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Entrepreneurship is the act of being an entrepreneur, which is a French word meaning "one who undertakes an endeavour". Entrepreneurs assemble resources including innovations, finance and business acumen in an effort to transform innovations into economic goods. This may result in new organizations or may be part of revitalizing mature organizations in response to a perceived opportunity. The most obvious form of entrepreneurship is that of starting new businesses; however, in recent years, the term has been extended to include social and political forms of entrepreneurial activity. When entrepreneurship is describing activities within a firm or large organization it is referred to as intra-preneurship and may include corporate venturing, when large entities start spin-off organizations. Entrepreneurship is often a difficult undertaking, as a vast majority of new businesses fail. Nevertheless such undertaking supposes the development of more than just a business venture. Entrepreneurial activities are substantially different depending on the type of organization that is being started. Entrepreneurship ranges in scale from solo projects (even involving the entrepreneur only part-time) to major undertakings creating many job opportunities. Many "high value" entrepreneurial ventures seek venture capital or angel funding in order to raise capital to build the business. Angel investors generally seek returns of 20-30% and more extensive involvement in the business. Many kinds of organizations now exist to support would-be entrepreneurs, including specialized government agencies, business incubators, science parks, and some NGOs. Lately more holistic conceptualizations of entrepreneurship as a specific mindset (see also entrepreneurial mindset) resulting in entrepreneurial initiatives e.g. in the form of social entrepreneurship, political entrepreneurship, or knowledge entrepreneurship emerged.
Capacity and willingness to undertake conception, organization, and management of a productive venture with all attendant risks, while seeking profit as a reward. In economics, entrepreneurship is regarded as a factor of production together with land, labour, natural resources, and capital. Entrepreneurial spirit is characterized by innovation and risk-taking, and an essential component of a nation's ability to succeed in an ever changing and more competitive global marketplace
The entrepreneur is an actor in microeconomics, and the study of entrepreneurship reaches back to the work of Richard Cantillon and Adam Smith in the mid-16th century, but was largely ignored theoretically until the late 19th and early 20th centuries and empirically until a profound resurgence in business and economics in the last 40 years. In the 20th century, the understanding of entrepreneurship owes much to the work of economist Joseph Schumpeter in the 1940s and other Austrian economists such as Carl Menger, Ludwig von Mises and Friedrich von Hayek. In Schumpeter, an entrepreneur is a person who is willing and able to convert a new idea or invention into a successful innovation. Entrepreneurship employs what Schumpeter called "the gale of creative destruction" to replace in whole or in part inferior innovations across markets and industries, simultaneously creating new products including new business models. In this way, creative destruction is largely responsible for the dynamism of industries and long-run economic growth. The supposition that entrepreneurship leads to economic growth is an interpretation of the residual in endogenous growth theory and as such is hotly debated in academic economics. An alternate, description posited by Israel Kirzner suggests that the majority of innovations may be much more
incremental improvements such as the replacement of paper with plastic in the construction of a drinking straw. For Schumpeter, entrepreneurship resulted in new industries but also in new combinations of currently existing inputs. Schumpeter's initial example of this was the combination of a steam engine and then current wagon making technologies to produce the horseless carriage. In this case the innovation, the car, was transformational but did not require the development of a new technology, merely the application of existing technologies in a novel manner. It did not immediately replace the horse drawn carriage, but in time, incremental improvements which reduced the cost and improved the technology led to the complete practical replacement of beast drawn vehicles in modern transportation. Despite Schumpeter's early 20th-century contributions, traditional microeconomic theory did not formally consider the entrepreneur in its theoretical frameworks (instead assuming that resources would find each other through a price system). In this treatment the entrepreneur was an implied but unspecified actor, but it is consistent with the concept of the entrepreneur being the agent of x-efficiency. Different scholars have described entrepreneurs as, among other things, baring risk. For Schumpeter, the entrepreneur did not bare risk: the capitalist did. Some notable persons and their works in entrepreneurship history. For Frank H. Knight  (1921) and Peter Drucker (1970) entrepreneurship is about taking risk. The behavior of the entrepreneur reflects a kind of person willing to put his or her career and financial security on the line and take risks in the name of an idea, spending much time as well as capital on an uncertain venture. Knight classified three types of uncertainty. • Risk, which is measurable statistically (such as the probability of drawing a red colour ball from a jar containing 5 red balls and 5 white balls).
• Ambiguity, which is hard to measure statistically (such as the probability of drawing a red ball from a jar containing 5 red balls but with an unknown number of white balls).
True Uncertainty or Knightian Uncertainty, which is impossible to estimate or predict statistically (such as the probability of drawing a red ball from a jar whose number of red balls is unknown as well as the number of other coloured balls).
The acts of entrepreneurship is often associated with true uncertainty, particularly when it involves bringing something really novel to the world, whose market never exists. However, even if a market already exists, there is no guarantee that a market exists for a particular new player in the cola category. The place of the disharmony-creating and idiosyncratic entrepreneur in traditional economic theory (which describes many efficiency-based ratios assuming uniform outputs) presents theoretic quandaries. William Baumol has added greatly to this area of economic theory and was recently honored for it at the 2006 annual meeting of the American Economic Association. The entrepreneur is widely regarded as an integral player in the business culture of American life, and particularly as an engine for job creation and economic growth. Robert Sobel published The Entrepreneurs: Explorations Within the American Business Tradition in 1974. Zoltan Acs and David Audretsch have produced an edited volume surveying Entrepreneurship as an academic field of research,  and more than a hundred scholars around the world track entrepreneurial activity, policy and social influences as part of the Global Entrepreneurship Monitor (GEM) and its associated reports.like cock
Being an entrepreneur is about more than just starting a business or two, it is about having attitude and the drive to succeed in business. All successful Entrepreneurs have a similar way of thinking and
posses several key personal qualities that make them so successful in business. Successful entrepreneurs like the ambitious Richard Branson have an inner drive to succeed and grow their business, rather than having a Harvard Business degree or technical knowledge in a particular field.
7 Key Qualities of a Successful Entrepreneur:
1. Inner Drive to Succee: Entrepreneurs are driven to succeed and expand
their business. They see the bigger picture and are often very ambitious. Entrepreneurs set massive goals for themselves and stay committed to achieving them regardless of the obstacles that get in the way.
2. Strong Belief In Themselves: Successful entrepreneurs have a healthy
opinion of themselves and often have a strong and assertive personality. They
are focused and determined to achieve their goals and believe completely in their ability to achieve them. Their self optimism can often been seen by others as flamboyance or arrogance but entrepreneurs are just too focused to spend too much time thinking about un-constructive criticism.
3. Search for New Ideas and Innovation: All entrepreneurs have a
passionate desire to do things better and to improve their products or service. They are constantly looking for ways to improve. They're creative, innovative and resourceful.
4. Openness to Change: If something is not working for them they simply
change. Entrepreneurs know the importance of keeping on top of their industry and the only way to being number one is to evolve and change with the times. They're up to date with the latest technology or service techniques and are always ready to change if they see a new opportunity arise.
5. Competitive by Nature: Successful entrepreneurs thrive on competition.
The only way to reach their goals and live up to their self imposed high standards is to compete with other successful businesses.
6. Highly Motivated and Energetic: Entrepreneurs are always on the
move, full of energy and highly motivated. They are driven to succeed and have an abundance of self motivation. The high standards and ambition of many entrepreneurs demand that they have to be motivated!
7. Accepting of Constructive Criticism and Rejection:
Innovative entrepreneurs are often at the forefront of their industry so they hear the words "it can't be done" quite a bit. They readjust their path if the criticism is constructive and useful to their overall plan, otherwise they will simply disregard the comments as pessimism. Also, the best entrepreneurs know that rejection and obstacles are a part of any leading business and they deal with them appropriately. True entrepreneurs are resourceful, passionate and driven to succeed and improve. They're pioneers and are comfortable fighting on the frontline The great ones are ready to be laughed at and criticized in the beginning because they can see their path ahead and are too busy working towards their dream.
25 Common Characteristics of Successful Entrepreneurs:
1. Do what you enjoy. What you get out of your business in the form of personal satisfaction, financial gain, stability and enjoyment will be the sum of what you put into your business. So if you don't enjoy what you're doing, in all likelihood it's safe to assume that will be reflected in the success of your business--or subsequent lack of success. In fact, if you don't enjoy what you're doing, chances are you won't succeed. 2. Take what you do seriously. You cannot expect to be effective and successful in business unless you truly believe in your business and in the goods and services that you sell. Far too many home business owners fail to take their own businesses seriously enough, getting easily sidetracked and not staying motivated and keeping their noses to
the grindstone. They also fall prey to naysayers who don't take them seriously because they don't work from an office building, office park, storefront, or factory. Little do these skeptics, who rain on the home business owner's parade, know is that the number of people working from home, and making very good annual incomes, has grown by leaps and bounds in recent years. 3. Plan everything. Planning every aspect of your home business is not only a must, but also builds habits that every home business owner should develop, implement, and maintain. The act of business planning is so important because it requires you to analyze each business situation, research and compile data, and make conclusions based mainly on the facts as revealed through the research. Business planning also serves a second function, which is having your goals and how you will achieve them, on paper. You can use the plan that you create both as map to take you from point A to Z and as a yardstick to measure the success of each individual plan or segment within the plan. 4. Manage money wisely. The lifeblood of any business enterprise is cash flow. You need it to buy inventory, pay for services, promote and market your business, repair and replace tools and equipment, and pay yourself so that you can continue to work. Therefore, all home business owners must become wise money managers to ensure that the cash keeps flowing and the bills get paid. There are two aspects to wise money management.
The money you receive from clients in exchange for your goods and services you provide (income)
The money you spend on inventory, supplies, wages and other items required to keep your business operating. (expenses)
5. Ask for the sale. A home business entrepreneur must always remember that marketing, advertising, or promotional activities are completely worthless, regardless of how clever, expensive, or perfectly targeted they are, unless one simple thing is accomplished--ask for the sale. This is not to say that being a great salesperson, advertising copywriting whiz or a public relations specialist isn't a tremendous asset to your business. However, all of these skills will be for naught if you do not actively ask people to buy what you are selling. 6. Remember it's all about the customer. Your home business is not about the products or services that you sell. Your home business is not about the prices that you charge for your goods and services. Your home business is not about your competition and how to beat them. Your business is all about your customers, or clients, period. After all, your customers are the people that will ultimately decide if your business goes boom or bust. Everything you do in business must be customer focused, including your policies, warranties, payment options, operating hours, presentations, advertising and promotional campaigns and website. In addition, you must know who your customers are inside out and upside down. 7. Become a shameless self-promoter (without becoming obnoxious). One of the greatest myths about personal or business success is that eventually your business, personal abilities, products or services will get discovered and be embraced by the masses that will beat a path to your door to buy what you are selling. But how can this happen if no one knows who you are, what you sell and why they should be buying? Self-promotion is one of the most beneficial, yet most underutilized, marketing tools that the majority of home business owners have at their immediate disposal.
8. Project a positive business image. You have but a passing moment to make a positive and memorable impression on people with whom you intend to do business. Home business owners must go out of their way and make a conscious effort to always project the most professional business image possible. The majority of home business owners do not have the advantage of elaborate offices or elegant storefronts and showrooms to wow prospects and impress customers. Instead, they must rely on imagination, creativity and attention to the smallest detail when creating and maintaining a professional image for their home business. 9. Get to know your customers. One of the biggest features and often the most significant competitive edge the home based entrepreneur has over the larger competitors is the he can offer personalized attention. Call it high-tech backlash if you will, but customers are sick and tired of hearing that their information is somewhere in the computer and must be retrieved, or told to push a dozen digits to finally get to the right department only to end up with voice mail--from which they never receive a return phone call. The home business owner can actually answer phone calls, get to know customers, provide personal attention and win over repeat business by doing so. It's a researched fact that most business (80 percent) will come from repeat customers rather than new customers. Therefore, along with trying to draw newcomers, the more you can do to woo your regular customers, the better off you will be in the long run and personalized attention is very much appreciated and remembered in the modern high tech world. 10. Level the playing field with technology. You should avoid getting overly caught up in the high-tech world, but you should also know how to take advantage of using it. One of the most amazing aspects of the internet is that a one or two person business operating from a basement can have a superior website to a $50 million company, and nobody
knows the difference. Make sure you're keeping up with the high-tech world as it suits your needs.. The best technology is that which helps you, not that which impresses your neighbors. 11. Build a top-notch business team. No one person can build a successful business alone. It's a task that requires a team that is as committed as you to the business and its success. Your business team may include family members, friends, suppliers, business alliances, employees, sub-contractors, industry and business associations, local government and the community. Of course the most important team members will be your customers or clients. Any or all may have a say in how your business will function and a stake in your business future. 12. Become known as an expert. When you have a problem that needs to be solved, do you seek just anyone's advice or do you seek an expert in the field to help solve your particular problem? Obviously, you want the most accurate information and assistance that you can get. You naturally seek an expert to help solve your problem. You call a plumber when the hot water tank leaks, a real estate agent when it's time to sell your home or a dentist when you have a toothache. Therefore, it only stands to reason that the more you become known for your expertise in your business, the more people will seek you out to tap into your expertise, creating more selling and referral opportunities. In effect, becoming known as an expert is another style of prospecting for new business, just in reverse. Instead of finding new and qualified people to sell to, these people seek you out for your expertise. 13. Create a competitive advantage. A home business must have a clearly defined unique selling proposition. This is nothing more than a fancy way of asking the vital question, "Why will people
choose to do business with you or purchase your product or service instead of doing business with a competitor and buying his product or service?" In other words, what one aspect or combination of aspects is going to separate your business from your competition? Will it be better service, a longer warranty, better selection, longer business hours, more flexible payment options, lowest price, personalized service, better customer service, better return and exchange policies or a combination of several of these?
14. Invest in yourself. Top entrepreneurs buy and read business and marketing books, magazines, reports, journals, newsletters, websites and industry publications, knowing that these resources will improve their understanding of business and marketing functions and skills. They join business associations and clubs, and they network with other skilled business people to learn their secrets of success and help define their own goals and objectives. Top entrepreneurs attend business and marketing seminars, workshops and training courses, even if they have already mastered the subject matter of the event. They do this because they know that education is an ongoing process. There are usually ways to do things better, in less time, with less effort. In short, top entrepreneurs never stop investing in the most powerful, effective and best business and marketing tool at their immediate disposal--themselves. 15. Be accessible. We're living in a time when we all expect our fast food lunch at the drive-thru window to be ready in mere minutes, our dry cleaning to be ready for pick-up on the same day, our money to be available at the cash machine and our pizza delivered in 30 minutes or it's free. You see the pattern developing--you must
make it as easy as you can for people to do business with you, regardless of the home business you operate. You must remain cognizant of the fact that few people will work hard, go out of their way, or be inconvenienced just for the privilege of giving you their hardearned money. The shoe is always on the other foot. Making it easy for people to do business with you means that you must be accessible and knowledgeable about your products and services. You must be able to provide customers with what they want, when they want it.
16. Build a rock-solid reputation. A good reputation is unquestionably one of the home business owner's most tangible and marketable assets. You can't simply buy a good reputation; it's something that you earn by honouring your promises. If you promise to have the merchandise in the customer's hands by Wednesday, you have no excuse not to have it there. If you offer to repair something, you need to make good on your offer. Consistency in what you offer is the other key factor. If you cannot come through with the same level of service (and products) for clients on a regular basis, they have no reason to trust you . . . and without trust, you won't have a good reputation. 17. Sell benefits. Pushing product features is for inexperienced or wannabe entrepreneurs. Selling the benefits associated with owning and using the products and services you carry is what sales professionals worldwide focus on to create buying excitement and to sell, sell more, and sell more frequently to their customers. Your advertising, sales presentations, printed marketing materials, product packaging, website, newsletters, trade show exhibit and signage are vital. Every time and every medium used to communicate with your target audience must
always be selling the benefits associated with owning your product or using your service. 18. Get involved. Always go out of your way to get involved in the community that supports your business. You can do this in many ways, such as pitching in to help local charities or the food bank, becoming involved in organizing community events, and getting involved in local politics. You can join associations and clubs that concentrate on programs and policies designed to improve the local community. It's a fact that people like to do business with people they know, like and respect, and with people who do things to help them as members of the community. 19. Grab attention. Small-business owners cannot waste time, money and energy on promotional activities aimed at building awareness solely through long-term, repeated exposure. If you do, chances are you will go broke long before this goal is accomplished. Instead, every promotional activity you engage in, must put money back in your pocket so that you can continue to grab more attention and grow your business. 20. Master the art of negotiations. The ability to negotiate effectively is unquestionably a skill that every home business owner must make every effort to master. It's perhaps second in importance only to asking for the sale in terms of home business musts. In business, negotiation skills are used daily. Always remember that mastering the art of negotiation means that your skills are so finely tuned that you can always orchestrate a win-win situation. These win-win arrangements mean that everyone involved feels they have won, which is really the basis for building long-term and profitable business relationships.
21. Design Your workspace for success. Carefully plan and design your home office workspace to ensure maximum personal performance and productivity and, if necessary, to project professionalism for visiting clients. If at all possible, resist the temptation to turn a corner of the living room or your bedroom into your office. Ideally, you'll want a separate room with a door that closes to keep business activities in and family members out, at least during prime business and revenue generating hours of the day. A den, spare bedroom, basement or converted garage are all ideal candidates for your new home office. If this is not possible, you'll have to find a means of converting a room with a partition or simply find hours to do the bulk of your work when nobody else is home. 22. Get and stay organized. The key to staying organized is not about which type of file you have or whether you keep a stack or two of papers on your desk, but it's about managing your business. It's about having systems in place to do things. Therefore, you wan to establish a routine by which you can accomplish as much as possible in a given workday, whether that's three hours for a part-time business or seven or nine hours as a full-timer. In fact, you should develop systems and routines for just about every single business activity. Small things such as creating a to-do list at the end of each business day, or for the week, will help keep you on top of important tasks to tackle. Creating a single calendar to work from, not multiple sets for individual tasks or jobs, will also ensure that jobs are completed on schedule and appointments kept. Incorporating family and personal activities into your work calendar is also critical so that you work and plan from a single calendar. 23. Take time off. The temptation to work around the clock is very real for some home business owners. After all, you don't have a manager telling you it's time to go home because they can't afford the overtime pay. Every person working from home
must take time to establish a regular work schedule that includes time to stretch your legs and take lunch breaks, plus some days off and scheduled vacations. Create the schedule as soon as you have made the commitment to start a home business. Of course, your schedule will have to be flexible. You should, therefore, not fill every possible hour in the day. Give yourself a backup hour or two. All work and no play makes you burn out very fast and grumpy customer service is not what people want. 24. Limit the number of hats you wear. It's difficult for most business owners not to take a hands-on approach. They try to do as much as possible and tackle as many tasks as possible in their business. The ability to multitask, in fact, is a common trait shared by successful entrepreneurs. However, once in a while you have to stand back and look beyond today to determine what's in the best interest of your business and yourself over the long run. Most highly successful entrepreneurs will tell you that from the time they started out, they knew what they were good at and what tasks to delegate to others. 25. Follow-up constantly. Constant contact, follow-up, and follow-through with customers, prospects, and business alliances should be the mantra of every home business owner, new or established. Constant and consistent follow-up enables you to turn prospects into customers, increase the value of each sale and buying frequency from existing customers, and build stronger business relationships with suppliers and your core business team. Follow-up is especially important with your existing customer base, as the real work begins after the sale. It's easy to sell one product or service, but it takes work to retain customers and keep them coming back.
J.R.D.TATA had remarked “if mere words could create wealth, the streets of India would be proud with gold. It takes more than words and wishes to generate wealth for a nation. A nation’s wealth comes out of vision and hard work of its entrepreneur.” Before establishing and starting any business activity, an entrepreneur has to take a note of the resources available to him objectively. Any project to be undertaken is bound to be affected by the environment as well as the resources are plenty and easily accessible. A resource could be defined as a variable quantity raw material, equipment, spare and funds available for carrying out a project or the starting a business activity. A very critical analysis of the available resources is necessary because then alone it will be possible to take correct decisions regarding the selection and starting of any project. The resource allocation at the unit level is an important decision in project planning. Resources being limited are required to be allocated judiciously. The objective of optimum use of the resources ensuring maximum productivity, profitability or the best performance must be fulfilled. The allocation of resources at the unit level depends on the existing environment because it decides the framework under which the business
activity is possible. Usually the large firms are in a better position to allocate the resources for any project as compared to small size firms.
WHAT IS A VENTURE?
Venture capital (also known as VC or Venture) is a type of private equity capital typically provided for early-stage, high-potential, growth companies in the interest of generating a return through an eventual realization event such as an IPO or trade sale of the company. Venture capital investments are generally made as cash in exchange for shares in the invested company. It is typical for venture capital investors to identify and back companies in high technology industries such as biotechnology and ICT (information and communication technology). Venture capital typically comes from institutional investors and high net worth individuals and is pooled together by dedicated investment firms. Venture capital firms typically comprise small teams with technology backgrounds (scientists, researchers) or those with business training or deep industry experience. A core skill within VC is the ability to identify novel technologies that have the potential to generate high commercial returns at an early stage. By definition, VCs also take a role in managing entrepreneurial companies at an early stage, thus adding skills as well as capital (thereby differentiating VC from buy out private equity which typically invest in companies with proven revenue), and thereby potentially realizing much higher rates of returns. Inherent in realizing abnormally high rates of returns is the risk of losing all of one's investment in a given startup company. As a consequence, most venture capital investments are
done in a pool format where several investors combine their investments into one large fund that invests in many different startup companies. By investing in the pool format the investors are spreading out their risk to many different investments versus taking the chance of putting all of their monies in one start up firm. A venture capitalist (also known as a VC) is a person or investment firm that makes venture investments, and these venture capitalists are expected to bring managerial and technical expertise as well as capital to their investments. A venture capital fund refers to a pooled investment vehicle (often an LP or LLC) that primarily invests the financial capital of third-party investors in enterprises that are too risky for the standard capital markets or bank loans. Venture capital is also associated with job creation, the knowledge economy and used as a proxy measure of innovation within an economic sector or geography. Venture capital is most attractive for new companies with limited operating history that are too small to raise capital in the public markets and have not reached the point where they are able to secure a bank loan or complete a debt offering. In exchange for the high risk that venture capitalists assume by investing in smaller and less mature companies, venture capitalists usually get significant control over company decisions, in addition to a significant portion of the company's ownership (and consequently value). Young companies wishing to raise venture capital require a combination of extremely rare yet sought after qualities, such as innovative technology, potential for rapid growth, a well-developed business model, and an impressive management team. VCs typically reject 98% of opportunities presented to them[ reflecting the rarity of this combination.
A business plan is a comprehensive set guideline for a new venture. Planning is essential and it must be done in a reasonable manner. Therefore, feasibility planning is used as a way of moderating the concept of a comprehensive business plan. Every business is unique. Therefore no plan is going to provide an absolute prescription for success. A feasibility plan is an outline of potential issues to address and a set of guidelines to help to help an entrepreneur make better decisions.
A well written plan should clearly identify the product, service, market and the founders. A feasibility plan should be prepared in a quality manner. The plan should be easy to read and must be complete and accurate. There should be no misspellings, improper grammar or mistakes in the data. Effective plans avoid emotion packed phrases and abstract language. Entrepreneurs who know how to write a good plan will avoid saying “think”
there is a market or they ‘believe’ a product will work. Instead, they will use facts to support their assertions. PROJECT: A project is work plan to achieve certain objectives within a specific period. It may be defined as definite and complete scheme or plan of action for achieving definite objectives or target. It is scheme or plan for investing money and other resources for starting a new business enterprise or for expanding the existing one. A project may be prepared for starting a new factory or a plant or it may be prepared for expansion or modernisation of the existing enterprise.
It means determining the route or the manner in which the project or the scheme is to be executed. Project planning starts with the discovery of a business starts with discovery of a business opportunity and ends with the completion of all details required for the execution. Project planning is the result of the detailed investigation of various aspects such as technical, managerial marketing and financial of the proposed business activity. It is essential in case of new projects as it gives the basic data required for the execution project. The entire plan of the project is noted in a written document called project report.
STEPS IN PROJECT PLANNING:
OF BUSINESS OPPORTUNITY: The discovery of
business opportunity usually relates to market, raw materials, and needs of the consumers and so on. The process of setting up of a business enterprise gets clear direction only when a promising business opportunity is discovered.
INVESTIGATION OF THE PROJECT: Investigation
relates to certain broad economic aspects such as market demand, investment required and margin of profit likely to be available. The preliminary investigation of the project is desirable in order to find out the possible success of the project after execution. Preliminary scrutiny facilitates the elimination of the unsound project at an unsound project at an early stage.
REQUIREMENTS STUDY: Requirements include land,
machinery, raw material, fuel, power, waste disposal, manpower and
transportation. This study needs to be conducted with help of technical consultants such as consulting engineers.
FEASIBILITY STUDY: It is a part of project planning. The
basic purpose is to verify the practical market standing of the project. If the initial feasibility study is favourable the promoters can go ahead with the final preparatory step in project planning.
PREPARATORY STEP: In the final preparatory stage certain
details of the project have to be worked out. The final preparatory step includes: (a)DETERMINIG CAPITAL REQUIREMENT: Project planning involves calculation of required capital for the project which includes fixed and working capital. Capital is required for the execution of the project. (b) FRAMING POLICIES: They are action paths and enable mangers to achieve the targets of the project in an orderly manner. They are useful for orderly execution of the project.
(c) PREPARINIG PROGRAMMES: Programme is the time table for conducting a particular activity in the project. Such programmes should be integrated properly and their timings and sequence should be adjusted accurately.
(d) PREPARINIG DESIGNS OF STRUCTURES AND PROCESSES: Design of the process equipment is prepared. Detail plan for layout roads, water supply, waste disposal, etc. are also prepared.
(e) DETERMINIG THE WORK-FLOW: The flow of work is a time schedule for different activities so as to complete the entire project efficiently and quickly.
The project report is a summary of project planning. It is prepared by experts after completing the project a planning. It serves as a base for feasibility studies and actual execution of project. The report deals with the different aspects of the proposed project. It is generally prepared by a team of experts including engineers, technicians and financial experts. Project report contains details regarding technical, financial, marketing and managerial aspects of a project. The purpose of project report is to place all necessary data for consideration of experts. The lending institutions desires to study the soundness of proposed project before granting loan. CONTENTS OF PROJECT REPORT: (1) Name, address and other details of sponsoring agency. (2) Brief history and summary of the propose project. (3) Technical details of the project which include details of plant layout, location, manufacturing process, products, etc. (4) Cost of production and profitability. (5) Manpower requirement of the project.
aspects of the project, which include cost of project, fixed
assets, fixed assets, working capital requirement and sources of finance. (7) Total income, operative profit and net profit. (8) Importance regarding marketing. (9) Importance of the project to national economy, export promotion.
ADVANTAGES OF PROJECT REPORT:
Project report is useful for taking bank loans and submitting proposals for govt. license and permission.
It is useful for quick reference during the process of execution of the project.
It is useful as a controlling device. Project report is useful for modification or for improvement in the proposed project during the course of feasibility study or a appraisal of the project.
(5) It is a base for feasibility study.
Feasibility study of project means to find out the practical utility or the future prospects of a project. It is necessary to study the practical utility in an impartial
manner. Feasibility study gives more safety and security to the sponsor of the project. It avoids possible failure after execution. The banks and financial institutions undertake such study in an impartial manner for the safety. Such appraisal is necessary and useful in the case of the large projects, which need huge financial investment. The basic purpose of feasibility study is to find out whether the project is technically, economically, financially and managerial sound. AREAS OF FEASIBILITY STUDY:
FESIBILITY STUDY: Location, size, layout and
technology are the important technical aspects which are considered in technical study. All technical details are evaluated in this area feasibility study. The extent of technical soundness of the project is available from technical feasibility study.
FEASIBILITY STUDY: Economic
feasibility relates to the market and marketing for the proposed product. The success and the profit of a project largely depend on the market available for the present and in the future. Due to rival producers, substitutes available and market competition the study is extremely complicated. During the economic feasibility study market analysis or forecast must be conducted with reasonable accuracy.
STUDY: It relates to the financial
aspect of the project. The success of the project depends on its profitability in the present and future. This study is concerned with capital cost estimates, sales revenue, working capital needs, earning estimates, cash flow studies and availability of funds for the execution of
the project. Since the purpose behind executing the project is to earn profit the commercial feasibility study gain importance.
FEASIBILITY STUDY: Even if the project is to be
economically, technically and financially feasible it can still fail if the people who implement or manage it are not capable. The success and the profitability of the project partly depend on managerial competence and so the lending institutions give special importance to this area of feasibility study.
It is a document prepared after completing different types of feasibility studies. It is prepared by the sponsors or even by banks or lending agency for the safety of their funds. It is prepared after the project report. It gives full analysis of the projected inputs and outputs covering all information upon which promoters can take final decision about the proposed project. Feasibility report may suggest certain modification in the proposed project. It is desirable to modify the project in the light of such modifications. Feasibility report is also useful for improving the proposed project and making it more safe and promising.
It was the vision and foresight of India’s first Prime Minister, Pandit Jawaharlal Nehru that paved the way for industrialisation in India. The five-year plans were designed from time to time to ensure the industrial growth of our nation. As a matter of industrial policy, therefore Pandit Nehru insisted on the
balanced regional growth and advocated that the necessary infrastructure should be provided to place industries on a sound footing. The central and the state government established several industrial estates and offered many infrastructural facilities for the industrial growth of our nation. It was necessary that the backward regions should be developed so that there is no lop sided development of industries. The Government of India on one hand offered certain concessions to the entrepreneurs for starting new units in those areas and also tried to extend positive help by way of providing the infrastructure.
Infrastructure is the background against which the industrial units could stand. In order that the states should have their balanced regional growth, the government built roads for transport of goods and the people to and from those areas. Regular and sufficient water supply was ensured. Sewage for protection from the polluted water was arranged. The infrastructure includes an “AIDS TO TRADE”.
For an example besides transports facilities the entrepreneur requires banking, insurance, communication, warehousing a services of mercantile agents. Electricity, lighting on the roads fine brigades, security, etc. become a must. The Government also tries to provide financial and raw material, labour and a market for the products produced. The industrial sector developed by the Maharashtra Industrial Development Corporation provides a number of infrastructure facilities. The entrepreneur prefer to set up their units in these zones because 1) It is not necessary to obtain permission for non-agricultural business. 2) There is no lien on the land.
3) The land is owned by the Government but it is given under the lease agreement for 95 years. 4) MIDC ensures that each plot of land would be offered pure water out of its reservoirs.
5) The state electricity board offers easy electric supply. 6) MIDC offers plots and sheds for small-scale producers and electronic industries. 7) Separate sections are created for engineering chemical and electronic industrial units. 8) There is systematic planning to help small scale, medium scale and largescale industries and commercial complexes so that the environment is conducive to the growth of industries.
Proper infrastructural facilities provided can ensure the entrepreneur to start new ventures and see that the same are established and proper. This is in the interest of the entrepreneurs as well as the state. If no such facilities are available the entrepreneurs may not be interested to take risk. Some times because of the insecurity and lack of infrastructure facilities there is a flight of industries from one state to another. Thus for some times the industrialists in Maharashtra were lured by the state of Gujarat by offering them a number of infrastructural facilities and also financial aid in terms of subsidies etc. The states, which are lacking the infrastructure and also are infested with insecurity, are slow in entrepreneurial growth. The state of Bihar in the recent times is an example.
LOCATION OF A BUSINESS UNIT:
The profitability and the performance of a business unit are very much influenced by the size of the business, location and the layout. The
location and the environmental factors are nowadays-prime consideration for the establishment of a business unit. The location of a business unit can decide the earning capacity and the cost control. It is the location, which can decide whether the business will be stable or otherwise. Recently the famous ENRON project in India came in trouble because of a particular location which it is feared would cause tremendous pollution. It was opposed and the government of Maharashtra had decided to cancel the agreement but due to the central Govt. interference the project was cleared. If the decision regarding the choice of a location is not taken on scientific basis there could be many difficulties to be faced in future. The location refers to a particular area or site place selected for establishing of setting a business unit. A number of factors are required to be considered before the decision regarding location is finalized. Thus the decision regarding the location could be directed by the Government for securing balanced regional growth of industries. It may establish industrial estates and offer a number of aids to support various units. Sometimes the pioneers in an industry prosper at a particular place. The important of convenient location cannot be ignored. The maximum convenience, minimum cost and the optimum efficiency are usually the guiding factors in deciding upon the location of a business unit.
BENEFITS OF SCIENTIFIC LOCATION:
According to I.I.Lundy the location decisions could have nearly 10% on the transport and distribution cost. The following are the benefit of a good location selected on scientific basis.
Better performance and maximum efficiency: It is possible to have raw material from the local area thus reducing the cost of transport. If the market is near the location of the production unit, less expenses would be incurred in reaching the finished products to have market.
Cost control: More profits could be also available because of reduction in cost on administration transport, marketing and fuel.
Smooth working: Because of the ready availability of raw material as well as disposal of effluents and quick delivery of the finished products the production as well as the marketing is carried out smoothly.
Expansion and diversification: When the business is established and starts prospering, the entrepreneur thinks of expansion and diversification. There are cases where such decisions are well supported by the location selected earlier by a visionary entrepreneur.
Ability to face competition: Since the location can help reduction of costs, the entrepreneur can have an edge over his competitors and can grab a bigger share of the market.
WEBER’S THEORY OF LOCATION:
The theory was put forth in 1909 and was popular in England in 1929. However, subsequently it lost its grounds because of practical considerations. The importance of this theory lies in the fact that it led the primary efforts to discuss the issue of location on somewhat scientific basis.
Mr. Alfred Weber advocated that the factors deciding the location of a business unit could be divided as: (A)Primary factors which included, a. Transport cost and b. Labour cost and, (B)Secondary factors, which included a. Existence of skilled labour in the region, b. Existence of auxiliary industries, c. Facilities of technical research d. Momentum of an early, start and e. Banking, insurance and transport facilities. The secondary factors were also known as Agglomerative and Deglomerative factors Mr. Weber provided a mathematical formula as: Location Material Index=Weight of localized material Weight of finished products If the index is less than one then the location should be near the market or place of consumption and if it is higher than one the cost need not be taken into account while locating a plant. However, Weber’s assumption regarding transport cost, fixed labour centres and fixed market places are unrealistic and hence, it is said that this theory has now only a historical importance.
FACTORS INFLUENCING THE LOCATION OF A BUSINESS UNIT:
The following are the primary factors of location: (a) Availability of raw material.
(b) Transport and communication facilities. (c) Cheap labour. (d) Proximity to market. (e) Power, fuel and water supply. Secondary factors: (a) Climatic conditions. (b) Financial facilities. (c) Personal factors. (d) Government and tax exemptions, land loan, etc. (e) Scope for expansion. (f) Industrial environment. (g) Existence of auxiliary industries. (h) Fire fighting facilities and amenities to employees.
STEPS IN THE SELECTION OF LOCATION:
An entrepreneur usually consults an engineer or and industrial economists before taking the decision regarding the selection of a location. There are three stages in the selection of a location:
of a region: Usually the consideration of a region is done in
the context of the suitability for industry. The entrepreneur consider: a. The availability of raw material. b. The proximity to the market. c. Transport and communication facilities. d. Availability of power, fuel and water and, e. Miscellaneous factors like suitable climate, law and order situation and industrial atmosphere, essential supplies like labour, banking facilities, etc.
of locality: After selection of the region, the entrepreneur
tries to select the locality in the region. He tries to consider the locality in that region. The following factors are considered: a. The availability of the adequate quantity and quality of labour. b. Prevailing wage scales in the industry. c. General attitude of the community towards industries. Enron was opposed by the people in the area on account of fear of pollution d. Types of industries available in the locality. e. Living conditions on the locality. f. Government reductions, tax concession, etc. g. Availability of banking transport and research facilities. h. Police protection and provision of fire fighting facilities.
of Site: The selection of exact site is done after deciding
upon the locality. In other words, we start with macro and end with micro considerations. Here a number of alternative sites are compared. A city, a village or an industrial estate is to be selected. The cost of land can differ with different sites. The roads and the railway should
be suitable. There should be facilities for good water supply and affluent and also a favourable surrounding. The state regulations regarding the industrial location are to be considered seriously because they can provide favourable or unfavourable industrial weather. The concentration of industries can create a number of problems like slums and social insecurity for reason like defence considerations, certain areas are prohibited areas. In other words, particularly for an industrial entrepreneur the decision regarding location is to be taken with ‘care and caution’.
Business environment cannot be neglected by an entrepreneur. It can make or mar the business. According to Keith Devis business environment is the aggregate of all the conditions, events and influence that surround and affect it. It consists of all external and internal factors that influence the complex interaction of the market, finance and production. Business environment is ever changing and hence can create as well as solve problems. A change in the government could be favourable
for some entrepreneurs, while it may create obstacles for others. Environment can create new opportunities and also new threats. Business planning is closely connected with business environment. The strength, weakness, the opportunities and the threats created by existing environment must be studied seriously before launching a project. The survival, growth, expansion and diversification are always influenced by the environment and therefore in study is a must for any entrepreneur who wishes to be successful in his venture. The following are the important types of environment:
environment: The political environment is created by the
political ideology or the system adopted by a county. The provisions of the constitution, various political parties in power and its opposition and the various political events affect the business. On the arrival of the election the business environment is tensed as uncertainty prevails. In India the Congress Government has been stable for quite some times. When Janata party won the elections, the industrial policy also underwent a change. The congress party was in favour of heavy industry. The Janata government encouraged small scale and tiny industries in order to provide employment to a large section of the society living in villages. The businessman has to keep a close watch over the political events and adjust themselves accordingly. (2) Economic environment: the economic environment is supplementary to political environment. The government industrial policy, export-import policy, fiscal policy, banking policy, etc. create new problems and opportunities for entrepreneur. The government may through its budgetary provisions create an environment which is conducive to the growth of private enterprise. The legal measures like FERA, MRTP and institutes like SEBI are responsible for creating a particular business environment.
The entrepreneur should be interested in exercising their influence on the government through bodies like chambers of commerce and trade associations so that the economic environment is helpful to the industries. (3) Social and cultural environment: Social and cultural environment too can create certain problems. The increasing consumer awareness, education progress of the ladies, changes in faith of the middle class opportunities on one side and problems on the other side. The emergence of the middle class as a powerful socio-economic group in the Indian market scene needs special attention by the business enterprise. Cultural factors include beliefs, arts, moral, customs, etc.. Cultural changes take place gradually. In brief, cultural factors contribute for the creation of social environment.
(4) Technological environment: The technological environment creates a problem of obsolescence. New technology is always preferred to the old one. Costly machinery can become junk or outdated. It is said that the technology of today are the junk of tomorrow. People find Xeroxing more convenient as compared to cyclostyling. The use of computers is growing. The electronic equipment’s are becoming the order of the day and therefore the entrepreneur who cannot keep pace with changing technological development will be lagging behind. (5) Demographic environment: The demographic environment tells us about the age and sex compositions, family size, religion and economic status of the population. The growth of industries raises the standard of living and the expectations of the people. The entrepreneur has to study the changing pattern of the demographic set up. It is the people who make the market.
The shift of the rural population to the urban areas can create new challenges to the entrepreneurs. (6) Natural or physical environment: it speaks about the geographical factors like weather and climatic conditions. The hills, rivers, oceans, land, soil, the flora and the fauna all constitute the physical on the background of which the business flourishes. This environment is very important as it can create shortage of raw material. If the rains are scanty the crop could burn. The famines and earthquakes, excess rain or draught could create problematic situation for the entrepreneur. This is also known as ecological environment and its consideration is inevitable.
(7) International environment: Today the international environment plays a dominant role in deciding the fate of many entrepreneurs. The policy of liberalization and the steps towards globalization is a topic of serious discussion today. The entry of multinational in Indian is posing a big challenge to the Indian entrepreneur. Obtaining ISO 9000 certification has become a must to compete in the international market. The policy of big powers like USA, Japan and China has been greatly affecting the business environment. In short since the whole world is becoming a village due to economic and political changes, modern entrepreneur should always be alert. He has to be ready to face the changing international scenario and take faster decisions to maintain his success.
ROLE OF INDUSTRIAL FAIRS:
International fairs are the fairs at which industrialists exhibits their products. These fairs are organized at regional, national and international levels. A large number of people from industry and trade visit these fairs. Such type of interaction is very helpful in promoting and sustaining entrepreneurship. The following are the main advantages of industrial fairs: i. Dissemination of information concerning new/improved products. ii. Booking of orders for supply of products. iii. On the spot sale of product. iv. Ideas for developing new/better related products. v. Foreign collaborations for technical know-how. vi. Assessing the trends in competition. vii.Contracts for dealership Import or Export.
EXAMPLE OF RELIANCE TECHNOLOGY VENTURE LIMITED
Reliance Technology Ventures Limited was launched in 2006 with an investment mandate to incubate new business ideas and invest in emerging and high-growth technologies. We seek out and invest in promising technology (IT, ITES, hardware and semiconductors), media & entertainment, and telecom (TMT) companies worldwide. Our investment focus is both - on established and new technologies, that advance the computing, communications, media and convergence platforms. While financial return is imperative, our greater mission is to spur innovation and inspire the entrepreneurial spirit to thrive. In going with our belief that we would like to be the preferred choice and premier partner of all our investee companies, RTVL works with an unlimited pool of funds and guarantees its full commitment to its investees over an unlimited period of time.
Dhama Apparel Innovations has developed technology that can be incorporated into apparel or accessories to provide thermal comfort. Dhama’s patented technology provides heating / cooling solutions to people living and working in difficult climatic environments. It's current ClimaCon technology provides heating and cooling solutions on demand and can be incorporated into any kind of apparel. Dharma’s patented technology has won the prestigious Gold Medal at Lockheed Martin’s Innovator’s competition in 2008 and MIT Business Plan Competition in 2005. Scalable Display Technologies, Inc., located in Cambridge, Massachusetts, is a leading provider of auto-calibration software used to create edge-blended displays. The technology patented by MIT, simplifies the creation of super-resolution, multi-projector displays of highest quality and scalable size. Their ‘Easy Blend’ software opens the door to wide-spread use of multi-projector displays for a new class of simulators based on off the shelf components, as well as supporting new forms of digital signage and data visualization tools. Suvidhaa Info serve is the pioneer of the Service Commerce (“S-Commerce”) revolution in India. The company empowers both small convenience stores and allied services providers
with a host of customized services, on a single electronic distribution platform, that they can conveniently offer their customers. These services span multiple industries including travel, telecommunications, entertainment, lifestyle, financial services, utilities, education, health, and many more. Pelago, Inc. is developing a new generation of consumer experiences based on breakthrough technology, including ‘Whrrl’, a new mobile and web-based service at the intersection of social networking and local discovery.
RTVL has advised in the acquisition of Vanco Plc by Reliance Globalcom. Vanco is a UK headquartered Global Network Operator, and offers enterprise clients across 230 countries, with cost-effective, optimized and fully managed network solutions. RTVL has advised in the acquisition of eWaves World by Reliance Globalcom. EWave World is a UK headquartered telecom company, focused on the rapidly developing market for wireless telephony services using the WiMAX technology standard. SEQUANS Communications is a leading supplier of subscriber station and base station chips for both fixed and mobile WiMAX, based on IEEE 802.16-2004 and 802.16e-2005
standards. SEQUANS has won multiple awards for its innovative SoC designs, including the best chip design award from WIMAX WORLD USA 2007 and the Red Herring 100 Global award for 2007.
Stoke develops carrier-class multi-access convergence gateways to help fixed, mobile and Internet-based operators realize the economic benefits and competitive advantages of network convergence. E-Band Communication Corporation is a leading developer of multi-gigabit capacity wireless communication systems based on 70/80 GHz millimeter wave radio technology. EBCC’s ‘E-Link™' system enables wireless service providers to backhaul vast amounts of digital IP-based wireless traffic and serve as a substitute for fiber in last mile metropolitan access networks. RTVL has advised in the acquisition of Yipes Holdings Inc. by Reliance Communications, in an all-cash deal valued at Rs.1,200 crores [$300 million]. Yipes is now known as Reliance Globalcom Services, Inc. and is the leading provider of managed network and application delivery services for the global enterprise.
Yatra.com is India’s largest online travel portal, a feat achieved within a span of 8 months from launch. Seed fund provides early-stage capital to startups in India and is led by an experienced team of entrepreneurs who have built hugely successful companies such as Hinditron, Channel V, CKS/US Web, IndiaBulls, Indiagames, Pinstorm and Geodesic.
RTVL has also led the investment in an unnamed technology company which formed
the basis of the largest venture capital transaction in India.
Approach - Investment Process
What we look for?
People: We encourage entrepreneurs and teams who have the ability to translate Reliance ADA Group’s philosophy, "Think Bigger, Think Better“, into an action plan, and execute as per world’s best standards or better. Competitive Edge: We look for compelling, IP-rich products, and services and business models, with a defensible strategy, and with a significant market opportunity. Financials: We look for financial plans to demonstrate the ability to generate the highest potential return on our investment.
Approach - Focus Sectors
We are constantly on the lookout for ideas with promise to invent new business categories or radically alter existing ones. Our passion is for new technologies A and new applications of technology that will drive high impact change. Se pp mi lic In We like to explore promising innovative ideas that invent or inherently change co Sys ati te tem business categories. Our investment focus falls into the following broad sectors nd – on s rn H uc So et W ar om to ft Se ir ITmu d r w rv nic el w atio & ar So ic es ar ns C e ft es s e o w A IT nter m ar pris In pp E C poe e fra lic S on ne str ati su nt uc on m s tur s er e Te So ch N ft no ex w lo t ar gy G e en er ati M on ed N ia et w or ks
Approach - Business Plan Submission
Area of company business Business strategy Company mission statement
Historical & projected size in dollars Underlying market drivers fuelling growth
Product differentiation – intellectual property – ownership of IP Revenue
model Product / solution pipeline or roadmap Key competitors Competitive advantages Barriers to entry
Roles & responsibilities Background of team members Board composition Historical & forecasted financials [2 years if available] Projected cash flows Current balance sheet (if at all) and projected balance sheet
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