Entrepreneurship and
Business Management
Mega Bucks Workshop
Indian Institute of Technology

Asif Khan

1
What is
Entrepreneurship?
Capacity to take risks
Ability to own and organize
Desire and capability to innovate and
diversi...
Who is an entrepreneur?
Person conducting own business
(Webster)
Person who sets up business deals in
order to make profit...
Why entrepreneurship?
Process of creating something different,
with value, by devoting necessary time
and effort, by assum...
Role of the Entrepreneur
An innovator who combines technical
innovations and financial finesses.
Important role in produci...
Entrepreneur as an
Economic Pioneer
Introduction of new goods and products
Introduction of new processes and
methods of pr...
Strategic Importance of
the Small-Scale Sector
Significant contributions to national income,
employment, and export earnin...
Entrepreneurship and
Small Businesses
Entrepreneurship is especially critical in small
businesses because:
Important sourc...
Marketing Management
Demand variables:
Demographic, social, economic,
political, and competitive factors in
market environ...
Marketing Management
Semi-demand variables:
Market segmentation
Customer behavior
Only partially under the control of the
...
Marketing Management
Decision Variables:
Product characteristics and pricing
Distribution and personal selling
Advertising...
Marketing Management
The essential entrepreneurial function
in marketing management is to design
an integrated marketing p...
Market Research
Marketing success depends on design of a
distinctive marketing plan
A small entrepreneur should not try to...
Operations Management
Process of designing and utilizing the
physical resources of the firm to
maximize the operational ca...
Operations Management
The entrepreneur’s smaller firm
generally has to provide specialized,
few-of-a-kind products and
per...
Financial Management
1. Effective utilization of the assetscurrent(short-term) and capital (long-term)
2. Provision of fun...
Financial Management
Finances needed for:
1. New investments in product development
2. Expansion of markets
3. Process imp...
Financial Management
Finding additional funds from sources as
1. Current liabilities
2. Bank loans
3. Equity investments
4...
Product Development
Improvements in design of existing product
Inventions of new products
Lack resources for full R&D faci...
Organizational
Management and
Control

Smaller companies go thru identifiable
stages of growth
Increased specializations i...
Formation and Growth
Formal and legal procedures of
formation- memoranda and articles of
association
Sole proprietorship
P...
Formation and Growth
Purchase of a small company- identify,
screen, evaluate, negotiate, and
structure payments
Consolidat...
Conclusions
Entrepreneurship is a challenging and
rewarding profession
Need to concentrate on market analysis,
financial r...
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Entrepreneurship and business management

  1. 1. Entrepreneurship and Business Management Mega Bucks Workshop Indian Institute of Technology Asif Khan 1
  2. 2. What is Entrepreneurship? Capacity to take risks Ability to own and organize Desire and capability to innovate and diversify (Stepanek, 1962) 2
  3. 3. Who is an entrepreneur? Person conducting own business (Webster) Person who sets up business deals in order to make profits (Collins Cobuild) Organizer of an economic venture, one who owns, organizes, manages, and assumes the risks of the business (Chandrashekhar) 3
  4. 4. Why entrepreneurship? Process of creating something different, with value, by devoting necessary time and effort, by assuming the accompanying financial, psychological, and social risks, and receiving the resulting rewards of monetary and personal satisfaction (Bowen and Hisrich, 1986). 4
  5. 5. Role of the Entrepreneur An innovator who combines technical innovations and financial finesses. Important role in producing competitive products, processes, and services. Generation of new employment Local and regional economic development Improved allocation of resources and transfer of technologies 5
  6. 6. Entrepreneur as an Economic Pioneer Introduction of new goods and products Introduction of new processes and methods of production Opening up of new markets Opening up of new sources of supply Industrial re-organization 6
  7. 7. Strategic Importance of the Small-Scale Sector Significant contributions to national income, employment, and export earnings Value of output over Rs. 5,70,000 crores Employment of over 17.5 million (> twice the private sector; almost as much as all public sector employment) Exports of over Rs. 54,000 crores (> 35 per cent of all exports) (2000-01 figures) 7
  8. 8. Entrepreneurship and Small Businesses Entrepreneurship is especially critical in small businesses because: Important sources of competition for large firms; challenge their economic power Offer a wide range of choice to consumers Sources of innovation and creativity Good career opportunities to work in an unstructured environment of a small company 8
  9. 9. Marketing Management Demand variables: Demographic, social, economic, political, and competitive factors in market environment Psychological, social, and economic patterns in customer motivations All autonomous factors 9
  10. 10. Marketing Management Semi-demand variables: Market segmentation Customer behavior Only partially under the control of the entrepreneur 10
  11. 11. Marketing Management Decision Variables: Product characteristics and pricing Distribution and personal selling Advertising policies Mostly under the control of the entrepreneur 11
  12. 12. Marketing Management The essential entrepreneurial function in marketing management is to design an integrated marketing plan, where the demand and semi-demand variables of the market are related to the product and decision variables of the firm. 12
  13. 13. Market Research Marketing success depends on design of a distinctive marketing plan A small entrepreneur should not try to compete on a product-to-product basis with large firms (same goods to same customers thru same channels at same prices !!) Instead, try to do “something different”. 13
  14. 14. Operations Management Process of designing and utilizing the physical resources of the firm to maximize the operational capabilities of the company Product/ service design Process design Job design Job standards 14
  15. 15. Operations Management The entrepreneur’s smaller firm generally has to provide specialized, few-of-a-kind products and personalized services, without the benefits of mass production and mass distribution 15
  16. 16. Financial Management 1. Effective utilization of the assetscurrent(short-term) and capital (long-term) 2. Provision of funds to support those assets 3. Use of current liabilities, intermediate loans, and capital debt or equity 4. Difficult for smaller companies to compete, in finance, with larger firms, simply because they lack money. 16
  17. 17. Financial Management Finances needed for: 1. New investments in product development 2. Expansion of markets 3. Process improvements, etc. Conserve available funds by preparing detailed financial plans, e.g. cash budgets, capital investment analysis, short-term plans 17
  18. 18. Financial Management Finding additional funds from sources as 1. Current liabilities 2. Bank loans 3. Equity investments 4. Retained earnings 5. Venture capital proposals 6. Angel funding proposals 18
  19. 19. Product Development Improvements in design of existing product Inventions of new products Lack resources for full R&D facility Must use available capabilities efficiently Outsourcing of R&D and innovation Technical feasibility, market feasibility, development time and cost, manufacturing capability, and strategic fit 19
  20. 20. Organizational Management and Control Smaller companies go thru identifiable stages of growth Increased specializations in tasks of staff Increased delegation on part of founder Increased systematization and formalization of information reporting and accounting procedures 20
  21. 21. Formation and Growth Formal and legal procedures of formation- memoranda and articles of association Sole proprietorship Partnership Private limited Public listing Cooperative 21
  22. 22. Formation and Growth Purchase of a small company- identify, screen, evaluate, negotiate, and structure payments Consolidation of a new companyintense conservation of cash, firm limitations on expenses, continual examination of company’s strategy. 22
  23. 23. Conclusions Entrepreneurship is a challenging and rewarding profession Need to concentrate on market analysis, financial resources, and technology management Cannot compete directly with the “big guys”, so need to be ingenious and innovative in all entrepreneurial functions 23

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