Setting business enterprise


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Setting business enterprise

  1. 1. Setting up a Business Enterprise<br />
  2. 2. Entrepreneur<br />Brings enterprise into successful venture<br />Brings new enterprise into existence<br />
  3. 3. Entrepreneur V/S Intrapreneur<br />
  4. 4. Traits of Entrepreneurs<br />Innovation<br />Ability to generate new ideas and search new business opportunities<br />Desire to Achieve<br />Strong desire to achieve something<br />Risk Taking<br />Ability to take moderate risks<br />Energy<br />High level of energy and stamina for hardwork<br />Vision<br />Ability to look beyond the present<br />Organising Skills<br />Ability to mobilise and coordinate resources<br />Responsibility<br />Sense of personal responsibility<br />
  5. 5.
  6. 6. I. Entrepreneurial Decisions in setting up Business Enterprise<br />
  7. 7.
  8. 8. 1. Line of Business<br />Nature & Type of business<br />Type of goods & services produced<br />Industrial, Trading or Service<br />Raw materials, technology, source of supply<br /><ul><li> Expected rate of return
  9. 9. Degree of risk
  10. 10. Technically feasible</li></ul>Probable operating costs and proposed revenue by market survey<br />Selection<br />Profitability <br />Product design, pricing, distribution & publicity<br />Product Decision<br />
  11. 11. 2. Size of the Units<br />Determination of scale of operations<br />Optimum size where average cost per unit is minimum<br />Large scale – Offers economies of scale but involves huge capital & expert managerial skills.<br />If risk involved is high, its preferable to start small and then grow.<br />A careful analysis and reconciliation of technical, managerial, financial, market and such factors should be considered.<br />
  12. 12. 3. Location of Business<br />It influences costs, profitability and growth<br />Absolute care should be taken since its very difficult to change the selected site.<br />3 stages are-<br />Select region<br />Choice of locality<br />Selection of the site<br />An unfavourable location may restrict the growth of the firm in addition to higher costs.<br />
  13. 13. 4.Form of Ownership<br />Determine the division of profits, authority, liability of owners, continuity of business and transferability of interests.<br />Forms<br />Sole Proprietorship<br />Partnership<br />Joint stock company<br />A good form of ownership should be easy to form, simple to operate, durable, flexible, free from heavy taxation and legal requirements.<br />
  14. 14. 5. Financial Planning<br />Adequate funds must be provided at the right time for the start & continuity<br />Advance decisions in financial planning are-<br />
  15. 15. 6. Provision of Physical Facilities<br />Selection of machines, equipments, plant and buildings.<br />Nature and quantum depends upon the <br />Size of the Firm – Large, medium or small<br />Nature of the Business – Manufacturing, trading and service<br />Process of Production- Capital-intensive or Labour-intensive<br />Availability of funds<br />Relative cost and effect on Productivity<br />Availability of spares<br />Maintenance services<br />Skills of workers<br />
  16. 16. s<br />7. Plant Layout<br />Arrangement of physical facilities is called Plant Layout.<br />Good layout is essential for efficient and economical operations<br />Helps reduce cost and efforts of material handling, inventory & space.<br />Proper placement to ensure smooth flow of material.<br />Layout should be flexible and adapt itself to changing conditions to avoid delays in production process.<br />
  17. 17. s<br />8. Internal Organization<br />Creation and development of internal structures<br />Departmentation, viz, Production, finance , marketing & personnel<br />Authority-Responsibility-Accountability relations<br />Facilitates efficient operations, avoids duplication, promotes mutual co-operation and coordination<br />Departmentation, delegation, span of control decisions.<br />
  18. 18. s<br />9. Personnel<br />Need of people or human capital<br />Human resource planning - Number & type of employees<br />Procurement, development & motivation<br />Proper compensation and non-financial incentives for maximum contribution towards organizational goal.<br />
  19. 19. s<br />10. Launching of the Enterprise<br />Completion of physical, organizational and financial aspects.<br />Final launch of the enterprise<br />
  20. 20. II. Generation of Business Idea<br />
  21. 21. Genration of Business Ideas<br />Sources of Business Idea<br />Observing Markets<br />Prospective consumers<br />Developments in other nations<br />Study of project profiles<br />Governement Orgns<br />Trade fairs and exhibitions<br />Generating Ideas-Approaches<br />Brainstroming<br />Improvement of an existing product<br />New ways of doing things<br />Utilizing waste materials<br />Converting hobbies into business<br />
  22. 22. Selection of a Project Idea<br />Cost structure must ensure reasonable return<br />Resources required could be easily mobilized<br />Compatible with legalities & regulations<br />Idea should match resources<br />Feasibility<br />Sufficient demand of the product or service<br />
  23. 23. III. Innovation,Creativity & Invention<br />Creativity<br />Process of generating new and novel ideas, they are of no use unless converted into a product or service<br /><ul><li> Spontaneous
  24. 24. Technical
  25. 25. Inventive
  26. 26. Innovative</li></ul>Innovation<br />Process of doing new things or doing old things in a new way<br /><ul><li> Innovation
  27. 27. Extension
  28. 28. Duplication
  29. 29. Synthesis</li></ul>Invention<br />The creation of something new, any idea or material.<br /><ul><li> Results in creation of new knowledge</li></li></ul><li>Creativity Process<br />Germination<br />Incubation<br />Preparation<br />Illumination<br />Verification<br />Recoginition of idea in initial stage<br />Garnering of information and fantasizing<br />Recognizing the feasibility of the idea<br />Validation of the value of ideas<br />Search for knowledge to rationalize the idea<br />
  30. 30. V. Feasibility Study<br />Commercial Aspect<br />Technical Aspects<br /><ul><li>Location
  31. 31. Size of plant
  32. 32. Raw materials & labour
  33. 33. Plant & equipment
  34. 34. Infrastructure
  35. 35. Foreign Collaborations</li></ul>Financial Aspect<br />Socio-economic Aspect<br />Marketability Aspect<br />Good to Go..<br />
  36. 36. VI. Project Appraisal<br />In-depth analysis made to decide selection or rejection of the project.<br />
  37. 37. VII. Project Report<br />Post feasibility study and project appraisal, the findings and recommendations are presented in a report known as Project Report.<br />Its helpful in getting clearances from Govt.<br />Also in applying loans from financial institution.<br />
  38. 38. , suppliers<br />VIII. Preparation of Business Plan<br />Written document<br />Describes all relevant internal and external elements effecting the start-up.<br />Integration of functional plans, stating long term and short term goals of the new venture.<br />Self assessment by entrepreneur<br />Determine the viability of venture in designated markets<br />Helps in raising necessary funds.<br />Judging the progress of the project at successive stages.<br />Investors, lenders, suppliers know about entrepreneur’s plans.<br />
  39. 39. IX. Launch Enterprise<br />Once convinced of the feasibility and profitability of the project, he assembles the necessary resources to launch the enterprise.<br />Once commissioned, the operational phase stage starts.<br />
  40. 40. Queries..?<br />