Entrepreneurship

Entrepreneurship is the act of being an entrepreneur, which is a

French word meaning "one who undertakes an endeavour". Entrepreneurs

assemble resources including innovations, finance and business acumen in an

effort to transform innovations into economic goods. This may result in new

organizations or may be part of revitalizing mature organizations in response to

a perceived opportunity. The most obvious form of entrepreneurship is that of

starting new businesses; however, in recent years, the term has been extended to

include social and political forms of entrepreneurial activity. When

entrepreneurship is describing activities within a firm or large organization it is

referred to as intra-preneurship and may include corporate venturing, when

large entities start spin-off organizations.

Entrepreneurship is often a difficult undertaking, as a vast majority of new

businesses fail. Nevertheless such undertaking supposes the development of

more than just a business venture. Entrepreneurial activities are substantially

different depending on the type of organization that is being started.

Entrepreneurship ranges in scale from solo projects (even involving the

entrepreneur only part-time) to major undertakings creating many job

opportunities. Many "high value" entrepreneurial ventures seek venture capital

or angel funding in order to raise capital to build the business. Angel investors

generally seek returns of 20-30% and more extensive involvement in the

business. Many kinds of organizations now exist to support would-be

entrepreneurs, including specialized government agencies, business incubators,

science parks, and some NGOs. Lately more holistic conceptualizations of

entrepreneurship as a specific mindset (see also entrepreneurial mindset)

resulting in entrepreneurial initiatives e.g. in the form of social

entrepreneurship, political entrepreneurship, or knowledge entrepreneurship

emerged.

Definition entrepreneurship

Capacity and willingness to undertake conception, organization, and

management of a productive venture with all attendant risks, while seeking

profit as a reward. In economics, entrepreneurship is regarded as a factor of

production together with land, labour, natural resources, and capital.

Entrepreneurial spirit is characterized by innovation and risk-taking, and an

essential component of a nation's ability to succeed in an ever changing and

more competitive global marketplace

History:

The entrepreneur is an actor in microeconomics, and the study of

entrepreneurship reaches back to the work of Richard Cantillon and Adam

Smith in the mid-16th century, but was largely ignored theoretically until the

late 19th and early 20th centuries and empirically until a profound resurgence in

business and economics in the last 40 years.

In the 20th century, the understanding of entrepreneurship owes much to the

work of economist Joseph Schumpeter in the 1940s and other Austrian

economists such as Carl Menger, Ludwig von Mises and Friedrich von Hayek.

In Schumpeter, an entrepreneur is a person who is willing and able to convert a

new idea or invention into a successful innovation.[3] Entrepreneurship employs

what Schumpeter called "the gale of creative destruction" to replace in whole or

in part inferior innovations across markets and industries, simultaneously

creating new products including new business models. In this way, creative

destruction is largely responsible for the dynamism of industries and long-run

economic growth. The supposition that entrepreneurship leads to economic

growth is an interpretation of the residual in endogenous growth theory and as

such is hotly debated in academic economics. An alternate, description posited

by Israel Kirzner suggests that the majority of innovations may be much more

incremental improvements such as the replacement of paper with plastic in the

construction of a drinking straw.

For Schumpeter, entrepreneurship resulted in new industries but also in new

combinations of currently existing inputs. Schumpeter's initial example of this

was the combination of a steam engine and then current wagon making

technologies to produce the horseless carriage. In this case the innovation, the

car, was transformational but did not require the development of a new

technology, merely the application of existing technologies in a novel manner.

It did not immediately replace the horse drawn carriage, but in time, incremental

improvements which reduced the cost and improved the technology led to the

complete practical replacement of beast drawn vehicles in modern

transportation. Despite Schumpeter's early 20th-century contributions,

traditional microeconomic theory did not formally consider the entrepreneur in

its theoretical frameworks (instead assuming that resources would find each

other through a price system). In this treatment the entrepreneur was an implied

but unspecified actor, but it is consistent with the concept of the entrepreneur

being the agent of x-efficiency.

Different scholars have described entrepreneurs as, among other things, baring

risk. For Schumpeter, the entrepreneur did not bare risk: the capitalist did.

Some notable persons and their works in entrepreneurship history.

For Frank H. Knight [4] (1921) and Peter Drucker (1970) entrepreneurship is

about taking risk. The behavior of the entrepreneur reflects a kind of person

willing to put his or her career and financial security on the line and take risks in

the name of an idea, spending much time as well as capital on an uncertain

venture. Knight classified three types of uncertainty.

Risk, which is measurable statistically (such as the probability of drawing

a red colour ball from a jar containing 5 red balls and 5 white balls).

Ambiguity, which is hard to measure statistically (such as the probability

of drawing a red ball from a jar containing 5 red balls but with an

unknown number of white balls).

True Uncertainty or Knightian Uncertainty, which is impossible to

estimate or predict statistically (such as the probability of drawing a red

ball from a jar whose number of red balls is unknown as well as the

number of other coloured balls).

The acts of entrepreneurship is often associated with true uncertainty,

particularly when it involves bringing something really novel to the world,

whose market never exists. However, even if a market already exists, there is no

guarantee that a market exists for a particular new player in the cola category.

The place of the disharmony-creating and idiosyncratic entrepreneur in

traditional economic theory (which describes many efficiency-based ratios

assuming uniform outputs) presents theoretic quandaries. William Baumol has

added greatly to this area of economic theory and was recently honored for it at

the 2006 annual meeting of the American Economic Association.[5]

The entrepreneur is widely regarded as an integral player in the business culture

of American life, and particularly as an engine for job creation and economic

growth. Robert Sobel published The Entrepreneurs: Explorations Within the

American Business Tradition in 1974. Zoltan Acs and David Audretsch have

produced an edited volume surveying Entrepreneurship as an academic field of

research, [6] and more than a hundred scholars around the world track

entrepreneurial activity, policy and social influences as part of the Global

Entrepreneurship Monitor (GEM)[7] and its associated reports.like cock

Being an entrepreneur is about more than just starting a business or

two, it is about having attitude and the drive to succeed in business.

All successful Entrepreneurs have a similar way of thinking and

posses several key personal qualities that make them so successful in

business. Successful entrepreneurs like the ambitious Richard

Branson have an inner drive to succeed and grow their business,

rather than having a Harvard Business degree or technical knowledge

in a particular field.

7 Key Qualities of a Successful Entrepreneur:

1. Inner Drive to Succee: Entrepreneurs are driven to succeed and expand

their business. They see the bigger picture and are often very ambitious.

Entrepreneurs set massive goals for themselves and stay committed to achieving

them regardless of the obstacles that get in the way.

2. Strong Belief In Themselves: Successful entrepreneurs have a healthy

opinion of themselves and often have a strong and assertive personality. They

are focused and determined to achieve their goals and believe completely in

their ability to achieve them. Their self optimism can often been seen by others

as flamboyance or arrogance but entrepreneurs are just too focused to spend too

much time thinking about un-constructive criticism.

3. Search for New Ideas and Innovation: All entrepreneurs have a

passionate desire to do things better and to improve their products or service.

They are constantly looking for ways to improve. They're creative, innovative

and resourceful.

4. Openness to Change: If something is not working for them they simply

change. Entrepreneurs know the importance of keeping on top of their industry

and the only way to being number one is to evolve and change with the times.

They're up to date with the latest technology or service techniques and are

always ready to change if they see a new opportunity arise.

5. Competitive by Nature: Successful entrepreneurs thrive on competition.

The only way to reach their goals and live up to their self imposed high

standards is to compete with other successful businesses.

6. Highly Motivated and Energetic : Entrepreneurs are always on the

move, full of energy and highly motivated. They are driven to succeed and have

an abundance of self motivation. The high standards and ambition of many

entrepreneurs demand that they have to be motivated!

7. Accepting of Constructive Criticism and Rejection:

Innovative entrepreneurs are often at the forefront of their industry so they hear

the words "it can't be done" quite a bit. They readjust their path if the criticism

is constructive and useful to their overall plan, otherwise they will simply

disregard the comments as pessimism. Also, the best entrepreneurs know that

rejection and obstacles are a part of any leading business and they deal with

them appropriately.

True entrepreneurs are resourceful, passionate and driven to succeed and

improve. They're pioneers and are comfortable fighting on the frontline The

great ones are ready to be laughed at and criticized in the beginning because

they can see their path ahead and are too busy working towards their dream.

25 Common Characteristics of Successful Entrepreneurs:

1. Do what you enjoy.

What you get out of your business in the form of personal satisfaction, financial

gain, stability and enjoyment will be the sum of what you put into your

business. So if you don't enjoy what you're doing, in all likelihood it's safe to

assume that will be reflected in the success of your business--or subsequent lack

of success. In fact, if you don't enjoy what you're doing, chances are you won't

succeed.

2. Take what you do seriously.

You cannot expect to be effective and successful in business unless you truly

believe in your business and in the goods and services that you sell. Far too

many home business owners fail to take their own businesses seriously enough,

getting easily sidetracked and not staying motivated and keeping their noses to

the grindstone. They also fall prey to naysayers who don't take them seriously

because they don't work from an office building, office park, storefront, or

factory. Little do these skeptics, who rain on the home business owner's parade,

know is that the number of people working from home, and making very good

annual incomes, has grown by leaps and bounds in recent years. 

3. Plan everything.

Planning every aspect of your home business is not only a must, but also builds

habits that every home business owner should develop, implement, and

maintain. The act of business planning is so important because it requires you to

analyze each business situation, research and compile data, and make

conclusions based mainly on the facts as revealed through the research.

Business planning also serves a second function, which is having your goals and

how you will achieve them, on paper. You can use the plan that you create both

as map to take you from point A to Z and as a yardstick to measure the success

of each individual plan or segment within the plan.

4. Manage money wisely.

The lifeblood of any business enterprise is cash flow. You need it to buy

inventory, pay for services, promote and market your business, repair and

replace tools and equipment, and pay yourself so that you can continue to work.

Therefore, all home business owners must become wise money managers to

ensure that the cash keeps flowing and the bills get paid. There are two aspects

to wise money management.

1. The money you receive from clients in exchange for your goods and services

you provide (income)

2. The money you spend on inventory, supplies, wages and other items required

to keep your business operating. (expenses)

5. Ask for the sale.

A home business entrepreneur must always remember that marketing,

advertising, or promotional activities are completely worthless, regardless of

how clever, expensive, or perfectly targeted they are, unless one simple thing is

accomplished--ask for the sale. This is not to say that being a great salesperson,

advertising copywriting whiz or a public relations specialist isn't a tremendous

asset to your business. However, all of these skills will be for naught if you do

not actively ask people to buy what you are selling.

6. Remember it's all about the customer.

Your home business is not about the products or services that you sell. Your

home business is not about the prices that you charge for your goods and

services. Your home business is not about your competition and how to beat

them. Your business is all about your customers, or clients, period. After all,

your customers are the people that will ultimately decide if your business goes

boom or bust. Everything you do in business must be customer focused,

including your policies, warranties, payment options, operating hours,

presentations, advertising and promotional campaigns and website. In addition,

you must know who your customers are inside out and upside down.

7. Become a shameless self-promoter (without becoming obnoxious).

One of the greatest myths about personal or business success is that eventually

your business, personal abilities, products or services will get discovered and be

embraced by the masses that will beat a path to your door to buy what you are

selling. But how can this happen if no one knows who you are, what you sell

and why they should be buying?

Self-promotion is one of the most beneficial, yet most underutilized, marketing

tools that the majority of home business owners have at their immediate

disposal.

8. Project a positive business image.

You have but a passing moment to make a positive and memorable impression

on people with whom you intend to do business. Home business owners must

go out of their way and make a conscious effort to always project the most

professional business image possible. The majority of home business owners do

not have the advantage of elaborate offices or elegant storefronts and

showrooms to wow prospects and impress customers. Instead, they must rely on

imagination, creativity and attention to the smallest detail when creating and

maintaining a professional image for their home business.

9. Get to know your customers.

One of the biggest features and often the most significant competitive edge the

home based entrepreneur has over the larger competitors is the he can offer

personalized attention. Call it high-tech backlash if you will, but customers are

sick and tired of hearing that their information is somewhere in the computer

and must be retrieved, or told to push a dozen digits to finally get to the right

department only to end up with voice mail--from which they never receive a

return phone call.

The home business owner can actually answer phone calls, get to know

customers, provide personal attention and win over repeat business by doing so.

It's a researched fact that most business (80 percent) will come from repeat

customers rather than new customers. Therefore, along with trying to draw

newcomers, the more you can do to woo your regular customers, the better off

you will be in the long run and personalized attention is very much appreciated

and remembered in the modern high tech world.

10. Level the playing field with technology.

You should avoid getting overly caught up in the high-tech world, but you

should also know how to take advantage of using it. One of the most amazing

aspects of the internet is that a one or two person business operating from a

basement can have a superior website to a $50 million company, and nobody

knows the difference. Make sure you're keeping up with the high-tech world as

it suits your needs.. The best technology is that which helps you, not that which

impresses your neighbors.  

11. Build a top-notch business team.

No one person can build a successful business alone. It's a task that requires a

team that is as committed as you to the business and its success. Your business

team may include family members, friends, suppliers, business alliances,

employees, sub-contractors, industry and business associations, local

government and the community. Of course the most important team members

will be your customers or clients. Any or all may have a say in how your

business will function and a stake in your business future.

12. Become known as an expert.

When you have a problem that needs to be solved, do you seek just anyone's

advice or do you seek an expert in the field to help solve your particular

problem? Obviously, you want the most accurate information and assistance

that you can get. You naturally seek an expert to help solve your problem. You

call a plumber when the hot water tank leaks, a real estate agent when it's time

to sell your home or a dentist when you have a toothache. Therefore, it only

stands to reason that the more you become known for your expertise in your

business, the more people will seek you out to tap into your expertise, creating

more selling and referral opportunities. In effect, becoming known as an expert

is another style of prospecting for new business, just in reverse. Instead of

finding new and qualified people to sell to, these people seek you out for your

expertise.

13. Create a competitive advantage.

A home business must have a clearly defined unique selling proposition. This is

nothing more than a fancy way of asking the vital question, "Why will people

choose to do business with you or purchase your product or service instead of

doing business with a competitor and buying his product or service?" In other

words, what one aspect or combination of aspects is going to separate your

business from your competition? Will it be better service, a longer warranty,

better selection, longer business hours, more flexible payment options, lowest

price, personalized service, better customer service, better return and exchange

policies or a combination of several of these?

14. Invest in yourself.

Top entrepreneurs buy and read business and marketing books, magazines,

reports, journals, newsletters, websites and industry publications, knowing that

these resources will improve their understanding of business and marketing

functions and skills. They join business associations and clubs, and they

network with other skilled business people to learn their secrets of success and

help define their own goals and objectives. Top entrepreneurs attend business

and marketing seminars, workshops and training courses, even if they have

already mastered the subject matter of the event. They do this because they

know that education is an ongoing process. There are usually ways to do things

better, in less time, with less effort. In short, top entrepreneurs never stop

investing in the most powerful, effective and best business and marketing tool at

their immediate disposal--themselves.

15. Be accessible.

We're living in a time when we all expect our fast food lunch at the drive-thru

window to be ready in mere minutes, our dry cleaning to be ready for pick-up

on the same day, our money to be available at the cash machine and our pizza

delivered in 30 minutes or it's free. You see the pattern developing--you must

make it as easy as you can for people to do business with you, regardless of the

home business you operate.

You must remain cognizant of the fact that few people will work hard, go out of

their way, or be inconvenienced just for the privilege of giving you their hard-

earned money. The shoe is always on the other foot. Making it easy for people

to do business with you means that you must be accessible and knowledgeable

about your products and services. You must be able to provide customers with

what they want, when they want it.

16. Build a rock-solid reputation.

A good reputation is unquestionably one of the home business owner's most

tangible and marketable assets. You can't simply buy a good reputation; it's

something that you earn by honouring your promises. If you promise to have the

merchandise in the customer's hands by Wednesday, you have no excuse not to

have it there. If you offer to repair something, you need to make good on your

offer. Consistency in what you offer is the other key factor. If you cannot come

through with the same level of service (and products) for clients on a regular

basis, they have no reason to trust you . . . and without trust, you won't have a

good reputation.

17. Sell benefits.

Pushing product features is for inexperienced or wannabe entrepreneurs. Selling

the benefits associated with owning and using the products and services you

carry is what sales professionals worldwide focus on to create buying

excitement and to sell, sell more, and sell more frequently to their customers.

Your advertising, sales presentations, printed marketing materials, product

packaging, website, newsletters, trade show exhibit and signage are vital. Every

time and every medium used to communicate with your target audience must

always be selling the benefits associated with owning your product or using

your service.

18. Get involved.

Always go out of your way to get involved in the community that supports your

business. You can do this in many ways, such as pitching in to help local

charities or the food bank, becoming involved in organizing community events,

and getting involved in local politics. You can join associations and clubs that

concentrate on programs and policies designed to improve the local community.

It's a fact that people like to do business with people they know, like and

respect, and with people who do things to help them as members of the

community.

19. Grab attention.

Small-business owners cannot waste time, money and energy on promotional

activities aimed at building awareness solely through long-term, repeated

exposure. If you do, chances are you will go broke long before this goal is

accomplished. Instead, every promotional activity you engage in, must put

money back in your pocket so that you can continue to grab more attention and

grow your business.

20. Master the art of negotiations.

The ability to negotiate effectively is unquestionably a skill that every home

business owner must make every effort to master. It's perhaps second in

importance only to asking for the sale in terms of home business musts. In

business, negotiation skills are used daily. Always remember that mastering the

art of negotiation means that your skills are so finely tuned that you can always

orchestrate a win-win situation. These win-win arrangements mean that

everyone involved feels they have won, which is really the basis for building

long-term and profitable business relationships.

21. Design Your workspace for success.

Carefully plan and design your home office workspace to ensure maximum

personal performance and productivity and, if necessary, to project

professionalism for visiting clients. If at all possible, resist the temptation to

turn a corner of the living room or your bedroom into your office. Ideally, you'll

want a separate room with a door that closes to keep business activities in and

family members out, at least during prime business and revenue generating

hours of the day. A den, spare bedroom, basement or converted garage are all

ideal candidates for your new home office. If this is not possible, you'll have to

find a means of converting a room with a partition or simply find hours to do

the bulk of your work when nobody else is home.

22. Get and stay organized.

The key to staying organized is not about which type of file you have or

whether you keep a stack or two of papers on your desk, but it's about managing

your business. It's about having systems in place to do things. Therefore, you

wan to establish a routine by which you can accomplish as much as possible in

a given workday, whether that's three hours for a part-time business or seven or

nine hours as a full-timer. In fact, you should develop systems and routines for

just about every single business activity. Small things such as creating a to-do

list at the end of each business day, or for the week, will help keep you on top of

important tasks to tackle. Creating a single calendar to work from, not multiple

sets for individual tasks or jobs, will also ensure that jobs are completed on

schedule and appointments kept. Incorporating family and personal activities

into your work calendar is also critical so that you work and plan from a single

calendar.

23. Take time off.

The temptation to work around the clock is very real for some home business

owners. After all, you don't have a manager telling you it's time to go home

because they can't afford the overtime pay. Every person working from home

must take time to establish a regular work schedule that includes time to stretch

your legs and take lunch breaks, plus some days off and scheduled vacations.

Create the schedule as soon as you have made the commitment to start a home

business. Of course, your schedule will have to be flexible. You should,

therefore, not fill every possible hour in the day. Give yourself a backup hour or

two. All work and no play makes you burn out very fast and grumpy customer

service is not what people want.

24. Limit the number of hats you wear.

It's difficult for most business owners not to take a hands-on approach. They try

to do as much as possible and tackle as many tasks as possible in their business.

The ability to multitask, in fact, is a common trait shared by successful

entrepreneurs. However, once in a while you have to stand back and look

beyond today to determine what's in the best interest of your business and

yourself over the long run. Most highly successful entrepreneurs will tell you

that from the time they started out, they knew what they were good at and what

tasks to delegate to others.

25. Follow-up constantly.

Constant contact, follow-up, and follow-through with customers, prospects, and

business alliances should be the mantra of every home business owner, new or

established. Constant and consistent follow-up enables you to turn prospects

into customers, increase the value of each sale and buying frequency from

existing customers, and build stronger business relationships with suppliers and

your core business team. Follow-up is especially important with your existing

customer base, as the real work begins after the sale. It's easy to sell one product

or service, but it takes work to retain customers and keep them coming back.

INTRODUCTION:

J.R.D.TATA had remarked “if mere words could create wealth, the streets of

India would be proud with gold. It takes more than words and wishes to

generate wealth for a nation. A nation’s wealth comes out of vision and hard

work of its entrepreneur.”

Before establishing and starting any business activity, an entrepreneur has to

take a note of the resources available to him objectively. Any project to be

undertaken is bound to be affected by the environment as well as the resources

are plenty and easily accessible.

A resource could be defined as a variable quantity raw material, equipment,

spare and funds available for carrying out a project or the starting a business

activity. A very critical analysis of the available resources is necessary because

then alone it will be possible to take correct decisions regarding the selection

and starting of any project.

The resource allocation at the unit level is an important decision in project

planning. Resources being limited are required to be allocated judiciously. The

objective of optimum use of the resources ensuring maximum productivity,

profitability or the best performance must be fulfilled.

The allocation of resources at the unit level depends on the existing

environment because it decides the framework under which the business activity

is possible. Usually the large firms are in a better position to allocate the

resources for any project as compared to small size firms.

WHAT IS A VENTURE?

Venture capital (also known as VC or Venture) is a type of private equity

capital typically provided for early-stage, high-potential, growth companies in

the interest of generating a return through an eventual realization event such as

an IPO or trade sale of the company. Venture capital investments are generally

made as cash in exchange for shares in the invested company. It is typical for

venture capital investors to identify and back companies in high technology

industries such as biotechnology and ICT (information and communication

technology).

Venture capital typically comes from institutional investors and high net worth

individuals and is pooled together by dedicated investment firms.

Venture capital firms typically comprise small teams with technology

backgrounds (scientists, researchers) or those with business training or deep

industry experience.

A core skill within VC is the ability to identify novel technologies that have the

potential to generate high commercial returns at an early stage. By definition,

VCs also take a role in managing entrepreneurial companies at an early stage,

thus adding skills as well as capital (thereby differentiating VC from buy out

private equity which typically invest in companies with proven revenue), and

thereby potentially realizing much higher rates of returns. Inherent in realizing

abnormally high rates of returns is the risk of losing all of one's investment in a

given startup company. As a consequence, most venture capital investments are

done in a pool format where several investors combine their investments into

one large fund that invests in many different startup companies. By investing in

the pool format the investors are spreading out their risk to many different

investments versus taking the chance of putting all of their monies in one start

up firm.

A venture capitalist (also known as a VC) is a person or investment firm that

makes venture investments, and these venture capitalists are expected to bring

managerial and technical expertise as well as capital to their investments. A

venture capital fund refers to a pooled investment vehicle (often an LP or

LLC) that primarily invests the financial capital of third-party investors in

enterprises that are too risky for the standard capital markets or bank loans.

Venture capital is also associated with job creation, the knowledge economy

and used as a proxy measure of innovation within an economic sector or

geography.

Venture capital is most attractive for new companies with limited operating

history that are too small to raise capital in the public markets and have not

reached the point where they are able to secure a bank loan or complete a debt

offering. In exchange for the high risk that venture capitalists assume by

investing in smaller and less mature companies, venture capitalists usually get

significant control over company decisions, in addition to a significant portion

of the company's ownership (and consequently value).

Young companies wishing to raise venture capital require a combination of

extremely rare yet sought after qualities, such as innovative technology,

potential for rapid growth, a well-developed business model, and an impressive

management team. VCs typically reject 98% of opportunities presented to them[

reflecting the rarity of this combination.

BUSINESS PLAN:

A business plan is a comprehensive set guideline for a new venture. Planning is

essential and it must be done in a reasonable manner. Therefore, feasibility

planning is used as a way of moderating the concept of a comprehensive

business plan.

Every business is unique. Therefore no plan is going to provide an absolute

prescription for success. A feasibility plan is an outline of potential issues to

address and a set of guidelines to help to help an entrepreneur make better

decisions.

A well written plan should clearly identify the product, service, market and the

founders. A feasibility plan should be prepared in a quality manner.

The plan should be easy to read and must be complete and accurate. There

should be no misspellings, improper grammar or mistakes in the data.

Effective plans avoid emotion packed phrases and abstract language.

Entrepreneurs who know how to write a good plan will avoid saying “think”

there is a market or they ‘believe’ a product will work. Instead, they will use

facts to support their assertions.

PROJECT:

A project is work plan to achieve certain objectives within a specific period.

It may be defined as definite and complete scheme or plan of action for

achieving definite objectives or target. It is scheme or plan for investing money

and other resources for starting a new business enterprise or for expanding the

existing one.

A project may be prepared for starting a new factory or a plant or it may be

prepared for expansion or modernisation of the existing enterprise.

PROJECT PLANNING:

It means determining the route or the manner in which the project or the scheme

is to be executed. Project planning starts with the discovery of a business starts

with discovery of a business opportunity and ends with the completion of all

details required for the execution.

Project planning is the result of the detailed investigation of various aspects

such as technical, managerial marketing and financial of the proposed business

activity.

It is essential in case of new projects as it gives the basic data required for the

execution project.

The entire plan of the project is noted in a written document called project

report.

STEPS IN PROJECT PLANNING:

(1)DISCOVERY OF BUSINESS OPPORTUNITY: The discovery of

business opportunity usually relates to market, raw materials, and needs of

the consumers and so on. The process of setting up of a business enterprise

gets clear direction only when a promising business opportunity is

discovered.

(2)PRELIMINARY INVESTIGATION OF THE PROJECT: Investigation

relates to certain broad economic aspects such as market demand, investment

required and margin of profit likely to be available. The preliminary

investigation of the project is desirable in order to find out the possible

success of the project after execution. Preliminary scrutiny facilitates the

elimination of the unsound project at an unsound project at an early stage.

(3)TECHNICAL REQUIREMENTS STUDY: Requirements include land,

machinery, raw material, fuel, power, waste disposal, manpower and

transportation. This study needs to be conducted with help of technical

consultants such as consulting engineers.

(4) INITIAL FEASIBILITY STUDY: It is a part of project planning. The

basic purpose is to verify the practical market standing of the project. If the

initial feasibility study is favourable the promoters can go ahead with the

final preparatory step in project planning.

(5)FINAL PREPARATORY STEP: In the final preparatory stage certain

details of the project have to be worked out. The final preparatory step

includes:

(a)DETERMINIG CAPITAL REQUIREMENT: Project planning

involves calculation of required capital for the project which includes fixed

and working capital. Capital is required for the execution of the project.

(b) FRAMING POLICIES: They are action paths and enable mangers to

achieve the targets of the project in an orderly manner. They are useful for

orderly execution of the project.

(c) PREPARINIG PROGRAMMES: Programme is the time table for

conducting a particular activity in the project. Such programmes should be

integrated properly and their timings and sequence should be adjusted

accurately.

(d) PREPARINIG DESIGNS OF STRUCTURES AND PROCESSES:

Design of the process equipment is prepared. Detail plan for layout roads, water

supply, waste disposal, etc. are also prepared.

(e) DETERMINIG THE WORK-FLOW: The flow of work is a time

schedule for different activities so as to complete the entire project efficiently

and quickly.

PROJECT REPORT:

The project report is a summary of project planning. It is prepared by experts

after completing the project a planning. It serves as a base for feasibility studies

and actual execution of project.

The report deals with the different aspects of the proposed project. It is

generally prepared by a team of experts including engineers, technicians and

financial experts.

Project report contains details regarding technical, financial, marketing and

managerial aspects of a project. The purpose of project report is to place all

necessary data for consideration of experts. The lending institutions desires to

study the soundness of proposed project before granting loan.

CONTENTS OF PROJECT REPORT:

(1)Name, address and other details of sponsoring agency.

(2)Brief history and summary of the propose project.

(3)Technical details of the project which include details of plant layout,

location, manufacturing process, products, etc.

(4)Cost of production and profitability.

(5)Manpower requirement of the project.

(6)Financial aspects of the project, which include cost of project, fixed

assets, fixed assets, working capital requirement and sources of finance.

(7)Total income, operative profit and net profit.

(8) Importance regarding marketing.

(9) Importance of the project to national economy, export promotion.

ADVANTAGES OF PROJECT REPORT:

(1) Project report is useful for taking bank loans and submitting proposals

for govt. license and permission.

(2) It is useful for quick reference during the process of execution of the

project.

(3) It is useful as a controlling device.

(4) Project report is useful for modification or for improvement in the

proposed project during the course of feasibility study or a appraisal of

the project.

(5) It is a base for feasibility study.

FEASIBILITY STUDY:

Feasibility study of project means to find out the practical utility or the future

prospects of a project. It is necessary to study the practical utility in an impartial

manner. Feasibility study gives more safety and security to the sponsor of the

project. It avoids possible failure after execution.

The banks and financial institutions undertake such study in an impartial

manner for the safety. Such appraisal is necessary and useful in the case of the

large projects, which need huge financial investment.

The basic purpose of feasibility study is to find out whether the project is

technically, economically, financially and managerial sound.

AREAS OF FEASIBILITY STUDY:

(1)TECHNICAL FESIBILITY STUDY: Location, size, layout and

technology are the important technical aspects which are considered in

technical study. All technical details are evaluated in this area feasibility

study. The extent of technical soundness of the project is available from

technical feasibility study.

(2)ECONOMIC\MARKET FEASIBILITY STUDY: Economic

feasibility relates to the market and marketing for the proposed product.

The success and the profit of a project largely depend on the market

available for the present and in the future. Due to rival producers,

substitutes available and market competition the study is extremely

complicated. During the economic feasibility study market analysis or

forecast must be conducted with reasonable accuracy.

(3)COMMERCIAL\FINANCIAL STUDY: It relates to the financial

aspect of the project. The success of the project depends on its

profitability in the present and future. This study is concerned with capital

cost estimates, sales revenue, working capital needs, earning estimates,

cash flow studies and availability of funds for the execution of the

project. Since the purpose behind executing the project is to earn profit

the commercial feasibility study gain importance.

(4)MANAGERIAL FEASIBILITY STUDY: Even if the project is to be

economically, technically and financially feasible it can still fail if the

people who implement or manage it are not capable. The success and the

profitability of the project partly depend on managerial competence and

so the lending institutions give special importance to this area of

feasibility study.

FEASIBILITY REPORT:

It is a document prepared after completing different types of feasibility studies.

It is prepared by the sponsors or even by banks or lending agency for the safety

of their funds. It is prepared after the project report.

It gives full analysis of the projected inputs and outputs covering all information

upon which promoters can take final decision about the proposed project.

Feasibility report may suggest certain modification in the proposed project. It is

desirable to modify the project in the light of such modifications.

Feasibility report is also useful for improving the proposed project and making

it more safe and promising.

INFRASTRUCTURAL FACALITIES:

It was the vision and foresight of India’s first Prime Minister, Pandit

Jawaharlal Nehru that paved the way for industrialisation in India. The five-year

plans were designed from time to time to ensure the industrial growth of our

nation. As a matter of industrial policy, therefore Pandit Nehru insisted on the

balanced regional growth and advocated that the necessary infrastructure should

be provided to place industries on a sound footing.

The central and the state government established several industrial estates

and offered many infrastructural facilities for the industrial growth of our

nation.

It was necessary that the backward regions should be developed so that

there is no lop sided development of industries. The Government of India on

one hand offered certain concessions to the entrepreneurs for starting new units

in those areas and also tried to extend positive help by way of providing the

infrastructure.

Infrastructure is the background against which the industrial units could

stand. In order that the states should have their balanced regional growth, the

government built roads for transport of goods and the people to and from those

areas. Regular and sufficient water supply was ensured. Sewage for protection

from the polluted water was arranged.

The infrastructure includes an “AIDS TO TRADE”.

For an example besides transports facilities the entrepreneur requires banking,

insurance, communication, warehousing a services of mercantile agents.

Electricity, lighting on the roads fine brigades, security, etc. become a must.

The Government also tries to provide financial and raw material, labour

and a market for the products produced.

The industrial sector developed by the Maharashtra Industrial

Development Corporation provides a number of infrastructure facilities. The

entrepreneur prefer to set up their units in these zones because

1) It is not necessary to obtain permission for non-agricultural business.

2) There is no lien on the land.

3) The land is owned by the Government but it is given under the lease

agreement for 95 years.

4) MIDC ensures that each plot of land would be offered pure water out of

its reservoirs.

5) The state electricity board offers easy electric supply.

6) MIDC offers plots and sheds for small-scale producers and electronic

industries.

7) Separate sections are created for engineering chemical and electronic

industrial units.

8) There is systematic planning to help small scale, medium scale and large-

scale industries and commercial complexes so that the environment is

conducive to the growth of industries.

Proper infrastructural facilities provided can ensure the

entrepreneur to start new ventures and see that the same are established

and proper.

This is in the interest of the entrepreneurs as well as the state. If no

such facilities are available the entrepreneurs may not be interested to

take risk.

Some times because of the insecurity and lack of infrastructure

facilities there is a flight of industries from one state to another.

Thus for some times the industrialists in Maharashtra were lured by

the state of Gujarat by offering them a number of infrastructural facilities

and also financial aid in terms of subsidies etc. The states, which are

lacking the infrastructure and also are infested with insecurity, are slow in

entrepreneurial growth. The state of Bihar in the recent times is an

example.

LOCATION OF A BUSINESS UNIT:

The profitability and the performance of a business unit are very

much influenced by the size of the business, location and the layout. The

location and the environmental factors are nowadays-prime consideration

for the establishment of a business unit.

The location of a business unit can decide the earning capacity and

the cost control. It is the location, which can decide whether the business

will be stable or otherwise. Recently the famous ENRON project in India

came in trouble because of a particular location which it is feared would

cause tremendous pollution. It was opposed and the government of

Maharashtra had decided to cancel the agreement but due to the central

Govt. interference the project was cleared.

If the decision regarding the choice of a location is not taken on

scientific basis there could be many difficulties to be faced in future. The

location refers to a particular area or site place selected for establishing of

setting a business unit. A number of factors are required to be considered

before the decision regarding location is finalized. Thus the decision

regarding the location could be directed by the Government for securing

balanced regional growth of industries. It may establish industrial estates

and offer a number of aids to support various units.

Sometimes the pioneers in an industry prosper at a particular place.

The important of convenient location cannot be ignored. The maximum

convenience, minimum cost and the optimum efficiency are usually the

guiding factors in deciding upon the location of a business unit.

BENEFITS OF SCIENTIFIC LOCATION:

According to I.I.Lundy the location decisions could have nearly 10% on

the transport and distribution cost. The following are the benefit of a good

location selected on scientific basis.

1) Better performance and maximum efficiency: It is possible to have

raw material from the local area thus reducing the cost of transport. If

the market is near the location of the production unit, less expenses

would be incurred in reaching the finished products to have market.

2) Cost control: More profits could be also available because of

reduction in cost on administration transport, marketing and fuel.

3) Smooth working: Because of the ready availability of raw material as

well as disposal of effluents and quick delivery of the finished

products the production as well as the marketing is carried out

smoothly.

4) Expansion and diversification: When the business is established and

starts prospering, the entrepreneur thinks of expansion and

diversification. There are cases where such decisions are well

supported by the location selected earlier by a visionary entrepreneur.

5) Ability to face competition: Since the location can help reduction of

costs, the entrepreneur can have an edge over his competitors and can

grab a bigger share of the market.

WEBER’S THEORY OF LOCATION:

The theory was put forth in 1909 and was popular in England in 1929.

However, subsequently it lost its grounds because of practical considerations.

The importance of this theory lies in the fact that it led the primary efforts to

discuss the issue of location on somewhat scientific basis.

Mr. Alfred Weber advocated that the factors deciding the location

of a business unit could be divided as:

(A) Primary factors which included,

a. Transport cost and

b. Labour cost and,

(B) Secondary factors, which included

a. Existence of skilled labour in the region,

b. Existence of auxiliary industries,

c. Facilities of technical research

d. Momentum of an early, start and

e. Banking, insurance and transport facilities.

The secondary factors were also known as Agglomerative and

Deglomerative factors Mr. Weber provided a mathematical formula as:

Location Material Index=Weight of localized material

Weight of finished products

If the index is less than one then the location should be near the

market or place of consumption and if it is higher than one the cost need not be

taken into account while locating a plant. However, Weber’s assumption

regarding transport cost, fixed labour centres and fixed market places are

unrealistic and hence, it is said that this theory has now only a historical

importance.

FACTORS INFLUENCING THE LOCATION OF A BUSINESS

UNIT:

The following are the primary factors of location:

(a) Availability of raw material.

(b)Transport and communication facilities.

(c) Cheap labour.

(d)Proximity to market.

(e) Power, fuel and water supply.

Secondary factors:

(a) Climatic conditions.

(b)Financial facilities.

(c) Personal factors.

(d)Government and tax exemptions, land loan, etc.

(e) Scope for expansion.

(f) Industrial environment.

(g)Existence of auxiliary industries.

(h)Fire fighting facilities and amenities to employees.

STEPS IN THE SELECTION OF LOCATION:

An entrepreneur usually consults an engineer or and industrial

economists before taking the decision regarding the selection of a

location.

There are three stages in the selection of a location:

(1)Selection of a region: Usually the consideration of a region is done in

the context of the suitability for industry. The entrepreneur consider:

a. The availability of raw material.

b. The proximity to the market.

c. Transport and communication facilities.

d. Availability of power, fuel and water and,

e. Miscellaneous factors like suitable climate, law and order

situation and industrial atmosphere, essential supplies like

labour, banking facilities, etc.

(2)Selection of locality: After selection of the region, the entrepreneur

tries to select the locality in the region. He tries to consider the locality

in that region. The following factors are considered:

a. The availability of the adequate quantity and quality of labour.

b. Prevailing wage scales in the industry.

c. General attitude of the community towards industries. Enron

was opposed by the people in the area on account of fear of

pollution

d. Types of industries available in the locality.

e. Living conditions on the locality.

f. Government reductions, tax concession, etc.

g. Availability of banking transport and research facilities.

h. Police protection and provision of fire fighting facilities.

(3)Selection of Site: The selection of exact site is done after deciding

upon the locality. In other words, we start with macro and end with

micro considerations. Here a number of alternative sites are compared.

A city, a village or an industrial estate is to be selected. The cost of

land can differ with different sites. The roads and the railway should

be suitable. There should be facilities for good water supply and

affluent and also a favourable surrounding.

The state regulations regarding the industrial location are to be considered

seriously because they can provide favourable or unfavourable industrial

weather.

The concentration of industries can create a number of problems

like slums and social insecurity for reason like defence considerations,

certain areas are prohibited areas. In other words, particularly for an

industrial entrepreneur the decision regarding location is to be taken with

‘care and caution’.

ENVIRONMENTAL PROBLEMS:

Business environment cannot be neglected by an entrepreneur. It can

make or mar the business. According to Keith Devis business

environment is the aggregate of all the conditions, events and influence

that surround and affect it. It consists of all external and internal factors

that influence the complex interaction of the market, finance and

production.

Business environment is ever changing and hence can create as

well as solve problems. A change in the government could be favourable

for some entrepreneurs, while it may create obstacles for others.

Environment can create new opportunities and also new threats. Business

planning is closely connected with business environment.

The strength, weakness, the opportunities and the threats created by

existing environment must be studied seriously before launching a

project. The survival, growth, expansion and diversification are always

influenced by the environment and therefore in study is a must for any

entrepreneur who wishes to be successful in his venture.

The following are the important types of environment:

(1)Political environment: The political environment is created by the

political ideology or the system adopted by a county. The provisions

of the constitution, various political parties in power and its opposition

and the various political events affect the business. On the arrival of

the election the business environment is tensed as uncertainty prevails.

In India the Congress Government has been stable for quite some

times. When Janata party won the elections, the industrial policy

also underwent a change.

The congress party was in favour of heavy industry. The Janata government

encouraged small scale and tiny industries in order to provide employment to a

large section of the society living in villages. The businessman has to keep a

close watch over the political events and adjust themselves accordingly.

(2) Economic environment: the economic environment is supplementary to

political environment. The government industrial policy, export-import policy,

fiscal policy, banking policy, etc. create new problems and opportunities for

entrepreneur. The government may through its budgetary provisions create an

environment which is conducive to the growth of private enterprise. The legal

measures like FERA, MRTP and institutes like SEBI are responsible for

creating a particular business environment.

The entrepreneur should be interested in exercising their influence on the

government through bodies like chambers of commerce and trade associations

so that the economic environment is helpful to the industries.

(3) Social and cultural environment: Social and cultural environment too can

create certain problems. The increasing consumer awareness, education

progress of the ladies, changes in faith of the middle class opportunities on one

side and problems on the other side. The emergence of the middle class as a

powerful socio-economic group in the Indian market scene needs special

attention by the business enterprise.

Cultural factors include beliefs, arts, moral, customs, etc.. Cultural changes

take place gradually. In brief, cultural factors contribute for the creation of

social environment.

(4) Technological environment: The technological environment creates a

problem of obsolescence. New technology is always preferred to the old one.

Costly machinery can become junk or outdated. It is said that the technology of

today are the junk of tomorrow.

People find Xeroxing more convenient as compared to cyclostyling. The use

of computers is growing. The electronic equipment’s are becoming the order of

the day and therefore the entrepreneur who cannot keep pace with changing

technological development will be lagging behind.

(5) Demographic environment: The demographic environment tells us about

the age and sex compositions, family size, religion and economic status of the

population. The growth of industries raises the standard of living and the

expectations of the people. The entrepreneur has to study the changing pattern

of the demographic set up. It is the people who make the market.

The shift of the rural population to the urban areas can create new challenges

to the entrepreneurs.

(6) Natural or physical environment: it speaks about the geographical factors

like weather and climatic conditions. The hills, rivers, oceans, land, soil, the

flora and the fauna all constitute the physical on the background of which the

business flourishes.

This environment is very important as it can create shortage of raw material.

If the rains are scanty the crop could burn. The famines and earthquakes, excess

rain or draught could create problematic situation for the entrepreneur. This is

also known as ecological environment and its consideration is inevitable.

(7) International environment: Today the international environment plays a

dominant role in deciding the fate of many entrepreneurs.

The policy of liberalization and the steps towards globalization is a topic of

serious discussion today. The entry of multinational in Indian is posing a big

challenge to the Indian entrepreneur.

Obtaining ISO 9000 certification has become a must to compete in the

international market.

The policy of big powers like USA, Japan and China has been greatly

affecting the business environment.

In short since the whole world is becoming a village due to economic and

political changes, modern entrepreneur should always be alert. He has to be

ready to face the changing international scenario and take faster decisions to

maintain his success.

ROLE OF INDUSTRIAL FAIRS:

International fairs are the fairs at which industrialists exhibits their products.

These fairs are organized at regional, national and international levels. A large

number of people from industry and trade visit these fairs. Such type of

interaction is very helpful in promoting and sustaining entrepreneurship.

The following are the main advantages of industrial fairs:

i. Dissemination of information concerning new/improved products.

ii. Booking of orders for supply of products.

iii. On the spot sale of product.

iv. Ideas for developing new/better related products.

v. Foreign collaborations for technical know-how.

vi. Assessing the trends in competition.

vii. Contracts for dealership Import or Export.

EXAMPLE OF RELIANCE TECHNOLOGY VENTURE

LIMITED

Dhama Apparel Innovations has developed

technology that can be incorporated into apparel

or accessories to provide thermal comfort.

Dhama’s patented technology provides heating /

cooling solutions to people living and working

in difficult climatic environments. It's current

ClimaCon technology provides heating and

 

 

Reliance Technology Ventures Limited was launched in 2006

with an investment mandate to incubate new business ideas and invest

in emerging and high-growth technologies. We seek out and invest in

promising technology (IT, ITES, hardware and semiconductors), media

& entertainment, and telecom (TMT) companies worldwide. Our

investment focus is both - on established and new technologies, that

advance the computing, communications, media and convergence

platforms. While financial return is imperative, our greater mission is to

spur innovation and inspire the entrepreneurial spirit to thrive.

In going with our belief that we would like to be the preferred choice

and premier partner of all our investee companies, RTVL works with an

unlimited pool of funds and guarantees its full commitment to its

investees over an unlimited period of time.

RTVL has advised and/or invested in deals to the tune of over $1

billion.

cooling solutions on demand and can be

incorporated into any kind of apparel. Dharma’s

patented technology has won the prestigious

Gold Medal at Lockheed Martin’s Innovator’s

competition in 2008 and MIT Business Plan

Competition in 2005.

Scalable Display Technologies, Inc., located  in

Cambridge, Massachusetts, is a leading

provider of auto-calibration software used to

create edge-blended displays. The technology

patented by MIT, simplifies the creation of

super-resolution, multi-projector displays of

highest quality and scalable size. Their ‘Easy

Blend’ software opens the door to wide-spread

use of multi-projector displays for a new class

of simulators based on off the shelf

components, as well as supporting new forms of

digital signage and data visualization tools.

Suvidhaa Info serve is the pioneer of the

Service Commerce (“S-Commerce”) revolution

in India. The company empowers both  small

convenience stores and allied services providers

with a host of customized services, on a single

electronic distribution platform, that they can

conveniently offer their customers. These

services span multiple industries including

travel, telecommunications, entertainment,

lifestyle, financial services, utilities, education,

health, and many more.

   

Pelago, Inc. is developing a new generation of

consumer experiences based on breakthrough

technology, including ‘Whrrl’, a new mobile

and web-based service at the intersection of

social networking and local discovery.

  

RTVL has advised in the acquisition of Vanco

Plc by Reliance Globalcom. Vanco is a UK

headquartered Global Network Operator, and

offers enterprise clients across 230 countries,

with cost-effective, optimized and fully

managed network solutions.

   

RTVL has advised in the acquisition of eWaves

World by Reliance Globalcom. EWave World

is a UK headquartered telecom company,

focused on the rapidly developing market for

wireless telephony services using the WiMAX

technology standard.

   

SEQUANS Communications is a leading

supplier of subscriber station and base station

chips for both fixed and mobile WiMAX, based

on IEEE 802.16-2004 and 802.16e-2005

standards. SEQUANS has won multiple awards

for its innovative SoC designs, including the

best chip design award from WIMAX WORLD

USA 2007 and the Red Herring 100 Global

award for 2007.

 

 

Stoke develops carrier-class multi-access

convergence gateways to help fixed, mobile and

Internet-based operators realize the economic

benefits and competitive advantages of network

convergence.

   

E-Band Communication Corporation is a

leading developer of multi-gigabit capacity

wireless communication systems based on

70/80 GHz millimeter wave radio technology.

EBCC’s ‘E-Link™' system enables wireless

service providers to backhaul vast amounts of

digital IP-based wireless traffic and serve as a

substitute for fiber in last mile metropolitan

access networks.

   

RTVL has advised in the acquisition of Yipes

Holdings Inc. by Reliance Communications, in

an all-cash deal valued at Rs.1,200 crores [$300

million]. Yipes is now known as Reliance

Globalcom Services, Inc. and is the leading

provider of managed network and application

delivery services for the global enterprise.

   

Yatra.com is India’s largest online travel portal,

a feat achieved within a span of 8 months from

launch.

   

Seed fund provides early-stage capital to

startups in India and is led by an experienced

team of entrepreneurs who have built hugely

successful companies such as Hinditron,

Channel V, CKS/US Web, IndiaBulls,

Indiagames, Pinstorm and Geodesic.

   

Other investments

RTVL has also led the investment in an

unnamed technology company which formed

the basis of the largest venture capital

transaction in India.

 

Approach - Investment Process

 

What we look for?

People:

 We encourage entrepreneurs and teams who have the ability to translate Reliance ADA Group’s philosophy, "Think Bigger, Think Better“, into an action plan, and execute as per world’s best standards or better.

Competitive Edge:

 We look for compelling, IP-rich products, and services and business models, with a defensible strategy, and with a significant market opportunity.

Financials:

 We look for financial plans to demonstrate the ability to generate the highest potential return on our investment.

Approach - Focus Sectors

 

We are constantly on the lookout for ideas with promise to invent new business

categories or radically alter existing ones. Our passion is for new technologies

and new applications of technology that will drive high impact change.

 

We like to explore promising innovative ideas that invent or inherently change

business categories. Our investment focus falls into the following broad sectors –

    IT

       Hardware

        Semiconductor & Components

       

Systems

  Communications

  Enterprise

         

      Software

       Application Software

   Infrastructure Software

    ITES

 

 

  Internet Services

  Consumer Technology

  Media

 

   Wireless Applications

  Next Generation Networks

Approach - Business Plan Submission

 

 

We encourage you to submit your business plan or investor

presentation.

We suggest that you cover the following broad areas in your

upload –

 

  Area of company

business

  Business strategy

  Company

mission statement

 

  

 

  Historical &

projected size in

dollars

  Underlying

market drivers

fuelling growth

 

  

 

  Product

differentiation –

intellectual

property –

ownership of IP

  Revenue model

  Product /

solution pipeline or

roadmap

    

 

  Key competitors

  Competitive

advantages

  Barriers to entry