Unit 2 rorest based enterprse.pptx

1. Unit 2: Forest based enterprise
identification and prioritization

2. 2.1 FEASIBILITY STUDY OF AN ENTERPRISE
• A Feasibility Study can be defined as a controlled process
for identifying problems and opportunities, determining,
objectives, describing situations, defining successful
outcomes and assessing the range of costs and benefits
associated with several alternatives for solving a problem.
• Feasibility study is one of the Enterprise Analysis.
Feasibility study is an analysis of the viability (possibility)
of an idea. A Feasibility Study is not a Business Plan. The
Feasibility Study is providing investigating function. The
Business Plan provides a planning function.
• The Feasibility Study is conducted before the Business
Plan. Project managers use feasibility studies to discern the
pros and cons of undertaking a project before they invest a
lot of time and money into it.

3. 2.1.1 Sensitivity Analysis and Risk analysis :
• This analysis will determine the sustainability of the project likely to
change under different conditions of the economic situation and
taking into account the internal parameters of the project, for
example, changes in distribution of goods.
• The main purpose of sensitivity analysis is to implement accounting
and predict what effect the input parameters of the project on the
resulting indicator. It includes weather is never guaranteed: markets
are unreliable, outbreaks of pests and diseases can occur at any time,
money problems, forest products harvesting and transportation
issues, transportation problems, availability of raw materials etc.
• The probability of the occurrence dry, average and wet seasons
influences the management and performance of the enterprise.
Political problems such as transport strike can also create problems
in operating an enterprise effectively.

4. • Sensitivity analysis and sustainability held in
the following key indicators:
i) Net present value (NPV),
ii) Internal rate of return (IRR),
iii) Payback Period (PB).

5. 2.1.2 Marketing Analysis:
• A marketing analysis is a study of the dynamism of the market. It is
the attractiveness of a special market in a specific industry.
Marketing analysis is basically a business plan that presents
information regarding the market in which you are operating in. In-
depth understanding of the market that you wish to enter and a
detailed analysis of the demands in the area is what market research
feasibility can offer you.
Market Feasibility includes:
• Industry description.
• Industry competitiveness.
• Market potential
• Access to market outlets.
• Sales projection Market assessment is needed to identify the
opportunities in the market. If no opportunities exist, there may be no
reason to proceed further.

6. • A step of market feasibility study includes:
1) Detailed interviews with stakeholders
2) Demographic assessment and trend analysis
3) In-depth quantitative survey
4) Careful assessment of competitors
5) Demand model with estimates and recommendations

7. 2.1.3 Technical Analysis:
• A technical feasibility study assesses the details of how you intend to
deliver a product or service to customers. It's the logistical or tactical plan
of how your business will produce, store, deliver, and track its products or
services.
• Before starting an enterprise, skill and knowledge of the entrepreneur on
that particular enterprise should be analyzed and enhanced. Everybody
wants quality products.
• The systems and. tools used to operate a business should be in quality with
good quality products and services.
Technical Feasibility Includes:
• Determine facility needs.
• Suitability of production technology.
• Availability & suitable of site.
• Raw materials.
• Other inputs: Product methodology need to be determined. It involves
which technology will be needed for production, how it will be operated
and the experience of the firm in using the technology.

8. 2.1.4 Economic analysis
• An economic analysis is a process in which enterprise
owners gain a clear picture of the existing economic
climate, as it relates to their company’s ability to thrive.
Economists, statisticians, and mathematicians often carry
out this analysis on behalf of for-profit and nonprofit
businesses.
• These types of economic evaluation consist of an in-depth
appraisal of the strengths and weaknesses of the market. An
economic analysis isn’t limited to medium or large-sized
businesses, it’s valuable for small companies as well.
• In fact, small enterprises probably need to perform
economic analysis more often than businesses that have
enough built-in capital and resources to sustain an economic
downturn.

9. 2.2 Identification and Prioritization Piloting
enterprise and it's Processes and Steps:
a) Identification and Selection of Potential
Enterprise/Entrepreneurs
b) Preliminary Field Visit and Community Consultation:
Understanding Local Context
c) Explore Potential Partners and Collaborators
d) Context Mapping: Understanding Socio-Economic
Situation
e) Orientation for Regular Saving and Increasing Investment
for Enterprise
f) Technical Facilitation for Establishing Cooperative

10. g) Support with the Seed Fund
h) Facilitate and Support to Improve Market Linkages
i) Capacity Enhancement through Training
j) Knowledge Enhancement through Orientation Meetings
k) Technical Support and Facilitation for Smooth Functioning
of the Cooperative

11. 2.3 CRITERIA FOR ENTERPRISE PRIORITIZATION:
• 1. Market criteria:
– Local level
– National level
– International level
• 2. Financial criteria:
– Total Cost (Initial cost, Implementation cost, Training cost and
maintenance cost)
– Contractual conditions (Commercial conditions, Service delivery,
Warranty)
• 3. Business criteria:
– Strategy (Fit with business strategy, fit with technology strategy,
Change management, Production policy)
• 4. Technological criteria:
– Technical platform (Independent platform, Languages and development
tools)
– Services (Internet service, User documentation, Technical
documentation)

12. • 5. Vendor criteria:
– Vendor profile (Vendor reputation, Financial strength,
Sustainability and social responsibility)
– Technical capability (Availability of resources, Research &
Development technology)
– Support (Relationships between customers and suppliers, Service
time)
• 6. Software criteria:
– Time (Implementation time, Training time, Production time)
– Functionality (Suitability (Function fitness), Interoperability,
compliance, Maintainability, Customization)
– Usability (User friendliness, Creation of user applications,
Efficiency)
– Flexibility (Ease of in-house development, Portability)
– Reliability (Maturity, Recoverability, Security)

13. The activities cycle to create and develop a micro-entrepreneur is
illustrated in the following steps:
• Step 1: Social mobilization for enterprise development
• Step 2: Entrepreneurship development through capacity
development
• Step 3: Technical Skills development
• Step 4: Assess to micro-finance services
• Step 5: Appropriate Technology Testing and Transfer
• Step 6: Market Linkage and Business Counseling

15. • Social mobilization for enterprise development: It involves community
sensitization, village community meeting, orientation on the process, principle
and strategy, sensitization workshop, and networking with the partner
organization. Likewise, the programme has developed special screening criteria
which test the entrepreneurial characteristics of the target participants. The
selection procedures aim to assess the potential entrepreneurial competencies of
target groups, particularly poor, women, dalits, indigenous nationalities and
unemployed youth who are eager to become entrepreneurs, and to select those
who, by virtue of their behavioural and entrepreneurial profiles, have a higher
probability of success.
• Entrepreneurship development through capacity development: Imparting
entrepreneurial skills is essential to build self-confidence and enhance risk-
bearing capacity of the potential entrepreneurs. MEDEP/MEDPA uses 'Start
and Improve Your Business' (SIYB), a step-by-step entrepreneurship
development package developed by the International Labour Organization
(ILO) with technical support from UNDP for rural settings. The SIYB helps
entrepreneurs to gradually acquire knowledge and business skills for business
creation and development. This has proved to be a catalyst for the expansion of
micro-enterprises in rural Nepal.

16. • Technical skills development: Several kinds of training are conducted for technical
skills development based on the participants’ interest and choice. Technical skill
training is designed and conducted immediately after the entrepreneurship skill
development package (i.e. SIYB). The nature and content of technical skill training
vary according to the type of enterprises. Skill development is based on a demand-
driven concept where MEDEP/MEDPA has developed and applied very rigorous
selection criteria that encourage participants to make demand for technical skill
development training. As per the demand of the participants, the programme designs
and delivers the technical skill development training, ensuring that trained participants
are immediately turned into sustainable entrepreneurs.
• Assess to Finance: Micro-finance activity refers to a process of facilitating micro-
entrepreneurs to have easy access to small-scale loans in different cycles and micro-
enterprises to fulfill the credit capital need of entrepreneurs. Micro-credit component is
mainly implemented in close collaboration with micro-finance institutions such as
Rural Development Bank, Nirdhan Utthan Bank and cooperatives. Apart from this,
they are also linked with district level institutions such as Local Development Fund, as
per the specific micro-credit need and situation of the districts. MEDEP/MEDPA also
encourages micro-entrepreneurs to establish micro-entrepreneurs groups, cooperatives
and producer associations. Regular-saving generation is encouraged in such groups
with an expectation that the capital thus generated helps group members in other small
financial matters and also helps develop the group as an institution.

17. • Appropriate Technology Testing and Transfer: Appropriate technology is a
small-scale, decentralized and grassroots solution to technological problems. It is,
therefore, low-cost, flexible, easily accessible, convenient to control, and less
complicated. As a demand-driven modality of the programme, the demand of
micro-entrepreneurs for a wide range of appropriate technology is supported, while
addressing issues of food safety, quality and technology. Participatory action
research and product development are also effective ways of bringing about
improvement and efficiency in products and services. Small-scale appropriate
technologies are tested and transferred for the extreme poor.
• Marketing Linkage and Business Counseling: Marketing is the most crucial sub-
system of any enterprise. It is a social and managerial process by which individual
or groups obtain what they need and want by creating, offering and exchanging
products and services with others. Customer satisfaction is key to marketing micro-
enterprises of the poor. Under the demand-driven marketing strategy,
MEDEP/MEDPA follows marketing analysis and development, and step-wise
marketing expansion strategies for the selection, growth and sustainability of micro-
enterprises. MEDEP/MEDPA also encourages the micro entrepreneurs to establish
the site, district, regional and national level market outlets apart from organizing
district, regional and national level industrial exhibition and trade fair. Similarly, the
programme supports the branding of products and provides training on intellectual
property rights.
• Follow-up and business counseling are the most important parts for the
sustainability of micro-enterprises. The programme gives high priority to business
counseling and follow-up services.

18. Problems of group based enterprises
Groupthink can cause problems such as:
• bad decisions
• exclusion of outsiders/dissenters
• lack of creativity
• blindness to potential problems
• resistance to new ideas
• excessive deference to authority
• believing only the facts that support existing
opinions