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ENTREPRENEURSHIP

 Entrepreneurship; is the means by which new organizations are


formed, therefore means with which wealth and job creation
mechanism are initiated.
 CHARACTERISTICS
 Innovative, Creativity, proactive, Autonomous, Assertiveness, risk
taker, hard work, optimistic, initiative.
 Destined for immediate feedback
 High degree of commitment
Entrepreneurial decision process
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PULL FACTORS
 Perception of advantages
 Spotting opportunities
 Government policies
 Motivation
 Influenced
PUSH FACTORS
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 Job dissatisfaction
 Joblessness
 Lay off
 Retirement
 Boredom
TEN MYTH ASSOCIATED WITH ENTREPRENEURSHIP
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 Entrepreneurs are doers not thinkers


 Entrepreneurs are born and not made
 Entrepreneurs are either inventors or innovators
 Entrepreneurs are academic and social misfit
 Entrepreneurs must feet the profile
 All you need is money to be an Entrepreneur
 All you need is luck to be an Entrepreneur
 Ignorance is a bliss for an Entrepreneur
 Entrepreneurs seek success but experience high failure rate
 Entrepreneurs are extreme risk takers(Gamblers)
FACTORS FAVOURING ENTREPRENEURSHIP
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 Developed Infrastructure
 Protective and promotion policies
 Growth in Education- Science, Technology and Management
 Risk taking abilities
 Hunger for Success
 Environmental/Cultural factors
 Globalization
Business Opportunity
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 An opportunity is defined as a favourable set of circumstances that


creates a need for a new product or service(Business)
 A business opportunity is said to exist when there is a room to offer a
product or a service in a particular market, which fulfils customers. In
this sense, a business opportunity is the chance to do something
differently and better.
 QUALITIES OF AN OPPORTUNITY
 Identify- product or service
 Evaluate-choices, Environment
 Selecting- what product, customers, Environment
Sources of opportunities
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 Customers
 Members of the distribution
 Technical people
 FORMS OF OPPORTUNITIES
 New products and Services
 New methods of production
 New ways of organizing
 New raw materials
SOWT ANALYSIS
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Strengths and weaknesses


Product pricing
Quality of the product
Skills and experience of workers
Location of the business
Availability of labour
Availability of capital
The distribution range
Production capacity
Customer awareness about the brand
Opportunities and Threats
Competitor’s availability
Government policies and programmes
Supplier’s prices
Availability of lending institutions
Availability of inputs at all times
Exit of the major competitor
INDUSTRY ENVIRONMENT- PORTER’S FIVE FORCES
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 Entry Barrier
 Supplier power
 Substitute availability
 Competitive rivalry
 Buyer’s power
 OPERATING ENVIRONMENT
 Competitive
 Creditors
 Customers
 Labour
 Suppliers
Entrepreneurship Vs Small businesses
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 Creativity
 Innovation
 Inventors
 High risk taker
 Higher profits
 Substantial wealth creation
 High speed of wealth creation
DEADLY MISTAKES BY ENTREPRENEURS
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 Luck of experience
 Lack of strategic management
 Poor financial control
 Weak marketing efforts
 Failure to develop an effective business plan
 Lack of inventory control
 Incorrect pricing
 Fear to make decision
Reasons for writing a business plan
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To convince oneself that the new venture is


worthwhile undertaking
To assist the management in goal setting and long
range planning
To attract investors
To explain the business to other companies with
which it would be useful to create an alliance or
contract
Used for lobbying funds from lending institutions
e.g., Banks
Business plan components
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1) Title Page
Business name and address
proprietor’s name and address
Business form
Business activity
2) Table of Content
3) Executive summery
Technical
CON’T
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Marketing
Financial and
Managerial details
4) Company description(Location, strategy and goals)
5) Product/ Service (should stress the characteristics and
benefits)
6) Market and competition
The Range of markets
The competitiveness of the industry(SWOT Analysis)
7) Marketing and Selling strategy( promotions,
advertising, discounts and free deliveries)
CON’T
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8) Operating plan
Trends of Production per day, location
9)Management
 Positions , qualification and experience required
10) Financial plan
Trade profit and loss account
Balance sheet and
Cash flow statement
LEGAL FORM OF BUSINESS ENTITIES
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1. Sole proprietorship
Advantages
 Easy to start and register
 The cost of starting it is low
 All the business profits belongs to the owner
 The owner makes decisions
 Easy to discontinue
 Relative freedom from the government control
 Freedom from corporate business taxes
CON’T
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Disadvantages
Unlimited personal liability
Limited access to capital
Limited skills and ability
Lack of continuity for the business
2.Partnership
A business entity formed by two or more people.
Regulations under partnership Act of 1890
All partners have an equal vote in how the business should run
All partners have invested equally in the business
Partners will not receive a salary
Partners will not receive interest on their capital invested
CON’T
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Advantages
Easy to form, as legal formalities required are few and expenses are low.
Complementary skills
The prospects of sharing risks
In case of sickness of one partner, the other partner fills the gap
Larger pool of capital
Disadvantages
Sharing of profits
Unlimited liability
Delayed decision making process
Bind by the acts of one partner
Lack of continuity.
CON’T
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Limited Company
The qualities of a limited company are; (Perpetual existence, Limited liability,
Incorporated of registration).
Advantages
Limited liability
Easier to finance and sell share
Greater status and credibility
Shareholders not personally liable
Transfer of ownership
 Unlimited life
Disadvantages
Cost and complexity of legal requirements
Profits are shared among the shareholders
Business pay tax on profits and shareholders pay tax on dividends
Extensive government regulations
CON’T
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Cooperatives
A cooperative is an autonomous association of persons united voluntarily
to meet their common economic, social and cultural needs and aspirations
through a jointly owned and democratically controlled enterprise.
Advantages
Limited liability
The cost of registration is very low
Shared losses and risks
Disadvantages
Poor performance record
Political interference and internal politics
Decision making is slow
The procedure for its formation is slow