The document discusses various aspects of developing a business idea including evaluating first mover advantages and disadvantages, sources of ideas, preliminary research methods like brainstorming and mind maps, frameworks for evaluating ideas, and tips for writing an effective business plan including key sections and common errors to avoid. It provides an overview of the important steps and considerations for transforming a business idea into a fully developed plan.

1. GROWTH OF A
BUSINESS IDEA
CHAPTER 2
ENTREPRENEURSHIP

2. Chapter Objectives
To understand the importance of the
business idea
To explain the significance of a ‘new’
business idea
To formulate a pre-selection process to
precede the search for a business idea
To list the possible source of business
ideas
To describe the process of researching
a business idea
To develop a comprehensive
framework for evaluating business ideas
2

3.  Warren Buffer says, “Today’s successful
companies live and die according to the quality
of their ideas”.
 Peter Drucker, “Innovation is the specific
instrument of entrepreneurs, the means by which
they exploit change as an opportunity for a
different business”
3

4. First Mover
Advantages
Technological
leadership: can also
lead to
Cost advantages
Economies of scale
Obtain and secure
scarce resources before
crowding
Impose switching costs
on buyers
Disadvantages
Reveal underlying
business concept
Others can try different
resource combinations
Investments in resolving
problems: others can
benefit from learnings
Inertia makes it difficult
to abandon strategy no
longer effective
4

5. Pre-selection
 Uncover your personal traits
 Knowledge and Experience
 Goals and aspirations
 Technical knowledge
 Domain knowledge
 Contacts
5

6. Sources of Business Ideas
Past work experience
Hobbies and interests
Strengths and abilities
Friends and family
Distribution channels
Travel
Books and magazines
Current trends
Research organizations
The web
6

7. Brainstorming
Some of the important ‘rules’ are as follows:
 Focus on quantity.
 Postpone criticism.
 Build on others’ ideas.
 Encourage crazy ideas.
 Work with a deadline.
7

8. Preliminary Research
 Cost structure
 Market structure
 Technology
 HR issues
 Government regulations
8

9. Mind Maps
9

10. Five Questions Framework
Q1. Which is the market segment being targeted?
Q2. What is the business model?
Q3. How big is your market?
Q4. How can you protect your business?
Q5. What are you getting out of it?
10

11. How to Write a Business Plan

12. Tips for Business Plan
1. Write from the audience’s perspective
2. Research the market thoroughly
3. Understand the competition
4. Attention to detail
5. Focus on the opportunity
6. Ensure all key areas are covered in the plan
7. Do the sums
8. Executive Summary
9. Review process
10. Implement the plan

13. Simple business plan outline
1. Executive Summary:
Write this last. It’s just a page or two of highlights.
2. Company Description:
Legal establishment, history, start-up plans, etc.
3. Product or Service:
Describe what you’re selling. Focus on customer
benefits.
4. Market Analysis:
You need to know your market, customer needs,
where they are, how to reach them, etc.

14. 5. Strategy and Implementation:
Be specific. Include management responsibilities
with dates and budgets. Make sure you can track
results.
6. Web Plan Summary:
For e-commerce, include discussion of website,
development costs, operations, sales and
marketing strategies.
7. Management Team:
Describe the organization and the key
management team members.
8. Financial Analysis:
Make sure to include at the very least your
projected Profit and Loss and Cash Flow tables.

15. 1. Executive Summary
1.1 Objectives
1.2 Mission
1.3 Keys to Success

16. 2. Company Summary
2.1 Company Ownership
2.2 Company History (for ongoing companies) or
Start-up Plan (for new companies)
2.3 Company Locations and Facilities

17. 3. Products and Services
3.1 Product and Service Description
3.2 Competitive Comparison
3.3 Sales Literature
3.4 Sourcing and Fulfillment
3.5 Technology
3.6 Future Products and Services

18. 4. Market Analysis Summary
4.1 Market Segmentation
4.2 Target Market Segment Strategy
4.2.1 Market Needs
4.2.2 Market Trends
4.2.3 Market Growth
4.3 Industry Analysis
4.3.1 Industry Participants
4.3.2 Distribution Patterns
4.3.3 Competition and Buying Patterns
4.3.4 Main Competitors

19. 5. Strategy and Implementation Summary
5.1 Strategy Pyramids
5.2 Value Proposition
5.3 Competitive Edge
5.4 Marketing Strategy
5.4.1 Positioning Statements
5.4.2 Pricing Strategy
5.4.3 Promotion Strategy
5.4.4 Distribution Patterns
5.4.5 Marketing Programs
5.5 Sales Strategy
5.5.1 Sales Forecast
5.5.2 Sales Programs
5.6 Strategic Alliances
5.7 Milestones

20. 6. Web Plan Summary
6.1 Website Marketing Strategy
6.2 Development Requirements

21. 7. Management Summary
7.1 Organizational Structure
7.2 Management Team
7.3 Management Team Gaps
7.4 Personnel Plan

22. 8.0 Financial Plan
8.1 Important Assumptions
8.2 Key Financial Indicators
8.3 Break-even Analysis
8.4 Projected Profit and Loss
8.5 Projected Cash Flow
8.6 Projected Balance Sheet
8.7 Business Ratios
8.8 Long-term Plan

23. Summary Company Formation
India

25. Enterpreneur
Entrepreneurship comes from the French verb 'entreprendre' which
means 'To undertake'.
It is the act and art of being an entrepreneur or one who undertakes
innovations or introducing new things, finance and business acumen in
an effort to transform innovations into economic goods.
This may result in new organizations or may be part of revitalizing
mature organizations in response to a perceived opportunity.
The most obvious form of entrepreneurship is that of starting new
businesses.
However, in recent years, the term has been extended to include social
and political forms of entrepreneurial activity.

26. Why join the navy if you can be a pirate
Steve jobs

27. Intrapreneur
To practice entrepreneurship by employees of and within the organization.
Encouraged to innovate and develop new ideas and convert them in into plans of
action that is beneficial for the organization
Transform its employee into ‘psychological owner’
Take advantage of company assets
But if it’s a failure then it’s a failure for the company
Companies using Intrapreneur:
Google,
3M,
Tata Steel
Virgin Airlines
(Google News was a result of Intrapreneurship)

29. Elements of Business Plan
Business Description

Mission Statement

Business Overview

Products and Services
Market Analysis

Market Characteristics

Target Customer Profile

Competitor Assessment
...Continued

30. Elements of Business plan
HR Plan

Manpower requirement study

Fulfillment plan

Retention plan

Assessment, Training and development

Policy framework

31. Elements of Business Plan
Marketing Plan

Products and Services

Pricing

Distribution

Promotion
Operating Plan

Ownership and Management

Resources and Production

Legal Issues
Financial Plan
Executive Summary

32. Common Business Plan Errors

Not Creating a Plan

Incomplete Market Research

Not Being Objective

Making Unrecognized Assumptions

Providing Useless Information

Skipping Steps

Missing Linkages

34. Legal Aspectsfor
Business

35. IndustrIal acts and
legIslatIons
Companies Act,1956
Indian Contract Act,1872
Industries (Development and Regulation) Act 1951
Trade Unions Act
Competition Act, 2002
Arbitration and Conciliation Act, 1996
Foreign Exchange Management Act (FEMA),1999
Intellectual property rights
Labour welfare

36. Laws relating to Arbitration & Conciliation
(both Domestic & International)

Arbitration and Conciliation Act, 1996

Arbitration Act, 1940

Arbitration (Protocol and Convention) Act, 1937

Foreign Awards (Recognition and Enforcement)
Act, 1961

37. Laws relating to Specific Industries

The Factories Act,1948

Directorate General Factory Advice Service &
Labour Institutes (DGFASLI)

Plantation Labour Act, 1951

Mines Act, 1952

Contract Labour (Regulation & Abolition) Act,
1970

Motor Transport Workers Act, 1961

Sales Promotion Employees (Conditions of
Service) Act, 1976
...ETC

38. Laws relating to Doing Business Abroad

Bilateral Investment Promotion and
Protection Agreement (BIPA)

Foreign Exchange Management Act
(FEMA)

39. Register a Company
Registrars of Companies (ROC) is appointed under Section
609 of the Companies Act.
It covers the various States and Union Territories.
It is vested with the primary duty of registering companies
floated in the respective States and Union Territories.
It ensures that such companies comply with statutory
requirements under the Act.
These offices function as registries of records relating to the
companies registered with them.

40. Steps to be taken to get incorporated a
private limited Company:
1. Select, in order of preference, a few
Suitable nameS, not leSS than four,
indicative of the main objectS of the
company.
2. enSure that the name doeS not reSemble
the name of any other company
already regiStered and alSo doeS not
violate the proviSionS of emblemS
and nameS (prevention of improper uSe)
act, 1950.

41. 3. Apply to the concerned ROC to ascertain the availability of a
name in the General Rules and Forms along with a
fee of Rs.1000/- If the proposed name is not
available apply for a fresh name on the same
application.
4. Arrange for the drafting of the Memorandum and Articles of
Association by the solicitors, the vetting of the same
by the ROC and the printing of the same.
5. Arrange for the stamping of the Memorandum and Articles
with the appropriate stamp duty.

42. 6. Get the Memorandum and Articles signed by at least two
subscribers in his own hand, his father's name,
occupation, address and the number of shares subscribed
for and witnessed by atleast one person.
7. Ensure that the Memorandum and Articles are dated after
the date of stamping.
8. Get the following forms duly filled up and signed:

Declaration of Compliance

Notice of the situation of the registered office of the
company

Particulars of the Director, Manager or Secretary

43. 9. Present the following documents to the ROC with the filing
fee and the registration fee:

The stamped and signed copies of the Memorandum and
Articles of Association (3 copies).

Form-1, 18 & 32 in duplicate.

Any agreement referred to in the M & A.

44. 
Any agreement proposed to be entered into with any
individual for appointment as Managing or whole time
Director.

Name availability letter issued by the ROC.

Power of Attorney from the subscribers in favour of any
person for making corrections on their behalf in the
documents and papers filed for registration.

Pay the Registration and Filing Fee by Demand
Draft/Banker's Cheque if it exceeds Rs.1000/-

Obtain the Certificate of Incorporation from ROC.

45. 10. Additional Steps to be taken for formation of a Public
Limited Company

Consent of Directors to act as such in Form No.29.

Arrange for payment of application and allotment money by
Directors on shares taken or agreed to be taken.

File the Statement in Lieu of Prospectus with the ROC in
schedule-iv of the Companies Act.

File a declaration in Form-20 duly signed by one of the
Directors.

Obtain the Certificate of Commencement of Business.

46. Cost of incorporation

Pvt Ltd Company (5 lacs authorised cap) 25k

Pvt Ltd Company (10 lacs) 40k

Partnership firm: 10k

Proprietorship: 5k

OPC(one person company :5k

LLP partnership firm: 20k