1. Factors affecting entrepreneurial growth?Ans:
Entrepreneurship does not emerge and grow spontaneously. Rather it
is dependent upon some factors that affect entrepreneur growth. It
these factors are positive then the growth is more on the contrary
less. These factors are mainly environmental factors. (1). Economic
Factor:Economic environment exercises perhaps the most direct and
immediate influence on entrepreneurship. It has some conditions
which are following below. (a. !ar"ets: The si#e are composition of
mar"et both influence entrepreneurship in their own ways.
$ractically% monopoly in a particular product in the mar"et becomes
more influential for entrepreneurship than a competitive mar"et.
(b. &apital: Availability of capital help to bring together the
labour at one% machine of another and raw material of yet another
to combine them to produce product. (c. 'abour: 'abour is the most
important factor of economic condition of entrepreneurship. It
appears that the labour problem can(t protect entrepreneurship from
emerging. (d. Raw materials: )ithout raw materials business can(t
be started% because production isn(t possible. (e. Industrial
policy: It includes rules% incentives. (f. *iscal policy: It
include tax% vat. (2). Social Factors:+ocial environment in a
country exercises a significant impact on the emergence of
entrepreneurship. The main components at social environment are as
follows:,(a. +ocial !obility: It means the people of society
transfers from one place to another exchangeculture% attitude etc.
If mobility is positive then growth is also positive. (b. +ecurity:
Entrepreneurship security is an important facilitator of
entrepreneurial behavior. Insecurity doesn(t hinder
entrepreneurship% but rather that different "inds of insecurity
will result in different "inds of entrepreneurship.(c. 'egitimacy
of entrepreneurship: Illegal activities are not under business as
well as entrepreneurship. -igh degree of legitimacy support to
start business. (3). Political Factor: It is also a important
factor to the entrepreneur. A country(s economic growth depends on
its political factors. The political factors are as follows:,(a.
$olitical stability:(b. $olitical ideology of government: $olitical
ideology of government influences the development of
entrepreneurship. It political ideology is favorable to bus growth
then entrepreneurship ta"es new initiative to from business. (c.
.ature of change in political ideology: /ue to the change of
government the political ideology also changes again and again. As
a result new sectors arise by declining the previous sectors. (4).
Pschological Factor:!any entrepreneurial theorists have propounded
theories of entrepreneurship that concentrate especially
spontaneously psychological factors. These factors are following:(a
.eed for achievement: .eed for achievement motivate to enhance
business tas"s for success it is psychological power. (b $erception
and motivation: Eternally support entrepreneurial behavior.
Especially perception and motivation with positive forces to enter
into business. (c. 'earning and personality: !ore learning about
business increases business efficiency. /ifferent personality
including reformist% innovator% ret realists% retails affect
business. (!). "egal factor:It means the country(s law and order
situation. It the law order situation "eep calm and 0uiet the
entrepreneurial growth may be high. 1arious types of legal factor
are as follows:(i.Income tax law.(ii.'abor law.(iii.)age law. 2.
#omen entrepreneurs$ growth % hur&les?Ans: $roblems faced by
)omen Entrepreneurship:, 2. 'ac" of confidence:A women is accepting
a subordinate status% as a result they lac" confidence of their own
capabilities. *amily members do not have much faith in women
abilities of decision ma"ing. 3. 'ac" of wor"ing capital: The ma4or
hurdle that the women face during starting and running a company
generally come from financing and balancing of life. 5efore
marriage she has to depend on father and after marriage she has to
follow the footsteps of her husband. They have limited access over
external sources of funds. Even getting loans from either a ban" or
financial institution is more difficult. 6. +ocio,cultural
barriers: In our society% more importance is given to male child as
compared to female child. India is a male dominated society. )omen
are not treated e0ual to men. This in turn% becomes as a barrier to
women entry into business. 7. +tiff &ompetition: )omen
entrepreneurs have to face a stiff competition with the men
entrepreneurs who do not have organisational set , up to invest a
lot of money for advertisementand development area and carry out
easy mar"eting of their product with the both organised sector and
their male entrepreneurs. +uch a competition ultimately result in
the li0uidation of women enterprises. 8. 'ess !obility: 9nli"e men%
women mobility in India is highly limited due to various reasons.
:ne of the biggest handicaps for women entrepreneurs is mobility of
travelling from place to place. ;. *amily Responsibility: In India%
it is mainly a women(s duty to loo" after the children and other
members of the family. The success of a married woman depends upon
supporting husband and family. +upport and approval is necessary
from ta"ing prompt decision in business. ilapidated, run down
premises, often in need of refurbishmentTrained, experienced sta%
?olunteers, often without training or experience& supportive
administrative framewor, e.g. someone to answer the telephone, do
the boos, sort out the invoices& lac of regular administrative
support at the very start of the enterprise& social and
business environment which is geared towards helping commercial
entrepreneurs gain the competitive edge, mae money, increase
pro!ts, satisfy shareholders9ed tape, bureaucracy, resistance
tochange9istinguish *etween social an& commercialEmphasis on
:eam =s. >n&i-i&ualThe B+tanford +ocial Innovation
ReviewB notes that venture capitalists invest in private businesson
the basis of a new companyAs leadership team and the organi#ation
that supports it. $hilanthropists ,, individuals who raise and
donate money for charitable causes ,, rather than venture
capitalists are often the primary investors in social
entrepreneursA pro4ects. TheyAre more li"ely to gauge the viability
of a pro4ect based on the individual at the helm. The review
challenges the focus on the individual in light of research showing
that successful change depends on a range of competencies ,,
competencies that re0uire strong leadership but that rarely can be
underta"en by a sole individual.Perceptions of =alue*or the
business entrepreneur% value lies in the profit the entrepreneur
and investors expect to reap as the product establishes itself in a
mar"et that can afford to purchase it. The business entrepreneur is
accountable to shareholders and other investors for generating
these profits. To the social entrepreneur% thereAs also value in
profits% as profits are necessary to support the cause. That said%
value for the social entrepreneur lies in the social benefit to a
community or transformation of a community that lac"s the resources
to fulfill its own needs.+easure of Profita*ilitThe ventures of
business entrepreneurs are always designed to turn profits that
benefit sta"eholders% such as shareholders or private investors.
+ocial entrepreneurs also may engage in for,profit activities.
-owever% they often structure their organi#ations as nonprofits% or
they donate their profits to the causes they support. .IHA )ater%
for example% is a for,profit company that sells bottled water.
According to BEntrepreneur%B 2== percent of the companyAs profits
support clean,water pro4ects in 9ganda% Henya% +ri 'an"a and
.icaragua.5pproach to #ealth ?reationAlthough the business
entrepreneur and the social entrepreneur are similarly motivated to
change the status 0uo% their missions differ significantly. The
business entrepreneur is driven to innovate within a commercial
mar"et% to the ultimate benefit of consumers. If successful% the
innovation creates wealth. The ventureAs success is gauged by how
much wealth it creates. To the social entrepreneur% wealth creation
is necessary% but not for its own sa"e. Rather% wealth is simply a
tool the entrepreneur uses to effect social change. The degree to
which minds are changed% suffering is alleviated or in4ustice is
reversed represents the organi#ationAs success.2. @a)ina&a
e(periment?Ans: @a)ina&a E(perimentnternal factors are those
which arise within an organisation. :he inclu&e:8 !ismanagement
in various functional areas of a company li"e finance%production%
mar"eting and personnelE )rong location of a unitE :verestimation
of demand and wrong dividend policyE $oor implementationof
pro4ectswhichmaybeduetoimproper planningormanagerial inefficiencyE
$oor inventory management in respect of finished goods as well as
inputsE 9nwarranted expansion and diversion of resources such as
personalextravagances%excessive overheads% ac0uisition of
unproductive fixedassets%etc.E *ailure to modernise the productive
apparatus% change the product mix and otherelements of mar"eting
mix to suit the changing environmentE $oor
labour,managementrelationship and associated low wor"ersAmorale
andlow productivity%stri"es%loc"outs% etc. E(ternal factors are
those which ta)e place outsi&e an organisation.
:heinclu&e:8 Energy crisis arising out of power cuts or
shortage of coal or oilE *ailure to achieve optimum capacity due to
shortage of raw materials as a resultof production set,bac"s in the
supply industries% poor agricultural output becauseof natural
reasons%changes in the import conditions%etc. Infrastructural
problems li"e transport bottlenec"sE &redit s0uee#eE +ituations
li"e mar"et recession% changes in technology%etcE International
pressures or circumstances% etcRE1I1A' :* +I&H.E++ )hen an
Industrial 9nit is identified as sic" a viability study should be
conducted to assess theunit% it covers: !ar"et :perations *inance
-uman Resource Environment The viability study may suggest one of
the following measures: /ebt restructuring Infusion of funds
Replacement of existing managementRE1I1A' $R:NRA!!E +ettlement with
creditors /isinvestment and disposal +trict control over costs
+treamlining of costs Improvement in managerial systems )or"ers
participation &hange of management !erger with a healthy
company14. ?omponents of *usiness plan?Ans: A business plan is
actually a compilation of several sub,plans. A simplified business
plancan be prepared within the municipality to consist of: title
page and table of contentsE executive summary and business profileE
mar"eting planE operations planE human resources planE and
*inancial
plan.$reparingabusinessplanmeansdevelopingacomprehensiveset of
operational activitiesarising from the strategic plans. It is an
essential step in the preparation for $$$s to ensure
thatmunicipalities "now: what the ob4ectives areE how the $$$
option will be managedE and -ow the $$$ goals will be attained. A.
Title page and table of contentsThetitlepageshouldincludethenameof
thepartnership% theperiodof timethat theplancovers% the date that
the plan was prepared as wellas a contact person% phone number
andaddress. Thetitlepageshouldloo"professional: it isthefirst
pageareader seesandfirstimpressions are important.The table of
contents lists the topics covered by the plan. As a road map% it
allows the reader to4ump immediately to those sections that are of
most interest.'. E(ecuti-e summar an& *usiness profileThe
purpose of the executive summary is to capture the highlights of
the business plan andserve as a 0uic" reference. The summary is
usually completed after the remainder of the planhas been written
and should preferably be about 2 or 3 pages long. It should
include: a brief description of the service% potential customers
and mar"etsE purpose and concept of the partnership (or why the
mar"etplace needs the services ofthe partnershipE business
targets(pro4ectionsin termsofunitsand monetary
volumesduringthetimeperiod that the plan covers and how it can be
attainedE re0uired financing and sources% how the funds will be
used and how the funds willberepaidE and 'in"ages to the
partnership(s strategic plan.Alongwiththis% abrief descriptionof
thepartnershiporganisationandownershipshouldbeprovided. :ther
useful informationincludesmanagement% previousfinancing(bywhom%
theproposed start,up date of operations% important details of the
partnershipAs current mar"et area%customers and trends that the
proposed business can build upon.?. +ar)eting planThe mar"eting
plan describes% in general terms: the industry in which the
partnership intends tooperate and the strategy to penetrate or
develop the target mar"etE how much is planned to besoldE
whothecustomersareE howtheserviceswill bepricedE
andhowtheserviceswill bepromoted. A full mar"eting plan and
strategy need not be included in the business plan but anumber of
alternatives need to be considered and evaluated in the planning
process before themar"eting plan is finalised.There are various
exercises that can be helpful in the planning process: +):T
analysis L strengths% wea"nesses% opportunities and threatsE $E+T
analysis L political% economic% social and technologicalE
5alancedscorecardLanalysisof theimpact of
achievingob4ectivesfromafinancialperspective% a customer
perspective and an internal perspective% and of innovation
andlearning% together with identification of critical success
factors and performancemeasuresE and 5rainstorming L for
alternative scenarios% opportunities and strategies.The mar"eting
plan must coverFinclude: evidencethat thepartnershipisawareof
mar"et conditions(si#eandstructure% thegeneral economy and
competitionE the implications of change (or trends%
newtechnologies% newproducts% differentlifestyles% ability of
customers to afford the serviceE the implications of legal or
political constraints on how the services are produced
anddeliveredE the competitive advantage of the particular service
to be provided or if it fills a particularniche in the mar"etplaceE
the basis for pricing the service based on costs% the competition
or what the mar"et willbearE the geographic location in which the
partnership will concentrate its promotionsE and the best way to
distribute the service to customers.In formal terms% the mar"eting
plan should address the four O$AsP of mar"eting: product%
price%promotion and place (distribution. It should also identify
strategically where the partnership isat% where it wants to go% and
how it will get there. A critical component will be a pro4ection
ofsales. )hereit isre0uiredtoma"eforecasts% at least threesetsof
pro4ectionsshouldbeconsidered: BoptimisticB% BpessimisticB% and
Bmost li"elyB scenarios.9. Bperations planThe operations plan is a
brief outline of the basic operation of the $$$ option. This may
beobvious to some people% but not necessarily to every sta"eholder.
The following needconsideration: how the service is to be providedE
wherethesuppliesandmaterialswill
bepurchasedandhowtheserviceistobedeliveredE what after,sales
service is re0uired (repairs and so onE what land% buildings%
facilities and e0uipment are re0uired% including costs and
financing(for lease or ownership% renovations% local taxes and
utility costsE what employee and management plans are re0uired%
including how s"illed labour can beaccessed if re0uiredE
thebusinesslocationthat ischosenandanexplanationof whyit
shouldservethepartnership(s needs% proximity to customers%
suppliers% transportation costs and locationof competitorsE and The
production capacity% turnover rates or services that can be
achieved realistically withthe existing or proposed plan and
staff.E. -uman resources plan!anagement is critically important to
the success of any $$$ option. Investors or lenders areloo"ing for
a balanced team of people to cover the important areas of
management% mar"eting%accounting and the technical s"ills to
deliver on the business plan. -uman resourcemanagement re0uires
thin"ing about how the partnership will recruit% screen% motivate%
train anddiscipline the staff needed to wor". The human resources
plan should coverFinclude the pointsbelow: It should name the "ey
people operating the $$$ option% and outline the education
orexperience each of them brings to it. It shouldexplain how"ey
areas of the operation arehandledandby whom. Anorganisational chart
may be useful in this regard. &ontingency plans should be
indicatedif a "ey person cannot wor" for an extended period of
time. It should indicate any wea"nesses in the management teamand
the strategy toovercome them and in what time frame. Training
existing staff% recruiting new employeesor hiring outside advisors
are some of the possibilities. It
shouldindicatewhethersalaryandcompensationof
managersandemployeesarecompetitive within the industry and whether
incentives such as commissions% bonuses orprofit sharing are being
offered. It should name the board of directors or professional
advisors and indicate howmanagement will use their experience and
guidance. The timing and fre0uency of boardmeetings should also be
indicated.Recognition of the contribution made by employees to an
organisation is one "ey to the growthand success of a partnership.
The plan should outline how the municipal management intendsto
identify% recruit or promote "ey people and maintain a strong sense
of collective achievementwith all employees.F. Financial
planThefinancialplan isa "ey componentofthebusinessplan.This
isbecausetheprocessofcreating financial pro4ections for the $$$
option revenue and expenses% cash flow and financialpositionwill
forcetheteampreparingthebusiness plantoexamineall of theother
"eycomponents of the plan. In doing this% they will be able to
describe their plan in monetary termsand detect any discrepancies%
gaps or unrealistic assumptions made earlier. The financial planis
also a valuable tool for creditors or government agencies when
evaluating the partnership(sneeds and use of funds. The financial
plan consists of: an income statementE a cash flow summaryE the
balance sheetEcapital sales and purchasesE and a financing
schedule.Income statementThe purpose of the income statement is to
disclose the annualrevenues and expenses of abusiness over the
period of time that the plan covers. *or an existing business%
information forat least the last one or two years is
necessary.&ash flow summary:f all the supporting documents% the
cash flow pro4ection is one of the most difficult to
prepare.5asically% it is an educated guess about when and how much
money will be coming into andgoing out of partnership option. The
cash flow forecast enables managers to decide what canbe afforded%
when it can be afforded and how the partnership will be "ept
operating on a month,to,month basis. This information is useful to
indicate the pro4ected increases or decreases of aban" loan that
may be re0uired during the year. Guarterly summaries are often
ade0uate% butoccasionally monthly summaries are re0uired for the
first year of operation.The balance sheetThe balance sheetdescribes
the assets%the liabilities andthe e0uity of the partnership at
aparticular point in time. It is a widely used accounting statement
that indicates the economicresources of the organisation and the
claim on those resources by creditors. This information isusefulin
that it allows management and creditors to compare the
partnership(s estimates% aswell as its past performance% against
industry averages.&apital sales and purchasesInvestors and
lenders will re0uire detailed information on the capital purchases
that areanticipated during the planning period% as wellas
information on how these assets are to befinanced and the expected
useful life of the assets. &apital assets include land%
buildings ande0uipment.*inancing scheduleThe financing scheduleor
loansummary shouldprovide thereader with asnapshot view
ofexistingandnewloansthat will beheldbythepartnership.
Informationshouldoutlinetheinterest rate being paid% fre0uency of
payments% security given% type of loan (amortised
versusnon,amortised and the expected term of the loan. *or existing
loans% the name of the financialinstitution should be indicated..o
one expects a new partnership to ma"e a profit in the first month%
0uarter or in some casesyear. -owever% there should be light at the
end of the tunnel. Interest on loans is repayable fromthe first day
of operation% and the partnership must show a return on the
investment% in terms ofboth time and money% within a realistic time
frame if it is to be viable.1!. Feasi*ilit analsis C its nee&
an& importance?Ans:As the name implies% a feasibility study is
an analysis of the viability of an idea. The feasibility study
focuses on helping answer the essential 0uestion of Oshould we
proceed with the proposed pro4ect ideaQP All activities of the
study are directed toward helping answer this 0uestion.M 5efore you
begin writing your business plan you need to identify how% where%
and to whom you intend to sell a service or product. Dou also need
to assess your competition and figure out how much money you need
to start your business and "eep it running until it is established.
M *easibility studies address things li"e where and how the
business will operate. They provide in,depth details about the
business to determine if and how it can succeed% and serve as a
valuable tool for developing a winning business plan. >mportant
of Feasi*ilit Stu&iesM 'ist in detail all the things you need
to ma"e the business wor"E M Identify logistical and other
business,related problems and solutionsE M /evelop mar"eting
strategies to convince a ban" or investor that your business is
worth considering as an investmentE and M +erve as a solid
foundation for developing your business plan. M Even if you have a
great business idea you still have to find a cost,effective way to
mar"et and sell your products and services. This is especially
important for store,front retail businesses where location could
ma"e or brea" your business. M *or example% most commercial space
leases place restrictions on businesses that can have a dramatic
impact on income. A lease may limit business hoursFdays% par"ing
spaces% restrict the product or service you can offer% and in some
cases% even limit the number of customers a business can receive
each day. M If the results show that the pro4ect is not a sound
business idea% then the pro4ect should not be pursued. Although it
is difficult to accept a feasibility study that shows these
results% it is much better to find this out sooner rather than
later% when more time and money would have been invested and lost.
:ther importance!ar"et 1iabilityA feasibility study typically
includes a mar"et analysis that loo"s at the current state and
direction of a mar"et and whether a new venture would be viable in
the mar"et. *or example% if an inventor creates a new type of
s"ateboard% mar"et research he conducts as part of a feasibility
study might show little interest exists for the new design. In this
case% the inventor might save himself time and money by scrapping
the pro4ect.*inancial 1iabilityEven if consumers are interested in
a new product or service% a business canAt succeed unless it can
produce and deliver the product to customers at a price that is
profitable. A feasibility study can assess the start,up and
operational costs of a venture and ma"e revenue pro4ections to
estimate whether a pro4ect is li"ely to be profitable. If a product
is too expensive to produce to be profitable% managers can loo"
into ways to cut costs to ma"e it financially feasible.Identifying
Threats!any external factors can harm the profitability of a
business. &onducting a feasibility study can helpmanagers
identify threats such as mar"et competition% unfavorable laws and
new technologies that might affect a pro4ectAs chances of success.
Identifying threats early on gives managers the opportunity to ta"e
action to mitigate the impact they might have on a business as a
new venture proceeds.Identifying :pportunities+mall businesses
often focus on selling products and services to small segments% or
niches% within larger mar"ets that have specific needs and
preferences. A feasibility study can help business managers
identify niches in mar"ets. *or instance% a feasibility study might
reveal that certain demographic groups within a mar"et are willing
to pay extra for product features that are not currently available%
giving a new company the chance to profit by fulfilling the
need.
