2nd assignment of entrepreneurship

Muhammad Danish | www.knowledgedep.blogspot.com

Q1:- Explain the Procedures of launching new Product.

Answer:

Follow these six steps are necessary to successfully launch your new product:

1. Test Product before your launch.

Testing can help you verify that your product, company and audience are ready for your

launch. Company can assess the like rate of audience about the product. If audience replies

positive thinking then the company can take next steps to launch the new product.

2. Improve your team.

As you move toward the release of your product, your staff will have to adjust to new

processes, which can be difficult. Maintain momentum throughout product development, and

give your team members the time and resources they need to familiarize themselves with the new

product and its customer support protocols. Set attainable goals so your staff can experience

small wins that build motivation.

3. Prepare for an increase in sales.

A new service can bring a sudden spike in sales. To avoid failure, you must ensure that

your team is prepared for the increase in volume and complexity of work. Make sure you fill all

necessary positions and educate team members on the vocabulary, processes and features of the

new product.

4. Remember your core business.

Focus on an exciting new product is only natural, but remembers not to neglect your

existing business. Strike a balance between giving the new product life and sustaining your

established enterprise.

5. Establish metrics as you go.

Set relevant goals, and regularly measure how well your service meets those goals. In

extreme cases, don’t be afraid to scrap your product if it isn’t performing. Remember

the principle of sunk costs: Just because you’ve already invested time and resources into

developing a product doesn’t mean you should keep trying to sell it. If profitability becomes

uncertain, it’s hindering your company’s growth.

6. Gather feedback after your launch.

Analyze customer feedback, and then determine what changes you need to make to enhance your

product. The University of Oregon, for example, conducted studies to improve the in-stadium

http://www.knowledgedep.blogspot.com/


experience. One improvement was the addition of 150 flat-screen HD monitors along the

stadium concourse. Fans can now watch the game when they’re away from their seats.

While there is never a guarantee that a new product will be successful in the marketplace,

properly preparing for and timing your launch can make your debut -- and your product -- more

memorable.



Q2:- Explain financial planning Balance sheet, Income statement

and Cash Flow Statement.

Answer:

Balance Sheet:

“A statement, which shows the financial position of a business”.

“A statement of the assets, liabilities, and capital of a business or other organization at a

particular point in time, detailing the balance of income and expenditure over the

preceding period”.

Elements of Balance Sheet:

1) Assest:

“Assets are things that a company owns that have value”.

a) Tangible assets

A tangible asset is an asset that has physical form.Tangible assets include

both fixed assets, such as machinery, buildings and land, and current assets, such

as inventory. The opposite of a tangible asset is an intangibleasset

b) Intangible assets

An intangible asset is an asset that is not physical in nature. Corporate

intellectual property (items such as patents, trademarks, copyrights, business

methodologies), goodwill and brand recognition are all common intangible

assets in today's marketplace.

c) Long-term investment

A long-term investment is an account on the asset side of a company's

balance sheet that represents the company's investments, including stocks, bonds,

real estate and cash, that it intends to hold for more than a year.

d) Deferred assets

A deferred asset is an expenditure that is made in advance, and is not yet

consumed. It arises from one of two situations: Short consumption period. The

expenditure is made in advance, and the item purchased is expected to be

consumed within a few months.

e) Current assets.

Cash and other assets that are expected to be converted to cash within a

year.



2) Liabilities:

A liability is legally binding obligations payable to another entity. Liabilities

incurred in order to fund the ongoing activities of a business. Examples of liabilities are

accounts payable, accrued expenses, wages payable, and taxes.

a) Authorized capital

The authorised capital of a company (sometimes referred to as the

authorised sharecapital, registered capital or nominal capital, particularly in the

United States) is the maximum amount of share capital that the company

is authorised by its constitutional documents to issue (allocate) to shareholders.

b) Issued capital

The share capital that has been issued to shareholders. This is part of a

company's authorised capital (the maximum amount of capital a company

can issue under its articles of association). The part that has not been issuedis

called unissued capital.

c) Paid up capital

Paid-up capital is the amount of money a company has received from

shareholders in exchange for shares of stock. Paid-up capital is only created when

a company sells its shares on the primary market directly to investors.

d) Reserve

A reserve is profits that have been appropriated for a particular purpose.

Reserves are sometimes set up to purchase fixed assets, pay an expected legal

settlement, pay bonuses, pay off debt, pay for repairs and maintenance, and so

forth.

e) Current liabilities.

Current liabilities are a company's debts or obligations that are due within

one year, appearing on the company's balance sheet and include short-term debt,

accounts payable, accrued liabilities and other debts. Essentially, these bills are

due to creditors and suppliers within a short period of time.

f) Shareholders’ equity

Shareholders equity is the difference between total assets and total

liabilities. It is also the Share capital retained in the company in addition to the

retained earnings minus the treasury shares.

Income Statement

A statement, which show the operation of business. It is also known as the profit and

loss statement (P&L), statement of operations, or statement of earnings.

Elements of the Income Statement

1) Revenue:

Gross receipts earned by the company selling its goods or services



2) Expenses:

The costs of the company to earn the gross receipts

3) Gains:

Total revenue is greater than total expenses.

4) Losses:

Wise versa

Methods for Constructing the Income Statement

a) Single Step Income Statement

Single Step income statement totals revenues, and then subtracts all expenses to

find the bottom line.

b) Multiple Step Income Statement

The more complex Multi-Step income statement (as the name implies) takes

several steps to find the bottom line.

Cash flow statement

A financial statement shows how changes in balance sheet accounts and income

affect cash and cash equivalents, and breaks the analysis down to operating, investing

and financing activities.

a) Operating activities.

Operating activities are the functions of a business related to the provision of its

offerings. These are the company's core business activities, such as manufacturing,

distributing, marketing and selling a product or service

b) Investing activities.

Investing activities are the second main category of net

cash activities listed on the statement of cash flows and consist of buying and selling

long-term assets and otherinvestments. In other words, this is the net amount of cash

received and paid during an accounting period for long-term assets and investments.

c) Financing activities.

Financing activities are transactions with creditors or investors used to

fund either company operations or expansions. These transactions are the third set o f

cash activities displayed on the statement of cash flows.



Q3:- Explain the Barriers to creativity.

Answer:

Creativity.

Creativity is the act of turning new and imaginative ideas into reality. Creativity is

characterised by the ability to perceive the world in new ways, to find hidden patterns, to make

connections between seemingly unrelated phenomena, and to generate solutions.

Barriers to Creativity:

1) We Are Not In A Creative Sector

You may not be an organisation that is in the creative sector but that does

not mean that you should not be looking at different ways of doing things.

2) I Don’t Have Time

As a leader, there are two very distinct but interrelated roles to consider

taking care of the present and building long term sustained success in the future. It

is easy to fill your schedule with the here and now and fool yourself into believing

you have no time.

3) Over Control

Much is said and written about employee engagement. The fact is

employees will only engage if they feel that if they come up with an idea it will be

given appropriate consideration. If you want to control everything you will never

get creativity.

4) No Incentive

Look at the reward structures in your organisation. Do they reward people

who come up with good solutions or do they just treat people as if they are all the

same?

5) Fear of Failure:

Every organisation needs to take some degree of risk. Those risks might

result in successes sometimes and failure at other times. If you fear failure, your

organisation, team or function will always be sub-optimal in terms of results. We

often learn more when we fail than when we succeed.

6) Complacency

The minute you think you have it cracked you are in dangerous waters.

Just look at organisations that were around in the past who are not any longer.

Don’t ever think that you have it all cracked.



Q4:- Explain the Techniques to improve creativity.

Answer:

1. Be diverse.

There is a reason they say that two heads are better than one. Diverse teams can be far

more creative than individuals can because several brains naturally can generate more ideas than

a single brain. However, too much or the wrong kind of diversity can actually hurt. To be most

creative, teams should have people of differing skills, talents and backgrounds, but with similar

values and motivations. Everyone should be united behind a common goal.

2. Take a break.

Ceaselessly grinding away at a problem is less likely to produce a creative breakthrough

than consistent effort combined with occasional breaks to rest, relax, and recharge. Incorporating

exercise into breaks helps even more. Research shows people come up with more and better

ideas while walking than while standing still. Moreover, do not discount meditation. The regular

practice of mindfulness has been consistently connected with greater creativity.

3. Reduce time pressures.

Although necessity may be the mother of invention, that does not mean people will only

be creative or be more creative when their backs are up against the wall. In fact, deadlines have

been shown to make people less creative. So, while you may at times be forced to be creative

when an 11th-hour problem strikes, you'll probably be at your creative best in a more relaxed

environment when you are not under the gun to deliver results quickly.

4. Change the scene.

Changing the physical environment has been shown to significantly help creativity.

Moving outside the business's familiar walls also helps brainstormers get outside their familiar

thought patterns.

5. Embrace failure.

One of the best-established connections between creativity and corporate culture has to

do with the way failure is treated. Simply put, creative people have to feel safe to come up

with new approaches and to try them out. That means not punishing failure and, in fact,

rewarding it.

6. Developing a Procedure For Capturing Ideas

It is the best techniques to improve the creativity of a business. the organization also can

develope a procedure to cature new ideas to improve creativity and improve the

organization’s production process and other systems.



7. Providing Creativity Training

The organization can train their employees to make them creative by providing them

creativity training. Most of the international organizations use this method to improve their

product and to do some thinks new.

8. Diversity of thought

Try different ways of thinking. Recognizing where you (and your team) are strong, and

where you aren’t, is critical. If you know you are not adept at one part of the creative process,

seek others who are. Bounce thoughts off them and listen to the new directions their differe nt

thinking can provide. Challenge yourself to be open to other’s perspectives.



Q5:- Explain the Components of Business Plans.

Answer:

Business Plan:

A carefully constructed guide for a person for starting a business.

Components of Business Plans:

1. Introduction:

Basic information of business such as ; name, address and phone number of the

business; the date of the plan was issued and a statement of confidentiality to keep

important information away from potential competitors.

2. Executive Summary

The executive summary is a crucial part of the business plan. It is a synopsis of

the main points of your business plan, highlighting the key features. This is usually the

first part of your plan that prospective investors will read and it must be interesting and

concise.

3. Benefits to the Community

It includes all information that how the business will have an impact on economic

development, community development, and human development.

4. Company and Industry

It also important to show the background of the company and choice of legal

form, information on the product and service to be offered, examination of potential

customers, current competitors and the business’s future.

5. Management Team

In this portion of the plan, a description of each member of the company

management team is provided. It should include their qualifications, accomplishments,

and commitments to business success.

6. Manufacturing and Operations Plan

This step of business plan include; Discussion of skills, talents and job description

of management team, managerial compensation, management training needs, and

professional assistance requirements.

7. Labour Force

In this step the management discuss the quality of Skilled workers available and

the training, compensation, and motiation of workers.

8. Marketing Plan

A marketing plan is a business document written for describing the current market

position of a business and its marketing strategy. Marketing plans usually cover a period

of one to five years.



9. Financial Plan

Financial planning is the task of determining how a business will afford to

achieve its strategic goals and objectives. Usually, a company creates a Financial

Planimmediately after the vision and objectives have been set.

10. Exit Strategy

An entrepreneur's strategic plan to sell his or her investment in a company he or

she founded. An exit strategy gives a businessowner a way to reduce or eliminate his or

her stake in the business and, if thebusiness is successful, make a substantial profit.

11. Critical Risk and Assumptions

In this step the management evaluate the weakness of the business and how the

company plans to ideal with these and other business problem.

12. Appendix

The appendix consists of an array of documentation that ranges from receipts and

bank statements to contracts and inventories. It should be used on an as-needed basis

and include only essential information.



Q6:- Diferrence between Managerial and Entrepreneurial

Decision Making.

Answer:

The difference between the entrepreneurial and the managerial styles (Managerial

styles are called the administrative domain) can be viewed from five key business dimensions;

which are following.

1. Strategic Orientation

The entrepreneur’s strategic orientation depends on his or her perception of the

opportunity. This orientation is most important when other opportunities have

diminishing returns accompanied by rapid changes in technology, consumer economies,

social values, or politicalrules. When the use of planning systems as well as measuring

performance to control current resources is the strategic orientation, the administrative

(managerial) domain is operant, as is the case with many large multi-national org.

2. Commitment to Opportunity

In terms of the commitment to opportunity, the second key business dimension,

the two domains vary greatly with respect to the length of this commitment. The

entrepreneurial domain is pressured by the need for action, short decision windows, a

willingness to assume risk, and few decision constituencies and has a short time span in

terms of opportunity commitment. This administrative (managerial) domain is not only

slow to act on an opportunity, but once action is taken, the commitment is usually for

a long time span, too long in some instances. There are often no mechanisms set up in

companies to stop and re-evaluate an initial resource commitment once it is made - a

major problem in the administrative (managerial) domain.

3. Commitment of Resources

An entrepreneur is used to having resources committed at periodic intervals that

are often based on certain tasks or objectives being reached. These resources, often

acquired from others, are usually difficult to obtain, forcing the entrepreneur to

maximize any resources used. This multistage commitment allows the resource

providers (such as venture capitalists or private investors) to have as small an exposure

as possible at each stage of business development and to constantly monitor the track

record being established. Even though the funding may also be implemented in stages in

the administrative domain, the commitment of the recourses is for the total amount

needed. Administratively oriented individuals respond to the source of the rewards



offered and receive personal rewards by effectively administering the resources under

their control.

4. Control of Resources

Control of the resources follows a similar pattern. Since the administrator

(manager) is rewarded by effective resource administration, there is often a drive to own

or accumulate as many resources as possible. The pressures of power, status,

and financial rewards cause the administrator (manager) to avoid rental or other periodic

use of the resource. The opposite is true for the entrepreneur who—under the pressure of

limited resources, the risk of obsolescence, a need for flexibility, and the risks

involved—strives to rent, or otherwise achieve periodic use of, the recourses on an as-

needed basis.

5. Management Structure

The final business dimension, management structure, also differs significantly

between the two domains. In the administrative domain, the organizational structure is

formalized and hierarchical in nature, reflecting the need for clearly defined lines of

authority and responsibility the entrepreneur, true to his or her desire for independence

employs a flat organizational structure with informal networks throughout.



Q7:- Explain the Michael Porter’s Five Forces Model

Answer:

Porter's five Forces

Porter's Five Forces is a model of analysis that helps to explain why different industries

are able to sustain different levels of profitability. This model was originally published in

Porter's book, "Competitive Strategy: Techniques for Analyzing Industries and

Competitors" in 1980. The model is widely used, worldwide, to analyze the industry

structure of a company as well as its corporate strategy.

1. Competition in the Industry

The importance of this force is the number of competitors and their ability to threaten a

company. The larger the number of competitors, along with the number of equivalent

products and services they offer, dictates the power of a company. Suppliers and buyers

seek out a company's competition if they are unable to receive a suitable deal.

2. Potential of New Entrants Into an Industry

A company's power is also affected by the force of new entrants into its market. The less

money and time it costs for a competitor to enter a company's market and be an effective

competitor, the more a company's position may be significantly weakened.

3. Power of Suppliers

This force addresses how easily suppliers can drive up the price of goods and services. It

is affected by the number of suppliers of key aspects of a good or service, how unique these

aspects are and how much it would cost a company to switch from one supplier to another.

The fewer number of suppliers, and the more a company depends upon a supplier, the more

power a supplier holds.

4. Power of Customers

This specifically deals with the ability customers have to drive prices down. It is affected

by how many buyers, or customers, a company has, how significant each customer is and

how much it would cost a customer to switch from one company to another. The smaller

and more powerful a client base, the more power it holds.

5. Threat of Substitutes

Competitor substitutions that can be used in place of a company's products or services

pose a threat. For example, if customers rely on a company to provide a tool or service that

can be substituted with another tool or service or by performing the task manually and this

substitution is fairly easy and of low cost, a company's power can be weakened.



Q8:- Explain the Women entrepreneurship.

Answer:

Women Entrepreneurs:

It may be defined as a woman or group of women who initiate, organise and run a

business enterprise.

Defination:

“Women who innovate initiate or adopt business actively are called women entrepreneurs.”

J. Schumpeter

“Women entrepreneurship is based on women participation in equity and employment of a

business enterprise.” Ruhani j. alice

Qualities of Women Entrepreneur

1) Accept challenges

2) Ambitious

3) Hard work

4) Patience

5) Motivator

6) Adventurous

7) Conscious

8) Educated

9) Intelligent

Functions of women entrepreneur

Their are basic four functions of women entrepreneur

Planning:

Planning is the most important function of entrepreneurship. Women entrepreneur

planning the all procedure or management to complete tasks of the business. the women

entrepreneur can not be run without planning.

Organizing:

Organizing is also an important function of women entrepreneurs that what, when

and how to do. If the business cannot be run without organizing of all procedure of

business.



Decision making:

Decision-making is a very difficult function of women entrepreneur. In case of

any problem, the good decision plays very important role. The wrong decision can make

the obstacles to achieve the business goals.

Risk Bearing:

Every business includes some portion of risk. However, women entrepreneurs

have risk taking capacity. They calculate different types of risks such as financial risk,

social risk, psychological risk etc. They handle risks by gathering information.

Psychosocial barriers:

1) Poor self-image of women

2) Inadequate motivation

3) Lack of courage and self-confidence

4) Inadequate encouragement

5) Lack of social acceptance

6) Unjust socio-economic and cultural system

7) Lack of freedom of expression

8) Afraid of failures and criticism

9) Susceptible to negative attitudes

10) Lacking in leadership qualities

Problems of women entrepreneurs:

1) Defying social expectations

Women may feel as though they need to adopt a stereotypically "male" attitude

toward business: competitive, aggressive and sometimes overly harsh.

2) Limited access to funding

Women mostly have limited funds to start business or to continue the business.

Mostly business men are investing in high level of companys other then women

entrepreneurs.

3) Owning your accomplishments

The communal, consensus-building qualities encouraged in young girls can leave

women unintentionally downplaying their own worth. a startup that provides personal

storage for events, said she has always found it difficult to convey her own worth as a

leader.

4) Building a support network

Forty-eight percent of female founders report that a lack of available advisers and

mentors limits their professional growth. Most of business today still rings true with the



philosophy that 'It's not what you know; it's who you know,' this can be a huge factor in

your ultimate success.

5) Balancing business and family life

It is also very difficult for women to adjust timing of business and family life.

mostly mothers, who start the business and try to adjust their life between business and

their family is very difficult.

6) Coping with a fear of failures

The fear of failure is the top concern of women who launch startups. Failure is a

very real possibility in any business venture.

Remedies to solve the problems:

1. The Financial problems can be removed by making Finance cells to provide the financial

sports to women entrepreneurs.

2. Markiting co-opratives are very help full for women entrepreneurs to solve marketing

problems and increase the sales.

3. Availability of raw material is also a problem of women entrepreneurs, it can be solve by

Suppling raw material with proper chain system.

4. By developing the enducation institutions and colleges the lack of Education and

awareness can be removed.

5. Training problem can be removed by developing the training centers for giving Training

facility to women entrepreneurs.



Q9:- Describe Business Model? Identify Four Major Component of

Business Model?

Answer:

Business Model:

It represents the common group of characteristic and methods of doing business to

generate sales revenues and reduce expenses.

Major components of Business Model:

1. The Offering

Value Proposition:

The value proposition is a description of the products and services the

business offers and why customers will be compelled to buy them. The value

proposition describes the problem the customers are experiencing and how the

products and services being offered will help solve that problem. It describes how

the features and characteristics of the products and services will contribute to the

solution of the customers’ problem.

2. Infrastructure

This is the part of the business that creates expenses. This part describes the basic

facilities, skills, manpower, partnerships, and production process needed to exploit the

business opportunity.

Core capabilities:

The capabilities and core competencies necessary to operate the business.

This includes land, facilities, equipment, personnel and their required skills

needed to produce the products or services described in the value proposition.

Partner network:

The business alliances needed to operate the business. Most businesses

need alliances, agreements, licenses, or other third party assistance (legal,

accounting, insurance, security, etc.) which are usually purchased from specialized

service providers.

Value configuration:

The process by which the products or services are produced and presented

to the customer. The value configuration describes how the materials, supplies, and

other required resources will be obtained and transformed into usable products or

services and how they will be made available to buyers.



3. Customers

This is the part of the business that generates revenue.

Target customer:

The demographics, purchasing patterns, and location of the potential

buyers of the products described in the value proposition.

Distribution channel:

The means by which the business delivers products and services to

customers. This includes the business's marketing and distribution strategy.

Customer relationships:

The process of interacting with the business’s customers. It includes

communicating; selling, supporting, and assisting customers purchase and use the

business’s products or services.

4. Finances

This is the part of the business that determines its financial performance and profit

Investment:

The investment needed to obtain the facilities, equipment, and working

capital to begin or sustain operations. This should include an itemization of these

expenses and sources of financing to obtain these funds and when they will be

required.

Cost structure:

The expenses required to produce the products or services described in the

value proposition. It should include an itemization of the expenses required by

expense category and the assumptions made to estimate these expenses.

Revenue:

The income a business receives from the sales of its products or services.

This includes sales volume and revenue projections and the assumptions and logic

used to make these projections.



Q10:- Role of Entrepreneur in Economic Development and also

explain Social Responsibility and Ethics.

Answer:

The major roles played by an entrepreneur in the economic development of an economy

is discussed in a systematic and orderly manner as follows.

(1) Promotes Capital Formation:

Entrepreneurs promote capital formation by mobilising the idle savings of public.

They employ their own as well as borrowed resources for setting up their enterprises. Such

types of entrepreneurial activities lead to value addition and creation of wealth, which is

very essential for the industrial and economic development of the country.

(2) Creates Large-Scale Employment Opportunities:

Entrepreneurs provide immediate large-scale employment to the unemployed,

which is a chronic problem of under developed nations. With the setting up.of more and

more units by entrepreneurs, both on small and large-scale numerous job opportunities are

created for others.

(3) Promotes Balanced Regional Development:

Entrepreneurs help to remove regional disparities through setting up of industries

in less developed and backward areas. The growth of industries and business in these areas

lead to a large number of public benefits like road transport, health, education.

(4) Reduces Concentration of Economic Power:

Economic power is the natural outcome of industrial and business activity.

Industrial development normally leads to concentration of economic power in the hands of

a few individuals which results in the growth of monopolies.

(5) Wealth Creation and Distribution:

It stimulates equitable redistribution of wealth and income in the interest of the

country to more people and geographic areas, thus giving benefit to larger sections of the

society. Entrepreneurial activities also generate more activities and give a multiplier effect

in the economy.

(6) Increasing Gross National Product and Per Capita Income:

Entrepreneurs are always on the look out for opportunities. They explore and

exploit opportunities, encourage effective resource mobilisation of capital and skill, bring

in new products and services and develops markets for growth of the economy. In this way,

they help increasing gross national product as well as per capita income of the people in a

country.

(7) Improvement in the Standard of Living:

Increase in the standard of living of the people is a characteristic feature of

economic development of the country. Entrepreneurs play a key role in increasing the

standard of living of the people by adopting latest innovations in the production of wide



variety of goods and services in large scale that too at a lower cost. This enables the people

to avail better quality goods at lower prices, which results in the improvement of their

standard of living.

(8) Promotes Country's Export Trade:

Entrepreneurs help in promoting a country's export-trade. They produce goods

and services in large scale for the purpose earning huge amount of foreign exchange from

export in order to combat the import dues requirement. Hence, import substitution and

export promotion ensure economic independence and development.

(9) Induces Backward and Forward Linkages:

Entrepreneurs like to work in an environment of change and try to maximise

profits by innovation. When an enterprise is established in accordance with the changing

technology, it induces backward and forward linkages, which stimulate the process of

economic development in the country.

(10) Facilitates Overall Development:

This leads to overall development of an area due to increase in demand and

setting up of more and more units. In this way, the entrepreneurs multiply their

entrepreneurial activities, thus creating an environment of enthusiasm and conveying an

impetus for overall development of the area.

Social Responsibility

Entrepreneurship is not only limited to starting business for profit but also should

combine notions of innovation, changes, opportunities and resources along with social

responsibility. It combines the entrepreneurship with a mission to serve the society.

ESR ensures the better living and improving communities through their social

activities; and providing amenities to the poor and the entrepreneurs can develop better

impact social interventions to lift the communities out of poverty.
