starting and managing your business 2

8/6/2019 Starting and Managing Your Business 2

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Small andMediumEnterprises

DevelopmentAgency ofNigeria


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CONTENTS Introduction Entrepreneurial traits Entrepreneurial Skill Validating the Business idea Validating my Resources Sources and uses of fund Sources of Assistance Pre-Investment Proposal Business Plan

Path to Business Success Conclusion


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INTRODUCTION

If you have decided to be an entrepreneur you have decidedto create a new business venture, to work for yourself, to beyour own boss.

A successful self employment depends upon, having an ideawhich will translate into a product or service which acustomer will need and be prepared to pay for.

A business which satisfies you in terms of allowing you tomake your own decisions or makes you a lot of money orprovides you with a job you really like doing

Having the right skills and ability both technical andmanagerial to run the business.

Having or obtaining the resources necessary to produce yourproduct or services


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Introduction Contd

Do you have a mental picture of who your

customers are likely to be? What of your

competitors? How are you going to beat

them? You need to plan because starting a

business without adequate planning is like

driving a car without headlight at two

hundred kilometers per hour in the middle ofa rainy night.


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ENTREPRENEURIAL TRAITS

As an entrepreneur you perform two distinct yet closelyintertwined functions: Entrepreneurship and management.

Entrepreneurship is the quality which enables people to starta new business or vigorously and innovatively expand an

existing one. There are some basic character traits existents in an

entrepreneur that enables him to seek-out businessopportunities, conceptualize and initiate business projectsgather the physical, financial and human resources needed to

start the business, set goals for themselves and theirenterprises and guide the enterprise and its people toaccomplish the goals.


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Entrepreneurial Traits contd

Take a minute and objectively rate yourself with the profile of an entrepreneur below

Self Confidence -Belief in your ability of Independence

-Independent

-Optimism

Strong will power -persistence and perseverance

-Determination

Task/Result oriented -Achievement oriented

-Hard work, drive, energy- Initiative

Risk taker -Like challenges

-judicious risk taking ability

Leadership -Good Communicator

- Gets along well with others

-Responsive to suggestions

Originality -Innovative, creative

-Resourceful

-Versatile

Future Oriented -Foresight, vision, perceptiveness


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Entrepreneurial Skill

Technical

Creative

Human

Innovative

Design

Conceptual

Management

Marketing


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Validating Your Business Ideas

The most common and reliable sources of Business ideas are educational skills andworking/Environmental experiences in ones life. The basic foundation for any successful venture istherefore the self conviction on the part of the entrepreneur that success can be achieved.

Developing appropriate and harvest answers to the following under listed questions would enable youvalidate your business idea

Is it practical?

Is it legal?

What service or product will I sell

Does it meet a need(s) of other people

Are they willing and able to pay for it.

Can it be produced at the right quality and in the required quantity

Can it be produced in am acceptable form as required by those wanting it.

Has it linkages possibilities

Can it meet the Constant changes in users, need and taste

Is there a prototype of the product existing

What is your Business advantage over existing firms

What niche or gap would my business fill

Can I create a demand from my business


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Validating Your Business Ideas

(Contd) The Idea validation stage of your project is the most

critical stage. Any mistake or misjudgments at thisstage may lead to colossal loss of fund in future. Youneed to collect a lot of data and information about

the project at this stage As Consultant we can be of immense assistance to

you. We would train you to improve yourentrepreneurial/management skills and also help youin gathering all the data needed to validate yourbusiness idea


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Validating My Resources

After validating your business idea the next stage is tovalidate your resources what resources do you need totranslate your idea into a business. These resourcesinclude:

Business Premises

Raw materials

Machinery/ Equipment

Personnel

Funds

How much of theses resources have you got now and howmuch of them do you need. e.g


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Business Premises

Are you renting or Building? What is yourproduct production requirement? Is there anyregulatory requirement in the sitting of the

project. Have your proposed businesspremise taken into consideration NAFDAC orSON requirements, which is more economicalto you at this stage of your business, to build

or to rent.


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Raw Material

Many a times people assure through albeit wrongly that thereis an abundant supply of the raw material for their project.There is the need to take a list of the required raw material foryour project. Are they seasonal goods? Are they always

available, is the one in your locality of the right quality andquantity for your business. What of cost? Are they bothavailable and affordable? Many small business ventures havecollapsed due to miscalculation of the availability of their rawmaterial. Information on raw material can be obtained from

RMRDC


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Marketing

It is very vital to keep in mind that your business begins and ends with themarketplace. It begins by identifying customer needs and it ends with thesatisfying of those needs and it ends with the right time and at the right price. Aprice that must also give an adequate return on your investment.

As a prospective new enterprise, have you taken a minute to work out who areyour major competitors? What is their market share? How do their products /services compare with yours? How do you anticipate that they will react to a newentrant into their market? How can you beat them?

What are the unique selling points that differentiate your product from theirs?Have you done any demand assessment of your product.

Who are your customers? Do you have several or will your sales be dependent onone or two. How do you intend to sell your products or services? Who will do theselling? Will you be adverting, calling on prospective customers or general selling

in the market. product

Price

Place

Promotion


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Sources of Assistance (Contd)

B STATE GOVERNMENT AGENGIES

State Ministry of Commerce and Industry Information on

the states economic priority projects and feasible MSMEs

in the State.

State Investment corporation Agencies Information on

financing and available extension service facilities in the

state.

c. NON-GOVERNMENTAL ORGANIZATION

NASSI

MAN

NASME


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Production Management

Production management is the process of the

effective planning and control of the

operations of that section of an enterprise

devoted to transforming materials intofinished goods.

Production planning-Factory location and

layout

Production Strategy

Production Policy


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Human Resource Management

The human resource is the greatest asset in

any enterprise. It is the management of

people within the enterprise towards the

attainment of the goals and objectives of thatenterprise.

It entails: Recruitment, Placement and

induction, Manpower planning, Training anddevelopment, Reward system, performance

appraisal, Industrial democracy , etc


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Financial Management

Financial management is that managerial

activity(interplay) which ensures that financial

resources are obtained and utilized in the

most prudent way for the attainment of theobjectives of the enterprise.

Financing Decision

Investment Decision

Dividend Decision


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The Ten Commandments of Small-

Business Finance

Thou shall set clear financial goals

Thou shall prepare personal financial

statement

Thou shall prepare business financial

statements

Thou shall support projections of future cash

flows with sound logic

Thou shall decide upon a target capital

structure


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The Ten Commandments of Small

Business Finance Contd

Thou shall recognize all current sources of

financing

Thou shall consider alternative sources of

financing

Thou shall recognize exposure to business risk

Thou shall ensure that the financial plan fits

with the overall business plan


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The Business Plan

Management

Manpower Requirement

Product or Services Market and Marketing

Production Process

Financial Analysis Profitability Analysis

Evaluation of the Project


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Path to Business Success

Knowledge

Skill

Motivation Ability

Resources

Delighted Customers Innovation


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Conclusion

Working for yourself amounts to being your

own boss. Your destiny and fate lie with you

and you alone. There is no one to tell you

what to do, how to do it, when, where or forwhom to do it. Remember that once on your

own, you are not likely to be able to do

everything you want to . You have to enjoy what you are doing and

strive to put in your best at all times.


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Conclusion Contd

Being on you own amounts to you either sink

or swim. You have to be every where at every

time, doing the right things at the right time

delighting customers by exceeding theirexpectations.


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Conclusion Contd

The time is now for you to make active

positive use of your instincts, insight and

perceptions to manipulate and manage them

to propel you to being an entrepreneur-inspiteof the obvious dangers and challenges.

You dont make an omelet without breaking

an egg. We therefore crave your indulgence totake a dive into the waters of

entrepreneurship and be your own boss.


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WELCOME

THEN GET STARTED! AS THERE

IS NO TIME TO PONDER.

WELCOME TO THE WORLD OF

ENTREPRENEURS

starting and managing your business 2

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