1111entrepreneurship and Project Management - Copy (2)

8/11/2019 1111entrepreneurship and Project Management - Copy (2)

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PROGRAM ON ENTREPRENEURSHIP

COURSE OUTLINE Session 1. INTRODUCTION OF ALL IN MBA CLASS !!!

Self Entrepreneurship story !!!

Nature and development of Entrepreneurship

Entrepreneurship Audit

The Value chain patterns

The three Key Assets

The top ten enterprises in IndiaThe top ten global companies

Session 2. ENTREPRENEURSHIP

Definition & Structure

Entrepreneurial Culture

Theories of Entrepreneurship

Classification and type of Entrepreneurs

Entrepreneurial traits and growth of Entrepreneurs

Nature and importance of Entrepreneurs

Entrepreneur versus Professional Managers

Development of Women Entrepreneurs


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SEARCH FOR A BUSINESS IDEA

PRODUCT PLANNING AND DEVELOPMENT

STRATEGY

EXISTINGPRODUCT

NEW

PRODUCT

EXISTING MARKETS

MARKET PENETRATION

PRODUCT DEVELOPMENT

NEW MARKET DEVELOPMENT

DIVERSIFICATION


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PRODUCT PLANNING AND DEVELOPMENT

PROCESSCONCEPT

CONCEPT

STAGE

EVALUATE

LAB

DEVELOP

MENT

PRODUCTDEVELOPMENT

STAGE

EVALUATE

PILOT

PRODUCTION RUN

IDEA STAGE

EVALUATE

IDEA

TESTMARKETINGSTAGE

EVALUATE

SEMICOMMERCIAL

PLAN TRIALS

COMMERCIALSTAGE

INTRODUCTION

GROWTH

MATURITY

DEDECLINE


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PHASES OF PROJECT FORMULATION

CONCEPTION OF

A NEW IDEAANALYSIS OF

RELATED ASPECTS

FORMULATION OF A

PROJECT

DESIGN OF A PROJECT


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SEQUENTIAL STAGES OF PROJECT

FORMULATION

PRE-INVESTMENT

COST BENEFITSOCIAL FINANCE

PROJECT

DESIGN NETWORK FEASIBILITY TECHNO INPUT


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STRATEGY PROJECT DESIGN

SEQUENTIAL

NARRATIONPROJECT LOGIC

GRAPHIC

PRESENTATIONNETWORK

RELATIONSHIP BETWEEN PROJECT

DESIGN AND NETWORK


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BASIC COMPONENTS OF A PROJECT

OBJECTIVE

ORGANISATION

RATE OF RETURN

SOCIAL BENEFITSSIZE OF

PROJECT


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CONCEPTUALISING THE PROJECT

Does your

Product

have a

Global

Market

Have you

checked it

out

Have you

factored the

export duty

Is your viable

project

viable?Have you set

a global

target data

Start

Financing

Redesign the

Project

Abort the

Project

Start

the

Project


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PHASES OF PROJECT MANAGEMENT

START IDENTIFICATION FORMULATION APPRAISAL

MANAGEMENTSELECTION IMPLEMENTATION


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PROJECT DESIGN AND NETWORK

ANALYSIS

STRATEGY PROJECT DESIGN

SEQUENTIAL

NARRATIONPROJECT LOGIC

GRAPHICAL

PRESENTATION NETWORK LOGIC


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ASPECTS OF PROJECT APPRAISAL

PROJECT APPRAISAL

TECHNICALFINANCIAL COMMERCIAL ECONOMIC MANAGERIAL

LEGAL SOCIAL ECOLOGICAL ORGANISATIONAL


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ECONOMIC ASPECTS OF A PROJECT

E

C

O

N

O

M

I

C

A

SP

E

C

T

S

INCREASED OUTPUT

BETTER SERVICES

INCREASED

EMPLOYMENT

HIGHER EARNINGS

INCREASED NATIONAL

INCOME


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ORGANISATIONAL ASPECTS

OF A PROJECT

ORGANISATION

SRTUCTRE ORGANISATION RECRUITMENT TRAINING


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FINANCIAL ASPECTS OF PROJECT

APPRAISAL

F

I

N

A

N

C

I

A

L

A

SP

E

C

T

S

FINANCIAL SOUNDNESS

EFFICIENT OPERTION

COST OF PRODUCTION

RETURN OF INVESTMENT


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CHARACTERISTICS OF AN

ENTREPRENEUR SESSION 2

ENTREPRENEUR

COMMMUNICATION SKILLS

TECHNICAL KNOWLEDGE

INNOVATION

BUSINESS SECRECY

CLEAR OBJECTIVE

EMOTIONAL STABILITY

CREATIVITY

PUBLIC RELATIONS

ORGANISATION

SKILLS


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QUALITIES OF A SUCCESSFUL


INSTINCT VISION KNOWLEDGE RISKTAKING APTITUDE

PRIDEWILL

POWERFLEXIBILITY CREATIVITY ORGANISING

TACTFUL VALUESSELF

CONFIDENCE DYNAMISM CHANGE


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FLOW CHART OF AN INDUSTRIAL


GENERATES PROFITS

MARKETING

TECHNICAL KNOW HOW

RISK TAKING

INITIAL CAPITAL &

FINANCE

INNOVATION

PROFITABLE

INVESTMENT

INDUSTRIAL LICENCE

E

N

T

RE

P

R

E

N

EU

R


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ENTREPRENEURIAL ENVIRONMENT

ENVIRONMENT

POLITITICAL ECONOMIC CULTURAL LEGAL TECHNOLOGICAL

ATMOSPHERE POLICIESVALUES RULES PRODUCTIVITY


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CHARECTERISTICS OF

ENTREPRENEURSHIP SESSION 2

ENTREPRENEURSHIP

DECISION

MAKING

RISK

TAKING

INNOVATION

ORGANISATION

SKILLFUL L

MANAGEMENT

ACCEPTING

CHALLENGES


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KEY ELEMENTS OF ENTREPRENEUR

SESSION 1

RISKTAKING INNOVATION

ETHICS

OPERATIONALEXCELLENCE

VALUES

CHARACTER

VISION ORGANISING SKILL


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HOW TO PREPARE A BUSINESS PLAN

SESSION 12 OBJECTIVE: BUSINESS IDEA : WHAT EXACTLY YOU WANT TO DO : BRAIN STORMING SESSION:

DEFINE THE OBJECTIVE AS A SPECIFIC OBJECTIVE IN A WRITTEN DOWN FORM ONLY.

MARKET SEARCH FOR THE PRODUCT AFTER PRODUCT IDENTIFICATION AND SEGMENTATION.

DEVELOP THE MARKETING PLAN BASED ON THE FAVORABLE AND UNFAVORABLE VARIABLES.

DEVELOP THE STRATEGY FOR OBTAINING THE START UP CAPITAL ALSO CALLED SEED CAPITAL

DEVELOP A STRATEGIC PLAN AS TO WHERE YOU WANT TO BE IN 1/2/3/4/5 YEARS !!!

DEVELOP A PLAN AS TO WHEN YOU WANT TO REACH BREAK EVEN STATUS !!! SPLIT THE COSTING OF THE PRODUCT INTO COMPONENTS TO ARRIVE AT COST/PROFIT

DEVELOP THE FINANCIAL PLAN TO OBTAINING THE NECESSARY FINANCING FOR PROJECT

DECIDE ON THE LOCATION OF YOUR BUSINESS LOCATION !!! LOCATION !!! LOCATION !!!

DEVELOP A PRODUCTION PLAN IF YOU WANT TO PRODUCE YOURSELF OR OUTSOURCE.

DEVELOP A MANPOWER/WOMAN POWER PLAN AS TO THE INITIAL NUMBER OF EMPLOYEES.

DEVELOP A MARKETING AND ADVERTISING STRATEGY FOR INTIAL LAUNCH OF PRODUCT.

PREPARE THE PROJECT REPORT USING ALL THE ABOVE POINTS IN YOUR REPORT

OBTAIN THE FINANCING FROM THE BANK AND THE INSTITUTIONS THAT HELP YOU !!!!

THANK YOU AND GOOD LUCK TO BECOME AN ENTREPRENEUR !!! DONT FORGET ATLEAST

TWO YEARS WORK EXPERIENCE IN THE PRODUCT/SERVICE YOU ARE PLANNING TO START TD !!!


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ENTREPRENEURIAL STRUCTURE

SESSION 1

STRUCTURE

VALUES EXTERNAL

ENVIRONMENT

SKILLS

PEOPLE TECHNOLOGY


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BASICS OF AN ENTREPRENEUR

SESSION 1

ORGANISATION

MANAGEMENTGROWTH

VISION

SKILL

URGE INNOVATION

RISK

ENTERPRISE


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CONCEPT OF ENTREPRENEURSHIP

SESSION 1

ENTREPRENEURSHIP ENTERPRISE

OBJECT

ENTREPRENEUR

PERSON PROCESS OF ACTION


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FAMILY BUSINESS SESSION 1

0 20 40 60 80 100TATA

RELIANCE

ITC

H.LEVER

FAMILY BUSINESS ACCOUNT FOR ABOUT 70% OF

THE TOTAL SALES AND NET PROFITS OF THE

BIGGEST 250 PRIVATE SECTOR COMPANIES

BIRLA SOURCE: CENTRE FOR MONITORING INDIAN ECONOMY

THAPAR


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INNOVATION CENTRE SESSION 2

INVENTORS

ENTREPRENEURS

GOVT.EMPLOYEES

STUDENTS&FACULTY

LICENSE TOANOTHER COMPANY

NEW CO. IN

INCUBATION CENTRE

NEW CO. IN

WORKPLACE

NEW CO. IN

BUSINESS

TECHNOLOGICAL

EVALUATION

ENTREPRENEURIAL

ASSESMENT

PRODUCT DEVELOPMENT

FEASIBILITY STUDIES


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METHODS OF MARKETING SESSION 8

Entrepreneurs cannot compete with a new brand of detergent or soap with HL !!!

Entrepreneurs need to produce a product for the benefit of the consumer with good ASS !!

Marketing by Kotler Marketing is an organization function to market and sell a product to a

consumer for a profit for the benefit of the company and its shareholders !!!

SALIENT FEATURES OF MARKETING:1Creative function to promote business & employment.

2.Co-ordinates Finance, Production & HR !!!3. Emphasis on what the customer needs and wants

4. Process of exchange between Seller & Buyer

5. Social benefits of increasing employment !!

DIRECT MARKETING: 1. Business to Business Marketing Ex Wholesaler to Retailer

2. Retailer to consumer or end user Ex Retail Stores

3. Company directly to consumer-Telemarketing !!

4. Internet Marketing !!! The future of Marketing !!!


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TRADITIONAL MARKETING

SELLING AT ANY COST TO THE CONSUMER !!!

PROFIT IS THE ONLY MOTIVE FOR SALES !!!

APPROACH IS PRODUCT ORIENTED !!!!

DOES NOT FIND ANY RELATIONSHIP WITH

OTHER MARKETING FUNCTIONS !!!

NO SOCIAL RESPONSIBILITY !!!

NO RESEARCH AND DEVELOPMENT !!!

MODERN MARKETING

SELLING TO SATISFY CUSTOMER NEEDS !!!

PROFIT MOTIVE IS SECOND TO SATISFACTION!!

APPROACH IS CONSUMER ORIENTED !!!

TAKES INTO ACCOUNT RELATIONSHIP WITH

ALL FUNCTIONS OF MARKETING !!!!

SATISFACTION OF CONSUMERS AS A SOCIAL

RESPONSIBILITY AND PAYS TAXES AND TAKES

PART IN WELFARE PROGRAMS !!!

R&D IS THE BASIS OF MARKETING WITH MR !!


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THE PRINCIPAL MARKETING FUNCTIONS:

MARKET INFORMATION AND RESEARCH : The basis of all Marketing functions !!!

PRODUCT PLANNING: Determine and develop the product mix to match all specifications of

packaging, pricing, service and after sales service !!!

ADVERTISING & PROMOTION: Press, TV, Radio, Hoardings, Posters, Point of Sale & Internet !!

SALES & DISTRIBUTION: Selling, Distribution, Warehousing, Transportation, Merchandising !!

The Marketing Mix is a combination of all the above functions to develop an effective

Marketing Plan and Strategy for the Entrepreneur to market and sell the product !!!

The Success of the Marketing in terms of Sales will be a measure of success of the

Entrepreneur.


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MARKET SEGMENTATION: Decide which segment of market you want to target !!!!!!

GEOGRAPHIC VARIABLES: Product determines the market as per region, state, nation !!!

DEMOGRAPHIC VARIABLES: Sex, age, family, size, occupation, religion, national origin !!!!

PSYCHOGRAPHIC VARIABLES: These variables depend on social status, life style & personality

BEHAVIORABLE VARIABLES: Consumers differ in knowledge, tastes, attitude and response !!

MARKET POSITIONING: Process of distinguishing a product from competition !!!!

THREE LOGICAL STEPS FOR MARKET POSITIONING:

1. ANALYZE MARKET OPPORTUNITIES FOR YOUR COMPANY !!!!

2.SELECT A MARKET AND TARGET A SPECIFIC SUB GROUP !!!!!

3.DEVISIVE A COMPETITIVE STRATEGYBasically a SWOT analysis and KITA for competition !!

THE RIGHT TIME APPROACH !!! 1. Product Launch- To be launched after MR & Advertising !!!

2. Promotions- Advertising for Product promotions !!!!

3. Timing between Advertising and launching the product !!!

4. Exit the market with a new product to confuse competition

MARKET RESEARCH: It is the basis of all Marketing activities and dont do anything without it


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MARKETING CHANNELS SESSION 8

CONCEPT OF MARKETING CHANNEL: Organized network of agencies and institutions !!!

PRODUCER- WHOLESALERS-RETAILERS-END CONSUMERS WHO USE THE PRODUCT/SERVICE !

CONNECTING LINK: Movement of Goods between POP !! and POC =Point of Consumption !!

DISTRIBUTION CHANNELS: Route through which goods flow from producer to consumer !!

DIRECT CHANNEL: No Middleman and the goods pass directly from producer to consumer.

INDIRECT CHANNEL: Middleman and Agent involved between Manufacturer and consumer.

IMPORTANCE OF MARKETING CHANNEL: Effective way for goods to reach consumer !!!

DIFFERENT MARKETING CHANNELS: 1. Manufacturer to Consumer-shortest channel !!

2. Mfg-Retailer-Consumer Ex. Supermarket !!

3. Mfg-Wholesaler-Retailer-Consumer Ex drugs !!!

4. Mfg-Agent-Wholesaler-Retailer-Consumer Voltas !!

5. Mfg-Wholesaler- Consumer Ex Hospitals ,Education !!

CONSUMER GOODS: 70% use the traditional wholesale outlets for some of their products !!

21% use wholesalers, 2% directly to consumer 18% through retailers.

INDUSTRIAL GOODS: 75% use wholesalers only 16% use direct selling !!!


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MARKETING CHANNELS SESSION 8

CHOICE OF CHANNELS: PRODUCT: 1.Product is perishable so few channels of distribution.

2. Longer channels for standardized goods Ex Automobile

3. Customer made product-direct Ex Computer by Dell !!

4. Technical Product direct to consumer-Cell phone

5. Jewelry sold directly to Retailer /Consumer High Value !!

MARKET: 1. Consumer goods market Retailers are needed but not so for industrial markets2. Market is large we have many channels and small market for direct selling !!

3. Direct selling for highly concentrated marketing but channels for big markets !!

BROKERS: They bring Buyers and Seller together, negotiate terms of sale and get commision

COMMISSION AGENT: Like a Broker but has possession of the goods& sales commission.

BANKS&INSURANCE COs: Banks provide loans & insurance cos provide insurance for goods.

AUCTIONEERS: Arrange for Auction of goods and work on a percentage of sales !!!

COMMON CARRIERS: Responsible for movement of goods from one place to another !!!!

MARKETING IS THE MOST IMPORTANT FUNCTION FOR A BUSINESS TO SUCCEED !!!!!!!!!!!


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MARKETING INSTITUTIONS AND

ASSISTANCE SESSION 9 EXPORT PROCESSING ZONES(EPZ): India has 7 EPZ SEEPZ in Mumbai for Gems & jewelry !!

EXPORT ORIENTED UNITS(EOU): Compliments the EPZ !! 502 units are in operation !!!

EXPORT PROMOTION INDUSTRIAL PARK SHEME(EPIP): created for export oriented items !!!

EXPORT HOUSES,TRADING HOUSES, STAR TRADING HOUSES : Export oriented !!!!

JUTE CORP. OF INDIA: Export, import and internal marketing and export of jute products !!!

STATE TRADING CORP OF INDIA(STC): Explore new markets to increase the exports !!!

PROJECTS & EQUIPMENT CORP. OF INDIA(PEC): Taken over the Railway Engg Div from STC !

HANDICRAFT& HANDLOOM EXPORTS CORP OF INDIA(HHEC): new markets for Handicraft !!

CASHEW CORP. OF INDIA(CCI): Subsidiary of STC to stabilize the import of cashew !!!

MMTC : To increase the exports of Indian minerals and import of raw materials for units here.

TEA TRADING CORP. OF INDIA(TTCI): To create a stable export for Indian packet/instant tea !!

THE SPICES TRADING CORP.LTD(STCL): To domestic and international trade in Spices !!!

SMALL INDUSTRIES DEVELOPMENT ORG.(SIDO): Has promotional activities in various areas

WORLD TRADE ORGANIZATION(WTO): is the legal and foundation of multilateral trading !!!

NAFTA: Free trade between US, Canada, Mexico for 15 years from 1989 No taxes !!!!

FREE AMERICAN FREE TRADE AREA OF THE AMERICAS(FTAA): Free trade with all Americas !!!


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SETTING QUALITY STANDARDS

SESSION 9 Liberalization of the industrial policy moved the economy into a market driven economy.

Quality Performance and Standards are very important for India to compete in the world.

ISO- Quality is total features of product/service to satisfy the implied needs of customer.

TOTAL QUALITY CONTROL (TQC): Quality Control is an integral part of Management !!!

Quality is no accident planned with no short cuts !!!

Use problems as sources of improvement in quality !!!Quality is conformance to requirements and specs.

Quality is achieved by prevention and not by appraisal

Quality is zero defects and measured by non-conformance

STANDARDIZATION: Standardization and Quality Control are vital factors for industry

ADVANTAGES OF STANDARDIZATION: Provides economic and technical good solutions !!

Optimum utilization of available raw materials.!!!

Defining the quality levels of the product !!!!

Providing basis for Quality Control for the product !!!


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SESSION 9 INTERNATIONAL SATISFACTION: ISO 9000 is the International Standard for Quality Systems.

IS 14000The Indian Standard

EN 29000- The European Community Standard

BS- 5750 The UK Standard

ISO 9001- Model for Quality Assurance in Design/development/production/instal/servicing. ISO 9002- Model for Quality Assurance in Production and installation.

IS0 9003- Model for Quality Assurance in Final Inspection

ISO 9004-1 Quality Management and Quality System Elements

ISO 9004-2 Quality Management and Quality System guidelines for Services

ISO 9004-3 Guidelines for Processed Materials.

ISO 9004-4 Guidelines for Quality Improvement

ISO- 9004-5 Guidelines for Quality Plans

ISO-9004-6 Guidelines for Quality Assurance for Project Management

ISO-9004-7 Guidelines for Configuration Management


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SESSION 9 THE ELEMENTS OF THE QUALITY SYSTEM:

MANAGEMENT RESPONSIBILITY: To have a documented system of quality assurance.

QUALITY SYSTEM: To have a documented Quality System for all aspects of the Business.

CONTRACT REVIEW: To meet Customers stated requirements.

DESIGN CONTROL: To control and verify that the design of the product meets requirements.

DOCUMENT CONTROL: To ensure that the Staff doing the work have the right documents. PURCHASING & SUB CONTRACTING: To ensure conformity of all quality requirements

PURCHASING SUPPLIES PRODUCT: To store the equipment belonging to customer properly.

PRODUCT IDENTIFICATION & TRACEABILITY: To identify and trace the product at all times.

PROCESS CONTROL: All work must be carried out under controlled conditions.

INSPECTION & TESTING: Product not to be shipped unless final inspection tests done

INSPECTION & TESTING EQUIPMENT: To ensure that the Testing Equipment is proper !!!

CONTROL OF A NON-CONFORMING PRODUCT: Separate defective products from good ones !

QUALITY RECORDS: All Quality records to be maintained for all aspects of the business

TRAINING: To ensure that competent people are trained to carry out the Q/C functions.


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SESSION 9 WHOM DOES ISO-9000 HELP: Companies Marketing & Selling to European Markets !!!

Vendors supplying to Companies that demand ISO 9000

Companies whose competitors are seeking this certification.

Companies with geographical and global operations

Companies whose parental companies need this certification.

WHOM ISO DOES NOT HELP: Companies that see ISO-9000 certification as an end itself

Companies that already have a TQM system in place.

Companies that follow other world wide Systems

Companies that have quality problems from HR problems

Companies that are Struggling to survive in todays market !!!

STANDARDIZATION IN INDIA: All Large, Medium & Small Industries conform to Standards.


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BREAKEVEN ANALYSIS SESSION 5

BREAK EVEN POINT-Establishes level of out put to break evenly cost & revenue for profit. BEP = Fixed Cost Total contribution X Total amount of Sales

( Total Sales-Total Variable costs= Total Contribution )

Example: Sales 1000 units

Selling price per unit 60

Variable cost per unit 40

Fixed cost 1500

BEP(UNIT VOLUME) 150020 (60-40) = 75 units BEP in terms of sales 75x 60= 4500

BEP (in terms of capacity utilization)= Total fixed costs divided by TC X Production of units

Example if the unit is to achieve a capital utilization of 40% 45% 60% 80% BEP will be 80%

CALCULATION OF BEP in physical terms BEP= FC Contribution (SP-VC)

Example FC= 1,000,000 VC= Rs 2 per unit,SP=Rs 4 per unit Max capacity=1,00,000

BEP= 1,00,000 divided by 2(4-2) = 50,000 units= 50 % capacity

NET PROFIT RATIO= NET PROFIT SALES X 100 CAPITAL TURNOVER RATIO: SALES Net capital employed X 100

Multiply both to get ROI

Example Sales 5,000 Capital 20,00,000,Profit 5,00,000 5,00,000 50,00,000X 50,00,000 divide by20,00,00 X 100 or 10%x2.5=25%


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SETTING UP & LOCATION OF AN

ENTERPRISE SESSION 11 Small Scale industry and Entrepreneurs play an important role in the growth of an economy!!

After 7thPlan SSI accounted for 55% of mfg sector & 40% of total exports employing 245 lakh.

LOCATION ! LOCATION ! LOCATION ! Is very important in the setting up of an enterprise!!

STEPS IN ENTERPRISE LOCATION 1. Selection of the region. 2. Selection of the community

3. Selection of the optimum and exact site.

FACTORS AFFECTING LOCATION 1. Availability of raw materials, power labor & govt. policy2. Banking and Finance and Research facilities available.

3. Religious and Education institutions in the area.

4. Price of land and disposal of waste and other amenities.

5. Technical know how and State Assistance in all areas.

SELECTING GENERAL AREA 1. Availability of raw materials and skilled/unskilled labor.

2. Nearness to the source of Power and Water.

3. Nuisance problems of noise, odor or smog

4. Suitability of climate. Ex Computers Bangalore.


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LOCATION OF AN ENTERPRISE SESSION

11 SELECTION OF ACTUAL SITE SITE A SITE B SITE C

FIXED CAPITAL

Land Acquisition cost

Building Construction cost

Equipment installation cost

COST OF PRODUCTION AND DISTRIBUTION MATERIALS COST

Direct Labor cost & indirect Labor cost

OVERHEADS:

Factory insurance & taxes

Factory depreciation

Office salaries

Selling overheads

Distribution overheads

TOTAL


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LOCATION OF AN ENTERPRISE SESSION

11 STATE INCENTIVES: Feasibility Study- 75% of cost of preparation of report-max Rs 5000 for

small scale industries, 50,000 for medium & large.

INVESTMENT SUBSIDY: 10% of fixed assets upto 5 lakh for small scale & 10 lakhs for M&L

DEVELOPMENT LOAN: 25% of fixed assets for small scale and 50 lakhs for M&L

WORKING CAPITAL LOAN: 25% of fixed assets for small scale and upto 50 Lakhs for M&L

PROCUREMENT OF KNOW HOW: Full upto Rs 25,000 for SCI and ceiling of I lakh for M&L

STAMP DUTY EXEMPTION: Exemption of Stamp duty for agreements with KSFC for both !!

SUBSIDY ON HOUSING: Rs 1500 per house not less than 300 sq ft for both SSI & M&L


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METHODS OF TRAINING SESSION 3

INDIVIDUAL INSTRUCTION- A single individual selected to be taught a complicated skill Pilot !!

GROUP INSTRUCTION- This method for a group where general instructions are to be given.

LECTURE METHOD- Instructor talks on theory followed by practice by the trainees

DEMONSTRATION METHOD- Instructor performs followed by performance by trainees

WRITTEN INSTRUCTION METHOD- Training is given with future written reference by trainees.

CONFERENCE METHOD- Conferences and Workshops are organized to impart training

MEETINGS METHOD- Meetings for groups to exchange ideas to discuss and get trained.


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STAFF TRAINING SESSION 3

STAFF TRAINING

BASIC

KNOWLEDGE

SKILLSEFFECTIVE

VISIONPRODUCTIVITY


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GERMAN AND JAPANESE APPROACH

SESSION 3 GERMAN EXPERIENCE:

Broad based training followed by specialization resulted in reduction of trades

Development of multi-craft skills and unique training modules .

Industry lead and role of initiative in restructuring and training.

Profile of workforce changed leading to more skilled workers

Retraining programs for skills improvement of the existing work force Overall personality development of the work force to become entrepreneurs

JAPANESE APPROACH- Opposite of German approach !!!

Little emphasis on formalized training but more emphasis on the job training !!!

Knowledge required to perform a set of activities efficiently and effectively

Skills refer to the technics required to translate knowledge into action and practice

Ability refers to the qualities required for the performance of the attained skill !!

AMERICAN APPROACH- Use a combination of the above two with initial formalized

theoretical knowledge followed by practical and emphasis on the job training !!!!


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ENTREPREUNERSHIP DEVELOPMENT

ORGANIZATIONS SESSION 3 STATE BANK OF INDIA

IDB- ENTREPREUNEURIAL MOTIVATION TRAINING CENTER IN NORTH EAST REGION

XAVIER INSTITUTE OF SOCIAL SERVICES- RANCHI

CENTER FOR ENTREPRENEURSHIP DEVELOPMENT-AHMEDABAD

STATE FINANCIAL CORPORATIONS

CENTER FOR ENTREPRENEURSHIP DEVELOPMENT- HUBLI

SMALL INDUSTRIES EXTENSION TRAINING INSTITUTE- HYDERABAD


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INSTITUTIONS TO HELP

ENTREPRENEURS SESSION 3 FOCUS OF EDP: To identify potential Entrepreneurs to train them with the knowledge, skills

and attitude required to become a successful entrepreneur !!!

ENTREPRENEURSHIP DEVELOPMENT PROGRAM ORGANIZATIONS

Entrepreneurship Development Institute of India (EDI)- Ahmedabad-National Resource Ctr.

National Institute for Entrepreneurship and Small Business Development (NIESBUD)-Delhi

Rural Entrepreneurship Development Institute (RED) at Ranchi in 1983 Most States and Management Institutes have organizations and courses for entrepreneurs.

Management Development Institute-Gurgaon Delhi- a premier institute of India

Science and Technology Entrepreneurship Parks(STEPS) with the help for many universities.

Center for Entrepreneurship Development(CED),Ahmedabad by State Government and Cos

Xavier Institute of Social Service-Ranchi conducts Entrepreneurial training programs.

Role of Development Banks-Providing special capital and seed capital to start the project SBI- 1.Liberalized financing 75%, 2.100% for technically qualified 3. Equity Fund Scheme for

interest free loan to meet the equity gap of 1 lakh

Role of NAYE-National Alliance of Young Entrepreneurs-development of Women Entrepreneurs.

AWAKE-Association of Women Entrepreneurs of Karnataka

WIMA-Women Entrepreneurs Association of Maharastra

SWWA-Self employed Women Association

ACH S GUI O


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TEACHERS GUIDE TO

ENTREPRENEURSHIP SESSION 3 COMPILED BY THE UNIVERSITY OF MARYLAND INTRODUCTION TO BUSINESS AND ECONOMICS

Global economy ,wealth distribution and relationship between government and industry

Regulation in a free market economy with tax structure stocks bonds and banks.

BASIC CONCEPTS OF ENTREPRENEURSHIP

Dynamics of change with opportunities and resources

Entrepreneurial view point with risk/reward factors and case histories

VENTURING

Innovation, Objective analysis and creation of a team

FINANCIAL PLANNING FOR NEW VENTURES

Financial Statements and Financial projections to determine funding requirements.

Debt and equity financing for valuation of the company

WINNING BUSINESS PLAN

Business plan objectives with a guide to a preparation of a sound business plan

Presentation of business plan for financing with operations plan from business plan

RAISING CAPITAL Fundraising tools with Financiers considerations

Sources of funding equity and debt capital to negotiate the deal !!!

ORGANIZATION FOR SUCCESS

Company name with Board of Directors by structuring the company to attract outstanding key employees

to create infrastructure without bureaucracy !!!

STRATEGY FOR ENTREPRENEURSHP


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STRATEGY FOR ENTREPRENEURSHP

DEVELOPMENT SESSION 3 The following strategies of Entrepreneurship is suggested for India

1. Public Entrepreneurship for those industries that private enterprise is not attracted Ex

Banks, Airlines, R&D wing of PSU to be streamlined to compete with private sector.

2.All possible efforts required to motivate the individual to become an Entrepreneur EX Tata

3.Need to develop Management Education to supplement their Entrepreneurship qualities.

4. Programs and incentives for Entrepreneurs to start business in back ward areas

5.Develop Entrepreneurial talent in India, In Japan, they come from the underprivileged class

6. Economic administration by the States to be more effective for the Entrepreneurs.

7. Greater emphasis on research relating to domestic technics against foreign collaboration.

8. Financial institutions should lend easily and make financing Entrepreneur friendly

9. New categories of Entrepreneurs like NRIs, Women, handicapped to be encouraged.

10 Management Institutes should have a cell for development of Entrepreneurs EX IIMA

11 Successful Professional Managers to be encouraged to become Entrepreneurs

12 Workshops and Seminars on Entrepreneurship to be conducted for awareness !!!

A-Z QUALITIES OF AN ENTREPRENEUR


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A Z QUALITIES OF AN ENTREPRENEURBY TREVOR DEVAS SESSION 3

A= Ambition

B= Believer

C= Creative

D= Determined

E= Enthusiastic

F= Fearless

G=God fearing

H= High Esteem

I= IndependentJ= Just

K= Kindness

L= Leader

M= Motivator

N= No politics

O=Organizer

P=Planner

Q= Questioning

R= Reliable

S= Studious

T= Team work

U= United

V= Voice

W= Workalcoholic

X= Execution

Y= Youthful

Z= Zeal

ENTREPRENEURIAL DEVELOPMENT


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ENTREPRENEURIAL DEVELOPMENT

SESSION 3APPROACHES TO ENTREPRENEURSHIP DEVELOPMENT

1. Develop and arrange the course content by analyzing needs and stating outcomes

2. Choose the appropriate training methods

3. Consider the topics, nature of learning ,trainee population, trainers and the time factor

4. Achieve training objectives

TRAINING OF ENTREPRENEURS

Achievement Motivation sessions to induce positive behavior and learning from feedback

Moderate risk taking is taught to take calculated risks based on all factors.

Problem Solving attitude to solve the problems internally only-no consultants !!!!

Develop the ability to define and set goals in life

Train to learn by ones own actions and behavior based on experience

Teach Management skills and technics to deal with the management problems

Overall objective of the training program is to make the entrepreneur more professional

ENTREPRENEUR VS PROFESSIONAL


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ENTREPRENEUR VS PROFESSIONAL

MANAGERS SESSION 3 Entrepreneurs and Professional Managers are two sides of a coin PROFESSIONAL MANAGEMENT

1. Body of Knowledge-Management of knowledge to enter the world of entrepreneurship

2. Management Tools- Tools of Management in specific functional areas

3. Specialization- Growing need to appoint specialists in each functional area

4. Separate Discipline-Management Studies is considered a separate discipline

5. Code of Conduct- Business Management is a social institution, responsible to customers,employees and the society.

6. Professional Association- Business Management Associations have been formed to have

ethics in business and project a good image of the managerial profession.

ENTREPRENEURIAL MANAGEMENT

1. Creative and innovative instinct from childhood- dare to be different

2. Calculated risk taking attitude- venture into the unknown

3. Work with borrowed or very little capital

4. Pride of ownership of the business

5. No pay check to look forward to every month !!!

6. You are your own boss- you decide whatever you want to do-freedom & independence !!!

PROCESS OF ENTREPRENEURIAL


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PROCESS OF ENTREPRENEURIAL

DEVELOPMENT SESSION 3 ENTREPRENEURIAL DEVELOPMENT PROGRAM EDP-Designed to help a person to strengthen

and meet his entrepreneurial motive to acquire skills and capabilities to play his role well.

EDP meant for first generation entrepreneurs who need help to become successful.

MISCONCEPTIONS ABOUT EDP

Joining an EDP is a privilege, many programs give false hopes about entrepreneurship !!

EDP means only training potential entrepreneurs through class room training Higher the number, better the EDP- Qualitative is better than quantitative !!

EDP Success is the Sole Responsibility of the Trainer-Motivator

Potential Entrepreneurs think that they will be successful by attending one EDP!!

Entrepreneurship is a process of development of an individual only

All cannot become Entrepreneurs since the success rate is low !!!

Professional Managers can become Entrepreneurs and vice versa

Entrepreneurship begins with childhood and can only be developed

EDP has become MDP- Executives have become Management !!!

SIMILARITIES BETWEEN MANAGERS


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SIMILARITIES BETWEEN MANAGERS

AND ENTREPRENEURS SESSION 3

ENTREPRENEURS

Produce results-Long term

Produce results through people-deal with people who can

conceptualize like them Take decisions-strategic involving

expansion ,diversification

To co operate under constraints-import policy, licensing etc.

Follow sound principles ofManagement-macro aspects likesocial responsibilty equalopportunity to governmentpolicies

MANAGERS

Short and medium term

Handle people in dailymanagement tasks

Operational and administrativedecisions only-short &medium term

Constraints are within theorganization, plant, labor etc

Principles are only related tothe company like delegation,accountability etc

DISTINCTIVE FEATURES BETWEEN ENTREPRENEURS AND MANAGERS


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DISTINCTIVE FEATURES BETWEEN ENTREPRENEURS AND MANAGERS

SESSION 3

ENTREPRENEUR

To see an opportunity

Risk taking

Tactical Planning

Interpersonal communication

Negotiating Trouble Shooting

Making it a growing concern

Innovator

Motivator

Determined

Idealist

Committed

Visionary

Planner

MANAGERS

Setting of Objectives

Policy formulation

Strategic Planning

Formal communication

Organizing Motivating

Controlling

Administrator

Skills

Confident

Specialist

Loyal

Planner

Implementer


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DISTINCTIVE FEATURES BETWEEN ENTREPRENEURS

AND MANAGERS SESSION 3

ENTREPRENEURS

Primary motive-freedom,goal oriented, self reliant, self-motivated

Time orientation-5-10 years

Action- whatever it takes to get the job done !!!

Skills-Knows business well

Courage-Self confident

Attention-Mainly on technology and market place

Risk-calculated-expects to succeed

Market Research-Creates products that cannot be tested

Status- dont believe in it

Failure/Mistakes-Learning experience

Decisions-decisive and action oriented

Who they serve-pleases self and customers

Attitude towards the system- rapidly advance

or use own system if frustrated

Problem solving style-Solves problems or starting over

Family history-Small business,agri background Relationship with parentsabsent,poor relations with father

Socio-economic background-lower to middle class

Education-Less educated

Relationship with others- Deal making as basics !!

MANAGERS

Wants promotions and rewards

Responds to quotas, weekly,monthly quarterly,

Delegates action

Professional training-MBA

Sees others in charge of his destiny

Events in company only

CarefulHas MR done before launching product

Cares about status-corner office

Likes to avoid mistakes,pospones recognizing failures

Agrees with those in power, delays decisions to see what bosseswant

Please bosses

Seeks position in nurturing system

Works out problems within the system

Family members worked for large companies

Independent of mother, good relations with father slightlydependent

Middle Class background

Highly educated

Hierarchy as basic relationship


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OWNER VS PROFESSIONAL MANAGER

SESSION 3

OWNER MANAGER

SOURCE OF AUTHORITYY-Personal

BASIS OF PHILOSOPHY-no diffusion betweenownership and control, no conflict betweenpersonal and company objectives

Integration of work and

social valuesNot a slave of economic goals

CHARECTERISTIC SKILLSAdoptive,diagnostic,change,tactical,pragmatic, social skills,good independent decisionmaking

ORGANIZATION-Informal,no differencebetween planners and doers,rewards on

basis of results only,everyone prepared to dowhatever it takes !!!

Open system of communication

PROFESSIONAL MANAGER

Expertise

Control without ownership

Conflict between individual

and organizational goals

clear distinction between

individual and the position

Values of work placedifferent from social values

Economic performance is

ultimate

Predictive,control of change

strategic facility, co-ordination

and control of specialists. Manipulative

skills applied on an impersonal basis

event shaping decision making,formal

relationship, difference between planning

and doing,technical qualifications only basisfor promotions, precise definition of rights and

duties and responsibilities,structural communication only

CLASSIFICATION AND TYPE OF


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CLASSIFICATION AND TYPE OF

ENTREPRENEURS SESSION 2 BUSINESS ENTREPRENEUR: They are individuals who conceive an idea for a new product or

service and then create a business to materialize their idea into reality.-small business

flourishes when the size is small !!!

TRADING ENTREPRENEUR- He is one who undertakes trading activity and not concerned

with manufacturing. He identifies a potential product and develops interest in people in

that product and explores domestic and international markets . INDUSTRIAL ENTREPRENEUR- He is a manufacturer who identifies the potential need of a

customer and tailors a product or service to meet that marketing need.

CORPORATE ENTREPRENEUR- He is a person who shows his innovative skill in organizing

and managing a corporate undertaking. A Corporate undertaking is a company registered

either under the Trust Act or Companies Act .

AGRICULTURAL ENTREPRENEUR- He is a person who undertakes agricultural activities like

raising and marketing of crops, fertilizers and other inputs of agriculture.

The above all are Entrepreneurs according to classification of Business

CLASSIFICATION OF ENTREPRENEURS


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CLASSIFICATION OF ENTREPRENEURS

SESSION 2 TECHNICAL ENTREPRENEUR: He is like a craftsman to develop and manufacture a product.

He concentrates more on production than marketing since he has the skill in production only.

NON-TECHNICAL ENTREPRENEUR- He is a person who is not connected with the production

aspects of the product but only developing the marketing and selling of the product

PROFESSIONAL ENTREPRENEUR- He is a person who is interested in starting a business but

does not have interest in managing or operating it once it is established. A professional

Entrepreneur sells out his business and starts another venture.

ENTREPRENEURS AND MOTIVATION-Motivation is the driving force that makes the entrepreneur achievehis objectives and influencing others by showing his business acumen.

PURE ENTREPRENEUR-A pure entrepreneur is a person who is motivated by psychological

and economic rewards. He becomes an entrepreneur for his own personal satisfaction in

work, ego or status.

INDUCED ENTREPRENEUR- An induced entrepreneur is one who is induced to become an

entrepreneur due to the assistance, incentives and rewards provided by the government to

start a new venture. A person with a sound project is provided complete assistance in India

and in the US !! MOTIVATED ENTREPRENEUR-A person is a motivated entrepreneur by the desire for self-fulfilment

They become entrepreneurs for making and marketing a product for consumers. If the product is

successful they are further motivated by reward in terms of profit.

SPONTANEOUS ENTREPRENEUR- A person who starts his own business by his own natural talent.

They are persons with drive and the confidence in their own natural abilities, Ex Musicians, Sportsmen


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ENTREPRENEURIAL TRAITS SESSION 2

CHARACTERISTICS OF AN ENTREPRENEUR: A Successful entrepreneur must be a person with

technical competence, initiative, good judgment intelligence leadership qualities,

self confidence ,energy ,attitude ,creativeness ,fairness , honesty, tactfulness and emotional

stability

MENTAL ABILITY: An Entrepreneur should be intelligent and have creative thinking

CLEAR OBJECTIVES: He should be clear about his Objective-MBO !! BUSINESS SECRECY: He should keep his business secrets confidentialcompetition

HUMAN RELATIONS : Good relations with customers, employees, suppliers & community

COMMUNICATION : He should have excellent communication skills-verbal & written

TECHNICAL KNOWLEDGE: An Entrepreneur must have technical knowledge of the product.

MOTIVATOR: He should build a team, keep them motivated for their career development.

SELF CONFIDENCE: He must believe in himself to achieve his goals.

LONG TERM INVOLVEMENT: Committed for 5 years2 years minimum in India & US

HIGH ENERGY LEVEL: Ability to work long hours- Whatever it takes attitude !!!

CHARACTERISTICS OF SMALL


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CHARACTERISTICS OF SMALL

ENTREPRENEURS SESSION 2 1. They are young 2. They are energetic/enthusiastic

3. They have minimum basic education

4. They are pleasant mannered

5. They are hard working

6. They are determined

7. They are systematic and follow a planned approach

8. They are self made 9. They are self confident

10. They are disciplined

11 They are trained/experienced

12 They have entrepreneurial zeal

13 They have little capital

14 Their area of operation is small

15 They generally deal in one product 16 They employee a few people

17 Their turnover is small

18 They are flexible.

CHARECTERISTICS OF LARGE SCALE


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CHARECTERISTICS OF LARGE SCALE

ENTERPRISES SESSION 2 1. Promoted and professionally managed through employed persons 2. Large capital

3. Capital by a large section of shareholders

4. Shares are registered on the Stock Market

5. Large Assets

6. Assets acquired by classified credit

7. Involved in diverse activities 8. Promotes the goods in the market

9. Huge turnover/sales/profit

10. Easy access to institutional finance

11. They have greater leverage for development

12. They are well connected politically

13. They are trend setters 14. They can create a demand for their products by powerful advertising

15. They are great visionaries to see the needs of the country

16. They are responsible and have a value driven corporate philosophy.

THEORIES OF ENTREPRENEURSHIP


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SESSION 2 CAPITALISM: Free market economy, freedom to operate within guidelines EX USA

SOCIALISM: The private enterprise does not contribute to the economy and is entirely

controlled by the government!!! No scope for Entrepreneurship !!!

MIXED ECONOMY- Private & Public Sector Ex India. Public Sector Units take care of manufacture and sale of capital goods

Entrepreneurs take care of manufacture of consumer goods

Both are allowed to compete with each other within the rules laid down by each state

Government steps in to control the private sector when prices become too high

They regulate the industry EX Airline industry fares too high during festive season

Mixed economy is good because both Private and Public Sectors compete with each other.

Sick units are the fault of the government and become healthy when Private takes over

THEORIES OF ENTREPREUNERSHIP


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THEORIES OF ENTREPREUNERSHIP

SESSION 2 Theories broadly classified into Economic Psychological, Social & Cultural

1.ECONOMIC THEORY-Mark Casson -The Entrepreneur-emphasized that the demand for

entrepreunership starts with need for change and imagination is an important factor

2.LIEBENSTEIN X THEORY-Basically X-efficiency is the degree of inefficiency in the use of

resources by the company and the Entrepreneur steps in to improve efficiency

3. DYNAMICS ENTREPRENEURSHIP THEORY-Introduced by Schumpter

His theory considers Entrepreneurs as catalysts to change the stationary

flow of the economy to a dynamic one by a) introduction of a new good

b) introduction of a new method of production c) opening of a new market

d) a new source of supply of raw materials e) carrying out a new organization

4. HARVARD SCHOOL THEORY- Harvard School(Cole,1949)-

Entrepreneurship is any activity that increases the profit in a business within the

guidelines of the economic, political and social setting of the business .


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THEORIES OF ENTREPRENEURSHIP SESSION 2

5. THEORY OF ACHIEVEMENT -McClellandDoing things in a better way and decisions under uncertainity

6. THEORY OF CHANGE-Young

People become entrepreneurs-low status recognition ,denied

access to social networks and when they have better resources

7. THEORY OF PROFIT- KnightEntrepreneurs are only identified by the need for profit

8. THEORY OF ADJUSTMENT OF PRICE- Kirzner

Kirzner says that the adjustment of price is the only reason people

become entrepreneurs



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SESSION 27. THEORY OF MARKET EQUILIBRIUM: Hayeks says that entrepreneurship is due

to absence of market equilibrium which is a on going process to develop to

the sale of the equilibrium

8. HAGANS THEORY OF SOCIAL CHANGE-He views Entrepreneurs as a creative

problem solver interested in things in the practical and technology realm and

driven by a duty to achieve.9. THEORY OF ENTREPRENEURSHIP SUPPLY-Behavioristic Model by John Kunkal

is concerned with the activities of individuals and their relations to both past

and present and surrounding social structures and physical conditions.

10 THEORY OF PERSONAL RESOURCEFULNESS- The concept relies mainly on the

initiative and innovation of the person who wants to become an Entrepreneur.

11 THEORY OF CULTURAL VALUES-Thomas Cochrans theorycultural values,roleexpectations and social sanctions-attitude towards work, role held by sanctioning

groups and operational requirements of the job

FACTORS INFLUENCING


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FACTORS INFLUENCING

ENTREPRENEURSHIP SESSION 3 Peter Heydemann,Science Counsellor-US Embassy says as under in the US which should

happen in India !!!!

Entrepreneurs and small business is the backbone of the US economy !!!

INCUBATOR CONCEPT- mostly attached to universities to help the entrepreneur translate

the results of market research into a product and helped the Entrepreneur with business and

financial planning,market development and government regulations.

These organizations help the Entrepreneur cut the red tape to start a business which isvery much needed in India !!!

Incubator Technology- 5-6 years old- 600 plus national laboratories could not service 1.5million entrepreneurs so the States took over.

Universities in the US play an important role in helping entrepreneurs and it is happening

In India too !! IIMA has a big Entrepreunerial Division and MIT will have it too !!!!

Last year the US government spent more than $2000 million helping small business

Incubators do not provide any decisions for the Entrepreneur, they just give their knowledge,

expertise, resources to help the Entrepreneur take his decision on his project !!!!!

Examples of Entrepreneurs that I like Bill Gates, Warren Buffet, Steve Jobs, Tatas, NarayanMurthy,!!!

THE ENTREPRENEURIAL CULTURE


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THE ENTREPRENEURIAL CULTURE

SESSION 2ENTRENEPRENEURSHIP CULTURE-vision, values, traits and understanding customer needs

CULTURE: Members regulate their behavior in harmony with other groups in the group

BUSINESS ETHICS- Entrepreneurs should only do what is right in business

PRODUCTIVITY CULTURE- Not only doing things right but doing right things better

TOTAL QUALITY CARE- Introduction of all efforts for totally quality care

TOP PROGRAM- Integration of all factors of productivity, innovation, culture ,mobilizatiion

of employees and customer satisfaction at the TOP !!!

CORPORATE VALUES OF AN ENTREPRENEUR:

Be a Leader not just a Manager-Set examples of punctuality, honesty and fairnessBe a Facilitator- Be accessible and listen to all levels of employees in the company

Be Deliberate- Be result oriented and avoid unproductive meetings

Be Explicit- in assigning responsibility both small and big tasks

Be Decisive Break the relations if someone is not working out. Indecision is bad for everyone.


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TOP PROGRAMME SESSION 2

n

TOP

CUSTOMER

PRODUCTIVITY INNOVATION NEW MARKETS

CULTURE CHANGE



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SESSION 1

ENTREPRENEURSHIP ENTERPRISE

OBJECT

ENTREPRENEUR

PERSON PROCESS OF ACTION

COMPARISON BETWEEN ENTREPRENEUR AND


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COMPARISON BETWEEN ENTREPRENEUR AND

ADMINISTRATIVE SESSION 3

ENTREPRENEUR

STRATEGIC ORIENTATION

Driven by perception of

opportunity

COMMITMENT TO SEIZEOPPORTUNITIESRevolutionary within short duration

COMMITMENT OF RESOURCES

Many stages with immediate decisions

CONTROL OF RESOURCES

Proper utilization of resourcesMANAGEMENT STRUCTURE

Flat with multiple informal networks

ADMINISTRATIVE

STRATEGIC ORIENTATION

Driven by controlled resources

COMMITMENT TO SEIZE

OPPORTUNITIESEvolutionary with long duration

COMMITMENT OF RESOURCES

Single stage with out of decision

CONTROL OF RESOURCES

Ownership or employment ofresources

MANAGEMENT STRUCTRE

Hierarchy


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CREDO OF ENTREPRENEURS SESSION 2

The world is looking for Entrepreneurs that are honest !!!

Entrepreneurs that are innovative !!!

Entrepreneurs that are optimistic!!!

Entrepreneurs that stand for the right !!

Entrepreneurs that care for the society !!

Entrepreneurs who stand for values!! Entrepreneurs with conscience!!

Entrepreneurs that neither brag or run!!

Entrepreneurs that neither flag nor flinch!!

Entrepreneurs who know their place and fill in!!

Entrepreneurs who know their business and attend to it !!

Entrepreneurs who are not too crazy !!!

Entrepreneurs who are not lazy to work !!

Entrepreneurs who will prosper with society

Entrepreneurs who will lead and motivate

Entrepreneurs who always dream for change

Entrepreneurs who live for their principles

DEFINITION AND STRUCTURE


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DEFINITION AND STRUCTURE

SESSION 1 & 2 Definition - derived from the French verb Entreprende- to

undertake or to start your own enterprise or business

Peter Drucker Innovation is the tool of entrepreneurs bywhich they exploit changes as an opportunity for a different

. Business or Service

Entrepreneurship-Innovation ,risktaking ,vision , organizingskills-all four inter-related.

Structure consists of External Environment, Value skills,

People and Technology which are all inter-related

PROJECT REPORT & APPRAISAL


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PROJECT REPORT & APPRAISAL

SESSION 4 PROJECT REPORTPrepared by expert on analysis of all aspects and is the basis for financing. SCOPE OF REPORT 1.Economic Aspects- should present economic justification for investment

2. Technical Aspects- should give the machinery and technology needed

3. Financial Aspects- Total investment required with entrepreneurs share.

4. Production Aspects- Description of product and reason for selection

5. Managerial Aspects- Entrepreneurs qualification and experience

CONTENTS OF REPORT: 1.Objective and Product design and features with sample

2. Market position and trends with anticipated demands

3. Supply of raw materials and manufacturing process

4. Details of plant, machinery power and water supply

5. Financial implications of project cost and profitability6. Manpower planning for the project

7. Social benefits and implications of the project .

ENTREPRENEURSHIP & PROJECT


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ENTREPRENEURSHIP & PROJECT

MANAGEMENT COURSE OUTLINE

Session 3- ENTREPRENEURIAL DEVELOPMENTEntrepreneurial Environment

Process of Entrepreneurial Development

Entrepreneurial Development Training

Institutions to aid Entrepreneurs

Session 4 PROJECTS MANAGEMENT

Search for a Business idea and concept of projects & classificationProject identification and formulation

Project Design and Network Analysis

Project Report and Appraisal

Factory Design and layout

Session 5 FINANCIAL ANALYSISAn input in financial appraisal

Ratio analysis and investment process

Break even and profitability analysis

Social Cost-Benefit analysis

Budget and Planning process

Applicability of various Acts of legislation

APPLICABILITY OF VAROUS ACTS


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APPLICABILITY OF VAROUS ACTS

SESSION 7 APPRENTICESHIP ACT 1961: Apprenticeship Advisor to give a notice in writing to employer. CONTRACT LABOR ACT 1970: License required if 20 or more employees employed in 12 mts.

PROVIDENT FUND ACT 1952: 20 or more employees eligible if wages less than 1000 pm.

ESI ACT 1952: 20 or more employees except seasonal factories.

EMPLOYMENT EXCHANGES ACT: Vacancies to be notified within one week if 25 employed.

EMPLOYMENT OF CHILDREN ACT: Employment of children prohibited where 10 or more!!

EQUAL RENUMERATION ACT 1976: Employer to pay equal salary/wages to men & women

FACTORIES ACT : Permission for 10 or more with power or 20 or more without aid of power.

INDUSTRIAL DISPUTES ACT 1947: Settlement of disputes and compensation for layoff !!

INDUSTRIAL STANDING ORDERS ACT 1961:Standing orders for classification if 100 or more !!

MATERNITY BENEFIT ACT 1961: Women get 6 weeks before and 6 weeks after if worked 160

in prior twelve months

MINIMUM WAGES ACT: Govt has fixed certain minimum wages for all types of employees

PAYMENT OF BONUS ACT 1965: 8.33% of wages with a max of 20% of wages earned PAYMENT OF GRATUITY ACT 1972: 15 days wages after 5 years service with 20 months max

PAYMENT OF WAGES ACT 1936: Timely payment of Wages to employees earning less than 1000

WORKMEN COMPENSATION ACT 1923: Compensation for workers with wages 1000 or less

BUDGET AND PLANNING PROCESS


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SESSION 7 BUDGET is a tool of Management used to plan and control the operations of the business. BUDGET is more than accounting and helps to prepare the master budget for all functions.

BUDGETORY CONTROL is based on forecasting sales income and accounting for expenses.

CLASSIFICATION OF BUDGETS: 1. Revenue and expense budgets

2. Manpower budgets

3. Capital expenditure budgets

4. Cash Budgets 5. Master operating budgets.

ADVANTAGES OF BUDGETORY CONTROL: 1. Helps the process of planning

2. He can delegate without loosing control

3. Keeps expenditure in check to see performance.

STEPS IN BUDGETTORY CONTROL: 1.Preparation of the Budget

2. Publishing the Budget and measuring the Results.3. Comparison of actuals with the Budget

4. Converting the variance to meet the Budget.



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SESSION 7 STEPS IN PREPARATION OF A BUDGET : 1. Objective or goal of the company in terms of sales

2. Planning to achieve this goal by MBO approach !!

3. Identify alternatives to achieve the objective.

4. Formulating Supporting Plans to achieve objective.

5. Numerize plans to make the Master Budget.

MANAGEMENT PLANNING: 1. Strategic Planning- Long term objectives of the company

2. Action Planning-Done to support the long term objective.

3. Operation Planning for day to day operations of the company

MANAGEMENT BUDGET: 1. Sales forecast and budget for expenses to achieve the target

2. Production budget to manufacture product to meet sales figure.

3. HR Budget for Manpower required to manufacture the product

4. Finance Budget required for funding all the above functions5. Based on all of the above a Master Management Budget

BUDGETTING is important to work within the budget for the overall profitability !!!!!

SOCIAL COST BENEFIT ANALYSIS


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SESSION 6 INDIAN ECONOMY- Major changes since 1991 to reduce govt control for private enterprise. ERR-Economic Rate of Return, ERP-Effective Rate of Protection, DRC-Domestic Resource cost

These factors help to decide whether a product to be produced domestically or imported?

SOCIAL COSTS- Means all consequences on the society as a result of the production process.

OBJECTIVE OF SOCIAL COST BENEFIT ANALYSIS:

1. Estimate costs and benefits gained due to the project implementation.

2. Estimate the costs and benefit to consumers and suppliers related to the project

3. Estimate the costs and benefits gained by the community.

4. Estimate the cost and benefits gained by the National Exchequer.

5. Estimate the costs and benefits over a period of time to see the feasibility of the project.

MAIN FEATURES OF COST BENEFIT ANALYSIS:

1. Assess the feasibility of the project in the public or private sector enterprise. 2.Identification and measurement of costs and benefits of implementing the project.

3. The effect of risk factor in the investment appraisal of the project.

4. Presentation of results of the cost benefit analysis to implement the project.



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SESSION 6 LM TECHNIQUE : Most widely used methods of Social/Cost Benefit Analysis. Uses hypothetical instead of actual prices when evaluating a project.

Shadow prices are used since they reflect better than actual prices for benefit to society.

LM technique assumes a country can buy and sell any quantity of a product at a world price.

ELEMENTS OF COST 1. MaterialsDirect or Indirect to manufacture the product

2. Labor- Direct & Indirect- Wages of carpenters, sweepers are indirect.

3. ExpensesFactory overheads, Administrative, Selling expenses. CLASSIFICATION OF COST: 1 Direct and Indirect cost Ex Materials & Labor are direct

2. Fixed & Variable costs Fixed not affected by level of production.

Variable depends on cost of raw materials which fluctuates.

STANDARD COST= Standard Material Cost + Standard Labor Cost + Standard Overheads Cost

= Standard Quality x Price + Standard Wages and Time

Overheads Volume of Production X Standard Man hours. AVERAGE & MARGINAL COST: Average cost is dividing total cost of production by no of units.

Marginal cost is the cost of marginal unit produced over lot.

EXAMPLE: Co produces 100 units at a cost of 2000, average cost is 2000 100=20 units


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PROFIT PLANNING AND CONTROL


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PROFIT PLANNING AND CONTROL

SESSION 5 PROBE INTO THE FUTURE: Profit Planning indicates what the future holds for the company. FLEXIBILITY: Attitude of flexibility and capacity to adjust to changes

SENSITIVITY: Sensitivity to change for an excellent profit performance

EXCELLENT DIRECTION & CONTROL: It requires both centralized/decentralized

direction/control

SUPPORT: Top Management must support or else profit planning will be a flop

ORGANIZATION: Profit Planning depends on clear cut lines of authority/responsibility

CONFIDENCE: Management should make sure all are putting their best for this planning.

TIMELINESS: There should be a Time limit specified for the Profit Planning Program

ADVANTAGES OF PROFIT MAXIMISATION:

1. Profit is the main reason for business No profit no Business !!!!

2. Profit maximization helps social and economic welfare. 3. Investors expect a positive return on their investment only by profit.

4. Profits help to create additional resources for expansion and diversification

5. Profit !! Profit !! Profit !! Is the main motive to be in Business !!!!

FIANCIAL ANALYSIS SESSION 4


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FIANCIAL ANALYSIS SESSION 4

FINANCE: It is the most important component once your project is approved to start up !!! SEED CAPITAL: Money borrowed from financial institutions or other sources to start !!

FIANCIAL ANALYSIS: Process of finding economic facts about a project by using financial data.

Helps to look at capital, operations cost and operating revenue for profit.

IMPORTANCE OF FA: Helps to evaluate the feasibility of investing in a project with risk factor.

USE OF FINANCIAL STATEMENTS 1. Govt regulations require maintaining financial records.

2. Income tax accounting to maintain all books of accounts

3. Executives decisions based on financial information

4. Bankers require accurate financial records for loans.

5. Investors and Shareholders need to know their money.

6. Credit from Suppliers and other agencies.

FIANCIAL TOOLS: 1. Trend Analysis2. Variable Analysis

3. Ratio Analysis

4. Fund Flow Analysis

RATIO ANALYSIS SESSION 5


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RATIO ANALYSIS: Relationship between Profit and Loss according to the Balance Sheet.50,000 profit over 500,000 investment gives a ratio of 10%

ADVANTAGES : 1.Produces financial ratios to give a financial picture of the company.

2. Ratio analysis helps to analyze company performance and failures.

LIMITATIONS: Financial Statements do not take the current economic conditions, inflation.

TYPES OF RATIOS 1.Liquidity RatiosCash to Sales ratio acid test for any business !!!

2. Profitability Ratio- Profit-Cost= Net operating profit !!!

3. Debt equity ratio- Amount of debt to be less than equity !!

4. Operating ratio-Net sales to net profit

5. Turnover ratio-Turnover of capital investment.

6. Miscellaneous-Receivables to working capital.

LIQUIDITY RATIOS: 1.Current RatioCurrent assets divided by current liabilities.

2. Acid test ratio- Quick assets divided by current liabilities.

LEVERAGE RATIOS: 1.Debt Equity ratio- lower the ratio the better 2: 1 is acceptable

2. Asset Coverage- Cost of fixed assets against borrowed funds.

3. Debt service coverage- Profit after tax(PAT) + Deprc+ Loan payments.

ACTIVITY RATIOS: Inventory turnover/net sales inventory-shows inventory efficiency management

Debtor-Velocity= ReceivablesX360 daysHigher the ratio higher the efficiency

Creditor/Velocity=CreditorsX360divide by Purchases-Ratio increases shows short term

liquidity problem or indicates that the company may get more credit from the market.

Fixed Asset-turnover rate-= Net Sales divided by Fixed Assets

Gross profit ratio percent= Gross Profit X 100 divided by Gross sales- Profit after mfg costs



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LIQUIDITY RATIOS: Current Assets Divided by Current Liabilities- Favorite for Bankers !!!2:1 is an acceptable ratio and accepted by Banks and RBI guidelines.

PROFITABILITY : Gross Profit Ratio(GDR)= Gross Profit X 100

Net Sales

Oldest and widely used to compare with similar industries to be favorable

Lower ratio indicates that the production expenses are on the high side.

Net Profit Ratio (NPR)= Net profit by sales X 100-Net profit after

deducting expenses NPR used GPR gives the banks a good financials.

RETURN ON EQUITY: Net Profit divided by Shareholders Funds X 100

Important ratio for Shareholders because it covers all factors.

DEBT/EQUITY RATIO (DER)- Proportions of Debt and the Equity Capital in the investment

DER measures investor leverage, smaller the equity capital,higher

the income per unit share. Equity owners want high ratios to allow

equity owners to control projects with small amount of capital

Financial Institutions need a sound DER not less than 50% of total

capital investment.

DEBT SERVICE COVERAGE RATIO: (DSCR)= Net profit+ depreciation + interest on term loan divided

Amount repayable on loan+ interest on loan

This ratio shows the safety availability for the company to pay back

the installment loans. Banks accept a ratio of 2:1, not lower than 1.33:1

PROJECT DESIGN & NETWORK


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ANALYSIS SESSION 4

PROJECT DESIGN- heart of the project involves planning scheduling and controlling. IMPORTANCE OF NETWORK ANALYSIS:

1. Whole project is considered a sequence of activities and events

2. Each activity is different but all are inter-related in the overall project.

3.Whole project on network with separate networks to make up the overall network

4. Time estimates projected for new and based on past experience for old projects

5. Cost estimates depend on the time estimate & changes in all factors in production.

6. Physical progress of the project to take corrective action in time for the project.

PERT/CPM- Technics developed in the US and the main differences are as under

CPM-Critical Path method-activities only and the costs of each activity for completion.

PERT-Performance Evaluation Review Technic emphasizes events for completion of project.

STEPS IN PERT 1.Establishment of Objective and development of project network

2. Schedule work breakdown and time estimation for each task3. Determination of critical path with event slacks and activity floats

4.Calculation of completion of the project in a specified time.

PERT- Time based- Optimistic time, pessimistic time and most likely time for completion

ADVANTAGES/LIMITATION OF


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PERT/CPM SESSION 4

PERT ADVANTAGES: 1.Best possible use of resources to achieve goals within the time2. Helps to handle the concept where no time data is available

3. Right action, at the right point and at the right time !!!

LIMITATIONS : 1. Hinders time estimates when activities are non repetitive

2. It does not consider resources required at various stages.

3. Frequent revision of PERT calculations which becomes costly

CRITICAL PATH METHOD: 1. Helps to get the time schedule

2. Control by Management is good with CPM

3. Better and detailed planning

4. Standard method for communicating projects schedules

5. Helps to pay more attention to critical events. LIMITATIONS: 1. Fails to use statistical analysis to determine time schedule

2. Assumes that there is a precise time for each activity but not true in reality

3. Difficult to use due to repeating entire evaluation when changes are made.


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CHECK LIST FOR FEASIBILITY REPORT


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SESSION 4 1. Examine public policy with respect to the industry 2.Specify outputs and alternate technics of production

3. List and describe alternate alternative location for operation of the enterprise.

4. Estimate sales revenue, capital and operating costs and profitability.

5. Market analysis and specify product pattern and prices.

6. Identify main source of supply of raw materials with alternative sources.

7.List major equipment and auxiliary equipment to be used for the project.

8. Specify sources of supply for equipment and process know how

9. Specify site and complete necessary investigations about the land and property.

10. Specify supply sources and connection costs for water supply, power & transportation.

11. Prepare layout and estimate working capital requirements

12. Phasing activities and expenditure during construction 13. Analysis of projected profitability based on a cost benefit analysis

14 . Determine measures for combating environmental problems

15. Be prepared to implement the project immediately.

PLANNING COMMISSION GUIDELINES


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FOR PROJECT FEASIBILITY SESSION 4

1. GENERAL INFORMATION-information about the type of industry and past performance.2. PRELIMINARY ANALYSIS-present data on the gap between demand and supply for the output.

- data on the capacity utilization of existing units in the industry

- Location of the project and implications on community.

- profitability and rate of return should be mentioned in the report.

3. PROJECT DESCRIPTION- Mention the technology to be used in the project

- Mention environmental issues arising from projects pollution

- Capital equipment used and operational requirements of the plant

- Manpower requirement and organization structure planned

- Mention the requirements of power and water to be used.

4. MARKETING PLAN- Demand and prospective supply and analysis of past trend in prices.

5. CAPITAL REQUIREMENT & COSTS- Information on all costs involved in the project.6. OPERATING REQUIREMENTS & COSTS-Costs incurred after commercial production

7. FINANCIAL ANALYSIS-Present some data to gauge the financial viability of the project

8. ECONOMIC ANALYSIS- To be done if exports to reflect the true value of foreign exchange.

PROJECT INDETIFICATION SESSION 4


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PROJECT INDETIFICATION SESSION 4

PROJECT INDENTIFICATION : It is the first step in a new venture. CRITERIA FOR SELECTING A PROJECT:

1. Investment size: 3-5 crores to get relatively easy financing from national institutions.

2. Location: New Entrepreneurs should choose a location near the States Capital

3. Technology: Use domestic technology without any foreign collaboration

4. Equipment: Entrepreneur should select the best technical advice for equipment

5. Marketing: Not advisable to get into a business with cut throat competition to consumer.

IMPORTANCE OF PROJECT IDENTIFICATION: Development in terms of income and employment generation

Projects provide for the framework which involve finance for a long term nature.

Projects brings about changes in the society in due course of time.

ENTERPRISE DEVELOPMENT CENTER:

1.intrapreneurship center- provides research ,skills ,environment to set up the enterprise

2.Venture Capital Exchangeprovides the necessary seed capital for the enterprise

3.Innovation Center- provides all assistance to the entrepreneur in planning, evaluation etc. 4. Incubation Center-provides the needed stimulus for the enterprises to succeed and grow.

FEASIBILITY REPORT: It is mandatory for new Entrepreneurs to consult the Director of Industries

Service Institute (SISI) in ones State who will guide the new Entrepreneur in all aspects.

CONCEPT OF PROJECTS & CLASSIFICATION


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SESSION 4

WORLD BANKS DEFINITION: Approval of capital investment to develop facilities to providegoods and services.

ATTRIBUTES OF A PROJECT: 1.Objective 2. Course of Action 3. Definite time perspective.

CHARECTERISTICS OF A PROJECT: 1.Investment 2.Benefit 3. Time limit 4. Location.

PROJECT LEVELS: 1.National Level 2. Sector level Ex Hotel 3. Individual project level.

PROJECT CLASSIFICATION: Sector Projects-Agriculture ,Irrigation ,Power ,Industry,Transport,SS

TECHNO-ECONOMIC :1.Factor Intensity Oriented-capital intensive or labor intensive.

2. Causation Oriented-Demand for certain goods and services.

3. Magnitude- Large scale, medium scale and small scale. FINANCIAL INSTITUTION CLASSIFICATION: 1.New Projects 2.Expansion 3.Modernization

4. Diversification

SERVICES PROJECTS: 1. Welfare 2. Service Projects 3.R&D 4. Educational projects

ASPECTS OF A PROJECT: 1.Product,marketing,technical,financial and economic aspects

2 Feasibility of the project based on the above factors.

PROJECT CYCLE: 1.Project Objective 2. Project Identification 3. Project Preparation

4. Project Implementation 5.Post Evaluation of the project as productive. PROJECT PLANNING MATRIX: 1. Overall Goal 2.Project purpose 3.Results project must achieve

4. Activities necessary to achieve those results/outputs.

PROJECT MANAGEMENT: It is combination of all the above factors in developing a suitable project

PROJECTS MANAGEMENT SESSION 4


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PROJECT- Plan to achieve a specific objective and uses and authority to implement it. PROJECT- Three attributes 1. input characteristics 2. output characteristics 3 social benefit

INPUT- Raw materials, energy, manpower, financial resources and an organization set up

OUTPUT-Production of goods, services, and quantitative, qualitative and financial aspects

SOCIAL BENEFIT- Input and output will determine the social benefit to the community.

SEARCH FOR A BUSINESS IDEA

CHOOSING AN IDEA- Choose many ideas and narrow down to one idea which is feasible on

the basis of your market research and the liking of the entrepreneur.

PRODUCT IDEAMansukhbai Patel man behind Paan Parag and Paan masala !!!

SANITARY NAPKIN/DIAPERS- Concept in the 80s- 30 crore and has potential for 840 crore

Market Leader is Johnson & Johnson, Huggies, Pampers

DATE SUPARI- Good profit for export to the US but banned item so dropped the projectFINAL SELECTION OF A PRODUCT- Depends on 1. Profitability 2. Not banned item

3. Import and export restriction, 4. experience in making

the product and 5. Market research and competition.



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THE ADOPTION PROCESS: 1.AWARENESS : Learns about a new idea , product or practice but has limited knowledge.

2. INTEREST: Interested in the product so gets more information about the product or idea.

3. EVALUATION: Evaluates the cost benefit analysis and feasibility of product/idea to work.

4. TRIAL: The Entrepreneur is ready to put the idea into practice and test market the product.

5.ADOPTION: Based on results of test marketing he decides about the product /idea

PRODUCT INNOVATION: Drucker To create a customer only marketing and innovation !!! METHODS OF OBTAINING PRODUCTS:

INTERNAL DEVELOPMENT: Best method to develop the product on your own

LICENSING: Getting the right to produce from patent holder, fees and royalty involved.

ACQUSITION: Buying the company that makes the product which is a costly project.

PRODUCT PLANNING AND DEVELOPMENT STATEGY:

1.MARKET PENETRATION- Selling more to existing and new customers to increase market 2.MARKET DEVELOPMENT-Creation of new markets for sale of existing products.

3.PRODUCT DEVELOPMENT- Introduction of a new product in existing established market

4.DIVERSIFICATION- A company enters a new market with a completely new product

PROJECT MANAGEMENT SESSION 4


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PROJECT MANAGEMENT SESSION 4

PRODUCT PLANNING AND DEVELOPMENT PROCESS: 1. NEW PRODUCT IDEA- Visualize new ideas to create and develop a new product-R&D

2. IDEA SCREENING- Poor or bad ideas are dropped and the best idea is evaluated and taken

3. CONCEPT TESTING- An idea screened studied in detail to develop mature product concepts

4. BUSINESS ANALYSIS-MR,C/B analysis, competition and most important profit from product.

5. PRODUCT DEVELOPMENT PROGRAM-1.Prototype2.Consumer testing 3. Branding/labelling.

6. TEST MARKETING-Test marketing for feasibility of a full national marketing program.

7. COMMERCIALIZATION- After test marketing launch national mass marketing program.

Examples of ideas which have become multi million $ companies !!!

1. Microsoft 2. Warren Buffet-62 companies 3. Apple 4. Dell 5. Federal Express 6 Tennis bracelet 7.Expandable ring/bracelet 8. Google 9 email 10 Cell phones 11 GPS system

12 Tiffin carrier deliver in Mumbai 13. Tatas Nano 14 Automatic transmission and cruise control in

cars. 15. Bathroom Tissue-Wipe him out-Saadam Hussein 16 Drive thru fast food, and banking 17. ATM machines 18. Mall concept 19.Wedding Planners 20 Comedy clubs

21 Real Estate business-Donald Trump 22.Lease/buy option for cars 23 Discounted airfares

and free travel and benefits for gamblers to Vegas !!!!

CHECK LIST FOR CHOOSING IDEAS


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SESSION 4 FIT YOUR SKILLS AND EXPERIENCE:

Do you believe in the product or service?

Does the need it fits means something to you personally?

Do you like and understand the potential customer?

Do you have experience in this type of business?

Does your skills fit the basic success factors of this business?

Are the tasks of the business you will enjoy doing yourself?

Do you enjoy working and supervising the people employed?

Has the idea begun to take over your imagination and spare time?

Does your idea have any social benefit? Are you expecting a good profit and return on investment?

FIT WITH THE MARKET:

Is there a real customer need?

Can you get a price that gives you a good profit?

Will customers believe in the product coming from your company?

Does your product satisfy the need of the customer over competing products?

Is there a cost effective way to get the message and the product to the customer?

FIT WITH THE ENTERPRISE:

Is there reason to believe your enterprise could be a very good business? Does it fit the enterprise culture?

Can you imagine who will sponsor it?

IF YOUR IDEA IS REJECTED:

Give up and select a new idea

Try and improve your idea , listen to others and try to get a sponsor for your idea so that your financial risk is low !!!

ENTREPRENEURIAL TRAINING


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SESSION 3

IMPORTANCE OF TRAINING Availability of skilled workers at all levels of management and improves their performance.

Enables workers to perform more efficiently and reduces defective products in production.

Minimizes accidents between unskilled and semi-skilled workers and reduces fatigue.

Training increases the efficiency of the employee who earns more to avoid overtime

Training improves relations between employees and management to reduce turnover.

Standardization and new technics can be adopted in a factory with trained employees

Team Spirit and team work is promoted and trained need less or no supervision.

OBJECTIVES OF TRAINING:

Basic knowledge of the industry to build necessary skills for new entrepreneurs.

Assist the Entrepreneur to function more effectively and have a second line of workers

Expose t

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