ENTREPRENEURSHIP DEVELOPMENT

Module I: Understanding Entrepreneurship ENTREPRENEURSHIP A theory of evolution of economic activities. A continuous process of economic development. An ingredient to economic development. Essentially a creative activity or an innovative function. A risk taking factor which is responsible for an end result. Usually understood with reference to individual business. The name given to the factor of production, which performs the functions of enterprise. Creates awareness among people about economic activity. enerates !elf"employment and additional employment

WH ENTREPRENEURSHIP To improve backwardness of the people. Economic development of the region. To analysis resource utili#ation. $roper utili#ation of human potentiality. !pecial attention to take up new activities. To create self"employment and generation of employment opportunity. Eradication of regional imbalances. %etter economic gain. The early history of entrepreneurship in &ndia reflects from the culture, customs and tradition of the &ndia people. The !ali"atra #esti$al o% &utta'() Orissa re*inis'en'e o% past glor" o% International trade . To process of entrepreneurship therefore passed through the potential roots of the society and all those who accepted entrepreneurial role had the cultural heritage of trade and business. 'ccupational pursuits opted by the individual under the caste system received different meaning of value attached to entrepreneurship. (hich is based on social sanctions) *aishyas are considered to venture in to business pursuits. As society grew and the process of business occupation depended and the value work tended towards change and the various occupational role interchanged with non"role group and sub"groups. $eople from different castes and status also entered into the entrepreneurial role.

The emergence of entrepreneurship in this part of the country got locali#ed and spread effect, took its own time. The concept of growth theory seems to be closely related in e,plaining the theory of entrepreneurship development as well. After the !econd (orld (ar entrepreneurship received new meaning for attaining economic development within the shortest possible time. %ut in the process they were seriously handicapped by the rigid institutional setup, political instability, marketing imperfection and traditional value system.

%ritishers for their own ulterior motive destabili#ed the then self sufficient &ndian economy. England flourished and &ndia had to pay for that. &n the process &ndia suffered heavy industrial loss. -evelopment of business eateries is a comple, phenomenon influenced by both the internal and e,ternal factors. &nternal factor originates in policies and attitude of the entrepreneur themselves. &n controlling the business itself, e,ternal factors are beyond the control of the business entrepreneur. They alone account for unpredictability of returns and risks assumed by the entrepreneur. A steady growth can be observed on the business of long cherished history of entrepreneurial development in the country is certainly promised or the environment to be created by the state and its agencies. The entrepreneurial motivation is one of the most important factors which accelerate the pace of economic development by bringing the people to undertake risk bearing activities. &n many of the developing countries a lot of attention is being paid to the development of entrepreneurship because it is not the proprietary .uality of any caste and community. The entrepreneurship is usually understood with reference to individual business. Entrepreneurship has rightly been identified with the individual, as success of enterprise depends upon imagination, vision, innovativeness and risk taking. The production is possible due to the cooperation of the various factors of production, popularly known as land, labour, capital, market, management and of course entrepreneurship. The entrepreneurship is a risk"taking factor, which is responsible for the end result in the form of profit or loss. According to A !chumpeter The entrepreneurship is essentially a creative activity or it is an innovative function. The economic activity with a profit motive can only be generated by promoting an attitude towards entrepreneurship. The renewed interest in the development of entrepreneurship to take up new venture should emphasi#e on the integrated approach. The developments of entrepreneurship will optimi#e the use of the une,ploited resources/ generate self"employment and a self sufficient economy. The young entrepreneur should be motivated to come out with determination to do something of their own and also to contribute to the national income and wealth in the economy. &f the country wants to achieve the growth at the grass root level, through social 0ustice and the crimination of poverty, it will have to provide institutional support and structural changes in organi#ation of financial institutions to promote entrepreneurship development. &ndustrial development in any region is the outcome of purposeful human activity and entrepreneurial thrust.

-avid 1elelland emphasi#ed the importance of achievement motivation as the basis of entrepreneurial personality and a cause of economic and social development through entrepreneurship by fulfilling the following needs such as 23 4eed for power +3 4eed for affiliation and 53 4eed for achievement. Another school of thought says 6entrepreneurship is a function of several factors i.e. individual socio cultural environment and support system7.

Entrepreneurship is vibrant assertion of the facts that individual can be developed, then outlook can be changed and their ideas can be converted into action though on organi#ed and systematic program for entrepreneurs. &t was also felt that systematic training can be given a better output and attracting people for taking up business venture can change economic scenario. %asic ob0ective in developing entrepreneurship and multiplying them in the society has been to enable the society to generate productive human resource, mobili#e and sustain the same in subse.uent process of development. The spontaneity and continuity of the process would depend on the kind of people that can be prompted and groomed in the entrepreneurial career. !ociologists, $sychologists and economists have all attempted to give a clear picture of the entrepreneur. !ociologists analy#e the characteristic of entrepreneurs in terms of caste, family, social value and migration. $sychologists on the other hand attempt to isolate entrepreneurs from general population on various personality trials such as need for achievement, creativity, propensity to take risk, independence leadership etc. Economists lighted situational characteristics such as occupational backgrounds access to capital business and technological e,perience and managerial skills with economic gains considered as characteristic of entrepreneur. As entrepreneur by implication is one who ventures out, who prefers change as a means of growth and it the process is prepared to take a calculated risk while taking risks he is aware of the possibilities, success as well as the conse.uence of failure. Entrepreneurship is the a't o% +eing an entrepreneur) ,hi'h 'an +e de%ined as -one ,ho underta(es inno$ations) %inan'e and +usiness a'u*en in an e%%ort to trans%or* inno$ations into e'ono*i' goods-. This may result in new organi#ations or may be part of revitali#ing mature organi#ations in response to a perceived opportunity. The most obvious form of entrepreneurship is that of starting new businesses 8referred as !tartup Company3/ however, in recent years, the term has been e,tended to include social and political forms of entrepreneurial activity. (hen entrepreneurship is describing activities within a firm or large organi#ation it is referred to as intra"preneurship and may include corporate venturing, when large entities spin"off organi#ations. Entrepreneurial activities are substantially different depending on the type of organi#ation and creativity involved. Entrepreneurship ranges in scale from solo pro0ects 8even involving the entrepreneur only part"time3 to ma0or undertakings creating many 0ob

opportunities. 1any 9high value9 entrepreneurial ventures seek venture capital or angel funding 8seed money3 in order to raise capital to build the business. Angel investors generally seek annuali#ed returns of +:"5:; and more, as well as e,tensive involvement in the business. 1any kinds of organi#ations now e,ist to support would"be entrepreneurs including speciali#ed government agencies, business incubators, science parks, and some 4 's. &n more recent times, the term entrepreneurship has been e,tended to include elements not related necessarily to business formation activity such as conceptuali#ations of entrepreneurship as a specific mindset resulting in entrepreneurial initiatives e.g. in the form of social entrepreneurship, political entrepreneurship, or knowledge entrepreneurship have emerged. The entrepreneur is a factor in microeconomics, and the study of entrepreneurship reaches back to the work of <ichard Cantillon and Adam !mith in the late 2=th and early 2>th centuries, but was largely ignored theoretically until the late 2?th and early +:th centuries and empirically until a profound resurgence in business and economics in the last @: years. &on'ept o% Entrepreneurship &t has assumed super importance for accelerating economic growth both in developed and developing countries. &t promotes capital formation and creates wealth in country. &t is hope and dreams of millions of individuals around the world. &t reduces unemployment and poverty and it is a pathway to prosper. Entrepreneurship is the process of searching out opportunities in the market place and arranging resources re.uired to e,ploit these opportunities for long term gains. &t is the process of planning, organi#ing, opportunities and assuming. Thus it is a risk of business enterprise. &t may be distinguished as an ability to take risk independently to make utmost earnings in the market. &t is a creative and innovative skill and adapting response to environment of what is real. Pro*otion o% Entrepreneurship iven entrepreneurshipAs potential to support economic growth, it is the policy goal of many governments to develop a culture of entrepreneurial thinking. This can be done in a number of waysB by integrating entrepreneurship into education systems, legislating to encourage risk"taking, and national campaigns. An e,ample of the latter is the United CingdomAs Enterprise (eek, which launched in +::@.

An entrepreneur is a person who has possession of a new enterprise, venture or idea and is accountable for the inherent risks and the outcome of a product. The term was originally a loanword from Drench and was first defined by the &rish"Drench economist <ichard Cantillon. Entrepreneur in English is a term applied to a person who is willing to help launch a new venture or enterprise and accept full responsibility for the outcome. Eean"%aptiste !ay, a Drench economist, is believed to have coined the word 9entrepreneur9 in the 2?th century " he defined an entrepreneur as 9one who undertakes an enterprise, especially a contractor, acting as intermediary between capital and labour9. A broader definition by !ayB 9The entrepreneur shifts economic resources out of lower and into higher productivity and greater yield. WHO IS .N ENTREPRENUER Fe is a person who develops and owns his own enterprise Fe is a moderate risk taker and works under uncertainty for achieving the goal. Fe is innovative Fe peruses the deviant pursuits <eflects strong urge to be independent. $ersistently tries to do something better. -issatisfied with routine activities. $repared to withstand the hard life. -etermined but patient E,hibits sense of leadership Also e,hibits sense of competitiveness Takes personals responsibility 'riented towards the future. Tends to persist in the face to adversity Convert a situation into opportunity. Moti$ation %or E'ono*i' De$elop*ent and Entrepreneurial .'hie$e*ent: Entrepreneurship plays an important role in the economic growth and development of nation. &t is a purposeful activity includes in initiation, promotion and distribution of wealth and service. An entrepreneur is a critical factor in economic development and an integral part of the socio"economic transformation. &t is a risk taking activity and challenging tasks, needs utmost devotion, total commitment and greater sincerity with fullest involvement for his personal growth and personality. The entrepreneurial career is not a one day 0ob nor is it bed of roses. $rosperity and success

never come easily. &t takes time and needs hard work, systematic planning and business acumen to be successful entrepreneur. Therefore, before choosing this path one should be very careful in knowing about his own self. This introspection process helps him in knowing about himself. Every person has his own potentiality and resource. Fow he looks in to this aspect. &f the person cans understand or identify his inner traits then it helps him choosing the right path for which he should look into his beliefs, faith values etc. Dor an entrepreneur it is of great importance to know about him on the basis of above mentioned individual consideration. These consideration give him ample scope to face his own self by asking the .uestion 6(ho & am)7 &f he can give meaning answer to this comple, .uestion with e,emplary courage and utter personal disregard to being e,posed, then it helps him in getting a fair idea about himself. 'n the whole it helps him to making the right decision in choosing the right path for getting involved for deciding the future course of action. This is nothing but a self"identification process. After having being proper identified his strength, weakness and ability, he can make a decision of his choice, whether he will take up entrepreneurship as a career or not. &f yes, then in which entrepreneurial area.

Choosing entrepreneurial career is like choosing a life partner. The person has to be there in the 0ob forever and may have to continue in that chosen line for generations to generation and grows in this process if it is matching/ if it mismatches it goes the other way round. Considering this aspect he should always be governed by three basic .ualitative instincts to serve in the world of uncertainty. These are G 823 (ill, 8+3 Heal, and 53 !kill. The hypothesis that entrepreneurship is linked to economic growth finds its most immediate foundation in simple intuition, common sense and pure economic observationB activities to convert ideas into economic opportunities lie at the very heart of entrepreneurship. Entrepreneurship is a source of innovation and change, and as such spurs improvements in productivity and economic competitiveness. Role o% entrepreneurship in e'ono*i' de$elop*ent: Entrepreneur: An entrepreneur can be regarded as a person who has the initiative skill and motivation to set up a business or enterprise of his own and who always looks for high achievements. Fe is the catalyst for social change and works for the common good. They look for opportunities, identify them and sei#e them mainly for economic gains. An action oriented entrepreneur is a highly calculative individual who is always willing to undertake risks in order to achieve their goals. Need %or Entrepreneurship De$elop*ent Economic development essentially means a process of upward change whereby the real pr capita income of a country increases over a period of time .Entrepreneurship has an important role to play in the development of a country. &t is one of the most important inputs in economic development. The number and competence of entrepreneurs affect the economic growth of the country. The economic history of the presently advanced countries like U!A, <ussia and 0apan supports the fact that economic development is the outcome for which entrepreneurship is an inevitable cause. The crucial and significant role played by the entrepreneurs in the economic development of advanced countries has made the people of developing and

under developed countries consious of the importance of entrepreneurship for economic development. &t is now a widely accepted fact that active and enthusiastic entrepreneurs can only e,plore the potentials of the countries availability of resourses such as labour, capital and technology. The role of entrepreneurs is not identical in the various economies. -epending on the material resources, industry climate and responsiveness of the political system, it varies from economy to economy. The contribution of entrepreneurs may be more in favourable opportunity conditions than in economies with relatively less favourable opportunity conditions. Entrepreneurship and E'ono*i' De$elop*ent Entrepreneurship helps in the process of economic development in the following waysB /0 E*plo"*ent 1eneration: rowing unemployment particularly educated unemployment is the problem of the nation. The available employment opportunities can cater only I to 2: ; of the unemployed. Entrepreneurs generate employment both directly and indirectly. -irectly, self employment as an entrepreneur and indirectly by starting many industrial units they offer 0obs to millions. Thus entrepreneurship is the best way to fight the evil of unemployment. 20 National In'o*e: 4ational &ncome consists of the goods and services produced in the country and imported. The goods and services produced are for consumption within the country as well as to meet the demand of e,ports. The domestic demand increases with increase in population and increase in standard of living. The e,port demand also increases to meet the needs of growing imports due to various reasons. An increasing number of entrepreneurs are re.uired to meet this increasing demand for goods and services. Thus entrepreneurship increases the national income. 30 !alan'ed Regional De$elop*ent: The growth of &ndustry and business leads to a lot of $ublic benefits like transport facilities, health, education, entertainment etc. (hen the industries are concentrated in selected cities, development gets limited to these cities. A rapid development, when the new entrepreneurs grow at a faster rate, in view of increasing competition in and around cities, they are forced to set up their enterprises in the smaller towns away from big cities. This helps in the development of backward regions.

40 Dispersal o% e'ono*i' po,er: &ndustrial development normally may lesd to concentration of economic powers in a few hands. This concentration of power in a few hands has its own evils in the form of monopolies. -eveloping a large number of entrepreneurers helps in dispersing the economic power amongst the population. Thus it helps in weakening the harmful effects of monopoly. 50 !etter standards o% li$ing: Entrepreneurs play a vital role in achieving a higher rate of economic growth. Entrepreneurs are able to produce goods at lower cost and supply .uality goods at lower price to the community according to their re.uirements. (hen the price of of the commodies decreases the consumers get the power to buy more goods for their satisfaction. &n this way they can increase the standard of living of the people. 60 &reating inno$ation: An entrepreneur is a person who always looks for changes. Apart from combining the factors of production, he also introduces new ideas and new combination of factors. Fe always tries to introduce newer and newer techni.ue of production of goods and services. An entrepreneur brings economic development through innovation. Entrepreneurship also helps in increasing productivity and capital formation of a nation. &n short, the development of the entrepreneurship is inevitable in the economic development of the country. The <ole played by the entrepreneurship development can be e,pressed in the following wordsB Economic development is the effect for which entrepreneurship is a cause Entrepreneurship directly affects the economic development and also serves as the positive source of economic growth. Economic development means an in crease in the per capita income of the country. Entrepreneurship is driving force behind the growth and development of the country. There is direct relationship between development and entrepreneurship. 1any economistsJ theories consider economic development and entrepreneurship as complimentary to each other. Da$id M'&lelland7s Theor" o% .'hie$e*ent Moti$ation: This theory is considered as one of the best theories of entrepreneurial development. This theory revolves around entrepreneurial behaviour and needs. &t focuses on three aspectsB

Need %or a'hie$e*ent:

This need plays an important role in determining

the success of activities done in to 1cClelland, economic behaviour can be described through achievement orientation. 1cClelland wroteB 6need for achievement is a desire to do well, not so much for the sake of social recognition or prestige, but for the sake of inner feeling of personal achievement.7 Need o% Po,er: This refers to the desire of a person to be influential in the group. This need offers direct satisfaction and authority to managers. Need %or a%%iliation: This need helps in maintaining a personal relationship with the subordinates. $eople with high need affiliation are more desperate about love, relationships and friendships. They love others and e,pect others to love them. 'n the basis of above mentioned needs, 1cClelland pointed out that following factors are necessary for entrepreneurial developmentB T,in 'hara'teristi's o% entrepreneurship: i3 ii3 $erforming activities in a brilliant manner, -ecision"making under uncertainty.

!elie% in personal a''o*plish*ent: 4eed for achievement means An individualJs need for personal success through e,cellence. !uch person en0oys taking responsibility. They take moderate risk and try to come out as winners all the time.

$sychological factors for entrepreneurial motivationB 4eed for achievement encourages the individual to take risk. $sychological factors that are responsible for entrepreneurial development are as followsB i3 ii3 iii3 iv3 v3 vi3 vii3 <isk bearing, oal orientation, -esire to achieve success, (illingness to take responsibility, Anticipating possibilities, Deeling of personal accomplishment, Concrete measures of task performance.

&nner concerns as the prime moversB According to 1cClelland, inner concerns are prime movers of entrepreneurship. These forces motivate the person to take risks, invent new ideas and attain profit ma,imi#ation.

Kack of ambition in Kess -eveloped Countries 8K-Cs3B Ambition among people of much country is very important for its development. &n an underdeveloped

country people lack ambition, which is a ma0or hurdle for the need of achievement that results in the lack of enterprise in K-Cs) Enterprise and So'iet": The activities of an entrepreneur cover a wide range in a conducive and congenial social environment. The social environment includes a number of factors which are critical for the growth of entrepreneurship and are listed as followsB #a*il" +a'(ground: Damily background is an important determinant in entrepreneurial environment and involves factors like family type, family status, and so on. &aste s"ste*: There are certain castes that have more entrepreneurial talent than others. This is because they have latent potential and speciali#ed culture by virtue of certain activities andLor means of livelihood traditionally practiced by them that helps to foster entrepreneurship. So'ial san'tions: !ocial sanctions and role e,pectations are important factors that determine the growth of entrepreneurs. Religious +a'(ground: <eligion too plays a crucial role in influencing entrepreneurial emergence and growth. 8ith and (in: Entrepreneurial initiatives are also determined by the success of oneJs kin, friends, relatives and others in any particular venture. So'ial Status: !ocial status contributes greatly to the growth of the entrepreneurship. &t is human nature to want to rise in the society and be regarded as a man of esteem. So'ial $alues: !ocial values and philosophy of a country are important in the growth of entrepreneurial culture in the society. So'ial responsi+ilit" o% the +usiness: This entails efficient utili#ation and conservation of natural resources for the benefit of the society. Entrepreneurial initiatives must to be carried on within the framework of social rules, laws of the land and the social policies. Wh" and ho, to start !usiness:

Entrepreneurial traits and s(ills: Entrepreneurs play a significant role in the development of the economy. An entrepreneur affects the lives of many people as it creates new 0ob, provides the product, develops the technology, and provides feasible solutions to the e,isting social

and environmental problems. Entrepreneurship creates wealth for the person and for the country. &t is the most powerful force of the economy. Today, the business environment and technological advancements present comple, challenges to an individualJs entrepreneurial drive and determination. 1ost entrepreneurs prefer to outsource pro0ects to save on operating cost. They even outsource the most critical process of their manufacturing or business operations. Entrepreneurs need the right interest to initiate the right motivation for starting a small business or pro0ect. &nterest comes from the dream to improve an individualJs lifestyle, social status, control of future, and raise standard of living. Entrepreneurship is a natural medium to fulfill economic aspirations, channel drive and energy, and build something for themselves.

.+ilit" to organi9eB Fe should be able to organi#e various factors effectively. Fe has to understand all the aspects of the business.

Pro%essional approa'hB Fe should be ob0ective and professional in approach. Ris( +earerB Fe should be risk taker. Fe should be ready to bear risk and uncertainties.

Inno$ati$eB 'rgani#er should be innovative. Fe should adopt modern techni.ues of production. Fe should not be reluctant to changes.

De'ision Ma(ingB 'ne has to take right decision at a right time by showing his promptness. Muick decisions are e,pected but hasty decisions shouldnAt be taken. -elay in decisions may increase cost of pro0ect and reduce the profits.

Negotiation s(illsB %usinessman regularly comes into contact with various persons like consumers, workers, government officials, etc. so he should communicate tactfully.

Vision : Leadership: Entrepreneurs must have a vision of where the company will be in the future. &n addition, you must be able to communicate you vision so as to motivate employees, investors, and partners to help you achieve that vision. Nou must be able to identify staffing needs, e,pertly fill them, and lead your team to success. <arely do entrepreneurs build successful companies all by themselves.

#o'us : E;e'ution: Entrepreneurs must focus to make sure that goals are achieved, customers are satisfied, and employees are motivated. Dor most entrepreneurs, staying focused is harder than it sounds. %e careful not to be seduced by the ne,t e,citing opportunity without e,ecuting on the priorities at

hand. And donAt let perfectionism prevent you from taking action, either/ at the end of the day, a product on the market is better than a product shelved due to lack of focus, e,ecution, or perfectionism. your customers as soon as possible. Persisten'e : Passion: As an entrepreneur, you must be passionate about what you are trying to accomplish. &n addition, you must be willing to commit whatever is needed of them, whether itAs time, energy, money, or other resources. Nou must persist through trying times 8which will be fre.uent3, and fight as much as needed to achieve the goals you have set for yourself and your team. Te'hni'al s(ills: As the owner of your firm, you may not need to be the most skilled technician on your team. %ut you need to have necessary foundational knowledge to be able to lead your technical team and make informed decisions. #le;i+ilit": !uccessful entrepreneurs understand that the world and the environment in which they operate are constantly changing. (hile you must focus on the end game, you also must adapt your strategies and offerings to meet changing market conditions. A wide range of skills are seen as entrepreneurial and useful to entrepreneurs, these include both personal traits and skills:

et to market and get feedback from

1anagement skills " the ability to manage time and people 8both yourself and others3 successfully Communication skills and the ability to sell ideas and persuade others The ability to work both as part of a team and independently Able to plan, coordinate and organi#e effectively Dinancial literacy Able to research effectively, for e,ample available markets, suppliers, customers and the competition !elf motivated and disciplined Adaptable &nnovative thinking and creative The ability to multi"task Able to take responsibility and make decisions The ability to work under pressure $erseverance Competitiveness (illingness to take risks Ability to network and make contacts

1any, if not all of these skills and traits are also useful to intrapreneurs, those who are entrepreneurial within an e,isting organi#ation 8internal entrepreneurs3. These skills and

traits would also benefit all employees within a business and so are useful for graduates to have. 1any of these skills, such as communication skills and the ability to work as part of a team, are already promoted within e,isting degrees. &n addition to those more general skills listed above, other more specific or business related skills, will be of use to entrepreneurs, these may includeB

%eing able to draw up a business plan for a new venture, %eing able to market and sell a new product or idea, Dinancial skills, such as book"keeping and calculating ta,, Awareness of intellectual property and possibly patent law.

The most significant influence on an individualAs decision to become an entrepreneur is workplace peers and the social composition of the workplace. Entrepreneurs also often possess innate traits such as e,troversion and a propensity forO risk"taking. According to !chumpeter, an entrepreneur characteristically innovates, introduces new technologies, increases efficiency, productivity, or generates new products or services. An entrepreneur acts as a catalyst for economic change and research indicates that entrepreneurs are highly creative individuals who imagine new solutions by generating opportunities for profit or reward. There is a comple,ity and lack of cohesion between research studies that e,plore the characteristics and personality traits of, and influences on, the entrepreneur. 1ost studies, however, agree that there are certain entrepreneurial traits and environmental influences that tend to be consistent. Although certain entrepreneurial traits are re.uired, entrepreneurial behaviours are dynamic and influenced by environmental factors. $sychological studies show that the psychological propensities for male and female entrepreneurs are more similar than different. $erceived gender differences may be due more to gender stereotyping. There is a growing body of work that shows that entrepreneurial behavior is dependent on social and economic factors. Dor e,ample, countries which have healthy and diversified labor markets or stronger safety nets show a more favorable ratio of opportunity"driven rather than necessity"driven women entrepreneurs. Empirical studies suggest that women entrepreneurs possess strong negotiating skills and consensus"forming abilities.

Mind Vs< Mone" in &o**en'ing Ne, Ventures:

!tarting a new business venture can be an e,citing and important decision for an individual with ambition. Fowever, there are a number of considerations that new entrepreneurs need to keep in mind as they take the initiative to establish their own enterprise. Dailure to fully consider some substantial concerns could leave entrepreneurs feeling uncertain in the midst of their new ventures. De$elop a solid +usiness plan: 'nce you know which entrepreneurial avenue you plan to e,plore, you need to begin researching the industry. et a grasp on the recent market trends and where the market will likely be headed in the near future. %ased on these observations, make a list of obtainable goals that will enable your enterprise to get started off on the right foot. Then brainstorm various approaches to achieving these goals. -etermine which scenario is the most sensible for you to commit to. Dinally, if your efforts should fall short of success, you still have alternative options to fall back on. #ollo, all legal regulations set %or "our industr": etting a business license usually

means 0umping through a variety of legal hoops no matter what the specific occupation. !ome legal prere.uisites can go by the wayside while trying to establish a new enterprise. -eciding which insurance policies to secure and what kind of health benefits to offer potential employees are 0ust a few legal considerations you might have to think about. 'ne technicality many new professionals forget about is the use of surety bonds, which are re.uired by law in many industries before a business license can be issued. !urety bonds are similar toOthough separate fromOinsurance, as they provide an additional financial protection. %e sure to check local bonding regulations for your industry to make sure your business will be in compliance, as auto dealer bond regulations are obviously very different from mortgage broker bond regulations. !e prepared to in$est a lot ,ithout earning it +a'( i**ediatel": (ith limited e,ceptions, you shouldnJt e,pect to turn a profit for a few years. !o early on, youJll need to determine how much money you should plan to invest in your venture during the first few years. &tJs also a good idea to secure either e,tra savings funds or a secondary income to live off of during this time.Dind a generous lender who understands your business plan and has faith in its ability to succeed. !uch a lender will back you up when times get rough. And donJt forget that youJll probably invest a great deal of time and money to get your name known within your industry. Ne$er underesti*ate the i*portan'e o% e%%e'ti$e =online0 *ar(eting: 1arketing in todayJs business market is neither simple nor limited. (ith seemingly infinite advertising

opportunitiesOfrom print to television to the internetOingenuity can go a long way. %uild an engaging website thatJs easy to navigate, showcasing your business to potential clients or consumers. <esearch shows that the ma0ority of people 0udge a business based on its online presence. (ithout a website, youJll be left behind/ with an unprofessional or confusing one, you could misrepresent the .uality of your business. #ull" 'o**it "oursel% to "our endea$or: -onJt e,pect phenomenal success if you arenJt willing to fully dedicate yourself to your pro0ect. <eali#e that this might mean late nights at the office and choosing business meetings over social events. !ince itJs your undertaking, itJs up to you to decide when, where, and how much you work. NouJve already made the decision to strike out on your own, all thatJs left is e,ecuting your success. Ho, to Raise Mone" %or a Ne, Venture:

There are many potential entrepreneurs out there, wondering how to raise money for a business venture. Anyone looking to start a company or business venture of their own, needs to know how to raise money for a business. The capital is one of the first things that need to be taken into consideration when one is setting out on a business venture, and there are many different sources to obtain this capital. &t is not necessary to stick to one particular source rigidly/ even a combination of various different sources can be made use of. Anyone who is wondering how to raise money for a restaurant, a small business, an advertising agency or any other small"scale venture should keep these methods in mind. Approaching the right people for the money is vitally important for the success of the business, and if this is not catered to properly, the business will be doomed from the very beginning. Personal Sa$ings: This is the most obvious source of money for starting a business. &f you have saved up enough money over the years, go ahead and make use of it for your business. Nou will not be answerable to anyone, and you will not have to worry about repaying someone. &f you choose this option, ensure that you are not using all your savings though. 1any people neglect this option of how to raise money for a business because if they lose the money, they will have nothing left to live on. Venture &apitalists: This is the ne,t most obvious source for your potential business. *enture capitalists are professional agencies who put in money, or venture capital, into

an upcoming business. (hat they get in return is either a share of the business, or a share of the profits, or pretty high interest rates. &t may sound like e,ploitation, but this is one of the best ways to get money. *enture capitalists are always looking for new and innovative business ideas that are likely to succeed. .ngel In$estors: These are a refined form of venture capitalists, but many people think they mean the same thing. Angel investors are less demanding than venture capitalists, and are with your business in the long run. Usually, they are someone who you would know personally, and they are simply looking for ways to get a higher return on their investment. Fow companies raise money depends a lot on the nature of the business, and the method of entrepreneurship adopted. Angel investors also help out the business by providing some guidance and mentoring. Personal !orro,ings: Fere is a method on how to raise money for a business that should be avoided as far as possible. Nou can borrow money from someone you know, namely your friends, family or other people. The problem here is that once you mi, business and personal relationships, things start to get a bit sour. This is a situation that needs to be handled with great tact and diplomacy, and not everyone can manage to do that. !till, this is a method that many people opt for. !an( Loans: Another answer to how to raise money for a small business, is to approach a bank for a small business loan. (ith banks you will not be re.uired to pay a very high interest rate, but you will need sufficient documentation about the business model of your business. Along with that, your credit history and financial stability will also be scrutini#ed, to see if you are worthy of getting the loan. 1ost people would love to get a bank loan, but are simply not eligible. This is especially true for someone who is wondering how to raise money to start a business without owning any fi,ed assets. .d$ertising: Fere is another answer, but one that re.uires a suitable amount of investment, and more than a fair share of patience. &f you can handle the advertising of your upcoming company well, you can get more than enough money to sustain it in the long run. There are some websites that also let you advertise your business plan, and then suit you up with a matching investor. This is a slightly unreliable method for sure, but it works wonders if one can find the right match. $eople wondering how to raise money for a marketing campaign, can use the methods already mentioned above. Other Options: Fere are some other answers to the .uestion AFow to raise money for a

businessA. 'ne can approach some small business investment companies, some business development commissions, some life insurance companies or a money broker as well. The reliability of these other options will not be very high, and their demands may be e,orbitant, but if you have run out of all other options, then this is something that you will need to resort to. Nou should move as soon as possible in order to get as much capital and business financing as you can. There are a variety of sources available to you, and as long as you have a great and reliable business plan, you will be able to procure capital. &t is not all that difficult to learn how to raise money for a business, but all you need, more than anything else, is the faith and belief in yourself.

Entrepreneurial su''ess and %ailures

Entrepreneurial #ailures: &n the (atson P Everett 8-efining !mall %usiness Dailure3 article small business failure can be classified into seven primary reasons. The first one, being bankruptcy is defined as discontinued operations with resulting losses to its creditors. Another reason for discontinuance is prevention from further losses, which means the owner recogni#es the need to end the business due to continuing personal financial losses while the creditors might still be receiving their agreed"upon payments. The third reason, Qmaking a go of itJ is the most sub0ective reason as it is based upon personal goals not being reached. (hile the business may not be running negative, the entrepreneur gives up because it might be too time consuming, stressful, disapproving and whatnot compared to the profit. The remaining reasons consist of retirement due to bad health, sale of business to reali#e a profit, unknown and other reasons. The reason & summari#ed 2@ pages of te,t into one single paragraph is not out of haste or to get off lightly, but because & considered it not to be essential in answering the topic .uestion. !ince the first ob0ective of this case is to give my opinion when an entrepreneur has failed & will present a definition for it as well as four reasons that can lead towards or away from it.

>.n entrepreneur has %ailed ,hen he?she stops +eing an entrepreneur<@ The best way to encourage entrepreneurship is to focus on the entrepreneur and not the factual, statistical or financial results heLshe or the nation in average performs. This is

why & focus on the individual entrepreneur when defining when heLshe has failed and the reasons behind it. These reasons can be found in the first chapters of Ciyosaki 8<etire Noung <etire <ich3B The power of your mind and listening to yourself is the most important factor. Dailing your first business is the key critical event that will test if you have failed as an entrepreneur. Kistening to the loser, wimp, coward and cynic inside you will cause you to stop being an entrepreneur and seek the security of working for another business. Fowever, choosing to listen to the winner, hero, giant and opportunist inside you will give the strength and the whys to start another business venture. Another factor, also created by your mind is reality. %y continuously e,panding your reality about what you can do will help overcome obstacles that you previously thought you cant do. The process on how to do this is by being a lifelong learner. The third reason an entrepreneur can fail is by listening to others. %y listening to cynics and poor people with limited reality you risk believing that starting a business is risky while it does not have to be. The conflict of interest is caused due to differences in reality while finding people with similar interests and reality will improve the business. The last way an entrepreneur can fail is through giving in on their values. Everyone likes to see themselves as honest, caring, loyal and fair. %ut when the going gets rough itJs the thief, crook, liar and tyrant in you that can get your attention. %y being able to block them out and face your creditors, investors, co"workers and clients with the right values when things go bad you wonJt risk not getting the opportunity to start another business in the future. (hile these factors are e,plained in an overly simplified way it is a way of e,plaining my shared views with this particular author while the direct answer to this .uestion is my personal thought written as a .uotation. Ho, are %ailed entrepreneurs treatedA Again focusing on the entrepreneur we will find the relevant factors e,plaining how entrepreneurs are treated and the reasons why some are treated differently than others. .s( "our 'reditors: The bankersJ and investorsJ opinions about the entrepreneur will be dependent on how they were treated when the business failed. &f the e,it strategy was bankruptcy there is a great chance that the entrepreneur will have to find new creditors

for a new business venture. Then again, if the small business was terminated to prevent further losses, and debts are ultimately paid these people will love you and want to hear your ne,t business plan and idea. .s( "our su+ordinates?'oB,or(ers: (hile founding a small business with the goal of selling it with a profit might be an acceptable solution for the entrepreneur, the employees of the company might not see eye to eye. !ince selling or restructuring a business might cost some employeeJs their 0obs it doesnJt matter how fancy the farewell party is. And those who do get to keep their 0obs might have good or bad opinions about getting a new bossLbusiness owner. .s( "our 'lients: The clientsJ perspective on the entrepreneur goes through the product it provides. The greater the need and benefits the product fills, the more supportive the clients who used it are towards the entrepreneur wanting to start fresh. 'n the contrary the product can be unhealthy, addictive or in another way unapproved by the society sharing no respect towards the person enabling its distribution. .s( "our %riends and %a*il": (hen it comes to those who are nearest and dearest the opinion will be based on their reality. &f the ma0ority thinks entrepreneurship is risky and hard work heLshe risks following their advice. &f the ma0ority thinks working all your life to make others rich is risky then this can be the entrepreneurJs reality. Wh" Do So Man" Ne, !usinesses #ailA /< Poor E;e'ution When "ouCre the +oss) the onl" pla'e "ou should point %ingers is at the *irror<
Crisp e,ecutionOrather than a clever ideaO is vital to the success of new businesses. &t stands to reason, therefore, that poor e,ecution is the downfall of most startups that go bust. There are several ways you can avoid e,ecution failure. Dirst, you should conduct an honest evaluation of your skills and only pursue opportunities that are aligned with your strengths. Entrepreneurs who are blinded by greed or arrogance are more prone to getting in over their heads. &tAs also wise to surround yourself with talented people who arenAt afraid to speak up when youAre headed off a cliff. Companies with inept leadership usually fail in the first year or two, but even established companies can stumble badly when they outgrow the capabilities of the founding team. %ill ates led 1icrosoft from inception to its current position as one of the largest and most successful companies in history, but this is seldom the case. As a founder, you need the

discipline to know when to hand over the reigns to a professional manager who can take your business to the ne,t level.

2< No Via+le Mar(et What i% ,e laun'hed a +usiness and no+od" sho,ed upA
Each day, entrepreneurs from the 9build it and they will come9 school of business invest their money in a cool idea with the hopes that customers will magically appear once they open the doors. All too fre.uently, these hopes turn out to be in vain. Fistory is replete with ventures that crashed and burned because the founders spent all of their time and money developing a product without bothering to consider how to attract customers. Even worse, many did not really understand what customers valued and were willing to pay for. &tAs imperative to research and validate the market before you launch your business. Talk to prospective customers and find out what they really need. Chances are, you will end up with a much more compelling offering than what you initially dreamed up on your own. <emember, %ind the 'usto*ers %irst, and then look for a solution.

3< Too Mu'h Le$erage 1i$e *e a le$er long enough and I ,ill +an(rupt *" 'o*pan"<
1ature companies can predict revenues over the ne,t few .uarters with some degree of certainty. These businesses can make prudent use of leverage, both financial 8debt3 and operating 8fi,ed overhead costs3, to improve e.uity returns. Fowever, the financial crisis of +::> demonstrated how even the most established companies can become over"leveraged, as %ear !tearns and 1errill Kynch can well attest. <evenues pro0ections for early"stage companies can be all over the map, which means that new ventures have even less margin for error than larger competitors. &n this environment, it can be dangerous to take on more than a modest amount of debt or other fi,ed obligations 8rent, salaries, etc.3. &f revenues take longer to ramp up than e,pectedOas they nearly always doOyou may find yourself handing the keys of your business over to your creditors.

4< Under'apitali9ing the !usiness Ma"+e "ou shouldC$e ,aited to order that red #errari a%ter all<<<
&tAs all too common for entrepreneurs to grossly underestimate the amount of time and capital necessary to reach cash flow breakeven, causing many promising ventures to shut down prematurely. %e conservative with your financial pro0ections and plan on having ad.uate funds when you launch to cover all sunk costs 8including startup losses3 until your company becomes cash flow positive.

&f you donAt have enough savings to cover the re.uired investment, it may be tempting to launch your startup under the assumption that you will be able to obtain funding at a later date. (hile staging investment has its advantages 8preserving the option to abandon, higher valuation andOthereforeOless dilution, etc.3, this strategy can backfire and leave you unable to get the money when you need it most or force you to negotiate with banks and investors from a position of weakness. &tAs often better to change the business model to bring re.uired investment in line with available resources.

5< La'( o% &o*petiti$e .d$antages Ne$er +ring a (ni%e to a gun%ightD

-oes your town really need another dry cleaner, pi##eria, or lawn care service) Entrepreneurs fre.uently start these me"too kind of businesses because of their simplicity and modest capital re.uirements. Fowever, the lack of competitive barriers renders them e,tremely vulnerable to new entrants, who will gladly cut prices to the bone to steal customers. &f you want your startup to thrive, you need something that insulates it from competition. &t could be a great location, a cool brand, proprietary technology, or a cost structure that cannot be easily replicated. 4one of these advantages is likely to be permanent, but they only need to shield you long enough for your company to take root. This will give you time to make investments that create additional barriers.

6<

&o*peting HeadBtoBHead ,ith Industr" Leaders A sure sign of impending failure is an entrepreneur who plans to bootstrap his new business while competing directly against entrenched market leaders. Karge businesses have enormous resources to deter

!etter sharpen those el+o,s<<<

competitors from entering their markets. %ig companies can undercut your prices, outspend you on advertising, and choke off access to suppliers and distributors. & strongly advise against making a frontal assault unless you have a world"class team and very deep pockets. Even then, your chances of success are likely to be disappointing. E< Pi'(ing a Ni'he that is too s*all 1ost small businesses compete successfully against larger rivals by speciali#ing in a niche market. Fowever, you still need to do your homework to be sure that the niche is large enough to support your business and that customers are not too e,pensive to find and serve. Nou may discover that niche markets can be 0ust as fiercely competitive as the mass

DonCt +e a *ar(et o% oneD

market. Nou need to figure out how fast your niche is growing and how much market share you will need to capture. &f your financial pro0ections re.uire you to hold more than a few percent of market share to remain profitable, be careful. -onAt press ahead unless you can convincingly demonstrate to yourself how your competitive advantages will enable you to become the market leader. F< !rea(up o% the #ounding Tea* A startup can be a high"stress environment, especially when you are struggling to turn the corner before the lights go out. At moments like this, disagreements about the direction of the company or the division of profits among the owners can lead to a rift within the founding team. %ecause people wear lots of hats in startups, the sudden departure of a key e,ecutive can doom a fledgling organi#ation. This makes it imperative to structure agreements so that the founders and key hires are treated fairly and that everyoneAs interests are closely aligned with the success of the new venture. G< Poor Pri'ing Strateg" The most common method for setting prices is to start at the unit cost and then mark up the price to achieve a profit, so"called 9cost"plus9 pricing. Unfortunately, cost has little to do with how a product or service is valued by customers, which can lead to systematic under pricing. Even worse, cost"based pricing can lead to prices that are greater than what the market will bear. %ecause unit cost is related to sales volume, high prices lead to fewer sales, which in turn increase unit cost, leading to a further round of price increases. /H< 1ro,ing too %ast rowth is considered the hallmark of business success, but uncontrolled growth canOand doesOkill entrepreneurial companies for two primary reasons. The first is that businesses need systems and infrastructure to scale properly, but few invest the time and effort to lay the foundations for growth in those first hectic years. ThatAs too bad, because things tend to spin out of control when you put the pedal down. This can be especially problematic for companies that receive a large infusion of outside capital. &tAs the

!rea(ing up is hard on "ou BB and "our 'o*pan"<

The pri'e is rightA

What goes upA

e.uivalent of trying to break the land speed record by strapping a 0et engine onto a soap bo, racer. -onAt be surprised when the wheels come off. The second reason is that top"line growth re.uires additional investments in fi,ed assets 8warehouses, machinery, trucks, etc.3 and working capital 8inventory, accounts receivable, etc.3. At controlled rates of growth, companies are able to finance incremental sales through internal cash flow. Fypergrowth, on the other hand, can suck up large amounts of cash, forcing businesses deep into debt or bringing the whole enterprise to a screeching halt. 1any times, owners are not even aware of the impending collapse, because they focus on profitability 8as depicted on the income statement3 rather than cash flow. 4ever forget that cash is the lifeblood of your businessR

Entrepreneurial Su''ess
Dactors affecting entrepreneurial successB (hat are the critical factors that can make an entrepreneur to become a successful) This is a sub0ect of research and analysis of many professionals and institutions. &t is very possible that we cannot e,pect to have an entrepreneur with all characteristics that make them successful. %ut, the combination of the most important factors can help you to build and manage successful business. /5 Entrepreneurial Su''ess #a'tors

The most critical and most important factors that can make an entrepreneur to become a successful areB Willingness to ta(e a'tion. This is the first and most important factor for each potential and current entrepreneur. All other factors presented below, wonJt have importance if he or she didnJt take a real action. 8no,ledge. They must have superior knowledge about business issues for business that they start. &reati$it". They must have creativity to be uni.ue and continuously improves business. S(ills. Each entrepreneur and each business need different entrepreneurial skills that in some cases can be crucial for business success. Intelligen'e. They must be intelligent to manage all possible situations and to solve the hardest problems that will be a constant in business life. Patien'e. They must be patient and to continue after losing the first battle, because the war is not finished. &tJs only the beginning.

Persisten'e. $ersistence simply is a refusal to give up from something, or ability to keep your actions against your personal feelings that youJre not ready for such actions. Deelings and motivation didnJt produce results, but the action is something that will produce it. Tea*,or(. 4obody can achieve anything alone so this is true also for an entrepreneur because theyJre not a 6!uperman7. They must be team players for their and business success. &al'ulated ris(. This is truly one of the most important .uestionsB did they take the risk) Nes, each business startup is in some level risky. Fowever, more important is how a successful entrepreneur takes a risk) The word 'al'ulated ris( is the most appropriate word for this feature. Sel%B&on%iden'e. !elf"confidence is a really important and key factor. & think that nobody would be an entrepreneur if donJt have self"confidence that he knows how to start and manage their own business. E;perien'e. !ometimes e,perience is in category not must have as a factor, but it is something that will increase business potential energy. They must employ all present and previous e,perience they had into the business. Talent. Talent is something inborn in an entrepreneur. !ometimes talent can be replaced with knowledge. Honest". Fonesty is important in every case, but sometimes honesty, being real can be the biggest enemy of an entrepreneur in some comple, conditions. &onne'tions. 1ore connection the more possibilities for building a successful business. Lu'(. Kuck is a psychological factor. !ome people can say that they donJt have a luck. And indeed there are some 6lucky people7 who 0ust accidentally found the right place at the right time. Fowever, it is a small percentage and cannot be included as a serious factor for success. Wh" The Nu*+er One is *ost I*portant #a'torA Dirst, all the factors listed without a willingness to take action represents a potential of an entrepreneur. Actually, this is the business potential energy stored in them that can and should be converted into kinetic energy, which will perform the 0ob. What ,ould +e the Pro%ile o% a Su''ess%ul EntrepreneurA $rofile of an Entrepreneur G <eady to take a'tions build upon a (no,ledge and 'reati$it" while combining the s(ills and intelligen'e, and is patient and persistent, have the ability to ,or( in

tea*s, ta(e ris(s, but not insane risk and have sel%B'on%iden'e and e;perien'e, while itJs honest, sometimes they are lu'(", and they have great 'onne'tions that can help doing business. Anyway, all factors or characteristics are important because theyJll increase business potential energy of entrepreneurs, and thus the overall business potential energy.

En$iron*ental d"na*i's and 'hange:

&reating an Entrepreneurial En$iron*ent What We Learned (hen economic developers talk about a positive environment for economic development, they are often talking about the business climate in the traditional sense G are there sites in the industrial park, is the community 6business friendly,7 are there roads and sewers for new factories) (hen we talk about an entrepreneurial environment, weJre talking about much more. There are three components of this environment that entrepreneurs need to addressB &ulture G Awareness of the importance of entrepreneurs to the local economy, celebration of the value that entrepreneurs bring, openness to entrepreneurs who often march to the beat of a different drummer, acceptance that failure is part of the entrepreneurial process and a willingness to encourage and support entrepreneurs when their first 8or even second3 venture doesnJt pan out In%rastru'ture G 1oving beyond the typical notion of infrastructure to include traditional and non"traditional leadership, educational institutions like community colleges and regional universities, cultural and recreational resources, .uality schools, social organi#ations that are diverse and emphasi#e creativity Entrepreneurial support ele*ents G !pecific programs and initiatives designed to provide a range of support to entrepreneurs of all types when and how they need it, including service providers like the Chamber and !mall %usiness -evelopment Centers, networking organi#ations and opportunities, financing programs, business incubation services, mentoring and coaching, and youth entrepreneurship education in and outside the schools. Understanding the components of an entrepreneurial environment is 0ust the first step in helping your community become more entrepreneurial. Nou also have to consider your readiness for entrepreneurship. As part of the Energi#ing Entrepreneurship institute, we e,plored a Readiness .ssess*ent tool that provides a useful way for you to think about whether your community is ready to embrace entrepreneurship as a development strategy.

This tool identifies six readiness factors to consider: 'penness to entrepreneurship as a development strategy Commitment to balancing business attraction and support for entrepreneurs Availability of entrepreneurship programs and support services (illingness to invest in entrepreneurship development strategies A leadership team committed to entrepreneurship (illingness to work beyond town borders to tap resources and achieve success

Entrepreneurial Pro'ess:
Entrepreneurial process can be defined as a process of starting new venture. &t involves all the functions, activities and actions associated with perceiving opportunities and enabling organi#ations to follow them.

Identi%"ing and e$aluating opportunities

&reating !usiness Plan

&reating !usiness Plan

Managing Enterprise

=.0

Identi%"ing and e$aluating opportunities

&dentifying and evaluating opportunities is a very time consuming. &dentification of opportunities is done by keeping in mind the fact that it should fit the personal skills and goals of entrepreneurs. %efore identifying any efficient business opportunity, entrepreneurs need to consider the followingB 1ust collect the information about the resource base, where heLshe is going to start a new business such as agriculture, forest and mines. 1ust collect the information on opportunity identification, which means the sources from where he can ac.uire funds for starting a new business. 1ust take the help of e,isting entrepreneurs in order to discuss the potential business opportunities. 1ust take a thorough study of the organi#ation, which are not performing well. 1ust collect information on the availability of infrastructure such as power, water and transport.

Today, there are no formal mechanisms that can be used for identifying and evaluating opportunities. &n order to get information related to opportunities, entrepreneurs basically depend upon following sourcesB 1embers of distribution system Consumer and business associates Technical people and e,perts After identifying the opportunities, it is the responsibility of the entrepreneurs to evaluate the opportunities. Evaluation of opportunities is a very comple, ta, and it allows entrepreneurs to assess, whether the specific product or service can satisfy the e,pectations of both entrepreneurs and consumers. Evaluation of opportunities includesB Assessing the length of opportunities <eal value of opportunities and perceived value of opportunities. -etermining the risks, rewards and advantages of the opportunity in the competitive environment. " <isks and rewards can be determined on the basis of market si#e and time period available for creating a new venture. 'pportunity assessment plan is also a very useful method that can be used for the evaluation of opportunities. Evaluation of opportunities helps in making decisions whether to act on an opportunity or not.

" "

'pportunity assessment plan includes the following aspectsB $roduct description Assessment of opportunity -escription of all physical resources re.uired for starting a new venture !ources of financial capital

=!0

&reating a !usiness Plan

%usiness can be described as a written document prepared by an entrepreneur to specify the details about internal and e,ternal elements re.uired for setting up a new venture. %usiness plan can be considered as a combination of different type of functional plans such asB Produ'tion Plan: &t specifies the details related to the production of services or goods. Creating a production plan is a pre production activity and it is an integral part of the overall business plan. &t is based on the forecasts made in terms .uantity and .uality re.uirements of the product. Organi9ational Plan: &t is a list activity that every individual of the organi#ation has to perform. &t contains the list of the work programs over the

period of si, months, a year or five years. &t helps the organi#ation in getting a clear view of the type of work that is to be performed. Mar(eting Plan: &t involves the task of creating plans for the marketing of new products, which an organi#ation decides to manufacture. This plan provides a method for distributing, promoting and pricing a product or service in the market. Operations Plans: All business units include operation plan as an integral part of business plan. &t is very useful in describing the flow of goods or services from the manufacturer to consumer. &t can also be used by retailers, whole sellers and service providers to provide a se.uence of steps re.uired for the e,ecution of a specific business transaction. #inan'ial Plan: &t is also an important part of the business plan. This plan helps to identify and evaluate different type of potential investments opportunities and commitment re.uired for setting up a new venture. &t can also be used to clarify, whether the business plan is feasible or not. Ris( .ssess*ent: <isk assessment is done to identify risks and alternative arrangements that can be used to meet the goals and ob0ectives of a business unit. &n the first step of risk assessment, the entrepreneur should identify the risks, which are associated with the set up of business venture. After identifying the risks, the entrepreneur should determine the ill affects of risks. After that entrepreneur should try to identify or develop a strategy that can be used for preventing and minimi#ing the scope of the risk. Venture Des'ription: -escription of a venture provides the details about the product, services and operations of a newly set up venture. -escription of venture is very useful for investors, since it provides the si#e and scope of business venture. Industrial and En$iron*ent .nal"sis: &ndustrial P environmental analysis involves identifying and evaluating e,ternal factors that could impact the business plan. &t is very useful for identifying trends and changes occurring in the national and international economies. Following are the examples of external environmental factors: " Culture " Economy " Technology " Kegal Concerns =&0 Identi%"ing Resour'es

The third step in the process is the identification of resources. These resources may be financial resources or physical resources such as raw materials. The identification of resources starts with the appraisal of an entrepreneurJs present resources. (hile identifying resources, entrepreneurs must take sure of the amount and variety of resources re.uired. Entrepreneurs must also evaluate the risk associated with inappropriate resources. <esources re.uired by a growing enterprise can be classified in to the following two categoriesB Tangi+le Resour'es: Tangible resources are those resources, which can be .uantified and are visible. Tangible resources include financial resources, organi#ational resources, physical resources and technological resources.

Intangi+le Resour'es: &ntangible resources are those resources, which are partially visible such as human resources, innovation resources and reputation resources.

The management of available resources is also essential for a growing enterprise. 1anagement of resources involves identification, allocation and relocation of resources in order to perform a specific task. <esources not only include raw materials or e.uipments but also the employees working in the organi#ation and the place where it is located. The resources of an enterprise can ultimately lead to a strategic advantage for it if they possess four characteristics, that is, if these resources are available, rare, costly to imitate and non"substitutable. =D0 Managing an Enterprise: This is the last step of the entrepreneurial process. After identifying resources, it is the responsibility of the entrepreneur to implement them in an efficient manner. This phase also involves identifying and managing operational problems of the enterprise. &n order to deal with the potential operational problems, most

of the entrepreneurs implement the process of establishing a control system in their

enterprise. Control system allows the entrepreneurs to identify problems areas very .uickly. Control system also provides a mechanism for resolving these problem areas.