Entrepreneurship

1. Business Plan: Purpose and Contents of a Business Plan
As a road map
Business Plan is a written document that describes the business idea and all the
relevant internal and external elements involved in launching a new venture
Three main perspectives must be considered in every business plan.
(1)The perspective of the entrepreneur who must articulate what the venture is all
about.
(2)Marketing perspective.
(3)Investors perspective.

2. IMPORTANCE OF BUSINESS PLAN
1. It helps determine the viability of the venture in a target market.
2. It guides the entrepreneur in starting the enterprise
3. The entrepreneur becomes aware of potential obstacles while writing the business strategy.
4. It serves as a guide to investors and thereby helps in obtaining finance.
5. Writing the business plan forces the founders to think about all aspects of the venture.
6. A clear business plan articulates the vision and goals of the founders.
7. A business plan communicates to all stakeholders. They can judge the venture’s future on
the basis of the business plan.
8. The business plan helps identify the important variables that will determine the success or
failure of the firm.
9. The business plan is used as a selling document to outsiders.

3. Elements of a Business Plan
Your Mission or Vision
• What does your business do?
• Where does this happen?
• Who does your business benefit?
• Why would potential customers care?
• Why would potential customers care?

4. Offer and Value Proposition

5. 3. Audience and Ideal Customer
• who your business will benefit
• defining your sales and marketing strategies

6. 4. Revenue Streams, Sales Channels and
Marketing
Revenue Streams
• Product sales:
• Affiliate income
• Advertising income
• Video income
• Franchise

7. Sales Channels
• Mobile point-of-sale
• E-commerce platform
• Social media channels
• Brick-and-mortar location
Marketing

8. 5. Structure, Suppliers and Operations
• Business structure
• Permits and certifications
• Roles and responsibilities
• Supply chain
• Day-to-day operations

9. 6. Financial Forecasts

10. MAIN CONTENTS OF A BUSINESS PLAN
Business Plans – Traditional
Summary
• Business Concept
• Current situation
• Key success factors
• Financial situation/needs

11. Vision
• Vision statement
• Milestones

12. Market Analysis
• The overall market
• Changes in the market
• Market segments
• Target market and customers
• Customer characteristics
• Customer needs
• Customer buying decisions

13. Competitive Analysis
• Industry overview
• Nature of competition
• Changes in the industry
• Primary competitors
• Competitive products/services
• Opportunities
• Threats and risks

14. Strategy
• Key competitive capabilities
• Key competitive weaknesses
• Strategy
• Implementing strategy

15. Products/Services
• Product/service description
• Positioning of products/services
• Competitive evaluation of products/services
• Future products/services

16. Marketing and sales
• Marketing strategy
• Sales tactics
• Advertising
• Promotions/incentives
• Publicity
• Trade shows

17. Operations
• Key personnel
• Organizational structure
• Human resources plan
• Product/service delivery
• Customer service/support
• Facilities

18. Creating the financials of the business
plan
• Assumptions and Comments
• Starting Balance Sheet
• Profit and Loss Projection
• Cash Flow Projection
• Balance Sheet Projection
• Ratio's and Analysis

19. Business Plans –Lean Startup?
• Key partnerships: These are the other businesses or services that will help run the business, including
suppliers, manufacturers, subcontractors, and similar strategic partners.
• Key activities: This section lists how the business will differentiate and have a competitive advantage.
• Essential resources: List any resources the company will leverage to create added value for the
customer.
• Value proposition: This statement describes the company’s unique value and what it brings to the
market.
• Customer relationships: This section describes how customers will interact with the business and
details the customer experience from start to finish.
• Customer segments: This is where the target markets are named. Investors will want a clear sense of the
types of customers the business will serve.
• Channels: Here is a list of how the business will use various forms of media to interact with customers.
• Cost structure: Here, the cost strategy is defined, with a focus on the highest costs the business is
facing.
• Revenue streams: This is where the plan states how the business will make money. All revenue streams
should be listed.

20. What is Marketing?
• Marketing is a term that covers a whole gamut of activities aiming to
make people aware of your products and services and persuade them to
buy the same.

21. Marketing and its Importance for
Businesses
• Marketing and its Importance for Businesses
• Marketing and its Importance for Businesses
• Building relationships between customers and business
• Boosting sales
• Staying relevant
• Making informed decisions

22. Types of Marketing
• 1. B2B Marketing (Co working Spaces)
• 2. B2C Marketing (restaurants)
• 3. C2B Marketing (Freelancers, Contractors, and Gig Workers)
• 4. C2C Marketing (Facebook Marketplace)

23. Market Research
What does a market research analyst do?
• Developing data collection tools and techniques
• Using data modeling tools
• Analyzing data sets and communicating findings
• Contributing data-backed insights to marketing strategy
• Conducting product testing and brand research

24. Types of Business Models
• Retailer
• Manufacturer (Ford Motor Company)
• Fee-for-Service
• Subscription (Spotify)
• Freemium (LinkedIn/LinkedIn
Premium)
• Bundling
• Marketplace (eBay)
• Affiliate (social media influencers)
• Razor Blade ( HP (printers and ink))
• Reverse Razor Blade (Apple
(iPhones + applications))
• Franchise (Domino's Pizza)
• Pay-As-You-Go (Utility companies)
• Brokerage

26. FACILITY LOCATION AND
LAYOUT

27. PLANT LOCATION
 Every entrepreneur is faced with the problem of
deciding the best site for location of his plant or factory.
 Plant location refers to the choice of region and the
selection of a particular site for setting up a business or
factory.
 An ideal location is one where the cost of the product is
kept to minimum, with a large market share, the least
risk and the maximum social gain.

28. Reason for firm should look for
additional or alternate location
 To establish new venture
 Expansion of existing business
 Changes in demand and supply
 Company policy on diversification and change of
working condition
 Changing in government policy

29. Alternate options open for
management
 Make or Buy decision
Sub-contract instead of expansion
Expand existing organization
Dispose of the existing plant and build new one

30. Location analysis
 Demographic Analysis
Trade Area Analysis
Competitive Analysis
Traffic analysis
Site economics

31. Cost Site- A (Rs) Site- B (Rs)
Cost of
establishments:
Land and
Buildings
350000 250000
Transport
facilities
20000 30000
Cost of
operations:
Taxes 10000 8000
Labour 100000 70000
Water, power
and fuel
10000 80000
Total 490000 438000
Two sites A and B are evaluated in terms of above
mentioned two costs as follows:

32. Factors influencing plant
location/facility location
1. General locational factors, which include controllable
and uncontrollable factors for all type of organisations.
2. Specific locational factors specifically required for
manufacturing and service organisations.

33. General Locational Factors
1. Proximity to markets
2. Supply of materials
3. Transportation facilities
4. Infrastructure availability
5. Labour and wages
6. Capital
 Controllable factors

34.  Uncontrollable factors
1. Government policy
2. Climate conditions
3. Supporting industries and services
4. Community and labour attitudes

35. Specific Locational Factors for
Service Organisation
1. Favorable labor climate
2. Proximity to markets
3. Quality of life
4. Proximity to suppliers and resources
5. Utilities, taxes, and real estate costs

36. LOCATION MODELS
Various models are available which help to identify the
ideal location. Some of the popular models are:
1. Factor rating method
2. Weighted factor rating method
3. Load-distance method
4. Centre of gravity method
5. Break even analysis

37. 1. Factor rating method
The process of selecting a new facility location involves
a series of following steps:
1. Identify the important location factors.
2. Rate each factor according to its relative
importance, i.e., higher the ratings is indicative of
prominent factor.
3. Assign each location according to the merits of the
location for each factor.

38. 4. Calculate the rating for each location by multiplying factor
assigned to each location with basic factors considered.
5. Find the sum of product calculated for each factor and select
best location having highest total score.
Let’s say you are a company that wants to open a new store in a city.
You have identified several potential locations and you want to
determine which location is the best choice. You can use the factor
rating method to evaluate each location based on several factors such
as proximity to customers, availability of labor, transportation costs,
and so on. You would assign a weight or rating to each factor based
on its relative importance and then rate each location for each factor.
Finally, you would calculate the total score for each location and select
the one with the highest score as the best choice.

39. ILLUSTRATION 1: Let us assume that a new medical
facility, Health-care, is to be
located in Delhi. The location factors, factor rating and scores
for two potential sites are
shown in the following table. Which is the best location based
on factor rating method?
Sl. No. Location factor Factor
rating
Rating
Location
1
Location
2
1 Facility utilization 8 3 5
2 Total patient per month 5 4 3
3 Employee preferences 5 5 3

40. Sl. No. Location factor Factor rating
(1)
Location 1 Location 2
Ratin
g
Total Rating Total
1 Facility
utilization
8 3 24 5 40
2 Total patient
per month
5 4 20 3 15
3 Employee
preferences
5 5 25 3 15
Total 69 Total 70
SOLUTION:

41. 2. Weighted Factor Rating Method
 In this method to merge quantitative and qualitative
factors, factors are assigned weights based on relative
importance and weight age score for each site using a
preference matrix is calculated. The site with the highest
weighted score is selected as the best choice.

42. ILLUSTRATION 2: Let us assume that a new medical
facility, Health-care, is to be
located in Delhi. The location factors, weights, and scores (1
= poor, 5 = excellent) for
two potential sites are shown in the following table. What is
the weighted score for these
sites? Which is the best location?
Sr No. Location factor Weight Scores
L-1 L-2
1 Facility utilization 25 3 5
2 Total patient per month 25 4 3
3 Average time per emergency trip 25 3 3
4 Land and construction costs 15 1 2
5 Employee preferences 10 5 3

43.  The weighted score for this particular site is
calculated by multiplying each factor’s weight by its score
and adding the results:
Weighed score location 1 = 25 × 3 + 25 × 4 + 25 × 3 + 15 × 1
+ 10 × 5
= 75 + 100 + 75 + 15 + 50 = 315
Weighed score location 2 = 25 × 5 + 25 × 3 + 25 × 3 + 15 × 2
+ 10 × 3
= 125 + 75 + 75 + 30 + 30 = 335
Location 2 is the best site based on total weighted
scores.
SOLUTION:

44. 3. Load-distance Method
 The load-distance method is another technique used
in location analysis. It is a quantitative method that
involves calculating the load (or demand) at each
potential location and the distance from each location to
the customers. The objective is to minimize the total cost
of transportation and the cost of serving customers. The
location with the lowest total cost is selected as the best
choice.

45. if a want to open a shopping mall in Jaipur India how would I calculate
this Load-distance Method
To calculate the load-distance method for a shopping mall in Jaipur, India, you would need
to identify the demand for your products in each potential location and the distance from
each location to your customers. You would then calculate the cost of transportation and
the cost of serving customers for each location.
For example, let’s say you have two potential locations: Location A and Location B. The
demand for your products at Location A is 100 units and the demand for your products at
Location B is 200 units. The distance from Location A to your customers is 10 miles and
the distance from Location B to your customers is 20 miles. The cost per unit of demand is
$1 and the cost per mile is $0.50.
To calculate the cost of transportation for Location A, you would multiply the distance (10
miles) by the cost per mile ($0.50), which gives you $5. To calculate the cost of serving
customers for Location A, you would multiply the demand (100 units) by the cost per unit
of demand ($1), which gives you $100. The total cost for Location A would be $105.
To calculate the cost of transportation for Location B, you would multiply the distance (20
miles) by the cost per mile ($0.50), which gives you $10. To calculate the cost of serving
customers for Location B, you would multiply the demand (200 units) by the cost per unit
of demand ($1), which gives you $200. The total cost for Location B would be $210.
In this example, Location A has a lower total cost than Location B, so it would be selected
as the best choice.

46. For Eg: Let’s say you are a company that wants to open
a new warehouse in a city. You have identified several
potential locations and you want to determine which
location is the best choice. You can use the load-
distance method to evaluate each location based on
the demand for your products and the distance from
each location to your customers. You would calculate
the total cost of transportation and the cost of serving
customers for each location and then select the one
with the lowest total cost as the best choice.

47.  The center of gravity method is another technique
used to determine the best location for a new facility.
This method involves calculating the center of gravity
for the demand for your products and then selecting a
location that is closest to the center of gravity
Centre of gravity is based primarily on cost
considerations. This method can be used to assist
managers in balancing cost and service objectives. The
centre of gravity method takes into account the
locations of plants and markets, the volume of goods
moved, and transportation costs in arriving at the best
location for a single intermediate warehouse.
4 Centre of Gravity

48. 5. Break Even Analysis
 Break even analysis implies that at some point in the
operations, total revenue equals total cost. Break even
analysis is concerned with finding the point at which
revenues and costs agree exactly.

50. break-even analysis can be used to identify the best location for a new facility. The break-even point is
the point at which total revenue equals total costs. By calculating the break-even point for each potential
location, you can determine which location will require the least amount of sales to cover all costs
associated with producing and selling your product.
For example, let’s say you are a company that wants to open a new store in a city. You have identified
several potential locations and you want to determine which location is the best choice. You can use
break-even analysis to evaluate each location based on the demand for your products and the costs
associated with each location.
To calculate the break-even point for each location, you would need to know the fixed costs associated
with each location (such as rent and utilities), the variable costs associated with producing and selling
your product (such as materials and labor), and the demand for your products at each location. Once
you have this information, you can use the following formula to calculate the break-even point:
Break-even point = Fixed costs / (Price - Variable costs)
Where:
Fixed costs = Costs that do not change with the level of production or sales
Price = Selling price per unit
Variable costs = Costs that change with the level of production or sales
Using this formula, you can calculate the break-even point for each potential location. The location with
the lowest break-even point would be selected as the best choice.

51. PLANT LAYOUT

52. Point to consider
1. Meaning
2. Objectives of Plant Layout
3. Principles of Plant Layout
4. Classification of layout

53. 1.Meaning of plant lay-out
• According to Moore “Plant layout is a plan of an optimum arrangement of
facilities including
Personnel
operating equipment
storage space
material handling equipment and
all other supporting services along with the design of best structure to
contain all these facilities”.

54. 2. Objectives of Plant Layout
1.Streamline the flow of materials through the plant.
2. Facilitate the manufacturing process.
3. Maintain high turnover of in-process inventory.
4. Minimize materials handling and cost.
5. Effective utilization of men, equipment and space.
6. Make effective utilization of cubic space.
7. Flexibility of manufacturing operations and arrangements.
8. Provide for employee convenience, safety and comfort.
9. Minimize investment in equipment.
10. Minimize overall production time.
11. Maintain flexibility of arrangement and operation.
12. Facilitate the organizational structure.

55. 3. Principles of Plant Layout
1. Principle of integration
2. Principle of minimum distance
3. Principle of cubic space utilization
4. Principle of flow
5. Principle of maximum flexibility
6. Principle of safety, security and satisfaction
7. Principle of minimum handling

56. 4.Classification of layout
• Layouts can be classified into the following five categories:
1. Process layout
2. Product layout
3. Combination layout
4. Fixed position layout

57. 1. Process Layout
Model of process Layout

58. Advantages of process Layout
• Flexibility
• better utilization of production facility
• Lower investment
• Increase knowledge of supervisors

59. Limitation of process Layout
• Reduce material handling efficiency
• Increase in cost
• Decrease productivity

60. 2. Product Layout
Model of product Lay-out

61. Advantages of product Layout
• In-process inventory is less
• Decrease handling cost
• Mechanized handling systems
• Unskilled workers can learn and manage the production.
• Manufacturing cycle is short due to uninterrupted flow of
materials.

62. Limitation of product Layout
• Stop entire production
• Difficult to change product design
• Required high investment
• Lack of flexibility

63. 3. Combination Layout
combination
type of layout for manufacturing different sized gears

64. 4. Fixed Position Layout
Fixed type of position Layout

65. Advantages of Fixed position Layout
• interest and pride in doing the job
• enlargement and upgrades the skills
• Flexibility
• Layout capital investment is lower.