sybms sem 3

1. Unit 3
Jyostna Jain

2. Entrepreneur Project Development &Business Plan
– Innovation, Invention, Creativity, Business Idea, Opportunities through change.
– Idea generation– Sources-Development of product /idea,
– Environmental scanning and SWOT analysis
– Creating Entrepreneurial Venture-Entrepreneurship Development Cycle
– Business Planning Process-The business plan as an Entrepreneurial tool, scope
and value of Business plan.
– Elements of Business Plan, Objectives, Market and Feasibility Analysis,
Marketing, Finance, Organization &Management, Ownership,
– Critical Risk Contingencies of the proposal, Scheduling and milestone

3. Innovation
“If you want something new, you have to stop doing something old”
― Peter F. Drucker

4. Types of Innovation
Market Innovation
Product Innovation
Supply source innovation
Financial Innovation
Brand positioning Innovation

5. Market Innovation
– The entrepreneurs may discover new markets to sell their products.
– The entrepreneur may be able to discover the new market by determining the market
opportunities.
– He can study the needs of each market segment in the light of current offerings by the
competitors.
– Segments with low level of satisfaction from present offering may represent excellent
market opportunity.

6. Example of Market Innovation
Reliance Jio Infocomm Ltd has resorted
to innovative pricing-Predatory pricing
strategy by providing free internet
services for a certain period to its
customers.

7. Product Innovation
– Product innovation is that which introduces or improves a product or service resulting in
what is offered to the end users.
Innovation types
Product
modification Product expansion

8. Example of Product Innovation

9. Supply Source Innovation
– This type of innovation takes place in procuring raw materials for the production process.
– It is usually prompted by shortage of supplies or lack of demand of the product in the
market.
– Example: Forward Vertical Integration-a manufacturer may join hands with another
manufacturer that manufactures an item one stage ahead in a particular industry. For
instance , a cloth manufacturer may join hands with readymade garments manufacturer

10. Brand Positioning Innovation
– Refers to the act of designing the company’s offering and image to occupy a distinctive
place in the mind of target market.
– Example: Hero Honda, fuel efficieny
– Mercedes is positioned as luxury cars
– Maruti Suzuki developed positive image of their firm through their positioning:
“count on us”

11. Financial Innovation
– Financial innovation is mainly related to the mobilization of financial resources from
outside rather than mobilizing from within the organization.
Some of the forms of financial innovation are:
Crowdfunding
Venture capital
Angel investors

12. Invention
Invention is something or the process of creating something that has
never been made before

13. Difference between Invention and Innovation
Invention
– It refers to the creation of a product or
introduction of a process for the first
time.
– It includes creating a new product.
– Any invention requires scientific skills.
– Example: Invention of wheel
Innovation
– It refers to improvement or making
significant contribution to something that
has already been invented.
– It includes adding value to something
already existing.
– It requires marketing, technical and
strategic skills.
– Example: introduction of
cycles,motorbikes,cars.

14. Creativity

15. Creativity process
Implementation and Review
Verification
Illumination
Incubation
Preparation
Idea generation

16. Qualities of Creative people
Sensitivity
Fluency
FlexibilityOriginality
Ability to
Abstract

17. Role of creativity and Innovation in Entrepreneurship
– Competitive advantage: Creativity and innovation helps to face competition in the market.
– Customer satisfaction: When the product performance matches with customer
expectation, the customers are satisfied.
– Corporate image: New designs, new models, new processes help the enterprise to achive
higher performance in terms of sales, market share and profits
– Optimum utilization of resources: Creative designs lead to higher sales which in turn
leads to higher production and distribution.
– Growth and Expansion
– Higher efficiency

18. Business Idea
– Business idea originates from any need or wants for any product or service that an
entrepreneur can identify.
Some of the essentials of a promising business idea are:
– Innovative
– Unique selling Proposition
– Relevant
– Customer benefit
– Profitability

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Unique business ideas

20. Methods of Idea Generation
– Brainstorming
– Nominal Group Technique
– Delphi Technique
– Reverse Brainstorming
– Brain Writing
– Gordon Model
– Attribute Listing
– Big dream Approach

21. Environmental Scanning

22. Swot Analysis

23. Steps in Business Planning Process
– Analysis of internal environment
– Analysis of the external environment
– Setting of corporate Objectives
– Formulation of strategies
– Analysis of strategies and plan
– Selection of best strategy
– Arrangement of Resources
– Allocation of resources
– Implementation
– Review

24. Entrepreneurship Development Cycle

25. Stage 1: Seed And Development
 At this stage, you should garner advice and opinion as to the potential of your business
idea from as many sources as possible: friends, family, colleagues, business associates, or
any industry specialists you may have access to.
 Ultimately the success of your business will come down to many factors– including your
own abilities, the readiness of the market you wish to enter and, of course, the financial
foundation in place (how are you going to finance your launch?).
 It’s where you take a step back and consider the feasibility of your business idea, and
also ask yourself if you have what it takes to make it a success.

26. Stage 2: Startup
– Once you have thoroughly canvassed and tested your business idea and are satisfied that
it is ready to go, it’s time to make it official and launch your startup.
– This is the riskiest stage of the entire lifecycle.
– Adaptability is key here, and much of your time in this stage will be spent tweaking your
products or services based on the initial feedback of your first customers.
– It can even get to the point where you are making so many changes to your offering that
you start to feel a bit of confusion.

27. Stage 3: Growth And Establishment
– If you’re at this stage, your business should now be generating a consistent source of
income and regularly taking on new customers.
– Cash flow should start to improve as recurring revenues help to cover ongoing expenses,
and you should be looking forward to seeing your profits improve slowly and steadily.
– The biggest challenge for entrepreneurs in this stage is dividing time between a whole
new range of demands requiring your attention– managing increasing levels of revenue,
attending to customers, dealing with the competition, accommodating an expanding
workforce, etc.

28. Stage 4: Expansion
– . Here you might start to think about capitalizing on this certain level of stability
by broadening your horizons with expanded offerings and entry into new geographies.
– Businesses in this stage often see rapid growth in both revenue and cash flow as the
blueprint has now been established, but be warned about getting too comfortable.
– In business, if you are not moving forward you are moving backwards, and without a
constant, almost nervous itch or desire to expand, complacency can set in, and you might
get caught off guard.

29. Stage 5: Maturity And Possible Exit
– Having navigated the expansion stage of the business lifecycle successfully, your
company should now be seeing stable profits year-on-year. While some companies
continue to grow the top line at a decent pace, others struggle to enjoy those same high
growth rates.
– It could be said that entrepreneurs here are faced with two choices: push for further
expansion, or exit the business.
– If you decide to expand further, you will need to ask yourself the same questions you did
at the expansion stage: Can the business sustain further growth? Are there enough
opportunities out there for expansion? Is your business financially stable enough to cover
an unsuccessful attempt at expansion?

30. Business Planning Process
– Analysis of internal environment
– Analysis of external environment
– Setting of corporate objectives
– Formulation of strategies
– Analysis of strategies
– Selection of best strategy
– Arrangement of resources
– Implementation
– Review

31. Importance of Business Plan
1. Importance to the Entrepreneur: 2. Importance of Financing Agencies
Finance 3. Importance to government agencies
Government clearance 4.Importance to Suppliers of Equipment
Project viability
Reference
Evaluation
Investment Decision

32. Elements of Business Plan
– Introductory page:
– Executive Summary
– Industry Analysis
– Description of venture
– Production plan
– Operation plan
– Marketing plan
– Organizational plan
– Financial plan
– Assessment of risk
– Appendix

38. Logo and Tagline

54. Objectives of Business Plan
– To guide operations and strategy development
– To test feasibility of the venture
– To establish credibility
– To attract resources
– To attract additional entrepreneurial-team members
– To build commitment towards the venture

55. Feasibility Study
– A feasibility study is an analysis of how successfully a project can be completed,
accounting for factors that affect it such as economic, technological, legal and scheduling
factors.
– Project managers use feasibility studies to determine potential positive and negative
outcomes of a project before investing a considerable amount of time and money into it.

56. Areas of Feasibility Study
– Technical feasibility study: Technology needed for the project, amount of money that will be
required to develop.
– Safety feasibility: it refers to an analysis of whether the project is capable of being
implemented and operated safely in the interest of the employees,and the people living in the
vicinity of the project.
– Political Feasibility Study:The directions for the proposed project are mostly dictated by the
political considerations. This is certainly correct for large projects with potential visibility that
may have important political implications and government inputs. For example, regardless of
the merit of project, the political necessity may be a source of assistance for a project. On the
other hand because of political factors, value able projects may face uncontrollable opposition.
An evaluation of the objectives of project with the current objectives of the political system is
required in the political feasibility analysis.

57. – Environmental Feasibility Study: All the environmental concerns raised or forecasted
should be addressed in environmental feasibility so that proper actions can be taken to
cover relevant issues of the environment. The ability of the project to timely acquire the
required permits, licenses and approvals at a reasonable cost should also be included in
this area.
– Market feasibility: The potential influence of market demand, competitive activities and
available market share should be considered in the market feasibility analysis. During the
start up, ramp up and commercial start up phases of the project, possible competitive
activities (local, regional, national and international) should be analyzed for early
contingency funding and impacts on the operating costs.

58. – Financial Feasibility: The ability of the project management to raise sufficient funds
required to implement the proposed project is included in the financial feasibility.
– Additional investors and other sources of funds are considered by the project proponents
for their projects in many cases. In such situations feasibility, sources, soundness and
applications of these project funds may be a hindrance.
– Other aspects of financial feasibility should also be viewed, if appropriate, like credit
worthiness, loan availability, equity, and loan schedule.
– The implications of land purchase, leases and other estates in land are also reviewed in
the financial feasibility analysis.

59. Ownership - Types
– Sole Proprietorship: A business owned and operated by a single individual — and the most common form
of business structure . The advantages with a sole proprietorship include:
– ease and cost of formation
– simply announcing you are in business and requesting any licenses and permits you may need; use of
profits
– since all profits from the business belong exclusively to you, the owner; flexibility and control
– you make all the decisions and direct the entire business operations; very little government regulations;
secrecy; and ease of ending the business.
– There are disadvantages, however, including unlimited liability —
– all business debts are personal debts, meaning you could lose everything you own if the business fails or
loses a major lawsuit; limited sources of financing
– based on your creditworthiness; limited skills
– the sole proprietor really must be a “jack-of-all-trades,” part manager, marketer, accountant, etc.; and limited
lifespan
– the business ends when the owner dies.

60. Partnership
A business that is owned and operated by two or more people There are two basics forms of partnerships, general and
limited. In a general partnership, all partners have unlimited liability, while in a limited partnership, at least one partner
has liability limited only to his or her investment while at least one other partner has full liability.
The advantages of a partnership include ease of organization
• simply creating the articles of partnership; combined knowledge and skills
• using the strengths of each partner for better business decision-making; greater availability of financing; and very
little government regulations.
There are Disadvantages, however, including
• unlimited liability
• all business debts are personal debts; reconciling partner disagreements and action
• each partner is responsible for the actions of all the others; sharing of profits
• all money earned has to be shared and distributed to the partners per the articles of partnership; and limited lifespan
the partnership ends when a partner dies or withdraws.

61. Joint
Hindu Family Business
– The origin of the Joint Hindu Family firm is to be found in the principles of inheritance under the second school i.e.,
Mitakshara school of Hindu Law. Under this school, the property of a Joint Hindu Family is inherited by a Hindu from his
father, grandfather, and great grandfather is called ancestral property.
– Merits of Joint Hindu Family Firm:
– 1. Stability:The existence of the Joint Hindu Family firm does not come to an end by the death, insanity, or bankruptcy of
any coparcener.
2. Management:The organisation, management, and control of the business is vested in the karta of the family. This results
in the ‘unity of command’ and non-interference in the conduct of business. This non-interference makes quick decisions, prompt
action maintenance of secrecy, etc., possible.
– 3. Liability:Except the karta, all other members’ liabilities are limited to the extent of their share in the ancestral property.
– 4. Membership:Unlike partnership, there is no such limit to the membership of the Joint Hindu Family Firm. However, it is
restricted to the three successive generations in the male line.
– 5. Credit worthiness:Compared to the sole proprietor, the credit worthiness of the family business is definitely more.

62. Joint stock company
 A joint-stock company is a business entity in which different amount of shares of the
company stock can be bought and sold by shareholders.
 Each shareholder owns company stock in proportion, evidenced by
their shares (certificates of ownership).
 That allows for the unequal ownership of a business with some shareholders owning
more of a company than others.
 Shareholders are able to transfer their shares to others without any effects to the continued
existence of the company.[2]

63. Advantages of Joint Stock Company
– 1. Limited liability:Shareholders of a company are liable only to the extent of the face value of shares held by
them. Their private property cannot be attached to pay the debts of the company. Thus, the risk is limited and
known..
– 2. Large financial resources:Company form of ownership enables the collection of huge .financial resources. The
capital of a company is divided into shares of small denominations so that people with small means can also buy
them.Benefits of limited liability and transferability of shares attract investors.
– 3. Continuity:A company enjoys uninterrupted business life. As a body corporate, it continues to exist even if all
its members die or desert it. On account of its stable nature, a company is best suited for such types of business
which require long periods of time to mature and develop.
– 4. Transferability of shares:. Shares of public companies are generally listed on a stock exchange so that people
can easily buy and sell them
– 6. Scope for growth and expansion:. On account of its vast financial and managerial resources and limited
liability, company form has immense potential for growth. With continuous expansion and growth, a company can
reap various economies of large scale operations, which help to improve efficiency and reduce costs.

64. Disadvantages of Joint Stock Company
– Legal formalities: Too many legal formalities have to be observed and several legal
documents have to be prepared and filed. Delay in formation may deprive the business the
momentum of an early start.
– Delay in decisions: Red tape and bureaucracy do not permit quick decisions and prompt
action. There is little scope for personal initiative and a sense of responsibility. Paid
employees like to play safe and tend to shift responsibility. There is lack of flexibility of
operations in a company.
– Lack of secrecy: Under the Companies Act, a company is required to disclose and
publish a variety of information on its working. Widespread publicity of affairs makes it
almost impossible for the company to retain its business secrets. The accounts of a public
company are open for inspection to public.

65. Cooperative Organization
– A cooperative organization is an association of persons, usually of limited means, who
have voluntarily joined together to achieve a common economic end through the
formation of a democratically controlled organization, making equitable distributions to
the capital required, and accepting a fair share of risk and benefits of the undertaking.

66. Advantages of Cooperative Organisation
– Easy formation
– Democratic Management
– Stability
– Limited liability

67. Disadvantages of Cooperative Organization
– Limited capital
– Inefficient Management
– Lack of business secrecy
– Lack of loyalty among members

68. Factors Influencing Ownership Type
Capital
Liability
Managerial control
Continuity of
Business
Business secrecy
Degree of
Independence

69. Critical Risks Contingencies of the Proposal
Natural events
Political
events
Government
policies
Technological
changes
Changes in
consumer
tastes

70. Coping with Risks and Uncertainties
– Contingent plans: the contingent plans contain alternate goals,policies,programmes ans
assumptions for likely situations.
– Workers Participation: without the active support of workers groups,it may not be
possible to introduce such changes.
– Management Information System:MIS would enable improved forecasting of future
events and situation.
– Defensive approach:An enterprise may adopt defensive strategies to cope up with
uncertain environment
– Centralisation of Authority: The enterprise may centralize the authority in the top
management.

71. Scheduling
– In project management, a schedule is a listing of a project milestone activities, and
deliverables, usually intended start and finish dates.
– In many industries such as engineering and construction the development and
maintenance of project schedule is a responsibility of a full time schedule or team of
schedulers depending on the size of the project.

72. TECHNIQUE USED PROJECT SCHEDULING
 Dividing complex projects to simpler and manageable tasks is the process identified as
WORK BREAKDOWN STRUCTURE (WBS).
 Usually, the project managers use this method for simplifying the project execution. In
WBS, much larger tasks are broken-down to manageable chunks of work. These chunks
can be easily supervised and estimated.
 Further sub dividing can be said as Decomposition.

73. Milestone
– MILESTONE: A milestone is a significant event that normally has no duration
– It often takes several activities and a lot of work to complete a milestone
– They’re useful tools for setting schedule goals and monitoring progress
– Examples include obtaining customer sign-off on key documents or completion
of specific products
– Milestones should be:
Specific Measurable Assignable Realistic Time-framed