Social Eterprise- A New Dimension of Entrepreneurship

Term Project
Social Enterprise-A New Dimension of Entrepreneurship
And
Entrepreneurial Development Incubator Company
Submitted To:
Course Instructor: Mr. Naeem Bhojani
Curse Title: Entrepreneurship
Course ID: 94255
Submitted By:
Name of Student: Muhammad Asif Khan
Student ID: MB-2-05-51271
Program: MBA-Regular
Semester: Fall 2016
Campus: PAF-Karachi Institute of Economics &
Technology (KIET)-City Campus
Submission Date: November 27, 2016

Social Enterprise- A New Dimension of Entrepreneurship
What is Social Entrepreneurship?
•The idea of Social Entrepreneurship has got increasing attention
of scholars as social problems in our complex modern society
have grown tremendously.
•Social Entrepreneurship seeks to exploit the practical dynamism
of the successful businessmen to enrich and help society,
especially in developing countries which are overwhelmed with
problems of dire poverty and lack of opportunities.
•They may, like any other business entrepreneurs, be interested in
profit, but their emphasis is on social change.
•They are often driven, creative individuals who exploit new
opportunities, question accepted norms, and refuse to give up
until they have remade the world for the better.

Origin And Growth Of Social Entrepreneurship
•Although the terms - social entrepreneurs and social
entrepreneurship- seem relatively new, the practices related to the
field can be found throughout the history.
•Several business entrepreneurs had become the most successful
social entrepreneurs by combining effectively the civic,
governmental and business worlds during 19 and 20 centuries and
promoted mainstream public services in welfare, schools, and
health care. A few of them to mention are:
Florence Nightingale, founder of the first nursing school
and developer of modern nursing practices,
Robert Owen, founder of the cooperative movement etc.

•Social Entrepreneurs and social enterprises have been in
existence for many centuries, but became prominent in recent
decades after the word “social entrepreneurship”.
•The terms social entrepreneur and social entrepreneurship
were used first in the literature on social change in the 1960s and
1970s to describe Robert Owen.
•The widespread use came during 1980s and 1990s and promoted
by Bill Drayton, the founder of Ashoka innovators for the Public
and others such as Charles Lead beater.

ORIGIN And Growth Of Social Entrepreneurship
•From the 1950s to the 1990s Michael Young was a leading
promoter of social enterprise.
•Professor Daniel Bell of Harvard was the world's most successful
entrepreneur of social enterprises during 1980s as he created
more than sixty new organizations worldwide, including the
School for Social Entrepreneurs (SSE) which supports individuals
to realize their own potential and to establish social enterprises
and social businesses.

•Muhammad Yunus, founder of Grameen Bank, is well known
contemporary social entrepreneur, who was awarded a Nobel
Peace Prize in 2006. The work of Yunus and Grameen emphasize
the enormous synergies and benefits when business principles are
unified with social ventures.
•J. Gregory Dees, popularly known as the “Father of Social
Entrepreneurship Education”, and Beth Anderson categorize the
plurality of Social Enterprise definitions into two main types
namely Social Enterprise and Social Innovation.

Opportunities And Challenges
•The most urgent challenge for national governments, local
authorities, policy makers and economic stakeholders is to
promote sustainable economic and social development so that
once the economy has recovered; the benefits can be widely
diffused.
•Social entrepreneurship and social innovation are part of the
solution, as they both explicitly aim at providing innovative
solutions to unsolved social problems.
•Social value creation should be at the heart of their mission in
order to improve individuals‟ and communities‟ lives and increase
their well-being.

Social Entrepreneur
•Social entrepreneurs are often driven, creative individuals who
exploit new opportunities, question accepted norms, and refuse to
give up until they have remade the world for the better.
•Social entrepreneurs are individuals with innovative solutions to
society’s most pressing social problems.
•They are ambitious and persistent, tackling major social issues
and offering new ideas for wide-scale change.
•Rather than leaving societal needs to the government or business
sectors, social entrepreneurs find what is not working and solve
the problem by changing the system, spreading the solution, and
persuading entire societies to take new leaps.

Social Entrepreneur
•They are both visionaries and ultimate the practical
implementation of their vision above all else.
•Social entrepreneurs have the same core temperament as their
business peers but use their talents to solve global social
problems.
•A business entrepreneur might create entirely new industries, a
social entrepreneur comes up with new solutions to social
problems and then implements them on a large scale.

Social Entrepreneur
•Just as entrepreneurs change the face of business, social
entrepreneurs act as the change agents for society, seizing
opportunities others miss and improving systems, inventing new
approaches, and creating solutions to change society for the
better.
Social Entrepreneurship And Higher Education
•A growing number of colleges and universities are establishing
programs focused on educating entrepreneurs. As a scholarly field
of inquiry, social entrepreneurship is in its embryonic stage of
development.

Social Entrepreneurship And Higher Education
•Social entrepreneurship has been a topic of academic inquiry for
nearly 20 years, yet relatively little scholarly output has appeared
in mainstream management and entrepreneurship journals.
•Future research would benefit from the incorporation of
multivariate methods to complement the case study techniques
that have dominated previous efforts.

Social Entrepreneurship Characteristics
Among the innate characteristics or psychological factors in the
case of social entrepreneurs, Nga and Shamuganathan (2010: 260-
261) highlight as main characteristics:
Extroversion:
The ability to make good contacts and express own beliefs or
feelings with ease,
Openness:
A natural position of openness to the surrounding environment or
exterior phenomena,
Agreeableness:
Being easily accepted through being pleasant and friendly .

Social Entrepreneurship Characteristics
Neuroticism:
The tendency to obsess about things considered important ; and
Conscientiousness:
Reliability and conscientious and thorough development of the
task itself (conscientiousness).
•As for the practices that characterize social entrepreneurs, social
entrepreneurship includes those that deepen the company's
corporate social responsibility and those that refer to the
variations in company executives' concerns with social problems.
Some of these practices are:

Social Entrepreneurship Practices
•Taking ethical components into account when formulating the
strategy;
•Maintaining management commitment to surrounding social
problems;
•Some company or management objectives of a social, rather than
merely an economic nature;
•Seeking information on business projects that can also have a
social benefit; and
•The company dedicates part of its budget and its activity to
obtaining economically viable goods and services that also benefit
the neediest sectors of society.

Development of Business Incubator Company
Introduction
•The basic purpose to develop the company is to provide
workspace, coaching, and support services to potential
entrepreneurs at early-stage of their entrepreneurial
careers.
•Our core objective is to encourage and support the rural
area population male and female (domestic women) to
take initiative and commence their own venture though
effectively utilizing the available resources and their skills.
•For the attainment of this objective at initial I have
decided to develop an organization in individual capacity
which serves as a business incubator for the upcoming and
tentative entrepreneurs.

Entrepreneurial Development Incubator
Company

Executive Summary
•This company will be formed and developed to materialize the
concept of Social Entrepreneurship in its true spirit.
•The purpose is not to run a business and to earn profit but to
passionately participate in the socio-economic development of
the country through developing entrepreneurs at micro level.
•It will not only help the country to move towards the economic
growth & sustainability but will also help us to bring the economic
prosperity among the neglected class of the society.

Business Concept
This business incubator company will work in diversified
business areas. First and foremost objective is to formalize
a strong marketing activity and bring the orders from the
local and foreign buyers in the following product
categories:
Livestock (Meat Products)
Fishries
Honey & Allied Products
Gem & Jewelries Including the Precious Stones
Handy Crafts
Apparel Products (Knitted / Woven)

Revenue Sources
In the beginning we will be marketing ourselves as one of the reliable
supplier and trader of the following products:
Edible Products Apparel Merchandises
Meat Products Knitted / Hosiery
Grains / Wheat / Rice / Pulse Woven
Fruits
Sea Food Products
Antiques and Valuable Handy Crafts
Gems & Jewelry Products
Artificial
Original

Competitor Analysis
•We are trying to enter in to the markets which possess a high
competition, where already manufacturer and traders are dealing
in the same product categories.
•They are well established and successfully serving the markets
and they are already penetrated.
•We are going to face a lot of resistance and competition from
global and local in market

TOWS Analysis
Threats:
•Improper infrastructure of the rural areas and the availability of
insufficient resources.
•Lack of coordination among the different governmental
organizations.
•Resistance from the external environment.
•Financial constraints that can limit the required pace of growth.
•Depending on human capabilities rather on technological
equipments.
•A threat of quick imitation of the strategy.
•Logistics Cost will be the vital.

TOWS Analysis
Opportunities:
•Availability of sufficient human resource with the right attitude which
can lead us towards attainment of our goals & objective.
•No direct competition in the global market and we can capitalize the
idea through effective planning.
•We can achieve rapid growth with effective utilization of diversified
workforce.
•Our effective public relation activities will help us to develop effective
relationship with the governmental organization and other relevant non-
government which can help us to effectively implement and our
entrepreneurial development program.
•If we will be able to effectively serve our primary purpose of the
foundation then foreign buyers will definitely extend their cooperation
for further expansion of business.

TOWS Analysis
Weaknesses:
•A unique idea and cause without adequate experience.
•If persistency will not be shown the failure is evident.
•Time constraint is the factor which will limit the rapid expansion.
•There are very vital chances that Initial working years will be with
low profit margins or without profits.
•We have to imitate every project from the basics under our
Entrepreneurial Development Program.
•In past it has been observed that the Micro Level Enterprise has
short span of life.
•Mushroom growth of the Micro Level Enterprise will be harmful
for the progress.

TOWS Analysis
Strengths:
•We are confident that our steering team has an ability to
produce results.
•Self-driven policies for the attainment of objectives.
•Rather acquiring we are focusing to develop.
•Our efficient marketing team can transform the idea into
reality through effectively enhancing the global customers’
network.

Marketing Strategy

Marketing Strategy
Local Markets:
•The local market will comprise on the markets which will
be similar to our markets in terms of culture, traditions
and behaviors.
•Initially we have included the following regions into this
category:
South Asian
Middle East
Far East

Marketing Strategy
Global Markets:
•All potential markets existing other than the above define local
markets will be considered as Global Market.
•We can distinguish this market into following regions:
European
Western Europe
Eastern Europe
North America
Africa
Asia

Business Operations
Our operational activities can be divided as follows:
Marketing
Operations
Finance & Accounts Department
Human Resource Department
Entrepreneurial Development Program

Entrepreneurial Development Program:

•Selection of the high potential individuals those who has an
ability and they keen to commence their professional career
as an entrepreneur.
•They must be hard working and able to interact with the
people highly social can work under stress.
•They must be able to develop and lead team.
•A comprehensive education, learning and training program
will be inaugurate to fully equip them with the appropriate
knowledge skills and abilities to run their own venture in their
respective area of interest and ease to doing business in their
respective locality.

•They will be continually monitored and all the necessary
assistance will be provided to them whenever required.
•They will encourage supporting others for the
development of their own ventures.
•All the new ventures (Micro Level Enterprises) will be
develop on the basis of BOTT (Built Operate Train &
Transfer).

Management
Chief Executive
Human
Resource
Department
Marketing
Department
Operations
Department
Finance &
Accounts
Department

Management
Our management practices will be based on the following
principles:
Cooperative Decision Making:
We believe in collective wisdom and well come all the suggestions
and criticism for the betterment and improvement.
Employee Empowerment:
We believe that our employees should be motivated towards the
cause and empower them to take initiative for the cause.
Innovation:
We welcome and encourage the input from our employees and
from those who have been directly associated with us and provide
them opportunity to materialize their creative ideas and
innovation.

Management
Sympathy:
We believe that our all acts will be towards the
betterment of the society and our actions will reflect the
sympathy and affection toward others.
Ownership:
We believe that our employees will take the
responsibility of their decisions and face the outcomes as
an owner.

Revenue Model
Acquisition
of the
Orders
from the
local and
foreign
buyers in
the defined
product
Categories
Outsourcing of
orders for
manufacturing
Developing
value chain
through EDP
Order
fulfillment
through
effectively
maintaining
the specified
quality level
by the
customers
Organizati
on Growth
and
Profitabilit
y through
expanding

Arrangement of Seed Capital for the Venture:
1. Angel Funding
2. Financial Institutions Funding
3. Donor Agencies & Governmental Institutions

Financial Analytics:
Projected Sales Forecast
(All amounts are in million rupees)
Product Categories
Base Year Year 2 Year 3 Year 4 Year 5
G L T G L T G L T G L T G L T
Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs.
1) Apparel Merchandise
6 2 8 7 2 9 9 2 11 10 3 13 12 3 16
2) Edible Products 5 3 7 5 3 8 6 4 10 8 4 12 9 5 15
3) Antiques & Handy Crafts
1 0 1 1 0 1 1 0 1 1 0 1 2 0 2
4) Gems & Jewellery Products
2 0 3 3 1 3 3 1 4 4 1 5 5 1 6
5) Miscellaneous Goods 2 1 2 2 1 2 2 1 3 3 1 3 3 1 4
Total Sales 15 5 20 18 6 24 22 7 29 26 9 35 31 10 41

Proforma Balance Sheet
Balance Sheet
(Amount in Million Rupees)
Assets
Fixed Assests:
Furnriture And Fixtures 0.50 0.50 0.50 0.50 0.50
Less:Accumulated Depricaition 0.03 0.475 0.05 0.45 0.08 0.43 0.10 0.40 0.13 0.38
Vehicle 0.50 0.50 0.50 0.50 0.50
Less:Accumulated Depreciation 0.03 0.475 0.05 0.45 0.08 0.43 0.10 0.40 0.13 0.38
Total Fixed Assets 0.95 0.90 0.85 0.80 0.75
Current Assets:
Cash 3.82 4.86 4.76 5.00 4.38
Prepaid Rent of Warehouse and Office 0.70 0.70 1.00 1.00 1.00
Accounts Receivable (5% of Sales) 0.90 5.42 1.20 6.76 1.44 7.20 1.73 7.73 2.07 7.45
Total Current Assets 5.42 6.76 7.20 7.73 7.45
Total Assets 6.37 7.66 8.05 8.53 8.20
Equities
Liabilites
Long Term liabilities:
Loan Payable 5.00 5.00 5.00 5.00 5.00
Less:Loan Insltallment 0.50 4.50 1.00 4.00 1.50 3.50 2.00 3.00 0.50 4.50
Long Term liabilities 4.50 4.00 3.50 3.00 4.50
Short Term Liabilities:
Acoutns Payable (10% of Sales) 1.05 2.40 2.88 3.47 4.15
Total Short Term Liabilites 1.05 2.40 2.88 3.47 1.05
Owner's Equity:
Personal Contibution 0.50 0.50 0.50 0.50 0.50
Add:Net Profit 0.52 0.86 1.27 1.76 2.35
Less:Personal Drawings 0.20 0.10 0.10 0.20 0.20
Total Owner's Equity 0.82 1.26 1.67 2.06 2.65
Total Equities 6.37 7.66 8.05 8.53 8.20

Proforma Income Statement
Proforma Income Statement
(All Amounts Are in Miilion Rupees)
Sales 20.00 24.00 28.80 34.56 41.47
Less: Cost of Goods Sold
Produrment Cost (70 % of Sales) 14.0 16.8 20.16 24.2 29.03
Direct Logisitcs (3% of Sales) 0.6 0.72 0.86 1.04 1.244
Direst Support Services (3% of Sales) 0.6 0.72 0.86 1.04 1.244
Warehouisng Cost (3% of the sales) 0.6 15.8 0.72 19 0.86 22.75 1.04 27.3 1.244 32.76
Gross Profit 4.2 5.04 6.05 7.26 8.71
Less: Marketing Expenses (2.5 % of Sales) 0.50 0.60 0.72 0.86 1.04
Human Rsources Expenses (2.5% of Sales) 0.50 0.60 0.72 0.86 1.04
Opeational Expenses (2.5% of Sales) 0.50 0.60 0.72 0.86 1.04
Utiltiy Charges (3% of Sales) 0.60 0.72 0.86 1.04 1.24
Rent Expenses (1 % of Sales) 0.20 0.24 0.29 0.35 0.41
Loan Reimbursement 0.50 0.50 0.50 0.50 0.50
Depricaiteion Expenses 0.05 2.85 0.05 3.31 0.05 3.86 0.05 4.52 0.05 5.32
Earning Before Interest & Taxes 1.35 1.73 2.19 2.73 3.39
Less: Interest Expense 0.70 0.70 0.70 0.70 0.70
Estimated Income Tax 0.14 0.17 0.22 0.27 0.34
Earning After Interest & Taxes 0.52 0.86 1.27 1.76 2.35

Time Line
• If we get the required finance to commence the venture then I
am confident that the venture will be fully operative and
striving towards its goals within the initial three years.
• Our venture will be transform into the public limited company
at the end of the fifth year.
• It is evident that we will be able to develop an effective value
chain with the through developing the Micro Level Enterprises
under our Entrepreneurial Developing Program.

Harvest Strategy
Initial Public Offering (IPO):
• As I have earlier mentioned that the venture will be transform
into the Public Limited Company and the equity offering will be
as followed:
• The 25 % shares will be offer to the angle financers / financial
institutions.
• The 24 % will be offer to the public and in case of the debt
financing of the 49% shares will be offer publicly.
• The 51% shares will be owned and retained by the company.

Critical Risk
• Unable to get finance for the venture.
• Marketing Department will unable to produce desired results.
• Global Business Environment will be affected due to
unavoidable circumstances.
• Unable to develop value stream through Micro Level Enterprise
Development.

Conclusion
• Under the entrepreneurial development program the interested
and the capable individuals will be selected from different rural
areas and they will be trained in their respective area in
accordance with the conditions, ease to do business and the
resources available in their locality.
• To attain this objective we will be closely in correlation with
governmental departments those who have been already
responsible to provide training the individuals in different
meadows.

Questions
And
Answers

Social Eterprise- A New Dimension of Entrepreneurship

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