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16th CenturyAppeared in French Language.Referred as- who organized & lead Military expedition.
17 CenturyUsed to refer the economic activity.
18th CenturyRichard Cantillon described as someone who undertakes a
business venture with no guarantee of profits.
19th Century
Entrepreneurship: Century which include actions and specialskills were required for entrepreneurs.
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Person who make a significant difference
Creative & InnovativeSpot & Exploit opportunities.
Find resources & competencies required to exploit
opportunities
Good Team builders & Networker.
Determined in the face of adversity & competition
Manage change & risk
An Entrepreneur is a person who organizes and manages abusiness undertaking, assuming the risk for the sake of profit.
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Creativity
Problem solving skills
Decision taking ability
Selling & Marketing their ideas
Find resources required to exploit
opportunities
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COMMON ELEMENTS OF ENTREPRENEURSHIP
Creativity and Innovation
Resource Gathering & the founding of an economic
organization
Chance for gain under risk & uncertainty
ENTREPRENEURSHIP
Creation of an innovative economic organisation for thepurpose of gain or growth under conditions of risk anduncertainty
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Entrepreneur Entrepreneurship Enterprise
Person Process of Action Object
Entrepreneurship is the process of creating value by pullingtogether a unique package of resources to exploit anopportunity"
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CreativityGetting Ideas
InnovationImplementing
Ideas
EntrepreneurshipHuman & Organizational
Processes
By
Distinction between Creativity, Innovation &
Entrepreneurship
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IDENTIFY THE ENTREPRENEUR
State their:
Business & Qualities
(apart from Leadership)
Think out of box
Keeping in mind, the concept of
Entrepreneurship
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Subhash Chandra's
Dhirubhai AmbaniK.P. SinghSubroto Roy
Kiran Mazumdar Shaw
Sabeer bhatia Mukesh Ambani
Shahnaz Hussain
Sarath Babu
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ENTREPRENEUR CHARACTERISTICS
Drive
Leader
Competitive
Innovative skills
Vision
Motivation
Self-confidence
Results orientated
Risk taker
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Capacity and willingness to assume risk
Willingness to hard work
Vision and foresightedness
Creative and imaginative thinking
Innovative and willingness to change
ENTREPRENEUR FEATURES
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66% of66% of entrepreneursentrepreneurs claim they were inspiredclaim they were inspiredby innate (intrinsic)by innate (intrinsic) desire,desire,
notnot educationeducation oror trainingtraining
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20-35- The agegroup showing thehighest rate of
entrepreneurialactivity.
Surprisingly,36-64 age group haslower rate
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39 average age of U.S. born entrepreneurs whenthey founded their companies
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50% of50% of allall U.S.U.S. businessesbusinesses areare home basedhome based
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8% of8% of AmericanAmerican entrepreneurs added employeesentrepreneurs added employees
overover the pastthe past yearyear
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8%
of home businesses haverevenues of $500,000or more
35%have revenues of $125,000or more
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TYPES OF ENTREPRENEUR
INNOVATIVEEntrepreneur
ADOPTIVEEntrepreneur
FABIANEntrepreneur
DRONEEntrepreneur
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INNOVATIVE ENTREPRENEUR
Sense the opportunities for
Introduction of New Ideas,
New Technology of production
Opening of New Markets.
Launches new products,discovers new markets,establishes new methodsof production andrestructures the enterprise.
Can work only whendefinite level of progresshas been previously
accomplished.
They focus on revolutionand development.
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ADOPTIVE ENTREPRENEUR
Instead of Innovating, Imitate
Technology
Methods innovated by others
Imitate the existing entrepreneur & setup their enterprise inthe same manner
Adopt victorious innovations launched by theinnovative entrepreneurs.
Duplicate the technology and techniques innovatedby others.
Suitable for underdeveloped countries.
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FABIAN ENTREPRENEUR
Adopt new technology when-
Realize that failure to adopt will lead to loss or collapse of
the enterprise
Always cautious. They neither introduce new changes noradopt new methods invented by others. They are lazy. Theyfollow old customs, old method of production, techniques.
They are not adaptable to the changing environment
Show by great caution and disbelief inexperimenting any change in the organization.
They imitate only in situations where it becomesnecessary to do so.
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DRONE ENTREPRENEUR
Refuse to adopt changes-
They are laggards.
Continue to operate in their tradition way & resist changes.
They are Conservative or Orthodox in outlook.who never allow any change in their production & style offunctioning. They never explore anything. They are alsocalled Laggards. They are pushed out of market whenproduct loses its marketability
Drone Entrepreneurs suffer losses, as they refuse tomake any modifications in the existing productionmethods.
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Mid-80s, Gifford Pinchot coined the term "Intrapreneur" todescribe employees of large corporations hired to think and
act as entrepreneurs.
Intrapreneurs, by definition, symbolizes the samecharacteristics as the ENTREPRENEUR.
These characteristics might include conviction, passion,
and drive. If the company is supportive, the Intrapreneursucceeds.
Intrapreneur should ask for permission before attempting
to create a desired future in practice
INTRAPRENEUR
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Intrapreneur works overtime helping to run someone else's
business, for the company's future.
Person within a large corporation who takes direct
responsibility for turning an idea into a profitable finished
product
Anyone who behaves with entrepreneurial spirit within a
large organization
INTRAPRENEUR
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Intrapreneurship refers to employee initiatives in
organizations to undertake something new, without being
asked to do so.Intrapreneurship involves using entrepreneurial behaviour
within an organisation and a different but overlapping skills
set is required
INTRAPRENEURSHIP
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.
COMPANYENTREPRENEU
RINTRAPRENEUR
IDEA Mr. KumarMangalam Birla
Mr. Sanjeev Aga
STARTV Mr. Richard Li Mr. Peter Mukherjea
Star
Entertainment under Sameer Nair as the CEO
TATARatan Naval Tata
Chairman
R Gopalakrishnan,Ishaat Hussain,
Kishor Chaukar &Arunkumar Gandhi
VODAFONE John Bond
Vittorio Colao (CEO)John Buchanan
(Deputy Chairman)Andy Halford
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ENTREPRENEUR
Person Organizer Risk Taker
Innovator Good Planner Leader Decision-Maker Visualizer Administrator Initiator
ENTREPRENEURSHIP
Process Organized form of Initiative Risk-taking activity
Process of Innovation Planning for successful
performance Crux of Leadership Decision making activity
Vision Administration Taking Initiative
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ENTREPRENEUR INTRAPRENEUR
Entrepreneur is employer Intrapreneur is employee
Independent in operation Depends on the organization toimplement his ideas
Bears all the risk involved inEnterprise
Does not bear all the risk
Exhibits higher need forachievement.
May not have high needachievement
Profit is the rewardAttractive salary, promotion &incentives are the reward
May not have formalqualification
Should have some professionalor technical qualification.
Do not have any boundary for
operations.
He has to operate within the
organisational policies
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ENTREPRENUERS & ECONOMIC DEVELOPMENT
OPTIMUM UTILISATION OF RESOURCES
GENERATION OF EMPLOYMENT
IMPROVEMENT IN STANDARD OF LIVING OF PEOPLE
NEW/ IMPROVED GOODS & SERVICES
HELP AGRI SECTOR
PROMOTE INTERNATIONAL TRADE
HELP COMMUNITY AT LARGE
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The Tata Group has donated a Rs 220 crores ($50
million) to the prestigious Harvard Business
School (HBS) to build an academic and a residential
building on the institutes campus in Boston.
New building will be called the Tata Hall and used
for the institutes executive education programmes.
Amount is the largest from an international donor in
Harvards 102-year-old existence.
Employees 396,517 (2009-10)
EXAMPLE
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ENTREPRENEURIAL CULTURE
Entrepreneurial culture implies a set of
VALUES (Principles, ethics, ideals, morals),
NORMS (Standard, rule)TRAITS (Character, personality, behavior, individuality,
persona, qualities)
that are conducive to the growth of entrepreneurship.
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Entrepreneurs often start their business because they wantto do things in their own way, and creating theentrepreneurial culture is their opportunity to see thateveryone does it their own way.
The entrepreneurs communicate what they believe isimportant for the organization to be doing.
This communication can be face to face, or can take place
in meetings, employee news letters, or in other writtenforms.
ENTREPRENEURIAL CULTURE
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Entrepreneurial culture is different from the culture of
traditional large organizations.
It is future oriented and emphasizes new ideas, creativity, risk
taking, and opportunity identification.
People feel empowered to manage their own jobs and time.
Everyone can make a contribution to the firms success, and
the common worker is a hero.
Communication is frequently horizontal and bottom up- while
the worker servers the customer , the manager servers the
worker.
ENTREPRENEURIAL CULTURE
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Dimension Traditional Org Entrepreneurial Org
Strategy Conservative Evolving, Futuristic
Productivity
Short-term Focus,Profitability
Short & long term,
Multiple Criteria
Risk PunishedEmphasize &Rewarded
Opportunity Absent Integral
Leadership Top-DownCulture ofempowerment
Power Hoarded Given away
Failure Costly Taken as a Lesson
Decision Making Centralized Decentralized
Structured Hierarchical Organic
Creativity Tolerated Prized & Worshiped
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Create jobs through the formation of new business ventures.
Utilize available manpower and resources that might have
remain idle and put them into productive use.
Create wealth, independence and status.
Stimulates growth in sectors with increase in D & S.
Increases productivity by means of innovation.
Facilitate and increase the need for technology.
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An entrepreneurial team consists of two or more personswho have an interest, both financial and otherwise, in andcommitment to the ventures future and success; whose workis interdependent in the pursuit of common goals and venturesuccess; who are accountable to the entrepreneurial team
and for the venture; who are considered to be at theexecutive level with executive responsibility in the earlyphases of the venture, including funding and pre-start up.
ENTREPRENEURIAL TEAM
Entrepreneurial team - A group of experienced people from
different areas of business who join to form a managerialteam with the skills to develop, make and market a newproduct.
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It means a group of people working together to pursue acommon goal. They have a stake in the venture. Theywant it to be successful and share its success as wellas failure.
The choice of organizational structure, legal form ofbusiness and entrepreneurial team depends on verycomplex conditions
These conditions are separated into two parts:
one related to human aspect and the other is legalorganizational form
ENTREPRENEURIAL TEAM
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A solid team attracts venture capital
Team can mitigate the pressures
To take the venture beyond founders abilities
Their skills can complement and give edge to the venture
Why team is important?
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Identify the requirement of your venture
Search for skilled human resource
Chalk out their responsibilities clearly
Make them aware of the goal they have to accomplish
Instill the sense of belongingness and team mentality
Identify and maintain an awareness of environmental
influences, demands and changes
HOW TO FORM A TEAM?
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ET DEPENDS ON 4 COGNITIVE STYLES
Initiation Style- Concerned with possibilities, pattern & ideas
Feeling Style- Focused on people & values.
Thinking Style- Interest in cause & affect relationship
Sensation- Concerned with activities.
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Entrepreneur is one who perceives the opportunities toinnovate, i.e. to carry out new combinations or enterprise.In his views, the concept of new combination leading toinnovation covers the following 5 cases
The introduction of new goods, that is the one with whichconsumers are not yet familiar, of a new quality.
Introduction of new method of productionOpening of new market
Conquest of new source of supply of raw materialCarrying out of new organization
ECONOMIC THEORY
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Entrepreneurship is likely to get a boost in a particular
social culture
Society's values, religious beliefs, customs, influence the
behaviour of individuals in a society
Entrepreneur is a role performer according to the role
expectation by the society
SOCIOLOGICAL THEORY
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Entrepreneurship gets a boost when society has sufficientsupply of individuals with necessary psychologicalcharacteristics
Psychological characteristics include need for highachievement, a vision or foresight, ability to face opposition
Characteristics are formed during the individuals
upbringing which stress on standards of excellence, selfreliance and low father dominance
PSYCHOLOGICAL THEORY
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MOTIVATION THEORY
Motivation theory by McClelland (Acquired Needs theory)
According to McClelland, a person has three types of needsat any given time, which are:
Need for achievement (get success with ones own efforts)Need for power (to dominate, influence others)Need for affiliation (maintain friendly relations with others)
Need for achievement is the highest for entrepreneurs
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EntrepreneurshipEntrepreneurship
Advantages
You areyour own
boss
Enjoy theprofits
from youefforts
Sense ofpride in
yourbusiness
Flexibilityin your
workschedule
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EntrepreneurshipEntrepreneurship
Some Disadvantages
Will need toput in long
hours
Needmoney to
start
Have tokeep up
withgovernment
rules andregulations
May have tomark harddecisions(hiring,
firing, etc.)
May losemoney
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Project is a temporary endeavor undertaken toproduce a unique product or service
Temporary Unique
PROJECT
Temporary Definitive beginning and end
Unique New undertaking, unfamiliar ground
CHARACTERISTICS
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Project management is the discipline of planning,organizing and managing resources to bring about thesuccessful completion of specific project goals andobjectives.
Project Management is the application of skills,knowledge, tools and techniques to meet the needs andexpectations for a project.
The purpose of project management is prediction andprevention, NOT recognition and reaction
PROJECT MANAGEMENT
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To ensure projects are delivered on time.
To ensure projects are delivered within schedule
commitment.
Continuous improvement in project process.
Implement project communication & Deliver Quality
solutions.
Reduced error.
Improve Effectiveness.
Appropriate Risk Management and Internal controls.
OBJECTIVE OF PROJECT MANAGEMENT
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SCOPESCOPE
TIMETIME
COSTCOST
TRIPLECONTRAINT
QUALITY
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INTERNAL FACTORS
Cost
Experience
Financial strength
Functional departments
EXTERNAL FACTORS
Demand of consumers
Competition
Suppliers
HOW TO CHOOSE A PROJECT
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Aim to objectively and rationally uncover the
STRENGTHS
WEAKNESSES
THREATS
FEASIBILITY STUDY
TWO criteria to judge feasibility
are cost required and value to be attained
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It provides the knowledge, conviction and specific
operational insights into the viability of a project, in terms of
market, financial, technical and other perspectives.
Provides the basis for developing the concept into a
business plan and subsequent start-up.
Feasibility study document acts as a reference for support
agencies, grant aiding authorities, potential partners,
business associates and lending institutions, as a basis for
generating interest and commitment for the proposed
business
FEASIBILITY STUDY INCLUDES
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TECHNICAL ANALYSIS
Product
Manufacturing Process
Plant size and production schedule
Machinery (major, and auxiliary as transport, materials)
Plant location
Plant Layout
StructuresRaw Materials
Utilities
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Involving market analysis of market conditions which
affect product, price, promotion, place (distribution) and
packaging.
It also examines market trends relative to past, present,
and future supply and demand issues regarding the
product/service, including a review of industry trends, targetmarkets, competitors, and other industry players.
MARKET ANALYSIS
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Present and expected marketing practices of competitors,
Proposed marketing program (4Ps) for the project,
Explanation for any material deviations, covering
a. Terms of sale (cash, 30 days, etc)
b. Channels of distribution, regional location of sales
outlets, and transportation and warehousing
c. Promotions
d. Packaging
MARKETING ANALYSIS
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FINANCIAL ANALYSIS
With emphasis placed on the provision of financial
statements, so that the project can be evaluated in terms
of various of commercial profitability and the magnitude of
finance required
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1. Sources of financing for the project
a. Sources selected, for both long term and short-termfinancing
b. Alternative sources considered and factors used in
determining the selected sources2. Amount and terms of financing for each sourceselected
a. Type of financing (capital stock, loan, etc)b. Currency of financing
c. Amountd. Security (as guarantee)e. Repayment periodf. Interest or dividend rate
FINANCIAL ANALYSIS
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3. Status of the financing from each sourcea. Actual releases already made- amounts and datesb. Applications already approved, but correspondingfunds not yet released - assurance of release of funds,and expected date
4. Financing of contingencies and seasonal peaks inworking capitala. Contingencies- provision made for the financing ofcontingencies, as overruns in construction costs or delayin start of normal operations
b. Seasonal peaks in working capital- provisions madefor the financing of seasonal increases in working capital
FINANCIAL ANALYSIS
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Income tax rates
Tarriff rates
Tax exemptions to be enjoyed by the project
Foreign exchange rate
General price levels
FINANCIAL ANALYSIS
Major assumptions used
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FINANCIAL ANALYSIS
Projected Financial Statements consists of
a. Projected income statement
b. Projected cash flow statement
c. Projected balance sheet
a. Break-even point1. Profit break-even point- volume and selling price2. Cash break-even point- volume and selling price3. Debt service sales volume
b. Capital, recovery and earnings.1. Cash pay off period2. Rate of returns