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    Module 1

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    MANSI MAHESHWARI

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    Module 1

    Uploaded by

    MANSI MAHESHWARI
    16 views14 pages

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    MODULE 1

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    © © All Rights Reserved

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    16 views14 pages

    Module 1

    Uploaded by

    MANSI MAHESHWARI

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    of 14

    ENTREPRENEURIAL RESOURCE

    MANAGEMENT (ENTR 312)


    MANSI TAPARIA
    Entrepreneurship

     Entrepreneurship is defined as the process of creating something different with


    value by devoting the necessary time and effort, assuming the accompanying
    financial, psychic and social risks and receiving the resulting rewards of monetary
    and personal satisfaction and independence.

     In simple terms, entrepreneurship is act of creating a business or businesses while


    bearing all the risks with the hope of making a profit.
    Entrepreneurial Competencies
     The characteristics possessed by an entrepreneur which results in superior
    performance are called as entrepreneurial competencies.

     Different entrepreneurial competencies are:


    - Initiative
    - Self-Confident
    - Persistence
    - Opportunistic
    - Information Seeker
    - Assertive
    - Persuasive
    - Goal Oriented
    - Concern for Employees
    Factors Affecting Entrepreneurial Growth

     Economic factors
    These factors provide a conducive economic environment and economic security for
    the enterprise to flourish.
    - Labor
    - Raw Material (Availability of affordable and good quality raw material)
    - Market (Product/service should be able to serve some purpose or solve a
    problem of the customers)

     Non-Economic Factors
    - Social Factors (entrepreneurial venture should be legitimate as per social norms)
    - Psychological Factors (Need for achievement, discontent with present situation)
    - Political Factors (Government support for entrepreneurs)
    Role and Importance of Entrepreneurship in
    Development of Economy
     Promotes Capital Formation : Entrepreneurs employ their own as well as borrowed
    money for doing business. Thus, it leads to value addition and creation of wealth

     Creates Large Scale Employment Opportunities: Entrepreneurs create jobs by


    providing employment to many people in their ventures.

     Promotes Balanced Regional Development: Entrepreneurs can help to promote


    balanced regional development through setting up of industries in backward areas
    which in turn leads to development of roads, healthcare, education facilities etc.

     Reduces concentration of economic power: Entrepreneurship helps to reduce


    concentration of wealth in the hands of few persons.
    Role and Importance of Entrepreneurship in Development of
    Economy

     Wealth Creation and Distribution: Entrepreneurship results in equitable distribution


    of wealth to different people and in different geographical areas.

     Increasing Gross National Product and Per Capita Income: Entrepreneurs exploit
    new opportunities, encourages effective resource mobilization of skill and capital,
    brings in new products and services and thus develops markets for growth of
    economy. It thus helps in increasing per capita income of people of the country.

     Improvement in Standard of Living: Through improvement in per capita income,


    entrepreneurship helps to raise standard of living of people.

     Promotes Country’s Export Trade: Entrepreneurs help in improving exports of the


    country and thus help in improving foreign exchange income of the country.
    Barriers to Entrepreneurship Development

     Finances: Entrepreneurship require availability of large amount of funds. Taking


    loans involve high interest rates which increase the expenses of the firm.

     Fear of Failure: A newly set up enterprise involves high risk of failure which can be
    due to many factors like lack of product-market fit, too many competitors etc.

     Corruption: Corruption is a huge barrier in entrepreneurship development. If young


    minds do not get a conducive environment (such as if there is no transparency in
    the process of getting necessary approvals) for setting up a new venture, then
    entrepreneurs are demotivated

     Stringent Rules and Regulations: Setting up a new enterprise involves considerable


    legal formalities like firm registration, taking product specific approval,
    determination of appropriate tax regimes.
    Identifying Opportunities For New Venture
     Business ideas are thoughts that when implemented can lead to income generation.

     Coming up with a new and feasible idea is a crucial first step for setting up an
    entrepreneurial venture.

     Sources of Business Ideas

     need recognition for customers (can be done through informal monitoring of customer
    needs or having a formal customer interaction);
     improvements in existing products and services (bodywash, handwash, shower gel);
     members of distribution networks as they are in close contact with end customers;
     government agencies (different rules and regulations stimulate development of new
    products; repositories of patents filed by people can stimulate thinking)
    Identifying Opportunities For New Venture

     competitors’ products and services


     trends (green trend; organic trend; health trend)
     trade journals and business magazines;
     trade fairs and exhibitions;
     own research and development;
     hobbies and interests (Aashka Goradia- Renee Cosmetics)
    Methods of Generating Ideas
     Even with a wide variety of available sources, coming up with a feasible business idea
    requires extra efforts.

     Several techniques re there to generate an idea:

    - Focus Groups: Moderator leads a group of people through an open in-depth discussion.

    -Brainstorming: Brainstorming stimulates people’s creativity through participation in group


    meetings where group members are allowed to freely express their ideas without any
    criticism.

    -Brainwriting: Written form of brainstorming where there is a written generation of ideas by


    group of people.

    - Problem Inventory Analysis: Two step procedure. First step involves providing a list of
    problems in general product category. Second step involves identifying products in that
    category that have these problems. This in turn helps in providing ideas for developing a
    product.
    Scanning and Screening Business Ideas
     Idea screening is a process used to evaluate innovative product ideas.

     The purpose of screening is to reduce number of ideas generated to some


    profitable business ideas.

     Ideas may be screened on the basis of following eight criteria:


    - Attractiveness of idea : should be of interest of entrepreneur and should be
    attractive for the market
    - Ability to undertake: Availability of necessary skills
    - Practicality: Is the idea really something that can be done
    - Potential Market Demand
    - Ability to Combat Competition
    - Ability to Differentiate
    - Price Potential: Competition should not only be based on price
    - Resource Availability
    Generation and Exploitation of New Entry
    Opportunity
     An entrepreneur’s resources (such as workforce) and knowledge about market and
    technology creates basis for entry into a new market.

     Having the market knowledge, technological knowledge and other resources creates an
    opportunity for new entry. However, the entrepreneur needs to assess if these bundle of
    resources are worthy of exploitation.

     Entrepreneurs’ decision for exploiting new entry opportunities depends on two factors:

    - information on a new entry (prior knowledge and information search; window of


    opportunity.

    - entrepreneur’s preference for an error of omission or error of commission. This


    means if the entrepreneur prefers to commit an error of commission then he will prefer
    exploiting the opportunity. If entrepreneur prefers error of omission, then he will prefer not
    exploiting the opportunity.
    Steps Involved in Setting up a New
    Venture/Business
     Identification of business opportunity – Already covered

     Generation of business idea- Already covered

     Feasibility Study- to evaluate proposed business idea to determine if the idea can
    really be translated to a successful business. It includes market feasibility, technical
    feasibility, financial feasibility and socio-economic feasibility.

     Preparation of Business Plan- It is a blueprint of how you will do your business and
    describes the nature of business, sales and marketing strategy, financial background
    a projected profit and loss statement.

     Launching the Enterprise


    Legal Formalities For Setting up a New Enterprise
     Name Availability

     Business Entity Registration: sole proprietorship, OPC, partnership firm, LLP, private company,
    public company.

     Founder’s Agreement: a document that contains vital information about a venture’s business
    participants.

     Legal Licenses and Permits


    - General Licenses and Registrations: GST registration, PAN, Bank Account, Shop and
    Establishment Act License (for commercial and physical premises).
    - Specialized Licenses and Registrations: IEC (Import-Export License, FSSAI License, Halal
    Certification,
    - Adherence to Labor Laws
    - Intellectual Property Registration and Protection
    - Non-Disclosure Agreements to prevent leakage of sensitive information

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