Professional Documents
Culture Documents
During the same period - the Industrial Revolution in England was evolving (where the entrepreneur was playing a visible role in risk taking and the transformation of resources) Entrepreneurship is an interdisciplinary concept. It contains various approaches (diversity of theories) that can used to increase ones understanding of the field.
Entrepreneurship:
"One who undertakes to start and conduct an enterprise or business, usually assuming full control and risk." A person who takes initiative for a business project, organises the resources it requires, and assumes the risks it entails. The 3 important elements in the definition are: - initiator - organiser - risk-taker
Job Satisfaction - working for someone else can often mean being engaged in tasks that provide no job satisfaction. - the job of entrepreneur provides characteristics such as skill variety, task significance, autonomy - which in turn results in a level of work satisfaction Being in Control - many entrepreneurs resent the idea that someone can control them, make decisions for them. - an important part of the appeal of small business ownership is that the individual can make his or her own decision
Energy Level - making a business succeed requires work - lots of hard work. - entrepreneurs typically have the energy level necessary to accomplish great amounts of work The Need to Achieve - one human quality or trait that is nearly synonymous with entrepreneurship
Others include:
Achievement Orientation Strong Verbal and Numerical Skills Selling Skills Problem Solving Abilities Strategic Planning Perseverance
It should be complete, sincere, factual, well structured and reader-friendly It is normally updated annually and looks ahead for a period of usually three to five years, depending on the type of business and the kind of entity. It also target changes in perception and branding by the customer, client, tax-payer, or larger community. When the existing business is to assume a major change or when planning a new venture - a 3 to 5 year business plan is essential
a. It helps you to identify better your target clients, outline your market segment, b. shape your pricing strategy and define the competitive conditions under which you must operate in order to succeed. c. ensures that all these considerations are consistent and properly harmonized. d. the business plan process often leads to the discovery of a competitive advantage or new opportunities as well as deficiencies in the plan.
Contd
2. Mutual understanding within the management team. 3. Determining financial needs and applying for funds 4. Approval from board of directors/shareholders
1.Commercial Banks 2.Private investment funds 3.Development funds 4.Multilateral development institutions. 5.Private investors. 6.Technical assistance credits/grants
Contd
The Chief Executive Officer (CEO) The marketing and sales manager The development and production managers The financial manager
Other enterprises which do not have adequate internal resources and hire external consultants to guide and facilitate the business planning process.
2. Developing a mission
3. Getting ready
4. Setting goals
Getting ready
Starting the actual work of preparing the business plan. Includes: Appointing a coordinator Hiring a facilitator Defining tasks Identifying team members. Gathering information
d. Setting goals
Is a prerequisite for the preparation of the business plan goals should be time-bound, realistic and measurable.
basically involves synthesizing and harmonizing your marketing, sales, development, manufacturing, operations and financing targets in such a way as to enable the enterprise to meet its overall objectives. This is usually conducted in an iterative process until full consistency of all elements of the business is achieved. f. Setting employee objectives One of the most important actions after your business plan has been completed Use it as a basis for setting the objectives of units and individuals in your firm Individual objectives (for every employee) should be fixed in writing and the results of the work should be monitored and assessed periodically. These should form the basis for the financial compensation of the employee.
Introduction
The dynamics of change is a critical part of the entire change process in any organization Any system or implementation plan, especially changes in the business environment have numerous dynamics The efficient identification and management of such dynamics are essential for the successful implementation of the change itself The dynamics not only attribute to the change but also to the overall business process
1. EVOLUTION
Under this change the dynamics involving the restructuring of the top level management and the overall restructuring of the organization are discussed The management structure is actually evolving from the existing structure rather than a revolutionary approach where the entire system is created from scratch The short term and mid-term objectives described in the business plan justify that the changes to the management structure is an evolutionary process.
Structural Implications
This is the category where the restructuring of the senior management is analysed The major element is the definition of the role of each individual in the senior management team The dynamics of the senior management in the reorganization directly effects the overall evolution process itself
Integration
Integration is the process of linking the senior management with the middle management and the operational staff in order to effectively implement the proposed changes in the organization It contribute to the actual deployment of the management reorganization through the restructuring of the middle management and the operational staff
Recruitment
It is a critical element for implementing the change process Recruitment of personnel to accomplish the changes is necessary in order to achieve the objectives of the organization Training programme can be organized for the existing personnel in order to accomplish the company's new ventures
2. LIFECYCLE
The life cycle changes are purely operational and focus upon the operational staff and their contribution to the production It will not only reflect upon the operational efficiency and motivation of the staff but mainly attribute to the management efficiency and the success of the changes introduced
Single Workshop
It is a dynamic element of the life cycle Management of the work shop by the manager and the subordinates under one roof is not only an initiative to achieve equal treatment and transparent operation of the production process but also increase the team working skills of the staff
Facilities
It is important to accomplish the hygiene, health and safety objectives of the organization in order to effectively motivate the personnel for effective performance in the workshop The company can increase its productivity by nurturing the efficiency of the operational staff through continuous performance reviews, support and motivating
Choosing a business that isn't very profitable. Even though you generate lots of activity, the profits never materialize to the extent necessary to sustain an on-going company.
Inadequate cash reserves. If you don't have enough cash to carry you through the first six months or so before the business starts making money, your prospects for Success are not good. Consider both business and personal living expenses when determining how much cash you will need.
Failure to price your product or service correctly. You must clearly define your pricing strategy. You can be the cheapest or you can be the best, but if you try to do both, you'll fail.
Overdependence on a single customer Putting up with inadequate management While poor management is cited most frequently as the reason businesses fail, inadequate or ill-timed financing is a close second.
Also think are you passionate about this particular business, or just about being in business?
Education and experience are both important success factors. Identify where you are deficient and acquire what you don't have.
Because there are highly educated business failures, as well as many highly successful business owners who are not very well educated. The best candidates for success are those who have adequate education and
Without determining your key success factors, you run the risk of needing to make expensive changes of direction later on as you have not aligned your objectives to the success of your business. You must sit down and think what you really need to do to make your dream business a success.
Evaluate each and every product that you sell and determine if you are selling them profitably. If not, you may need to identify how to make its current sales profitable, whether by reducing your costs for that product or increasing its price.
3. DEVELOP NEW PRODUCTS WHILE MAINTAINING THE HIGH QUALITY OF EXISTING PRODUCTS. Ensure that your products are created or chosen in response to the needs of your customers. Ask for customer feedback through surveys or direct interaction with them to find out what are the items that they need and expect from your business.
4. FIND AND RETAIN HIGH-VALUE CUSTOMERS. The 80-20 rule of business states that 80 percent of your business will come from 20 percent of your customers. It is therefore critical that you exert the extra effort to ensure that you retain the business of your top customers.
5. CREATE AND MAINTAIN THE HIGHEST LEVEL OF CUSTOMER SATISFACTION. A very important success factor needed to sustain your business is to provide the best service to your customers. Satisfied customers are more likely to come back to you. Better yet, give your customers more than they expect.
You have to be passionate about your business to be successful, but take care not to fall in love with the wrong business
Feasibility Planning
MODULE 2
Feasibility Planning??
A feasibility planning is a brief formal analysis of a prospective business idea.
The goal is to give the entrepreneur a clear evaluation of the potential for sales and profit for a particular idea.
A feasibility plan is that part of a business plan that will help you and your investors determine if your idea will thrive.
Focus on the proposed plan of action and provide a detailed estimate of its costs and benefits.
Internal Factors
Infrastructure Project scope Labor relations Project location Project leadership Organizational goal Management approach Technical manpower supply Resource and capital availability
External Factors
Public needs Market needs National goals Industry stability State of technology Industrial competitors Government regulations
Summary of Project Plan Objectives Approach Policies and Procedures Contractural Requirements ( document problematic areas ) Project Schedule Resource Requirements Performance Measures Contingency Plans Tracking , Reporting , and Auditing
Planning Phase
Define problem
Analysis Phase
Gather information
Prioritize requirements
Design Phase
Design and integrate the network Design the application architecture Design the user interfaces Design the system interfaces Design and integrate the database Prototype for design details Design and integrate the system controls
Implementation Phase
Construct software components
Convert data
Support Phase
Maintain the system
Technology Development
Organization
Organization
Organizational Objective
Organizational Objective
Preventing of Failures
Project Feasibility
Measure of how beneficial or practical the development of an information system will be to an organization . Process by which feasibility is measured Continuing process of feasibility assessment
Tests of feasibility
Need Analysis Process Work Engineering & Design Cost Estimate Financial Analysis Project Impacts Conclusions and Recommendations
Feasibility Dangers
lA
project that was once feasible may not remain so - why not? lFeasibilities can often conflict !
lBest
lWhat
solution can often be the most expensive lgood operational feasibility lpoor economic feasibility
Managing Expectations
Often most difficult aspect of a project Tool for balancing priorities Rows in matrix are project dimensions :
Cost Schedule Scope / Quality
Managing Expectations
Columns in matrix are the priorities :
Max or Min : most important Constrain : median importance Accept : lowest importance
Impossible to optimize all simultaneously ! Rule : 1 check per row & column
Expectation Management
Priorities Max or Min Constrain Accept
Cost: $20B Schedule: Deadline 12/1969 Scope / Quality: Man on the moon, return safely X
Tests of Feasibility
Operational Feasibility bHow well work in the
Technical Feasibility bHow practical is the technical solution? bHow available are technical resources and expertise?
Tests of Feasibility
Schedule Feasibility bHow reasonable is the project timetable? Economic Feasibility bHow cost-effective is project or solution? bCost-benefit analysis
the
Operational Feasibility
Questions to Ask bIs the problem worth solving? b bWill the solution to the problem work? b bHow do end users and management feel about the solution? b bHas a usability analysis been conducted?
Technical Feasibility
Questions to Ask bIs the proposed solution practical? b bDo we possess the necessary technology? b bDo we possess the necessary technical expertise? b bIs the schedule reasonable?
Economic Feasibility
Cost - benefit analyses bHow much will the system cost?
hDevelopment costs hOperation costs hMaintenance and support costs
bDo we possess the necessary technology? bDo we possess the necessary technical expertise? bIs the schedule reasonable?
Poe tB d e T ml t r j c u g t e pae
A th r Nm u o's a e As mt n su pio s P r o n l/Inr sr cuea s mt n es n e f a t u t r su pio s Inr sr cuea s mt n f a t u t r su pio s - I itia n twr a dr mtea c s u ga e c v r dinZ X r je t -n l e ok n e o c e s p r d s oee Y po c Po r m aica s mt n r ga mt su pio s - B d e c r e tlyc n in e p n e o ly - u g t ur n o ta s x e s s n - Rv n e tob e timte u o c mle no mr e s r e - ee u s e s a d p n o p tio f ak t uv y Wr s e ta de p nea s mt n okh e n x e s su pio s - Aea emn g r s lay( 0 2 $ - vr g a a e a r 2 0 $ ) - A n a e p n ein r a e - n u l x e s ce s - B n f a din ir c c s c a g sp r y a - e eits n d e t o ts h n e e e r - B n f ( sap r e ta eo wg s - e eits a ec n g f a e ) E p ne x e ss Pronl es n e B n f s( t3 % e eit a 2 ) Hr w r a d ae S fw r ot a e C mue Ua eC ss o p t r s g ot Ta in C ss r in g ot L r r R s uc s iba y e o r e Po r m a t n n ea dU ga eC ss r ga M ine a c n p r d ot Ta e C ss r v l ot A m isr t eC ss d in t aiv o t A m is a n d in tr tio Ps g, Fdx o ta e e e Cm u ic tio s o mn a n P b a nc s u lic tio o ts T t l A m isr t eC ss oa d in t aiv ot T t l D e tC s oa ir c o t In ir c C ss( t5 .5 ) d e t ot a 4 % Y a lyPo c C ss er r je t ot Ya 1 er Ya 2 er Ya 3 er Og n aio N m, D t r a iz t n a e ae
Cost Analysis
$5 0 7 ,0 0 3 % 0 % 3% 2 Ya 4 er Ya 5 er
Benefit Analysis
Benefit analyses bTangible benefits can be easily quantified . b bMeasured in terms of monthly or annual savings , or of profit to organization b bIntangible benefits more difficult to quantify .
Benefit Analysis
ngible Benefits Intangible Benefits ewer processing Improved customer goodwill errors Improved employee morale ncreased throughput time ecreased responseBetter service to communit steps limination of jobBetter decision - making ncreased sales educed credit losses educed expenses
Economic Feasibility
Payback analysis bHow long will it take to recoup the costs of this project? b hReturn on investment ( ROI ) analysis b bNet present value analysis
Feasibility Analysis
Compare candidate systems on basis of several characteristics bBetter analysts always consider multiple solutions
Cn id t 3 a d ae
P ,M W dw I V S in o s 2 0 c s s r es 0 0 la s ev r a dwr s tio s n ok ta n
C n s re lie t- ev r
H 4 Vd p PM e t la e pin r s r r tes
k y o r &mu e e b ad os
M S LD M S Q BS w 1 0 ar y d ith 0 G r a e c pb a a ility
Candidate 3
Score: 100
Technical Feasibility Technology: Assessment of maturity, availability, ability to acquire, and desirability of computer technology needed to support the candidate. Expertise: Assessment of the technical expertise needed to develop, operate, and maintain the candidate system Economic Feasibility Cost to Develop Payback period (discounted) Net Present Value Detailed Calculations
Score: 60
Stage I Initiation
In this stage, information technology is first introduced into the organization. According to Nolans article in 1973, computers were introduced into companies for two reasons. The first reason deals with the company reaching a size where the administrative processes cannot be accomplished without computers. Also, the success of the business justifies large investment in specialized equipment. The second reason deals with computational needs. Nolan defined the critical size of the company as the most prevalent reason for computer acquisition. Due to the unfamiliarity of personnel with the technology, users tend to take a "hands off" approach to new technology. This introductory software is simple to use and cheap to implement, which provides substantial monetary savings to the company.
Cont..
Stage I Key points: User awareness is characterized as being "hands off". IT personnel are "specialized for technological learning". IT planning and control is not extensive. There is an emphasis on functional applications to reduce costs.
Stage ||-contagion
Even though the computers are recognized as change agents in Stage I, Nolan acknowledged that many users become alienated by computing. Because of this, Stage II is characterized by a managerial need to explain the potential of computer applications to alienated users. This leads to the adoption of computers in a range of different areas. A problem that arises in Stage II is that project and budgetary controls are not developed. Unavoidably, this leads to a saturation of existing computer capacity and more sophisticated computer systems being obtained. System sophistication requires employing specialized professionals. Due to the shortage of qualified individuals, implementing these employees results in high salaries. The budget for computer organization rises significantly and causes concern for management. Although the price of Stage II is high, it is evident that planning and control of computer systems is necessary.
Cont
There is a proliferation of applications. Users are superficially enthusiastic about using data processing. Management control is even more relaxed. There is a rapid growth of budgets. Treatment of the computer by management is primarily as just a machine. Rapid growth of computer use occurs throughout the organization's functional areas. Computer use is plagued by crisis after crisis.
Stage |||-control
Stage III is a reaction against excessive and uncontrolled expenditures of time and money spent on computer systems, and the major problem for management is the organization of tasks for control of computer operating costs. In this stage, project management and management report systems are organized, which leads to development of programming, documentation, and operation standards. During Stage III, a shift occurs from management of computers to management of data resources. This shift is an outcome of analysis of how to increase management control and planning in expending data processing operations. Also, the shift provides flexibility in data processing that is needed in a case of managements new controls. The major characteristic of Stage III is reconstruction of data processing operation.[1][2]
Cont..
There is no reduction in computer use. IT division's importance to the organization is greater. Centralized controls are put in place. Applications are often incompatible or inadequate. There is use of database and communications, often with negative general management reaction. End user frustration is often the outcome.
Stage 4-integration
Stage IV features the adoption of new technology to integrate systems that were previously separate entities. This creates data processing (IT) expenditure growth rates similar to that of Stage II. In the latter half of Stage IV, exclusive reliance on computer controls leads to inefficiencies. The inefficiencies associated with rapid growth may create another wave of problems simultaneously. This is the last stage that Nolan acknowledged in his initial proposal of the stages of growth in 1973.
Cont..
Stage IV Key points: There is rise of control by the users. A larger data processing budget growth exists. There is greater demand for on-line database facilities. Data processing department now operates like a computer utility. There is formal planning and control within data processing. Users are more accountable for their applications. The use of steering committees, applications financial planning becomes important. Data processing has better management controls and set standards.
Cont
Data administration is introduced. There is identification of data similarities, its usage, and its meanings within the whole organization. The applications portfolio is integrated into the organization. Data processing department now serves more as an administrator of data resources than of machines. A key difference is the use of term IT/IS rather than data processing..
Stage 6-maturity
In Stage VI, the application portfolio tasks like orderly entry, general ledger, and material requirements planning is completed and its structure mirrors the organization and information flows in the company. During this stage, tracking sales growth becomes an important aspect. On the average, 10% batch and remote job entry, 60% are dedicated to data base and data communications processing, 5% personal computing, 25% minicomputer processing.
Cont..
Systems now reflect the real information needs of the organization. Greater use of data resources to develop competitive and opportunistic applications. Data processing organisation is viewed solely as a data resource function. Data processing now emphasizes data resource strategic planning. Ultimately, users and DP department jointly responsible for the use of data resources within the organization. Manager of IT system takes on the same importance in the organizational hierarchy as say the director of finance or director of HR
The major implication of a market research is that the business man could formulate an exact plan to run his business. The assets required, human resource, capital all these could be found out. When new business ventures are taken up, a good market research could help to find the strength ,weakness,oppurtunities and threat facing it and work on it.
Business men could find various promotional activities to boost their business. They could also work on their finance, resource management to improve their business. The data collected could be used as a bench mark to identify other problems and alo for developing new strategies.
There are various steps in planning a new ventures. Establishing goals The first step in planning a new business venture is to establish goals that your nonprofit seeks to achieve with the business. Identify Business Opportunities the next step in the business planning process is to identify and select the right business.
Local Market Study Market study you will be able to identify gaps in existing products and services and unsatisfied demand for additional or expanded product and services Preparing own plan After the study from the data obtained a proper plan is formed and suitable strategies are formulated.
Implementing the plan Next step is implementing plans and objectives for the company to follow and looking at the financial status to check whether the plan adapted is good or not
The systematic and objective process of generating information for aid in making marketing decisions
MARKETING RESEARCH
Marketing research is the process of collecting information on any fact relevant to the market Market research is a systematic collection of information, its analyses and interpretation to strategize some relevant business decision like whether one should enter new markets, whether one should charge premium prices, what kind discounts would be more attractive to the customer etc
Need for MR
To identify the existing needs of the market To decide over introduction of new product or service in the market To direct the business plan To identify the potentiality of the market To understand growth rate of the market Consumer satisfaction
Pre-launch marketing
When you start thinking of launching your own businesses, there seem to be a million things to consider :Business names. Price of the product. Product quality. Market structure. Competitors market share. Consumers satisfaction.
Embryonic Stage
The initial stage, more accurately the inception state of the development of a venture, focusing on the initiation of the venture is generally known as the [Venture] Embryonic Stage. This stage is characterized by the focus on the development of the Product Technology dimension of the vision innovation space.
The actual object of the focus depends on the development-state of the product on the Product Technology Dimension as noted in the vision analysis. Usually, the dimension development state may be one of two states: The technology has been validated experimentally, or the technology is simply conceptual. In the former state, the object of the focus is on the optimization of the technology dimension; and in the latter state, the object of the focus is on the experimental validation of the dimension to be followed by the optimization.
By and large, a business is simply the profitably marketing of a product, and this phase of the Start-up Stage is concerned with creating of the capability of being in possession of the products to sell, creating of the business, and the establishing of the procedures or business practices/models on which to rest the operations of the business.
Although this phase seems to entail the making of several decisions, the phase is, by and large, not difficult, but as with every building process, must be thorough managed to set a good foundation before moving forward. The Execution Phase of the Start-up Stage generally focuses on the marketing of the company and products within the initial target market segment of the Embryonic Stage, creating repeat customers, and establishing the business critical mass necessary for the venture to thrive, and is effectively is the Market Entry Phase of the venture evolution. This Phase is the most critical phase of the venture development stages, because this is the phase in which most ventures fail, and has, to that end, been given special presentation.
This phase is the beginning of the onset of the implementation of the Growth Tactics Implementation Plan, hence the business is effectively put into a dynamic state: Relative to the Starting Phase when the venture, in essence, is in an inertial state, starting operations of the venture in this phase gets to put the venture into a dynamic state.
The Penetration Phase generally focuses on the marketing of the company and products to more customers within the market entry segments, and the optimization and implementation of the template manufacturing technology dimension as well as the expansion of production capacity for the newer products to meet the anticipated purchases of the prospective newer customers. The sale of the products to more customers of the initial market segment, otherwise the penetration into that initial market segment, gives this phase it name of Penetration Phase. This phase usually ends with the horizontal growth of the product, as the product is repeatedly customized to meet the needs of different customers within the initial market segment of market entry.
The Growth Stage generally focuses on marketing of the company and products for market entry into other target marketsegments as identified in the Growth Tactics Business Plan, expansion of product line consistent with the set of products defined as first generation products of the venture, and production capacity increases for the newer products and variants of established products based the customization during the Execution Phase of the Start-up Stage.
Include previous accomplishments and you have many. Summarize your agricultural experience
Personnel
Present Personnel needs What skills your Employees have Part-Time help to meet changing volume Training needs, costs
Market Summary
Competition
Summarize competition Outline your companys competitive advantage
Financial Plan
Cash Flow Statements-Include all Sources and Uses of cash. Dont forget the loans, the credit card consolidations, etc. Balance Sheets- Assets, Liabilities, Net worth Previous 3 years, (if you have them) Be consistent with your values Income Statement
Appendix
Resumes Job Descriptions Maps Letters of acceptance from Coop. Letters from related Department, others as needed Copies of leases, agreements, deeds !!!! Letters of Reference !!!
It is extremely difficult to develop and provide a highquality product or service without conducting at least some basic market research.
Market research has a variety of purposes and a variety of data collection methods might be used for each purpose. The particular data collection method that you use during your market research depends very much on the particular information that you are seeking to understand.
Employees- Your employees are usually the people who interact the most with your customers. Ask them about products and services that customers are asking for. Ask employees about what the customers complain about. Comment Cards- Provide brief, half-page comment cards on which they can answer basic questions such as: Were you satisfied with our services? How could we provide the perfect services?
Competition- What is your competition selling? Ask people who shop there. Many people don't notice sales or major items in stores. Start coaching those around you to notice what's going on with your competition. Customers- One of the best ways to find out what customers want is to ask them. Talk to them when they visit your facility or you visit theirs. Documentation and Records- Notice what customers are buying and not buying from you. If you already know what customers are buying, etc., then is this written down somewhere? It should be so that you don't forget, particularly during times of stress or when trying to train personnel to help you out.
Focus Groups- Focus groups are usually 8-10 people that you gather to get their impressions of a product or service or an idea.
Surveys by Mail- You might hate answering these things, but plenty of people don't -- and will fill our surveys especially if they get something in return. Promise them a discount if they return the completed form to your facility. Telephone Surveys- Hire summer students or parttime people for a few days every six months to do telephone surveys.
Primary Research
Secondary Research
Primary Research
This kind of research involves the collection of new information by conducting market surveys, telephonic interviews, questionnaires and focus group interviews. This information is gathered by directly contacting the customers. This research is customised according to the research requirements of the company. Firms can gain insights about the target markets by means of focus groups, surveys, interviews or observation. Primary research is generally based on sampling techniques and requires statistical methodologies. The sample size could be as small as 1 percent of the market and thus the information and results gathered are highly accurate.
Secondary Research
Secondary research involves processing data that has already been collected by previous researchers. It refers to consultation of previous studies and findings such as reports, press articles and previous market research projects in order to come to a conclusion. This type of research is based on information gathered from studies previously performed by government agencies, trade associations, and other organizations. This type of research is less expensive as opposed to the primary research as it does not require new research methods.
Census Bureau- There is a vast amount of information available to you, and much of this is online. Chamber of Commerce- Get to know the people in your local office. Offices usually have a wealth of information about localities, sources of networking, community resources to help your business, etc. Department of Commerce- The Department has offices in various regions across the country and publishes a wide range of information about industries, products and services.
Ask Librarians- See the Directory of Associations, Sales and Marketing Management magazine, Statistics Index (SI), Encyclopedia Of Business Information Book, Standard & Poor's Industry Survey's and Consumer's Index. Trade and Professional OrganizationsOrganizations often produce highly useful newsletters for members, along with services for networking, answering questions, etc. Trade and Professional Publications- These have become much more useful as various trades become more specialized and their expectations are increasing for timely and useful information.
GROWTH STRATEGIES
A strategy based on investing in companies and sectors which are growing faster than their peers. The benefits are usually in the form of capital gains rather than dividends.
The growth strategy sets the goals and priorities for all other initiatives in an organization's growth programme. To grow successfully, a company must first define and focus on its "profitable core."
1. Market opportunities: Market opportunities arise from three key sources: discontinuities (such as regulatory change and technological breakthroughs), major trends (including demographic shifts and changes in consumer tastes), or latent demand for products not currently offered. This latent demand could be for entirely new products or new bundles of attributes based on an existing product.
2.Organizational Capabilities :
It include the company's existing capabilities, as well as those it could reasonably build.
3. Management commitment : It is critical to the long-term success of a growth strategy. At LP, we take stakeholder management very seriously and pride ourselves on building growth strategies with management beliefs and prejudices in mind.
Marketing plan
A marketing plan may be part of an overall business plan. Solid marketing strategy is the foundation of a well-written marketing plan. While a marketing plan contains a list of actions, a marketing plan without a sound strategic foundation is of little use.
Systematic futuristic thinking by management. Better co-ordination of a company's efforts. Development of performance standards for control. Sharpening objectives and policies Better prepare for students development.
WHAT IS PRICE?
To the consumer... To the consumer... Price is the cost Price is the cost of something of something
The price charged to customers multiplied by The price charged to customers multiplied by the the number of units sold. number of units sold. Revenue minus expenses Revenue minus expenses
Revenue = Unit Price Number of units sold Revenue pays for every activity Whats left over is Profit
Marketers must select a price that is not too high or not too low, a price that equals the perceived value to target consumers
u tt a tS S Q s P o u n it c ia ri b O g ts c e ju s e v iQ u to a tu S Q s P o u n ir c iP ri b O g tv c e ji s e v ic n i b O g t c e j s e u t a t S Q s P o u n i c i r b O g t c e j s e v
e lS a S ri O -a s e te n e il rj P d g n ic is b O ii tr c e jO s e v e le a S ri O -n s e td n e it rj P d g n iP c ie b O ic tv c e jr s e v g n i b O i t c e s e e l a S r O s e t n e i r P d g n i c b O i t c e s e v ir fP o rd P ri O -f to e tt n e ii rj P d g n iO c ib O ie ti c e jr s e v it fn o rd P ri O -P te e tc n e ir rj P d g n in c ii b O iO tv c e jg s e v b i t c e s e i f o r P r O t e t n e i r P g n i c b O i t c e s e v
Pricing Objectives
io fr o rP P e irt O -i tf d e tO n c ir rP P g n ii in fe o rP P e id rt O -e tt d e tr n c ii rP P g n ic g n i i f o r e i r O d e t n c i r g n i
Target Target Return on Return on Investment Investment
e jO b O e v ij tb c s e je b O e v it tc c s e v i s e j b O e v i t c s
Profit Maximization: Setting prices so that total revenue is as large as possible relative to total costs Return on Investment: Net profit after taxes divided by total assets
s e lS a S e il rO -a d e te n c is rP P g n iO s e lr a S e ie rO -i d e tn n c it rP P g n ie d c i r g n i s e l a S e i r O d e t n c i r g n i
e jO b O e v ij tb c s e je b O e v it tc c s e v i s e j b O e v i t c s
Market Share: A companys product sales as a percentage of total sales for that industry Sales Maximization
Short-term objective to maximize sales Ignores profits, competition, and the marketing environment May be used to sell off excess inventory
u tt a tS S Q s P o u n it c ia ri b O g ts c e ju s e v iQ u to a tu S Q s P o u n ir c iP ri b O g tv c e ji s e v ic n i b O g t c e j s e u t a t S Q s P o u n i c i r b O g t c e j s e v
Demand Demand
The quantity of a product that The quantity of a product that will be sold in the market at various prices for a will be sold in the market at various prices for a specified period. specified period.
Supply Supply
The quantity of a product The quantity of a product that will be offered to the market that will be offered to the market by a supplier at various prices by a supplier at various prices for a specific period. for a specific period.
Price
2.50
D Price D
20
40
60 80 100 120
Quantity supplied
Price Equilibrium
2.50 2.00 D Surplus S
Price
Price Equilibrium
20
40
60
80
100
120
Quantity demanded
Elasticity of Demand
Elasticity of Demand
Price Goes... Price Goes... Down Down Up Up Up or Down Revenue Goes... Revenue Goes... Up Down Up Down Stays the Same Demand is... Elastic Inelastic Inelastic Elastic Unitary Elasticity
Discounting Discounting early purchases early purchases Limiting early sales at Limiting early sales at discounted prices discounted prices Overbooking capacity Overbooking capacity
Deviate with changes Deviate with changes in level of output in level of output
Do not deviate Do not deviate as level of output changes as level of output changes
Keystoning Keystoning
Profit Maximization Profit Maximization Pricing Pricing Break-Even Break-Even Pricing Pricing Target-Return Target-Return Pricing Pricing
Methods Methods Used to Used to Regain Regain Price Price Control Control
Franchising Franchising
Avoid business with Avoid business with price-cutting discounters price-cutting discounters Package marked with Package marked with selling price selling price DEVELOP DEVELOP BRAND LOYALTY BRAND LOYALTY
MODULE 3
ACQUIRING AN ESTABLISHED VENTURE
For someone leaving employment and starting a business, one of the significant factors which might exist when comparing buying an existing business against building one from scratch, is the expertise that person has in running an organisation. In starting an entity from the beginning, a person might be given the time and opportunity to get used to their new way of life. Making decisions for themselves, bring the various components of the business together might be good learning experiences for the person to undergo. There might be distinct advantages however, completing this training whilst transforming the business start-up idea in to an actual working operation. Mistakes which are made during the set-up stage are likely to be small and be able to be corrected before the operation go live. If the person buys an existing business however, any mistakes which are made due to the persons inexperience will be made in real-time on a live business. They stand a greater chance therefore, of affecting the customers and generally having a greater effect on the operation. The question to ask is: I am capable of running an established business right now or should I learn about it whilst I set-up my own?
You will also have to budget for professional fees for solicitors, surveyors, accountants etc. You will probably also need several months' worth of working capital to assist with cashflow. If the business has been neglected you may need to invest quite a bit more on top of the purchase price to give it the best chance of success. You may need to honour or renegotiate any outstanding contracts the previous owner leaves in place. You also need to consider why the current owner is selling up and how this might impact the business and your taking it over. It's possible current staff may not be happy with a new boss, or the business might have been run badly and staff morale may be low.
Disadvantages Of Acquiring an Established Business often need to invest a large amount up front, and
Introduction
Business valuation is a mixture of art and science wrapped up in a professionals opinion. But in the real world, the value of a business is what a buyer will pay for the enterprise. How a buyer can determine a fair value can be based on methods described below. Each of these methods may have variations depending on application and specific situations. Its common to value a business by a number of different methods and use a weighted average for the final valuation. There are a number of reasons to value a business but for purposes of this article we will limit our scope to valuing businesses for the purpose of buying and selling. Below are the approaches with specific methods used within each
Cont
While the mathematics of the capitalization is quite simple, the process of estimating net earnings and selecting the appropriate capitalization is complex. The following outline is simplified and shows the basic steps of the capitalization of earning method
Cont..
1 . Determine the type of earnings to be capitalized . Owners discretionary income (includes owner salary) Earnings before interest, taxes, depreciation and amortization Earnings before interest and taxes Net Profit After Tax Free Cash Flo
Cont
2 . Prepare a recast statement of earnings based on historical earnings .
Cont.
The capitalization method is used when growth of the company is forecasted to be flat or less than 5% annually. When growth is expected to be greater than 5% it would be appropriate to use the Discounted Future Earnings Method. In applying the discounted future earnings method to estimating economic value, the amount of future earnings from the business is estimated for each forecasted period. The estimated earnings for each year are then discounted at the appropriate discount rate to determine their present value. The present value of each period of estimated earnings for all future years are then added to determine the total present value. The last step determines what we call the terminal value. Its the residual value of the property at the end of the period of years being estimated. This value is discounted to its equivalent present value and added to the present value of the future earnings to determine total economic value. This method is most often used in merger and acquisition
5 . Rules of Thump
What are rules of thumb? Rules of thumb or industry formulas are supposedly market derived units of comparison (from Market Data Approach). The multiple or percentage contained in the formula is an expression of the relationship between gross purchase price and/or some indicator of the operating results of the business (Sales, Net Profit, Gross Profitetc.) Since these formulas are statistically derived from the sale of many businesses of each type. You have to be very careful because the formulas are based on averages. Not all businesses operate at the industry average, which would overvalue or undervalue a business if the rule of thumb was applied. They do serve their purpose if the appraiser can determine the business operates in
MODULE 4
STAGES The Seed stage The Start-up stage The Second stage The Third stage The Bridge/Pre-public stage
FIVE
At this stage, we presume that the idea has been transformed into a product and is being produced and sold. This is the first encounter with the rest of the market, the competitors. The venture is trying to squeeze between the rest and it tries to get some market share from the competitors. This is one of the main goals at this stage
Cont.
Asset Management approach incorporates the economic assessment of trade-offs among alternative investment options and uses this information to help make cost-effective investment decisions.
Cont..
The practice of managing the whole life cycle (design, construction, commissioning, operating, maintaining, repairing, modifying, replacing and decommissioning/disposal) of physical and infrastructure assets such as structures, production and service plant, power, water and waste treatment facilities, distribution networks, transport systems, buildings and other physical assets.
Contd..
Conditional loan: In this type of financing ,an interest free loan is provided during the implementation period but it has to pay royalty on sales and has to repay the loan according to a pre-determined schedule as soon as the company is able to generate sales and yield income.
Income notes: This type of financing is nothing but an admixture of blending of conventional and conditional loans. Hence both interest and royalty are payable but at much lower rate than in the case of conditional loans.
Contd
Venture economics has defined Venture capital as providing seed, start-up and first stage financing and also funding the expansion of companies that have already demonstrated their business potential but do not yet have access to the public securities market or to credit oriented institutional funding services, venture capital also provides management in leveraged buy out financing.
Contd .
3. Bank- sponsored venture capital funds promoted by public sector banks such as Canfinance and SBI Caps. 4. Private venture capital funds promoted by the foreign banks/private sector companies and financial institutions such as Indus Venture Capital Funds, Credit Capital Venture Fund and Grindlays India Development Fund.
Hindus Venture Capital Fund. Twentieth Century Venture Capital Fund. Credit Capital Venture Fund (CCVF). IL & FS Venture Corporation.
METHODS OF FINANCING
Venture Capital or risk finance should generally be in equity or quasi-equity form like convertible loan instruments. The following firms are used by VCCs/VCFs in India. Equity: The venture capitalist provides venture capital in the form of equity for the project and acts as co-owner with the entrepreneur, sharing profits and loss in the venture. The equity is generally less than the promoters contribution so that the promoter can retain effective control and majority ownership of the enterprise. Conditional Loans: A conditional loan is not repayable like a conventional loan and does not carry interest. The repayment of conditional loan is linked to the sales or turnover of the company in the form of royalty.
Contd
Conventional Loans: Some VCCs/VCFs like RCTC also provide conventional loans to entrepreneurs for a long period of 10-12 years. Income Notes: Income note is a hybrid security combining the features of both conventional loan and conditional loan. On this security, a floor rate of interest (say 8 percent) and a royalty on sales of company are charged. Other Financial Instruments: There are some other innovative financial instruments being used by some VCFs in India. They are 1. Partially convertible debentures 2. Fully convertible debentures 3. Cumulative convertible preference shares
Working Capital
Definition The amount of capital perpetually locked up in the form of current assets (i.e, raw materials, work in process, finished goods, sundry debtors, and cash in hand required to sustain a specified level of activity (in terms of production and sales) under specific conditions. The level of investment changes continuously as a result of : Change in operating levels Change in specific conditions like raw material prices, process time, credit extended to consumers etc.
OPERATING CYCLE
Contd
Recent development Assessment based on Nayak committee. Recommendations of Nayak Committee: All units with a fund based limit of up to Rs.50 lakhs, the minimum working capital will be 25% of the annual turnover, where 20 % will be financed by the institutions and 5 % will be the contribution of the entrepreneur.
Need for Govts intervention: Liberalization & globalization of Economy Opportunities in increased access to a much larger market for their products & services But facing challenges in their scale of operation, technological obsolescence, inability to access institutional credit and intense competition in marketing
Central Government
State Governments
formulation of policies & schemes programmes to provide direct and indirect assistance schemes for cluster development schemes for income & employment generation overall supports in credit, fiscal, marketing, technology & quality upgradation, establishing technology resource centre, sick unit rehabilitation, entrepreneurial & managerial development, empowerment of women-owned enterprises etc
implementation of policies & schemes registration/de-registration of MSMEs regulating schemes of subsidy & concessions providing scarce raw materials, marketing assistance, long term loan assistance, industrial sheds, statutory regulatory assistance etc
NSIC
Micro Finance Programme Trade Related Entrepreneurship Assistance and Development (TREAD) Fund for Regeneration of Traditional Industries Financial assistance to SC/ST
MSME
KVIC & Coir Board
TADHDCO
Prime Ministers Employment Generation Programme (PMEGP) Performance & Credit Rating External Market Development assistance for Coir Industries
NSIC
Coir Board
Mahila Udyam Nidhi (MUN) National Equity Fund (NEF) Integrated Development of Leather Sector Assistance to States for developing export infrastructure & other activities (ASIDE)
SFCs & Banks SFCs & Banks CLRI State Level Export Promotion Committee
Govt. Agencies: DICs/MSMEs/Industrial Associations Municipality/Corporation Company Affairs Inspector of Factories Corporate Affairs
Govt. formalities
Cooperative societies
Partnership Deed
Registrar of Cooperative Societies Inspector-General of Factories Superintendent/Collector of Central Excise Local Sales Tax Dept. State Pollution Control Board
Govt. formalities
Power connection Employing more then 10 workers with power connection Effluent disposal, gaseous waste, etc F.P.O.- license for fruit & vegetable based products/ Food products
Electricity Board Chief Inspector of Factories District Health Office/Public Health Dept. Fruit & Vegetable Preservation Office
Govt. formalities
Drug License for Drugs & Cosmetic Products Patents & Designs Registration Trade Mark Registration ISI/BIS Mark
Controller of Patents & Designs Registrar of Assistant Trade Marks Bureau of Indian Standards
Govt. formalities
Import Export Code Number Registration under VAT Service Tax Registration Income Tax Factory Accommodation Industrial plots/sheds
Joint Director General of Foreign Trade Asst. Commissioner Commercial Taxes Superintendent of Central Excise Income Tax Dept. SIDCO Limited
Entrepreneurial LifeCycle
Entrepreneurial managementis defined as the practice of taking entrepreneurial knowledge and utilizing it for increasing the effectiveness of new business venturing as well as small- and medium-sized businesses.
The heart of entrepreneurial management is continually juggling these vital management issues :
1. 2. What is this venture about? 3. Where should it go? 4. How will it get there? 5. What does it need to get there? 6. What structure is best?
1 . Opportunity Recognition
This gestation period is quite literally the pre-start analysis. It often occurs over a considerable period of time ranging from one month to ten years.
2 . Opportunity Focusing
This is a sanity check, a go/no-go stage gate for part-time entrepreneurs because it fleshes out shaky ideas and exposes gaping holes. It is important to include objective, outside viewpoints because different people can investigate the same opportunity and come to opposite conclusions.
3 . Commitment of Resources
This stage starts with developing the business plan. A common mistake entrepreneurs make is skipping the business plan.
4 . Market Entry
Profitability and success define the market entrystage. If the business modelwas profitable, reasonable objectives were met
7 . Liquidity Event
This stage is focused on capturing the value created in the previous stages through a business exit. The opportunity to exit successfully from a venture is a significant factor in the entrepreneurial life cycle, both for the entrepreneur and for any investors providing investment capital along the way.
Copy right
A set ofexclusive rightsgranted to the author or creator of an original work, including the right to copy, distribute and adapt the work. Copyright allows authors, musicians, artists, etc. to make money off of their labor. It prevents others from taking there work for free. It also prevents people from altering the work without permission.
For works created after January 1,1978,copyright lasts for the life of author plus 70 years. In the case of a joint work, copyright lasts for 70 years after the last surviving author's death. For anonymous and pseudonymous works and works made for hire, copyright lasts 95 years from the year of first publication or 120 years from the year of creation, whichever ends first.
For works created but not published or registered before January 1, 1978, copyright lasts for the life of the author plus 70 years, but it will not expire earlier than December 31, 2002. If the work is published before December 31, 2002, copyright will not expire before December 31, 2047. For pre-1978 works still in their original or renewal term of copyright, copyright is extended
Fair Use
Alimitation and exceptionto theexclusive rightgranted bycopyrightlaw to the author of a creative work, that allows limited use of copyrighted material without acquiring permission from the rights holders. Examples include commentary, criticism, news reporting, research, teaching, library
Sales tax
Income tax
Labour legislations
Environment laws
IPR?????
IPR is Intellectual Property Right IPR is defined as information with commercial value or simply Product of Mind It is a composite of ideas , inventions and creative expression plus the public willingness to bestow the status of property on them IPR give its owners the right to exclude others from access to their property and not lawfully by others without owners permission WIPO provided that Intellectual Property includes rights related to
vScientific , literary or artistic field vPerformance of performing artists , broadcasts vScientific inventions vIndustrial designs vTrade marks , commercial names vProtection against unfair competition
Patents ????
Grant of exclusive rights to an inventor over his invention for a limited period of time
The exclusive rights conferred include the right to make, use, exercise, sell or distribute the invention in India
Grants the patent holder right to make use or sell the patented products or process
Patents , by providing an opportunity to recoup the cost of invention & to make profit out of the invention , encourage R&D & thereby contribute to the well being of the society
Patent owner may give permission to , or license , other parties to use the invention on mutually agreed terms
Owner may also sell the right to the invention to someone else , who will then become the new owner of the patent Once the patent expires , the protection ends & an invention enters the public domain
Material reward
The Indian Patents Act was amended in 1970 : law related to patents
The Indian Patents Act , 1970 became effective from January 1 ,2005, lays down :
Eligibility , procedures & conditions for grant of patents Inventions & other subjects not patentable Rights & obligations of patentee Grounds for revocation of patents Matters related to working of the patent & compulsory licensing Rights of government regarding patented products
The first step in securing a Patent is the filing of Patent Application Patent Application contains : vTitle of invention vIndication of the technical field vBackground vAbstract / Description of the invention
v Visual materia ls drawin gs , plans ,
If there is any delay in filing the application , the invention would fall into the public domain
Abstract ideas
Inventions that are not useful (such as perpetual motion machines) or that
Conclusion
Forms of IPR Patent What it protects Inventions Criteria , inventiveness , Duration Novelty 20 years industrial applicability Copyright Design Expression of ideas Originality Literary works:lifetime of the author+60yrs 10+5yrs External appearance of the Original/new , product significantly distinguishable Identification symbols , words or letters Design of ICs Distinctive , visually perceptible Original , distinctive , distinguishable
Unlimited 10yrs
Protection of plant New varieties , farmers variety varieties GI Goods of specific geographical origin
* Introduction stage
Entrepreneur can take many forms and can be defined in m any ways * conceptual background this analyses and describes about the main concepts used in the study based on a review of existing theoritical and emperical studies * Developing a conceptual framework mainly focus
* data and methodology not only a complicated phenomenon but is also a non linear process * results after classifyng all the studies in the transition stages and identifying the main barriers at each stage the final step is to conclude thus by obtaining good results * Limitations clasification of different types of barriers into formal , informal ,and other categories is much difficult
* Concluding remarks the final stage is to conclude thus by getting sufficinent answers
After issuing the acknowledgement, trade marks registry will issue the first examination reports(minimum 8-12 months required)and there is no objection in that they publish the marks in the trade mark journal for public information (minimum 3-5 months required) and will call for objections if any up to 3 months. If there is no objection from anyone, the trademark registry will issue the certificate of trade mark registration
Continue.
Iftheyfindanysimilaritywiththeother applicationoranyclarificationrelatingtothe usageofthetrademarktheregistraroffice willobjecttheapplicationforseekingthe clarificationfromtheapplicant.Theapplicant cangivetheexplanationtotheregisterby givingawrittenstatementsupportingwith anaffidavitfurthertothatregistrarwillcall theapplicantorhisAttorneyforabetter clarificationorallybyaskingfewquestion fromtheregistrarandifheissatisfiedwith theapplicantsclarificationtheapplication willbeacceptedforadvertisementinthe TrademarkJournal.
4TH STEP:Advertisementperiodand Opposition: Fromthedateofadvertisementwithin4 monthsanyaggrievedpartycanopposethe trademarkregistrationandthisiscalledas opposition.Ifoppositionisfiledthenwehave tofilethecountertotheoppositionwith evidenceandtheregistrarwilltakethe decisionbasedontheevidenceandpurityof thetrademark