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Entpreneurial Management (EM04_04 ) Before starting up a small scale industry - 2

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This is part of a course that I taught at the Bangalore University last spring - on Entrepreneurial Management. Decks EM04_01 -4 are on starting a small scale industry and on pre-startup processes for small scale industries in India

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Entpreneurial Management (EM04_04 ) Before starting up a small scale industry - 2

  1. 1. Management 04_4 – Before starting the project Suhas Dutta
  2. 2. Syllabus coverage • To understand what constitutes a business opportunity, scanning the environment for opportunities, evaluation of alternatives and selection based on personal competencies. • An overview of the steps involved in starting a business venture – location, clearances and permits required, formalities, licensing and registration procedures • Assessment of the market for the proposed project • To understand the importance of financial, technical and social feasibility of the project. Content (c) Copyright 3nayan Consulting. All rights reserved, 2014 - 18.2
  3. 3. Today, we shall cover • Market assessment • Project feasibility analysis Content (c) Copyright 3nayan Consulting. All rights reserved, 2014 - 18.3
  4. 4. Lets watch Content (c) Copyright 3nayan Consulting. All rights reserved, 2014 - 18.4 • 5 marketing tools
  5. 5. Market assessment Content (c) Copyright 3nayan Consulting. All rights reserved, 2014 - 18.5
  6. 6. Market assessment • In a competitive economic system, the success, survival and growth of enterprise warrants market assessment • Need oDetermine what the customers want – depending on their education, employment, age, income, status etc • The important elements are: Content (c) Copyright 3nayan Consulting. All rights reserved, 2014 - 18.6 Market demand analysis Competitive situation Trade practices
  7. 7. Market demand analysis • The variables which determine market demand are: • The entrepreneur should be in touch with vendors, and customers Content (c) Copyright 3nayan Consulting. All rights reserved, 2014 - 18.7 Product Total volume Total purchased Customer group Geographical area Time period Marketing environment Marketing programme
  8. 8. Competitive analysis • Entrepreneurs should have a clear sense of competitors and know: oNumber of competitors oCompetitor market share oCompetitor product SWOT oMarket perception and image oTrade practices oMajor customers Content (c) Copyright 3nayan Consulting. All rights reserved, 2014 - 18.8
  9. 9. Understanding trade practices • Know the intermediaries: oAgents, brokers, chain stores, malls, export houses etc. • Important to know trade practices oDiscounts oPseudo offers oCredit facilities oHome delivery oGifts etc. Content (c) Copyright 3nayan Consulting. All rights reserved, 2014 - 18.9
  10. 10. Forecasting market demand Surveys •Direct oral interviews •Indirect surveys •Mailed questionnaire •Schedules sent through enumerates •Through agencies Statistical •Time series •Regression •Extrapolation Leading indicators Others •Market factor analysis •Simulation Content (c) Copyright 3nayan Consulting. All rights reserved, 2014 - 18.10
  11. 11. Project feasibility analysis Content (c) Copyright 3nayan Consulting. All rights reserved, 2014 - 18.11
  12. 12. Project feasibility analysis Market analysis Financial analysis Technical analysis Social profitability analysis Economic analysis Managerial analysis Content (c) Copyright 3nayan Consulting. All rights reserved, 2014 - 18.12
  13. 13. Market analysis • Method of screening project ideas as well as evaluating project’s feasibility in terms of markets: • Methods used to estimate the market demand are: Content (c) Copyright 3nayan Consulting. All rights reserved, 2014 - 18.13 Area of market Distribution channels Trade practices Competition Existing demand Survey Sales experience Market segmentation
  14. 14. Financial & technical analysis Financial analysis • Aspects need to be analyzed: oInitial capital requirement oTotal project cost oRequirement of fixed capital and working capital oCash flows and fund flows Technical analysis • Aspects that require analysis: oMachinery and equipment oLocation of the plant oPlant layout oPower and communication facilities oRaw materials oWork force etc. Content (c) Copyright 3nayan Consulting. All rights reserved, 2014 - 18.14
  15. 15. Others Social profitability analysis Projects and companies need to be socially aware and help the society by constructing schools, and hospitals and participating in community development projects Economic analysis •Economic trends •Extent of competition •Price structure •Cost of the project •Demand for the product •Trade cycles Managerial capability Required for long term feasibility of the project Content (c) Copyright 3nayan Consulting. All rights reserved, 2014 - 18.15
  16. 16. Further readings / viewings • History of corporations (Part 2) • http://www.abhinavjournal.com/ima ges/Commerce_&_Management/Ja n13/13.pdf Content (c) Copyright 3nayan Consulting. All rights reserved, 2014 - 18.16

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