bus entrepreneurship

8/12/2019 Bus Entrepreneurship

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The word entrepreneurship has been derived from the french word

meaning to undertake


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Entrepreneurship is the function of seeking

investment and production opportunity,

organising an enterprise to undertake a newproduction process, raising capital, hiring labour,

arranging the supply of raw materials, finding

site, introducing a new technique/ commodities,

discovering new sources of raw materials and

selecting top managers for day to day operation of

the enterprise.. According to Higgins


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Entrepreneurship is the purposeful activity of an

individual or a group of associated individuals,undertaken to initiate, maintain or aggrandise

profit by production or distribution of economic

goods and services.


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Innovation A function of high achievement Organisation building function A function of group level pattern A function of managerial skills/ leadership Gap filling function

A function of status withdrawal Political, social, economic strucures Limitation/demand/labour structures Religious beliefs


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The person The task

The environment The organisation


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Schumpters views According to him an entrepreneur is one who

innovates and gets to create a differentcombination of enterprise resources andderives satisfaction from the problem solvingrole that is required

Innovation may be newproduct/service/method/resource/newmarket/


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Francis A WalkerAccording to him anentrepreneur is one who posesses above

ordinary skill sets to run an enterprise. He is apioneer and a captain to the industry.

He feels true entrepreneurs are a rare breed A competent entrepreneur commands

superior rewards to risk


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Economists view/ theory- that economic gainis the key driver

Sociologists view/theory-social structure/cultures shape entrepreneurial spirit hencegiving rise to business communities/castes

Psychologists view/theory- its a personsneed for power/ innovate that drives him toentrepreneurship


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Coined in late 70s in United states .manytop exec s left their top jobs and ventured to

start their own units which met with highdegree of success A need was felt to retain successful managers Concept of intrapreneurship was born An intrapreneur handles the business as his

own, takes risks, handles challenges andtakes responsibilities.


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According to McClelland

An unusual creativeness A propensity of risk taking

A strong need for achievement


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Total commitment, perseverance Drive to achieve Opportunity and goal orientation Taking initiative and personal responsibility Problem solving Realism, sense of humour

Calculated risk taking Seek feedback, internal locus of control Low need for status Integrity


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Innovating entrepreneurship- aggressivecollection and analysis of information andimplementation

Adoptive/Imitative entreprenurs- adoptssuccessful innovations

Fabian entrepreneurship- very cautious, does

not take much risk..follows beaten track Drone entrepreneurship- Very traditional in

approach..refuses to accept any change evenif losses occur; conventional in nature


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Individual and Institutional entrepreneur- insmall scale its individual,as it grows it has to

be institutionalised Entrepreneur by inheritancefamily

business, Business houses Technologist entrepreneurs Entrepreneurs by force- NRI s, VRS and

others who are not employed due to variousreasons


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Exchange functions- perceiving marketopportunities; procurement of scarce resources;purchasing inputs, marketing, managing

competition Political administration functions- dealing with

registrations, licences, taxes, subsidies;managing HR; Customers and Supply relations;

Managerial functions-Finance, production, Technology functions- acquiring and overseeing

factory assemblage, industrial engineering,upgrading process, quality management, newproduction techniques


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Innovation to differentiate from invention

Risk bearing- business is a game of skill whererewards and risks are great. Risk of capital,personnel hired, investments made,technology adopted.

O & M Organisation and Management-organisation building, expanding, conduct ofthe business


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Motivation is that drive which causes aperson to undertake a goal oriented action

Motivational theories are based on theassumption that behaviour is generallypurposeful

Entrepreneurial motivation is seen as thewillingness to sustain entrepreneurialbehaviour


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Need for achievement- drive to do well, face

challenges and remove obstacles (n Ach) Need for Power- need to control, influence

others and impact situations Need for Affiliation- affiliation motive, need

to establish links with others. All the three can exist in a person however the most dominant

motive will prevail on the entrpreneurs ctions


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Factors internal to the entrepreneur--------

Strong desire to do independent work Technical knowledge / manufacturing

experience Business experience in related area


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Financial assistance available frominstitutions

Accommodation in industrial estates Machinery on hire/purchase Political climate/ government policy NGO s assistance Support of large business houses Heavy demand/ good margin Availability of sick units for sale at low price


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To establish an entrepreneurial system thefollowing steps are required

Search for business ideas Process the ideas Assemble the necessary inputs/ resources Establish the enterprise


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Search for the business idea entails looking fora viable venture

Sources- Observing markets Prospective customers Development in other nations Study of project profiles Government organisations Trade fairs and exhibhitions


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Preliminary evaluation and testing of ideas--Technical feasibility and commercial viability Detailed analysis- feasibility of ideas are

compared- evaluation done Idea selection- influencing factors usually are

exim policy on specific products, excess

demand, experienced feild, parent- ancillarystatus,available expansion capacity, accrualof economies of scale, delicensedsector,subsidies etc


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Input requirements- assembling theresources. Main inputs are

1.Information & Intelligence regarding size andnature of demand, volume of supply, sources,prices, technology required, number and typeof personnel required, amount and sources offunds, nature and degree of competition,govtpolicies, export/import regulations


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Considerable wealth Prestige and status

Economic independence Sense of achievement and pride Providing employment Planned career for next generation Increases productivity and GDP of a nation


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Industrial fairs are exhibhitions organised atregional, state, national or international levels

Advantages to entrepreneur Information dissemination of product/service Point of sale New ideas for improvement Foreign collaboration/ knowhow Assessment of competition/trends Dealership contacts/ export/import trade


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A project may be defined as a non repetitive activity or

interrelated activities towards an objective to be achieved in a

specific time period

Project identification is concerned with the development of

opportunities- which may be Additive, Complimentary or

Breakthrough

Every project has 3 basic dimensions- Inputs, Outputs, Social

costs and benefits


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Quantifiable and non quantifiable projects

Sectoral projects- Agriculture, Industry & Mining,

Transport & Comm etc,

Techno economic projects-Factor intensive, causation

oriented, magnitude oriented ( small, medium large)

Finance based classification- New, expansion,

modernisation, diversification ; Services such as

welfare, service, R&D, education


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To be specific, never general Not too complex

Measurable, Tangible, Verifiable Resource bound Realistic Consistent to organisational plans and

policies


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Internal- Dependence on consultants

Implementation within costs and schedules Project management team is not part of

objectives setting Availability of physical and non physical

resources such as finance, personnel,patenting etc.


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Nature, size, location etc

Government policy and regulation Availability of financial institutions to supply

financeTechno economic survey and a Desk research

are two important techniques of projectidentification


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Industrial surveys Lead bank surveys

Research labs Literature on industries Import/export statistics Profitability studies Studies on price/shortage etc of commodities


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After a due analysis of the 3 basic dimensions-Inputs, Outputs, Social costs and benefits;the

entrepreneur may identify the project hewishes to implement

Distinction is drawn as to Demand based and resource based industry Import substitute and Export oriented

business


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Pre investment stage

Construction phase

Normalisation Phase


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Project formulation takes into account:

Appropriate technology External economy Qualified personnel Government regulationsIt is a step by step investigation and

development of a project idea


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An industrial economist

A market analyst A technologist/ engineer/specialist A mechanical / industrial engineer A management accounting expert


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A project design defines the individualactivities which go into the core elements of

the project and their inter relationships

A network analysis is the consideration oftime and resources profile of project

activities- to identify the optimal course ofaction taking into account the availableresource constraint and amount of time


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Network-A series of related activities Activity- An action to complete a specific

event; start point to end of time taken Event start and completion of an activity Network diagram graphical representation

of a set of events and activities related to a

project- circles to indicate each event Burst- starting event for a no of activities Node ending event of many activities


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Critical path-activities Preceding/succeeding/concurrent activities

Dummy activity Slack EST/LST EFT/LFT Float- total and independent float


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Payback period Average Rate of return

Net present value Benefit cost ratio Internal rate of return


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The design of factory directly orindirectly affects the operationalcosts


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Nature of manufacturing process Plant layout

Smooth operations Lighting, ventilation and services Material handling Cost of building Nature of product Future expansion Appearance


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To facilitate the manufacturing process-minimise material handling- to make

economic use of building and manpower-provide employee safety and convenience inwork

Three types- product layout; process layout

and combined layout


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Requirements relating to health- cleanliness,

ventilation, dust & fumes, humidification,

overcrowding, lighting, drinking water,washrooms, spittoons

Welfare requirements-washing, facilities for

storing/drying, first aid, canteen, shelters,

restrooms, creches


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Selection of the product-based on economicviability of product

Selection of form of ownership- SSI s mostly

prefer sole tradership, partnership or Pvt ltdcompany and is mostly family owned

Selection of site- choose a suitable plot for

factory/shed- industrial areas developed bySIPCOT,SIDCO,MMDA or Industrial estates orFTZ s( to considerincentives/sibsidies/infrastructure/proximity)


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Designing capital structure- how much will beown capital, long term loans from friends, termloans from banks/ institutions

Acquisition of manufacturing knowhow Preparation of project report- technical &economic feasibility/ viability;financialimplications/ managerial competency

Provisional registration- then apply for licenses/

power connection After above can apply for permanent

registration certificate


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Introduction of land and building; space/ rawmaterial used/ product/capital organisation etc..

Format

Name, address Product/service Targeted monthly/quarterly production Principal raw material Work shed area Power requirement- (HP) Employment skilled and unskilled Cost of project- fixed and working capital Turnover estimated


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Expected profit

Expected profit as % of expected sales and

capital investment

B E point

Financial assistance from books/institution

expected

Details of margin money brought in by

entrepreneur and sources


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Fixed capital-land,building,plant,equipment,furniture etc.

Product development cost-market research,

collaborations, consultancy fees etc. Preoperative expenses Recurring expenditure

Cost of production Break even point Profitability Cash flow analysis


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Two stages: provisional and permanentregistration

With provisional regn the unit can apply forpermission to construct factory shed to localauthority, power connection, financialassistance, sales tax registration etc.

When all steps has been undertaken toestablish the SSI unit permanent certificatecan be obtained


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Sole proprietorship Partnership

Joint stock company Cooperative enterprise

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