1. Lecture 3 www.AssignmentPoint.com

2.  Entrepreneur is a person who takes the risks necessary to organize and manage a business and receives the financial rewards and non-monetary rewards.  How do we know who is an entrepreneur? ◦ Previously doctors, lawyers, accountants, dentists, etc were not considered as entrepreneurs because they did not had to take risks in those times. ◦ On the other hand, an individual who takes some risks and start a hotel business can be regarded as an entrepreneur. www.AssignmentPoint.com

3.  Five ways to identify a entrepreneurship characteristic ◦ Need for achievement: One who has a strong desire for independent success & sets his own goals. ◦ Low need to conform: The one who understands how an unpopular or unknown thing can be done. ◦ Persistence: Someone who knows ways to do things better for his/her business. ◦ High energy level: One who has high energy to work without counting the hours. ◦ Risk taking tendency: Someone who doesn’t fear to take risks & believe firmly in his/her abilities. www.AssignmentPoint.com

4.  Planning oversights ◦ Failure to detect market & competition. ◦ Poor knowledge of economics. ◦ No plans for emergency situations.  Poor managerial qualities ◦ Lack of ability to deal with people. ◦ Unwillingness to work hard and long hours. ◦ Unwillingness to learn the business properly.  Use of inadequate business methods ◦ Poor record keeping ◦ No inventory control and credit control www.AssignmentPoint.com

5.  Under-financing ◦ Lack of funds to buy adequate raw materials, office supplies, equipment and other resources. ◦ Lack of funds to buy merchandise & supplies. ◦ Lack of funds to hire personnel. ◦ Lack of funds to acquire or hire capital. www.AssignmentPoint.com

6.  Franchising is a purchased right to use a established business name and to sell goods & services in a specific geographic territory.  Franchisee is an independent owner of a franchised outlet who enters into an agreement with the franchisor.  Franchisor is the licensing company who shares the brand image with many franchisees through an agreement.  International examples: Pizza Hut, Subway, McDonalds, Starbucks Coffee, KFC, Holiday Inn, Baskin-Robbins, Blockbuster videos, Shell, Gloria Jeans, Burger King, Donut King, Hallmark Cards, etc.  Local examples: TopClean Laundry, Dandy Dying, Partex, Archies, Band Box, Helvetia, BFC etc. www.AssignmentPoint.com

7.  Contractual agreement between the franchisee (person) and franchisor (company)  A branded good or service (the actual brand or product for what the franchisee is paying)  Operation by a businessperson for the purpose of earning profit.  Monitoring by the franchisor so that standard procedures and a standardized product or service are used. www.AssignmentPoint.com

8.  Advantages of owning a franchise ◦ Guidance ◦ Brand name & image ◦ Proven product or service ◦ Financial assistance  Disadvantages of owning a franchise ◦ Royalty/Costs ◦ External control & dependence ◦ Weak training programs www.AssignmentPoint.com

9.  Small Business: One that is independently owned and operated and is not dominant in its field of operation.  Advantages ◦ Ownership feeling ◦ Freedom & independent ◦ Satisfaction in using own talents ◦ Financial gain ◦ Control & power  Disadvantages ◦ Risk of loosing money ◦ Slow profits initially ◦ Lack of specialist employees www.AssignmentPoint.com

10. oManufacturing  An Individual can go for a manufacturing business. There are many small manufacturing firms.  Categories include, printing shops, flour mill, garment manufacturers, Home & office furniture shop, bakeries, steel mill, etc. oService  The service sector is a very diverse field and it has many opportunities. Since service is not a tangible product, it doesn’t cost much like as manufacturing to initially establish.  Types of service firms: Business services, Personal services, Repair services, Entertainment & recreation services, Hotels & motels. www.AssignmentPoint.com

11. oWholesaling  Involves buying in bulk from farmers or other manufacturers and then selling it to retailers, other wholesalers or industrial firms.  Such items may include groceries, fruits & veggies, machinery, stationeries, accessories, etc. oRetailing  They are merchants who sell goods to the consumers and end users.  Retailers can be a small grocery shop or convenient store or it can be a giant retailer like Wal-Mart, Kmart, J. C. Penny, Marks & Spencer, etc. www.AssignmentPoint.com

12. oHome based business  Businesses in which an individual works or conducts activities from his/her home.  Categories of home based businesses include, day care, internet marketing or services, home made food catering, child care, teaching & coaching, counseling, publications, interior decorations, etc. www.AssignmentPoint.com

13.  Starting a business without a plan, goal or direction will lead to vulnerability in future.  The objective of developing a business plan is to carefully look into the business in depth by understanding issues like: ◦ What the business will be? ◦ What resources are needed? ◦ How to manage it ◦ What bank to be used ◦ Who will be my competitors, suppliers, customers, etc. www.AssignmentPoint.com