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Evolution of entrepreneurship
Before having the present definition the term of
entrepreneur was related to a lot of assertions.
Agricultural entrepreneur
Industrial entrepreneur
essentially a manufacturer who identifies the potential
needs of customer and sales a product or service to meet
the market need.
CONTINUE
Classification According to Motivation:
Pure entrepreneur: is an individual who is
motivated psychological and economic reward.
Induced entrepreneur: is the one who is induced to
take up entrepreneurial task due to the policy
measures of the government that provides assistance,
incentive and necessary overhead facilities to start a
venture.
To the society
Using resources properly
Employment
Minimizing toxic level
CONTINUE
To the Enterprise
Survival and growth
Profit
Company image
Fair compensation
The Process of Entrepreneur
Small Businesses
Meaning of Small Businesses
The definition of small business differs from country to
country. There may even be different definitions used
by different agencies in one country.
Market share
Independence the owner has control of the business
himself
Determination of objectives
Planning
Sound organization must be staffed with sufficient
number of employees having different talents and skills
relevant to the business
Adequate capital
Efficient management
Research
Business good will
Satisfied customer success of a business depends to a
large extent on the function of affording the customers
with their varying needs and requirements.
Reasons for Failure of Small
Business
Many small businesses fail due to various reasons.
Lack of finance: the small entrepreneurs posses a weak
financial structure and find it extremely difficult to obtain
credit because of lack of collateral security.
Poor availability of infrastructure:
Obsolete technology most small business use old
technologies because they cannot afford better. As a result
the quality of their goods is inferior and the cost of
production is higher than
Marketing problems
Poor managerial and organisational skills
Brain Storming Exercise
Write two paragraphs about Entrepreneurship and
Small Business Management?
GROUP DISCUSSION
CRITICALLY EVALUATE SOMALILAND SMALL
BUSINESSES POBLEMS AND SUGGEST THE WAY
FORWARD or SOLUTIONS?
Avoiding pitfalls of small
businesses
Know your business in depth:
Have a good relation with stake holders
Prepare business plan
Managing financial resources
Understanding financial statement
Learn to manage people effectively (HRM)
Take up short professional courses in management
(entrepreneurship)
Be sensitive to your customers
Success requires
time and energy
from the entire
region
Recruit from outside
or grow locally?
Chapter Three
Weakness of franchisor
Absolute control cannot be exercised
Physical separation
CONTINUE
Merit of franchisee
Gets advantage of already established brand name
Easy to establish business using well developed system
Initial financial assistance
Opportunity to marketing training and counseling
Greater chance of success.
CONTINUE
De-merit of franchisee
Sharing profit in terms of royalty is mandatory
Strick adherence to standard operating procedures or
limited freedom
Restriction on buying others product.
DISCUSSION
WHICH BUSINESS YOU LIKED TO DEVELOP OR
INVEST?
CONSIDERING THE ADVANTAGE AND
DISADVANTAGE OF EACH ONE?
Chapter Four
Unlimited liability
Risk of implied agency: a dishonest or incompetent
partner may make, by his acts, misjudgments or faults,
the firm in difficulties because his acts would bind the
firm and the remaining partners.
Lack of harmony: as every partner has equal voice in
the management, every one would try to assert his
position and try to promote his personal interest
CONTINUE
Lack of continuity: the business can come to an end
due to death, retirement, or withdrawal of a partner for
any reasons like dissatisfaction, bankruptcy or any
serious disagreements
Non transferability of interest:
Lack of public confidence:
Joint Stock Company
(Corporation)
A joint stock company is essentially a group of persons
coming together voluntarily to carry on certain
business by organising themselves into a single entity
with a view to function as an artificial person to the
eyes of the law.
Features of Corporation
Difficulty of formation:
Lack of owners personal interest:
Delay in decision making
Fraudulent management
Taxation:
Expensive management:
Co-operatives
Co-operatives society is a voluntary association of
independent, economic units, has farms, business and
households to form a business organised, capitalized
and managed by, of and for its member patrons so as
to improve the members economic positions within
the existing system.
Features of Cooperative
Voluntary/open membership:
Equality of voting rights
Democratise control
Disposal of profit or surplus:
Service motto: a cooperative society is organised
primarily with the objective of rendering maximum
service to its members in a certain field. It does not
aim at profit at the cost of its members, for it is formed
basically for providing certain essential facilities to
members.
Principle of cooperative
President or Chairman;
Vice-president or vice chairman
Secretary; and
Treasurer.
Types of Cooperatives
The principal types of cooperatives are the following:
Consumers Cooperatives
Producers cooperatives (industrial cooperatives)
Marketing cooperatives
Housing cooperatives
Credit Cooperatives
Advantage of Cooperatives
Democratic management:
Limited liability
Stability and Continuity
General reserves
Exemptions and privileges
Disadvantage of Cooperatives
Limited capital
Lack of managerial talent
Lack of motivation:
Delay in decision-taking and Implementation
Lack of secrecy and Government regulations
Public Enterprises
Meaning of public enterprises
A public enterprise is one that is organised by a
federal, state or city government for the purpose of
conducting public business.
Characteristics of Public
Corporation
Primarily service motto
Government financed
Collective ownership
State management
Public accountability
Chapter Five
Focus groups:
Brainstorming:
Checklist:
Problem inventory analysis
Study and process Idea
While evaluating the major points to be considered
are:
Technical feasibility that is the possibility of
production with the available skill and technology.
Commercial viability of the idea based on cost and
CONTINUE
profitability. It evaluated the tradeoff between cost and
income to judge the attractiveness of a business idea.
Selecting the best Idea
Product where the entrepreneur has firsthand
manufacturing experience.
Product where the entrepreneur has the marketing
work experience with the particular product.
Product which is perceived as highly profitable.
Product where government has banned imports.
Product where the export demand is high and with
good margins
CONTINUE
The raw material requirement of an existing nearby
big unit.
Products on which government declares sub sides
incentives, other industrial/financial benefits.
Products where there is demand growth.
Products that are easy to distribute.
Step two: Analysis of Internal and External
environment(SWOT Analysis)
Managing Enterprise
Production and Operation Management