IntrapreneurshipDevelopments of internal markets, autonomous and semi autonomous business units within the organization, producing products/services/technologies that employ company resources in a unique way

Intrapreneurship gives managers of corporation’s freedom to take initiative and try new ideas. Intrapreneurship is entrepreneurship within the existing business; they focus on creativity and innovation.

Intrapreneurship is Corporate Entrepreneurship

Intrapreneurship bridges gap between entrepreneurs and managers, third career path

Intrapreneurs take new ideas, work on prototypes and convert them into profitable products and businesses

It is a tool for stimulating and capitalizing on individuals in an organizations who believe that something can be done in a different way

Intrapreneurship is about new business ideas while driving to work or taking a shower

Advantages of Intrapreneurship

Build and improve corporate business

Capital for the idea easily comes from internal resources within the corporate identity

Established corporate image can boost the success of intrapreneurial idea

Continuous access to the propriety technology to stay competitive

Corporates offer economies of in marketing, distribution and services

Corporates offer unique advantage of multidisciplinary work

Intrapreneur retains job security and enjoys the freedom and prosperity

Due to intense competition most companies prefer intrapreneurs to managers

Intrapreneurs Profile

Vision/Goal Setters

Motivation

Action oriented

Intrapreneurs learn to manipulate the system

Well rounded business skills/learn from mistakes

Moderate risk takers

Intrepreneurial Environment

Research & Development

Funding

Creating A Climate

Training

Reward System

Multi-disciplinary

Committment

Entrepreneurial Perspective

• Concept of Entrepreneur - Multidisciplinary

• Dynamic - changes over time and place

• Catalyst - triggers entrepreneurial process

• Drive and Initiative

• Risk Bearer

• Director of Musical Instruments

• Co-coordinator, Organizer, Manager, Supervisor

• Innovator, Dreamer, Visionary

• “Heffalump”

Origin and Evolution

• “Entreprendre” (French Verb) - to undertake,

• Bold, hazardous undertaking

• Creates wealth, generates employment

• Profitable use of land, labour and capital

• Risk Bearing under Uncertainity

• 16th Century- Military Expeditions

• 17th Century Construction & Fortification Activity

• 18th Century- Economic Activity

Classical Theory

Richard Cantillon’s - bearer of non-insurable risk

Adam Smith -recognized merchant, employer & undertaker

An Enquiry Into the Nature & Causes of Wealth of Nations (1776) he extolled the role of capital formation as an important determinant of economic development

Smith did not distinguish between Capitalist and Entrepreneur, the premium for risk and uncertainty was not assigned

Neo-Classical Theory

• Say’s entrepreneur unites means of production and creates value by employing them.First economist to distinguish entrepreneur from capitalist

• Leon Walrus’s -4th factor of production. (Co-ordinator)

• Marshall- assigned risk bearing and management as entrepreneurial function

• J. S. Mill emphasized direction and production processes acknowledging extraordinary skills of entrepreneurship

• Francis Walker distinguished between entrepreneur and capitalist

• Keynes’s entrepreneur is an equity owner and decision maker

Modern Thinkers

• Knight - bearer of non insurable risk and uncertainty, their supply is governed by economic, psychological and social factors

• Higgins’s entrepreneurship is a function of seeking investment and production opportunity

• Cole focuses on aggrandizement of profits

• Max Weber distinguished between adventurous spirit and spirit of capitalism. He linked entrepreneurship to religion

• Jeffrey Timmons - knack of sensing an opportunity where others see chaos,contradiction and confusion

• Fredrick Harbinson stated organisation building activity is critical for industrial development

• Joseph Schumpeter put the human agent at the centre of the process of economic development which takes place in five ways.

• New Product

• New Method

• New Market

• New Source of supply

• New Organization

Contemporary Thinkers

Hagen –Socio Psychological approach

He identifies child rearing practices, low father dominance and maternal love as factors promoting entrepreneurship as main elements

Liebenstein – Gap Filling

Peter Kilby – “Heffalump”

Thomas Cochran – Patterns of child rearing and family.

John Kunkel – Entrepreneurship depends on a combination of circumstances that are difficult to create and easy to destroy.

Peter Drucker – Entrepreneur always searches for change, responds to it and exploits it as an opportunity.

Frank Young - Entrepreneurial activity is generated by family background.

David McClelland – Researched achievement orientation as the most directly relevant factor for explaining economic behaviour.

Economists – harbingers of growth

Sociologists – sensitive energizer

Psychologists – motivation conducive to development

Political Scientists - leader

Entrepreneur (Conceptual Framework)

Entrepreneur– Person

Enterprise – Creation

Entrepreneurship - Process

Advantages of Entrepreneurship

• Wealth Creation

• Generation of Employment

• Economic Development & Growth

Entrepreneur

Enterprise

Entrepreneurship

Nature & Development of Entrepreneurship

• Entrepreneurship - creating Wealth, Employment & Opportunities

• Case Studies

• Global

• National

• The New Entrepreneur

• The Art of spotting opportunities

• 10 Trends driving Entrepreneurs

The World's Top Entrepreneurs

1. Fredrick W. Buckman (Trans Elect) 55 year old, nuclear engineering v PhD. Chairman & CEO v Co- Founder Trans – Elect Carrying power without generating it will yield 14% return on

equity. Grids worth 850m, $. Goal to become biggest transmission owners in the US.

2. Stelios Haji – Ioannou (EasyGroup) Easy Group 34 years, Chairman & Founder of Easy Group aims at starting one company a

year – so far he is on schedule He has launched 6 businesses in 6 years from on-line car rental and financial

services sites to cyber cafes. He aims at making money out of capital gains and not royalties. Personal fortune 1.3 billion $ besides owing a shipping company

3. Joseph J. Atick (Visionics) 37, was a scientist labouring in obscurity A day later he was the highest in high-tech security His 7 year old company Visionics Corp. Jersey City N. J.

makes biometrics matched against those in the database to identify anyone from runaways captured on video.

The 200m$ biometrics markets is expected to hit 1 billion $ by 2004

Since Sept. 10, Visionics Stock price has nearly quadrupled to about 15$

10 Entrepreneurs who changed Corporate India

1. Cowasjee Nanabhai Davar

1854, steam powered textile mill capitalized at 5 lakh, paid 10% dividend for 6 years

2. Sir Jamshetji Nusserwanji Tata

Focused on steel, Hydroelectric power Technical education.

3. Chidambaram Pillai

His Swadeshi steam Navigation Company broke the monopoly of British

4. Ravi Bahadur Mohan Singh Oberoi

In 1934 he mortgaged his wife's Jewellery worth Rs.20,000 to buy a stake in British partner stake in Clarke's hotel Simla.

In 1995 he opened the 1st 5 Star Hotel in Delhi. 34 hotels, 7 countries later, Oberoi was the 1st Indian multinational

5. Henning Hock Larsen

Larsen & Toubro came to India to set up a cement plant in 1938 which became India’s engineering giant worth 5,400 crores – from nuclear plants to new expressways Larsen's stamp on India is indelible.

6. Dr. Verghese Kurien

Dr. Kurien created Operation Flood largest dairy development programme in the world.

India became world’s largest milk producer through 10 million farmers in Kaira district Gujarat.

Humble farmers, cowherds all have a stake in Amul.

7. Karsanbhai Knodidas Patel

Patel knew no marketing, no management – but created a brand in his backyard in 1969 worth 2,440 crores. Today Nirma’s cut price detergent shook HLL.

8. Aditya Vikram Birla

Long before globalizations become a buzzword he spread outward with a textile mill in Thailand.

The World’s largest Palm refinery in Malaysia. Till 1995 the group had 17 companies in 14 countries.

9. Dhirubhai Ambani

Truly a tumultuous entrepreneur of Gujarat village school teacher’s son worked for a petrol station, mixed opportunism with street- smartness and manipulated licence raj to his advantage Adapted to licence raj – Reliance today is a 60,000 crore empire.

10. N. R. Narayan Murthy

Messiah of the new middle class

How many companies have 1,388 employees that are rupee millionaires and 72 dollar millionaires including drivers and peons.

Along with 7 professionals he built a tech powerhouse from Rs. 10,000- initial investment in 1981.

With middle class values, hard work, humility, honesty and innovation he inspired the whole nation.

10 Trends Driving Entrepreneurship

1. Nuclear Families

2. Shrinking Government jobs

3. Easier money

4. Less economic control

5. Technology

6. Just-do it effect

7. Growing Services

8. Growing Consumer Class

9. Instant Classification

10. Globalization

Business Planning Process

The success or failure of an enterprise depends on the project, the identification of which is the first step. It consists of analysis of economic data for identifying the right product or service

Peter Drucker classifies opportunities as Additive- concerns with the existing resources without making a change. Complementary opportunity is introducing new ideas, involves change

Breakthrough Opportunity

Breakthrough involves drastic, fundamental changes in the existing business

Risk is least in additive opportunities, greater in complementary and greatest in Breakthrough

Keeping in mind these factors and expecting fair return the entrepreneur has to choose the project

Identify, explore and select the business opportunity

What is an Opportunity?

An opportunity is defined as an attractive project idea, which an entrepreneur accepts as a basis for his investment decision. Good business ideas should be convertible into feasible projects. Ingredients of business opportunity

Good market scope-gaps between demand and supply. An attractive acceptable return on investment. Technical, production, commercial and management viability

Opportunity Evaluation

Compatible with Promoter-financial and human resources. Availability of raw materials-cost of obtaining them

Compatible with Government regulations and priorities. Cost of the project-material, labour and overheads

Potential Market-consumption trends, nature of competition, potential demand in domestic and export market, availability of substitutes, seasonal variations. Risk inherent in the project-changes in demand, technology

Project Classification

Quantifiable and non Quantifiable

Projects concerned with industrial development, power generation, mineral development are quantifiable

Projects involving health, education and defense are non quantifiable

Techno-economic projects. Magnitude oriented-large medium and small

Causation oriented-demand based or raw material based

Factor Intensity Oriented

Capital intensive or labour intensive depends on large scale investment in plant and machinery, human resources

According to the Planning Commission- Sectoral projects- Agriculture and allied sector, Industry and Mining, Social Service, transport and Communications, Irrigation and power, miscellaneous sector

Classification by financial institutions- new projects, expansion, diversification, modernization, educational, research and development, service and welfare projects

Steps to Implementation

Study the environment and decide whether to go into trading, manufacture or service

Define the aim

Self- Evaluation-question your competency and strengths

Specify requirements-space, plant, machinery, technical soundness, marketing ability, finance. Every successful step will take the entrepreneur one step ahead, one failure many steps back

Importance of Project identification

Process of development by income and employment generation, they become agents of economic, socio-cultural development, project commitment cannot be easily reversed, projects involve substantial financial outlay. They develop infrastructure and environment. Long term benefits

Internal Constraints due to management system, feasibility report, availability of physical, non physical resources aiming for unrealistic objectives

External Constraints

Nature, Size and location-limiting factors when project does not conform to the socio-economic objectives

Government policies and regulations-delays in approvals, foreign collaboration approvals, environmental clearance, foreign exchange regulations

Cumbersome Procedure-documentation systems

Project Report

Necessary for the entrepreneur and developmental agencies

SIDO under the Ministry publishes guidelines, statistical information on many items with regard to present and installed capacity,production and capacity utilization, Govt. approach towards the item, production activity level, match financial resources with amount required.

Institutions helping Entrepreneurs

Small Industries Service Institute (SISI)

State Industrial Development Corporation

Technical Consultancy of IDBI

Specialized cells set up nationalized banks

The size of the report depends on the unit

Nature of production and the product

Amount of financial assistance required

Project Report Contents

Project Description

Market Potential

Capital Cost and Sources of Finance

Assessment of Working Capital

Other financial aspects

Economic and Social Variables

General Information

Name and address of the entrepreneur

Qualifications,experience, capabilities

Partners whether sleeping

Trends in the industry

Past Production trends

Future demands

Organization structure, constitution,registration

Product Information

Site, town, industrial estate,land owned or leased, NOC and location

Demand based –near the market

Resource based eg sugar close to sugar

Skill Based eg carpet near the skill center

Footlose Industries-covered or open

Raw Material

Imported or local, licensed or controlled

Availability of skilled labour communication facilities,transportation facilities, power and fuel

Availability of water-ice plants, tanneries and breweries

Method of waste disposal-noise pollution,effluent treatment machine vibrations

Technology selected indigenous or imported

Details of Manufacturing Process

Production Flow Chart, sub-process, specifications, cost and capacity

Quality control arrangements,testing inspection and equipments. ISI certificate

Market Potential-demand and supply position/gap

Price- Competitors price

Marketing Strategy

Selling of the product proposal

Distribution network, Ancillary unit, ancillary service

Seasonal items/during off season

Transportation

Capital Cost & Sources of Finance

One time cost- vehicles, land, building, furniture, jigs plant & machinery

Working Capital Costs-RM, WIP &FG inventory

Assessment of Working Capital

Most units fall sick due to inadequate assessment of WC requirements. Entrepreneurs perspectives are different from Bank’s perception

Banks have 3 different forms below 25,000, between 25000 to 5 lakh and above 5 lakh

Anticipate shortages and plan WC well

Other Financial Aspects

Prepare the project B/S, P & L account, cash flow statement.

Calculate the beak even point

Debt Service Coverage Ratio

Net Profit after Tax

Depreciation

Interest

Economic and Social Variables

Cost Benefit Analysis

Abatement Costs to protect environmental damage

Promoting Employment

Import Substitution

Ancilliarisation

PERT, CPM charts

Project Implementation

Activity Chart

Acquiring Land ,Registration

Obtaining loans

Construction of Building

Ordering Plant and Machinery

Supply and installation of plant and machinery

Recruitment of Personnel

Trial Production, Commercial Production

Business Plan Outline

Description of business

Marketing

Competition

Operating procedures

Personnel

Business insurance

Financial data

Personality of an Entrepreneur

Who is an Entrepreneur?

Each one has unique characteristics –

Vision, Drea, Organizer,Manager, Co-ordinator

Innovator, Leader, Risk-taker, Dynamic, Goal Seeker

Rises after every fall Converts Obstacles to Opportunities

Common Thread

Achievement Motivation

• high drive, high activity level

• constantly struggling to achieve

• goal seekers

• decision makers, problem solvers

• accept achievable challenges

Kinds of Entrepreneurs

Innovating

Imitating

Fabian – carry on types, shy, lazy

Drone - traditional

Inheritance

Technologist

Prime Mover – growing, expanding, and diversification oriented

Manager Type – Keeps it running

Minor Innovation

Initiator

Satellite – ancillary

Local trading type (limited outlook)

Entrepreneurs are made not born

Everyone cannot be an Entrepreneur

Good Entrepreneurship is a combination of genetic factors, conditioning and dynamism

Entrepreneurship is not gender specific

Could be men, women or children

Personality of Entrepreneur

Economic - Drive, Risk-Taker

Psychological – Achievement Motivation

Political - Leadership

Sociological - Customer Orientation

Entrepreneurial Personality

Indomitable will – never say die

Fire in belly

Will to win

Innovations and Entrepreneurship

Innovations & Entrepreneurship

• Innovation is investing resources to create wealth or investing wealth to create resources

• Innovation is conscious search for opportunity

• The innovation entrepreneurship link the entrepreneur creates new wealth producing resources or endows existing resources with enhanced potential for creating wealth

Innovative Strategy

• Innovative strategy for ongoing business

• Better or more & new and different

• Why innovation? To face competition, to stand out in the clutter, to survive the recession,

• to solve problems

Innovations and Profits

• Innovations can happen by reducing cost of production and increase demand for your product

• The role of the innovator needs technical knowledge, emotional intelligence, huge common sense & intuition

• Spirit of adventure and obsession to bring change

• Profits & innovation, two sides of same coin

Breaking the circular flow

• Schumpeter’s model describes breaking the circular flow with an innovation in the form of new product for making profits

• Profits caused due to innovation tend to be competed away as others imitate and adapt

• Innovative entrepreneur comes out with another innovation when the favourable effect of the former innovation dies out

• Profits are generated & continue to rise with innovation

Instilling Attitude for innovation

• Encourage creative conflict

• Big ideas come from small teams

• Learning happens away from the desk

• Understand the products and users

• Live in the future

• Failure can sometimes lead to innovation

• Join prototyping to brain storming for fast track innovations

Sources of innovation

• Peter Drucker – sources of innovation

• Incongruities

• Process needs

• Industry and Market change

• Demographics change

• Changes in perception

• New knowledge

Principles of Innovation

• Purposeful systematic innovation begins with analysis of sources of opportunity

• Innovation is both conceptual and perceptual

• Innovators must go & look, ask and listen

• Innovative entrepreneurs must use the right brain and left brain

• They must look at figures, people and opportunities

• Effective innovators start small, create new users and new markets

Acquisition

• Purchase of the company or a part of it so that the acquired company is completely absorbed.

• Fitting in overall direction & structure of the organizational plan.

Advantages

• The acquired company is already a established company.

• Gets a customer base, sales structure,supplier,wholesaler,retailers, employees.

• Actual cost of acquiring a business is less costly.

• Assessing opportunities becomes easier.

Disadvantages

• Acquired companies have a bad track record.

• Key employees may leave.

• Purchase price may be inflated.

• Self-evaluation may not be there.

• Price determination & negotiation is important.

Ancillarization

• Industrial undertakings having investments in fixed assets, plant & machinery whether on ownership or hire purchase are engaged in manufacture of parts & components, sub assemblies ,tooling, intermediaries.

• 50 % of its production has to be given to other undertakings.

Benefits of ancillarization

• Leads to growth of employment

• Leads to growth of GDP

• Leads to growth of Entrepreneurship.

Advantages

• Investment is Low

• Inventories’ investment is drastically reduced for big companies.

• Economical

• Parent co and the ancillary work like a team.

Disadvantages

• Payments are delayed.

• Adopting higher technology becomes a problem due to limitation of size.

• Bargaining power of parent co creates low operating margin.

• Interest on delayed payment(SSI & ANCILLARY 1993 ACT)

Venture Capital Funding

Venture Capital plays an important role in financing small enterprises, where growth and risk is high. This investment is needed at implementation between start up and commercial production. Venture capital providers offer services such as business development, approval of project ideas, financial assistance and management expertise

Features of Venture Capital Funding

Venture capital firms insist on equity participation through direct purchase of shares or convertible securities

It ensures continuous participation of the venture capitalist in the entrepreneurs business

Venture Capitalist may also provide services of marketing, technology & developing organizational structure

VC comes into play when it is not easy to access capital from conventional sources

High Business Growth

The business must have a high potential for growth. Venture Capitalist is not averse to risk

The flow of funds from the VC is in a phased manner and can be in the form of debt in initial stages

Venture Capitalist is not an equity holder.

Venture Capitalist will ensure the exit route in the appropriate manner ensuring the interest of the entrepreneur as well

Venture Capital Process

Preliminary Screening- This begins with the business plan of the entrepreneur. A good plan should have clear cut mission, clearly stated objectives, in depth industry and market analysis and key financial statements. The executive summary of the Business Plan will help the VC to evaluate the proposal from the long term policy and short term needs in developing portfolio balance. He investigates the industry and ensures he has appropriate knowledge & ability to invest. ROI and credibility of the entrepreneur play a key role in the decision

Due Diligence

This stage covers the agreement on principal terms between entrepreneur and venture capitalist before making commitment of money, time, efforts involved. Review of the company history, business plan, resumes of promoters and key managers, financial background of promoters and target market is scrutinized. Risk analysis of the business is jointly undertaken

Negotiations

Once the viability of the project is clearly understood, the negotiation process starts. This covers amount of investment by the promoters and Venture capitalists

Total funds to be made available to the VC, debt component and the interest rate for the loans, securities, equity and convertible securities, protective clauses, right to control the management of business, buy-back arrangements and finally exit routes

Contract (MoU)

After taking into consideration all the dimensions, the MoU is signed between both parties. This should take into consideration the regulatory laws as well.

Flow of funds- this progress according to the MoU. The external business environment changes and flexibility is desired from both parties hence periodic reviews are conducted

Tips for Entrepreneurs

Select the venture carefully

Acquire all the facts and previous background of the VC

Always try and keep an intermediary who is useful for negotiations and disputes

Avoid lawyers and accountants in the initial stages

Be careful of what is promised and what is promised

Be flexible and patient

Indian Scenario

Always remember performance establishes trust

There are many VC s in India in the form of individuals and firms. IT entrepreneurs have availed of VC. Banks and Financial Institutions have promoted this concept

SIDBI, Technology Finance Corporation of India (TDICI), Risk Capital and Technology Finance Corp. of India (RCTC), SBI Venture Capital fund, Can bank, Indus Venture, Andhra Pradesh and India Investment Fund

NEW ENTERPRISE CREATION AND MANAGEMENT

ENTREPRENEURIAL QUALITIES AND COMPETENCIES

CHARMS OF BEING AN ENTREPRENEUR

You are Your Own Boss You are Independent You No Longer “Work for Somebody” You Create Jobs for Others You Use Your Creative Talents, Skills & Knowledge for Your Own  Benefit You Get Unlimited Rewards You Prove to the World that You are an “Achiever”

Because You Seek Nothing Less Than Excellence

TIPS ON BEING A SUCCESSFUL ENTREPRENEUR

Do Not Start an Enterprise Without Having/Acquiring All-Round Knowledge About It.

Be Lavish in Calculating Expenditure and Miserly in Calculating Income.

 Do Not Expect Early and Easy Returns From Your Enterprise.

Be Prepared for Delegation When Needed.

Do Not Take High Risks; Take Moderate and Calculated Risks.

Be a Systematic Planner; Go Step By Step to Reach Your Goal.

Manage Your Time Effectively for Maximum Utilisation.

Be an Information Gatherer about Your Competitor.

Do Not Avoid Problems - Anticipate Problems and Be A Problem-Solver.

Consult Experts and Other Entrepreneurs, When in Doubt.

 Be a Decision Maker - Take Decisions After Weighing and Evaluating All

Implications Do Not Be Afraid If the Decision is Difficult and Unpleasant

Be Cost Conscious - Always Weight The Costs and Benefits of All Expenditure.

Have Commitment to Your Work Contract

Be Punctual in Your Delivery Schedule.

Be Quality Conscious.

Difficulties Will Come - Do Not Give Up.

Be Assertive, Direct and Honest.

YOU CAN BECOME AN ENTREPRENEUR IF YOU HAVE THESE COMPETENCIES

1. Initiative

2. Seeing and Acting on Opportunities

3. Persistence

4. Information Seeking

5. Concern for High Quality Work

6. Commitment to Work Contract

7. Efficiency Orientation

8. Systematic Planning

9. Problem Solving

10. Self Confidence

11. Assertiveness

12. Persuasion

13. Use of Influence Strategy

NEW ENTERPRISE CREATION: THE PROCESS

ENTREPRENEURIAL PROCESS

Stages Involved in Entrepreneurial Process

 

BUSINESS OPPORTUNITY IDENTIFICATION & SELECTION: THE SEVEN STEP PROCESS

Step 1 : Preparation of Personal Profile

Step 2 : Development of Business Opportunity Identification & Selection (OIS) Framework

Step 3 : Generation or Identification of Ideas

Step 4 : Snap Investigation of Ideas

Step 5 : Evaluation in Terms of Decision Making Framework and Shortlisting of Ideas

Step 6 : Pre-feasibility study

Step 7 : Opportunity Selection

THE PROCESS OF STARTING A BUSINESS

Selection of Location : A Vital Decision

Pollution NOC : A Must

Stage 1 

Perceiving,Identifying &Evaluating anOpportunity

 

Stage 2 

Drawing up a

Business Plan

Stage 5 

Consolidation and

Management

Stage 3 

MarshallingResources

 Stage 4

 

Creating the Enterprise

 

Infrastructure Facilities : The Basic Requirements

Land & Building : Make Correct Assessment

Select the Right Manufacturing Process

Balance the Plant & Machinery

Technical Know-how/Design & Engineering : Evaluate the Correct Status

Miscellaneous Fixed Assets : Provide Bare Minimum

P & P Expenses : Make Adequate Provision

Contingencies : A Cushion Against Exigencies

Margin for Working Capital : Make Adequate Provision

Project Cost : An Estimate of Funding Requirements

Financial Viability : The Crucial Part of Project Evaluation

Means of Finance : Meeting the Funding Requirements of the Project

Profitability : Reflecting the Payback Capacity of the Project

Break-Even Point : The Cutoff Period for Profit & Loss

Cash Flow : The Financial Plan

Internal Rate of Return : A Measurement of Gains Versus the Resources Employed

Economic Viability : A Commitment to the Society

Government Formalities and Procedures

PREPARING A BUSINESS PLAN: THE KEY COMPONENTS

Basic Parameters

Market Feasibility

Technical Feasibility

Financial Viability

Implementation Schedule

BENEFITS OF PREPARING A BUSINESS PLAN

Provides Focus and Directions to Your Business

Indicates How to Remain Competitive

Plan Ensures Your Growth

It Pays to Remember

STEPS FOR SYSTEMATIC PLANNING

Step 1 : Understanding Requirement of the Task

Step 2 :Breaking Down Large Task into Small Sub-task

Step 3 : Identifying Alternatives

Step 4 : Comparing Alternatives in the Light of Goals Sought

Step 5 : Choosing an Alternative

Step 6 : Anticipating Obstacles

Step 7 : Taking Logical Steps

Step 8 : Learning from Experience

Step 9 : Reworking Strategy

NEW ENTERPRISE MANAGEMENT

MARKETING MANAGEMENT

FINANCIAL MANAGEMENT

MANPOWER PLANNING

TIME MANAGEMENT

EXPORT MARKETING

MANAGEMENT OF SEVEN CRISES IN BUSINESS

BUSINESS COMMUNICATION

NEW ENTERPRISE MANAGEMENT: MARKETING MANAGEMENT

6 Ms OF EFFECTIVE MANAGEMENT OF MARKETING

1. Man  

2. Money

3. Machine

4. Material

5. Market  

6. Motion

MULTI-FACETS OF MARKETING `

Research

Planning

Branding

Pricing

Distribution

Selling

Packaging

Merchandizing

Warehousing

After-Sales-Service

Sales Promotion

Advertising

Credit Policy

MARKETING FOR SMALL BUSINESS – SOME ECONOMICAL METHODS

1. Employ Some Good Salesmen.

2. Use Local Media

3. Try To Establish Your Market Through Word of Mouth Publicity

4. Identify Persons Who Can Influence Others in a Given Area And Try To Make Them Your Customers

5. Be A Member of The Local Social As Well As Trade Organizations

6. Take Maximum Advantage Of Local Fairs, Exhibitions And Business Functions

7. If Your Product Is Durable Or Semi-Durable,

8. You Can Work On A Franchise Basis For A Known Brand of Product

9. Door To Door Selling

10. If It Is A Product For Children You Can Also Distribute Samples In Schools

11. For Industrial Products, Personal Contacts, Demonstrations, Samples And Test Use Can Be Useful.

12. For Technical Products, You Have To Establish And Maintain Contacts With Advisers, Consultants And Technical Staff

NEW ENTERPRISE MANAGEMENT: FINANCIAL MANAGEMENT

THE FUNCTIONS OF FINANCIAL MANAGEMENT

Managerial Functions

Routine Functions

EFFECTIVE FINANCIAL MANAGEMENT IN BUSINESS

Return on Investment (ROI)

Degree of Liquidity

Risk Factor in Investment

PRINCIPAL FINANCIAL STATEMENT

Balance Sheet

Profit and Loss Account

Trial Balance

WHAT IS BUDGETING

A Budget is the Plan of Your Firm

A Budget is Always Quantified in Financial Terms

The Budget Must Quantify Revenues and Expenses Related to a Specific Operation

A Budget Should Be Prepared for a Specified Period of Time

NEW ENTERPRISE MANAGEMENT: MANPOWER PLANNING

PLANNING FOR MANPOWER

Manpower Planning And Selection of Employees Are Very Important For Any Organisation. Manpower Planning Involves Not Only Estimating the  Requirement for Workers And Supervisory Staff, But Also Involves Effective   Utilisation of Manpower Resources

STEPS TO ENSURE THE AVAILABILITY OF MANPOWER

Step 1 : Examine The Objectives of Your Organisation For The Next Few Years.

Step 2 : Forecast Manpower Based On Your Future Plan

Step 3 : Prepare A Chart of Existing Manpower

SOURCES OF MANPOWER SUPPLY

Internal Supply

Private Placement Agencies

Industrial Training Institutions, Polytechnics,etc

Management Schools

NEW ENTERPRISE MANAGEMENT: TIME MANAGEMENT

PRINCIPLES OF TIME MANAGEMENT

1. Analyse your time inventory and utilise it periodically

2. Keep some time free, daily, for thinking about your business and planning

3. Find out your personal prime time

4. Delegate non-priority tasks to subordinates

5. Reward yourself each time you follow your time management plan

6. Before you go to sleep each night, plan the work for the next day

NEW ENTERPRISE MANAGEMENT: EXPORT MARKETING

EXPORT MARKETING – HINTS

If You Are A New Exporter, Here Are Some Hints For You

Prepare Yourself For International Marketing Through Experience in the Local Market, Acquire the Required Technical Expertise Before Venturing into Export, Beware of Why You Should Enter the Export Market And What Your Goals Are, Develop Export Marketing Plans And Strategies, Adopt Marketing Strategies That Add Value To Your Product in the Export Market, Identify Good Sales Agents / Distributors in the Market Targeted, Price Your Product Carefully.

IDENTIFYING AND EVALUATING

EXPORT OPPORTUNITIES

Identify Market Segments

Identifying Wants and Needs

Maintain Records on Growth Trends

INTERNATIONAL MARKETING STRATEGY

When you decide to export, you must formulate an export strategy. This will tell you where you are going and how you should get there.

INGREDIENTS OF INTERNATIONAL MARKETING STRATEGY

Market Segmentation

Market Research

Product Characteristics

Export Pricing

Distribution Channel

EXPORT COSTING METHODS

The Cost-Plus Approach

Marginal Costing or the Contribution Pricing

The Value-Added Costing

INFORMATION ON COMPETITIVE PRODUCTS IN WORLD MARKETS

Financial Times

The Public Ledger

Metal Bulletin

Marketing in Europe

Prices of Selected Asia/Pacific Products

Catalogues of Mail Order Houses

Guidelines for Exporters for Various Products in UK Market

Fresh Produce Journal

NEW ENTERPRISE MANAGEMENT: MANAGEMENT OF SEVEN CRISES IN BUSINESS

 THE SEVEN BUSINESS CRISES – Evaluating Performance: Ladder of Seven Crises

Here are The Types of Business Crises,

The Causes and the Measures to Prevent These Crises

First Crisis: Starting Crisis

Inadequate Rounded Managerial Experiences/Inadequate Understanding of the Line Chosen

Under Estimation of the Capital Requirement for the Project

Lack of understanding of accounts

Wrong Choose of Equipment/Project Capacity

Ignorance about Taxation

Avoiding Starting Crisis

Choose the project line you are most familiar with (experience, education, market contacts, special knowledge, etc.)

Make realistic, not over ambitious, plans

Allow the project report to `thaw` and recheck optimistic assumptions

Be conservative about income (low and late) and liberal about expenditure (high and early) in making cash flow projection

Never start a project without ensuring sufficient funds-change it, curtail it or drop it

Use as much advice and information as possible from all possible sources

Invest in an accountant at the earliest (learn what important financial data are needed)

Visit sales tax and excise offices regularly

Second Crisis: Cash Crisis

Excessive attention to profits and sales growth rather than cash-in-hand (overinvestment in raw material stock, rising outstanding amount, etc.)

Excessive investment in fixed assets by tying up funds

Unplanned expansion in time and stages

Avoiding Cash Crisis

Understand the relationship between profit and cash and the difference between cash and assets

Constantly watch for ways of economising on cash

Consult good accountant, bankers and financial experts; invest in a good accountant at the first opportunity

Constantly assess cash position and prepare cashflow statements every three months in advance

Monitor raw material stock, semi-finished goods, inventory of finished goods and outstanding recoveries

Third Crisis: Delegation Crisis

Inability to delegate responsibilities and share the decision making burden.

Psychological problems (“only I can do better”, lack of capability to guide and groom others     and lack of trust in subordinates)

Business and responsibility grow but time does not, thus business suffers and success ends in failure.

Avoiding Delegation Crisis

Seek out a capable second person to supplement `you`

Test him, watch him and start sharing responsibilities

Consult management experts or colleagues to identify your own weaknesses and select the second person who is strong in those weak areas

Be prepared for according a high salary, appropriate status and authority and profit-sharing to retain the key person

Fourth Crisis: Leadership Crisis

Single owner or partners unable to manage responsibilities of a large firm

Failure to delegate authority and to develop a management team

Failure to adopt the managing style of an effective leader clinging to the old style of not delegating authority and doing everything by himself/herself.

Avoiding Leadership Crisis

The entrepreneur must train, discipline and re-educate himself in new management skills and styles for achieving and sustaining growth.

Old habits, outdated knowledge and management by one or two subordinates will not do

Act like a leader than a manager/supervisor

Constantly evaluate how you spend your time

Concentrate on business strategies, future plans, competition, government policies, etc.

Develop a team of executives and give them sufficient authority to create in them leadership qualities

Fifth Crisis: Financial Crisis

Failure to choose the right source of funding for expansion (excessive dependence on borrowed funds)

Failure to go to public

Over ambitious and unrealistic expansion plans using surplus funds

Psychological problems of losing control – 100% ownership of declining unit vs 80% of a large successful firm

Avoiding Financial Crisis

Sufficient delegation, good team work and constant monitoring help avoid financial crisis

Consult experts and bankers to choose the best source of funds and the time and mode of expression

Do not be afraid to go public

Remember : 80% ownership of a growing firm is better than 100% ownership of a stagnant/declining one

Sixth Crisis: Prosperity Crisis

Satisfaction with current success – caught napping

Failure to watch out for new competition, technological changes, raw material substitutes, new     products and consumer tastes

Loss of market share and declining profits

Overconfidence, a cockiness arising out of prosperity, ambitious expansion moves,and intoxication by success

Avoiding Prosperity Crisis

Always keep your eyes and ears open; do not relax even in prosperity

Always remain firmly aggressive and not passive

Do not be overconfident. Do not enter into an unknown project or over ambitious expansion

Remember success today is no guarantee of success tomorrow

Seventh Crisis: Management Succession Crisis

Long illness, accident, unexpected death or incapability of the entrepreneur

No one groomed to take over management responsibilities in such a case

The second key person does not have sufficient shares in the firm

Death duty or estate duty obligations

Failure to delegate, lack of planning, over-confidence-all taking their toll.

Avoiding Management Succession Crisis

Succession has to be planned-remove all doubts and apprehensions

Take advance action in selecting and grooming a management successor

Have one person with general management skills and few others with special skills

A team is better than a single “prince”

Invite competent persons on the board of directors

Develop a club of like-minded businessmen

Constantly interact with bankers and investors

Prepare a will, transfer shares and plan for death duty, etc.

Brief your family about assets, liabilities and other key elements of your business

NEW ENTERPRISE MANAGEMENT: BUSINESS COMMUNICATION

CONCEPT OF COMMUNICATION

Understand the Concept of Communication through 7 C’s And 4 S’s

The Seven C’s

Credibility

Context

 Content

Clarity

Channels

Consistency

Capability of the Audience

The Four S’s

Shortness

Simplicity

Strength

Sincerity

THE TEN COMMANDMENTS OF EFFECTIVE COMMUNICATION

1. Be Sure of What and Why You Wish to Communicate

2. Be Clear in the Use of Language

3. Watch How Much You Communicate

4. Use Adequate Medium

5. Provide the Right Climate

6. Listen Attentively 

7. Watch out for Unintentional Communication   

8. Remember That Communication is a Two Way Process

9. Be Sure Your Actions Do Not Contradict Your Communication   

10. Provide Communication Training