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Ø ESTABLISHING ENTREPRENEURIAL SYSTEMS
FUNDAMENTAL OF ENTREPRENEURSHIP
STEPS
1. Search for business ideas
2. Process the idea
3. Select the idea
4. Assemble the necessary input resources
5. Establish the enterprise
• IDEA SELECTION
• analysis of feasibility report. The following factors also taken into considerations:-
1. Products whose imports are banned or restricted by the government
2. Products which can be exported easily and profitably
3. Products whose demand exceeds supply
4. Products in which the entrepreneur has manufacturing and marketing ability
5. Products which showed high profitability
6. Products favored by the industrial policy
7. Producst for which incentives and subsidies are available
• INPUT REQUIRMENTS
1. INFORMATION AND INTELLIGENCE:-
a. Size and nature of demand for the product or service
b. Volume and sources of supply
c. Profit cost volume relationship
d. Sources of raw material
e. Type and suppliers of technology, machinery and equipment
f. Number and types of personnel required
g. Nature and degree of competition
h. Government policy and regulations
2.FINANCE:-
1. Fixed capital
2. Working capital
3. Two main methods for estimating the funds:-
A. Cost theory: under this method,financial requirements of an enterprise are the
aggregate of fixed assets,current assets,intangible assets. The total expenditure is estimated
B. Earning theory:-in this method,the capitalization of a company is equal to
the capitalized value of the estimated earnings. Like if the average profit is 30 lacs and
return required is 25 % and then amount of funds one crore 20 lacs
4. Sources
5. Capital structure
3.PERSONNEL: