SOURCES OF INFORMATION FOR ENTREPRENEURSHIP DEVELOPMENT

The Library is a primary resource for information. Government agencies have a variety of publications
which may be useful. Some colleges and universities have reference libraries which may have a circulation
section available to the public. Also research institutes and some large corporations have libraries with
sections on specific topics. Libraries are the storehouse of information which may be useful in operating a
small business. Books, periodicals, reports and newspapers may contain information which can be of help in
solving some of the problems in operating a business
2. Internet can be used to carry out research and to find useful information and data. Examples of these
search engines are Google, Bing, Ask etc Also E-mail can be used to communicate with providers of
information who have websites on the internet.

3. Subscribing to Trade Papers and Magazines. Desirable entrepreneurs should have time to read articles
especially in understanding new trends and developments relating to business. It is advisable to keep a file of
pertinent articles for future reference

4. Industrial Data is helpful in comparing a business to other similar businesses. The data is available from
trade associations or government agencies and includes ratios such as; stock turnover, cash discounts
percentage mark-up etc.

5. Membership-Based Organisations can provide services such as conducting research, organizing

education and training programmes, implementing new technology, responding to members questions and
concerns and disseminating information through newsletters, magazines and special reports.

6. Training Programmes can help entrepreneurs to develop formal plans for improving their managerial
skills and ability. Training courses and adult education programmes are designed by many institutions,
agencies and associations. Entrepreneurs should be aware of these personal development possibilities and
take full advantage of them

7. Employees. The people who work for a business can provide answers to specific problems in a business.
For example, entrepreneurs might ask employees for their advice and assistance about stock display or
customer attitudes. Employees are in a good position to give valuable advice providing they know that their
opinions and suggestions are valued.
Also customers can supply very special information about the products and services they buy. Customers
should be asked about their opinions because they are an excellent source of information about the relative
strength and weaknesses of a business operation.

8. Other Business Owners. Most businesses have common problems and owners are generally willing to
discuss their problems with one another. Occasionally, the competitive nature of business may discourage
this frank exchange, but if business are unrelated and do not compete for the same customers, entrepreneurs
may be willing to share ideas concerning solutions to a common problem. In this way, all business owners
can benefit from this interaction and improve their business operations.

trade association,: also known as an industry trade group, business association or sector association, is an
organization founded and funded by businesses that operate in a specific industry. An industry trade association
participates in public relations activities such as advertising, education, political
donations, lobbying and publishing, but its focus is collaboration between companies. Associations may offer
other services, such as producing conferences, networking or charitable events or offering classes or educational
materials. Many associations are non-profit organizations governed by bylaws and directed by officers who are
also members.

Trade journals and magzenes Trade publications (journals and mazaines) can be
defined as publications containing current news, developments and products in a specific industry. Trade
publications focus on practical information for professionals working in the field or industry.
1. Consumers the potential consumer should be the final focal point of ideas for the entrepreneurs. The
attention to inputs from potential consumers can take the form of informally monitoring potential ideas or needs
or formally arranging for consumers to have an opportunity to express their concerns. Care needs to be taken to
ensure that the new idea or the needs represents a large enough market to support a new venture.
2. Existing Companies with the help of an established formal methods potential entrepreneurs and
intrapreneurs can evaluate competitive products & services on the market which may result in new and more
market appealing products and services.
3. Distribution channels members of the distribution channels are familiar with the needs of the market and
hence can prove to be excellent sources of new ideas. Not only do the channel members help in finding out
unmet or partially met demands leading to new products and services, they also help in marketing the offerings
so developed.
4. Government it can be a source of new product ideas in two ways firstly, the patent office files contain
numerous product possibilities that can assist entrepreneurs in obtaining specific product information, and
secondly, response to government regulations can come in the form of new product ideas.
5. Research & development Entrepreneurs own R&D is the largest source of new idea. A formal and wellequipped research and development department enables the entrepreneur to conceive and develop successful new
product ideas.

Nature and Types of Information Required By Entrepreneurs

(a) Marketing Information :
Whoever engages in a business, whoever embarks on entrepreneurial tasks will-knowingly or unknowingly
engage in marketing. We can state that whenever people engaged in business, they also engage in marketing.
Some aspects of marketing have over the years changed dramatically. Selling alone was considered to be the
actual marketing activity.
(b) Technical Information
In developing a business idea there is a need for potential entrepreneur to adopt a carefully moderated and
intelligent technical approach.
Planning is a process that never ends for business. It is extremely important in the early stages of any venture
when the entrepreneur will need technical information to prepare a preliminary business plan. There are different
types of technical information that may be part of any business operation.
(c) Information and Communication Technology (ICT)
Information and communication technology is very important source of information for Entrepreneurship
development as we know that the whole world is now a global village where information about a product/service
can be easily sourced. One can source through the internet and find out the kind of hardware, software for the
kind of business one want to venture into. It may be packages on accounting and production or databases
appropriate for the business.
(d) Technology Is Constantly Changing the Demands of Consumers
Businesses use new technologies to produce new products and services. Entrepreneurs should realize that new
technological developments such as the internet and cell phones increase the exchange of information and may
have an effect on the operations of their business, Entrepreneurs may not be aware of the nature and effects of all
new technologies, yet, they must try to determine technical developments which are likely to have the greatest
impact on their business operations.
(e) Financial Information
Whether a business is small or large, owners and executives-must have financial information relating to the type
of business they want to establish. One of the most often overlooked areas of information for entrepreneurship
development is the financial information. Often regarded as a back-office aspect of the business, the financial
information plays a critical role for decision making. Because decisions are only as good as the information on
which they are based, establishing a reliable data from business: environment must be a priority for all
businesses regardless of size and industry. It is only when you have proper financial information than an
entrepreneur will know the amount of capital require for the kind of business he is going into and ways of
sourcing fat it.
(f) Legal Information
Business is the totality of the economic and commercial life of any nation. Business could be carried on as a
small, medium or large scale enterprise. It could also be carried on as domestic or international business but you
have to know the legal implication on each one of them. This is where the legal information is very important.

Business information comes in general surveys, data, articles, books, references, search-engines, and internal
records that a business can use to guide its planning, operations, and the evaluation of its activities. Such
information also comes from friends, customers, associates, and vendors. Published sources may be daily
newspapers; financial, trade, and association magazines; databases, government statistics, directories, technical
manuals, and much else. In effect, since "information" is defined more by context than by content, business
information is whatever information helps a business know its environment.

PROJECT APPRAISAL
Project appraisal means the assessment of a project. It is critical and analytical evaluation of the project
from different angles. While appraising a project, technical, commercial, economic, ecological, social and
managerial aspects are taken into consideration. Project appraisal is usually done by a financial,
institution which besides making an anlaysis of costs and benefits of a proposed project assesses the
project from the various aspects of an investment proposition before extending finance. Project appraisal
is, therefore, a process whereby a leading financial institution makes an independent and objective
assessment of the various aspects of an investment proposition for arriving at a financial decision and is
aimed at determining the viability of a project and sometimes, also in modifying its scone and content so
as to improve its viability.
A project involves employment of scarce resources. Hence, the
entrepreneur has to appraise various projects before allocating the
scarce resources for a project. First a project has to be appraised
from economic aspects. The economic aspects of appraisal
include production of goods or services, generation of additional
revenue, employment of labour, better rewards for the owners of
capital, etc. A good organisation is required for the
implementation of the project. An entrepreneur usually has three
types of organisation to fall upon: sole trade proprietorship,
partnership and joint stock companies. The type of organisation
suitable for the project has to be setup.
The financial institutions have to take special care with regard to the managerial aspects of the project.
The management should be competent and efficient, otherwise a good project may fail. Technical
appraisal includes the location and site of the project the technology used, technical collaboration if any,
capacity utilization, plant layout, project design etc. The financial appraisal should ensure that the
projects has a sound financial base. Analysis of cost, pricing, availability band utilization of funds,
income and expenditure and fair return on investments are the areas to be covered under financial
appraisal. Commercial/marketing aspects of appraisal are concerned with potential demand for the
product/service, quality of product/service, price, design, marketing channels etc. Ecological and social
aspects of a project have assumed much importance today. The project should be eco- friendly and should
aim at societys well-being. In short, a financial institution requires a detailed evaluation of the feasibility
from the point of view of

Methods of Project Appraisal

1. Economic Analysis:
Under economic analysis, the project aspects highlighted include requirements for raw material, level of capacity
utilization, anticipated sales, anticipated expenses and the probable profits. It is said that a business should have
always a volume of profit clearly in view which will govern other economic variables like sales, purchases,
expenses and alike.
It will have to be calculated how much sales would be necessary to earn the targeted profit. Undoubtedly,
demand for the product will be estimated for anticipating sales volume. Therefore, demand for the product needs
to be carefully spelled out as it is, to a great extent, deciding factor of feasibility of the project concern.
In addition to above, the location of the enterprise decided after considering a gamut of points also needs to be
mentioned in the project. The Government policies in this regard should be taken into consideration. The
Government offers specific incentives and concessions for setting up industries in notified backward areas.
Therefore, it has to be ascertained whether the proposed enterprise comes under this category or not and whether
the Government has already decided any specific location for this kind of enterprise.
2. Financial Analysis:
Finance is one of the most important pre-requisites to establish an enterprise. It is finance only that facilitates an
entrepreneur to bring together the labour of one, machine of another and raw material of yet another to combine
them to produce goods.
In order to adjudge the financial viability of the project, the following aspects need to be carefully
analysed:
1. Assessment of the financial requirements both fixed capital and working capital need to be properly made.
You might be knowing that fixed capital normally called fixed assets are those tangible and material facilities
which purchased once are used again and again. Land and buildings, plants and machinery, and equipments are
the familiar examples of fixed assets/fixed capital. The requirement for fixed assets/capital will vary from
enterprise to enterprise depending upon the type of operation, scale of operation and time when the investment is
made. But, while assessing the fixed capital requirements, all items relating to the asset like the cost of the asset,
architect and engineers fees, electrification and installation charges (which normally come to 10 per cent of the
value of machinery), depreciation, pre-operation expenses of trial runs, etc., should be duly taken into
consideration. Similarly, if any expense is to be incurred in remodeling, repair and additions of buildings should
also be highlighted in the project report.
2. In accounting, working capital means excess of current assets over current liabilities. Generally, 2: 1 is
considered as the optimum current ratio. Current assets refer to those assets which can be converted into cash
within a period of one week. Current liabilities refer to those obligations which can be payable within a period of
one week. In short, working capital is that amount of funds which is needed in day todays business operations.
In other words, it is like circulating money changing from cash to inventories and from inventories to receivables
and again converted into cash.
This circle goes on and on. Thus, working capital serves as a lubricant for any enterprise, be it large or small.
Therefore, the requirements of working capital should be clearly provided for. Inadequacy of working capital
may not only adversely affect the operation of the enterprise but also bring the enterprise to a grinding halt.

The activity level of an enterprise expressed as capacity utilization, needs to be well spelt out in the business plan
or project report. However, the enterprise sometimes fails to achieve the targeted level of capacity due to various
business vicissitudes like unforeseen shortage of raw material, unexpected disruption in power supply, inability
to penetrate the market mechanism, etc.
Then, a question arises to what extent and enterprise should continue its production to meet all its
obligations/liabilities. Break-even analysis (BEP) gives an answer to it. In brief, break-even analysis indicates
the level of production at which there is neither profit nor loss in the enterprise. This level of production is,
accordingly, called break-even level.
3. Market Analysis:
Before the production actually starts, the entrepreneur needs to anticipate the possible market for the product.
He/she has to anticipate who will be the possible customers for his product and where and when his product will
be sold. There is a trite saying in this regard: The manufacturer of an iron nails must know who will buy his
iron nails.
This is because production has no value for the producer unless it is sold. It is said that if the proof of pudding
lies in eating, the proof of all production lies in marketing/ consumptio. In fact, the potential of the market
constitutes the determinant of probable rewards from entrepreneurial career.
Thus, knowing the anticipated market for the product to be produced becomes an important element in every
business plan. The various methods used to anticipate the potential market, what is named in Managerial
Economics as demand forecasting, range from the naive to sophisticated ones.
4. Technical Feasibility:
While making project appraisal, the technical feasibility of the project also needs to be taken into consideration.
In the simplest sense, technical feasibility implies to mean the adequacy of the proposed plant and equipment to
produce the product within the prescribed norms. As regards know-how, it denotes the availability or otherwise
of a fund of knowledge to run the proposed plants and machinery.
It should be ensured whether that know-how is available with the entrepreneur or is to be procured from
elsewhere. In the latter case, arrangement made to procure it should be clearly checked up. If project requires any
collaboration, then, the terms and conditions of the collaboration should also be spelt out comprehensively and
carefully.
In case of foreign technical collaboration, one needs to be aware of the legal provisions in force from time to
time specifying the list of products for which only such collaboration is allowed under specific terms and
conditions. The entrepreneur, therefore, contemplating for foreign collaboration should check these legal
provisions with reference to their projects.
While assessing the technical feasibility of the project, the following inputs covered in the project should
also be taken into consideration:
(i) Availability of land and site.
(ii) Availability of other inputs like water, power, transport, communication facilities.

(iii) Availability of servicing facilities like machine shops, electric repair shop, etc.
(iv) Coping-with anti-pollution law.
(v) Availability of work force as per required skill and arrangements proposed for training-in-plant and outside.
(vi) Availability of required raw material as per quantity and quality.
5. Management Competence:
Management ability or competence plays an important role in making an enterprise a success or otherwise.
Strictly speaking, in the absence of managerial competence, the projects which are otherwise feasible may fail.
On the contrary, even a poor project may become a successful one with good managerial ability. Hence, while
doing project appraisal, the managerial competence or talent of the promoter should be taken into consideration.
Research studies report that most of the enterprises fall sick because of lack of managerial competence or
mismanagement. This is more so in case of small-scale enterprises where the proprietor is all in all, i.e., owner as
well as manager. Due to his one-man show, he may be jack of all but master of none.