ESTABLISHING ENTREPRENEURIAL SYSTEMS

Ø  ESTABLISHING ENTREPRENEURIAL SYSTEMS

FUNDAMENTAL OF ENTREPRENEURSHIP
STEPS

1.       SEARCH FOR BUSINESS IDEAS

2.       PROCESS THE IDEA

3.       SELECT THE IDEA

4.       ASSEMBLE THE NECESSARY INPUT RESOURCES

5.       ESTABLISH THE ENTERPRISE

Ø  SEARCH FOR BUSINESS IDEA

1.       SEARCHING FOR SUITABLE BUSINESS IDEA

2.       ORIGINATION OF IDEA:-

1.       SUCCESS STORY OF FRIEND/RELATIVE/NEIGHBOR

2.       DEMAND OF CERTAIN PRODUCTS

3.       VISITING OF EXHIBITIONS/FAIRS

4.       READING MAGAZINES/JOURNAL

5.       ATTENDING WORKSHOPS OR ED PROGRAMMES

6.       IDEAS SHOULD BE SOUND AND WORKABLE

•     SOURCES FOR BUSINESS IDEA

1.       OBSERVING MARKET:- MARKET SURVEY WILL REVEAL THE POSSIBILITY OF DEMAND,TRENDS IN DEMAND,COMPOSITION AND PATTERN OF DEMAND, IT WILL HELP IN IDENTIFYING THE PRODUCTS AND INDUSTRIES WHICH ARE IN DEMAND

2.       PROSPECTIVE CUSTOMER:-DATA ON CONSUMER NEEDS AND PREFERENCE MUST BE COLLECTED.

3.       DEVELOPMENT IN OTHER NATIONS:-AN ENTREPRENEUR CAN DISCOVER GOOD BUSINESS IDEAS BY KEEPING IN TOUCH WITH DEVELOPMENT IN ADVANCED NATIONS

4.       STUDY OF PROJECT PROFILES:VARIOUS GOVERNMENT AND PRIVATE AGENCIES PUBLISH PERIODIC PROFILE OF VARIOUS PROJECTS AND INDUSTRIES.

5. GOVERNMENT ORGANIZATIONS:-DEVELOPMENT BANKS,STATE INDUSTRIAL DEVELOPMENT AND VARIOUS GOVERNMENT ASSIST IN DISCOVERING AND EVALUATING BUSINESS IDEAS
6. TRADE FAIRS AND EXHIBITIONS:- NATIONAL AND INTERNATIONAL TRADE FAIR ARE A VERY GOOD SOURCE OF BUSINESS IDEAS BECAUSE IT PROVIDE LATEST INFORMATION ABOUT VARIOUS PRODUCTS/MACHINES ETC.ALSO HIGHLIGHT THE MARKET TRENDS IN TERMS OF DEMAND POTENTIALS AND ALSO MEETING CUSTOMERS,COMPETITORS ETC

•     IDEA PROCESSING AND SELECTION

•     PRELIMINARY EVALUATION AND TESTING OF IDEAS AFTER DISCOVERING,SCREENING AND TESTING OF IDEAS IS DONE:-

•               TECHNICAL FEASIBILITY:-

1.       POSSIBILITY OF PRODUCING THE PRODUCT

2.       AVAILABILITY OF NECESSARY TECHNOLOGY

3.       MACHINERY AND EQUIPMENT

4.       LABOUR SKILLS AND RAW MATERIALS

5.       PLANT LOCATION AND LAYOUT

•     COMMERCIAL VIABILITY:-

1.       COST AND BENEFIT ANALYSIS

2.       ELABORATE MARKET CONDITIONS AND PREVAILING SITUATIONS

3.       FEASIBILITY STUDY OF THE PROJECT

4.       LIKELY DEMAND,EXPECTED SALES VOLUME,COST OF PRODUCTION,BREAK EVEN POINT ETC

5.       IN ORDER TO JUDGE THE WORK ABILITY AND PROFITABILITY OF THE PROPOSED BUSINESS FEASIBILITY ANALYSIS HAS TO BE CONDUCTED

•     DETAILED ANALYSIS:-

1.       FULL INVESTIGATION FROM TECHNICAL FEASIBILITY,ECONOMIC VIABILITY,FINANCIAL VIABILITY ETC

2.       CONSULTATION WITH MANY EXPERTS

3.       DOCUMENTED IN THE FEASIBILITY REPORT AND IT IS HELPFUL IN THE FINAL SELECTION OF THE PROJECT AND ALSO USEFUL FOR PRCOURING LICENCES,FINANCES

•     IDEA SELECTION

•     ANALYSIS OF FEASIBILITY REPORT. THE FOLLOWING FACTORS ALSO TAKEN INTO CONSIDERATIONS:-

1.       PRODUCTS WHOSE IMPORTS ARE BANNED OR RESTRICTED BY THE GOVERNMENT

2.       PRODUCTS WHICH CAN BE EXPORTED EASILY AND PROFITABLY

3.       PRODUCTS WHOSE DEMAND EXCEEDS SUPPLY

4.       PRODUCTS IN WHICH THE ENTREPRENEUR HAS MANUFACTURING AND MARKETING ABILITY

5.       PRODUCTS WHICH SHOWED HIGH PROFITABILITY

6.       PRODUCTS FAVORED BY THE INDUSTRIAL POLICY

7.       PRODUCST FOR WHICH INCENTIVES AND SUBSIDIES ARE AVAILABLE

•     INPUT REQUIRMENTS

1. INFORMATION AND INTELLIGENCE:-
1. SIZE AND NATURE OF DEMAND FOR THE PRODUCT OR SERVICE
2. VOLUME AND SOURCES OF SUPPLY
3. PROFIT COST VOLUME RELATIONSHIP
4. SOURCES OF RAW MATERIAL
5. TYPE  AND SUPPLIERS OF TECHNOLOGY,MACHINERY AND EQUIPMENT
6. NUMBER AND TYPES OF PERSONNEL REQUIRED
7. NATURE AND DEGREE OF COMPETITION
8. GOVERNMENT POLICY AND REGULATIONS
2. FINANCE:-

1.       FIXED CAPITAL

2.       WORKING CAPITAL

3.       TWO MAIN METHODS FOR ESTIMATING THE FUNDS:-

a.       COST THEORY: UNDER THIS METHOD,FINANCIAL REQUIREMENTS OF AN ENTERPRISE ARE THE AGGREGATE OF FIXED ASSETS,CURRENT ASSETS,INTANGIBLE ASSETS. THE TOTAL EXPENDITURE IS ESTIMATED

b.       EARNING THEORY:-IN THIS METHOD,THE CAPITALIZATION OF A COMPANY IS EQUAL TO THE CAPITALIZED VALUE OF THE ESTIMATED EARNINGS. LIKE IF THE AVERAGE PROFIT IS 30 LACS AND RETURN  REQUIRED IS 25 % AND THEN AMOUNT OF FUNDS ONE CRORE 20 LACS

4.       SOURCES

5.       CAPITAL STRUCTURE

3. PERSONNEL:

a)       NUMBER OF PERSONNEL REQUIRED FOR MANAGEMENT,TECHNICAL AND OTHER POSITIONS

b)       QUALIFICATION AND EXPERIENCE

c)        SOURCES,SELECTION  CRITERIA

d)       METHODS OF INDUCTION AND ORIENTATION

e)       POLICIES FOR EVALUATION OF THEIR PERFORMANCE

f)        METHODS OF REMUNERATIONS

g)       FACILITIES