Basics of entrepreneurship

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A quick makeover of my wife's PowerPoint presentation. I tried explaining the 6x6x6x6 rule for text but she cannot relate to that. Shows how a good template and simple pictures can transform a text …

A quick makeover of my wife's PowerPoint presentation. I tried explaining the 6x6x6x6 rule for text but she cannot relate to that. Shows how a good template and simple pictures can transform a text heavy presentation.

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  • MUST HAVE A SOUND GODLY VISION
    An idea from God that makes the unseen visible and the unknown possible
    It was the vision of light that possessed Thomas Edison to invent the light bulb
    It was the vision of giving every person access to people friendly software that inspired Bill gates to develop and invent the Microsoft global empire
    God created each person with a unique vision. He has tremendous plans for you that no one else can accomplish.
  • A Sound Business Concept: The single most common mistake made by entrepreneurs is not picking the right business to begin with. The best way to learn about your prospective business is to work for someone else in that business before beginning your own. There can be a huge gap between your concept of a fine business and reality.
  • The path to self-employment, owning and managing your own business, can come
    about quite fortuitously or it can happen by design. For example, a new mother builds a makeshift baby-carrier that frees her hands, keeps baby comfortable, and converts to a seat for grocery carts. When she goes out with it, she is asked so many times where she bought it that she decides she should go into the business of producing them. This mother has hit upon a market opportunity quite accidentally; for many entrepreneurs like her, their ideas came about as a result of hobbies or an out of the blue inspiration. But these revelations are few and far between and they require a lot of patience; waiting and hoping an idea will surface. So, for the rest of us, we need to force the issue and figure out where and how to look for business opportunities.
    The most common source of new venture opportunity arises from past work experience. Studies have shown that about 45% of venture ideas are formed while working in the same industry. Some good questions to ask yourself when searching for business opportunities are:
    Could I do my current job on my own instead of as an employee?
    How could this product or service be made better?
    A customer has asked about a certain product or service extension, is this something I can provide?
    Is there a business opportunity that my company has rejected that I could pursue independently?
    When searching for an entrepreneurial venture it is important to recognize that the discovery is not a result of random actions, it is a structured process that is based on solid observations about how to do something better or different.
    New product or service: This is the type of new venture strategy that most people think of first, but it also involves the most innovation, creativity and time.
    Parallel Competition: Do what others are doing; only, do it better.
    Buy a Franchise: No ingenuity required, but it is important to thoroughly research the franchiser, purchase price, and obligations including royalties.
    Geographic Transfer: Look for successful businesses in other cities or countries and bring the product or service to your own region before the original company expands.
    Exploit a Supply Shortage: Is there something that is hard for you, your customers, your friends, etc to get? If so, figure out how to supply it profitably.
    Buy a Business: This strategy requires systematic searching for the right opportunity: confirm that there is adequate cash flow and that the price reflects the cost of asset acquisition and a reasonable premium for profitability and goodwill.
    Regardless of the method used to uncover an exciting new venture opportunity, the real work has just begun. You now have the task of evaluating your idea and yourself to make sure that the prerequisites for success are there. With a good idea and good leadership, your entrepreneurial dream can come true. Start the process now, and begin observing the many ways you can serve the market directly
  • Understanding Of Your Market: A good way to test your understanding is to test market your product or service before your start. You think you have a great kite that will capture the imagination of kite fliers throughout the world? Then hand-make some of them and try selling them first.
  • A market in its entirety is too broad in scope for any but the largest companies to tackle successfully. The best strategy for a smaller business is to divide demand into manageable market niches. Small operations can then offer specialized goods and services attractive to a specific group of prospective buyers. There are undoubtedly some particular products or services you are especially suited to provide. Study the market carefully and you will find opportunities. As an example, surgical instruments used to be sold in bulk to both small medical practices and large hospitals. One firm realized that the smaller practices could not afford to sterilize instruments after each use like hospitals did, but instead simply disposed of them. The firm's sales representatives talked to surgeons and hospital workers to learn what would be more suitable for them. Based on this information, the company developed disposable instruments which could be sold in larger quantities at a lower cost. Another firm capitalized on the fact that hospital operating rooms must carefully count the instruments used before and after surgery. This firm met that particular need by packaging their instruments in pre-counted, customized sets for different forms of surgery. While researching your own company's niche, consider the results of your market survey and the areas in which your competitors are already firmly situated. Put this information into a table or a graph to illustrate where an opening might exist for your product or service. Try to find the right configuration of products, services, quality, and price that will ensure the least direct competition. Unfortunately, there is no universally effective way to make these comparisons. Not only will the desired attributes vary from industry to industry, but there is also an imaginative element that cannot be formalized. For example, only someone who had already thought of developing pre-packaged surgical instruments could use a survey to determine whether or not a market actually existed for them. A well-designed database can help you sort through your market information and reveal particular segments you might not see otherwise. For example, do customers in a certain geographic area tend to purchase products that combine high quality and high price more frequently? Do your small business clients take advantage of your customer service more often than larger ones? If so, consider focusing on being a local provider of high quality goods and services, or a service-oriented company that pays extra attention to small businesses. If you do target a new niche market, make sure that this niche does not conflict with your overall business plan. For example, a small bakery that makes cookies by hand cannot go after a market for inexpensive, mass-produced cookies, regardless of the demand.
  • Every business has a specific marketing strategy that usually works best and has already been proven by your most successful competitors. You can benefit from their experience by copying successful marketing plans, including selling methods, pricing and advertising. Make a list of the most successful businesses that fall within your field of interest and study them (and even go to work for them). Visit these businesses and be prepared to ask the questions that are most important to you.
    Learn as much as you can about the needs of your customers and how to gain feedback from them. For example, if you open a restaurant, a displeased patron will probably not complain because it is not a pleasant experience. Instead, he will not return. So, for example, you must take care to inspect the plates as they are returned to the kitchen.
    Will your customers be looking for convenience, pricing, quality and/or service? It will be difficult to make sound marketing and promotional decisions without being informed on their real wants and needs. If a specific geographical area defines your market, low cost demographic reports based on the census can be obtained that will furnish information on population by race, income and home ownership
  • .
    Most employers agree: the toughest part of being an employer is finding and keeping good employees. Begin your search for the good employee as soon as you decide that you are going to be an entrepreneur.
    Define what you need from an employee.
    List the characteristics you require.
    Network: get the word out that you are looking for help.
    Develop and maintain sources for building your workforce.
    Consider family members, retired workers and students.
    Your customers need to feel confident that they are dealing with people who are knowledgeable and helpful. Five characteristics customers like most when dealing with a sales or service person are:
    Product or service knowledge
    Presentable appearance
    Courtesy
    Honesty
    Sincerity
    To achieve these qualities, look for marketing employees who:
    Like what they do
    Are quick learners who have curiosity to expand their knowledge
    Project a pleasant and positive image
    Like people and relate well to them
    Are helpful to customers as well as to fellow associates
    Are ambitious and hope someday to have your job
  • NETWORKING
    Surround yourself with successful people
    Mingle with the rich and successful to make valuable contacts and to find out exactly how they got there and utilise their expertise to your advantage
    Be cost conscious and cut down on luxurious expenses
    Invest in more than one business
    Don’t put all your eggs in one basket
    Whilst your focus on running your own business also make investments in blue chip companies, funds that are solid and respected.
    Make savings a habit always put aside at least 10% of your salary into fund or stock
    SET PRICES FOR SUCCESS
    Your product or service must be priced to entice buyers and cover your overhead, production, distribution labour and marketing costs and most importantly make a profit
    Look at the shop rite concept – revolution in supermarket business and our prices – high volume
  • PRACTICE OPEN COMMUNICATION
    Communicate, communicate, and communicate. When you think you’ve communicated enough, do it again.
    Use several different channels to inform the people in your company. Company newsletter, town meetings, bulletin boards and plain old chat sessions are just a few.
    Do more listening than talking. Your employees have their fingers on the pulse of activity in your company. Help them help you.
  • Basic rules for Handling Serious Business Problems
    Identify and acknowledge your problems with brutal honesty.
    Immediately reduce your losses by unemotionally cutting your costs to maintain a positive cash flow and profitability. This is the first and most important action to take.
    Don't switch horses. Stay with the business you know unless its future is fatally defective.
    Take the initiative to explain to your creditors what your problems are and why slow or smaller payments will be necessary. Never write post-dated checks or send late payments without an explanation.
    Don't cut value or quality of your products or services. Make them even better.
    Improve every aspect you can of your performance and image.
    Look for opportunity in adversity. Sometimes there will be bargain opportunities during business slumps.
    Remember that businesses have cycles. So, hang in there and ride out the adverse periods.
    Suggested Activities
    Review case histories of the most successful businesses in your field.
    Review the case histories of failed businesses to determine their mistakes. Was it inadequate testing, planning and experience?
    Identify a typical business problem in your intended business and plan a solution.
    Identify a combination of problems in your business and plan a solution.

Transcript

  • 1. Building A Successful Business By Bolaji Osime – Small Business Mentor
  • 2. My Road Map To Success If success means  Making God my Cornerstone  Praying and fasting hard  Establishing a God Given Dream  Working very hard 24/7  Empty panadol packs  Attending numerous seminars  Overcoming several Challenges Then definitely I have a successful business
  • 3. Where Are You Now?  Starting a new business?  Working to grow current business?  Enjoying success in your business?  What is the cornerstone of your business ?
  • 4. Are you Ready?  Are you cut out for this?  Why are you doing this ?  Where will your business be 5 years from now?  What makes your business different
  • 5. 20 Years Proven Track Record  Story of  Determination, perseverance, hard work, patience, long suffering  Grew Gic  From 13 students to 600 students  Grew Global Bookshop  From one customer to  World of fun  From to over 200 in attendance  Total Turnover for all biz  Now N350 million
  • 6. Steps to a great Business  An Entrepreneurial Spirit (Traits needed)  A Sound Business Concept and Vision  Growing Market  Understanding the Market  Capable Management  Able Financial Control  Consistent Business Focus
  • 7. Consider This:  Have you chosen your corner stone?  Have you prayerfully established your business idea, vision and mission  God wants you to succeed  Joshua 1v8 Read Word + Obedience = Success  Jeremiah 29V11  Deutronomy 18v18  ASK GOD FIRST!!  Ask God for an idea, a clear vision.
  • 8. Personality Traits You Need I  Ambition , Drive and Achievement  Optimistic Attitude  Calculated risk taker  Innovative and Creative  Works under stress  Skilled Organizer
  • 9. Personality Traits you need II  Goal and People oriented  Eye for opportunity  Self-confident & Self reliant:  High level of energy and Hard worker  High tolerance for ever changing situations  Disciplined, persistent & Determined
  • 10. Strategic Business Vision  See into the future  A Divine Vision  that fills a need  necessary capital  burning desire  Clear picture of how to reach destination  Job33 v14-15  Proverbs 29 V18a  Hebrews 2v1
  • 11. A Sound Business Concept  Is your idea sound?  Do you fill a need?  Do others fill that need?  Will a lot of customers buy it?  Are your returns attractive?  Are the risks acceptable?
  • 12. Business Concept Validation  Check your idea for faults  Be ready to answer questions  from investors and bankers  Is the market ready for it?  How soon will your idea be put into operation?  (Assume delays, worst case scenarios)
  • 13. “I never perfected an invention that I did not think about in terms of the service it might give others …I Find out what the world needs, then I proceed to invent” Thomas Edison, Inventor
  • 14. Opportunities In Nigeria  Unsatisfied needs  Transportation, alternative to energy  Changing government policies  Privatization - telecoms, ban on importation of biscuits, juice, furniture  Technological changes  Internet cafes, website pages for coys, flash disks, cake graphics
  • 15. Opportunities In Nigeria  Demographic changes  Working mothers - daycares  Environmental changes  Poverty- breaking bulk, more demand for repair shops & Tokunbo markets -cars, Okadas, clothes etc  Trends  Entertainment, sports, leisure, eating habits
  • 16. Growing Market  You must attract and retain a sustainable growing market  Potential customers  Why will they purchase it from you?  Identify your market  size and locations.  How will you reach your customers?  How will you advertise & market your products services  Explain your pricing strategy  Define your revenue streams
  • 17. Finding A Niche Market  Select specific target market  Ensure right configuration:  Products/services, Quality, price  Least direct competition  Know & analyze competition  Competitive advantage?  Delivery of better quality service
  • 18. Marketing Strategy  Who can you better serve than your competitors?  Tailor your product, prices, distribution, promotion  Profitably meet unmet customer needs?  Determine customers needs by market research  Analyze your competitive advantages  Develop a market strategy  Select specific markets by target marketing  Satisfy needs by identifying a market mix
  • 19. Capable Management • Look for experienced people • Who you like and admire • Have good ethical values • Have complementary skills • Are smarter than you • Hire the skills you lack • Define your unique ability • Seek others who turn your weaknesses into strengths
  • 20. Consistent Business Focus People who specialize in a product or service will do better than people who do not specialize. Focus your efforts on something that you can do so well that you will not be competing solely on the basis of price.
  • 21.  Explain your source and the amount of initial equity capital.  Develop a monthly operating budget for the first year.  Develop an expected return on investment and monthly cash flow for the first year.  Provide projected income statements and balance sheets for a two-year period.  Discuss your break- even point. Financial Control
  • 22. Financial Control  Explain your personal balance sheet and method of compensation.  Discuss who will maintain your accounting records and how they will be kept.  Provide "what if" statements that address alternative approaches to any problem that may develop.  Have a hands on approach and ensure you monitor your daily income and expense  Keep Costs Down
  • 23.  Stay in a field you love.  Know your business before you start  Work for someone else in it  Develop human talent  Value your customers  Establish a loyal customer base  Make your business “process, not people” Dependent  Document your business processes  Keep a very close eye on your business especially the financials Other Tips For Success
  • 24. …And  Copycat the winners in your business  Specialize, even to a single product  Find a product or service that is:  Needed or desired  Thought by customers to have no close substitute  Not subject to price regulation  Set a cap on your liability  Learn computer skills  Learn communication skills  Have a lawyer, accountant, and insurance agent before you start.
  • 25. …FINALLY  Prepare a business plan  Prepare the site criteria model for your particular business  Do "for and against" lists for major decisions  Buy when everyone is selling (and vice versa)  Deal with those you like, trust and admire  Learn accounting  Create your own internal control plan  Keep going to school in important subjects Give back to the community
  • 26. Rewards of Entrepreneurship  You will be your own boss.  Hard work and long hours benefit you, rather than someone else.  Earning and growth potential are far greater.  A new venture is as exciting as it is risky.  Endless challenge and opportunities for learning.  Independence  Satisfying way of life
  • 27. Rewards of Entrepreneurship  Work harder, earn more money, and are happier than if you worked for a large company.  Opportunity to gain control over your destiny -- achieve what is important to you.  Opportunity to make a difference -- combining concerns for social issues with the chance to make a good living.  Opportunity to reach your full potential -- situations where your growth is limited only by your own talent and energy.  Opportunity to reap unlimited profits. Although money is not the driving force for most entrepreneurs, profit can be a motivating factor.
  • 28. Why Businesses fail  Uncontrolled cash flow:  Run out of cash, you crash.  Project cash flow for expansion very conservatively  Be sure to:  Forecast income (sales) very low  Forecast expenses very high  Provide for unanticipated contingencies.  Insufficient sales:  Ruthlessly cut costs.  Higher costs:  Increase volume of sales?  Offset with higher prices?
  • 29. Business failure  New competition  Business recessions  Incompetent managers or employees: Act swiftly to rid yourself of them.  Dishonesty and theft.  Study your most successful competitor
  • 30. Why Businesses fail  Slow growing Market  Lack of experience  Insufficient capital  Poor location  Poor inventory management  Over-investment in fixed assets  Poor credit arrangements  Personal use of business funds  Unexpected growth
  • 31. Do’s of Business  Motivate your managers with monetary incentives tied to their individual success.  Copycat the successful marketing and policies of your large successful competitors.  Stick with what you do best during downturns in business cycles.  Compartmentalize your expanding business into profit centers.
  • 32. Do’s of Business  Copycat the internal controls used by your successful competitors.  Prepare monthly financial statements of your individual profit centers.  Act swiftly to rid yourself of incompetent or dishonest employees.  Take the initiative to keep creditors informed of your problems and needs.
  • 33. …Don’ts  Never sign a lease without your lawyer's review.  Avoid a "commodity" business (one without pricing power) i.e. Trading  Don't burn bridges of job security to start a business if you can help it.  Don't become a business zombie: take time off.  Don't compete with category killers (Shoprite) unless you have a special niche.  Don't even think about your second store until the first one is reliably profitable.
  • 34. …Don’ts  Do not give you personal guarantee unless absolutely required; then limit your liability.  Do not let commissioned salespersons set prices.  When required for any reason, do not fail to promptly cut cost to maintain positive cash flow.  Don't cut the value or quality of your product or service.  Do not delegate signing checks (any amount) or making capital expenditures.
  • 35. Want More Information?  See fate foundation  email me at:  osime@hyperia.com
  • 36. ThankThank YouYou