Entrepreneurial Entrepreneurial ProcessProcess

Unit No 2

1. Identify and Evaluate Opportunity

Opportunity AssessmentCreation and Length of Opportunity Real Value and Perceived Value of OpportunityOpportunity and Personal Skill for Goal settingCompetitive Environment

2. Develop Business Plan

Title PageTable of ContaneExecutive SummaryMajor Sections

Description of Business Description of Industry Technology / Financial / Marketing /

Production Plan Organisational / Operational Plan Summary

3. Resources Required

Determine Resources Required (Land, Capital, Man power, Machines, Technology etc…)Determine Existing ResourcesIdentify Gap and SuppliersDevelop access to needed resources

4. Manage the Enterprise

Develop Management StyleUnderstand Key variable for successIdentify problemsDevelop Control systemDevelop Growth strategy

STEP 1 :- Identify Business Opportunity (Creating an Idea)

Sources of Business Idea

Methods of Generating Idea

Creative Problem solving Methods

Product planning and Development stage

Sources of Business IdeaSources of Business Idea

1. Customers1. Customers

2. Existing Product/services2. Existing Product/services

3. Distribution channel3. Distribution channel

4. Government4. Government

5. R&D5. R&D

1. Focus Group1. Focus Group- - A Group of 10 – 12 customers with high sensibility A Group of 10 – 12 customers with high sensibility

towards product and from different backgroundtowards product and from different background

2. Brainstorming2. Brainstorming- A group of people meet to obtain new idea with the - A group of people meet to obtain new idea with the

following conditionfollowing condition1. No Criticism1. No Criticism2. Freewheeling is encouraged2. Freewheeling is encouraged3. Quantity of Ideas3. Quantity of Ideas4. Combination and improvement of Idea4. Combination and improvement of Idea

3. Problem Inventory Analysis3. Problem Inventory Analysis- Problems of various nature like Physiological, - Problems of various nature like Physiological,

Sensory, Activities related, Buying and usage, PsychologicalSensory, Activities related, Buying and usage, Psychological

Methods of Generating Idea

Creative Problem Solving Methods

1.Brainstorming2.Reverse Brainstorming (With Criticism)3.Brainwritting 4.Gordon Method (When individual are unaware)5.Checklist Method (Idea through Related Issues)6.Free Association (Idea through chain of words/synonyms)7.Forced Relationship(Idea of product combination)8.Collective Notebook Methods (Provide pocket diary to members to note down idea on problem statement)9.Attribute Listing (List down Positives/Negatives)10.Big Dream Approach (Constraint free thinking)11.Parameter Analysis

Opportunity Recognition

Education

Experience

Prior Knowledge of Markets and Customer and Problem

Entrepreneurship Alertness

Network

Successful Opportunity Recognition

Product planning and Development Stages

IDEA

STAGE

C ONCEPT

STAGE

PRODUCT

DEV

TEST

MARKETING

PLC

STEP -2 DEVELOP BUSINESS PLAN

Business Plan is a written document prepared by the entrepreneur that describes all the relevant external and internal elements involved in starting new venture.

It is an integration of various functional plans like marketing, financial, production, and HR.

Structure of Business Plan

Title Page Table of Contain Executive Summary Major Sections

Description of Business Description of Industry Technology / Financial / Marketing /

Production Plan Organisational / Operational Plan Summary

Usage of Business Plan

1.It helps in getting Capital2.It boosts up confidence of stakeholders in

business3.It gives direction to functional areas4.It helps in achieving targets5.It helps in identifying loopholes in business

structure

Reasons for failure of Business Plans

1.Unreasonable goals2.Non - measurable Goals3.The entrepreneur has not made total

commitment to Business4.Lack of Experience5.The Entrepreneur has no sense of potential

business threats6.Customers need was not fulfilled

Marketing Plan

1.Defining the Business Situation2.Defining the Target Market3.Considering strength and weakness in target

market4.Establishing goals and objectives5.Defining marketing strategy and action

programme6.Marketing strategy like B2B, B2C etc.7.Budgeting the marketing strategy8.Implementation of Plan9.Monitoring the progress of Marketing actions

Financial Plan

- It mainly includes 1. Sources and application of Fund

- Capital Budgeting (Long term)- Operating Budgeting (Short term)

2. Cash flow 3. Income Statement 4. Break even analysis5. Sources and application of Fund

STEP 3 :- RESOURCES REQUIRED

A Few very important resources are 1.Human Power2.Land3.Finance4.Machines / Technology

Funding Business (Financial Viability of Business)

1.Self / Partners2.Family and Friends3.Credit (Bank, Government loan)4.Venture Capital5.R&D Limited Partnership6.Private Equity placement7.Public Equity offering8.Credit from suppliers

Sources of Fund.doc

Need For finance1.Early Stage Finance

1. Seed Capital2. Start up Capital

2.Expansion Financing1. Second Stage (No Cash outflow)2. Third Stage (Growth with cash outflow)3. Fourth Stage (Bridge financing to prepare

company for Public financing)

3.Acquisition Financing1. Traditional Acquisition (Assuming

ownership and control)2. Leverage Buyouts3. Going Private

Venture Capital

-Overview-Types of Venture Capitalist

- Private like TATA, SBI- NBFCs like IDFC, IFCI etc..- State Government- Central Government

- Points To be considered for Capital Venture