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Entrepreneurship
Session-52/03/07
Grameen Bank
Grameen Bank sought to cultivate a culture of mutual responsibility and empowerment among borrowers and staff alike.
Grameen credo—“Discipline, unity, courage, and hard work in all walks of our lives”
Grameen Bank
All banking staff visit members in their villages on a weekly basis .
Grameen Bank has given out loans to more than 4.48 million people in Bangladesh and has maintained a remarkable 98.9% repayment rate.
Entrepreneurial performance:
Socio cultural background of entrepreneur (SB):
Motivational force (MF): Knowledge and ability (KA): Financial strength FS): Environmental variables (EV): EP=f (SB,MF,KA,FS and EV)
How to judge the performance:
Gestation period: Financial result :Total asset
utilized for the physical expansion of an enterprise.
To analyze the financial result: Return on capital employed. Net profit over sales. and other ratios.
How to judge the performance:
Capacity utilization: Availability of required inputs like:
Raw materials. Power Labour for the finished product.
How to judge the performance:
Expansion and diversification: Value added by manufacturer: Firms contribution to national
economy. Ability to take higher degree of
risk Growth of offspring business:
How to judge the performance:
Others: sales turnover, size of employment generated, volume of exports, r&d activities, rural development.
Entrepreneurial Network Relationships
Business Relationships: Formal and informal liaisons
with suppliers and wholesalers. Contracts or informal
relationships with subcontractors.
Existing contacts with potential customers or clients.
Business Relationships:
Potential contacts with clients or customers through networks established in prior employment.
Professional Relationships:
Formal or informal relationships with bankers,security analysts,savings and loan managers,investment managers.
Formal and informal laisons with insurance companies,venture capitalists,or private investors.
Contacts with attorneys,consulting organizations,import/export bankers.
Organizational relationships:
Relationships with previous employers and universities.
Formal ties with corporations through new venture units.
Formal or informal ties with government agencies,state agencies,local political organizations.
Social Relationships:
Membership in local,state,or national professional associations.
Membership in or attendance at trade and professional conferences.
Relationship established through local or regional social clubs,athletic clubs and social events.
Other relationships: Family relationships and
friendship networks through family ties.
Ethnic, cultural and religious affiliations.
Trade groups and union membership.
From Idea To Business: Building a business takes four
things: a product or service, a business
model, a team, and money.
A product or service Make sure that your idea fills a real
market need. You don’t always need a new
product category. Microsoft was a late entrant in window systems, spreadsheets, word processors, and presentation software. Yet they virtually own those product categories.
Business Idea :
The business idea to be selected so as to:
1.Enable entrepreneur to utilize the skills+tech+market knowledge.
2.Enable to use of locally available raw materials for product or services.
3.They make products that have demand in market.
Business Idea :
4.Enable the entrepreneur to solve a current problem existing in the market.
There are three initial factors that entrepreneurs must consider
when judging their ideas.
1. Size of opportunity: whether the opportunity is big
enough for them to get an appropriate return on their investment of time, energy, money, etc.
If the opportunity is too small, it’s probably not worth pursuing.
There are three initial factors that entrepreneurs must consider when judging their ideas.
2. Complexity of opportunity: A second question to ask is how
complex the opportunity is. How difficult will it to be to
execute on the opportunity?
There are three initial factors that entrepreneurs must consider when judging their ideas.
3. Amount of funding and resources required:
An opportunity must be judged with regards to how many resources are required to execute it.
If the amount of resources is too much, the entrepreneur may not be able to accumulate the resources and/or the return on investment will be reduced.
Sources of Business Idea:
Discussion with people. Looking through books. Visiting shops and attending
trade shows. Information from research
institutes. Brainstorming
Commitment to Excellence
Understand the customer. Provide quality products and
services. Knowledge and expertise, esp.
business. Details. Continuous learning. Commit time and effort.
Innovation Management:
To recognize the importance of innovation.
Role of key individuals. Need to view innovation as a
management process.
Importance of Innovation: To survive innovation is must in
this complex world. The ability to change and adapt
is essential to survive. Its applicable in virtually all the
industries.
Study of innovation: The engine of growth. The view of Schumpeter. General overview of innovation
process.
Interactive model of innovation:
Barriers to Entrepreneurship:
Economic Barriers: Capital Labour Raw Materials
Non Economic Barriers:
Cultural Blocks: Importance of Logic: Respect for Entrepreneurship: Tradition Binding: Emotional Block:
Personal Barriers to Entrepreneurship:
Lack of sustained motivation: Difficulty with ambiguity: Inability to dream and use
subconscious: Impatience in society problem: Impatience in solving problem: Lack of clear perception:
Corporate Entrepreneurship
Concerned with innovation that leads to new corporate divisions or subsidiary ventures.
Corporate Entrepreneurship: New and different forces shaping the
global competitive landscape are: Rapid advancements and changes in
technology The changed business paradigm bought
by World Wide Web Opening of global markets And importantly, increased success of
entrepreneur ventures through out the world
Corporate Entrepreneurship:
Corporate entrepreneurship refers to “the process of creating new business within established firms to improve organizational profitability and enhance a firm's competitive position or the strategic renewal of existing business”,
Extrinsic Environment: The industry scenario competition, technological development,
customers and legal/regulatory framework
Intrinsic Environment : internal affairs; namely the management, culture, encouragement to creativity and co-sharing of profits
Corporate Entrepreneurship:
The Corporate entrepreneurship venture of any corporate is dependent on active elements of it extrinsic/intrinsic environment.
National success in entrepreneurship depends on interaction of local cultures with national policies :
Entrepreneurial Characteristics:
Need to achieve-Desire to be a winner:
Competition by itself can be misleading.
Competition directed to beat others-seed for destruction.
Competition with self-imposed standards-Internalized kind of competition.
Perseverance Quality to Stick to it:
Intense level of determination. Desire to overcome hurdles. Solve problem and complete a
job. Not obstructed by difficult
situations.
Moderate risk takes-Prefer middle of the road:
They are not high risk takers,not gamblers.
Moderate and calculated risk.
Use of feedback-Knowing how to perform:
Concerned about their performance-doing well?
How well or poor working? Feedback helps for the
corrective action to improve.
Facing uncertainty-Tolerance for ambiguity and unfamiliar situation:
Make decisions under uncertainty. Achievement oriented people tend to
optimize even under unfamiliar situation.
They see no reason why they cannot win through their abilities.
They present a picture of boldness.
Stress takers-Possess drive and energy: They have tremendous amount
of personal energy and drive. To cope up with situations and
make right decisions.
Self confidence-Faith in their abilities:
High level of self confidence. They strongly believe in their
capabilities. They are against people who are
overconfident and arrogant.
Initiator :Seeking Responsibility
Independent, Highly self reliant innovator, The champion of free enterprise
economy. They believe in their personal
effort. Takes initiative to solve problem
and fill vacuum.
Positive self concept-Aware of oneself internal locus of control:
Awareness of own strength and weakness.
Uses positive knowledge to support his thinking.
He is rarely negative. Maintains a positive correlation
between belief and hardwork.
Flexibility-Flexible in Decisions:
Weighs equally the pros and cons of a decision.
Tend to change if situation demands.
People with open mind and not rigid.
Analytical ability: Unaffected by personal likes and dislikes.
They are realistic. Specific approach for business
undertakings.
Ability to find and explore:
Quick to see opportunity. They anticipate plan and fulfill
their goals.
Sam Walton's 10 Rules for Success
Commit to your business. Believe in it more than anything
else. If you love your work, you’ll be out
there every day trying to do the best you can, and pretty soon everybody around will catch the passion from you - like a fever.
Sam Walton's 10 Rules for Success
Share your profits with all your associates, and treat them as partners. In turn, they will treat you as a partner, and together you will all perform beyond your wildest expectations
Sam Walton's 10 Rules for Success
Motivate your partners. Money and ownership aren’t
enough. Set high goals, encourage
competition and then keep score. Make bets with outrageous payoffs.
Sam Walton's 10 Rules for Success
Communicate everything you possibly can to your partners.
The more they know, the more they’ll understand. The more they understand, the more they’ll care. Once they care, there’s no stopping them.
Sam Walton's 10 Rules for Success
Information is power, and the gain you get from empowering your associates more than offsets the risk of informing your competitors.
Sam Walton's 10 Rules for Success
Appreciate everything your associates do for the business. Nothing else can quite substitute for a few well-chosen, well-timed, sincere words of praise.
They’re absolutely free and worth a fortune.
Sam Walton's 10 Rules for Success
Celebrate your success and find humor in your failures.
Don’t take yourself so seriously. Loosen up and everyone around you will loosen up. Have fun and always show enthusiasm. When all else fails put on a costume and sing a silly song.
Sam Walton's 10 Rules for Success
Listen to everyone in your company, and figure out ways to get them talking.
The folks on the front line - the ones who actually talk to customers - are the only ones who really know what’s going on out there.
You’d better find out what they know.
Sam Walton's 10 Rules for Success
Exceed your customer’s expectations. If you do they’ll come back over and over.
Give them what they want - and a little more. Let them know you appreciate them. Make good on all your mistakes, and don't make excuses - apologize.
Sam Walton's 10 Rules for Success
Stand behind everything you do. ‘Satisfaction guaranteed’ will make all the difference.
Sam Walton's 10 Rules for Success
Control your expenses better than your competition. This is where you can always find the competitive advantage.
You can make a lot of mistakes and still recover if you run an efficient operation. Or you can be brilliant and still go out of business if you’re too inefficient.
Sam Walton's 10 Rules for Success
Swim upstream. Go the other way. Ignore the conventional wisdom. If everybody is doing it one way,
there’s a good chance you can find your niche by going exactly in the opposite direction.
Small Scale Business:
The Small Scale Sector is the natural habitat of entrepreneurs.
Most entrepreneurs start small and then nurture their units into large industries.
Small Scale Business:
The SSI Sector provides an opportunity for them to hone their skills and talents, to experiment, to innovate and transform their ideas into goods and services needed by the society.
Small Scale Business:
Initially the capital investment in small ventures is nominal
the technology used is low, so it becomes easy for first time entrepreneurs to set up a venture.
Profile of SSI Sector in India
95% of Industrial Units in the Country
39.92% of Value Added in the Manufacturing Sector
34.29% of National Exports 6.86% of Gross Domestic
Product
Profile of SSI Sector in India
Employment To 193 Lakh Persons
Production of Over 7500 Items in the Industrial Sector
298 Items Reserved for Exclusive Manufacture
358 Items for Exclusive Purchase from This Sector
SMALL SCALE SERVICE AND BUSINESSENTERPRISE [SSSBES]
An industry related service/business enterprise with:
investment up to Re.0.5 million (5 Lakhs) in fixed assets,
excluding land and building, is treated as an SSSBE.
E.g. advertising agencies, Marketing consultancy, Auto repair, services and garages, Tailoring, Desktop printing etc.
Small Scale Business:
70 percent of the total innovations in the world have come from the Small Scale Sector:
Siemens, Ford, Eastman Kodak, Lever
Brothers, Reliance, Nirma, Rasna were all started small and then nurtured into
big businesses.