entrepreneurship modified ppt

7/31/2019 Entrepreneurship MODIFIED PPT

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ENTREPRENUER

&ENTREPRENURESHIP


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Definitions Derived from French word Entreprendremeans to undertake. Richard Carleton: a person who buys

factors of production at certain prices inorder to combine them into a productwith a view to sell them at uncertainprices.

Considered as a risk bearer. Ex. Farmerpays definite price for seeds, fertilizers,pesticides, labours etc but not certain atwhich price he could sell his produce.


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F.H. Knight : a person who bearsuncertainty (risk which cannot beinsured & is incalculable) can be

reduced by taking insurance. J.B. Say : one who combines the landof one, labour of another & capital of

yet another & thus produces aproduct. By selling product pays rent,wages and interest.


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Peter F Drucker : One who considersthe changes that take place in market asan opportunity to do business. Innovationis his tool. Joseph Schwnpeter : Individuals whointroduce something new in the marketor economy.

New encyclopaedia : An individual whobears the risk of operating business inthe face of uncertainty about the futureconditions.


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QUALITIES OFENTREPRENUERS

Mental ability Organising ability

Hard work Discipline Clear objectivesNeed for high achievement Optimistic Risk taking


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H.R. ability

Emotional stability Communication ability Self-confidence

Adaptability Positive attitude They are also good managers, pro-

active, realistic, have comprehensiveawareness & conceptual ability.


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Promotional formality Raising Capital Providing Infrastructure Selection of human resources Carrying out the Operations


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Risk Bearing Organisation of the Resources Innovation Exploration of new opportunities Providing Leadership& Motivatingthe people


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WHAT ISENTREPRENURESHIP?

B. HIGGINS : The function of seeinginvestment & production opportunities;organising an enterprise to undertake a

new production process; raising capital;hiring labour, arranging for raw material,finding a site & combining these factorsof production into a going concern;introducing new techniques, newcommodities, discovering new sources ofnatural resources & selecting top-

managers for day-to- day operations.


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SUMMARY

Thus Entrepreneurship is acombination of various qualities likeorganisation skills, innovativeness,

risk-bearing, managing uncertainty,ability to bring together & use factor ofproduction, analysing market

opportunities, observing the changetaking place in the market, methods &technologies & studying the tastes &preferences of consumers.


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ENTREPRENUERS &ECONOMIC DEVELOPMENT:

OPTIMUM UTILISATION OFRESOURCES GENERATION OF EMPLOYMENT -IMPROVEMENT IN STANDARD OFLIVING OF PEOPLEBALANCED REGIONALDEVELOPMENT


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HELP AGRI SECTOR

PROMOTE INTERNATIONALTRADEHELP COMMUNITY AT LARGE

CAPITAL FORMATION DISTRIBUTION OF INCOME &WEALTH NEW/ IMPROVED GOODS &SERVICES


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ENTREPRENEURIALMOTIVATIONINTERNAL FACTORS

Strong desire to do something new.To be independent in Life.

Making the maximum use oftechnical/professional knowledge.Occupational experience/background.

Passionate about particular activity.Dissatisfaction with present job.To attain self-satisfaction.


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EXTERNAL FACTORS

Utilizing Government grants &subsidiaries.To continue ancestor business.

Financial assistance from Institutions.Availability of resources.Encouragement from big business

houses.Availability of sick units/ easy financialterms.Encouragement from family members.


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ESTABLISHMENT OF ANENTERPRISE1. IDENTIFICATION OF OPPORTUNITIES:

The product to be produced or service to beprovided should be carefully selected. Thusthe idea to select such a product mayoriginate from different sources. Theimportant sources of business idea are asfollows:

a) Market observation: analysis of demand &

supply for goods, availability of rawmaterials, profit range, likely change infuture demand.

b) Consumer survey: taste & preferences of

consumers, considerable no of consumers


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C) Competing alternative product: Noof manufacturers, Degree of competition,to manufacture either better qualitygoods at same price or even to providesame quality goods at a cheaper rate.

d) Development in other countries: borrowing business ideas attending trade

fairs in foreign countries through tradedelegation sponsored by Chambers ofcommerce/ government or collaboration/

joint venture with foreign producer.


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e) Product profiles: Variousgovernment & non-governmentagencies prepare & publish product

profiles which can be a basis forbusiness idea generation.

f) Trade fairs and Exhibitions:

g) Government policies:Announcement of concession, grantsto manufacture certain products.


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h) Research institutes: Many researchInstitutes like private government help inborrowing patents from them (privategovernment) and produce the product.

i) Research & development: In case of bigcompanies , to develop new products, or tomodify existing products.

j) Brain storming sessions: In case of large

and multinational companies to come outwith new ideas- by forming groups ofemployees of different levels and allowingthem to deliberate & suggest some newideas.


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2. PROCESSING & SELECTION OF IDEAa) Technical feasibility: the product chosen

should be technically feasible I e should becapable of being manufactured using sometechnology.

b) Commercial viability: refers to cost benefitanalysis to know whether the product wouldyield expected rate of return.

c) Financial & managerial considerations:amount of finance required, sources offinance to be worked out & managerialsources, its availability & its cost.


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d) Final selection: products whichpass through all the tests(betechnically feasible, commercially

viable) are considered for finalselection.

some points may be allotted

for each test and that product whichgains highest points may be selectedfor production.


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3. DECIDING THE LOCATIONmany factors influence the

location of the unit.1) Availability of raw materials.2) Market accessibility3) Human resource4) Supply of power5) Fuel & water


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6) Transportation7) Government policies- subsidies &incentives.

8) Climate.9) Scope for further expansion.


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4. DECIDING THE FORM OF OWNERSHIP whether under sole proprietorship or

partnership or joint venture. (partnership act-

1932).Factors affecting ownership forms are:1) Ease of formation- sole proprietorship is

easy to form.2) Capital required- small business less

capital required then sole proprietorship isapplied. If the business requires high capital

joint venture is applied.


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3) Extent of liability- unlimited liabilityin case of sole proprietorship &partnership, limited liability in case of

joint stock company and cooperatives.4) Control- The complete control lies

with the proprietor in case of soleproprietor. In case of partnershipcontrol is as per partnership deal. Incase of joint companies &cooperatives, control is different fromownership.


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5) Continuity of business: joint stockcompanies enjoy continuity ofbusiness because ownership is

different from management.6) Flexibility: sole proprietorship is

more flexible

7) Maintenance of secrecy: secrecycan be maintained by soleproprietorship.


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8) Government regulations: soleproprietorship is subject to minimumregulations & interference. Partnership

comes under partnership act, societiesunder cooperative societies act &companies under company act.

9) Tax liability: the tax structure of thegovernment is to be considered todecide the type of organization.


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5] REGISTRATION & LICENSING it is necessary in case of starting

industrial units. Certificate ofregistration will be issued in twostages.

1) Provisional Registration

Certificate:It is the initial registration to starting

a small scale industry. It is issued for

1 year which can be extended for


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To get an industrial plot or industrialshade.To avail bank loan.To get license from localadministration.To get water & power supply.For procuring plant machinery & rawmaterials.To get NOC from PC board.


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2) Permanent RegistrationCertificate:

It is issued when all the formality of

establishing the unit is over. Thiscertificate will be useful for:a) To apply for subsidies & incentivesb) To avail bank loanc) To get income tax & sales tax

concessiond) To avoid central excise duty

concession


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6] SPECIFIC CLEARANCES 1) Conversion of agricultural land:

through an application to concerned

local authority.2) Urban land ceiling clearance:

taking permission to hold vacant land

beyond the limit through specialpermission.

3) Building plan approval: to be

approved by local authority.


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4) Factories Act: obtain permission fromauthorities ex- permission frominspectorate of factories to start factory.

5) Trade license: from local authority ex-certificate from local municipality for ahotel industry.

6) Pollution control board clearance:

getting NOC from PC board. 7) Sales tax registration: from the state &centre authorities to sell & purchasegoods.


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8) Central Excise Registration: to getregistration from central exciseauthorities if the goods are excisable.

9) Bureau of Indian Standard (BIS)certificate:10) Fruit product order 1955: license

through ministry of food processing11) Food Adulteration Act: that can

get from local authorities in case ofsale of food & food articles.


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12) Power Loom Registration: 13) Drugs & cosmetics license: in

case of manufacturing drugs &

cosmetics. 14) Approval for Hotels: from

department of tourism in case of big

hotels. 15) 100% Export oriented units: to get

permission from the concerned expert

council.


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7] ASSEMBLING NECESSARYRESOURCES

1) Finance- getting finance from Banks/ financial institutions

2) Building- to be constructed in case noindustrial shade is allotted.

3) Plant & machinery- placing purchasingorder for plant & machinery.

4) Raw materials- get the raw materialsthrough private party or throughgovernment.

5) Human resources- appointment ofworkers & management personnel.

entrepreneurship modified ppt

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