COURSE MATERIALOFENTREPRENEURSHIP DEVELOPMENT PROGRAMME FORPMEGP BENEFICIARIES Khadi & Village Industries Commission 3 Irla Road , Vile Parle(W), Mumbai-56 1 INDEX Sl no Name of the Topic Page no 1.COMMUNICATION & PRESENTATION3-6 2.LEADERSHIP8 3.ENTREPRENEURSHIP CHARMS AND CHALLENGES10-12 4.QUALITY STANDARDS14-18 5.MANPOWER MANAGEMENT20-21 6.TIME MANAGEMENT23-25 7.CHARACTERISTICS OF AN ENTREPRENEUR;A MATTER OF ATTITUDE AND SKILL 27-29 8.BUSINESS PLAN PREPARATION31-34 9.DESIGN AND PACKING36-39 10.COSTING, PRICING AND PROFIT MAKING 41-45 11.RAPPORT BUILDING AND UNFREEZING MICROLAB 47-49 12.THEMATIC APPERCEPTION TEST (TAT ) 51-54 13.SCORING MANUAL FOR ACHIEVEMENT MOTIVATION (TAT) 56-59 14.PURCHASING INVENTORY/MATERIAL MANAGEMENT61-62 15.BREAK EVEN ANALYSIS 64-71 16.ESTABLISHMENT OF AN ENTERRISE : SYSTEMATIC APPROACH73-76 17.LEGAL FORMALITIES FOR SETTING UP OFUNIT78 18.MARKETING STRATEGY AND SALES TECHNIQUES82-84 19.ACCOUNTS AND BOOK- KEEPING86-90 20.CRISIS MANAGEMENT92-96 21.CUSTOMER RELATIONSHIP MANAGEMENT98-102 22.ENTERPRISE GROWTH PRODUCT DIVERSIFICATION EXPANSION 104-106 23.RISK TAKING BEHAVIOUR108-109 24.SUSTAINABILITY OF AN UNIT; PRECAUTIONS NEEDED 111-115 25.VALUE ADDED TAX117-120 26.INCOME TAX122-125 27.SALES TAX127-130 28.MANAGEMENT OF WORKING CAPITAL131-133 2 1. COMMUNICATION & PRESENTATION 3 1.COMMUNICATION & PRESENTATION Introduction : The word Communication is the art and science of conveying messages completely and without distortion from one human being to another. Thewordoriginatesfromcommunis,whichmeanstogethercommon,thus communication means sharing the ideas, information and experience with each other.Thus communicationimpliesinteraction.Theconceptofcommunicationindicatestwoway process,itinvolves,exchange,suggestsparticipationandadoptionandincludessharing.Therefore, communication is not complete till the message is understood. Communicationcanbeseenasaprocessofcreatingmeaning.Meaningisnot transferable.Whataretransferablearethemessageandnotthemeaning.Meaningis generatedfromwithin.Meaningistheresultofinterpretationofthemessagebythe receiver.Communication becomes effective when the sender of the message creates such condition,thatthereceivernotonlygetsthemessagebutalsounderstandsitandderives the meaning intended by the sender. Thus communication is an important process in the management of an enterprise. Objectives of communication : 1.To convey ideas, opinions, views, news, data or information. 2.To facilitate the managerial decision-making and policy-making. 3.To elicit the co-operation in and out of the organization of all those concerned. 4.To secure co-ordination of different departments or sections within the organization. 5.To promote the managerial efficiency and productivity. 6.To achieve the organizational aims, goals and objectives. 7.To develop the morals and team-spirit among the staff/employees. 8.To improve the intra and extra organizational relationship. Process of Communication : Itinvolvesgroupactivitiesparticipationandco-operation.Itconnects twoterminals namely(1)senderofmessage,(2)Receiverofmessagebyusinganymedia.Itinvolves, 4 not only transmission of information but also its follow-up and feedback.Following are the various elements involved in the process of communication. 1.Message It is any peace of information relating to any fact, idea, opinion feeling, attitude or the course of action. 2.TransmitterIt is the communicator or sender of message.It conceives and initiate messages,it motivates and tries to change the behavior of the receiver.3.EncodingThe message consists of certain information which will be translated / converted into assets of figure science, symbols, words, actions, pictures, charts, graphs, diagrams, audio-visual etc. it is called encoding.4.ChannelisingThe transmitter selects a suitable channel of communication to transmit the encode messagetothereceiver.Thechannelsofcommunicationincludestheuseof different media like radio, video, Dictaphone, telephone, telax, fax, e-mail or face to face conversation.5.ReceiverReceiver is the person to whom the message is meant for.It is the second important terminal.Heorshehastoreceiveinterpretperceiveunderstandandactuponthe message. 6.DecodingItistheprocesstranslating/convertinganduncodedmessageintoordinary understandable language inday to day life.The receiverdecodes the message by convertingthewords,figures,science,symbols,charts,graphsetc.into understandablesubstanceofmeaning.Itisnecessaryforinterpretingand understanding a peace of message.7.Acting / ImplementingThereceiverwillactandimplementthemessageinpracticeaccordingtohis understanding of the message. 8.Feed BackIt is the last but not least element/communication process.It involves passing of the informationabouttheresponsefollow-upandimplementationofmessagebythe receiver to the sender / transmitter. 5 12 Characteristics of Effective Communication:1.Creditability2.Context3.Contents4.Clarity5.Conciseness6.Completeness7.Courteousness8.Correctness9.Channels10.Continuity and Consistency 11.Capability Communication Model : Varieties of models have been put forward to explain the process of communication.Theyspringfromavarietyofsourceslikepsychology,philosophy,linguists,televisionor electronics. An engineering Model : Inanycommunicationsituationtherearetwomainelementthesenderandthe receiver, applied to a training process the trainer is a sender and the receiver is the trainer.Thetrainerhascertainmessageintermsofsomeconceptsprinciplespracticesor application,whichhewantstraineestounderstand.Heencodethatmessageinterms language,bothverbalandvisualusingtechnicaltermtheirdefinitions,symbolsformulae, bothverbalandvisualusingtechnicaltermtheirdefinitions,symbols,formulae,diagrams, graphs sketches, photographs, different methods and technique.This encoded message is transmittedusingvariouscommunicationchannelsi.e.throughsensesofseeinghearing, touching,smellingandtesting.Thecommunicationwillbemoreeffectivewhenmore channelsofcommunicationareused.Thismessageisreceivedbythereceiverwho decodes it for himself on the basis of his intelligence. Types of Communication:There are two types of communication -i.Verbalii.Non VerbalThe verbal communication with gestures and expressions give more meaning to the message.The non-verbal communication must be with proper gestures and expressions to give more meaning to the message. 6 Role play Tounderstandtheimportanceofpropercommunicationdividebatchinto5groups. Provide one paragraph to each group. a.Participant A must tell the others about the paragraph contents byFacing away from the group.Speaking in 3 sentences only.The others cannot ask any questions.b.Participants B must tell the others about the paragraph contents byFacing away from the group.Speaking in 3 sentences only.The others cannot ask any questions. c.Participant C must tell the others about the paragraph contents byFacing towards the group.Speaking in 3 sentences only with gestures.The others can ask 3 questions to which the answers can only be Yes or No. d.Participant D must tell the others about the paragraph contents byFacing towards the group.Speaking in 3 sentences only.The others can ask 3 questions, to which the answers can only be Yes or No.e.Participant E must tell the others about the paragraph contents byFacing towards the group.Speaking in 3 sentences only.The others can ask 3 questions of any kind. ii.Intheaboveexerciseasktheotherparticipantstonotedowntheir understanding after each round.iii.The learning should be f.Just words alone are not enough to convey a message.g.Words with gestures & expressions give more meaning to the message.h.Asking questions can help make understanding more effective.IStart multimedia and take them through screens 1-8. Explain where required. 7 2. LEADERSHIP 8 2.LEADERSHIP A leadership is one of the important aspects, which shall be developed by each and every human being.The effective leadership is required to lead and guide the subordinate toperformorganizationaltaskeffectivelyandefficiently.Theleadershipistheactivityof influencing people to strike willingly for group objections. The role/importance of leadership are under here :1.Goal Setting :Theleadershiphastosetthegoalsandobjectivesforhissectionorgroup.Goal setting is one of the important functions of a leader.The goals may be set all by himself, or he may take the help of his subordinates in setting goals. 2. Developing Morale :Oneoftheimportantfunctionofaleaderistodevelopmoraleinhis subordinates.Healwaysstrivestokeephissubordinatesingoodmoodorhigh spirits.He always tries to develop positive attitude of his subordinates. 3.Securing willing participation :Theleaderinfluencesthesubordinatestoworkwillinglytowardsgroup objectives.A good leader neveruses force to make the subordinates works.As a good example on his part, he takes active part in the activities of the group. 4.Encourages initiative :The leader encourages initiative among his subordinates.He provides them with freedom to come up with new innovative suggestions and ideas.He creates a healthyenvironmentinwhichsubordinatestakeactiveinterestinthe accomplishment of objectives. 5.Developing Team Spirit :Theleadercoordinatestheactivitiesofhissubordinates.Ifthereisany difference of opinion among his subordinates, he strives to solve the differences.He make s every effort to develop team spirit in his subordinates.A good leader does not believe in divide and rule policy. 6.Representation :Theleaderistherepresentativeofhissubordinates.Herepresentshis subordinates when ever there is a need to express their views with higher authorities within or outside the organization.7.Creating confidence :Agoodleadercreatesconfidenceinhissubordinates.Hemakesthemto accept and face challenges. 8.Providing guidance :Aneffectiveleaderprovidesvitalguidanceandassistancetohisfollowers whenever it is required.9 3. ENTREPRENEUSHIP CHARMSAND CHALLENGES 10 3.ENTREPRENEURSHIP CHARMS AND CHALLENGES Ifself-helpisthebesthelp,thenself-employmentisthebestemploymentand entrepreneurship, the most exciting level of self-employment.In employment one works for others one works as others want one to do.There is no scope for doing as you wish, doing whatyouwishdoinghowyouwish.Butentrepreneurshipistheoppositeofemployment.You work for yourself, achieve a target or a goal set by yourself and reap the satisfaction of having achieved the goal yourself. Entrepreneurshipisnotamatterofheritage,itisentirelyamanifestationofsuch potentialities that any individual born in any caste, community and class can have.As such, any person having a certain set of behavioral traits and mental aptitudes in him/her can be come an entrepreneur.Besides, there is no need for such a person to be groomed from the verychildhoodforbecominganentrepreneur.Evenifhegrownuphasworkedona differentlineandhasdevelopedthesetraitsoraptitudesheorshecanbegroomedand developed as an entrepreneur through counseling and motivational measures. 1.Points in Your Favour : This is applicable to a greater degree to the science and technologygraduates and diplomaholdersforthesimplereasonthatduringeducationperiod,duetotheirconstant inter-actionwithscienceandmaterialsubjects,theyacquireamentalityforobjective considerationsandevaluationofanyissue.Giventohardwork,thoroughnessand perceivingthingssquarelyinanymomentofcrises,theyarebetterqualifiedtofacea problem and find out a possible solution. Secondly, the science and technology graduates and diploma holders have a natural aptitudetopickupfastthetechnicalitiesnormallyinvolvedinproductionprocessofany enterprise. Withthesepluspointsintheirfavour,entrepreneurshipshouldnaturallybean attraction for science and technology graduates.Some more material reasons for the same are - a.Itprovidesthemanopportunitytoenterintoaprocesswhichleadstothe realizationofanindividualspassionforinnovationanddevelopment.Findings based on a research study done in the western countries have shown that small enterprises have been the origin of many radical innovations. b.Itisthroughscienceandtechnologyinputsthatmoderntechnologycanbe introducedinthesmallscalesectorandtherebyanewcosteffectivenessand sophisticationcanbebroughtaboutintheproductmanufacturedinthesmall scale sector.c.Tofindasuitableemploymentonehastoknockmanydoorsandsomany shocks and even then one may not succeed.But to be an entrepreneur one has toknockonlyonedoor,thatisonesownselfandifthequalitiesand competencies are there, in whatever small quantity, he has the prospectus at him 11 disposaltosucceedassuch.Theshocksarethereinentrepreneurshiptoo,but they can be absorbed if one is cast in an entrepreneurial mould.d.TheGovernmentofIndiaandtheStatesoffersomanyfacilitiesincentivesand schemestohelpnewentrepreneursandparticularlytechnologygraduatesin taking up entrepreneurial career. This career path is no more as thorny as it used to be decades ago. e.As an entrepreneur, one is not only employed but creates employment for others one is not only realizing the goal in his life but is also a source of livelihood for so many.Theprideofbeingalordofonesowndestinyiscoupledwiththe satisfactionofbeingthebenefactorofsomany. It is not enough to be technically qualified and experienced; one has to let the society,nationatlargetobenefitfromonestechnicalcompetenceand experience.Entrepreneurshipprovidesanexcellentopportunitytorealizeboth thegoalstheindividualstatusaswellasanindividualscontributiontothe society. Settingupyourownenterpriseisonewaytoachievethatdoublefulfillment.ThefollowingcaseofShriRamaswamy,atechnocrat,shouldleavenodoubtsin your mind 2.Achievements of a Technocrat Entrepreneur : (Here is the story of a technocrat, who is now enjoying the fruits of his success after adeterminedeffortandhardworkputinbyhim.Aninnovativeproductandhistechnical backgroundarekeyfactorstohissuccess,overandabovehisownentrepreneurial characteristics. The path to any success is slow and gradual.You can also plan your way to reach such innovativegoals,bankingonyourscienceandtechnologybaseandanentrepreneurial spirit) Mr. K.K.Ramaswamy is he founder of Sharp Tools a firm manufacturing light weightpumps.Withinaspanof12yearshehasreachedanannualbusiness turnoverofRs.4crores.Heisagraduateinmechanicalengineering.Fromhis schooldaysonwardshehadanaspirationtobecomeanindustrialist.After completinghiseducation,hejoinedoneoftheleadingmachinetoolmanufacturing firms at Coimbatore. He worked there for 10 years as Shop Floor Manager, because of his hard work and loyalty to the management, he was sent to West Germany for training in manufacturing precision tools.He was there for two years and came back and served the same unit for a year. Heexpressedhisdesiretothemanagementtostarthisunitandreceived goodencouragementfromthem.In1968,withonlyRs.10,000/-fromhissavings, he started his own unit.For three years he was concentrating on job orders only.In 1972hefiledatendertoBHELforRs.2.5Lakhsforafabricationassignment.He gottheorderbutdidnothavemoneytoexecutethesame.HeapproachedState 12 Bank of India and convinced the Officer and got a loan for that particular work.He completed the work before the schedule date which give him a profit of Rs. 1 lakh. At that time he thought of diversifying and started searching the market.He made a trip to Europe and some Arabian countries.In Saudi Arabia he saw a light motorpumpweighingjust10kg.whichattractedhisattention.Theordinarypump manufactured at that time in India weighed about 50 kg.Hethoughtthatifheenteredinthatparticularlineitwouldhaveabetter future.Hepurchasedonepumpanstarteddevelopingitinhisfactory.Within6 monthshewassuccessfulindevelopingthemotorandgaveittoaleading educational institute.Then people gradually started asking for the light weight motor pump for their own use.Its performance was also very good.He slowly expanded his unit and entered the South India market through dealers. Atpresentheismanufacturingabout15000motorpumpsperyearandhas 10%oftheSouthernmarketshare.Hestartedthreeotherunitstocatertothe market needs and now he as a labour force of 120 persons.He has 4 professional engineerslookingaftereachfactory.According,tohimheplansinadvanceand executesthejobinconsultationwiththestaffandfinishesitattheappointedtime. Every year he arranges his dealers conference gets feed back and improves quality constantly. Two years back he got ISI trade mark for his motor pumps. Mr.Ramaswamyhasbecomeoneofthemostrespectedandrecognized entrepreneursoftheregion.In1983,hewaselectedPresidentoftheCoimbatore District Small Scale Industries Association and Vice-President of the Rotary Club of Coimbatore.He was given the NATIONAL AWARD for Small Scale Industries in the year 1983. 13 4. QUALITY STANDARDS 14 4QUALITY STANDARDS Customers pay only for what is of use to them and this gives them value.Nothing else constitutes value Peter DruckerIn the prevailing economic situation, large and small enterprises in developing and developed countries are discovering that the old ways of doing business do not workanymoreandthatnewapproachesarecalledfor.Companiesareadopting newsystemofmanagementforbothinternalandexternalpurposes.Theuseof TQMprinciplesandqualitymanagementsystemsincooperatingwithother companies,enteringintoagreement,anddeveloping,manufacturingandsupplying therequiredproductsandservicesmeetingcustomerexpectationsisbecoming more and more a business imperative. Quality management has thus become a fundamental management function.Deliberate actions are taken to ensure that customer requirements are identified and met through the implementation of quality planning, quality control, quality assurance andcontinuousqualityimprovement,insuchawayastoobtainmaximum advantage.Quality assurance is considered to mean all the actions taken to ensure that the customers requirements are understood and met. Economicstudiespointoutthatmeetingquality,deliveryandcost requirements is the only effective long-term method for success in the export trade.Furthermore,recentstudiesshowthatqualityisadynamic,ever-changingconcept thathasbecomethebusinessimperativeofthedayforenterprisesofallsizesin both their domestic and export markets and especially so for developing counties. Exportpromotionisvitallylinkedtoeconomicdevelopment,andunlessa countryexportsqualitygoodsandservicesmeetingcustomerrequirements,there canbenosteadyeconomicgrowth.Noenterprisecanaffordtocompromiseon quality if it is to establish a good image for its products and for its country.A single consignmentofinferiorqualitycantarnishthegoodnameoftheexporterandthe country as a whole. Customerdontcomplain,theyswitch.Andinmostcases, theydontevenletyou know that they are unhappy. Deming.WhatDemingsaysaboutcustomers(seeinsetabove)istruegenerally,and applies to both internal and external markets.However, many importers do complain bitterly,andstigmatizethenameofthecompanyandthenameofthecountryof origininthesamebreath,andthenswitch.Someexportershavetolivewiththis switch for a lifetime.15 Furthermore,developingcountriesshouldrealizethat,whilerapidlygrowing marketsexistabroadfortheirexportproductsandservices,unlessenergeticsteps aretakentoenterthem,thosemarketscangobydefaulttotheexporterswhoare already supplying them.SMEs may require the strong and vigorous backing of their government to penetrate new markets.Theinitiativetointroduceexportqualitymanagementarisesfrommarket pressuresoffromaconvictionthatamarketingadvantagewillbegainedfrom applying quality management concepts to the export cycle.Quality as a management imperative :Quality became the management imperative of the 1990s and will continue to be the key to success in the next millennium.We often see the words quality first, qualityrightthefirsttime,qualityrighteverytime,anddemandsforqualityand serviceinvadeeverysphereofactivity,fromthemotorvehicleswedrive,tothe domestic appliances we use, the food we eat, the restaurants we dine in, the doctors we visit, and the products we import and export, reminding us that quality is the goal ofeverybusiness,andthatitsfocusisthecustomer.Inaddition,satisfyingthe requirements of the customer is a dynamic activity: both customers and their needs change, and the supplier has to recognize this. Whenitcomestotrade,noexportingcountrycanaffordtocompromiseon quality.Thecurrenteconomicclimatecallsforexportmarketingandpromotion effortswithassurancesofsuperiorandconsistentqualityinproductsandservices, associated with lower prices and delivery of the right product at the right time. What is quality ?Having said that quality is the management imperative of today, let us examine what quality actually is.Thewordquality,however,beingawordmuchinfashion,hasmany meaningsandinterpretations,manyofwhicharesubjective.Furthermore,mostof thequalitygurus,andevenorganizations,havesometimescoinedtheirown definitions of the term.While the definitions may differ, what is important is that the definition should be clear without a shadow of doubt in the mind of users.Fromthemanydefinitionsbeingusedindifferentcontexts,itisclearthat quality is in fact a complex and multifaceted concept, embracing the sum of all the characteristicsofaproductorservicethatcontributetoitssuperiorityand excellence. Product quality : Aproductwhichmaybehardware,software,processedmaterialsor assemblies or a service results from a series of processes transforming inputs into outputs.How does one define product quality?16 Many factors influence product quality: these normally cover the raw material, productionmachinesandequipment,productionprocesses,andtheworkers.For these reasons, it becomes difficult, if not impossible, to make two products identical inquality,astherewillalwaysbetheexpectedandobviousvariationscommonto anystatisticaldistribution.Inpractice,however,theprocessneedstobedesigned sothatitresultsinproductswithsmalloracceptablevariationsinquality characteristics,resultinginamoreuniformandstablequalitylevelmeetingthe stated and implied needs of the customer.Product quality should normally meet the requirements of the market, as well as contractual and organizational demands, and these requirements should be expressed in functional parameters and documented. Among the contributors to product quality are the following.oContinuousimprovementorupdatingoftheproducttomeettheevolving requirements of the market place.oBuildingqualityintothedesignoftheproducttomeettherequirementsand opportunities of the market place.oProviding support throughout the life cycle of the product so as to maintain its design characteristics and value for the customer.Needlesstosay,forcertainproducts,reliability,maintainabilityandavailability will be important quality characteristics. Service quality :In recent times, services have become the fastest-growing sector of the world economy.Excessivepreoccupationwithproductqualityandthedifficulties inherentindefiningroles,functionsandqualitycharacteristicsintheservices sectorwereresponsibleforthelowprioritygiventothesectorinthepast.Anotherimportantreasonfornegligencewasthatcustomercomplaintsinthe sector were taken lightly and were seen as an irritant rather than an opportunity for improvements; any investment in quality in the services sector was viewed by management as an unnecessary expense.Quality standards can be more easily established for goods than for services. Goodscanbeinspectedandtestedforconformity,defectivescanbeidentified, correctiveactionscanbetaken,providedperformancelevelshavebeen established.Services are usually produced and consumed at the same time, and servicedeficienciescannotbeeliminatedbeforedelivery,servicesbeing personalized and subjective.In additional, service quality standards are difficult to establish because measurements are subjective, and customers will have their own expectations about what service quality is or should be.For export of services, the usual inquiries from the buyer relate to assurance ofcontinuityofsupplyandconsistencyinquality.Inaddition,servicesare usually labour-intensive, involving complex cross-functional integration of several 17 supporting systems.Thus all processes that affect a suppliers ability to provide aqualityservice,suchasthoselistedbelow,needtobeincludedinthequality assurance system.Quotations for client works; Contracting with clients;Developing a work plan; Implementing the work plan and a review of work; Client reviewThe implementation of a quality system based on the ISO 9000 series should provideanopportunityforevaluatinghowanenterpriseisconductingits business,andwhetherornottherearefurtheropportunitiesformeetingthe service needs of its clientele. ISO 9004-2:1991, Quality management and quality system elements Part 2: Guidelinesforservices,embracesalltheprocessesneededtoprovidean effective service, from marketing to delivery, which are appropriate to all sizes of enterprise.With services, we need to:Define clearly the requirements of a service in terms of characteristics that are observable and subject to customer evaluation;Defineclearlytheprocessesthatdeliveraserviceintermsof characteristicsthatmaynotalwaysbeobservablebythecustomerbut that will directly affect service performance. Furthermore,aserviceorservicedeliverycharacteristicmaybequantitative or qualitative depending on the method of evaluation and who evaluates it, whether it istheserviceorganizationorthecustomer.Whenitcometoexports,itisnot necessarytoemphasizethatthereshouldbeaprogrammeforthecontinuous improvement of service quality.This should identify changing market demands, any ineffective or insufficient quality system controls, and estimate and reduce costs.Allpossiblemeansofgettingcustomerfeedbackneedstobeexplores,with continuousevaluationofthecustomersneeds,requirementsandperceptionof service quality, as these parameters and any corrective action they may require are important for profitability and competitive survival. ThisisespeciallyimportantforSMEswithlimitedfacilities,know-howand infrastructure. Process quality : Beforelookingatprocessquality,weneedtohaveaglobalviewofthe businessprocesstoenableustovisualizetheoverallflowofresourcesand activitiesandtodeterminethepurposeandscopeofthekeyprocesses.Thecore business process is identified as the flow and interaction of activities concerned with meetingcustomerrequirementsandwhichconvertmarketopportunityintoactual revenue.In all businesses there are what we call supporting processes : processes 18 withintheorganizationrequiredtomaintaintheeffectivenessofthecorebusiness process.Keepingtightcontrolofactivitiesdeemedcriticalforthebusinessis essential.Having said this, we should emphasize that all operations associated with productorprocesscharacteristicsthatcanhaveasignificanteffectonaproduct quality needs to be identified and controlled. In any activity, process quality, since it is an important parameter, should be :Planned to be attained under controlled conditions.Documented as work instructions, as required.Examined to determine the effectiveness of the process.Verified at key production points to minimize the occurrence and the effects of errorsandtomaximizeyields.Forexample,arethehardwareofsoftware, processing steps, raw materials or processed inputs, processing services and theworkingenvironmentatthesepointsconducivetoobtainingprocess quality.?Monitored and controlled in relation to finished product specifications or other requirements as may be necessary.Plannedandspecifiedinrelationtoallin-processandfinalverificationswith documented procedures for testing each quality characteristic.Thedevelopmentofnewmethodsforimprovingprocessqualityshouldbe encouraged. Higherlevelsofproductqualityrequirecontinuousmonitoring,controland improvementofprocesses.Thefinalproductissimplythesumtotalofseveral processes.Quality improvement thus starts at the process level. 19 5. Manpower Management 20 5.Manpower Management Youalonecantmanagetheshow,andyourwillneedtohirepeoplefor various kinds of job.In a small scale unit you may need to recruit perhaps 5 to 8 persons only.But that is precisely why you must be very careful in recruiting the right ones. Asmallfirmhasitsownstyleandways.Youneedpeoplewhoare competent, who can understand you and work for you.But many small business entrepreneursrecruittheirownrelatives,friendsandothersatlowwagesto make more profits ! And this is the most dangerous things to do ! You may spoil both your relations and work.You may perhaps save on salary, but then lose by way of poor control over performance. 1.Hiring is a Commitment Activity :It is advised that you act as a businessman and as a professional, and not as a social worker !! Recruit people with the right approach and getwhat you want from them; otherwise they can have their pleasure at your cost.Remember you are hiring a person, for his competence and not for his life. Itisoftenfaster,cheaperandsafertohiresomeonewiththenecessary expertise than to experiment with developing a home-grown expert at your cost.SSI units do not have that much time, money and resources to train and develop their men at their own cost, at least not initially !!Beonthelookoutforrightkindofpeople,fromthedayyouhavestarted, thining of your unit.You will have to identify them.So keep your eyes open and do not think, it is too early for that.You may recruit them at a later stage but can definitelystarttappingtheresourcesnow.Thesourcesthroughwhichyoucan recruit may be many.Before that you specify :Skills and expertise you need Kind of experience that will help youBenefits and remuneration you can afford to pay2.Sources of Recruitment :Your own resourcesPersons working in nearby factoriesEmployment AgenciesAdvertisement in newspapers or business journalsTechnical institutes and colleges 3.Process of Recruitment :Entrepreneurs will have to adopt systematic approach for recruiting staff so as to avoid complications.It is advisable to give a written order to the person being employed,specifyingalltermsandconditionsoftheappointment.Specific mentionabouttheprobation(trial)periodshouldbemadesoastoensurethat 21 unsuitable and unwanted persons are not recruited for a long time.It ay also be advisable to enter into contract with someone in case of special services required forshorttimeonly.Therecruitmentprocedureshouldinvolvevariouskindsof tests and interviews to identify whether a person possesses necessary skills and abilities for the required job. Itisalsoimportanttonotethatpeopleworkingforyouwillneedsomething more over and above their salary.It will be long term interest for both employer and employee to offer some attractive and reasonable incentives and benefits to employees to sustain their motivation and interest in the work.4.Training : Duringrecruitmentofpersons,theentrepreneurshouldalsoconsiderthe possibility of training staff for specific skills. Though ina small-scaleunit it may notbepossibletotrainstaffmembersregularlyduetocostsinvolved,an intelligentefforttotrainpersonnelinsmallgroupsshouldbeinitiated.Itisonly through training that you can always update the skills and knowledge required to perform job duties better. 22 6. TIME MANAGEMENT 23 6.TIME MANAGEMENT Busylivesandworkschedulescansometimesaffectthewaywethinkandmake decisions.Rushed decisions can lead to costly results.The secret to good management of abusinessisgoodtimemanagement.Ensuringthatyourcompanyrunslikeclockwork muststartattoplevel.Badmanagementcanonlydecreasethemoraleandefficiencyof the company. Good leadership is the key to success of any business.The decisions and future of thecompanyreliesatManagementlevel,butensuringthatdecisionsaremadecorrectly and action is taken promptly relies on the individuals Time Management.A delay in making a decision or reacting to a problem can be a costly business mistake. TimeManagementissomethingthatneedstobelearnedandpracticed,itmustbe mastered and become part of your life to be truly effective.Once you have mastered good timemanagementskillsatwork,youwillfindthatyourautomaticallyapplythemtoother areas of your life. Tools for good Time Management : PlanningPrioritizingBeing preparedDelegatingAllocating ResourcesFollowing upThese tools are a guide to assist you in implementing Good Time Management practices both personally and throughout your business. Planning Time Management Skills : Goodplanningisprobablyoneofthemostimportantaspectsofgoodtime management.Knowingwhatishappeningatpresentandwhatwillbehappeninginthe future will help you to plan your time more efficiently. Findoutwhatisgoingoninyourbusiness,anythingthatcouldhaveanimpacton resourcesorbecomeacriticalissueneedstobeconsidered.Analysetheissuesandbe preparedforthem.Estimatetheworkloadrequired,whodoeswhatandhowlongitwill take.Anything that can be done earlier in preparation should be done and therefore easing the pressures at the critical stages. Forex.ifyoursbusinessiscurrentlyquotingonamajorjob,thenanalysethe resources that will be required if yu win the contract.Will you required any additional staff, or perhaps your staff might need some specialized training, do systems need to be altered, willspecialequipmentberequired,whowillmanagetheprocess,whatarethecritical milestones?.Knowingthisinformationcanassistyoutoprepareaplanningscheduleand ensurethatwhenthetimecomes,yourcompanywillbeready.Notonlywilliteasethe pressure buy it will also ensure customer satisfaction. 24 Estimating the time a task will take is extremely important.If accurate estimation is difficult,thenbreakdownthetaskintosmallersections,thenestimatethese.Itisalso importanttoworkoutwhowilldowhat,andwhatneedstobedoneinwhatorder.Set deadlines for each milestone and ensure everyone is aware of these. Nomatterhowsmallthejobis,preparationandplanningareessentialsothatyou cangetthingsdoneproperlyandontime.Northingworsethanleavingsomethingtothe lastminuteandthenfindingoutthatitisgoingtotakelongerthanyouexpectedorworse the deadline has been moved forward. Keep a diary and maintain it accurately.Set deadlines for yourself on every task or job and ensure that stick to these.If your make diary entries for everything that your need to do everyday, you will soon be able to gauge at a glance how busy you can expect a day to be before you commit yourself to anything extra. Reviewyourdiaryattheendofeachdayandifsomethinggotmissedorwasnt finalized move it to a new day and allocate a new deadline.Try and stick to your plan, there willbetimeswhentheunforeseenhappens,howeverwithgoodplanningthisshouldhave minimal impact on your time. Prioritizing Time Management Skills : Assessyourtasksforthedayandworkoutaprioritysystem.Criticaltasks, importanttasks,essentialtasksandothertasks.Fromyourlist,giveeachtaskapriority andwithineachpriorityanorderofimportance.Onceyouhavedonethis,youcanbegin tackleeachtotaskinorderofimportance.Soevenifyourdayendsupbeingchaotic,at least your critical tasks would have been done.Most busy people will tell you that it is amazing how much you can fit in a day. This is often true, the reason is because when you have very little time, you try and get as much doneinit,whereaswhenyouhavealotoftime,youtendtorelaxmoreandtherefore achieve less. Makeeachminutecount,ifyoucanmanagetodoacoupleofthingsatoncethen better still. If you are on hold on the phone, may be you can type a memo or letter while you wait.If you own a mobile phone, you would be amazed at how much you can achieve on thewaytoworkinthemorning.Dontwaittogettotheofficebeforeyourconfirmyour appointments for the day, do it on the way in. more time saved!. Being Prepared Time Management : Being prepared will ensure you dont waste any valuable time.There are many ways ofbeingpreparedfrombeinginformedtoensuringyouhaveeverythingready.Knowing whatiscomingupinthefutureandbyanticipatingwhatmightberequiredofyourwill ensure that you are prepared adequately. Wementionedbeforethatknowingwhatiscomingupinthefuturewillhelpyouto allocateresourcesandensureyouhaveeverythingreadyforwhenthetimecomes.This applies equally on a personal basis as well as company wide.As the month progresses you canaddinformationandkeepyournotesupdated.Bythetimeyourmeetingcomes,you 25 will be ready in just a few minutes instead of in hours.Less pressure and you willensure you havent forgotten anything or left out anything important. Delegating and Allocating Resources Time Management : Learn to delegate effectively and you will be more efficient at everything you do.It is not a matterofgettingeveryoneelsetodoyourwork;itismoreamatterofusingresources wisely.There is no point you attempting to do something and wasting 3 hours on it, when someone else could do it in hour. Sometimes,wetendtowastetimelookingforinformationortryingtoanalysesomething, when someone else might already have this available. Get to know your staff better, find out whodoeswhatandwhateachpersonsstrengthsare.Useyourstaffsknowledgeand abilities to their highest potential. Considerexternalresourceswhensomethingneedstobedone.Therearespecialistsin justabouteveryfield,chancesaretheyhavetheknowledge,equipmentandabetter understanding of the work required.This would enable you to be free to handle other more important matters.Following up Time Management : Followinguponoutstandingissueswillensurethereisnolastminutepanic.By ensuringthatthingsrunontrackandworkisprogressingsteadily,youwillensurethat deadlinesaremetcomfortably.Leavingthingstothelastminuteorfindingoutthat something hasnt been done at the closing of a deadline is not good time management. Spreadthetasksoveraperiodoftimeandfollowuptoensurethateachoneis completedaspertheplan.Ifsomethingisrunningbehindfindoutthewhy.Thereason couldbethatthetaskhasbeenallocatedtothewrongperson,orperhapsthatproblems have arisen and these were not anticipated.Ifyoucontinuallyfollowupeachtaskanddeadline,thenyoucanreacttoany problems encountered while there is still time. Therearemanytoolstoassistyouingoodtimemanagement,diaries,palmpilots, alarms,softwareapplicationsandotherthings,howeverthebesttimemanagementtoolis being organized. 26 7. CHARACTERISTIC OF AN ENTREPRENEUR; A MATTER OF ATTITUDE AND SKILL 27 7.CHARACTERISTICS OF AN ENTREPRENEUR;A MATTER OF ATTITUDE AND SKILL Anentrepreneurisapersonwhotakesriskofsettinguphisownventurefor perceived rewards.He/she is a person who initiates the idea, formulates a plan, organizes resources and puts the plan into action to achieve his goal.Entrepreneurhavespecificcharacteristics,qualities.Theyhavespecialstrengthswhich they draw upon for their adventure into business.If a person want to start and succeed in the enterprise, he/she required to play different roles at different stages of enterprise.The characteristics which an entrepreneur must possess the following 1.Need to Achieve :Mostpeopledreamofsuccessandachievement,butdonottakeanyactions towards achieving these dreams.Entrepreneurs, on the other hand, have a strong desire to achieve a higher goal and make their dreams come true.For them winning is achievement. 2.Perseverance :Oncecommittedtoagoalandacourseofaction,entrepreneursbecomeabsorbed init.Theyarenotdeterredbydifficultiesandproblemsthatbesetanyproject;theywork hard until the whole project is successfully accomplished. 3.Moderate Risk Taker:Entrepreneursarenothighrisk-takers;theyarenotgamblers.,Theychoosea moderate risk rather than play wild speculative gamble.They love a moderate risk situation, high enough to be exciting, but with a fairly reasonable chance to win.4.Ability to find and explore opportunity :Entrepreneurialpersonsarequicktoseeandseizeopportunities.Theyshowan innovative turn of mind and convert difficulties into opportunities.But they are realistic too.They plan and anticipate carefully how to achieve their goals in realizing an opportunity. 5.Analytical Ability :Entrepreneursarerealistic.Theyhaveamatteroffactapproachaboutbusiness undertakings.They are not likely to let personal likes and dislikes stand in their way.When they required assistance, they select experts rather than friends and relatives to help them.They generally do not take an emotional attitude towards their business or a problem.6.Using Feedback :Entrepreneursliketohaveimmediatefeedbackoftheirperformance.Theylike prompt and accurate data and it does not make any difference whether the information they getisfavorableorunfavorable.Infact,theyarestimulatedbyunfavorablenewstopour more energy into attaining their objectives. 7.Facing Uncertainty :Achievement oriented people tend to be optimistic even in unfamiliar situations.The odds may not be clear but the circumstances may be appealing.Entrepreneurial persons in such situations see noreason why they cannot win through their abilities.They go ahead undeterred,sometimesevenwithoutguidelinesandfrequentlymakethebestofwhatever opportunitiesthereare.Astheybegintounderstandtheirenvironmenttheybeginto 28 calculate their chances very closely.Thus, paradoxically they present a picture of boldness inthefaceoftheunknownandprudenceinthefaceofthefamiliar.Theyusuallywinby applying their special insight and skill. 8.Independence :It is found that most entrepreneurs start off on their own because they do not like to work for other people. They like to be their own masters and want to be responsible for their own decisions. 9.Flexibility :Mostsuccessfulpeopleafterweighingtheprosandconsofadecision,tendto changeifthesituationsodemands.Theydonothesitateinrevisingtheirdecisions.Successful entrepreneurs are persons with open minds, not rigid. 10.Planner :Mostsuccessfulpeopletendtosetagoalforthemselvesandpaltoachievethat goal in a certain time limit. 11.Interpersonal Skills :Anentrepreneurisapersonwhoduringthecourseofhisactivities,comesacross many types of persons with whom he has to deal.He has to make them work for him, with him and help him to attain his objectives.Hence he should be a person who likes working with people and who has skills of dealing with people. 12.Motivator : Inthecourseofhiscareer,anentrepreneur,willberequiredinmanysituationsto influence people and make them think in his way and act accordingly.He motivates people to act.13.Stress Taker :As a central figure in your enterprise, you will have to cope up with many situations atthesametimeandmakerightdecisionswhichmayinvolvealotofphysicaland emotional stress.All this can be done if you have the capacity to work long hours and keep cool under a lot of tension.14.Positive Self Concept :Anachieverdirectshisfantasiestowardstheaccomplishmentofworthwhilegoals and sets standard of excellence in what he is doing.This is based upon the awareness of hisstrengthandweaknesses.Heusespositiveknowledgetosupporthisthinking.Heis rarely negative.15.Orientation to Future :Entrepreneurs show a high level of future orientation.They do not allow the past to obsess them.They are oriented towards present and future. So it was, but now what to do; this is their usual response. Noentrepreneurhasallthesequalities.Butmostofthemwillhavemany.Sothe firststepforapersonaspiringforentrepreneurshipismakinganinventoryofthetraitshe 29 possesses.Thisself-awarenessandanalysiswillhelpdefinehisstrengthandhelp overcome his weaknesses. 30 8. BUSINESS PLAN PREPARATION 31 BUSINESS PLAN PREPARATION New entrepreneurs often have a misconception thatplanning isessential only for large enterprises.Usually they have following doubts i.Is planning in small enterprises as essential as it is in big ones ?ii.Cansmallentrepreneurscontemplatelongtermplanningwhentheydonot enjoy the advantages of huge finance and expert staff as big ones do ?iii.Can small enterprises successfully implement long term plans ?But planning for the small entrepreneuris critical for the very same reasons.Theentrepreneurhaslimitedresourcesintermsoftime,financeandmanpower.Thesmallentrepreneurisgoingtoputhislifessavingstostarttheventureandto losethisinvestmentisariskyandunsettlingproposition.Henormallyputsallhis stakes in his ventures and expects the business to make reasonable profit and give returnsonhisinvestment.Theopportunitytobeyourownbossispartofthis return.Itisofutmostimportancethattheenterprisesucceedsastheentrepreneur has totally committed himself to the venture. Itis,therefore,necessarythatsmallenterprisesselectverycarefullythe fronts for action and formulate all the strategies with due care and calculated risk as theentrepreneurcannotaffordtomakemistakeswhichwillcosthimtime,money and mental peace.1.Why Planning ?Planning is essentially choosing a course of action from available alternatives.Itinvolvesdetailingofthecoursechosen.Itdiffersfromotherfunctionsnotonlyin formoftheactivitiesinvolvedbutalsointhefacultiesinvolved.Itforcesthe entrepreneur to view reflectively, analyse his environment, the enterprise, the people involved and himself in a certain perspective.(i).Planning is essential to survive in the most dynamic situations:Most small entrepreneurs tend to be controlled by the volatile environment of today.Earlieritwaspossibletoavoiddevelopingorevolvingyourproductor processuntilyourcompetitorsuccessfullyestablishedhisownproductorprocess.Today this is no longer valid.Such an enterprise would soon ruin itself. Toleadinafastchangingenvironment,anentrepreneurshouldplanfor aggressivestrategiestoshouldertheinherentrisk. Theseriskscan bereducedby continuous planning and re-planning. (ii).Planning strengthens the position of entrepreneurs:Ifthesmallentrepreneursdonotadoptplanningtheymaykeepondrifting without purpose or direction, in the belief that their survivalin business depends on the mercy of over-powering forces.This will prevent them from taking any decisive stepsfortheirowndevelopment.Ontheotherhand,theymayfeeltemptedto indulgeinrecklessandblindgambling.Planninghencehelpstoleadtheminthe right direction. 32 (iii).Planning gives an overall picture:Becauseofconstraintsonhisvariousresources,itisessentialforan entrepreneurtohavepre-knowledgeofallthestepsinvolvedinimplementingand runninghisenterprisesothathewillbebetterorganizedtoco-ordinatehislimited resources. (iv).Anticipation of problems:The entrepreneur will have a clear picture of his project and the requirements at various stages if the project is thoughtfully planned.Planning equips him with the knowledge of the problems that are likely to arise and he can therefore, rehearse for alternative actions to the many What ifs.(v).Planning helps in time management:Again, because a small entrepreneur has to play the multi-faceted role, fulfilling various needs of his enterprise, it is essential for him to define his action in terms of time.This will give him pointers to the areas which should claim his priority and help him to effectively utilized and co-ordinate his resources. Successfulentrepreneursdifferfromunsuccessfulonesintheir methodofdecisionmaking.Theyexamineallpossibleoptions,evaluateall argumentsfororagainstandtheykeeponlookingfornewoptionsoralternatives.There is evidence in support of successful ones who adopted planning against those who did not examine any options or alternatives.It has been proved that those who use systematic panning and intelligent implementation are most likely to succeed. Planning,therefore,shouldbeintegratedintothecompanyssystemandfor thesmallentrepreneuritshouldbedirectedmoretowardsfindingsandexploiting opportunities rather than waiting to create them. Most small entrepreneurs are constrained in their planning because a).They believe planning is not needed for them;b).Astheenterpriseissmall,theybelievetheycankeepeverythingintheir heads;c).They feel that planning is a waste of time as it cannot be implemented.2.Areas of Planning : Forthesmallentrepreneurplanningneednotbecomplex.Ifheweretoput down on paper what is in his mind, a lot of clarity would emerge. He should start planning by defininga).His present status: the resources available to him b).His goal: within the constraints of his resources, what can be achieved.c).Howbesttoattainit::coordinatingandmobilizingtheabovetwofactorsto achieve his goal in the shortest possible time. To plan, then, he will have to start posing a few questions:Internal :- To analyse his personal strengths and weaknesses:oWhat am I good at ?33 oWhere can I improve ?oWhat are the resources available to me ?oWhat is the volume of resources that I can effectively mobilize ?Market :- To check if the plans he forsees are supported by demand:oWill what I produce self ? oWhy will people by it ?oHow does my product compete with others in the market ? Environment :- A small entrepreneur should always take into account the outsidefactorsoverwhichhehasnocontrolbutwhicharelikelytoaffect him.oWhat are governments policies ?oHow do they affect me ?oWill changing trends in social customs and culture affect my product demand ?oCan I diversify if the need arises ?Basically then an entrepreneur should plan fori).Survivalii).Profitiii). Diversification3.Some Principles of Planning for Small Enterprises:Anynoting,nomatterhowshort,forplanningismuchbetterthanno noting at all.The most difficult part of planning is to start.Once started it is then easy to proceed ahead.The factual basis of the venture, its customers and its environment should be thoroughly investigated. Tomakeplanningrealistic,itisnecessaryto haveaclearunderstanding ofonesbusiness,strengthandweakness.Manyatimeanoutsideris moreobjectiveandakeenercommentatorthantheownerandinside personnel.Effectiveplanningneedscreativityandconstructivethinking and many a time insiders are not able to perceive what an outsider can.Alternativeopportunitiesbasedontheresourcesoftheventureandthe anticipated needs of the customer should be developed.Planning is a process, not an isolated occasional act, hence plans should always be periodically reviewed and should be kept alive through constant updatingandfeedback.Itshouldneverbecomearitualormerepaper work.Forthesmallenterpriseitisessentialtohaveplansthatcanbe implemented as early as possible.Panning should take into consideration the implementation.34 Planningshouldbesupplementedbyperformancereporting.Onewho wishestoimplementhisplanssuccessfullymustregularlyexaminethe expectedprogressagainstactualprogresstodecidefurthercourseof action. 35 9. DESIGNANDPACKING 36 9.DESIGN AND PACKING Withglobalizationandfreetrade,theproductsaremovingaroundtheworld andpackagingplaysanimportantroletoundergorigoroustestinthedistribution environmentofthelogisticalchain.Apartfromtheprotection,italsohastosatisfy differentneedsoftheconsumerindifferentlocations.Also,ithastopassthrough thestringentlawsontheimpactofthepackagingmaterialdisposabilityonthe environment.Currently,theserequirementsvaryfordifferentproductsdifferent countries.Thepackagingmediashouldbeeasilyrecyclable,reprocessableor biodegradablesothatgenerationofsolidwasteisminimized.Righttypeof packagingwithsuperiorproductcandefinitelypromoteexportandithastbe environmentally friendly. Followingaresameoftheimportantpointstobenotedinthepackage design/selection. 1.Product Requirement :Understandingoftheproductisveryessentialtodeterminetheextentof packaging required for safe journey of the product from the production house to the consumer.It needs to be analysed in a very detailed manner such as Doestheproductneedextraprotectiontopreserveitstaste,aroma,colour from dryness, moisture, etc ?; if it is food item.Does the product need extra protection against moisture, light, odours, heat, cold,oxygen,corrosionandotherchemicalreactions,micro-organisms, insects, rodents, mould, pilferage, etc. ? Canthedesignorcompositionoftheproductitselfbemodifiedsothatitis economically,ortechnicallybetteradaptedtotheconsumerpackage,if necessary ?Canthesamepackages/designsusedonthe domesticmarketalsobeused for export ?2.Distribution Requirement :Thelogisticsplaysanimportantroleindeterminingthepackagingmaterial andformselection.Whattypeofpackagingmethodsareemployedbyyour competitorshavetobestudiedbeforeenteringtheirmarket.Someofthepoints which need to be studied with respect to distribution requirements are given below What kind of consumer packages are used by the competitors, and why ?Is there any particular trend to be observed that will entail changes in the near future ?Is it necessary now, or in the near future, to provide the packages/labels with the Universal Product Code (UPC) of the European Article Numbering (EAN) bar coding symbols ?Have the wholesalers/retailers opinions been ascertained on 37 Type of packagesQuality standards Package sizes and dimensions Suitability for displayEase of unpacking and price markingGeneral graphic layout3. Consumer Requirement :The consumers world over are not the same.They differ from region toregionandtheirpreferenceswithrespecttoshape,colour,layoutofthe package need to be studied and some of the points are given below Hastheproductitselfbeenadapted/modifiedtotheconsumerstastesand requirementsonthetargetmarketsvis--vis,e.g.productdesign,shape, colour, scent, sugar content, spicing, etc ? Has this been verified by field tests among consumers in the target markets ? Is the package convenient for the consumer to handle, open, recluse, empty, close, reuse, destroy after use, etc.? If the package is provided with an opening device, it this clearly indicated and easy to use? Isthegenerallayoutofthegraphicdesignacceptabletothetasteof consumers in the target markets? Has this been verified by field tests among consumers in the target markets?Doesthetextonthepackage/labelprovideconsumerswithcomprehensive and easy-to-understand information on the special features of the product and its use?4.Types of Consumer packages :Differentpackagingoptionsareavailableintermsofmaterialandformsand their selection depends on many factors and they have to be studied such as Havethesealternativetypesofconsumerpackagesbeenthoroughly analysed as to their Availability from local suppliers ?Their technical and promotional quality for eg. Printing ?Has the alternative readymade packages been objectively studied ?Hasthemechanizationofthepackingprocessbeenstudiedforpossible savingsincosts,orformeetingthegeneralhygiene/exactquantity requirements in target markets?5.Promotional design of consumer packages :Promotionoftheproductintheconsumershelfinsupermarketsisavery important aspect in the packaging design requirement since it has to act as a silent salesman.The product in the shelf will be competing with other brands of the same 38 product and your product has to have a striking appeal over other products and that should make the consumer to select your product over other products.The general layout and graphics of the package plays a vital role in this regard and some of the points which need attention are discussed below General layout :- Shouldthegenerallayout/positioningofthepackageorlabel design put emphasis on -The brand: Corporate brandmark/logotype or product brand name ?Theproduct:Productdesignation,illustration,use,quality,UniqueSelling Proposition, etc?Thetarget:Men/Women/Children,wholefamily,ethnicgroups,age high/medium/low income groups, etc?Shouldthelayoutreflectonlyoneoftheseconceptsorconsistofa combination of two or all three of them?ILLUSTRATION:Doestheillustrationprovideatrueandhonestpictureoftheproductasitis inside the package as to size, colour, degree of processing, ingredients used, etc.?Istheillustrationinconformitywiththeexistinglawsandregulationsinthe target markets ? Istheillustrationunderstandable,andingoodtaste,totheconsumerinthe target market, e.g. with respect to moral or religious concepts ?Is the illustration suitable for reproduction in black and white in advertising or on television ?Isitpossibleforthelocalprintertoreproducetheillustrationinacceptable quality, and at reasonable cost ?Colour :Arethereanyparticularcolourswhicharepreferredorshouldbeavoidedin the selected target markets? Have fashion trends been observed in the selection of colours? Are the selected colours strongly associated with the type of product, and the consumer target group?Has the visibility and readability/ contrast of texts, and the effect of colours on apparent package size, been taken into consideration ?Havethetechnicalandeconomicaspectsoftheselectednumberofcolours been discussed with the printer?Is the number of colours in proportion to the desired effect of the design and toessentialcommercialrequirements?Isthereastrongreasonforeach additional colour? 39 Shape :Does the shape of the package reinforce the brand image of the product? Is the shape of the package convenient for the consumer to handle? Does it cause problems in the filling line, e.g. through instability?Is the package easy and stable to stack in retailers displays?Doestheshapeanddimensionsofthepackageconformtoeventually existing standards or trade practices in the target markets?Text :Isthetexteasytounderstand,clearlyvisible,easilyreadableanddoesit have a high attention value on the shelf?Isthetypographyup-to-date,andconsistentthroughoutthepackage/label design?Is the product name correctly expressed and does it stand out clearly from the background ?Isthetextinconformitywiththelaws,regulationsandtradepracticesinthe target markets. Isthetextprintedcorrectlyintherequiredlanguages,intherequiredsize, and positioned according to eventual regulations?Does the text clearly state how the product should be stored? If it is food item or medicine. Hasthebrandnameandlogotypebeencorrectlyanduniformityusedonall packages/labels. ?AspertherecentcircularofMinistryofHealthandFamilyWelfarethatall products should carry a label of Nutrition Value / Contents of the products on itspackagingwhichwillbemandatorywef19-03-2009.detailswillinclude contentsofcalories,proteins,carbohydrates,sugar,fibre,vitaminsetc.,and also details of transfacts contents available in the products. 40 10. COSTING, PRICING AND PROFIT MAKING 41 10.COSTING, PRICING AND PROFIT MAKING Howmuchdoesitcost?Thisistheusualquestionweaskwhenwedoshopping. Whatwereallymeanisnotthecostinthestrictsenseoftheterm,butthesellingprice.Whatthenisthemeaningofcost?Isitthesumofthecostofraw-material,labour,power etc? Or is it something more than that ?Itisnecessarytounderstandthemeaningofcostandcosting,itsimportanceand how to go about arriving at the cost of goods that we manufacture or services we provide. 1.What is Costing ?Professional accountants define costing as the process of classifying, recording and appropriately allocating expenditure for determination of cost of the products or services.In simpleterms,costingistheprocessofdetermininghowmuchitcostsyoutoproduceand sell a given product or service. Understandingandrecordingofcostandcosting,iscrucialfornewentrepreneurs, so that anything that happens to a unit in terms of cost, can be controlled or improved, only if proper record and system of costing is adopted.Unfortunately many times entrepreneurs realize this only after costs have been incurred.2.Types of Cost :From the definition of costing, we can note that were are not talking of just the cost of producing a given item, but also the cost involved in distributing/selling it.If we talk in terms ofproductssuchas,electronicmeasuringdevices,typewriters,washingmachinesetc,we canaddonemorecomponenttothecostviz.,thecostofaftersalesservice.Thus,itis necessary for us to understand various components of costs.The two basic components of total cost viz., Direct Cost and Indirect Cost are explained below.Direct Cost :- Itreferstothoseitemsofcostthatcanbeattributeddirectlytotheendproduct.For example, the cost of yarn in manufacturing textile is a Direct Cost.In other words, the cost of those items that become part of the end product are termed as Direct Cost.The two items of Direct Cost that can be readily identified with the end product are the material cost and labour cost. The direct material cost consists of the cost of raw materials and components.For example,ifyouraremanufacturinganElectronicMeasuringinstrument,youmayyourself manufacturePrintedCircuitBoard(PCBs)anddecidetobuytransistors,knobsandother itemsfromthemarket.So,thedirectmaterialcostincludesthecostofitemsrequiredto manufacturePCBs,costofweldingelectrodesusedintheprocess,costofboughtout items such as, transistors, capacitors etc.Thedirectlabourcostconsistsofwagesandotherbenefitspaidtotheworkersfor the time they spend in making a given product. Indirect CostIt refers to all those items of cost that are incurred in running a business and those that cannot be identified independently with the end product directly. 42 3.How Much One Unit of the Product Cost ?WhetheryouaremakingtablesorchairsortransistorsorTVboosters,youmust know how much it costs to produce one unit of a given product apart from knowing the total expenses of your factory as such.Ifyou are manufacturing more than one product in your unit,itisallthemoreimportantthatyouknowtheshareofeachitemoftheoutput (production) in the total expenses of the unit (i.e. the factory or service station as the case may be). An illustration of Direct Costs:Let us take the example of a unit manufacturing wooden tables and find out how to arrive at the cost of one table. Thedirectcostofproducingatableiseasytocalculate.Thedirectmaterialcost consists of wood, glue and fasteners which works out to be say, Rs. 300/-.When it comes to direct labour cost, one way to arrive at the figure is to find out all wages paid to the workers in a given month (say, Rs 12,000) and divided it by the number oftablesproducedinamonth.Anotherwayistofindoutforhowmanyhoursinagiven month the workers are engaged in production of tables.Then, using the figure of wages for that month, divided the same by the number of hours worked in the month to arrive at hourly labour cost.Then, find out how many hours it takes to make a table.Multiply this figure by hourly labour cost to arrive at direct labour cost per table. Forthesakeofillustration,letussaythattheDirectLabourCostisRs.144/-per table (at a production level of 1000 tables per year and direct labour cost of Rs.1,44,000/-). Whilemakingthissortofcalculation,itisimportanttoappropriatelyforecastthe labour requirement and the probable quantum of output given that level of work force.The problem is simplified if you already have a running business since you can use the figures of thepreviousaccountingyear.Youmayhavetomakesurethattheraw-dataisof representative nature. Thus,thedirectcostpertableisRs.444/-i.e.Rs.300directmaterialcostandRs. 144/- direct labour cost. How to Calculate Indirect Costs ?Inanybusiness,manyexpensescannotbedirectlyidentifiedwiththeendproduct. You may repair the shed or your office building, the broken typewriter or a burnt out motor.You may insure your factory or godowns.The telephone bills and the rent if any, the power bills, salary to the accountant, steno and other office staff and the interest you pay on loans are such items that cannot be directly attributed to the end product.All such items of costs areknownasIndirectCostsoroverheads.Theoverheadsformapartofthecostofthe output since they facilitate production of a part product or a service as the case may be.So, they have to be reflected in the cost of the end product.If you have a running business, you just have to find out al the items of the Indirect cost from the previous years accounts.For those of you who are yet to start the business 43 operation, it is necessary to sit down and make a list of all items of costs which then can be divided into Direct and Indirect Costs. Thenextstepwouldbetoestimatehowmuchyouwouldspendoneachofthese categories and segregate the items of Indirect Cost, which as per unit of the output can then becalculatedbydividingthetotalindirectcostbythenumberofunitsproposedtobe producedinthatyear.Thecalculationisnotallthatsimpleifyouhavemorethanone product.WewilllaterfindouthowtocalculateIndirectCostprunitinamulti-product situation. In the illustration that we are talking of, let us say that the total Indirect Cost including rent,insurance,repairsandmaintenance,postage,telephones,stationery,salarytooffice staff, watchman etc., cost of publicity/advertisement and interest on loan put together works outtoRs.1,20,000/-peryear.Atanannualproductionlevelof1,000tables,theIndirect Cost per unit will come to Rs. 120/-. Thus, the total cost of one table is Rs. 564/- which includes:Direct material Cost - Rs. 300, Direct Labour Cost -Rs. 144,Indirect Cost Rs. 120Let us think of a situation where the order booking in a given year is at peak and the unit produces 1500 tables instead of 1000 tables.The Indirect Cost per table would then be Rs. 80/- (total indirect cost amounting to Rs.1,20,000/-) instead of Rs.120/- which means, a reduction of Rs. 40/- in the cost per table.Likewise, if you produce only 500 tables instead of Rs. 1000, may be due to lack of orders or non-availability of raw-material, the Indirect Cost per table would be increased to Rs. 240/- (rs.1,20,000/500 tables) representing an increase of Rs. 120/- per table.Thus,youmighthavebynownoticedthattheindirectcostperunitisinversely relatedtothelevelofproductioni.e.anincreaseordecreaseinproduct\ionlevelwould correspondingly decrease indirect cost per unit and ultimately, the total cost. Thus,moreyouproducefromthebuildings,machinesandofficestaffyouhave,in other works given the same level of overheads, lesser will be the total cost of our products.Here, we are making an assumption that with the change in the production level, there will not beany change in the quantum of overheads or indirect expenses.This assumption is valid in most of the cases.However, as a matter of caution, it is necessary to examine each itemofIndirectCostcloselytodeterminewhetheritremainsconstantandifnot,towhat extentitwouldchangegiventhechangeintheoutputlevel.Forexample,ifyoudouble yourproductionassumingthattheworkingspaceandthecapacityofthemachineryyou alreadyhavepermitthesame,youmayneedtoemployadditionalofficestaff/managerial stafftohandletheincreasedquantumofyourbusinessoperations,inwhichcase,the IndirectCostwouldbeaddedtoeachoftheproduct.Notedbelowisabriefofonesuch method Atthefirstinstance,youfindouthowmanypersonsdirectlyinvolvedinproduction activitiesareactuallyworkinginagivenyear.Ifyourunitisnotyetinoperationyoumay 44 have to make estimates to arrive at the said figure.The, find out how many hours they work in a day and how many days in a year, to arrive at the number of hours of Direct Labour that goes into production in a given year.After separately calculating the total Indirect Cost per year, divide this by the number of man-hours or the number of hours of direct labour that go into production in that year, to arrive at the Indirect Cost per hour of Direct Labour.Indirect Cost Per Hour=Total Indirect Cost of Direct LabourTotal Hours of Direct LabourThen,calculatethetotalnumberofhoursspentonproducingeachofthe4items.This calculation becomes a bit complicated since more than one worker will be engaged in producing a given item.A careful study of the production process would help you to make an estimate of the number of hours required to be put in to make one piece of chair or table or any such item right from raw-material stage to finishing.Thus, after finding out how many hoursittakestoproduceagivenitem,youcancalculatetheIndirect Costforthatitemby multiplying the said figure with the hour rate i.e. the Indirect Cost per hour of Direct Labout that you have calculated earlier. 4.Lest You Forget :Add the cost of transportation and unloading charges for the raw materials that you procurei.e.takeintoaccountlandedcostoftherawmaterial,notjusttheamount youpaytothe rawmaterialsupplier.Itisobviousforrunningbusinessbutnot so obviousinproposedventurewhereallcalculationsarebasedon estimates/projections. Ifyouintendtomanufactureanexcisableitem,inmostofthecasesyouhaveto pay the excise before you remove the goods from factory/warehouse.But then, you willrealizethesamefromthecustomersaftersometimedependingontheduration ofthecreditthatyouintendtoprovide.Theinterestonfundssoblockedisvery much a part of the cost.This again is obvious for on-going business, but not so for a proposed venture. Asapartofcostingexercise,whenyoumakeexhaustiveestimatesonnumberof man-hoursrequiredtoproduceagivenproduct,wenormallypresumethatthe workerswouldbeworkingon-thejobfortheentiredurationofthepaidworking hours. Normally, the assumption does not hold good since by nature, people tend to relax a few minutes now and then, and chat with fellow workers for such losses while calculating direct man-hour cost. Ifyouproposetomanufacturesomeproductthatneedsserviceorwarranty,itwill involve expenses on men and materials as a part of after-sales-service.You have tomakeproperestimatesofsuchexpensesrightattheplanningstagelestunder-quote your product.Before you go ahead implementing your project and even thereafter, there is a need tostudytheproductionprocesscarefullyandaccountforthelossesofmaterials duringproduction.Suchlossesmayoccurduetosub-standardraw-material, 45 improper handling of the same or due to the very nature of the production process.It isnecessarytotaketheseintoaccountwhilearrivingatDirectMaterialCostand make adequate provision for the same. Similarly, it is possible that a part of the output may be rejected during quality tests at your end or by the customer himself.Such rejections may or may not be avoidable.Especially,forthatportionoftherejectionsthatarenotavoidable,adequate provision is to be made so that the loss due to rejections in the natural course of the business is reflected as an expenditure and ultimately, as a part of the total cost. Moreoftenthannot,itmaybedifficulttoanticipatetheeventualitiesas indicatedaboveatatimewhenyouarestillplanningyourproject.Thatdoesnot underminetheimportanceoftheexercise.Itonlysuggeststhatitisnecessaryto lookforindicators,clues,informationfromtheexistingmanufacturesinorderto arrive at cost figures as accurately as possible. 46 11. RAPPORT BUILDING AND UNFREEZING MICROLAB 47 11.RAPPORT BUILDING AND UNFREEZING MICROLAB Amicrolabisaprocessorientedpackageofexperiencewhichisusedto preparetheparticipantstolearnpsychologically.Ithelpsthemtomotivate,get involvedintheprogramme,makethemawareoftheimportanceoflearningthrough experienceandopentheirvisionfortheprogrammeintotality.Laboratorytraining has been found to be useful as it provides a preamble to such programmes in terms ofmechanicsoftheparticipantsinvolvementandthephilosophyofexperiential learning as compared to learning through other training methods.Objectives To help participants familiarize themselves with each other.To build up and break the participants expectations of the programme; andTohighlightanintegratedprocess-orientedtrainingwithdifferentmodulesof the programme. Group size :UnlimitedTime Required :Itdependsontheobjectivesofthemicrolab. However,onehourtoone-and-ahalf hours may serve the purpose for an entrepreneurs training programme.Physical Setting :It required enough unstructured space for the participants to move around freely. A sample Microlab for Potential Entrepreneurs :oWalk around.oFormintopairswithapersonwhomyouhavenotmettillnow.Telleachother something about yourself. (2). oWalk around.oFormintonewpairswithsomeoneyouhavenotmet.Sharewitheachother something about yourself which makes you think that you can be an entrepreneur.oWalk around.oForm into new pairs.Share with each other two reasons why you are here.oWalk around. oForm into new pairs.Talk to each other about hobbies. (2) oWalk around.oForm into triads.Share with each other two things you like the most and two things you dislike the most. (2) oWalk as fast as you can.oFormintonewpairs.Sharewitheachotherthreethingsyouconsidertobeyour strengths and two things you consider to be your weaknesses. oMove around.48 oForm into triads.Share with each other one significant experience you can recollect from your childhood. (4) oWalk slowly; when you walk, greet each other non-verbally.oFormintotriads.Thinkofanentrepreneuryoucameacrosswhomyouconsiderasvery effective.Share with each other his qualities and what impressed you about him. (5)oThinkofanentrepreneurwhomyoudonotconsidertobesuccessful.Sharewith each other what has made him unsuccessful. (5) oWalk around.oForm into pairs.Tell your partner two things which you like in him and two things in which you think he can improve. (2) oWalk around.oForm into triads.Share with each other something you consider to be significant in your family. (3)oWalk around.oForm into new pairs, share with each other two of your dreams or two of your goals in life. (3) oWalk around.oFormintonewtriads.Thinkofanexperiencewhereyoudidsomethingwonderfuloran experience when you felt great.Share with others the details of this experience. (5).oWalk around.oForm into new triads.Tell a story what you learnt from your parents or in the school which had impressed you.Share with others the story and why it had impressed you. (5). oForm into groups of four.Discuss the general problems of entrepreneurs and make a list of the problems. One of you may present it to the total group. (5) oPresentation by groups on problems. (5) oWalk around.Close your eyes while you walk. (1) oStopandopenyoureyes.Pairwiththepersonclosesttoyou.Sharewitheach otheryourexperienceofanyoneoccasionwhenyoufacedaproblemandcould solve it successfully. (3) oRe-arrange into groups of four.Discuss the characteristics of entrepreneurs.One of you may present them after five minutes to the total group. (4)oPresentation by groups on characteristics. (4)oWalk around.oForm into pairs.Tell your partner the qualities you would like to develop in yourself tobecomeanentrepreneur.Sharewitheachotherhowyoufeelbeinghereand participating in this exercise. (3) oForm into groups of four.Each of you will give a new project idea to the group.When you are doing this, this, the others will ask you one question each on the idea. (1) (Figures in brackets indicate the duration in minute, for the activity.) 49 Some lead questions for processing Microlab : Aftertheactivitiesarecompleted,thefacilitatormayhelptheparticipantstofind somemeaninginthem. Forthis,heneedsto generatedataandputitinsuchawaythat the participants develop a link between whathas happened and how useful it is for further learning.Thefollowingquestionsmayhelpthefacilitatortoprocessthedatagenerated during the micro lab:How do you feel now?How deeply were you involved in activities?Why did you do it ? Do you consider these activities meaningful to you ?What did you get out of it ?Do you think that this session is useful for the programme ? 50 12. THEMATIC APPERCEPTION TEST (TAT ) 51 12.THEMATIC APPERCEPTION TEST (TAT )This is the test for ascertaining the level and intensity of achievement motivation through the imaginative writing produced by the participants against a set of pictures.Objectives :To determine the existence and level of achievement motivation among participants. To help them to internalize the associative network or elements of achievement motivation;To emphasize the formation and use of achievement language in day-to-day thinking and action.Time Required : The data collection requires thirty minutes.The total number of sessions required foranalysisanddiscussiondependsuponthemovementofthegroupintermsofstated objectives.Sessions may be taken in continuation or distributed over two to three days. Material Required : Slides, transparencies, pictures, instruction sheets or TAT scoring sheets. Setting :This would require a seating arrangement with a table or desk to enable writing.Process :i).Thefacilitatoremphasizestheimportanceofthetaskbyencouragingthe participants to be as imaginative as possible and look forward through the third eye, that is beyond what they are going to see. ii).An instruction sheet is distributed to the participants and the facilitator asks them to gothroughtheinstructionswithundividedattention.Thefacilitatormayevenread out from the instruction sheet and provide sufficient time to the participants to check andre-checkcertainpointswhichtheywouldliketobeclarified.Thefacilitatorat this point may not add anything beyond what is given in the instruction sheet. Instructions : 1.Before starting the exercise, the facilitator instructs the participants as follows :Fortwentyseconds,youwillseeapictureonthescreen. Thenyouwillbe given five minutes to write a story about what you have seen.While writing, you may consider the following questions to build up the story.What is happening ? who are the people ?What has happened in the past that led up to this situation ? What is being thought? What is wanted ? by whom ?What will happen ? what will be done ?You should try to make the stories interesting and dramatic and relate them to a human situation instead merely describing the picture.Do you have any questions.?(Detailed instruction sheet given in Appendix II) 52 2.Afterthestorywritingbytheparticipantsisover,thefacilitatormaycreatean atmosphere where the hold-up thinking and feeling may surface in the group.This can be done by putting some lead questions like:What do you feel now ?How much involved were you? What do you find in this exercise ?Would you like to work on it ?This creates further interest amongst the participants, to involve themselves in the scoring and analysis of data.3.Thefacilitatorthenrevealsthepurposeoftheexercise,thatistoknowthe achievementthinkingorachievementmotivationpresentintheparticipants.Also, the significance of using pictures to assess the need for achievement is high-lighted.4.How can we tell whether one has the need for achievement in his thinking ?5.We have standardized the scoring process based on which it has to be found out whether our stories fulfill any of the following criteria :i).Desire for success in competition with others.ii).Desire for success in competition with a self-imposed standard of excellence.iii). Unique accomplishment. iv). Long-term involvementIfthestoriesfulfillanyofthestatedcriteria,itwouldbescoredasAI (achievementimagery)andindicates,therefore,thepresenceofachievement motivation.Wheneverthereisanydoubtwhetherornotoneofthecriteriafor achievementimageryhasbeenmet,andyetthestoryisnottotallyunrelatedto achievement,itisclassifiedasTI(taskimagery).Storiesinwhichthereisno reference to any achievement goal are scored as UT (unrelated imagery).TheconceptofscoringAI,UIandTIisgivenwithexamplesandtheparticipants doubts are clarified before they go in for the subsequent steps.6. The participants are given a set of sample stories and are asked to score for AI, UI, and TI.7.Adiscussionisgeneratedaboutthescoredstoriesandthefacilitatorclarifiesthe doubtsoftheparticipants.Animpressionisalsogiventotheparticipantsthatthey are progressing well within the time frame.8.Anothersetofpracticestoriesmaybegiventotheparticipantsandtheymaybe asked to score for AI, UI and TI quickly..The facilitator may disclose the expert scoring of the second set of practice stories and ask them to find out the points of difference, if any.By now it is expected that the participants will feel secure and confident to a great extent in scoring AI, UI and TI.10.They may be asked to score their own stories in terms of AI, UI and TI. 53 11. Thefacilitatormayaskthemtoformagroupofthreeorfourandinterchangetheir scored stories and discuss the difference of view points, if any.The facilitator has to act as an expert to short out the differences. 12. At this stage, the facilitator brings forward the concept of the level or intensity of ach.MotivationpresentinanystorywhichhasscoredanAI.Theconceptmaybe highlighted with the help of the following questions.i). Someofus/allofus/fewofushavefoundAIinourstories.Whatdoesit mean ?ii).DoesitmeanthatallthosesecuringAIhavethesamelevelofachievement motivation ?iii).How can we know the level of achievement motivation ?13.The facilitator explains the level of motivation in terms of an-associate net-work.14. They are reminded of the practice stories scored as AI and are asked to score for the presence of elements in these stories.15. Adiscussionwithparticipantsontheelementsscoredbythemandclarifyingtheir doubts. 16. The participants are asked to score elements in their own stories.17. A discussion around total scores obtained by the participants.18. The facilitator may focus on the frequently occurring elements and the absence of a few elements.19. At this point, a suggestion is made to write a hypothetical story incorporating all the elements.20. A discussion on :Why the presence of all elements is desirable ?What the elements mean to us ? Consciously manipulating all the elements in a story is also not easy.It requires a deliberate attempt to internalize the elements and reflect them in our thinking and action.It is possible to acquire a high need to achieve.Asmallconceptsessionon(a)characteristicsofapersonwithneedto achieveand(b)achievementmotivationvsentrepreneurshighlightofresearches and experiences. Trainers GuideAllthestepsstatedearlierarepresentinthefollowingfourmajoraspects concerned in the exercise. ExcitementAction Experimentation andFacilitation 54 Activities performed under four different aspects1ExcitementPresentingachallengebeforetheparticipationtobeasimaginativeas possible and write interesting stories instead of merely describing the picture 2Action Askingparticipantstowritestories,makingthemseriousinfollowing instructions, and sticking to the time allotted to write the stories.3Experimentation Know what have you done, developing concept and skill of scoring AI, TI and UI along with the element of achievement motivation, helping them to find out themissingelements,re-writinganimaginarystoryincorporatingallthe elements.4Facilitation Whatdidwedo?whydidwedo?whatdoI,asanentrepreneur,findon introspection ? yes.I can, and will be an achievement oriented person. 55 13. SCORING MANUAL FOR ACHIEVEMENT MOTIVATION 56 13. SCORING MANUAL FOR ACHIEVEMENT MOTIVATIONA standard procedure developed by McClelland (1958) is followed inscoring achievement motivation. To determine the presence of achievement motivation in an individual the person is invited to write a story relating to a series of pictures shown tohim.Thecontentsofthestoriesareanalysednotonlytoascertainthepresence but also the level of achievement motivation.Achievement Imagery : The Main Criterion For Scoring Ifthewriterinvolvesanachievementgoal,eithernexplicittermsorinanimplied fashion,thenastoryhasachievementimagery.Achievementgoalcanbedefined as:(1)successincompetitionwithsomestandardofexcellence,regardlessof whether the individual may achieve the goal or not, or (2) success in competition with a standard of excellence where the individual is in clear competition with others, and he is determined to win, or to do better.This being his primary concern. 1.Scoring Achievement ImageryTheAIinastorymaytakenumberofforms,butalloftheseareinstancesofa desire to compete with a standard of excellence.(A).Desire for success in competition with othersHere, it is stated in explicit terms thata characteraffirms adesire to compete with others: example:Hewantedtowinthecontest;or,itmaybeimpliedusingexpressionsof sentiments or feelings, example: He is happy because he won the contest.(B).Desire for success in competition with selfIn this case a standard is set which is primarily self-imposed.It could be explicit; he wants to compete the job by the best possible technique.; or it could be implied, by referringtosentimentorfeelings;example.Heispleasedthathefoundthebest possible technique to complete the job. (C).Unique accomplishmentWhenacharacterinastoryisworkingonsomethingthatisoutofhislineofusual work, then he is achieving a unique accomplishment.This could be: creative work, scientificdiscovery,invention,etc.Here,auniqueaccomplishmentneednot necessarily be explicit or implied; the very fact that a person is involved in achieving somethingunique,isapersonalaccomplishment,andhence,itisevidentthatthe characterclearlyexpressesadesireto meet ahighstandardofexcellence,without mentioning it. (D).Long-term involvementIfacharacterinthestorystatesthatheisreferringtoanachievementgoal,which constitutes a lengthy time period, then it is obvious that the involvement which could be in termsofacareeroranyprimarygoals,isinitselfastandardofexcellence.Examples: Career involvement : He wants to become a manger. He has worked hard all these years to become an entrepreneur. 57 2.Doubtful Achievement ImageryIfthereisastorywhichisunrelatedeitherexplicitlyorimplicitlytoanycompetitive standard, but bears some reference to achievement, then it is classified as TI.The T stands for a common task in a routine problem. 3.Unrelated ImageryIfastoryfailstobearanyreference,whatsoever,toanyachievementorcriteria mentioned above, then it is generally classified as Unrelated imagery (UI).I.Scoring Sub-CategoriesAchievement ImageryIfastoryhasAI,thenitcanbescoredforachievementrelatedsub-categories.These are :i).Stated need for achievement (N)Desire to reach achievement goal. Strong indications of presence of motive/need. Specific accomplishment. Reference to personal status General desireAltruistic desireNeedisscoredonlyonceinastory,ifstatedexplicitly,andisa motivational statement. ii).Activity design to lead to an achievement goal (Act) Mentionofactualstatementofactivityindependentoforiginalstatementof situationandfinaloutcomeofstory;shouldbementionedinthebeginning,in-between or at the end; mention of past activity indicating effort. Act + : successful activities leading to achievement goal.Act -- : activities leading towards unsuccessful outcome.Act ? : outcome of activity is doubtful.3.Anticipation of success or failure in relation to the goal (Ga) Ga + :Positive anticipation of goal achievement.Ga -- : Positive anticipation of goal achievement.Both these activities may be present in one story, but each can be scored only once. 4.Obstacles of blocks (Bp/Bw)Bp: Internal or external obstacles located within the person, or personal block.Bw: Obstacles formed as part of the environment, world, or located in a situation that the character is dealing with; also scored when difficulty lies either in the person or in a situation.Both these activities can occur simultaneously in any story, but each can be scored only once. 5.Help from another person (H) H:Help,aid,sympathyorassistancewhichencouragesthepersontostrive for achievement; to be considered from the point of view of the character in the story.58 6.Feelings/emotions connected with attaining/failing to attain the goal (Fe)Feelings or emotions, associated with goal attainment, positive imagery or frustration of achievement directed activity. Fe + :Positive feelings, imagery; direct objective, definite accomplishment;beneficiary to others.Fe -- :Negative feelings associated with failure; objective results of complete failure and deprivation.Eitheroftheabovemayappearsimultaneouslyinthesamestory,butthey can be scored only once. 7.Achievement theme (Th) When AI is elaborated/enlarged to become the central theme; may or may not be an elaboration of experiences related to striving (successful or not) for an achievement goal.Scoring of Sub-categories___________________________________________________________________Sub-categories SymbolScore ___________________________________________________________________1.Need N + 1 2.Activity Act + orAct + 1or Act ?3.Goal anticipation (a) Positive goal anticipation Ga ++ 1 (b) Negative goal anticipation Ga --+ 14.Obstacle or blocks(a) Personal blocks Bp+ 1(b) Worldly blocks Bw+ 15.HelpH+ 16.Feeling (a) Positive feeling Fe ++ 1 (b) Negative feelingFe --+ 17.Achievement theme Th+ 1 _____________________________________________________________________Stories with AI+ 1_____________________________________________________________________Maximum obtainable score in one story will be + 11 59 TAT SCORING FOR THE ACHIEVEMENT MOTIVE Story No. AIUINACT+ACTACT -- GA + GA -- BpBwHFe + Fe -- ThTotal N.B. AI- Achievement ImageryBp - Personal Block UI- Unrelated Imagery Bw-Worldly Block N- Stated NeedH-HelpAct - Successful actionFe+-Positive Feeling+towards goalFe---Negative Feeling ACT - Unsuccessful ActionTh-Achievement ThemaAct ?- Doubtful Action towards the goal Ga+- Positive goal anticipation GA --- Negative anticipation60 14. PURCHASING INVENTORY / MATERIAL MANAGEMENT 61 14.PURCHASING INVENTORY/MATERIAL MANAGEMENT Anewentrepreneuralwaysthinkofimplementingownideastofulfillthedreams.Sometimestherearechancesthatforfulfillingthesedreams,he/shepaysmoreandit becomesacostlydreamanditprovestobeproblemcreatingtask.Ontheotherhand selection of cheap or less costly machineries and other material has its own problems too. A new entrepreneur while managing the purchases has to take care of many things, same of the clues are as follows.Organizeyourbuying,makeeffortstolookatfewalternativesratherthanjust accepting what is being offered to you in the first instance. Compare all available Brands or Makes.For machineries, compare machinery havingsamespecifications.Aneasywaytoknowaboutthisistoaskyour supplier how he is better than others.Though they have their ready answer, you can see through them.Justdontbelieveallthesmoothtalkofthesupplier.Moveintothemarketand find out how the same machinery is performing.The list of customers where the machinery is supplied should also be obtained from the supplier, but your visit to these customers should be independent. Inselectingasupplier,localoneshouldbepreferred.Trytoknowaboutthe suppliers reputation. Somesourcestofindthisoutare:DirectoriesofAssociationsandFinancial InstitutionswhichhaveapprovedsupplierslistandalsoBlacklistedsuppliers.Thiswillensurethatyouarenotnegotiatingwiththenotrecommended category !! In case advance money is to be paid, it is better to deal with a known party or a person.Manysategovernmentshaveagenciessupplyingequipmentandyou may decide to deal through them.The National Small Industries Corporation Ltd (NSIC), New Delhi or the Small Industries Corporation in your sta