entrepreneurial process unit no 2. identify and evaluate opportunity develop business plan resources...
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Entrepreneurial Entrepreneurial ProcessProcess
Unit No 2
1. Identify and Evaluate Opportunity
Opportunity AssessmentCreation and Length of Opportunity Real Value and Perceived Value of OpportunityOpportunity and Personal Skill for Goal settingCompetitive Environment
2. Develop Business Plan
Title PageTable of ContaneExecutive SummaryMajor Sections
Description of Business Description of Industry Technology / Financial / Marketing /
Production Plan Organisational / Operational Plan Summary
3. Resources Required
Determine Resources Required (Land, Capital, Man power, Machines, Technology etc…)Determine Existing ResourcesIdentify Gap and SuppliersDevelop access to needed resources
4. Manage the Enterprise
Develop Management StyleUnderstand Key variable for successIdentify problemsDevelop Control systemDevelop Growth strategy
STEP 1 :- Identify Business Opportunity (Creating an Idea)
Sources of Business Idea
Methods of Generating Idea
Creative Problem solving Methods
Product planning and Development stage
Sources of Business IdeaSources of Business Idea
1. Customers1. Customers
2. Existing Product/services2. Existing Product/services
3. Distribution channel3. Distribution channel
4. Government4. Government
5. R&D5. R&D
1. Focus Group1. Focus Group- - A Group of 10 – 12 customers with high sensibility A Group of 10 – 12 customers with high sensibility
towards product and from different backgroundtowards product and from different background
2. Brainstorming2. Brainstorming- A group of people meet to obtain new idea with the - A group of people meet to obtain new idea with the
following conditionfollowing condition1. No Criticism1. No Criticism2. Freewheeling is encouraged2. Freewheeling is encouraged3. Quantity of Ideas3. Quantity of Ideas4. Combination and improvement of Idea4. Combination and improvement of Idea
3. Problem Inventory Analysis3. Problem Inventory Analysis- Problems of various nature like Physiological, - Problems of various nature like Physiological,
Sensory, Activities related, Buying and usage, PsychologicalSensory, Activities related, Buying and usage, Psychological
Methods of Generating Idea
Creative Problem Solving Methods
1.Brainstorming2.Reverse Brainstorming (With Criticism)3.Brainwritting 4.Gordon Method (When individual are unaware)5.Checklist Method (Idea through Related Issues)6.Free Association (Idea through chain of words/synonyms)7.Forced Relationship(Idea of product combination)8.Collective Notebook Methods (Provide pocket diary to members to note down idea on problem statement)9.Attribute Listing (List down Positives/Negatives)10.Big Dream Approach (Constraint free thinking)11.Parameter Analysis
Opportunity Recognition
Education
Experience
Prior Knowledge of Markets and Customer and Problem
Entrepreneurship Alertness
Network
Successful Opportunity Recognition
Product planning and Development Stages
IDEA
STAGE
C ONCEPT
STAGE
PRODUCT
DEV
TEST
MARKETING
PLC
STEP -2 DEVELOP BUSINESS PLAN
Business Plan is a written document prepared by the entrepreneur that describes all the relevant external and internal elements involved in starting new venture.
It is an integration of various functional plans like marketing, financial, production, and HR.
Structure of Business Plan
Title Page Table of Contain Executive Summary Major Sections
Description of Business Description of Industry Technology / Financial / Marketing /
Production Plan Organisational / Operational Plan Summary
Usage of Business Plan
1.It helps in getting Capital2.It boosts up confidence of stakeholders in
business3.It gives direction to functional areas4.It helps in achieving targets5.It helps in identifying loopholes in business
structure
Reasons for failure of Business Plans
1.Unreasonable goals2.Non - measurable Goals3.The entrepreneur has not made total
commitment to Business4.Lack of Experience5.The Entrepreneur has no sense of potential
business threats6.Customers need was not fulfilled
Marketing Plan
1.Defining the Business Situation2.Defining the Target Market3.Considering strength and weakness in target
market4.Establishing goals and objectives5.Defining marketing strategy and action
programme6.Marketing strategy like B2B, B2C etc.7.Budgeting the marketing strategy8.Implementation of Plan9.Monitoring the progress of Marketing actions
Financial Plan
- It mainly includes 1. Sources and application of Fund
- Capital Budgeting (Long term)- Operating Budgeting (Short term)
2. Cash flow 3. Income Statement 4. Break even analysis5. Sources and application of Fund
STEP 3 :- RESOURCES REQUIRED
A Few very important resources are 1.Human Power2.Land3.Finance4.Machines / Technology
Funding Business (Financial Viability of Business)
1.Self / Partners2.Family and Friends3.Credit (Bank, Government loan)4.Venture Capital5.R&D Limited Partnership6.Private Equity placement7.Public Equity offering8.Credit from suppliers
Sources of Fund.doc
Need For finance1.Early Stage Finance
1. Seed Capital2. Start up Capital
2.Expansion Financing1. Second Stage (No Cash outflow)2. Third Stage (Growth with cash outflow)3. Fourth Stage (Bridge financing to prepare
company for Public financing)
3.Acquisition Financing1. Traditional Acquisition (Assuming
ownership and control)2. Leverage Buyouts3. Going Private
Venture Capital
-Overview-Types of Venture Capitalist
- Private like TATA, SBI- NBFCs like IDFC, IFCI etc..- State Government- Central Government
- Points To be considered for Capital Venture