Entrepreneurial Process Unit No 2

Identify and Evaluate Opportunity Develop Business Plan Resources Required Manage The Enterprise

1. Identify and Evaluate Opportunity  Opportunity Assessment  Creation and Length of Opportunity  Real Value and Perceived Value of Opportunity  Opportunity and Personal Skill for Goal setting  Competitive Environment

2. Develop Business Plan  Title Page  Table of Contane  Executive Summary  Major 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 Resources  Identify Gap and Suppliers  Develop access to needed resources

4. Manage the Enterprise  Develop Management Style  Understand Key variable for success  Identify problems  Develop Control system  Develop 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 Idea 1. Customers 2. Existing Product/services 3. Distribution channel 4. Government 5. R&D 1. Customers 2. Existing Product/services 3. Distribution channel 4. Government 5. R&D

1. Focus Group - A Group of 10 – 12 customers with high sensibility towards product and from different background 2. Brainstorming - A group of people meet to obtain new idea with the following condition 1. No Criticism 2. Freewheeling is encouraged 3. Quantity of Ideas 4. Combination and improvement of Idea 3. Problem Inventory Analysis - Problems of various nature like Physiological, Sensory, Activities related, Buying and usage, Psychological Methods of Generating Idea

Creative Problem Solving Methods 1. Brainstorming 2. 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 IDEASTAGEIDEASTAGE CONCEPTSTAGECONCEPTSTAGE PRODUCTDEVPRODUCTDEV TESTMARKETINGTESTMARKETING 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 Capital 2. It boosts up confidence of stakeholders in business 3. It gives direction to functional areas 4. It helps in achieving targets 5. It helps in identifying loopholes in business structure

 Reasons for failure of Business Plans 1. Unreasonable goals 2. Non - measurable Goals 3. The entrepreneur has not made total commitment to Business 4. Lack of Experience 5. The Entrepreneur has no sense of potential business threats 6. Customers need was not fulfilled

 Marketing Plan 1. Defining the Business Situation 2. Defining the Target Market 3. Considering strength and weakness in target market 4. Establishing goals and objectives 5. Defining marketing strategy and action programme 6. Marketing strategy like B2B, B2C etc. 7. Budgeting the marketing strategy 8. Implementation of Plan 9. 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 analysis 5. Sources and application of Fund

STEP 3 :- RESOURCES REQUIRED A Few very important resources are 1. Human Power 2. Land 3. Finance 4. Machines / Technology

 Funding Business (Financial Viability of Business) 1. Self / Partners 2. Family and Friends 3. Credit (Bank, Government loan) 4. Venture Capital 5. R&D Limited Partnership 6. Private Equity placement 7. Public Equity offering 8. Credit from suppliers Sources of Fund.doc

 Need For finance 1. Early Stage Finance 1.Seed Capital 2.Start up Capital 2. Expansion Financing 1.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 Financing 1.Traditional Acquisition (Assuming ownership and control) 2.Leverage Buyouts 3.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