall be prepared.

If disbursement are more than receipts, entrepreneur a has to borrow or use cash in
bank an if receipts are more, he shall invest in short term or deposit in banks

It is difficult to project cash flows on exactly on the basis of monthly receipts and
disbursements. One easy method is anticipate that 60% of sale in each month is
received as cash and 40%^ in the subsequent month.

Per month cash flow helps in determining level of borrowings and surplus cash can be
used to repay any debt or invested in highly liquid assets or used to purchase any new
equipment.
Proforma Balance Sheet

Summarizes the projected assets, liabilities and net worth of the business. It depicts the
situation of the business at end of the First year.

Assets represents items that are owned or available to be used by the business.
Divided in to Current Assets, that are highly liquid assets including cash or can be
converted in to cash and consumed in a period of less than one year. Fixed Assets are
tangible and will be used over a long period of time.

Liabilities represents every thing that is owed to the creditors. Current Liabilities are
those which are due within a year whereas Long term Liabilities includes loans/debts
taken by the business for a long time period.

Owner Equity represents excess of all assets over all liabilities showing net worth of the
business. It is the amount invested by the owner. Profits are shown as Retained
Earnings in the Proforma Balance Sheet.

Break Even Analysis

Break Even is the volume of sales where the venture neither makes a profit nor incur a
loss. This point dictates volume of sales need to cover Total Variable and Fixed
Expenses.

It is important to find out when a profit may be achieved thus showing financial potential
for the startup business. Break Even analysis shows how much units must be sold or
how much sales volume must be achieved in order to break even.

Determining the Break Even Formula

Total Revenue (TR) = Total Cost (TC)

Where TR = Selling Price x Quantity (SP x Q)
And TC = Total Fixed Cost (TFC) + Total Variable Cost (TVC)
SP x Q = TFC + TVC
where TVC = Variable cost per unit x Qty (VC/Unit x Q)
SP x Q = TFC + VC/Unit x Q
(SP x Q) VC/Unit x Q = TFC
Q(SP VC/Unit)) = TFC
Q = TFC/SP-VC/unit
Which is the break even quantity

There is a major problem in declaring which cost is variable and which is fixed.
Reasonably deprecation, salaries, wages, rent and insurance are considered as fixed
whereas materials, selling expenses and direct labor are taken as variable costs.

Companies having more than one product, Break Even is calculated for every product
differently.
Proforma Sources and Uses of Funds

Summaries all the projected sources of funds available for the venture and how these
funds will be disbursed.

Purpose is to show how net income and financing were used to increase assets or pay
off debts.
Typical sources of funds are from operations, new investments, long term borrowings
and sale of assets. Profit is also included as source of fund and deprecation is added
back as it does not go out of pocket.

Applications of funds may include increased assets, retire long term liabilities, reduce
owner equity and pay dividends.

The statement of Proforma Sources and Application of funds statement helps the
entrepreneur and investors in understanding the financial well being of the company
and effectiveness of financial management policies of the company.

Software Packages

Used for tracking financial data and generate financial statements. Other purpose may
include check writing, payroll, invoicing, inventory management, bill paying, credit
management and taxes. They are helpful in presenting different scenarios and to asses
their impact on the Proforma statements. MS Excel, Quick Book, Peach Tree
Accounting, MS Financial Manager are few good options as ready made packages.

Startup Company shall select very simple and easy to use soft wares.
 Chapter 13.

Entrepreneurial Strategy; Generating and Exploiting

New Entries

Stage 3: Feedback loop of Resources

Knowledge Entry Strategy

Resource Assessment Risk Reduction FirmFirm

Bundle of new entry Strategy Performance
Performance
opportunity

Other
Resources Organization

Stage 1 New Entry Generation Stage 2 New Entry Exploitation

NEW ENTRY:

1. Offer established products in new market.

2. Offer new market to new or established market.
3. Creating a new organization.

Three Stages:

1. Generate new entry opportunity.

2. Exploit new entry opportunity.
3. Feedback loop.
GENERATION OF NEW ENTRY STRATEGY:
Resources as a source of competition advantage.

Resources are the inputs to production process and are basic building blocks to a firms
performance e.g. machinery, capital, skilled labour and knowledge.
Resources are combined to form a bundle to achieve superior performance.

Characteristics Of Resources:

1. Valuable to pursue opportunities, neutralize threats and serve customers.

2. Inimitable: Difficult to substitute.
3. Rare: Possessed by very few competitors.

Creating A Resource Bundle, That Is Valuable, Inimitable & Rare:

The basis of entrepreneur resources is knowledge i.e. Out of the box thinking and to
come up with innovative ideas.

Type Of Knowledge:

There are two types of knowledge:

1. Market Knowledge:

Possession of Information, technology, know-how and skills that provide insight into a
market and its customers.
Entrepreneur share market knowledge with customers.
Use of market research and face to face interaction

2. Technological Knowledge:

Possession of information, technology, know-how and skills that provide insight into
waves to create new knowledge.
ASSESSING THE ATTRACTIVENESS OF A NEW ENTRY
OPPORTUNITY:
Assess whether the resource bundle is worth exploiting.

1. Information on a New Entry:

a) Prior knowledge and information search.

More prior knowledge means less

Large knowledge base helps in making the process fail.
More the information better it is but it is time consuming and costly.

c) Window of Opportunity

When window is open environment is favorable for entrepreneur to exploit but when it
gets closed, environment becomes unfavorable e.g. More competitors entering into
business.

2. Comfort With Making A Decision Under Uncertainity:

More information and window of opportunity work in opposite direction.

Error of commission that is negative outcomes from acting.
Error of omission that is negative outcomes from non-acting.

3. Decision To Exploit Or Not To Exploit The New Entry:

It depends on whether sufficient information for decision making is available and

window of opportunity is still open.
ENTRY STRATEGY FOR NEW ENTRY EXPLOITATION:

Being First First Mover:

Advantages

1. First mover develop a cost advantage that is produces in a great volume and
reducing its cost (Economics of scale)
2. First mover face less competition that is market share lost to competitor is less
than market growth rate.
3. First mover secures important channels that are supplier and distributor.
4. First movers are better positioned to satisfy customer that is selection of target
market and establishing products.
5. First mover gain expertise through participation that is learn and improve
monitor changes and built networks.

Disadvantages

1. Environmental Instability:

If the resource bundle and external environment fit, the firm is rewarded with superior
performance.

Environmental changes are taken place:

a) Demand Uncertainty:

Under estimating or over-estimating the demand that is potential size of the market and
growth rate.
Changing customer choices and tastes.

c) Technological Uncertainty:

Whether the technology will perform as expected and whether new technology will
make previous outdated.
Introduction of superior technology.

c) Adaptation:

Adaptability to new environmental condition.

Entrepreneurs needs to creates a balance between persistence and flexibility.
2. Customers Uncertainty:

Uncertainty of the consumer how to use the product and whether it will perform as
expected.
Customers like most people avoid uncertainty.

Strategies to Reduce Uncertainty:

Advertising and comparison marketing.

Create a frame of reference for entirely new products.
Use of demonstration and documentation for How To use advice.

3. SHORT LEAD TIME:

Lead time is the grace period that the first mover gets over its competitor for entering
first.

Suggestions:

Build customer loyalties.

Build switching costs e.g. frequent flyer programs or frequent buyer programs.
Protecting product uniqueness through patent, trade marks and copy rights.
Securing access to important sources of supply and distributor.
RISK REDUCTION STAREGIES FOR NEW ENTRY
EXPOITATION:
Risk is the probability of and magnitude of downside loss.
Major risk are cost due to market demand, technological development and competition.

1. MARKET SCOPE STRATEGY:

a) Narrow Scope Strategy:

A small product range to a small number of customer to satisfy a particular need.

Characteristics:
Customize products and high level of craftsmanship. Thus differentiating from large
competitors.

Standardized vs Customized

Risks:
Mass marketer may jump into this profitable niche.
Demand or market do not grow.

b) Broad Scope Strategy:

Offering a range of products across many different market segments.

More stable demand.
Reduces risk associated with customers uncertainty and market uncertainty.
Unsuccessful products can be drop.
Risk is increased competition.
2. IMMITATION STRATEGY:

Copying practices of other firms.

Capitalizing of experience of other.
Research and copy. (R & C)
Develop the skills required to be successful and not to start from scratch.

Types

1. Franchising:
Use of proven formula from a franchiser.

3. Me Too:

The established company holds a good position, so me too try to build advantage
through minor variations e.g. Aquafina launch Pepsi.

Benefits
1. Reduce cost of R & D.
2. Reduce customer uncertainty.
3. Legitimate entry.

Difficulties
1. Organization cultures are different.
2. Legal action by others.

3- MANAGING NEWNESS:

Challenges for new Organizations:

New organization fails costs in learning new task.

Over-lapping responsibilities or gaps in responsibilities.
Absence of informal structures.

Strategies:

Need for training and education of employees.

Learn How to learn is very important.
Adaptability and Flexibility.
 Chapter 14.
STRATEGIES FOR GROWTH AND MANAGING THE
IMPLICATIONS OF GROWTH

GROWTH STRATEGIES:
A new entry in terms of new product or new market.
Benefits of growth include capture market share, new customers and first sales.

1. Penetration Strategy:

Encouraging existing customers to buy more of the firms current product. E.g. Repeat
purchase and increased usage

2. Market Development Stratey:

Selling existing product into new market

i) New Geographical Market:

Selling existing product into new location

ii) New Demographic Market:

Offering product to different demographic group on the basis of income, living, age, sex
or education

iii) New Product Use:

Finding new uses of existing products e.g. mobiles, four wheel drives.

3. Product Development Strategy:

Offering new product to existing marketing customers.

Firms know their existing customers well and also uses same distribution channels e.g.
Aquafina by Pepsi, Kinley by Coca-Cola

4. Diversification Strategy:

Offering a new product to new market

Types:

Backward Integration:

Moving a step back (up) in the value added chain towards raw material. E.g. a finished
good manufacturer becomes wholesaler of raw material.
Forward Integration:

Moving a step forward (down) in the value added chain towards the customers. E.g.
finished good manufacturer becomes finished good wholesaler.

Horizontal Integration:

Occurs at same level of value added chain but simply involves a different but
complementary value added chain. E.g. A washing machine manufacturer

ECONOMIC IMPLICATIONS OF GROWTH:

Becoming a big business does not require growing public, small businesses also grow.
Business failures do not show the negative outcome of an economy even it helps by
providing learning experience to other entrepreneurs.
Good performing economics require high risk and high potential opportunity.

IMPLICATION OF GROWTH FOR THE FIRM:

BENEFITS OF GROWTH:

Production efficiency
Better bargaining power
Stable and prestigious company.

PRESSURE OF GROWTH:

i. Pressure on Financial Resources:

Growth requires large cash and stretch financial resources of the firm.

ii. Pressure on Human Resources:

Problems of employees moral employee burnout and increased employee turnover.

iii. Pressure on the Management of Employees:

Both growth results in changes required in management of employees that is
decentralization which is difficult to be borne by the entrepreneur

iv. Pressure on the Entrepreneurs Time:

Time cannot be stored, rented, hired or bought, yet it is a very important resource of the
entrepreneur.
1. OVERCOMING PRESSURES ON EXISTING FINANCIAL RESOURCES:

Acquired new resources and better manage existing resources.

Financial Control:
Financial control techniques:

i. Managing Cash Flow:

Prepare monthly cash flows and compare actual with the budgeted ones.
Prepare a daily cash sheet.
Use of Security Analysis that is a room for +- 5% shall be kept.
Find the reasons of deviation and have a tight control.

ii. Managing Inventory.

Too much inventory drains OUT cash flow and creates problems of storage and
transportation whereas too less inventory results in lost sales and unhappy customers.
Better use a software system for inventory management.
Commonly used methods are FIFO & LIFO.

iv. Managing Fixed Assets:

Fixed assets require servicing and they depreciate as well so entrepreneur needs to
keep them in good working condition.

iv. Managing Cost and Profits:

Established cost standards as per the industry and compare actual with the budgeted
amounts for that time period.
Find ways to reduce the cost and find causes of high costs than budgeted.

v. Taxes:

Timely submission of Federal and State Taxes and it is suggested to me a tax

constants.

vi. Record Keeping:

Use of software and computers for keeping records.

Databases
Important records are customer data, supplier data, employees data and sales data.
2. OVERCOMING PRESSURES ON EXISTING HUMAN RESOURCES:

Initially entrepreneur does the hiring by himself and later he may use a professional
employer organization (PEO).
Decision to have how many people as permanent employees and how many part times.
Prepare and maintain employee feedback system.
Maintain corporate culture that is stories and rituals of organization.

3. OVERCOMING PRESSURES ON THE MANAGEMENT OF THE EMPLOYEE.

The management shall go for participative style of management that is including others
in decision making.

Advantages of Participative Style of Management:

i. Making information processing fast.

ii. Increases problem solving skills.
iii. Increase motivation of employees.
iv. Increases initiatives.

Activities To Ensure Participative Style Of Management:

i. a We approach.
ii. Communicate with Employees:
The open communication builds trust and reduces fear.
iii. Provide Feedback:
A constructive and honest feedback towards employees for improvements
iv. Delegate some Responsibility to others:
Delegation of authority and decision making at lower level of management
v. Provide Continuous Training for Employees:
To increase employees abilities and capacity to improve
4. OVERCOMING PRESSURES ON ENTREPRENEURS TIME:

Time management is a process of improving an individual productivity to more efficient

use of time.

BENEFITS:

i. Increased Productivity:
Focus on important tasks and have sufficient time for them
ii. Increased Job Satisfaction:
Increased job satisfaction, completion of important tasks results in job satisfaction
iii. Improved Inter-personal Relationship:
Spending quality time allowing improved relationships outside and inside organization
iv. Reduced Time Anxiety and Tensions:
Reduced tensions, anxiety and freeing up of entrepreneurs
v. Better Health:
Less psychological and physiological strain on body and mind

BASIC PRINCIPLE OF TIME MANAGEMENT:

i. Principle of Desire.
ii. Principle of Effectiveness.
iii. Principle of Analysis.
iv. Principle of Teamwork.
v. Principle of Prioritized planning.
vi. Principle of Re-analysis.

IMPLICATIONS FIRMS GROWTH FOR THE ENTREPRENEUR

Some entrepreneurs lack the ability to make the transition, others are able but unwilling.
Put a halt to growth for some time.

A CATEGORIZATION OF ENTREPRENEUR AND FIRMS GROWTH

Actual Growth f the Firms:

i. The entrepreneur possess both ability and aspiration to grow
ii. Unused potential for Growth:
Ability is present but no aspiration
iii. Constrained Growth:
No ability but aspiration to grow (Most dangerous situation)
iv. Little Potential for Firm Growth:
Neither ability nor aspiration