ENTREPRENEURSHIPDEVELOPMENT

SKI
LLS

LECTUTREMANUAL2022
BYMr
.Ki
yagaGeof
freyMut
ebi
Tel
.+211(
0)924650320
Emai
l.
kiyagageof
f@gmai
l.
com

1
TABLEOFCONTENTS
1.
0INTRODUCTI
ONTOENTREPRENEURSHI
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.4
1.
1Hi
stor
icali
nfor
mat
iononent
repr
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shi
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.4
21s
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.5
1.
2Per
spec
tivesonent
repr
eneur
shi
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..5
1.
3Def
ini
ti
onofent
repr
eneur
shi
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.6
1.
3.1Char
act
eri
sti
csofent
repr
eneur
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.6
1.
3.2Typesofent
repr
eneur
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.10
2.
1ENTREPRENEURI
ALENVI
RONMENT.
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.12
2.
2Char
act
eri
sti
csofent
repr
eneur
ialenvi
ronment.
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.12
2.
3Di
mens
ions
/cat
egor
iesofent
repr
eneur
ialenvi
ronment.
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.12
3.
1BUSI
NESSI
DEAGENERATI
ON.
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.19
3.
2Sour
ceofvent
urei
deas.
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.19
4.
1NATUREOFABUSI
NESSOPPORTUNI
TY.
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..20
4.
2Thi
nki
ngc
ret
ivel
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..21
4.
3 Ei
ghtSt
epst
oEval
uat
eaBus
ines
sOppor
tuni
ty(
Inf
ogr
aphi
c).
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..22
5.
1THESTRATEGI
C“WI
NDOWOFOPPORTUNI
TY”.
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26
5.
2Spot
tingt
hewi
ndowofoppor
tuni
ty.
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.27
5.
3Loc
ati
ngt
hewi
ndowofoppor
tuni
ty.
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.29
5.
4Meas
uri
ngt
hewi
ndowofoppor
tuni
ty.
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..32
5.
5Openi
ngt
hewi
ndowofoppor
tuni
ty.
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.36
5.
6Cl
osi
ngt
hewi
ndowofoppor
tuni
ty.
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.37
5.
5.1 Compet
iti
veadvant
age.
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..38
6.
0INNOVATI
ONI
NENTREPRENEURSHI
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48
6.
1.5St
agesoft
heI
nnovat
ionPr
oces
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..49
7.
1RI
SKSANDRI
SKMANAGEMENT.
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.53
7.
2TypesofRi
skManagement
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.53
7.
3Ri
skManagementPr
oces
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55
7.
4Ri
skMoni
tor
ing.
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.57
8.
1BARRI
ERSTOENTREPRENUERSHI
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.58

2
 8.
2Bar
rier
satt
heI
ndi
vidualLevel
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58
8.
3Barri
ersar
isi
ngfr
omt heenvir
onment..
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.60
8.2.
1Thepoli
ti
co-
legalenvi
ronment
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..60
8.
2.2Ec
onomi
cenvi
ronment
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61
8.
2.3Soc
ialbar
rier
stoent
repr
eneur
shi
p..
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.62
8.
3Bar
rier
sar
isi
ngf
romt
heempl
oyi
ngf
irm.
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..62
9.
0ABUSI
NESSPLAN.
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..63
I
mpor
tanc
eofabus
ines
spl
ant
oanent
repr
eneur.
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63

9.
2Component
sofabus
ines
spl
an.
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.64
2.
Bus
ines
sdes
cri
pti
on.
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.
.65
3.
Produc
tsands
ervi
cesdes
cri
pti
on.
.
..
..
.
..
..
.
..
..
.
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..
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..
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.
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.
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.
..
.65
5.
Mar
ketanal
ysi
sands
trat
egy.
.
..
..
.
..
..
.
..
..
.
..
..
.
..
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.
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.
.65
6.
Mar
ket
ingands
alespl
an.
.
..
..
.
..
..
.
..
..
.
..
..
.
..
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.
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.
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.
..66
7.
Compet
iti
veanal
ysi
s..
.
..
..
.
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.
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..
66
8.
Managementandor
gani
zat
iondes
cri
pti
on.
.
..
..
.
..
..
.
..
..
.
..
..
.
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.
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.
..
.66
9.
Financ
ialpl
anandpr
ojec
tion.
.
..
..
.
..
..
.
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.
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.
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..
.66
10. Oper
ati
ngpl
an.
.
..
..
.
..
..
.
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.
..
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.
..
..
.
..
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.
..
..
.
..66
12.
Exhi
bit
sandappendi
ces.
.
..
..
.
..
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.
..66

3
1.
1INTRODUCTI
ONTOENTREPRENEURSHI
P
1.
2Hi
stor
icali
nfor
mat
iononent
repr
eneur
shi
p
"
Ent
repr
eneur
"isal
oanwor
dfr
om Fr
enc
h.Thewor
dfi
rstappear
ed i
ntheFr
enc
h
di
cti
onar
y ent
ited Di
l cti
onnai
re Uni
ver
selde Commer
cec
ompi
led by J
acquesdes
Br
usl
onsandpubl
ishedi
n1723.Es
pec
ial
lyi
nBr
itai
n,t
het
erm"
advent
urer
"wasof
ten
us
edt
odenot
ethes
amemeani
ng.Thes
tudyofent
repr
eneur
shi
preac
hesbac
ktot
he
wor
kint
hel
ate17t
h and ear
ly18t
hcent
uri
esofI
ri
sh-
Frenc
h ec
onomi
stRi
char
d
Cant
il
lon,
whi
chwasf
oundat
ionalt
ocl
ass
icalec
onomi
cs.
Cant
il
londef
inedt
het
ermf
irs
t
i sEs
nhi sais
url
aNat
ureduCommer
ceenGénér
al,orEs
sayont
heNat
ureofTr
adei
n
Gener
al,abookWi
ll
iam St
anl
eyJ
evonsc
ons
ider
edt
he"
cradl
eofpol
it
icalec
onomy
".
Cant
il
londef
inedt
het
erm asaper
sonwhopaysac
ert
ainpr
icef
orapr
oduc
tandr
esel
ls
i
tatanunc
ert
ainpr
ice,
"maki
ngdec
isi
onsaboutobt
aini
ngandus
ingt
her
esour
ceswhi
le
c
ons
equent
lyadmi
tti
ngt
her
iskofent
erpr
ise"
.Cant
il
lonc
ons
ider
edt
heent
repr
eneurt
o
bear
iskt
akerwhodel
iber
atel
yal
loc
atesr
esour
cest
oexpl
oitoppor
tuni
ti
est
omaxi
miz
e
t
hef
inanc
ialr
etur
n.Cant
il
lonemphas
izedt
hewi
ll
ingnes
soft
heent
repr
eneurt
oas
sume
t
her
iskandt
odealwi
thunc
ert
aint
y,t
hushedr
ew at
tent
iont
othef
unc
tionoft
he
ent
repr
eneuranddi
sti
ngui
shedbet
weent
hef
unc
tionoft
heent
repr
eneurandt
heowner
whopr
ovi
dedt
hemoney.

20t
hcent
ury

I
nthe20t
hcent
ury,ent
repr
eneur
shi
pwass
tudi
edbyJ
osephSc
humpet
eri
nthe1930s
andbyot
herAus
tri
anec
onomi
stss
uchasCar
lMenger(
1840-
1921)
,Ludwi
gvonMi
ses
(
1881-
1973)andFr
iedr
ichvonHayek(
1899-
1992)
.Whi
let
hel
oanf
rom Fr
enc
hoft
he
Engl
ish-
languagewor
d"ent
repr
eneur
"dat
est
o1762,
thewor
d"ent
repr
eneur
ism"dat
es
f
rom 1902andt
het
erm"
ent
repr
eneur
shi
p"al
sof
irs
tappear
edi
n1902.Ac
cor
dingt
o
Sc
humpet
er,
anent
repr
eneuri
swi
ll
ingandabl
etoc
onver
tanewi
deaori
nvent
ioni
ntoa
s
ucc
ess
fuli
nnovat
ion.Ent
repr
eneur
shi
pempl
oyswhatSc
humpet
erc
all
edt
he"
gal
eof

4
c
reat
ivedes
truc
tion"
tor
epl
acei
nwhol
eori
npar
tinf
eri
orof
fer
ingsac
ros
smar
ket
sand
i
ndus
tri
es,s
imul
taneous
lyc
reat
ing new pr
oduc
tsand new bus
ines
smodel
s,t
hus
c
reat
ivedes
truc
tioni
slar
gel
yres
pons
ibl
eforl
ong-
ter
m ec
onomi
cgr
owt
h.Thei
deat
hat
ent
repr
eneur
shi
pleadst
oec
onomi
cgr
owt
hisan i
nter
pret
ati
on oft
her
esi
duali
n
endogenousgr
owt
htheor
yandass
uchc
ont
inuest
obedebat
edi
nac
ademi
cec
onomi
cs.
Anal
ter
nat
ivedes
cri
pti
onbyI
sraelKi
rzner(
1930-)s
ugges
tst
hatt
hemaj
ori
tyof
i
nnovat
ionsmaybei
ncr
ement
ali
mpr
ovement
s-s
uchast
her
epl
acementofpaperwi
th
pl
ast
ici
nthec
ons
truc
tionofadr
inki
ngs
traw-t
hatr
equi
renos
pec
ialqual
it
ies
.

21s
tcent
ury

I
nthe2000s
,ent
repr
eneur
shi
pwasext
endedf
rom i
tsor
igi
nsi
nfor
-pr
ofi
tbus
ines
sest
o
i
ncl
udes
oci
alent
repr
eneur
shi
p,i
nwhi
chbus
ines
sgoal
sar
esoughtal
ongs
ides
oci
al,
envi
ronment
alorhumani
tar
iangoal
sandevent
hec
onc
eptoft
hepol
it
icalent
repr
eneur.
Ent
repr
eneur
shi
pwi
thi
nanexi
sti
ngf
ir
m orl
argeor
gani
zat
ionhasbeenr
efer
redt
oas
I
ntr
apr
eneur
shi
pandmayi
ncl
udec
orpor
atevent
ureswher
elar
geent
iti
es"
spi
n-of
f"
s
ubs
idi
aryor
gani
zat
ions
.

1.
2Per
spec
tivesonent
repr
eneur
shi
p

Asanac
ademi
cfi
eld,ent
repr
eneur
shi
pac
commodat
esdi
ff
erents
chool
soft
hought
.It
hasbeens
tudi
edwi
thi
ndi
sci
pli
ness
uchasec
onomi
cs,s
oci
ologyandec
onomi
chi
stor
y.
Somevi
ew ent
repr
eneur
shi
pasal
loc
at ot
edt heent
repr
eneur
.Thes
esc
hol
arst
endt
o
f
ocusonwhatt
heent
repr
eneurdoesandwhatt
rai
tst
hatanent
repr
eneurhas(
seef
or
exampl
ethet
extundert
heheadi
ngsEl
ement
sbel
ow)
.Thi
siss
omet
imesr
efer
redt
oas
t
hef
unc
tional
ist
icappr
oac
htoent
repr
eneur
shi
p.Ot
her
sdevi
atef
rom t
hei
ndi
vidual
ist
ic
per
spec
tivet
otur
nthes
pot
lghtont
i heent
repr
eneur
ialpr
oces
sandi
mmer
sei
nthe
i
nter
playbet
weenagenc
yandc
ont
ext
.Thi
sappr
oac
hiss
omet
imesr
efer
redt
oast
he
pr
oces
sionappr
oac
h,ort
hec
ont
ext
ualt
urn/
appr
oac
htoent
repr
eneur
shi
p.

Ent
repr
eneur
shi
pisanac
tofbei
nganent
repr
eneur
,or"
theownerormanagerofa
[
14]
bus
ines
s ent
erpr
ise who,by r
isk and i
nit
iat
ive,at
tempt
sto make pr
ofi
ts"
.
Ent
repr
eneur
sac
tasmanager
sandover
seet
hel
aunc
handgr
owt
hofanent
erpr
ise.
Ent
repr
eneur
shi
pist
hepr
oces
sbywhi
chei
therani
ndi
vidualorat
eam i
dent
if
iesa
5
bus
ines
soppor
tuni
tyandac
qui
resanddepl
oyst
henec
ess
aryr
esour
cesr
equi
redf
ori
ts
expl
oit
ati
on.Ear
ly-
19t
h-c
ent
uryFr
enc
hec
onomi
stJ
ean-
Bapt
ist
eSaypr
ovi
dedabr
oad
def
ini
ti
onofent
repr
eneur
shi
p,s
ayi
ngt
hati
t"s
hif
tsec
onomi
cres
our
cesoutofanar
eaof
l
owerandi
ntoanar
eaofhi
gherpr
oduc
tivi
tyandgr
eat
eryi
eld"
.Ent
repr
eneur
scr
eat
e
s
omet
hingnew,s
omet
hingdi
ff
erent
—theyc
hangeort
rans
mut
eval
ues
.Regar
dles
sof
t
hef
irms
ize,bi
gors
mal
l,t
heyc
anpar
takei
nent
repr
eneur
shi
poppor
tuni
ti
es.The
oppor
tuni
tyt
obec
omeanent
repr
eneurr
equi
resf
ourc
rit
eri
a.Fi
rst
,ther
emus
tbe
oppor
tuni
ti
es or s
ituat
ions t
orec
ombi
ne r
esour
ces t
o gener
ate pr
ofi
t.Sec
ond,
ent
repr
eneur
shi
prequi
resdi
ff
erenc
esbet
weenpeopl
e,s
uchaspr
efer
ent
ialac
ces
sto
c
ert
aini
ndi
vidual
sort
heabi
li
tyt
orec
ogni
zei
nfor
mat
ionaboutoppor
tuni
ti
es.Thi
rd,
t
aki
ng on r
iski
s a nec
ess
ity.Four
th,t
he ent
repr
eneur
ialpr
oces
srequi
res t
he
or
gani
zat
ionofpeopl
eandr
esour
cses
.

1.
3Def
ini
ti
onofent
repr
eneur
shi
p
Ref
erst
otheac
tivi
tyofs
ett
ingupanew bus
ines
staki
ngonf
inanc
ialr
isksi
nthehopeof
pr
ofi
ts.

Ent
repr
eneur
shi
pist
heac
tofc
reat
ingabus
ines
sorbus
ines
seswhi
lebui
ldi
ngands
cal
ingi
t
t
ogener
ateapr
ofi
t.

I
nanut
shel
lENTREPRENEURSHI
P:I
stheac
torc
apac
ityandwi
ll
ingnes
stodevel
opand
c
reat
e,or
gani
zeandmanageanewbus
ines
svent
ureal
ongwi
thanyofi
tsr
isksi
nor
der
t
omakepr
ofi
ts.Ent
repr
eneur
shi
pcombi
nedwi
thr
esour
cesl
ikel
and,l
abor
,nat
ural
r
esour
cesandc
api
talc
anpr
oduc
epr
ofi
ts.

Whoi
sanent
repr
eneur
?

I
saper
sonwhoi
dent
if
iesanoppor
tuni
tyi
nthemar
ketandc
reat
esanewbus
ines
sint
he
f
aceofr
iskandunc
ert
aint
yfort
hepur
pos
eofac
hievi
ngpr
ofi
tsandgr
owt
h.

1.
3.1Char
act
eri
sti
csofent
repr
eneur
s1)Cr
eat
ivi
ty:

Cr
eat
ivi
tygi
vesbi
rtht
osomet
hingnew.Forwi
thoutc
reat
ivi
ty,t
her
eisnoi
nnovat
ion
pos
sibl
e.Ent
repr
eneur
sus
ual
lyhavet
heknac
ktopi
ndownal
otofi
deasandac
ton
6
t
hem.
Notnec
ess
ari
lyever
yideami
ghtbeahi
t.Butt
heexper
ienc
eobt
ainedi
sgol
d.

Cr
eat
ivi
tyhel
psi
ncomi
ngupwi
thnew s
olut
ionsf
ort
hepr
obl
emsathandandal
lows
onet
othi
nkofs
olut
ionst
hatar
eoutoft
hebox.
Ital
sogi
vesanent
repr
eneurt
heabi
li
ty
t
odevi
senewpr
oduc
tsf
ors
imi
larmar
ket
stot
heoneshe’
scur
rent
lypl
ayi
ngi
n.

2)Pr
ofes
sional
ism:

Pr
ofes
sional
ism i
s a qual
it
y whi
ch al
l good ent
repr
eneur
s mus
t pos
ses
s.An
ent
repr
eneur
’smanner
ismsandbehavi
orwi
tht
hei
rempl
oyeesandc
lient
elegoesal
ong
wayi
ndevel
opi
ngt
hec
ult
ureoft
heor
gani
zat
ion.
Al
ong wi
th pr
ofes
sional
ism c
omesr
eli
abi
li
ty and di
sci
pli
ne.Sel
f-di
sci
pli
ne enabl
esan
ent
repr
eneurt
oac
hievet
hei
rtar
get
s,beor
gani
zedands
etanexampl
eforever
yone.

Rel
iabi
li
tyr
esul
tsi
ntr
ustandf
ormos
tvent
ures
,tr
usti
ntheent
repr
eneuri
swhatkeeps
t
hepeopl
eint
heor
gani
zat
ionmot
ivat
edandwi
ll
ingt
oputi
nthei
rbes
t.Pr
ofes
sional
ism
i
soneoft
hemos
timpor
tantc
har
act
eri
sti
csofanent
repr
eneur
.

3)Ri
sk-
taki
ng:

Ar
isk-
taki
ngabi
li
tyi
ses
sent
ialf
oranent
repr
eneur
.Wi
thoutt
hewi
llt
oexpl
oret
he
unknown,onec
annotdi
scovers
omet
hinguni
que.Andt
hisuni
quenes
smi
ghtmakeal
l
t
hedi
ff
erenc
e.Ri
sk-
taki
ngi
nvol
vesal
otoft
hings
.Us
ingunor
thodoxmet
hodsi
sal
soa
r
isk.
Inves
tingi
nideas
,nobodyel
sebel
ievesi
nbutyoui
sar
iskt
oo.

Ent
repr
eneur
shaveadi
ff
erent
iat
edappr
oac
htowar
dsr
isks
.Goodent
repr
eneur
sar
e
al
waysr
eadyt
oinves
tthei
rti
meandmoney.
But
,theyal
wayshaveabac
kupf
orever
yri
sk
t
heyt
ake.

Forexpl
ori
ngi
ntheunknown,onemus
tbebes
towedwi
th at
rumpc
ard;agood
ent
repr
eneurhasone,al
ways
.Al
so,eval
uat
ionoft
her
iskt
obeunder
takeni
sal
so
es
sent
ial
.Wi
thoutknowi
ngt
hec
ons
equenc
es,
agoodent
repr
eneurwoul
dn’
tri
ski
tal
l.

4)Pas
sion:

7
Yourwor
kshoul
dbeyourpas
sion.Sowhenyouwor
k,youenj
oywhatyou’
redoi
ngands
tay
hi
ghl
ymot
ivat
ed.Pas
sionac
tsasadr
ivi
ngf
orc
e,wi
thwhi
ch,youar
emot
ivat
edt
ost
rivef
or
bet
ter
.

I
tal
soal
lowsyout
heabi
li
tyt
oputi
nthos
eext
rahour
sint
heof
fi
cewhi
chc
anormay
makeadi
ff
erenc
e.Att
hebegi
nni
ngofever
yent
repr
eneur
ialvent
ureoranyvent
ure,
t
her
ear
ehur
dlesbutyourpas
sion ens
urest
hatyou ar
eabl
etoover
comet
hes
e
r
oadbl
ocksandf
orgeaheadt
owar
dsyourgoal
.

5)Pl
anni
ng:

Per
haps
,thi
sist
hemos
timpor
tantofal
lst
epsr
equi
redt
orunas
how.Wi
thoutpl
anni
ng,
ever
ythi
ngwoul
dbeal
oos
est
ringast
heys
ay,
“Ifyouf
ailt
opl
an,
youpl
ant
ofai
l.
”
Pl
anni
ngi
sst
rat
egi
zi
ngt
hewhol
egameaheadoft
ime.
Itbas
ical
lys
umsupal
lther
esour
ces
athandandenabl
esyout
ocomeupwi
thas
truc
tur
eandat
houghtpr
oces
sforhowt
oreac
h
yourgoal
.

6)Knowl
edge:

Knowl
edgei
sthekeyt
osuc
ces
s.Anent
repr
eneurs
houl
dpos
ses
scompl
eteknowl
edgeof
hi
sni
cheori
ndus
try
.Foronl
ywi
thknowl
edgec
anadi
ff
icul
tybes
olvedorac
ris
isi
s
t
ackl
ed.

I
tenabl
eshi
m t
o keep t
rac
k oft
he devel
opment
sand t
he c
ons
tant
lyc
hangi
ng
r
equi
rement
soft
hemar
kett
hathei
sin.Mayi
tisanew t
rendi
nthemar
ketoran
advanc
ementi
ntec
hnol
ogyorevenanew adver
tis
er’
sent
ry,anent
repr
eneurs
houl
d
keephi
msel
fabr
eas
tofi
t.Knowl
edgei
sthegui
dingf
orc
ewheni
tcomesl
eavi
ngt
he
c
ompet
iti
onbehi
nd.New bi
tsandpi
ecesofi
nfor
mat
ionmayj
ustpr
oveasus
efulasa
newl
ydevi
seds
trat
egy.

Hes
houl
dknowwhathi
sst
rengt
hs&weaknes
sesar
esot
hatt
heyc
anbewor
kedonand
c
anr
esul
tinaheal
thi
eror
gani
zat
ion.

Agoodent
repr
eneurwi
llal
wayst
ryt
oinc
reas
ehi
sknowl
edge,whi
chi
swhyhei
sal
waysa
l
ear
ner.
8
Thebet
teranent
repr
eneurknowshi
spl
aygr
ound,
theeas
ierhec
anpl
ayi
nit
.

7)Soc
ialSki
ll
s:

As
kil
lseti
sanar
senalwi
thwhi
chanent
repr
eneurmakeshi
sbus
ines
swor
k.Soc
ialSki
ll
s
ar
eal
soneededt
obeagoodent
repr
eneur
.Over
all
,thes
emakeupt
hequal
it
iesr
equi
red
f
oranent
repr
eneurt
ofunc
tion.

Soc
ialSki
ll
sinvol
vet
hef
oll
owi
ng:

• Rel
ati
ons
hipBui
ldi
ng

• Hi
ri
ng and Tal
ent

Sour
cing• Team

St
rat
egyFor
mul
ati
on

Andmanymor
e.

8)Open-mi
ndednes
stowardslear
ning,people,
andevenf ai
lur
e:
Anentrepr
eneurmustbeaccepti
ng.Thet r
uer eal
izat
ionofwhic
hsc
enar
iooreventc
anbea
us
efuloppor
tuni
tyi
snec
ess
ary.Tor
ecogni
zes
uchopeni
ngs
,anopen-
mindedat
tit
udei
s
r
equi
red.

Anent
repr
eneurs
houl
dbedet
ermi
ned.
Hes
houl
dfac
ehi
slos
seswi
thapos
iti
veat
tit
ude
andhi
swi
ns,humbl
y.Anygoodbus
ines
smanwi
llknownott
ofr
ownonadef
eat
.Tr
yti
ll
yous
ucc
eedi
sther
ightment
ali
ty.
Fai
lur
eisas
teporawaywhi
chdi
dn’
twor
kac
cor
ding
t
othepl
an.Agoodent
repr
eneurt
akest
heexper
ienc
eoft
hiss
etbac
kandwor
kseven
har
dwi
tht
henextgoali
nli
ne.

Thi
sexper
ienc
eisi
ncul
cat
edt
hrought
hepr
oces
sofac
cept
edl
ear
ning.
Goodent
repr
eneur
s
knowt
heyc
anl
ear
nfr
omever
ysi
tuat
ionandper
sonar
oundt
hem.
Inf
ormat
ionobt
ained
c
anbeus
edf
ort
hepr
oces
sofpl
anni
ng.

9
Lear
ningwi
thanopenmi
ndl
etsy
oul
ookatyourf
aul
tshumbl
y.Newi
nfor
mat
ional
ways
makesanent
repr
eneurques
tionhi
scur
rentr
esol
ve.I
tal
sopr
ovi
desanewper
spec
tive
t
owar
dsapar
tic
ularas
pec
t.Open-
mindednes
sal
soenabl
esyout
oknowandl
ear
nfr
om
yourc
ompet
iti
on

9)Empat
hy:

Per
hapst
he l
eas
tdi
scus
sed val
ue i
nthe wor
ldt
odayi
sempat
hyorhavi
ng hi
gh
emot
ionali
ntel
li
genc
e.Empat
hyi
stheunder
standi
ngofwhatgoesoni
nsomeone’
s
mi
nd.Thi
sas
kil
lthati
swor
thament
ion.A goodent
repr
eneurs
houl
dknow t
he
s
trengt
hs and weaknes
ses ofever
y empl
oyee who wor
ks underhi
m.You mus
t
under
standt
hati
tist
hepeopl
ewhomaket
hebus
ines
sti
ck!You’
vegott
odepl
oy
empat
hyt
owar
dsyourpeopl
e.

Unhappyempl
oyeesar
enotdet
ermi
nedandasanent
repr
eneur
,iti
supt
oyout
ocr
eat
e
awor
kingenvi
ronmentwher
epeopl
ear
ehappyt
ocome.Tol
ookaf
tert
hei
rwel
l-bei
ng,
anent
repr
eneurs
houl
dtr
ytounder
standt
hes
ituat
ionofempl
oyees
.Whatc
anbea
mot
ivat
ionalf
act
or?Howc
anImakemyempl
oyeeswantt
ogi
vet
hei
rbes
t?Al
lthi
sis
under
stoodt
hroughempat
hy.

Keepi
ngawor
kpl
acel
ightandhappyi
ses
sent
ial
.Forwi
thoutempat
hy,
anent
repr
eneur
c
annotr
eac
hthehear
tsofempl
oyeesnort
hes
ucc
esshedes
ires
.Empat
hyi
soneoft
he
mos
timpor
tantc
har
act
eri
sti
csofanent
repr
eneur
.

10)
Andlas
tly,t
hecust
omerisever
ythi
ng:
Agoodentrepr
eneurwil
lal
waysknow thi
s;abus
ines
sisal
laboutt
hec
ust
omer
.How
yougr
abac
ust
omer
’sat
tent
ioni
sthef
ir
sts
tep.Thi
scanbedonet
hroughvar
ious
medi
umss
uchasmar
ket
ingandadver
tis
ing.

I
tisal
soi
mpor
tantt
hatyouknowt
heneedsofyourc
ust
omer
s.Thepr
oduc
tors
ervi
ce
whi
chi
sbei
ng c
reat
ed byyouror
gani
zat
ion needst
ocat
ert
otheneedsofyour
c
ons
umer
s.Per
sonal
izi
ngabus
ines
sforc
ons
umer
swi
llal
soboos
tthes
ales
.

Theabi
li
tyt
osel
lyour
sel
finf
rontofapot
ent
iali
nves
tmentwheni
tcomesi
nthef
ormof

10
ac
ust
omeri
sal
sor
equi
red.Bei
ngr
eadywi
tht
heknowl
edget
opl
eas
eac
ust
omer
,isa
wayt
ohaveas
ucc
ess
fulbus
ines
s.

1.
3.2Typesofent
repr
eneur
s

“
Pus
h”(
for
ced)and “
pul
l”ent
repr
eneur
s,―pus
h ent
repr
eneur
s ar
ethos
e whos
e
di
ssat
isf
act
ionwi
tht
hei
rcur
rentpos
iti
onf
orr
eas
onsunr
elat
edt
othei
rent
repr
eneur
ial
c
har
act
eri
sti
cs,pus
hest
hem t
ost
artabus
ines
s.Pul
l’ent
repr
eneur
sar
ethos
ewhoar
e
l
ured by t
hei
rnew bus
ines
sideasand i
nit
iat
e bus
ines
sac
tivi
ty bec
aus
e oft
he
at
trac
tivenes
soft
hebus
ines
sideaandi
tsper
sonali
mpl
icat
ion.“
Pus
h”and“
pul
l”
ent
repr
eneur
sar
eac
ombi
nat
ionoft
heabovet
wo.Theyar
enor
mal
lymor
emot
ivat
ed
andt
husout
per
for
mot
hert
ypesofent
repr
eneur
s.

However
,pus
hent
repr
eneur
swer
efoundt
obemor
esuc
ces
sfult
hanpul
l‘ent
repr
eneur
s.
Theyar
emor
edet
ermi
nedandper
sis
tentbec
aus
etheynor
mal
lyhavenot
hingt
ofal
lbac
kto.

I
nnovat
iveent
repr
eneur
sas
sembl
eal
argevar
iet
yofi
nfor
mat
ionandc
ombi
near
ange
off
act
orsexper
iment
all
ytopr
oduc
enewpos
sibi
li
ti
esi
nter
msofmar
ket
,tec
hni
quesor
pr
oduc
ts.
Count
rieswi
thaver
yunder
devel
opedi
ndus
tri
albas
ehar
dlypr
oduc
ethi
stype
ofent
repr
eneur
sbec
aus
eofl
ackoft
henec
ess
aryi
nfr
ast
ruc
tur
e.

I
mit
ati
ve (
adopt
ive)ent
repr
eneur
s;They i
mit
ate and adoptt
he t
echnol
ogi
esand
t
echni
quesi
nnovat
ed by ot
her
s.They ar
e par
tic
ular
lyi
mpor
tanti
n undevel
oped
c
ount
riesal
though nothi
ghl
yregar
ded i
n mor
e devel
oped ec
onomi
es.However
,
i
mit
ati
veent
repr
eneur
sal
soneedt
obec
reat
ivei
nor
dert
omodi
fyi
nnovat
ionst
osui
t
t
hei
rspec
ialc
ondi
ti
ons
.

Oppor
tuni
sti
cEnt
repr
eneur
s:Theyc
ons
tant
lyl
ookf
orandexpl
oits
ever
aloppor
tuni
ti
es
bec
aus
eoft
hei
rwi
des
kil
lsandknowl
edgeac
cumul
atedf
rom awi
deeduc
ati
onal
bac
kgr
ound,exper
ienc
e orexpos
ure.Theys
tar
tbyexpl
oit
ing s
mal
loppor
tuni
ti
es
s
eeki
ngandexpl
oit
ingas
eri
esof
,of
tenvar
iedoppor
tuni
ti
esast
heygr
ow.

11
Vi
si
onar
yEnt
repr
eneur
s:Theyhaveal
mos
tsi
mil
arc
har
act
eri
sti
cst
otheoppor
tuni
sti
c
ent
repr
eneur
showever
,whi
leoppor
tuni
sti
c‘ent
repr
eneur
spur
sues
ever
albus
ines
s
oppor
tuni
ti
es,t
hevi
si
onar
yent
repr
eneur
snor
mal
lyc
onc
ent
rat
eont
hepur
sui
tofa
s
ingl
epower
fuloppor
tuni
ty.

Dr
oneEnt
repr
eneur
s:Ats
omei
nst
anc
eint
hei
rbus
ines
s,c
raf
tsman-
ent
repr
eneur
sar
e
s
ocomf
ort
abl
ewi
tht
hei
rac
hievement
sthatt
heydec
idenott
otr
youtnews
trat
egi
es
even i
fthey s
eem t
o be bet
tert
han t
he onest
hey ar
ecur
rent
ly us
ing.Thos
e
ent
repr
eneur
sthatwi
llnotc
hangeunderanyc
irc
ums
tanc
esar
eref
err
edt
oasdr
one
ent
repr
eneur
s.Sl
owl
ybuts
urel
y,t
hes
eent
repr
eneur
swi
llbef
orc
edt
ocl
ose.

Fabi
an Ent
repr
eneur
s:Ar
eal
sor
eluc
tantt
ochange,butar
esomet
imesf
orc
edby
c
irc
ums
tanc
est
ochange.Theyr
espondver
ysl
owl
ytoc
hangesi
nthemar
ket
,andt
his
af
fec
tst
hei
rgr
owt
handc
ompet
iti
venes
s.However
,byf
oll
owi
ngapr
ovenpat
h,t
hes
e
ent
repr
eneur
sar
e pr
otec
ted f
rom t
he unc
ert
aint
y ofnew i
nnovat
ions
.They ar
e
t
her
efor
eli
kel
ytos
urvi
vef
oral
ongt
ime.Theyhowevergr
ow ver
ysl
owl
yordonot
gr
ow atal
lbec
aus
etheyf
ailt
oexpl
oitnew i
nnovat
ionst
hatar
enor
mal
lymor
e
pr
ofi
tabl
e.

Sol
oandNet
wor
kEnt
repr
eneur
s

Di
ff
erenc
esbet
weenent
repr
eneur
swhodevel
opedt
hei
rbus
ines
sideasont
hei
rown
(
sol
eent
repr
eneur
s)vs
.thos
ewhogott
hei
rideasf
rom t
hei
rsoc
ialnet
wor
ks,and
devel
op t
hem us
ing t
he net
wor
ks (
net
wor
k ent
repr
eneur
s)ar
efound.The s
olo
ent
repr
eneuri
sli
mit
edt
ohi
smeansandc
apabi
li
ti
eswhi
let
henet
wor
kent
repr
eneur
c
an gets
omes
uppor
tfr
om t
henet
wor
ktos
uppl
ementhi
sindi
vidualmeansand
c
apabi
li
ti
es.Thenet
wor
kent
repr
eneur
sist
her
efor
emor
eli
kel
ytogr
ow bet
terand
f
ast
er.

Copr
eneur
s:Ar
e ent
repr
eneur
ialc
oupl
eswho wor
ktoget
herasc
o-owner
sofan
ent
erpr
ise.Al
thoughs
omes
chol
arsc
ons
iderbus
ines
sco-
owner
shi
pass
omet
hingt
hat
c
aneas
ilyl
eadt
odi
vor
ce,s
omer
esear
cher
shavedes
cri
bedi
tasanexc
iti
ngpr
act
ice
t
hati
nvol
vesc
ari
ngf
or,s
uppor
tingandgr
owi
ngabus
ines
swi
ths
omeoneyour
eal
ly
l
oveandwi
ll
ingt
orai
seac
hil
dwi
th.I
tisi
mpor
tant
,however
,tof
irs
tbui
ldas
ucc
ess
ful
12
r
elat
ions
hipbef
orel
aunc
hing(
star
ting)t
heent
erpr
ise.

I
ndi
vidualand i
nst
itut
ionalent
repr
eneur
s:Mos
tst
art
-up f
irmsar
e domi
nat
ed by
ent
repr
eneur
sac
tingi
ndi
vidual
ly,orc
omi
ngt
oget
heri
ndi
vidual
ly.However
,ast
he
bus
ines
sgr
owsandbec
omesmor
ecompl
ex,i
tbec
omesi
mpor
tantt
odevel
opt
he
ent
repr
eneur
ials
kil
lst
hroughac
orpor
atebody.

Par
t-t
imeent
repr
eneur
s:St
art
ingbus
ines
sonapar
t-t
imebas
isi
sapopul
arent
ryt
o
ent
repr
eneur
shi
p.I
tal
lowsonet
ogett
hebes
tofbot
hwor
lds(
bei
ngs
elf-empl
oyed
andbei
ngempl
oyedbys
omeoneel
se)byget
tingt
hebenef
it
sofent
repr
eneur
shi
pand
t
hes
ecur
ityofar
egul
ars
alar
y.I
tal
soal
lowspar
t-t
imer
stopr
otec
tthems
elvesagai
nst
t
her
iskofbus
ines
sfai
lur
e,andenabl
est
hem t
otes
tthec
irc
ums
tanc
esbef
oremaki
ng
t
he f
inalc
ommi
tment
.Par
t-t
ime ent
repr
eneur
s ar
e nor
mal
lys
uit
ed f
or young
ent
erpr
isesbec
aus
easent
erpr
isesgr
ow,t
heyt
endt
otakeupmor
eti
meunt
ilt
he
ent
repr
eneurdec
idest
obec
omef
ullt
ime.

2.
0ENTREPRENEURI
ALENVI
RONMENT
Ent
repr
eneur
ialenvi
ronmentr
efer
stot
hec
ombi
nat
ionofnumberoff
act
orst
hatar
eext
ernal
andt
hei
ror
gani
cint
egr
ati
onwhi
chhaveani
mpac
tont
hebus
ines
sst
art
uppr
oces
sbyan
ent
repr
eneur
.

2.
1Char
act
eri
sti
csofent
repr
eneur
ialenvi
ronment
Unc
ert
aint
yEnt
repr
eneur
ialenvi
ronmenti
schar
act
eri
sti
csbynumberofunknown/
ris
ks
t
hataf
fec
tthebus
ines
s.Si
ncet
oday’
senvi
ronmenti
sdynami
candc
hangesr
api
dly,
ent
repr
eneur
sneedt
odemons
trat
eanabi
li
tyt
oac
commodat
eunc
ert
ains
ituat
ions
Res
our
ces
car
cit
yTheent
repr
eneur
ialenvi
ronmenti
schar
act
eri
zedbyl
imi
tedr
esour
ces
e.
g.l
abour
,raw mat
eri
al,l
and and s
uchl
imi
tbus
ines
s ac
tivi
ti
es however
,the
ent
repr
eneural
wayss
truggl
esandac
tinamannert
hatmakeshi
m/hert
othr
ivei
nsuc
h
c
ondi
ti
ons
.Oppor
tuni
tyor
ient
ati
onTheent
repr
eneur
ialenvi
ronmenti
schar
act
eri
zedby
s
omanyc
hanc
esandoppor
tuni
ti
est
hatpeopl
ecanexpl
oitandt
akeadvant
ageof
.
Fl
exi
bil
it
yTheent
repr
eneur
ialenvi
ronmenthasnumberofoppor
tuni
ti
est
hatmaynot
l
astf
ors
olongandt
her
efor
eanent
repr
eneurr
equi
reshavi
ngi
mmedi
ater
eac
tion.

13
2.
2Di
mens
ions
/cat
egor
iesofent
repr
eneur
ialenvi
ronment
I
. Economicenvir
onment
I
I. Poli
ti
calenvi
ronment
I
II
. Soc
ial
-envi
ronment
I
V. Demogr
aphi
cenvi
ronment

V. Gl
obalenvi
ronment

1.
Economi
cenvi
ronment

I
tref
erst
othenat
ureofec
onomi
csys
tem ofapar
tic
ularc
ount
ryt
hatdi
rec
tlyaf
fec
t
t
hel
evelofent
repr
eneur
ialdevel
opmentandt
hel
evelofec
onomi
cbus
ines
sac
tivi
ti
es.

Ec
onomi
cfac
tor
sinf
luenc
ingent
repr
eneur
ialenvi
ronment

I
nfr
ast
ruc
tur
es:

Pr
esenc
eofdevel
opmenti
nfr
ast
ruc
tur
ese.
g.wat
ers
uppl
ypr
omot
esbus
ines
sac
tivi
ti
eswhi
le
underdevel
opedi
nfr
ast
ruc
tur
ese.
g.poorr
oadsl
imi
tbus
ines
sac
tivi
ti
es.

Cos
toft
hebus
ines
s:

Hi
ghc
ost
sofdoi
ngabus
ines
seghi
ghwagesands
alar
ies
,hi
ghc
ost
sofr
awmat
eri
alsl
imi
t
bus
ines
sac
tivi
ti
eswhi
lel
owc
ostofdoi
ngbus
ines
smot
ivat
espeopl
etoi
nves
t.

Ec
onomi
cset
ting:

Ec
onomi
cpr
ivi
leges
/of
fert
oinves
tor
sli
kef
reel
and,t
axhol
idayspr
omot
esbus
ines
s
ac
tivi
ti
es whi
le abs
enc
e ofec
onomi
cinc
ent
ives l
imi
ts ent
repr
eneur
ialat
tit
udes and
r
esour
ces
.

Legalr
equi
rement
s:

Pr
otec
tioni
sm, owner
shi
p r
ight
s and guar
ant
ee gi
ven t
o bus
ines
s men pr
omot
es
ent
repr
eneur
ialat
tit
udesanddevel
opmentwhi
let
ightandunf
avor
abl
elegalr
equi
rement
s
l
imi
tst
heat
tit
udes
.

14
Ec
onomi
cpol
ices
:

A mar
kets
yst
em /
anopens
yst
em off
orc
esofdemandands
uppl
yinf
luenc
esr
esour
ce
al
loc
ati
onhenc
epr
omot
ingent
repr
eneur
ialat
tit
udewhi
leac
ont
rol
leds
yst
em l
imi
tsi
ts
devel
opment
.
Admi
nis
trat
ivei
ssues
:

Cl
earandmi
nimalpr
ocedur
esofbus
ines
sregi
str
ati
on,t
axat
ionandl
icens
ingpr
omot
e
ent
repr
eneur
ialwhi
leexc
ess
iveat
tit
udes
.

Fi
nanc
ials
yst
em:

Wel
ldevel
opmentofbanksandnon-
banki
nst
itut
ionse.
g.I
nsur
anc
epr
omot
esent
repr
eneur
s.

2.
Soc
ial
-cul
tur
alenvi
ronment

Thi
sdi
mens
ionl
ooksatt
heent
repr
eneur
ialenvi
ronmenti
nter
msofs
oci
alval
ues
,
at
tit
udes and behavi
ors or pr
act
ices of peopl
ein a gi
ven s
oci
etyt
hat af
fec
t
ent
repr
eneur
shi
pdevel
opment
.egr
iskt
aki
ng,s
cor
n/s
hameas
soc
iat
edwi
thf
ail
ure,
val
uesat
tac
hedt
oinnovat
ionset
c.

Soc
ialc
ult
uralf
act
orst
hati
nfl
uenc
eent
repr
eneur
ialat
tit
ude

Cul
tur
eonbus
ines
s

Communi
ti
es t
hat have c
ons
ervat
ive bel
ief
s about bus
ines
s us
ual
ly l
imi
t
ent
repr
eneur
ial at
tit
udes and bus
ines
s wher
e as s
oci
eti
es t
hat have a hi
gh
ent
repr
eneur
ialval
ueonbus
ines
spr
omot
epos
iti
veat
tit
ude.

Rel
igi
on:

Rel
igi
ouss
ect
sthatpr
ovi
des
omeki
ndofs
uppor
ttoent
repr
eneur
ssomet
imespr
omot
e
i
nves
tmentwhi
let
hos
ethatar
econs
ervat
ivel
imi
tpeopl
efr
omi
nves
tment
.

Rol
emodel
s

15
Exi
stenc
e ofs
ucc
ess
fulent
repr
eneur
s us
ual
ly mot
ivat
es peopl
etoc
arr
youtbus
ines
s
ac
tivi
ti
es whi
let
he pr
esenc
e of f
ew s
ucc
ess
ful ent
repr
eneur
s us
ual
ly di
scour
ages
ent
repr
eneur
ialac
tivi
ti
es.

Soc
iali
dent
if
icat
ion(
Howaper
sons
eesher
sel
f)

I
nar
easwher
epeopl
ear
epr
oudofbec
omi
ngent
repr
eneur
sorr
esour
cef
ulpeopl
ether
eis
al
waysapos
iti
veent
repr
eneur
ialat
tit
udet
hani
npl
aceswher
epeopl
ehaveani
nfer
ior
ity
c
ompl
exaboutbus
ines
s.
Soc
ialf
inanc
ials
uppor
t

Avai
labi
li
tyofenoughc
api
tals
uppl
iedbyt
hec
ommuni
tyc
reat
esac
onduc
ivec
limat
efor
i
nves
tmentt
hani
nas
ituat
ionwher
ether
eisnof
inanc
ials
uppor
t.

3Demogr
aphi
cEnvi
ronment
Demogr
aphi
cenvi
ronmentr
efer
stoas
etoff
ami
lybac
kgr
ound,popul
ati
ons
etup,age,
c
ompos
iti
on,
etct
hatmayhaveanef
fec
tont
hees
tabl
ishmentofi
nves
tmentorbus
ines
s.

Demogr
aphi
cfac
tor
sthati
nfl
uenc
eent
repr
eneur
ialat
tit
ude
Genderdi
ff
erenc
es

Ment
endt
ohavegr
eat
erc
hanc
esofdoi
ngbus
ines
sesbec
aus
etheyc
aneas
ilymobi
li
ze
c
api
talandar
ephys
ical
lys
trongc
ompar
edt
ofemal
eswhof
acedi
ff
icul
ti
esi
nac
qui
ri
ng
c
api
talandar
eseenaspeopl
eofaweaks
ex.
Age

Us
ual
lyyoungpeopl
esi
ngl
eandwi
thoutpr
ess
ingneedsandr
espons
ibi
li
ti
esus
ual
lyf
indi
t
eas
ytopar
tic
ipat
ethant
heagei
ngwhol
ookatt
hems
elvesast
heyar
eint
hei
rlas
tdays
.

I
ncomel
evel
soft
hepopul
ati
on

Peopl
ewi
thhi
ghi
ncomel
evel
sus
ual
lys
tandhi
ghc
hanc
esofs
avi
ngpar
toft
hei
rinc
ome
andt
henl
ateri
nves
titi
ninc
omeac
tivi
ti
esc
ompar
edt
olowi
ncomeear
ner
swhoal
mos
t
s
pendal
lthei
rinc
omeahundr
edper
centori
tcanbei
ntheot
herwaywher
elowi
ncome
ear
ner
stendt
olookf
orot
heroppor
tuni
ti
esi
nanef
for
tofi
ncr
eas
ingt
hei
rear
ningsand

16
geti
nvol
vedi
nbus
ines
sac
tivi
ti
est
hant
hehi
ghi
ncomeear
ner
swhogetc
omf
ort
abl
e
wi
thwhatt
heyear
n.

Levelofeduc
ati
on

Somet
imespeopl
ewi
thhi
ghl
evelofeduc
ati
ont
endt
opar
tic
ipat
einbus
ines
sac
tivi
ti
es
bec
aus
eitgi
vest
hem f
ormals
kil
ls,bus
ines
sski
ll
s,negot
iat
ions
kil
lset
ccompar
edt
o
t
hos
eofl
owl
evelofeduc
ati
onwhi
chmakest
hemi
nfer
ior
.

Popul
ati
ons
izeandgr
owt
hrat
e

I
n a dens
ely popul
ated pl
acet
her
eis hi
gh or l
arge mar
ket and t
his enc
our
ages
ent
repr
eneur
ialat
tit
udeasc
ompar
edt
opl
aceswi
thl
owpopul
ati
on.

Fami
lybac
kgr
ound

I
nfami
li
eswi
thpr
ogr
ess
iveheadsi
nbus
ines
snor
mal
lyenc
vour
aget
heyoungonest
ost
art
upbus
ines
svent
uresunl
ikef
ami
li
eswi
thonl
yempl
oyees
.

Fami
lys
ize

Fami
li
eswi
thbi
gnumberf
aceec
onomi
char
dshi
pswhi
chenc
our
aget
hem t
ost
artup
bus
ines
sunl
ikes
mal
lfami
li
eswher
etheheadc
anpr
ovi
deal
lthei
rneedsandt
heydon’
t
l
ookf
orbus
ines
soppor
tuni
ti
es.

Fami
li
eswi
thal
otofr
esour
cest
oinher
ite.
glandt
heyoungonesar
eenc
our
agedt
o
vent
urei
nbus
ines
sac
tivi
ti
est
hanf
ami
li
eswi
thl
it
tleornor
esour
cest
oinher
itwhi
ch
wi
lldi
scour
agebus
ines
sat
tit
udes
.

Changi
ngages
truc
tur
e

Changi
ngagespr
ovi
deanoppor
tuni
tyf
ort
hos
ewi
ll
ingt
ounder
taker
iskse.
gtheagi
ng
s
truc
tur
epr
ovi
desl
aborf
ormi
ddl
eage.

17
4.
Pol
it
icalEnvi
ronment

I
tref
erst
othegover
nmentl
aws
,gover
nmentbodi
es,gover
nmentpol
ici
est
hatpr
omot
eor
r
est
ric
tbus
ines
sac
tivi
ti
es.

Pol
it
icalf
act
orst
hati
nfl
uenc
eent
repr
eneur
ialenvi
ronment

NB:Youc
angi
veneut
ralf
act
ors
,expl
anat
ionont
wos
ides

Pol
it
icalc
limat
e

Pol
it
icali
nst
abi
li
tyof
tenr
esul
tsi
ntol
ossofas
set
s,l
ives
,cl
osur
eoft
hebus
ines
s,and
s
uchdi
scour
agesent
repr
eneur
ialat
tit
udeswhi
ler
elat
ivel
ypeac
eands
tabl
ecommuni
ty
pr
omot
esbus
ines
sst
abi
li
ty.
Gover
nmentpol
icyoft
axat
ionands
ubs
ide

Hi
gh t
axes i
mpos
ed on ent
repr
eneur
s ac
tivi
ti
es br
ings a negat
ive at
tit
ude t
owar
ds
ent
repr
eneur
shi
p whi
les
ubs
idespol
icye.
g.gi
ving off
reeand donat
ions
,taxhol
idays
,
enc
our
agespeopl
e

Gover
nmenti
nst
itut
ions
/Nat
ureoft
hei
nst
itut
ion

Uns
uppor
tivepol
ici
esofgover
nmenti
nst
itut
ionse.
g.URA,NEMA,UNBSl
imi
tsbus
ines
s
ac
tivi
ti
esamongpeopl
e.

Pol
it
icalandr
eli
giousr
efugees

Di
spl
acementofpeopl
eres
ult
sint
olos
sofj
obs
,di
scl
osur
eoft
hei
rfi
rms
,war
swhi
ch
di
scour
agesc
reat
ivi
tyandi
nnovat
ion.

Legalenvi
ronment

Thi
sconc
ernst
hel
awsandl
egalpr
ocedur
esi
nac
ount
ry.

5.
Thegl
obalenvi
ronment

18
Gl
obal
izat
ioni
sthegr
eat
ermovementofpeopl
e,goods
,capi
talandi
deasduet
oinc
reas
ed
ec
onomi
cint
egr
ati
onwhi
chi
ntur
nispr
opel
ledbyi
ncr
eas
edt
radeandi
nves
tment
.

Thi
sdi
mens
ioni
ncl
udesopeni
ngupwor
ldt
rade,devel
opmentofadvanc
edmeanof
c
ommuni
cat
ion,
growt
hofmul
ti
nat
ionalc
orpor
ati
ons
,inc
reas
edmobi
li
tyofl
abor
,goods
,
c
api
tal
,dat
aandi
deaseveni
nvol
vesi
ncr
eas
edi
nfec
tiousdi
seas
esandenvi
ronment
al
pol
lut
ion.

Fac
tor
sint
hegl
obalenvi
ronmentt
hati
nfl
uenc
eent
repr
eneur
iali
ntent
ions

Gl
obalFi
nanc
e

Thi
srepr
esent
sthe oppor
tuni
ti
esi
nthe ar
easofi
nter
nat
ionalpayments
yst
ems
,
c
urr
enc
yexc
hanger
atesandi
nter
nat
ionalf
inanc
ingbodi
esl
ikeI
MF,
Wor
ldBanket
cthat
havegr
eat
lyf
oundedent
repr
eneur
shi
pdevel
opment
.

Gl
obalTrade
I
ncreas
edc ros
sboar
dert
radeal
sopr
ovi
desoppor
tuni
ti
est
odi
ff
erenti
ndi
vidual
sand
i
ndus
tri
es s
uch as ac
ces
sibi
li
tyt
oint
ernat
ionalmar
ket
s wi
thout bar
rier
s,vas
t
c
ommuni
cat
ionnet
wor
ks,s
trongt
radeagr
eement
set
c,s
uchpr
ovi
deent
repr
eneur
ial
i
ntent
ions
.

Gover
nmentGl
obalpol
icy

Thi
sinvol
vesgover
nment
s’at
tempt
stol
iber
ali
zet
heec
onomyt
oal
lowt
heef
for
tsoft
he
pr
ivat
eent
repr
eneur
stos
tar
tbus
ines
sinor
dert
ogener
ateef
fi
ci
enc
yandi
ncr
eas
e
pr
oduc
tivi
ty.Forexampl
e,Ugandahasl
iber
ali
zedt
hef
orei
gnexc
hangepol
icyandt
he
expor
tmar
ket
swhi
chhasal
lowedent
repr
eneur
stof
lour
ishwi
thoutr
est
ric
tions
.

Mar
ketopennes
s.

Si
nceUganda’
sloc
almar
keti
ssmal
lduet
olow pur
chas
ing powerofc
ust
omer
s,
i
nter
nat
ional
lyi
thasmadegoodpr
ogr
esst
oat
tai
nrec
ogni
zabl
eint
ernat
ionalt
rade
opennes
slevel
s,whi
chhasmadet
heent
ryt
onat
ionalandi
nter
nat
ionalmar
ket
seas
y.

Expor
tPol
icy
19
Thi
spol
icyexpandsmar
ketf
orent
repr
eneur
ses
pec
ial
lyi
fthepol
icyi
sli
ber
ale.
gUganda
of
fer
spr
efer
ent
ialmar
ketac
ces
stoEUandUSAf
oranumberofexpor
tsl
iket
hos
emade
under

I
mpor
tPol
icy

Af
avor
abl
eimpor
tpol
icy hel
psent
repr
eneur
sto getr
esour
cest
hatar
eloc
all
y
unavai
labl
eatr
educ
edc
ost
se,
ginUganda,t
hepol
icyc
har
gesauni
for
mcor
por
atet
ax,
gi
vesexempt
ionsf
rom i
mpor
tdut
yforpl
antandmac
hiner
yet
c,al
lthes
ecr
eat
ea
c
onduc
iveandat
trac
tiveent
repr
eneur
ialenvi
ronmentf
orpeopl
etoac
t.

Democ
rac
y

Thi
sref
erst
othef
reedomofi
ndi
viduali
nit
iat
ivesandf
reedomoft
hought
,speec
handac
tion.

Al
lthes
esuppor
tinnovat
ionandc
reat
iver
ecogni
ti
onofbus
ines
soppor
tuni
ti
es.

3.
0BUSI
NESSI
DEAGENERATI
ON
Whati
sani
dea?

Ref
erst
oat
houghtorc
oll
ect
ionoft
hought
sthatgener
atei
nthemi
nd.Ani
deai
s
us
ual
lygener
atedwi
thi
ntent
,butc
anal
sobec
reat
eduni
ntent
ional
ly.I
deasof
tenf
orm
dur
ingbr
ains
tor
mings
ess
ionsort
hroughdi
scus
sions
.

A bus
ines
sideai
sas
tar
ting poi
ntf
oranyc
urr
entorf
utur
eent
repr
eneur
s.I
t‘
s
i
mpor
tantbec
aus
epr
esentt
hebegi
nni
ngofanewl
if
e–al
if
eofabus
ines
sandal
if
e
ofanent
repr
eneur
.Butani
deabec
omesi
mpor
tantwhent
heent
repr
eneurput
siti
nto
ACTI
ON.

3.
1Sour
ceofvent
urei
deas
Wor
kExper
ienc
e:Thebas
isf
ornew vent
urepr
epos
iti
ont
omanyent
repr
eneur
sist
he
wor
k exper
ienc
e.Fr
om t
he knowl
edge oft
hei
rpr
esentorr
ecentj
obs
,they s
ee

20
pos
sibi
li
ti
esi
nmodi
fyi
ngexi
sti
ngpr
oduc
tors
ervi
ceordupl
icat
ingabus
ines
sconc
epti
n
adi
ff
erentl
ocat
ion.

I
nvent
ionofNew Pr
oduc
ts:Ent
repr
eneur
sal
waysmus
tseekt
hepos
sibi
li
tyofi
ntr
oduc
ing

new met
hodsandi
nvent
iont
omaket
hei
rpr
oduc
tors
ervi
cedi
ff
erentf
romt
hei
rcompet
itor
s.

Hobbi
es:Somet
imeshobbi
esgr
owbeyondt
hei
rst
atur
eashobbi
est
obec
omebus
ines
s.
Forexampl
e,anamat
eurphot
ogr
apherwhophot
ogr
aphsandc
oll
ectphot
ogr
aphsand
pi
ctur
es f
or hi
s/her per
sonal s
ati
sfac
tion may eas
ily bec
ome a pr
ofes
sional
phot
ogr
aphert
oear
nhi
s/herl
ivi
ng.Ac
cident
alDi
scover
y:Somet
imesnat
uralabi
li
tyt
o
makei
nter
est
ingorval
uabl
edi
scover
iesbyac
cidentmayenabl
esomeonet
obec
omeor
t
oent
eri
nanew bus
ines
svent
ure.Cer
tai
nindi
vidual
sar
eseent
ocomeac
ros
sand
c
reat
eus
efuli
deasi
ntheor
dinar
ycour
seofday-
todayl
ivi
ng,i
nwhi
chs
uchac
cident
al
f
indi
ngsr
emai
ntobet
hes
our
ceoft
hei
rli
vel
ihood.

Del
iber
ateSear
ch:Anewbus
ines
smayal
soemer
gef
rom apr
ospec
tiveent
repr
eneur
's
del
iber
ates
ear
ch-apur
pos
efulexpl
orat
iont
ofi
ndanewvent
urei
dea.Ther
ear
etwo
appr
oac
hest
othi
ssear
chani
nsi
de-
outappr
oac
handanout
side-
inappr
oac
h.

Whenani
nsi
de-
outappr
oac
hisus
ed,ent
repr
eneur
sfi
rsts
urveyt
hei
rownc
apabi
li
ti
esand
t
henl
ookatt
henewpr
oduc
tsors
ervi
cest
heyar
ecapabl
eofpr
oduc
ing.

Whenent
repr
eneur
sfol
lowanout
side-
inappr
oac
h,t
heyf
irs
tlookf
orneedsi
nthemar
ket
pl
aceandt
henr
elat
ethos
eneedst
othei
rownexi
sti
ngorpot
ent
ialc
apabi
li
ti
es.
Ref
ineaNewvent
ureI
dea:Anewvent
urei
deaof
tenr
equi
resanext
endedper
iodof
t
imef
orr
efi
nementandt
est
ing.
Thi
sispar
tic
ular
lyt
ruef
oror
igi
nali
nvent
ionswhi
ch
nec
ess
itat
edevel
opment
alwor
ktomaket
hem oper
ati
onalevenl
ow-
tec
hnol
ogy
bus
ines
smayr
equi
reext
endeds
tudyandmodi
fi
cat
ioni
ndeed;ent
repr
eneur
smus
t
r
efi
net
hei
rtos
omeext
entast
heypr
epar
ethevent
urepl
ans
.

Eval
uat
eYourEduc
ati
onandExper
ienc
e:As
ucc
ess
fuls
tar
t-upc
all
snotonl
yforas
ound
bus
ines
sidea,butal
sof
ors
omemi
nimum amountofent
repr
eneur
ialeduc
ati
onand
21
exper
ienc
e.Evens
o,i
tisi
mpos
sibl
etopr
esc
ribeexac
tingr
equi
rement
s.Fabul
ous
ly
exc
ept
ionswi
llal
waysexi
st.

I
ncompet
enc
e,ac
aus
eofmanyf
ail
ures
,fr
equent
lyr
efl
ect
sinadequat
eeduc
ati
onal
pr
epar
ati
on.Ac
ademi
ceduc
ati
oni
snots
ubs
tit
utef
orexper
ienc
e,however
.Thef
ormal
educ
ati
on s
yst
em i
n manyc
ount
riesgi
vesl
it
tleat
tent
ion t
opr
epar
ati
on f
ors
elf
-
empl
oymentbyl
aunc
hingnewbus
ines
svent
ure.

Wi
thoutanyques
tion,t
hewoul
dbeent
repr
eneurs
houl
dpos
ses
stheknowl
edgeand
s
kil
lsnec
ess
aryt
ocr
eat
ethepr
oduc
tsors
ervi
cest
henewvent
urewi
llpr
oduc
e.Thi
s
al
lcomest
hroughexper
ienc
e.Nat
ural
lyt
hel
engt
hofdes
irabl
eexper
ienc
evar
iesf
rom
onet
ypeofent
erpr
iseand/
orper
sont
oanot
her
.

I
ndi
vidual
scont
empl
ati
ngoft
hei
rownt
ypi
cal
lydowel
ltoc
ons
iderc
ert
ainyear
sof
empl
oymenti
nas
imi
larbus
ines
s.

4.
0NATUREOFABUSI
NESSOPPORTUNI
TY
Abus
ines
soppor
tuni
tyar
isesbec
aus
einhumanl
if
ether
eisal
waysawayt
odot
hings
di
ff
erent
lyandt
odot
hingsbet
ter
.Forabus
ines
soppor
tuni
tyt
obepr
esent
.Thatwhi
ch
i
sdonedi
ff
erent
lymus
thaveval
ueornew val
ue.I
tist
hisval
ueornew val
uewhi
ch
r
epr
esent
sabus
ines
soppor
tuni
ty.Thenew val
uec
anber
epr
esent
edbyi
mpr
oved
qual
it
y,al
owpr
ice,
fas
tdel
iver
yet
c.

22
4.
1Thi
nki
ngc
ret
ivel
y

23
4.
3 Ei
ghtSt
epst
oEval
uat
eaBus
ines
sOppor
tuni
ty(
Inf
ogr
aphi
c)

Bef
oreyous
tar
tanybus
ines
s,i
tsi
mpor
tantt
oeval
uat
ethebus
ines
soppor
tuni
tyt
o
es
tabl
ishwhet
heri
tisvi
abl
e.Wear
econs
tant
lybombar
dedwi
thpr
obl
emsever
ydayof
ourl
ives
.Iam al
wayss
eei
ngt
hes
epr
obl
emsasbus
ines
soppor
tuni
ti
esandt
her
efor
e,I
f
indmys
elfeval
uat
ingi
deasal
lthet
ime.Thi
sexer
cis
ehasmademer
eal
iset
hatt
her
e
ar
e8s
tepst
oeval
uat
eabus
ines
soppor
tuni
tyadequat
ely.

24
1)Def
ineYourCus
tomerBas
e

Yourc
ust
omerbas
ewi
lls
impl
ycompr
iset
hos
epeopl
eorent
iti
est
hathaveades
iref
or
yourpr
oduc
tors
ervi
cest
hati
sn‘
tbei
ngf
ulf
il
ledbyot
herc
ompet
itor
sal
ready.I
not
her
wor
ds,
whatunmetneedsar
eyous
eeki
ngt
osat
iat
e.Sever
alques
tionsal
wayspopupi
n
mymi
nd:

I
. Whatunmetneedsexi
stt
hatar
en‘
tbei
ngf
ulf
il
ledbyot
herc
ompet
itor
s?
I
I. Doy
ourpr
oduc
tsors
ervi
cesf
ulf
ilt
hos
eneedsenough?
I
II
. Woul
dyourpot
ent
ialc
ust
omer
swoul
dbewi
ll
ingt
opar
twi
thmoneyt
oac
qui
ret
hem
r
athert
hanbuyf
romt
hemar
ket
?

I
V. I
fso,
whatpr
icewoul
dtheybewi
ll
ingt
opay?V. What quant
ity wi
llt
hey be
wi
ll
ingt
obuy?

VI
. Howl
argei
syourmar
kets
ize?
VI
I. Wi
llt
hec
ust
omer
squi
ckl
yadoptyourpr
oduc
tors
ervi
ceorwi
llt
heyr
equi
real
otof
c
onvi
nci
ng?

VI
II
. Wi
llt
heybuyyourpr
oduc
t/s
ervi
ceonc
eormanyt
imes
?

2)Det
ermi
net
heSc
alabi
li
tyofYourBus
ines
s

Theabi
li
tyt
osc
aleupy
ourbus
ines
sisakeyc
ons
ider
ati
on.
Iti
sevenni
ceri
fyouc
oul
dbei
na
bus
ines
swher
edel
iver
ingt
o1,
000peopl
etakest
hes
ameef
for
tsasdel
iver
ingt
o100,
000
peopl
e.

Forexampl
ewhenyouwr
iteanar
tic
lei
nabl
ogonc
e,youdon‘
tneedt
owr
iteagai
njus
t
bec
aus
evi
si
tor
str
aff
icyours
itei
sinc
reas
ing.
Thats
amear
tic
lec
aneas
ilyber
eadbyt
he
100,
000peopl
ewhoar
enow ac
ces
singyourwebs
ite.Lookf
orabus
ines
sthatc
anbe
s
yst
emi
zed,gr
ownt
hroughgoodmar
ket
ingandwi
thl
argeenought
argetmar
ket
sthat
t
hewhol
eexer
cis
epr
oveswor
tht
heef
for
t.

25
3)Under
standt
heCos
tSt
ruc
tur
e

Yous
houl
dcons
idert
hec
osts
truc
tur
efr
oms
ever
alangl
es:
I
. Whatar
ethec
ost
snec
ess
aryt
opr
oduc
eyourgoodsors
ervi
ces
?Thes
ear
e
al
soknownaspr
oduc
tionc
ost
s.Youneedt
oknowt
hes
ecos
tsi
ntot
ali
tyas
wel
lasperuni
tofs
ale.
I
I. How muc
hshoul
dyouri
nit
iali
nves
tmentbei
nor
dert
opr
oduc
ether
ight
quant
ityandqual
it
ytof
ulf
ilc
ust
omerdemand?Thi
swi
llr
equi
reyout
othi
nk
t
hrought
hepr
oduc
tionpr
oces
sandc
omeupwi
tht
hei
nit
ialc
ostout
lay.

Thes
ingl
emos
timpor
tantdec
isi
oni
neval
uat
ingabus
ines
sispr
ici
ngpower
.Ifyou‘
vegott
he
powert
orai
sepr
iceswi
thoutl
osi
ngbus
ines
stoac
ompet
itor
,you‘
vegotaver
ygoodbus
ines
s.

Andi
fyouhavet
ohaveapr
ayers
ess
ionbef
orer
ais
ingt
hepr
iceby10per
cent
,thenyou‘
ve
gotat
err
ibl
ebus
ines
s‖-
War
renBuf
fet
t:Bus
ines
sMagnat
e,I
nves
tor&Phi
lant
hropi
st

4)Es
tabl
isht
heSour
ceofFi
nanc
ing

Onc
eyouhavedet
ermi
nedt
hec
ost
,youneedt
oknowwher
eyouwi
llobt
ainf
inanc
ing
f
rom.Ar
eyougoi
ngt
ofi
nanc
ethebus
ines
sful
lyus
ingyourper
sonals
avi
ngs
?Ar
eyou
pl
anni
ngt
ous
edebt(
loansf
rom bank,f
ri
endsorf
ami
ly)
?Orar
eyougoi
ngt
orai
se
moneyt
hroughi
ssui
ngouts
har
esi
nexc
hangef
orc
api
tali
njec
tioni
ntoyourbus
ines
s?

5)Whati
sYourBus
ines
s’sCont
ext(
Ext
ernalEnvi
ronment
)

J
ustl
ikepl
ant
s,t
her
ear
emanyenvi
ronment
alf
act
orst
hatwi
llaf
fec
tst
art
ingup
bus
ines
ses
.Youmaynotbeabl
etoc
ont
rolt
hem butyouc
anadj
ustyourbus
ines
sto
s
uityourdi
rec
tion.
Asabus
ines
sowner
,youhavet
ocons
idert
hes
ekeypoi
nts
:

I
. Whatgover
nmentl
egi
slat
ionaf
fec
tsyourbus
ines
sandi
nwhatway?Some
bus
ines
ses ar
e al
ways under gover
nments
crut
iny f
or i
nst
anc
e al
cohol
pr
oduc
tion.Youneedt
oadher
etot
hel
aw andkeepaneyeonc
hangest
o
ens
urec
ompl
ianc
e.

26
 I
I. Changesi
ntheec
onomyc
oul
daf
fec
tyourbus
ines
s.I
stheec
onomyweakor
s
trong?Howar
ethec
hangesi
ninf
lat
ion,exc
hanger
ates
,bankl
endi
ngr
ates
ands
ofor
thgoi
ngt
oaf
fec
tyourbus
ines
s?

I
II
. Whatar
ethet
rendst
hatc
oul
daf
fec
tthedemandf
oryourpr
oduc
tsors
ervi
ces
?
Forexampl
eifyouar
eint
hef
ashi
oni
ndus
try,youhavet
okeepupwi
tht
he
f
ashi
ont
rendsi
nor
dert
osat
isf
yyourc
lient
‘sneeds
.
I
V. Whatt
rendsi
nraw-
mat
eri
alc
ost
sort
echnol
ogyc
oul
daf
fec
tyourbus
ines
s?
Thegover
nmentmayi
ntr
oduc
enewl
evi
esandexc
isedut
iesoni
mpor
tat
ionof
r
awmat
eri
alsandt
hiswi
llhaveas
igni
fi
canti
mpac
tonyourpr
oduc
tionc
ost
s.

V. Whatnewpr
oduc
tsar
ecomi
ngi
ntot
hemar
kett
hatc
oul
daf
fec
tyourbus
ines
s?

6)LevelofCompet
iti
on

Thi
swi
lldependont
het
ypeofbus
ines
syouar
egoi
ngi
nto.Regar
dles
s,i
tisver
y
i
mpor
tantt
odet
ermi
net
hel
evelofc
ompet
iti
oni
nyourc
hos
enbus
ines
s.Sever
al
ques
tionsyouneedt
oas
kyour
sel
finc
lude:

I
. Whatar
ethec
ompet
iti
vef
orc
esi
nyouri
ndus
try?Compet
iti
vef
orc
esmaypr
esent
t
hems
elvesi
nvar
iousway
sfori
nst
anc
efr
om c
ompet
iti
onamongs
tsuppl
ier
s,buyer
s,
newent
rant
s,l
eaver
sorr
ival
rywi
thi
nthei
ndus
try.

I
I. Whatbar
rier
scanyoubui
ldt
okeepc
ompet
iti
onawayf
romyourc
ust
omerbas
e?
I
II
. Howmuc
hwi
lli
tcos
tyout
okeepc
ompet
itor
satbay?

7)KeySuc
ces
sFac
tor
s

Youneedt
oas
kyour
sel
fwhatwoul
dbekeymos
timpor
tantt
hingsyouwoul
dhavet
odo
bet
tert
hananyoneel
sei
nthei
ndus
tryt
omaket
hisbus
ines
ssuc
ceed.Thes
ear
ecal
led
t
hekeys
ucc
essf
act
orsf
oryourbus
ines
s.I
deal
ly,t
heyar
eus
ual
ly3-
5func
tions
,
ac
tivi
ti
es,orbus
ines
spr
act
ices
,def
inedbyt
hemar
ketasc
rit
icalt
othec
ompany/
c
ust
omerr
elat
ions
hip.
Exampl
eswoul
dbeexc
ell
entc
ust
omers
ervi
ce,
fas
tdel
iver
y,and

27
s
uper
bqual
it
y,eas
eofac
ces
stoc
arec
ent
resands
ofor
th.Doyouhavet
hec
apabi
li
ti
es
andas
set
stoexec
utewel
lagai
nstt
hes
esuc
ces
sfac
tor
s.

8)Det
ermi
net
heOver
allPr
ofi
tabi
li
tyoft
heBus
ines
s

Fi
nal
lyaf
teryouhavec
ons
ider
edal
lthef
act
orsabove,
youc
annowes
timat
eyourbus
ines
s‘s
pr
ofi
tabi
li
ty.
Thi
swi
lldet
ermi
newhet
hert
opur
suet
hebus
ines
soppor
tuni
tyordr
opi
t:

I
. Yourc
ustomerbases
houldt
ellyout
hef
utur
erevenuepot
enti
alf
oryourbus
ines
s;
I
I. Yourc
ostanal
ysi
sshoul
dtel
lyouhowmuchitwi
llcos
ttorunt
hebusines
s;
I
II
. Fr
om t
her
evenuepot
ent
ialandt
hec
ostanal
ysi
s,youwi
llbeabl
etopr
edi
ctyour
f
utur
epr
ofi
ts;

I
V. Yourc
ompet
iti
onandenvi
ronment
alanal
ysi
scant
ellyouhowt
hos
epr
ofi
tsmi
ghtbe
af
fec
tedi
nthef
utur
ewhent
her
ear
echangesi
nthes
etwof
act
ors
.

I
fthebus
ines
sispr
ofi
tabl
eint
hel
ongr
un,
thenpr
oceed,
other
wis
edr
opi
t.Beari
nmi
ndt
hat
bus
ines
sesc
ant
akebet
ween2-
3year
sbef
oret
heybr
eakeven.

5.
0THESTRATEGI
C“WI
NDOWOFOPPORTUNI
TY”
Thewi
ndowofoppor
tuni
tyi
sthemet
aphor(
compar
ingt
hemeani
ngofanobj
ectf
romwhati
s
us
ual
lymeanst
oanot
herobj
ect
).

Thewi
ndowi
samet
aphor(
somet
hingt
hati
dent
if
iess
omet
hing)s
igni
fyi
ngagapi
nthewal
l
wher
ethegapi
sanoppor
tuni
tyandt
hewal
lisamar
ket
.

Sot
hewi
ndow ofoppor
tuni
tyi
sagapi
nthemar
ketwhi
chwheni
dent
if
iedc
anbe
expl
oit
edbyanent
repr
eneur
.Thewi
ndowofoppor
tuni
tyc
anbeunder
stoodandexpl
oit
ed
i
n5s
tages
.

I
. Spot
tingt
hewi
ndowofoppor
tuni
ty.
I
I. Loc
ati
ngi
t.
I
II
. Meas
uri
ng

28
 I
V. Openi
ngV. Cl
osi
ng.

Spot
tingt
hewi
ndowThi
sinvol
vess
canni
ngt
hewal
lofexi
sti
ngbus
ines
stof
indt
hewi
ndow
t
hati
sspotgapsi
nthemar
ketpl
ace.

Loc
ati
ngt
hewi
ndow.Thi
sisdevel
opi
nganunder
standi
ngofhow t
hewi
ndow i
stobe
pos
iti
oned.

Meas
uri
ngt
hewi
ndow.
Isaneval
uat
ionoft
heoppor
tuni
tyt
hati
sdet
ermi
ninghowmuc
h
val
uei
tcangener
ate.

Openi
ngt
hewi
ndow.I
sti
mingt
hevi
si
oni
ntor
eal
it
y.I
tinvol
vesc
ommi
tti
ngi
mpor
tants
take
hol
der
ssuc
hasempl
oyees
,fi
nanc
ier
sandot
herr
esour
cepr
ovi
der
s.
Cl
osi
ngt
hewi
ndow.I
stoens
uret
hatt
hevent
urewi
lls
urvi
ve.Thewi
ndow mus
tbe
c
los
eds
othatc
ompet
itor
sshoul
dnotmovet
hroughi
t.Ther
efor
etheent
repr
eneurwi
ll
des
ignac
ompet
iti
ves
trat
egyf
ors
ust
aini
ngt
hevent
ure.

5.
1Spot
tingt
hewi
ndowofoppor
tuni
ty.
Abus
ines
soppor
tuni
tyi
sthatc
hanc
etodos
omet
hingi
nawayt
hati
sdi
ff
erentorbet
ter
t
hant
hewayi
tisdoneatt
hemoment
.Abus
ines
soppor
tuni
tyof
fer
sthepos
sibi
li
tyof
del
iver
ingnew val
uet
othec
ust
omer
.Manymet
hodsofs
pot
tingoppor
tuni
ti
eshave
beenr
esear
chedandhavebeent
est
edi
nres
ear
chanddevel
opmentdepar
tment
sof
or
gani
zat
ionsandhaveal
sobeenappl
iedbyi
ndi
vidualent
repr
eneur
.Someoft
hemor
e
c
ommononesi
ncl
ude;

Met
hodofs
olvi
ngapr
obl
em byf
indi
ngpr
act
icalwaysofdeal
ingwi
tht
hem us
ual
lyby
l
ear
ningf
romt
hepas
t.

I
.Pr
obl
empr
opos
als
.
I
I.Cons
umerpr
opos
alsI
II
.
Us
eofc
reat
ivegr
oups
.

I
V. Mar
ketmappi
ng.
29
V. Feat
uress
tret
chi
ng.
VI
. Pr
oduc
tbl
endi
ng.
VI
I. Combi
nedappr
oac
h.

Pr
obl
emanal
ysi
s

Theent
repr
eneurmakesi
tahabi
ttol
istpr
obl
emsf
acedbyi
ndi
vidual
sori
nst
itut
ions
.
Thes
eseedsandpr
obl
emsmaynotbeknownbyi
ndi
vidual
sori
nst
itut
ionst
hems
elves
.
Theent
repr
eneurkeepsas
kinghi
m/her
sel
fli
ke

Howt
his/
thatpr
obl
emmi
ghtbes
olved.

Howc
ant
hingsbedonebet
ter
.Wel
lthoughtoutans
wer
stos
uchques
tionsmaypr
esenta
newbus
ines
soppor
tuni
ty.

Consumerpropos
als
Thi
sinvol
vesdeli
ber
ateef
for
tbyt
heent
repr
eneurt
oes
tabl
ishl
ikel
yneedsofc
ust
omer
s.

Byl
ist
eni
ngt
ogr
ievanc
esc
ust
omer
sexpr
esss
omet
imesi
nadequat
elyabouthow t
hings
c
oul
dbedonebet
ter
.

Bydi
rec
tlys
ugges
tingal
ter
nat
ivewaysofpr
ovi
dingapr
oduc
toras
ervi
cei
nthel
att
er
c
aset
hisc
all
sfornet
wor
kingdec
isi
on,mar
ket
ingof
fi
ci
alsi
nor
gani
zat
ionss
uchas
pur
chas
ingor
gani
zat
ionsandac
count
ing.

Us
eofc
reat
ivegr
oups
.

Undert
hisappr
oac
h,i
naddi
ti
ont
othi
sown,t
heent
repr
eneurr
ichesi
nthec
reat
ivi
ty
ofot
her
s.As
mal
lgr
oupofpeopl
eac
taspot
ent
ialc
ust
omer
sandpr
oduc
texper
ts.
Theyt
hent
hinkaboutt
hei
rneedsi
napar
tic
ularmar
ketonc
eandc
ons
iderhowt
hos
e
needsc
anbes
tbes
erved.
Thi
swayanewoppor
tuni
tymayemer
ge.
Mar
ketmappi
ng

Thi
sref
erst
oas
tudyofvar
iousmar
ketc
ondi
ti
onst
hati
spl
ott
edonamapt
oident
if
ytr
ends
ofpr
ice,
Levelofi
ncome,
gender
,ageet
c…

30
Pr
oduc
t di
mens
ion / buyer c
har
act
eri
sti
crel
ati
ons
hips ar
ethen gener
ated.Thes
e
r
elat
ions
hipsar
ecal
ledamar
ketmap.

Pr
oduc
tswi
lls
epar
ateouti
ntodi
sti
nctgr
oupsdependi
ngont
hei
rloc
ati
onont
he
mar
ketmap.Themappr
ovi
desapower
fulvi
sualr
epr
esent
ati
onofwhati
sthemar
ket
c
apsi
nthemar
kett
hatc
anbei
dent
if
iedasoppor
tuni
ti
es.

Feat
uress
tret
chi
ng.

Thi
sexer
cis
einvol
veswaysonwhi
chi
mpor
tantf
eat
uresonanexi
sti
ngpr
oduc
tor
s
ervi
cec
anbeal
ter
edi
nsomeway.Theappr
ovali
stot
ests
uchf
eat
urest
hatwoul
dbe
c
hangedwi
thwor
dsandexpr
ess
ionss
uchasbi
gger
,smal
ler
,st
ronger
,fas
ter
,mor
e
of
tenet
c.

Productbl
endi
ng.
Inthiscas
enewproduc
tsar
ecr
eat
edbybl
enc
hingt
oget
herf
eat
uresf
rom exi
sti
ngpr
oduc
ts
ors
ervi
ces
.

Combi
nedAppr
oac
h.

Theent
repr
eneur
scaus
esot
herpeopl
esuc
hasempl
oyees
,tec
hni
calandevenc
ust
omer
sto
bei
nvol
vedi
ncr
eat
ingi
deas
,us
inganyoft
hes
ever
alear
li
ermet
hods
.

5.
2Loc
ati
ngt
hewi
ndowofoppor
tuni
ty
Loc
ati
ngt
henewvent
ureort
henewpr
oduc
tmeanspos
iti
oni
ngi
nther
elat
iont
othe
mar
ketgaps
othatot
herbus
ines
sesar
enotdoi
ngexac
tlyt
hes
amet
hingast
he
ent
repr
eneur
.Thenew vent
uremus
toper
atei
nsuc
hawayt
hati
twi
lls
ervei
nthe
c
hos
enmar
kets
egmentbet
tert
hanexi
sti
ngr
ivalf
irms
.

Toac
hievepos
iti
oni
ngoft
henewvent
urec
anbet
hroughappr
oac
hes
.

I
. St
rat
egi
c pos
iti
oni
ng
31
 I
I. Mar
ketpos
iti
oni
ng.

St
rat
egi
cpos
iti
oni
ng.

Looksatt
hewayt
hevent
uresaswhol
ecanac
hieveac
ompet
iti
ves
pac
ebybei
ngf
ar
di
ff
erentf
romr
ivalf
irms
.

Mar
ketpos
iti
oni
ng.

Looksatt
hewayt
hevent
urec
andi
sti
ngui
shi
tspr
oduc
tors
ervi
ces
ucht
hati
tdel
iver
stot
he
mar
kets
omet
hingdi
ff
erentf
romt
heof
fer
ingsofr
ival
s.

St
rat
egi
cpos
iti
oni
ng

Met
hodsofac
hievi
ngs
trat
egi
cpos
iti
oni
ng

Fourmaj
ormet
hodsar
e:

St
agei
nval
ueaddi
ti
on.

Cus
tomers
egment
saddr
ess
ed.

Cus
tomerneedsaddr
essed.
Meansofaddr
essi
ngtheneeds
.

St
agei
nval
ueaddi
ti
on

Thi
sisac
onc
eptwhi
chexpl
ainst
hes
tageswher
ebyt
heout
put
sofonebus
ines
sbec
ome
i
nput
soft
henextbus
ines
sonaval
ueaddedc
hai
n.

I
ftheent
repr
eneur
sreal
izedt
hatal
ongwi
thval
ueaddi
ti
onc
hai
nthathe/
shec
anadd
s
omenew val
uewhi
chexi
sti
nbus
ines
sar
enotpr
ovi
ded,t
hent
hevent
urewi
llhave
ear
nedi
tss
elfs
omec
ompet
iti
ves
pac
eint
hemar
ketpl
acebeanewus
eoft
hepr
oduc
t,

32
bet
terqual
it
y,f
ast
erdel
iver
yandanyot
herbenef
itt
hathasnotbeenpr
ovi
ded.

Cus
tomers
egment
saddr
ess
ed.

Theent
repr
eneur
scant
argetas
pec
ifi
cpor
tionoft
hemar
ketandc
anappl
ycus
tomer
sont
he
por
tionors
egment
.

Segment
ati
onc
anbeac
hievedt
hroughf
ourway
s;

Demogr
aphi
csegment
ati
on.
Age,
sex,
levelofeduc
ati
on,
loc
ati
on,
etc
.

Geogr
aphi
csegment
ati
on:vi
rgi
npl
aces
,commonl
yofas
egment
.

Spec
ial
izat
ion e.
g.s
pec
ifi
cindus
try e.
g.t
our
ism,educ
ati
on,
mec
hani
calBuyi
ngpr
oces
se.
g.whol
esal
e,r
etai
l,henc
edel
iver
y
Cus
tomerneedsaddr
ess
ed.

Ther
eisal
wayst
hegapwhi
chi
slef
tbyf
ir
mst
hatar
esuppl
yingc
ons
umesoror
gani
zat
ions
.
Somes
ingl
efi
rmc
anunder
standt
hedi
ver
seneedsofc
ust
omer
soror
gani
zat
ions
.

Meansofaddr
ess
ingt
heneeds
.

Thi
sinvol
vesf
indi
ngnew s
olut
ionst
othepr
obl
emsofc
ust
omer
s.Themai
navenueof
f
indi
ngnews
olut
ionsi
sthr
oughi
nnovat
ions
.

Marketposi
ti
oni
ng
I
tinvolvesgai
ningamar
kets
har
efort
hepel
tors
ervi
ce.Theent
repr
eneur
sshoul
d

Cor
eval
ues

Pac
kagi
ng appl
yingt
ocus
tomer
s

Ser
vic
e

ac
hievedby
payi
ngc
los
eat
tent
iont
othet
hreec
omponent
sas
pec
tsofapr
oduc
t
33
makehi
sorherpr
oduc
eors
ervi
ceat
trac
tivebyof
fer
inggr
eat
erval
uet
hanc
ompet
itor
s.
Mar
ketpos
iti
oni
ngc
anbe

Ser
vic
e–pr
ovi
dingemot
ionalbenef
it
sfr
om t
hepr
oduc
te.
g.af
ters
elfs
ervi
ce,war
rant
y,
s
peedofs
ervi
ce,
cus
tomer
sar
eamongot
her
s.

Not
e

I
nal
lthet
hreec
omponent
stheel
ementofqual
it
yisver
yimpor
tant
.

Mar
ketpos
iti
oni
ngac
hievest
heent
repr
eneurc
ust
omerorbr
andl
oyal
ty.
Thi
sist
hei
ncr
eas
ed
f
eel
ingbyt
hec
ust
omert
hatt
hepr
oduc
tors
ervi
cei
snoteas
ilys
ubs
tit
utabl
ebyt
hos
eof
r
ival
s.
5.
3Meas
uri
ngt
hewi
ndowofoppor
tuni
ty
Att
hiss
tage,
theent
repr
eneurwantt
odet
ermi
nehowmuc
hval
uemi
ghtbec
reat
edby
t
henewvent
ure.St
art
inganewbus
ines
svent
urei
sver
ymuc
hli
kevent
uri
ngi
ntot
he
unknown.

34
Theunknowni
sthepl
aceofunc
ert
aint
y.

Mar
keti
nfor
mat
ionpr
ovi
desaus
efulgui
dei
ntr
acki
ngt
heunknown.I
treduc
es
t
her
isksandunc
ert
aint
ypot
ent
ialent
repr
eneur
sneedt
oknow t
hatmar
ket
i
nfor
mat
ioni
sakeyr
esour
ce,t
her
efor
eitmayneedt
obeboughtandc
ert
aint
y
c
ost
sti
met
ocol
lec
t.

Theent
repr
eneurmus
tgui
deagai
nstl
ookpr
obl
emswhi
chr
elat
etomar
keti
nfor
mat
ion
Thes
ear
e

I
. Par
alys
isbyanal
ysi
s.
I
I. Ext
inc
tionbyi
nst
inc
t.

Par
alys
isbyAnal
ysi
s

Thi
ster
m des
cri
bet
hes
tat
eofnat
urec
aus
edbyt
heent
repr
eneurwhenhe/
shebec
omes
mor
eint
eres
tedongat
her
ingi
nfor
mat
iont
hent
aki
ngdi
rec
tac
tion.

Par
alys
isbyanal
ysi
scanl
eadt
oac
oll
aps
eofabus
ines
svent
ure.
.

Ext
inc
tionbyi
nst
inc
t.

I
t‘
sthemaki
ngofi
ll
-i
nfor
medandi
ll
-j
udgeddec
isi
onhur
riedl
ywi
thoutmaki
ngorc
oll
ect
ing
enoughi
nfor
mat
ion.

Gat
her
ingmar
keti
nfor
mat
ion.

Theent
repr
eneurmus
tinf
ormhi
m/her
sel
finakeyar
ea.

Gener
almar
ketc
ondi
ti
ons
.

Theat
trac
tivenes
soft
hei
nnovat
ion.

Thewayt
henew vent
urec
anei
nit
iat
edandpos
iti
onedi
nthemar
ketpl
ace.
Thewayi
nwhi
chc
ompet
itor
smi
ghtr
eac
ttot
henewvent
ure.

35
Gener
almar
ketc
ondi
ti
ons

Fac
tor
stof
ocusonar
e

Cus
tomerneedsandr
equi
rement
s.

Mar
ketgr
owt
hrat
eandt
rend.

Thes
izeoft
hepot
ent
ialmar
ket
.

St
ruc
tur
e ofc
ust
omergr
oupsand s
egment
s.I
n
dept
hint
ervi
ews

Thi
sisanor
gani
zedandwel
lmanagedi
nter
view.Thes
pec
ifi
cinf
ormat
ionr
equi
redi
s
det
ermi
nedi
nadvanc
e.Ther
elevantques
tiont
obeas
kedt
oac
ust
omerar
epr
epar
ed
bef
oret
hei
nter
view.Howeveraddi
ti
onalques
tionsc
anbepos
sedwher
eandnec
ess
ary
dur
ing t
he ent
repr
eneur
.Though hi
ghl
y ef
fec
tive i
n dept
hint
ervi
ews ar
eti
me
c
ons
umi
ngandc
ost
lyt
oar
range.

Foc
usgr
oups
.

Thi
sisas
mal
lgr
oupofc
ust
omer
saver
agi
ng5-
10i
nnumber
,gr
oupmember
sar
e
i
nter
viewedaboutt
hei
rper
cept
ionsandat
tit
udesc
onc
erni
ngapar
tic
ularpr
oduc
tbei
ng
agr
oup,af
ocusgr
oupi
ndi
ff
icul
ttomanagewhenc
ust
omer
sar
eindus
tri
albuyer
s,i
t
bec
omeseas
iert
ohandl
eaf
ocusgr
oup.

Us
ageandAwar
enes
sst
udi
es.

Awr
itt
enques
tionnai
rei
shandedt
ous
ersofapar
tic
ularpr
oduc
trequi
ri
ngUs
er‘
sat
tit
udes
andf
eel
ingaboutt
hepr
oduc
t.Thewayt
heyus
ethepr
oduc
t.

Thi
sisal
owc
ostmet
hodwhi
chi
sal
soobj
ect
ive.
Howevermanyoft
heques
tionnai
resar
enot

36
r
etur
ned.

Productt
rios
Thisi
nvolvesus
eofpr
oduc
tsampl
es.
Thenewpr
oduc
tisof
fer
edt
opot
ent
ialc
ust
omer
s.
Sec
ondl
ytheent
repr
eneuras
kst
heus
ersaboutt
hei
rexper
ienc
ewi
tht
hepr
oduc
t.Thi
s
i
sasawayef
fec
tivemet
hodonhel
pinghi
mtol
ear
nforas
pec
tsoft
hepr
oduc
tors
ervi
ce
c
anbei
mpr
oved.

Quant
itat
ivemet
hods

I
tisal
way
sadvant
ageoust
o det
ermi
ne t
he nat
ure ofwhatt
he mar
ketwi
llof
feri
n
quant
itat
ivet
erms
.

Ques
tionst
obeans
wer
edi
ncl
ude.

Howl
argei
sthemar
ket
.

Howf
asti
sitgr
owi
ng?

Howl
argear
ethekeys
egment
s?
Howmanyc
ust
omer
sar
ether
e?
Howmuc
hdot
heybuy?
Howof
ten?

Whatar
ethemar
kets
har
esoft
hec
ompet
itor
ssuppl
yingt
hemar
ket
?

Whatl
evelofi
nves
tmentdoc
ompet
itor
smakei
ndevel
opi
ngt
hemar
ketanddef
endi
ngt
hei
r
pos
iti
ononi
t.

Maj
orappr
oac
hesofquant
itat
ivemet
hodsar
e:-

I
. Us
eraudi
ts.
I
I. Di
str
ibut
orAudi
ts.
I
II
. Manuf
act
urer
sout
put
.
I
V. Rel
atedmar
ket
sappr
oac
h.

37
Us
eraudi
ts.

Thi
sinvol
vess
elec
tingas
ampl
eofpr
oduc
tus
ers
.Thenaqui
rei
sadmi
nis
ter
edor
t
elephoneandf
acet
ofac
eint
ervi
ewsar
econduc
ted.Thepur
pos
emaybet
odet
ermi
ne
how muc
htheus
erspur
chas
eorhow of
tent
heypur
chas
ethepr
oduc
t.Thedat
a
c
oll
ect
edhel
pst
oes
tabl
ishmar
kets
egment
ssi
zesandot
hers
egmentc
har
act
eri
sti
cs.
Di
str
ibut
oraudi
ts.

Thi
sinvol
vesmoni
tor
ingt
hemovementoft
hepr
oduc
tthr
oughi
tsdi
str
ibut
ionc
hai
n.A
r
epr
esent
ati
ves
ampl
eoft
hedi
str
ibut
orsi
sas
kedt
opr
ovi
dei
nfor
mat
ionabouti
ssuess
uchas
.

How muc
hofapar
tic
ulari
tem t
heybuy
Howf
requent
ly.

Howmuc
htheykeepi
nst
ock.

Howmuc
htheys
elloverapar
tic
ularper
iodet
c.

Manuf
act
urer
s‘out
put
.

Alt
heout
putf
igur
esofmanuf
act
urer
swhoc
ont
ribut
etot
hemar
ketofapar
tic
ularpl
et
wasc
oll
ect
edei
therdi
rec
tlyort
hrought
axof
fi
cer
s.I
tisi
mpor
tantt
onot
ethatt
ax
f
igur
esmayi
ncl
udei
mpor
ts.

Rel
atedmar
ket
sappr
oac
h.

Event
sthatoc
curi
not
hermar
ket
sar
erel
atedt
otheent
repr
eneur
scor
emar
ketc
anyi
eld
bot
hquant
itat
iveandqual
it
ati
vei
ndi
cat
orsf
ort
henewvent
ure.

38
 Co-
use

Suppl
y Cor
e Enduse
market
s market
s market
s

Ad
jacent
markets

5.
4Openi
ngt
hewi
ndowofoppor
tuni
ty.
Theent
repr
eneurandt
henew vent
urewi
llhavet
odependons
takehol
der
swho
al
ready have r
elat
ions
hip wi
th ot
her f
ir
ms on t
he i
ndus
try.Thi
simpl
ies t
he
ent
repr
eneurf
acest
het
askofwi
ri
ngt
hemovert
henewvent
ure.

Keys
takehol
der
sinc
lude;f
inanc
ier
s,empl
oyees
,suppl
ier
sandc
ust
omer
s.Fi
nanc
ier
s
r
elat
ions
hip

Thes
ear
epr
ovi
der
sofi
nit
ialc
api
talands
ubs
equentf
undi
ng.Capi
tali
sar
esour
cei
n
ext
remel
yval
uabl
eands
car
ce.Fi
nanc
ialr
esour
cesormoneyhaveas
pec
ialpos
iti
oni
n
bus
ines
sbec
aus
ebei
ngl
iqui
dmoneyf
aci
li
tat
esi
ntheac
qui
ri
ngofot
herr
esour
ces
.

Thel
eveloff
inanc
iali
nves
tmentdependonThenat
ureands
izeoft
hevent
ure.
Theexpec
tedf
utur
egr
owt
hoft
hevent
ure.

Somebus
ines
scans
tar
tsmel
landgr
ow i
ntoeas
ilypl
anneds
tagesandbr
anc
hes
.Ot
her
bus
ines
sesc
anonl
ybevi
abl
easmedi
ums
izedvent
uresorevenl
argeones
.

Capi
tals
truc
tur
e

Thet
ermc
api
tals
truc
tur
edes
cri
best
hemi
xoft
hedi
ff
erents
our
cesofi
nves
tmentc
api
tal
.
Maj
orel
ement
sofc
api
tals
truc
tur
ear
e;

Equi
tyc
api
talDebi
t.

Amongot
hert
hingsc
api
tals
truc
tur
eref
lec
tst
hel
evelofr
isks
har
ing.

39
At
tent
ionmus
tbepai
dtot
hef
actt
hat

The l
ender
shave at
endenc
ytor
educ
ethe amountappl
ied f
or.
Lender
swantadegr
eeofc
ont
roli
nthebus
ines
s.

Commons
our
cesofi
nves
tmentf
inanc
einc
lude;

I
. Ent
repr
eneur/f
undsGover
nmentl
oans
.
I
I. Commer
cialbanks
.
I
II
. Mi
crof
inanc
e.
I
V. Vent
urec
api
tal
ist
s.V. Bus
ines
sAngel
s.
Rel
ati
ons
hipwi
thEmpl
oyees
.

Humans
kil
lisr
equi
redt
opr
ovi
del
abour
,tec
hni
calknowl
edgeandl
eader
shi
p.The
ent
repr
eneurmayneedt
oat
trac
tspec
ial
izedHumanSki
ll
s.Thi
sisonl
ypos
sibl
eif
at
trac
tiver
emuner
ati
oni
sof
fer
ed.

Thepot
ent
ialempl
oyeest
hinkt
her
ear
epr
ospec
tsf
orper
sonagr
owt
handdevel
opment
.

Gai
ningHumanc
ommi
tment
.

I
fanequalamountoff
undsi
savai
ledt
o2ormor
epeopl
etodot
hes
amet
hingunder
s
imi
larc
ondi
ti
onsr
esul
tswi
llbeobt
ained.
Thedi
ff
erenc
eisi
nthei
ndi
vidual
s.Peopl
eof
humanr
esour
cesar
espec
iali
nawaybec
aus
etheymus
tbegi
venmot
ivat
ionand
l
eader
shi
pbyt
heent
repr
eneuref
fec
tivemot
ivat
ionands
ucc
ess
full
eader
shi
pdor
esul
t
i
ncommi
tmentandc
ommi
tmentpr
oduc
espeakper
for
manc
e.Theent
repr
eneur
smus
t
knowt
hati
nst
ruc
tionandl
eader
shi
par
enot

―addi
ti
onal
‖butar
einamoder
nbus
ines
sasbas
icast
hemont
hlypay.
Rel
ati
ons
hipwi
ths
uppl
ier
s

I
ftheent
repr
eneurent
ersabus
ines
swher
ether
ear
efews
uppl
ieshe/
shewi
llf
aceas
eri
ous
r
elat
ions
hippr
obl
em.

Ther
eisext
remec
asewhent
hes
uppl
iesc
apac
ityt
otakeonaddi
ti
onalc
ust
omer
scannotbe

40
i
ncr
eas
eds
otheent
repr
eneur
s‘c
hoi
cei
stheedgenots
omeoneel
se.

Rel
ati
ons
hipwi
thc
ust
omer
s.

Li
kec
api
tal
,cus
tomer
sdet
ermi
net
hatavent
ureexi
stsori
tdoesnot
.Towi
ncus
tomer
s,
t
heent
repr
eneurhast
opr
ovi
det
hem wi
thgoods
/ser
vic
eswhi
chgenui
nel
ysat
isf
ythei
r
needsands
olvest
hei
rpr
obl
emsbutneedsar
enew,t
her
efor
einmos
tsi
tuat
ions
,the
ent
repr
eneurwi
llbeof
fer
ings
omet
hingc
ust
omer
sar
eal
readyus
ing.

Rel
ati
ons
hipwi
thc
ust
omer
sdi
ff
ert
owhet
hert
heent
repr
eneurhasmor
efew ormany
c
ust
omer
s.

5.
5Cl
osi
ngt
hewi
ndowofoppor
tuni
ty
Cl
osi
ngt
hewi
ndowi
nvol
vesgi
vingt
hevent
ureori
tspr
oduc
tss
omeuni
queandval
uabl
e
f
eat
ures
othatc
ompet
itor
sdonotc
omet
othes
amewi
ndow andexpl
oitt
hei
dent
if
ied
oppor
tuni
ty.
I
mpor
tanc
eofc
ompet
iti
veadvant
age

Thevent
uresl
ongt
erm exi
stenc
eands
ucc
essc
annotbeguar
ant
eedunl
esst
hevent
urei
s
pr
otec
tedf
romc
ompet
iti
ons
.

Thei
deaofc
ompet
iti
veadvant
agei
showas
trat
egyc
anbedes
ignedt
odevel
oppr
otec
tion
agai
nstc
ompet
itor
sent
eri
ngt
hewi
ndow.

I
not
herwor
dsgai
ningc
ompet
iti
veadvant
agei
saboutdevel
opi
ngmec
hani
smsf
or
c
los
ingt
hewi
ndow.I
ftheent
repr
eneurc
andos
omet
hingwhi
chot
herf
irmsf
ind
di
ff
icul
ttoi
mit
ate,
ther
efor
ecompet
iti
veadvant
agehasbeenat
tai
ned.

5.
5.1Compet
iti
veadvant
age

Compet
iti
veadvant
agei
sthedi
ff
erenc
ecus
tomer
sfi
ndi
napr
oduc
toft
hef
irmt
hati
snot
pr
esenti
nthepr
oduc
tsofot
herf
ir
ms.

Ac
ompet
iti
ve advant
age i
s gai
ned i
fthe bus
ines
scons
ist
ent
ly of
fer
scus
tomer
s
s
omet
hingwhi
chi
sdi
ff
erentf
romwhatc
ompet
itor
sar
eof
fer
ing.
41
Ther
efor
ecompet
iti
veadvant
agei
swhyc
ust
omer
swi
llc
hoos
epr
oduc
tAr
athert
hanB
whent
het
wopr
oduc
tsc
omef
romt
hes
amei
ndus
try.

Sour
cesofc
ompet
iti
veadvant
age.

Compet
iti
veadvant
agehas4maj
ors
our
ces
;

I
. Cos
tsour
ces
.
I
I. Knowl
edges
our
ces
.
I
II
. Rel
ati
ons
hips
our
ces
.
I
V. St
ruc
tur
als
our
ces
.

Cos
tsour
cesofc
ompet
iti
veadvant
age
Abus
ines
scanat
tai
ncompet
iti
veadvant
agebyof
fer
ingi
tspr
oduc
tsatal
owerpr
ice.
Alower
pr
icei
mpl
iest
hatt
hef
ir
misof
fer
ingmor
eval
uef
ormoney.

Toac
hievet
his
,thec
ompanymus
tmakec
osts
avi
ngsi
nonewayort
heot
her
.
Costs
avingscanbeachievedi
nfourkeyar
eas
.
I. Lowerinputpr
ices.
I
I. Ec
onomi
esofs
cal
e.
I
II
. Exper
ienc
ecur
veec
onomi
es.
I
V. Tec
hnol
ogi
cali
nnovat
ion.

Loweri
nputpr
ices

Thef
irmc
ani
dent
if
yas
our
ceofi
nputs
uppl
ythati
scheapert
hat
‘st
hes
our
cesofs
uppl
y
avai
labl
etoc
ompet
itor
s.Thei
nput
scanber
awmat
eri
als
,equi
pment
,ener
gy,
labouret
c.

Thel
owerc
ostc
ant
henbeus
edt
ochangel
owerpr
ice.

Ec
onomi
esofs
cal
e

Thei
deaofec
onomi
esofs
cal
eistr
educ
euni
tcos
t.Al
argerout
putmeanst
hatf
ixed
c
ost
sar
ebei
ngus
edmor
epr
oduc
tivel
y.Suppos
eforexampl
ecompani
esA,BandCar
e
eac
hpayi
ngamont
hlyr
ateofs
h.1mi
ll
ions
uppos
eApr
oduc
es3000uni
tsandB2000

42
uni
tsandC9000uni
ts.
Theuni
tcos
tforeac
har
easf
oll
ows
;

A = 333.
333

B = 142.
85

C = 111.
111

Exper
ienc
ecur
veEc
onomi
es

Ec
onomi
esofs
cal
ear
ebas
edonout
putofapot
ent
ialper
iod.
Exper
ienc
ecur
veec
onomi
esar
e
bas
edonc
umul
ati
veout
putandar
egr
adual
.

Tec
hnol
ogi
cali
nnovat
ion

I
tmeanst
hatmor
eef
fi
ci
entwaysenabl
ethef
irmt
oreduc
ecos
tsofaddi
ngval
ue.

2.
Knowl
edges
our
cesofc
ompet
iti
veadvant
age.

Af
irmc
anat
tai
ncompet
iti
veadvant
age,i
fitknowst
hingt
hatc
ompet
itor
sdonotknow.
Thef
ir
mcant
henus
ethi
sknowl
edget
odel
ivernewval
uet
othemar
ket
.
Knowl
edges
our
cesar
e;

I
. Pr
oduc
tknowl
edgeI
I.
Mar
ketknowl
edge.

I
II
. Tec
hni
calknowl
edge.

Pr
oduc
tknowl
edge
I
faf
irmsunder
standi
ngofapr
oduc
tisexc
ept
ionali
tcanus
ethatknowl
edget
ocr
eat
eal
l
f
eat
ureswhi
char
emor
eat
trac
tivet
obuyer
s.Themos
timpor
tantofs
uchf
eat
uresi
sQUALI
TY.

Mar
ketknowl
edge.

Mar
ketknowl
edgec
anbeaboutc
ons
umerneeds
,cons
umerbuyi
ngpat
ter
ns,t
echni
quest
o
i
nfl
uenc
econs
umer
set
c.

43
Mar
ketr
esear
chandgoodmar
ketanal
ysi
senhanc
emar
ketknowl
edge.

Tec
hni
calknowl
edge
Super
ior
ityi
ntec
hni
calknowl
edgei
sas
our
ceofi
nnovat
ion.I
nnovat
ionsar
eas
our
ceof
c
ompet
iti
veadvant
ageRandDdepar
tment
sar
eus
efuli
ngai
ningt
echni
calknowl
edge.

Rel
ati
ons
hips
our
cesofc
ompet
iti
veadvant
age
Theent
repr
eneurneedst
ocul
ti
vat
ewar
mrel
ati
ons
hipwi
thi
mpor
tants
takehol
der
s
war
nrel
ati
ons
hipmeant
hatt
her
eist
rus
t.Tr
usti
sval
uebec
aus
eitr
emovesdoubtand
r
einf
orc
esgoodwi
llc
anof
ferc
ompet
iti
veadvant
age.

Rel
ati
ons
hipwi
thc
ust
omer
s.

Thevent
ureneedst
obui
ldagoodr
eput
ati
onwi
thc
ust
omer
swhenc
ust
omer
sar
efew
t
her
elat
ions
hipsmus
tbeasper
sonalaspos
sibl
e.Empl
oyeeswhoar
econs
tant
lyi
n
t
ouc
hwi
thc
ust
omer
ssuc
hass
alesper
sonnelandc
ust
omerac
countmanager
s.

Whenc
ust
omer
sar
emanyt
hef
ir
m wi
llneedt
oreac
hthem t
hust
hemedi
abys
ust
ained
adver
tis
ingandt
hroughpubl
icr
elat
ionsac
tivi
ti
es.

Relat
ionshi
pwit
hs uppli
ers
.
I
si mport
antbecausetheymayof
feri
nput
sadegr
eepr
ice,onc
redi
tandi
timpr
ovedqual
it
y
level
.
Rel
ati
ons
hipwi
thf
inanc
ier
s

Theent
repr
eneurmus
tst
rivet
owi
nthec
onf
idenc
eoff
inanc
ier
s.Communi
cat
ionwi
th
t
hei
rneedst
ober
egul
arandf
requentl
ender
sofmoneydonotl
ike―s
urpr
ise‖r
eques
ts
s
uchr
eques
tsmus
tbepl
annedi
nadvanc
e.

St
ruc
tur
esour
cesofc
ompet
iti
veadvant
age

Or
gani
zat
ionals
truc
tur
ecanbedes
ignedi
nsuc
hawayt
hati
tenabl
esmanagementofa
c
ompanyt
ocol
lec
tinf
ormat
ion f
rom t
hemar
ketpl
acef
irs
tenough and us
ethe
i
nfor
mat
iont
omakef
ast
ermovesaheadofc
ompet
itor
s.

Thei
deaor
igi
nals
truc
tur
eisonewhi
chemphas
izest
asksr
athert
hanr
oles
.

44
Loc
ati
onandl
ayoutoft
hebus
ines
s

Thel
ogi
cofl
ocat
ioni
stol
ocat
ethec
ompanyatt
hes
itet
hatwi
llmaxi
miz
ethel
ikel
ihoodof
s
ucc
ess
.

Thel
ocat
iondec
isi
onofmanuf
act
uri
ng/pr
oces
singbus
ines
s.

Unl
iker
etai
lands
ervi
cebus
ines
s,t
hemanuf
act
urerdoesnotal
wayshavef
ulll
iber
tyt
o
c
hos
eal
ocat
ion.Ur
banaut
hor
ityr
egul
ati
onsdoc
ons
ider
abl
ereduc
ethi
sli
ber
ty.I
n
many i
nst
anc
es ur
ban aut
hor
iti
es z
one of
fcer
tai
n ar
ea and c
onf
ine pr
oces
s/
manuf
act
uri
ngbus
ines
stot
hes
ezones
.Thi
sispar
tic
ular
lys
oift
hepr
oces
sesar
e
c
ons
ider
edt
opr
oduc
eof
fens
iveandpr
isoner
sef
for
tss
uchasmai
zepoi
sonousgas
es
t
hatmaybehar
mfult
ohumanbei
ngsandani
mal
s.

I
nsomec
asesandt
otheadvant
ageofmanuf
act
ures
uchz
onesar
epr
ovi
dedwi
thadequat
e
ameni
ti
ess
uchaswat
er,
elec
tri
ci
tyandr
ail
ways
idi
ng.

Whent
heent
repr
eneurwhoi
sengagedi
npr
oces
singofmanuf
act
uri
nghasac
hoi
cel
ocat
ion
t
hef
oll
owi
ngf
act
orsar
econs
ider
ed.

I
. Tr
ans
por
t
I
I. Per
ishabi
li
ty.
I
II
. For
eignt
radez
ones/dut
ytr
eez
ones
.
I
V. Empowermentzones
.
V. Bus
ines
sincubat
ors.
VI
. Tr
ans
por
tat
ioni
ssue
VI
I. Rai
lways
idi
ngs
VI
II
. I
tisi
mpor
tantt
hatapl
ant

Tr
ans
por
t

Bul
kingmat
eri
alsc
anec
onomi
cal
lybet
rans
por
tedonwat
erandt
her
efor
eal
akes
ideorr
iver
s
idel
ocat
ionbec
omesani
mpor
tantf
act
or.

Per
ishabi
li
ty

45
Fi
shmus
tbepr
oces
sedandpac
kedatt
hewat
ersedgevegandf
rui
tsneedt
obepr
oces
sed
andpac
kednearf
iel
dswher
etheyar
egr
own.

For
eignt
radez
ones

Thes
ear
espec
ial
lydes
ignat
ed ar
easwher
edomes
ticc
ompany
‘si
mpor
tmat
eri
als
equi
pmentandc
omponentpar
tsf
rom f
orei
gnc
ount
ries
.Thes
ear
ethenas
sembl
edor
pac
kagedoraddedt
oadomes
ticc
omponenti
ntoac
ompl
etemanuf
act
uredi
tem.

I
nthef
reet
radez
one,t
heent
repr
eneurandot
herbus
ines
speopl
ewi
llnotber
equi
redt
o
paydut
yandt
axesofi
mpor
tedpar
ts.

Taxesar
epai
donf
ini
shedpr
oduc
ts.

Empower
mentz
ones

Somegover
nment
sis
olat
eempower
mentz
onesasar
east
hatar
eec
onomi
cal
ly
depr
ess
ed.Ent
repr
eneur
sandot
herbus
ines
speopl
ear
eof
fer
edphys
icali
ncent
ives
oni
nves
tment
smadei
ntheempower
mentz
ones
.Ins
omec
ount
ries
,inves
tor
sar
e
of
fer
ed addi
ti
onali
ncent
ivesf
orempl
oyi
ng wor
ker
swho ar
eres
ident
sofan
empower
mentz
ones
.Bus
ines
sinc
ubat
ors

A bus
ines
sinc
ubat
ori
sanar
rangementwher
ebyavar
iet
yoff
aci
li
ti
esands
uppor
t
s
ervi
cest
obus
ines
sfi
rmses
pec
ial
lys
tar
tupsar
eof
fer
ed.Suc
hfac
ili
ti
esar
eof
fer
edi
n
onel
ocat
ion.
Themai
npur
pos
esofs
ett
ingupbus
ines
sinc
ubat
ors

Toenhanceeconomi
cdevel
opmenti
ntheec
onomy.
Todiver
sit
y.

Commoni
ncubat
orsf
aci
li
ti
esi
ncl
ude,l
ow c
ost
,rent
als
pac
e,Ac
ces
stoear
lys
tage
c
api
tal
,ac
ces
stogover
nmentgr
ant
s,s
ecr
etar
ials
ervi
ces
,tel
,comput
ersands
oftwar
e,
expor
tinf
ormat
ionas
sis
tanc
emanagementandc
ons
ult
ati
ons
ervi
ceset
c.

Whent
hebus
ines
sreac
hamat
ures
taget
heygetoutoft
hei
ncubat
orands
tar
toper
ati
ng
nor
mal
ly.

46
Wher
etheyexi
st,bus
ines
sinc
ubat
orsar
ethei
deall
ocat
ionf
ors
tar
tupmanuf
act
uri
ng
ent
erpr
ises
.

Si
tel
ocat
ionf
orr
ent
alands
ervi
cebus
ines
s

I
nar
etai
lbus
ines
s,t
heunder
lyi
ngi
ssuei
stol
ocat
eas
itet
hatens
uress
teadyf
low of
c
ust
omer
s.Thec
rit
eri
atoappl
yinc
lude:
-

I
. Tr
adeAr
eaSi
ze.
I
I. Cus
tomert
raf
fi
c.
I
II
. Vi
si
bil
it
y.
I
V. Adequat
epac
kings
pac
e.V. Roomf
orexpans
ion.

Tr
adeAr
eas
ize

Theent
repr
eneurs
houl
dcons
iderwhet
hert
hear
eac
anens
ureenoughc
ust
omer
satt
he
pr
esentt
imeandt
hef
ores
eeabl
efut
ure.

Thel
argert
hebus
ines
sandt
hewi
dert
hec
oll
ect
ionofmer
chandi
sebei
nghandl
ed,t
he
br
oaders
houl
dit
str
adear
eabe.

Fac
tor
s af
fec
ting t
rade ar
ea
s
ize.I
. Ret
ail
c
ompat
ibi
li
ty.

I
I. Degr
eeofc
ompet
iti
onTr
ans
por
tnet
wor
ks.
I
II
. Cul
tur
alandemot
ionalf
act
ors
.

Ret
ailc
ompat
ibi
li
ty

I
tdes
cri
best
hebenef
it
sac
companyi
ngs
uit
sbyl
ocat
ingnearot
herbus
ines
swhi
char
e
handl
ingr
elat
edandc
ompl
ement
arypr
oduc
ts.
Theent
repr
eneurs
houl
dcar
eful
lys
tudy
t
hes
urr
oundi
ngmi
xofbus
ines
sinhi
sorhers
urr
oundi
ng.
Degr
eeofc
ompet
iti
on
Thel
ocat
ions
izeandac
tivi
ti
esc
ompet
ingbus
ines
sist
hef
irs
tofi
tski
ndi
nanar
ea,i
ts
t
radear
eas
izei
sext
ens
ive.I
fsever
albus
ines
swhi
char
edi
rec
tlyc
ompet
ingwi
tht
he
f
ir
mar
eal
readyoper
ati
ngt
het
radear
eas
izewi
llber
educ
ed.

47
Tr
ans
por
tNet
wor
k.

Anar
eas
ervedbymaj
orr
oads
,mi
norands
treetr
oadshaveanexpandedt
radear
eas
ize.
I
nchoos
ingas
ite,
theent
repr
eneurs
houl
dens
uret
hatt
her
oadnet
wor
kisl
ikel
ytor
un
s
moot
hlyandi
sfr
eeofobs
tac
lest
hatmyi
nconveni
enc
ecus
tomer
s.

Cul
tur
alandEmot
ionalFac
tor
s.

I
nmanyur
banar
eas
,somei
mmi
grantandet
hni
cgr
oups
,tendt
ocl
ust
ert
oget
her
.Suc
h
gr
oupst
endt
opat
roni
zebus
ines
sthatbel
ongst
othei
rmember
s.Forpeopl
ewhodonot
bel
ongt
osuc
hgr
oupst
het
radeAr
eas
izei
sreduc
ed

Oneemot
ionalf
act
ori
sfear
.Hi
ghc
rimear
easar
eavoi
dedbyc
ust
omer
s.

Cus
tomert
raf
fi
c

Thi
sist
hemos
timpor
tantf
act
ori
nsi
teeval
uat
ion.Cus
tomert
raf
fi
ciss
impl
ythe
numberofpot
ent
ialc
ust
omer
spas
singbyt
hes
itedur
ingbus
ines
shour
s.Bot
hmot
or
andpedes
tri
ant
raf
fi
car
eimpor
tant
.Hi
ghc
ust
omert
raf
fi
car
ewi
theas
yac
ces
sibi
li
tyi
s
akeys
ucc
essf
act
ori
nar
etai
lbus
ines
s.

Vi
si
bil
it
y

Vi
si
bil
it
yexpl
ainst
hedegr
ee,
towhi
chabus
ines
ssi
tes
tandsout
.As
ite―s
tandsout
‖A
s
itel
acki
ngvi
si
bil
it
yput
sthebus
ines
satamaj
ordi
sadvant
ageevenbef
orei
topensi
ts
door
s.I
tabus
ines
smaj
orc
ont
act
sar
ebyt
el,i
nter
net
,vi
si
bil
it
ysei
zest
obeavi
tal
f
act
or.Bus
ines
sest
hatgooutt
ooper
atei
nthepr
omi
sesoft
hei
rcus
tomer
sdonot
r
equi
remuc
hvi
si
bil
it
y.Theyc
anevenoper
atef
rom t
hei
rownhomes
.Suc
hbus
ines
ses
i
ncl
udepl
umbi
ng,
val
uat
ions
ervi
ces
,cat
eri
ng.

Adequat
epar
kings
pac
e.

48
Cus
tomer
swi
llnots
topi
nar
easwher
ether
eisl
ackofc
ommi
tmentands
ecur
epac
kings
pac
e.

Roomf
orexpans
ion

I
nthec
asewher
etheent
repr
eneurpl
anst
ocons
truc
townpr
emi
ses
,thel
ocat
ions
houl
dbe
f
lexi
bleenoughs
oatt
opr
ovi
def
orexpans
ionoff
utur
esuc
ces
snec
ess
iti
ess
o.

Loc
ati
onopt
ionsf
ors
ervi
ceandr
etai
lbus
ines
s.

Town c
ent
re
Res
ident
ialmal
ls.
Shoppi
ng
mal
ls.
Nearc
ompet
itor
s.

Subur
bs/outs
car
ts.

At t
ime Town
c
ent
re

Thedownt
ownorhuboft
ownmodelandpedes
tri
ant
raf
fi
cist
het
radi
ti
onalc
ent
reoft
own.

Cent
reoft
ownl
ocat
ionsar
esui
tabl
efors
mal
lbus
ines
sesbec
aus
e

Thei
rcent
rall
ocat
ionenabl
est
hem t
oat
trac
tcus
tomer
sfr
om t
heent
iret
radi
ngar
eaoft
he
t
own.

Theybenef
itf
romt
het
raf
fi
cgener
atedbyt
her
umor
sot
herbus
ines
sesc
lus
ter
edi
nthear
ea.

Townc
ent
rel
ocat
ionshaves
omedi
sadvant
agest
hrough.

Themanybus
ines
sest
hatl
ocat
eint
heml
eadt
oint
ens
ivec
ompet
iti
on.

Duet
oi)abover
ent
alc
har
gesar
eus
ual
lyhi
gh.

Ther
eisaper
manentpr
obl
emoft
raf
fi
cconges
tionbot
hmot
orandpedes
tri
an.

Town c
ent
rel
ocat
ionsar
echar
act
eri
zedbyi
nadequat
epac
kings
pac
e.Pet
tyt
hef
tsar
e

49
ac
ommonc
har
act
eri
sti
csoft
ownc
ent
res
.

Res
ident
ialar
eas
.

Thebusi
nesswhi
chloc
atenearr
esident
ialar
easrel
yheavi
lyont
hel
ocalt
radear
ea.
Resi
denti
alar
eal
ocati
onshavesomeAdvantages
.

Oper
ati
ngc
ost
saswel
lasr
entar
eus
ual
lyl
ow.

Bus
ines
sesar
einc
los
econt
actwi
tht
hei
rcus
tomer
s.Theyof
fer
f
lexi
blewor
kinghour
s.

Shoppi
ngc
ent
reandmal
ls

Thes
ear
econs
ider
edt
hemor
emoder
nshoppi
ngs
ites
.As
hoppi
ngmal
lisaf
aci
li
ty
wher
edi
ff
erentt
ypesofbus
ines
soper
ateunderoner
oof
.Shoppi
ngmal
lst
her
efor
e
of
fert
hemoder
nandenvi
ronmentc
onc
eptofones
tops
hoppi
ng.

Thec
ostofl
ocat
ingas
hoppi
ngmal
lisas
tronomi
cal
.

Ther
ear
efourt
ypesofs
hoppi
ngc
ent
resandmal
ls.

Subur
bshoppi
ngc
ent
res
.

Communi
ty.

Regi
onalPowerc
ent
res
.
Subur
bshoppi
ngc
ent
res
Thes
ear
eus
ual
lynearr
esi
dent
ialar
eas
.Bec
aus
eoft
hel
imi
tedar
eat
heyc
ommandt
hey
ar
eus
ual
lys
mal
l.As
ubur
bshoppi
ngc
ent
rewi
llus
ual
lyhave3-
10s
hops
.TheAr
chor
s
hipi
sas
upermar
ket
.

Communi
tys
hoppi
ngc
ent
res
Thedi
ff
erenc
ebet
weenac
ommuni
tyands
ubur
bshoppi
ngc
ent
resi
sonl
ysi
ze.A
c
ommuni
tys
hoppi
ngc
ent
rewi
llhaveevenupt
o50s
hoppi
ng‘
s.Theanc
hors
hipi
sa
s
upermar
ketwi
thawi
devar
iet
yofi
tems
.

50
Regi
onals
hoppi
ngmal
ls.

Thes
eser
veamuc
hlar
gert
radear
easevenupt
o20ki
lomet
ersr
adi
us.
Aregi
onals
hoppi
ng
mal
lcanhaveupt
o100t
ypesofbus
ines
ses
.theanc
horbus
ines
seswi
llbes
ever
alwi
der
var
iet
ysupermar
ket
s.
Powerc
ent
res

Ther
ear
ehal
fwaybet
weens
ubur
bshoppi
ngc
ent
resandr
egi
onals
hoppi
ngc
ent
res
,power
c
ent
rest
argett
heweal
thi
ers
egment
sofac
ommuni
tywhowants
elec
tionandc
onveni
enc
e.

Poorc
ent
resar
eanc
horbyhi
ghc
las
ssupermar
ket
ssel
li
nghi
ghc
las
spr
oduc
ts.

Nearc
ompet
itor
s

Al
thoughbus
ines
sowner
str
ytoavoi
dloc
ati
onst
hatar
edi
rec
tlynearc
ompet
itor
sot
her
s
needt
oloc
atenewerc
ompet
itor
s.

Ent
repr
eneur
sneedt
oreal
izet
hatt
her
eisal
imi
tloc
ati
ngnearc
ompet
itor
s.Cont
inual
gr
owt
hwi
lll
eadt
oat
imewhent
hemar
ketwi
llr
eac
hsec
tor
ati
onpoi
ntands
ell
sst
artt
o
dr
op.

Subur
bs/Out
scat
s.

Theout
scet
sbus
ines
sisl
ocat
edi
nanar
eawher
ebot
hmot
orandpedes
tri
ant
raf
fi
car
e
l
ow.
Thi
sisadi
sadvant
aget
hatc
anonl
ybeenc
ount
eredbyaggr
ess
ivemar
ket
ing.

Theadvant
agesout
scatl
ocat
ionar
e:

Theyof
ferampl
epac
kagi
ngs
pac
e.They
of
feraqui
tenvi
ronment
.

Homebas
edbus
ines
s

Gl
obal
lyt
her
eisc
ons
ider
abl
egr
owt
hinhomebas
edbus
ines
s.Thi
sisbec
aus
e;

Ther
eisequal
lyc
ons
ider
abl
egr
owt
hoft
hes
ervi
ces
ect
orands
uchbus
ines
sesc
anbeeas
ily

51
oper
atedathome.

Advanc
ement
sinc
omput
erandt
elec
ommuni
cat
iont
echnol
ogyhavemadei
teas
ytooper
ate
athome.

Advant
ages

a.Reduc
edc
ostofr
ent
.
b.Reduc
edf
uelandt
rans
por
tat
ionc
ost
s.
c
.Savi
ngoft
imet
hatwoul
dbeus
edi
nthehomeof
fi
cet
ravel
.
Di
sadvant
ages

a)I
nter
rupt
ionsanddi
ver
sionsathomee.
gchi
ldr
en,
cooki
ng.
b)I
sol
ati
onhenc
edemot
ivat
ing.
c
)Lac
kofpr
ofes
sionali
mage.
Anal
ysi
sthebus
ines
sforar
etai
l

Onc
ethel
ocat
ioni
ssuehasbeenr
esol
ved,t
heent
repr
eneurmus
tpayat
tent
iont
othe
pr
emi
sesandt
hephys
icals
etupwi
thi
nthem t
ocont
ribut
esi
gni
fi
cant
lyt
othes
ucc
essofa
r
etai
lbus
ines
s.

Thegoalofl
ayouti
sthatt
hepr
emi
sesmus
tof
ferc
ust
omerc
omf
ortandoper
ati
onal
ef
fi
ci
enc
yformaxi
mums
ales
.

Thef
oll
owi
ngf
act
orsar
eimpor
tanti
ndet
ermi
ningpr
emi
sesi
ssues
.

a.Si
ze.
b.Ext
ernalAppear
anc
e.
c
.Ent
ranc
e.
d.Si
gnage.
e.I
nter
ior
sandEr
gonomi
cs.
f
. Li
ght
sandf
ixt
ures
.

52
6.
0INNOVATI
ONI
NENTREPRENEURSHI
P
Ever
yonec
ani
nnovat
e.I
nnovat
ionmeansc
omi
ngupwi
thnewwaysofdoi
ngt
hings
.
Br
ingi
ngi
nnovat
ioni
ntoyourbus
ines
scanhel
pyous
avet
imeandmoney,andgi
ve
yout
hec
ompet
iti
veadvant
aget
ogr
owandadaptyourbus
ines
sint
hemar
ket
plac
e.

Whati
sinnovat
ion?

I
nnovat
iongener
all
yref
erst
ochangi
ngpr
oces
sesorc
reat
ingmor
eef
fec
tivepr
oces
ses
,
pr
oduc
tsandi
deas
.

Forbus
ines
ses
,thi
scoul
dmeani
mpl
ement
ingnewi
deas
,cr
eat
ingdynami
cpr
oduc
tsor
i
mpr
ovi
ngyourexi
sti
ngs
ervi
ces
.Innovat
ionc
anbeac
atal
ystf
ort
hegr
owt
hand
s
ucc
essofy
ourbus
ines
s,andhel
pyout
oadaptandgr
owi
nthemar
ket
plac
e.

Bei
ngi
nnovat
ivedoesnotonl
ymeani
nvent
ing.
Innovat
ionc
anmeanc
hangi
ngyourbus
ines
s
modelandadapt
ingt
ochangesi
nyourenvi
ronmentt
odel
iverbet
terpr
oduc
tsors
ervi
ces
.

Suc
ces
sfuli
nnovat
ions
houl
dbeani
n-bui
ltpar
tofyourbus
ines
sst
rat
egy,
wher
eyouc
reat
ea
c
ult
ureofi
nnovat
ionandl
eadt
hewayi
ninnovat
ivet
hinki
ngandc
reat
ivepr
obl
ems
olvi
ng.

I
nnovat
ionc
ani
ncr
eas
ethel
ikel
ihoodofyourbus
ines
ssuc
ceedi
ng.Bus
ines
sest
hati
nnovat
e
c
reat
emor
eef
fi
ci
entwor
kpr
oces
sesandhavebet
terpr
oduc
tivi
tyandper
for
manc
e.

6.
1.5St
agesoft
heI
nnovat
ionPr
oces
s
St
age1:I
deaGener
ati
onandMobi
li
zat
ion

Thegener
ati
ons
tagei
sthes
tar
tingl
inef
ornew i
deas
.Suc
ces
sfuli
deagener
ati
on
s
houl
dbef
uel
edbot
hbyt
hepr
ess
uret
ocompet
eandbyt
hef
reedom t
oexpl
ore.A
goodexampl
eist
hatanor
gani
zat
iont
hatenc
our
agess
ucc
ess
fuli
deagener
ati
on
al
waysf
indsabal
anc
ebet
weenpl
ayf
ulnes
sandneed.

Onc
eanewi
deai
sgener
ated,i
tpas
sesont
othemobi
li
zat
ions
tage,wher
eint
hei
dea
t
ravel
stoadi
ff
erentphys
icalorl
ogi
call
ocat
ion.Si
ncemos
tinvent
orsar
en‘
tal
so

53
mar
ket
ers
,anewi
deaof
tenneedss
omeoneot
hert
hani
tsor
igi
nat
ort
omovei
tal
ong.
Thi
sst
agei
svi
tal
lyi
mpor
tantt
othepr
ogr
ess
ionofanewi
dea,
ands
kippi
ngi
tcandel
ay
orevens
abot
aget
hei
nnovat
ionpr
oces
s.

St
age2:Advoc
acyandSc
reeni
ng

Thi
sst
agei
sthet
imef
orwei
ghi
ngani
dea‘
spr
osandc
ons
.Advoc
acyands
creeni
ng
havet
otakepl
aceatt
hes
amet
imet
oweedouti
deast
hatl
ackpot
ent
ialwi
thout
al
lowi
ngs
takehol
der
stor
ejec
tideasi
mpul
sivel
ysol
elyont
hebas
isoft
hei
rnovel
ty.
Theaut
hor
sandr
esear
cher
shavef
oundt
hatc
ompani
eshadmor
esuc
ces
swhent
he
eval
uat
ionpr
oces
swast
rans
par
entands
tandar
diz
ed,bec
aus
eempl
oyeesf
eltmor
e
c
omf
ort
abl
econt
ribut
ingwhent
heyc
oul
dant
ici
pat
ehowt
hei
rideaswoul
dbej
udged.
Forexampl
e,ones
oft
war
eengi
neerf
rom ani
nfor
mat
iont
echnol
ogyor
gani
zat
ions
aid,
―Oneoft
het
hingsIhaves
truggl
edwi
thi
seval
uat
ionsofmyi
deas
.Someofmyi
deas
l
ightupf
iresar
oundher
e,whi
leot
her
sar
esquas
hed..
.
..
..Needl
esst
osay,Igr
ow
s
kept
icalwhen[
theexec
uti
ves
]as
kfori
deasandt
hendonotpr
ovi
def
eedbac
kast
o
whyani
deawasnotpur
sued.
‖St
age3:Exper
iment
ati
on

Theexper
iment
ati
ons
taget
est
sthes
ust
ainabi
li
tyofi
deasf
orapar
tic
ularor
gani
zat
ion
atapar
tic
ulart
imeandi
napar
tic
ularenvi
ronment
.Att
hiss
tage,i
t‘
simpor
tantt
o
det
ermi
newhot
hec
ust
omerwi
llbeandwhatheors
hewi
llus
ethei
nnovat
ionf
or.
Wit
h
t
hati
nmi
nd,t
hec
ompanymi
ghtdi
scovert
hatal
thoughs
omeonehasagr
eati
dea,i
tis
aheadofi
tst
imeorj
ustnotr
ightf
orapar
tic
ularmar
ket
.However
,it
‘si
mpor
tantnott
o
i
nter
prett
hes
eki
ndsofdi
scover
iesi
ftheyt
urni
ntof
ail
urest
heyc
oul
dac
tual
lybet
he
c
atal
yst
sofnewandbet
teri
deas
.

Was
hingt
onMut
ualI
nc.
‘
srec
enti
nter
iorr
edes
ignpr
ovi
desagoodexampl
eofhow
s
ucc
ess
fulexper
iment
ati
onwor
ks.I
nst
eadofappl
yinganewdes
ignt
oal
lit
sbr
anc
hes
,
t
he banki
ng and i
nsur
anc
e c
ompany
, headquar
ter
ed i
n Seat
tle, Was
hingt
on,
i
mpl
ement
edt
hedes
igni
njus
tac
oupl
eofl
ocat
ionst
oseehowi
twoul
dber
ecei
ved.

54
Subs
equent
ly,
whenc
ust
omer
sres
pondedf
avor
abl
y,t
hebankt
ooki
tsi
nnovat
iont
othe
nextl
evel
,appl
yingt
henewdes
ignt
osever
alot
herbr
anc
hes
.Thi
sway,t
hec
ompany
di
dn‘
tlos
emoneyandt
imebyappl
yinganew i
deaal
latonc
ewi
thoutknowi
ngi
fit
woul
dsuc
ceed.

St
age4:Commer
cial
izat
ion

I
nthec
ommer
cial
izat
ions
tage,t
heor
gani
zat
ions
houl
dlookt
oit
scus
tomer
stover
ify
t
hatt
hei
nnovat
ionac
tual
lys
olvest
hei
rpr
obl
emsandt
hens
houl
danal
yzet
hec
ost
s
andbenef
it
sofr
oll
ingoutt
hei
nnovat
ion.Theaut
hor
smakes
uret
onot
ethat―an
i
nvent
ion i
s onl
ycons
ider
ed an i
nnovat
ion [
onc
e]i
thas been c
ommer
cial
ized.
‖
Ther
efor
e,t
hec
ommer
cial
izat
ions
tagei
sani
mpor
tantone,
simi
lart
oadvoc
acyi
nthati
t
t
akest
her
ightpeopl
etopr
ogr
esst
hei
deat
othenextdevel
opment
als
tage.For
exampl
e,onec
hiefexec
uti
veof
fi
cers
aid,
―Wel
ear
nedas
impl
ethi
ng:Res
ear
cher
sand
i
deac
reat
orsdonotappr
eci
atet
henuanc
esofmar
ket
ingandc
ommer
cial
izat
ion.
.Int
he
pas
t,wet
riedt
ogett
her
esear
cher
sinvol
vedi
nthec
ommer
cial
izat
ionas
pec
tsoft
he
bus
ines
s.Theendr
esul
twaspai
nandmor
epai
n.‖

St
age5:Di
ff
usi
onandI
mpl
ement
ati
on

Thedi
ff
usi
onandi
mpl
ement
ati
ons
tagesar
e,ac
cor
dingt
otheaut
hor
s,―t
wos
ides
oft
hes
amec
oin.
‖Di
ff
usi
oni
sthepr
oces
sofgai
ningf
inal
,companywi
deac
cept
anc
e
ofani
nnovat
ion,andi
mpl
ement
ati
oni
sthepr
oces
sofs
ett
ingupt
hes
truc
tur
es,
mai
ntenanc
eandr
esour
cesneededt
opr
oduc
eit
.Agoodexampl
eofas
ucc
ess
ful
appr
oac
htodi
ff
usi
onc
omesf
rom I
nter
nat
ionalBus
ines
sMac
hinesCor
p.,whi
ch
i
nvol
vesi
tsempl
oyeesear
lyi
nthei
deagener
ati
ons
tageandc
onduc
tss
o-c
all
ed
i
nnovat
ionj
ams
,towhi
cht
heyi
nvi
tenotonl
yempl
oyeesbutal
soc
lient
s,bus
ines
s
par
tner
sandevenempl
oyees
‘fami
li
es.I
BMai
dsl
aterdi
ff
usi
onbygi
vingever
yonea
s
takei
nthei
deaf
romt
hebegi
nni
ng.

Advant
agesofi
nnovat
ion

55
 I
nnovat
ionc
andel
ivers
igni
fi
cantbenef
it
s.I
tisoneoft
hec
rit
icals
kil
lsf
or
ac
hievi
ngs
ucc
essi
nanybus
ines
s.I
tcanhel
pyous
olvepr
obl
ems
,gener
ate
pr
ofi
t,i
ncr
eas
eyourmar
kets
har
eandedgeoutc
ompet
itor
s.

Advant
agesofi
nnovat
ioni
nbus
ines
s

Someoft
hekeypr
act
icalbenef
it
sofi
nnovat
ionar
e:

• i
mpr
ovedpr
oduc
tivi
ty
• r
educ
edc
ost
s
• i
ncr
eas
edc
ompet
iti
venes
s
• i
mpr
ovedbr
andr
ecogni
ti
onandval
ue
• newpar
tner
shi
psandr
elat
ions
hips
• i
ncr
eas
edt
urnoverandi
mpr
ovedpr
ofi
tabi
li
ty

I
nnovat
ionenabl
espr
obl
ems
olvi
ngandpr
ovi
desc
reat
ivei
nsi
ghtt
hatal
lowsyout
olook
att
hingsf
rom adi
ff
erentper
spec
tive,r
egar
dles
sofwhet
heryouar
edevel
opi
nganew
pr
oduc
t,r
efr
eshi
ngs
trat
egyorf
indi
nganor
igi
nalwayt
ost
ayaheadoft
hec
ompet
iti
on.

How youappr
oac
hinnovat
ionwi
lldependonyourbus
ines
s.Typi
cal
ly,i
tcanbean
enhanc
ementt
oyourexi
sti
ngpr
oduc
tors
ervi
ce,anexpans
iont
oyourbus
ines
sora
c
ompl
etec
hangeofdi
rec
tion-s
eec
ommonappr
oac
hest
oinnovat
ion.

Ri
sksofnoti
nnovat
ing

Doi
ngs
omet
hingnew,
unt
est
edorunpr
ovenmays
eemr
isky.
However
,thebi
gges
tri
skof
al
lforamoder
nbus
ines
smayi
nfac
tbenoti
nnovat
ing.

Rel
uct
anc
eori
nabi
li
tyt
oimpr
oveyourpr
oduc
tsors
ervi
cesmayl
eaveyourbus
ines
sunabl
e
t
ocompet
e,di
ver
sif
yors
impl
yoper
ate.
Bus
ines
sest
hatf
ailt
oinnovat
erunt
her
iskof
:

56
 • l
osi
ngmar
kets
har
etoc
ompet
itor
s
• f
all
ingpr
oduc
tivi
tyandef
fi
ci
enc
y
• l
osi
ngkeys
taf
f
• r
educ
edmar
ginsandpr
ofi
t
• goi
ngoutofbus
ines
s

I
nnovat
ionc
anbepr
ecar
iousbutt
hepot
ent
ialbenef
it
scanbevi
talt
othec
ont
inui
ng
s
ucc
essofyourbus
ines
s.Readmor
eont
her
isksandr
ewar
dsofi
nnovat
ion.

I
nnovat
ionandBus
ines
s

I
nnovat
ionpos
esc
hal
lenges
.Ifones
tepoft
hepr
oces
sisweakori
fac
ompanyl
acksa
s
yst
emat
icpr
oces
sforac
cept
ingandnur
tur
ingi
nnovat
ivei
deas
,theor
gani
zat
ionwi
ll
r
elyons
erendi
pit
y.Butwi
tht
her
ightappr
oac
h,mi
nds
etandr
esour
ces
,ac
ompanyc
an
r
eapt
hes
trat
egi
cbenef
it
sofgr
owt
h.

Manager
spl
ayavi
talr
olei
nanor
gani
zat
iont
hatmeet
sthec
hal
lengesofi
nnovat
ion.
In
I
nnovat
ion:Management
,Pol
icy & Pr
act
ice,t
he s
tudy out
li
nes key ar
eas wher
e
manager
scanas
sis
twi
tht
hepr
oces
sofi
nnovat
ion.

Manager
sneedt
opayc
ons
tantat
tent
iont
ooper
ati
onaldet
ail
sofi
nnovat
ionpr
ojec
ts.
Manager
sshoul
dkeepaneyeonhowt
hei
rpr
ojec
tsar
edoi
ng,
and,
toeas
ethebur
denof
t
hist
ask,t
hey c
an es
tabl
ishal
ear
ning-
foc
used envi
ronment t
hat enc
our
ages
empl
oyeest
oexpl
oreandgener
atenewi
deas
.

• Manager
sneedt
obec
learabouthowi
deasar
esel
ect
edandeval
uat
ed.
Clear
-cut
pr
otoc
olsar
eaf
eat
ure ofr
obus
tor
gani
zat
ions
,and t
hes
e pr
otoc
olshel
p
manager
skeept
hei
rfoc
usont
hepr
oces
sesofr
obus
tinnovat
ion.

• Manager
smus
tqui
ckl
yres
pond t
o ex
ter
nalc
ons
tit
uent
sand pr
ovi
de t
hei
r
opi
nionsf
orexper
iment
ati
on.Ther
ightques
tionsc
anhel
pgui
det
hispr
oces
sto
makei
tef
fec
tiveandr
elevant
.

57
 • Manager
sneedt
opayat
tent
iont
ocus
tomerdes
iresandper
cept
ions
.Cr
eat
ive
us
eoft
echnol
ogy,
suc
hasdat
ami
ningandper
vas
ivec
omput
ingi
nfr
ast
ruc
tur
e,i
s
i
mpor
tant
.

Manager
scanhel
pes
tabl
ishac
ult
ureofi
nnovat
ion.
Anopenands
uppor
tiveenvi
ronment
c
anl
eadt
oor
gani
zat
ionals
ucc
ess
,aswel
lasr
ecogni
ti
onandpr
ofes
sionalgr
owt
hfor
empl
oyeeswhoof
fer

7.
0RI
SKSANDRI
SKMANAGEMENT
"
Ris
kcomesf
romnotknowi
ngwhatyou'
redoi
ng.
"~War
renBuf
fet
Ther
eisnobodyont
hispl
anetwhohasnott
akenas
ingl
eri
ski
nhi
sorherl
if
e.Eac
handever
y
per
sonj
our
neyst
hroughl
if
etaki
ngs
omer
iskort
heot
her
.

Al
lthatvar
iesf
romper
sont
oper
soni
sthedegr
eeandamountofr
iskt
hati
staken.
Forexampl
e,anunwel
lper
sonnott
aki
ngmedi
ci
nei
satadi
ff
erentr
iskasc
ompar
ed t
oa
mul
ti
nat
ionalc
ompanyi
nves
tingmi
ll
ionsofdol
lar
sinanewl
ineofbus
ines
s.

7.
1TypesofRi
skManagement
As
ses
smentoft
her
isk,
obt
aini
ngopt
ionsf
orhandl
ingt
her
isk,
andanal
yzi
ngt
her
isksi
n
or
dert
odet
ermi
net
hewaysi
nwhi
cht
hes
amemayc
hangear
esomewayst
odealwi
th
r
isk.Ther
ear
edi
ff
erentt
ypesofr
isksandmanagementmus
tbeawar
eofal
ltheki
nds
.
Ther
isksc
anbef
inanc
ialr
isks
,pr
oces
sri
sks
,int
angi
bler
isks
,ti
mer
isks
,humanr
isks
,
l
egalr
isks
,andphys
icalr
isks
.Br
iefnot
esonvar
ioust
ypesofr
isks
;

Fi
nanc
ialr
iski
sthel
ossofkeyr
esour
cesl
ikef
undi
ng,
etc
.Int
hisc
aset
hec
ompanywi
ll
nothaveadequat
ecas
hfl
ow t
omeetf
inanc
ialobl
igat
ions
.Cr
edi
tri
sk,l
iqui
dit
yri
sk,
mar
ketr
isk,
oper
ati
onalr
isksar
edi
ff
erentt
ypesoff
inanc
ialr
isks
.

Cr
edi
tri
sk:Whent
hebor
rowerbec
omesdef
aul
tandwasunabl
etomakepayment
sas
pr
omi
sedi
tiss
aidt
obeCr
edi
tri
sk,
als
ocal
leddef
aul
tri
sk.

I
nves
tmentr
iskwasas
soc
iat
edwi
tht
hiswher
ethei
nves
torl
oss
eshi
spr
inc
ipalandi
nter
est
t
oo.

58
Li
qui
dit
yri
sk

Somet
imesduet
olac
kofl
iqui
dit
yint
hemar
ketanas
setc
annotbes
oldt
omaket
hepr
ofi
tor
t
opr
evental
oss
.

Mar
ketr
isk

Duet
othec
hangei
nval
ueoft
hemar
ketr
iskf
act
orsval
ueofi
nves
tmentpor
tfol
ioor
t
heval
ueofat
radi
ngpor
tfol
iowi
lldec
reas
e.For
eignexc
hanger
ates
,st
ockpr
ices
,
i
nter
estr
ates
,andc
ommodi
typr
icesar
ethes
tandar
dMar
ketr
iskf
act
ors
.

Oper
ati
onalr
isk

Ar
iskar
isi
ngf
rom exec
uti
onofanor
gani
sat
ion'
sbus
ines
sfunc
tionsi
sOper
ati
onalr
isk.
Ri
sksar
isi
ngf
rom t
hepeopl
e,s
yst
emsandpr
oces
sest
hroughwhi
chanor
gani
sat
ion
oper
ates
.Fr
audr
isks
,legalr
isks
,phys
icalorenvi
ronment
alr
isksar
eot
herc
ategor
ies
i
ncl
udedundert
his
.

Pr
oces
sri
sks
:Ri
skybus
ines
spr
oces
sest
hatc
oul
dleadt
opr
ojec
tfai
lur
e.

I
ntangi
bler
isks
:Thos
eri
skst
hatar
eof
tenas
soc
iat
edwi
thdamaget
other
eput
ati
onofan
or
gani
sat
ionori
tsbr
and.

Ti
mer
isks
:Ri
skswhi
chof
teni
nvol
vet
hingsc
onnec
tedt
oti
me.

Humanr
isks
:Los
sofc
rit
icalempl
oyeesorknowl
edgewhi
char
econnec
tedt
omanpower
.

LegalRi
sks
:Los
sesi
ncl
udegover
nmentr
egul
ati
onsandt
hes
amehavi
ngani
mpac
tont
he
oper
ati
onsoft
hec
ompany.
Phys
icalr
isksar
ethos
elos
esofphys
icalr
esour
cess
uchasequi
pment
,bui
ldi
ngs
,land,et
c
duet
onat
uraldi
sas
ter
sormanmade.

Whatar
ether
isksofs
tar
tingmyownbus
ines
s?
Al
thoughyouc
anr
eapmanybenef
it
sbys
tar
tingyourownbus
ines
s,t
her
ear
edef
ini
tel
y
s
omer
isks
.Themos
tcommoni
ncl
ude:

59
 • Los
ingmoney.You'
regoi
ngt
oneedmoneyt
ogetyours
mal
lbus
ines
sst
art
ed.
Whet
heryour
aidyours
avi
ngsac
count
,hi
tupf
riendsandr
elat
ives
,orbor
row
f
rom abank,t
her
e'saver
yrealpos
sibi
li
tyt
hatyourbus
ines
swon'
tsuc
ceedand
t
hatyou,yourf
riends
,ort
hebankwi
llnevers
eet
hatmoneyagai
n.I
fyour
bus
ines
sidea i
sri
sky,as
k your
sel
fwhet
heryou'
re wi
ll
ing t
o gambl
e your
r
eti
rement
,yourf
ri
ends
hips
,andevenyourgoodc
redi
tonyourbus
ines
sidea.

• Per
sonals
acr
ifi
ce.Bus
ines
ssuc
ces
scanc
omeatahi
ghper
sonalc
ost
.Get
ting
yourbus
ines
supandr
unni
ngmayc
ons
umemos
tofyourt
imeandener
gy,
i
ncl
udi
ngyourpr
eci
ouseveni
ngsandweekends
.Youmaynothavemuc
hti
mef
or
f
ami
lyorf
riendsort
heext
rac
asht
otakeas
econdhoneymoonwi
thyours
pous
e.
Bef
oreyouqui
tyourj
ob,
dec
idewhet
heryou(
andyourf
ami
ly)ar
ereadyt
omake
s
omeoft
heper
sonals
acr
if
icesnec
ess
aryf
oryout
ocr
eat
eas
ucc
ess
fuls
mal
l
bus
ines
s.

7.
2Ri
skManagementPr
oces
s
Whati
saRi
skManagementPr
oces
s?

Thec
onc
eptbehi
ndar
iskmanagementpr
oces
sisext
remel
ysi
mpl
e.I
tist
hepr
oces
sof
ant
ici
pat
ingandanal
yzi
ngr
isksandc
omi
ngupwi
thef
fec
tiveandef
fi
ci
entwaysof
managi
ngaswel
laser
adi
cat
ingt
hem.Her
ear
ethedi
ff
erents
tepst
hatar
einvol
vedi
n
t
hispr
oces
s:

1. Ri
skI
dent
if
icat
ion:

Thef
irs
tst
epi
nvol
vesi
dent
if
yingr
isks
.Cer
tai
nri
sksc
oul
dbequi
teobvi
ouswher
easaf
ew
ot
her
smayneedac
ert
ainamountofant
ici
pat
ion.
Ther
ecoul
dbevar
ioust
ypesofr
iskss
uch
as
:

– bus
ines
sri
sks
– f
inanc
ialr
isks
– c
ommer
cialmar
ket-
relat
edr
isks
– technol
ogyri
sks
– s
hor
tter
mri
sks
,longt
ermsr
isks–per
sonalr
isks
,et
c.–Oper
ati
onal

60
 r
isks(
ess
ent
ial
lys
ameasBas
leI
I)

• Peopl
e
• Pr
oces
ses
• Bus
ines
s
• Pr
ojec
ts
• Tec
hnol
ogy
• Legalandr
egul
ator
y
• Ext
ernal
2. Ri
skAnal
ysi
s:
• Thi
sist
henexts
tepaspar
toft
her
iskmanagementpr
oces
s.Onc
eal
lther
isks
havebeeni
dent
if
ied,
iti
sti
met
oanal
yzeands
crut
ini
zeeac
honeoft
hem.

• Ri
skanal
ysi
sshoul
dbedonebot
hqual
it
ati
vel
yaswel
lasquant
itat
ivel
y.
• Det
ermi
nehowbi
gat
hreateac
hri
ski
s,whatc
oul
dbei
tsc
ons
equenc
e,i
tsi
mpac
t,
et
c.Eac
hri
skwi
llhaveal
ikel
ihoodf
act
ori
.e.
,apr
obabi
li
tyf
act
or.Ont
hebas
isof
i
tsi
mpac
tandi
tsl
ikel
ihoodf
act
or,youc
anpr
ior
iti
zedi
ff
erentr
isksass
eri
ous
,
moder
ate,
mil
d,et
c.

• Us
eac
olorc
odi
ngs
yst
em f
oreas
ygr
aphi
calanal
ysi
s.Onc
eyouhaveal
lthi
sdat
a
l
aidouti
nfr
ontofyou,
youwi
llbei
napos
iti
ont
oranki
ndi
vidualr
isks
.

3.
Ris
kEval
uat
ion:

Thi
sbas
ical
lyi
nvol
vesc
ompar
ingt
hei
dent
if
iedandanal
yzedr
iskswi
thyouri
ndi
vidual
goal
soryourc
ompany'
spr
esetgoal
sandobj
ect
ives
.Youc
ant
henc
hoos
etogr
ade
r
isksanddec
idet
hef
utur
ecour
seofac
tiont
obet
akenbas
edonhows
ever
elyt
her
isk
i
sli
kel
ytoi
mpac
tyourgoal
s,obj
ect
ivesandt
arget
s.

4.
Ris
kTr
eat
mentandCont
ingenc
yPl
an

Thenexts
tepi
nvol
vespr
epar
ingar
iskt
reat
mentandc
ont
ingenc
ypl
an.I
tisvi
talf
rom t
he
per
spec
tiveofent
erpr
iser
iskmanagement
.

Whatwi
llyoudoi
fther
iskmat
eri
ali
zes
?

61
Canyoudosomet
hingtooverc
omet heris
k?Canyoutakes
omemeasurestoles
seni
tsi
mpac
t?
Youshoul
dthi
nkaboutal
lthesequest
ionsandcomeupwithar
iskt
reatmentand
c
ont
ingenc
ypl
anf
ort
hes
ame.I
tshoul
dinc
ludewaysi
nwhi
cht
ocont
rolaswel
l
asover
comet
her
iskc
ondi
ti
ons
.

7.
3Ri
skMoni
tor
ing
• Thi
sisnott
henexts
tepass
uch,r
atheri
tiss
omet
hingt
hats
houl
dhappenona
c
ont
inuousbas
isatal
lst
agesoft
her
iskmanagementpr
oces
s.HaveaRMMM
(
Ris
kMi
ti
gat
ion,Moni
tor
ingandManagement
)pl
ani
npl
acef
ort
hes
ame.You
c
anal
somakeus
eofc
ert
ainr
iskmanagements
oft
war
esf
ort
hispur
pos
e.

• Att
hes
amet
ime,
ther
eshoul
dbepr
operc
ommuni
cat
ionbet
weent
hedi
ff
erent
depar
tment
sinvol
vedi
nther
iskmanagementpr
oces
s.Communi
cat
ioni
svi
tal
bec
aus
eitc
anaf
fec
ttheent
irepr
oces
sbot
hnegat
ivel
yaswel
laspos
iti
vel
y.

• Thes
ewer
esomebas
icsr
egar
dinghow ar
iskmanagementpr
oces
swor
ks.
Dependi
ngoni
ndi
vidualr
equi
rement
sandneeds
,itc
anal
waysbec
ust
omi
zed
pr
ovi
dedyouhaveenoughknowl
edgeandr
esear
chdat
aavai
labl
eathand.
Bec
aus
e,ast
hepopul
ars
ayi
nggoes
,"Ri
skvar
iesi
nver
sel
ywi
thknowl
edge.

• Managi
ngt
her
iski
samaj
oras
pec
toft
hebus
ines
s.Whenac
ompanyi
sabl
eto
managet
her
iskwheni
tar
isest
hent
hebus
ines
scanbes
ust
ained.
Ifunf
ores
een
r
isksar
enotmanagedt
heni
twi
lll
eadt
othedec
ayoft
heent
irebus
ines
sand
event
ual
lyt
hec
ompanywi
llf
all
.Ever
ycompanymus
tfol
low ent
erpr
iser
isk
managementwhi
chi
sapr
oces
sofpl
anni
ng,or
gani
zi
ngandc
ont
rol
li
ngal
lthe
ac
tivi
ti
esoft
heor
gani
zat
ion.Whenal
lthes
tepsar
ecar
eful
lyi
nspec
ted,t
hen
r
iskc
anbepr
edi
ctedi
nadvanc
eandnec
ess
aryac
tionsmaybet
akent
omi
nimi
ze
t
headver
seef
fec
t.

• Ent
erpr
iser
iskmanagement(
ERM)i
sas
soc
iat
edwi
thanyt
ypeofr
iskt
hatmay
ar
iseduet
ofi
nanc
ial
,st
rat
egi
coroper
ati
onalf
ail
ures
.ManyERMpac
kageshave
beendevel
opedf
orus
ebyor
gani
zat
ions
.Ther
iskmanagementabi
li
tyoft
he
bus
ines
sisnowc
ons
ider
edasamai
ncr
iter
ionf
ors
crut
ini
zi
ngt
hec
ompany
.The
ERM pr
oces
sthati
sfol
lowedbyt
hec
ompanyi
sof
tenanal
yzedbyaboar
dof
di
rec
tor
sandc
hangesar
emadeasandwhenr
equi
red.

62
 • Foranybus
ines
s,t
hisr
iskmanagementpr
oces
sisc
ruc
ialasi
tdet
ermi
nest
he
s
tabi
li
tyoft
heor
gani
zat
ion.
Ther
iskmanagementpr
oces
shel
pst
hec
ompanyt
o
i
dent
if
yther
isk,anal
yzet
hec
aus
eandt
akec
ount
erac
tionst
omi
nimi
zet
he
l
oss
esi
ncur
red.Theabi
li
tyt
opr
edi
ctt
her
iskdet
ermi
nest
hes
ucc
essoft
he
pr
oces
s.Thi
srequi
resc
aref
ulwat
chi
ngofal
lthedepar
tment
sint
hec
ompany
.

• Theent
erpr
iser
iskmanagementpr
oces
smus
tbec
ust
omi
zedf
oreac
hbus
ines
s
dependi
ngont
hes
ervi
cet
hati
spr
ovi
dedbyt
hebus
ines
s.Al
ltheheadsoft
he
depar
tment
smus
tbemadet
opar
tic
ipat
einpl
anni
ngt
her
iskmanagement
pr
oces
s.

• Ther
iskmanagements
trat
egymus
tbei
mpl
ement
edi
ntheor
gani
zat
iont
o
mi
nimi
zet
her
isks
.Int
hei
nit
ials
tagesoft
her
iskmanagementpr
oces
s,t
he
i
nfl
uenc
eofr
isksont
hes
tabi
li
tyofbus
ines
swi
llbehi
gh.

• Whent
hepr
oces
sisper
fec
tlypl
annedandexec
uted,t
her
iskswi
llhavel
ess
er
i
nfl
uenc
eont
heor
gani
zat
ion.

Under
standi
ngt
her
isks

Thec
aus
eandt
heef
fec
toft
her
iskmus
tfi
rstbei
dent
if
ied.Thehi
stor
icalper
for
manc
e
hast
obeanal
yzedandi
tises
sent
ialt
ofi
ndoutwhathasl
eadt
other
isk.Bas
edont
his
i
nfot
hec
urr
ents
trat
egyoft
hec
ompanymus
tbes
tudi
edandt
hef
utur
eri
sksmus
tal
so
bei
dent
if
ied.

NOTE:Donoti
nves
twher
eyouhavenoc
ont
rolot
her
wis
eyouwi
lll
oseever
ythi
ng

8.
0BARRI
ERSTOENTREPRENUERSHI
P
Bar
rier
s of ent
repr
eneur
shi
p ar
e f
act
ors t
hat hi
nder t
he devel
opment of
ent
repr
eneur
shi
p.They do notonl
y hi
nderpeopl
efr
om get
ting and pr
act
ici
ng
ent
repr
eneur
ials
kil
ls,
butal
sopr
eventpr
act
ici
ngent
repr
eneur
sfr
om ac
hievi
ngt
hef
ull
benef
it
sthatent
repr
eneur
shi
phast
oof
fer
.Manyoft
hes
ebar
rier
sar
emai
nlyi
ndi
rec
t
obs
tac
les
,rat
hert
hananyc
onc
ret
e,obj
ect
iveobs
truc
tionsi
nthewayofmaki
ngt
he
ent
repr
eneur
ialdec
isi
on.Bar
rier
scanar
isebef
rom t
hes
oci
al,ec
onomi
candpol
it
ical
envi
ronmentwi
thwhi
cht
hei
ndi
viduali
nter
act
s.Theyc
anal
sobec
aus
edbyt
headver
se

63
c
ondi
ti
onswi
thi
ntheor
gani
sat
ionwi
thwhi
cht
hei
ndi
vidualwor
ks.However
,mos
t
bar
rier
sar
eadi
rec
tres
ultofani
ndi
vidual
‘
sfai
lur
esandweaknes
ses
.

8.
1Bar
rier
satt
heI
ndi
vidualLevel
I
ndi
vidualweaknes
sespos
ethebi
gges
tthr
eatt
oent
repr
eneur
shi
pinSout
hSudan.
Suc
h
bar
rier
sar
eignor
ed,asf
ocusi
snor
mal
lyont
heenvi
ronment
alf
act
ors
.Si
nceonec
an
eas
ily ac
ttor
educ
ethes
e weaknes
ses
,they us
ual
lyf
orm t
he mai
nfoc
us of
ent
repr
eneur
shi
ptr
aini
ngpr
ogr
ammes
.
Bar
rier
satt
hei
ndi
viduall
evelwoul
dinc
lude:
-

Poorent
repr
eneur
ials
kil
ls:Mos
tent
repr
eneur
sand pot
ent
ialent
repr
eneur
shave
l
imi
tedent
repr
eneur
ials
kil
ls.Theyar
eri
skaver
se(
feart
aki
ngr
isks
),l
ackc
reat
ivi
ty,
l
ack i
nnovat
ion, l
ack endur
anc
e, l
ack f
lexi
bil
it
y, and ot
her ent
repr
eneur
ial
c
har
act
eri
sti
cs.Thi
smeanst
hatmanypeopl
ewi
lls
tar
tbus
ines
sest
hatar
eimagesof
exi
sti
ngbus
ines
sesr
esul
ti
ngi
nver
yint
ens
ecompet
iti
oni
nver
ynar
row f
iel
dst
hat
pr
ovi
de l
it
tler
etur
nsf
ort
he i
nves
tment
.Ent
repr
eneur
ialc
har
act
eri
sti
csc
an hel
p
bus
ines
scanhel
pbus
ines
speopl
etol
ookf
orandexpl
oitnewoppor
tuni
ti
es.

Lac
k ofbus
ines
s and t
echni
cals
kil
ls:Bus
ines
sski
ll
sin mar
ket
ing,ac
count
ing,
managementet
c,ar
erequi
redbyal
lpr
act
ici
ngent
repr
eneur
stoef
fec
tivel
ymanage
t
hei
rent
repr
eneur
ialvent
ures(
bus
ines
ses
).Manybus
ines
sesal
sor
equi
res
pec
ial
ised
t
echni
calknowhowt
osetup,
oper
ateandmanage.
Lac
kofs
uchs
kil
lsmanyt
imesl
imi
ts
t
hec
apac
ityofent
repr
eneur
stoef
fec
tivel
yexpl
oitt
hef
ullpot
ent
ialoft
hei
rvent
ures
.
Mor
eover
,duet
othehi
ghr
ateofi
ll
it
erac
y,manyent
erpr
isi
ngi
ndi
vidual
sal
sol
ackt
he
c
apac
ityt
oappr
eci
ateandac
qui
ret
hes
eski
ll
s.

Lowmobi
li
tyandexpos
ure:

Mobi
li
tyandexpos
urenor
mal
lyof
fer
sthebi
gges
trevel
ati
onf
ornewi
deast
hats
hape
c
reat
ivi
tyand i
nnovat
ionst
hats
hape ent
repr
eneur
shi
p.However
,Sout
h Sudanes
e
gener
all
ydonott
ravelwi
del
y,donotr
eadwi
del
yanddonotexpl
oreori
nves
tigat
e.Asa
r
esul
t,evenhi
ghl
yeduc
atedpeopl
eremai
nlar
gel
ynar
row mi
nded.Thi
sli
mit
sthe
c
reat
ivenes
sandi
nnovat
ivenes
sofSout
h

64
Sudan‘
spot
ent
ialandpr
act
ici
ngent
repr
eneur
s.

Lac
kofRol
eModel
sinent
repr
eneur
shi
p:

Sout
hSudani
sser
ious
lyl
acki
ngr
olemodel
sint
hef
iel
dofent
repr
eneur
shi
p,whi
ch
l
imi
tst
henumberofpeopl
ewhowi
ll
ingl
yas
pir
eforac
areeri
nent
repr
eneur
shi
p.Many
peopl
ehaveaver
ylow opi
nionofs
truggl
ingent
repr
eneur
ials
tar
tsups
,whi
let
hey
c
ons
idert
hef
ews
ucc
ess
fulent
repr
eneur
stobes
uperl
uckyi
ndi
vidual
swhoc
anonl
ybe
admi
redbutnotbeemul
ated(
copi
ed)
.Asar
esul
t,ver
yfew peopl
ear
eat
trac
tedt
o
ent
repr
eneur
shi
pasac
areerofc
hoi
ce.Mos
tar
efor
cedi
ntoent
repr
eneur
shi
pasal
ast
r
esor
t,wi
thoutenoughi
nter
estandc
ommi
tment
.Yeti
nspi
rat
ioni
sakeyc
har
act
eri
sti
c
of ent
repr
eneur
shi
p.New ent
repr
eneur
s need t
o be i
nspi
red by t
he exi
sti
ng
ent
repr
eneur
sthatt
heyadmi
re.

Lac
kofbus
ines
set
hic
s:Manyent
repr
eneur
shavef
ail
ed,
orbeenc
ompr
omi
sed,
bec
aus
e
ofunet
hic
albehavi
our
.Unpai
dloans
,unpai
dorhi
ghl
yexpl
oit
edempl
oyees
,unpai
d
s
uppl
ier
s,s
ubs
tandar
d goods
,tax evas
ion (
avoi
ding t
ax payment
s),c
orr
upt
ion,
s
muggl
inget
c.c
har
act
eri
semanybus
ines
svent
uresi
nSout
hSudant
oday.Whi
les
uch
behavi
our
smays
omet
imesr
esul
tinaqui
ckpr
ofi
t,manyt
imest
hes
ebadpr
act
iceshave
anegat
ivei
mpac
ttot
heent
repr
eneurandmanyt
imesc
rippl
ingt
hem c
ompl
etel
y.
Compl
acenc
y-l
ackofmot
ivat
ion:

Bec
aus
eofl
ackofr
olemodel
sandl
imi
tedexpos
ure,
ent
repr
eneur
sinSout
hSudant
end
t
obes
ati
sfi
edwi
thr
elat
ivel
ysmal
landmodes
tac
hievement
s.Theyt
endt
ohavel
it
tle
mot
ivat
ionf
orhi
gherorext
raor
dinar
yac
hievement
s.Thet
endenc
ytopr
emat
urel
y
c
elebr
ates
ucc
essl
imi
tst
hegr
owt
hofmanyent
repr
eneur
ialvent
ures
.

Lac
kofc
ont
inui
ty:Ver
yfewf
ir
msi
nSout
hSudanar
eknownt
osur
viveaf
tert
hedeat
hof
t
hei
rfounder
s.Ver
yfewent
repr
eneur
shavet
heoppor
tuni
tyt
opas
sont
hei
rent
erpr
ises
t
onew gener
ati
onsandwat
chf
rom t
hes
ideast
heent
erpr
isesc
ont
inuet
opr
osper
.
Mor
eover
,manyf
irmsar
eknownt
ochangebus
ines
sordi
ver
sif
yver
yfas
tbef
oregai
ning
t
her
equi
redexper
ienc
e.Lac
kofc
ont
inui
tyaf
fec
tst
hel
ear
ningc
ycl
eoft
hef
irm andt
he
ent
repr
eneur
.Thi
sal
sonegat
ivel
yaf
fec
tst
hel
ong t
erm c
ompet
iti
venes
soft
hes
e

65
ent
erpr
ises
.

Car
eerdependenc
y:Sout
hSudanes
pec
ial
lyt
heeduc
atedhavel
ongbeendependenton
t
hei
rcar
eer
sto pr
ovi
de f
ort
hei
rli
vel
ihood.Ent
repr
eneur
shi
p hasf
orl
ong been
r
egar
dedasal
astr
esor
tef
for
tmai
nlyr
eser
vedf
ort
heunder
-educ
ated.Al
thought
his
mi
nds
eti
srapi
dlyc
hangi
ng,i
tsef
fec
tiss
til
labi
gbar
riert
oent
repr
eneur
shi
pinSout
h
Sudan.

8.
2Bar
rier
sar
isi
ngf
romt
heenvi
ronment
The envi
ronment al
so pr
esent
s numer
ous bar
rier
sto pr
act
ici
ng and pr
ospec
tive
ent
repr
eneur
sinSout
hSudan.
Someoft
hes
ebar
rier
sar
edi
scus
sedbel
ow:

8.
2.1Thepol
it
ico-
legalenvi
ronment
Pol
it
icali
nst
abi
li
ty:Pol
it
icali
nst
abi
li
tyhasaf
fec
teddi
ff
erentar
easofSout
hSudanf
or
manyyear
s.Thi
sst
ateofaf
fai
rshasr
obbedSout
hSudanofmanyent
repr
eneur
s,and
manymor
eent
repr
eneur
shavel
ostl
if
eti
mes
avi
ngsandbus
ines
sas
set
s,whi
leot
her
s
havebeenf
orc
edbyi
nst
abi
li
tyt
ocl
ose.Thi
saf
fec
tsc
ont
inui
tyandexper
ienc
eand
r
esour
ceac
cumul
ati
ont
hati
ses
sent
iali
ntoday
‘sc
ompet
iti
veenvi
ronment
.

Bus
ines
sadmi
nis
trat
ive pr
ocedur
es:I
n many c
ases
,the bus
ines
senvi
ronmenti
s
domi
nat
edbyc
ompl
exandbur
dens
omer
egul
ati
ons
,favour
iti
sm,c
orr
upt
ion,andweak
enf
orc
ementmec
hani
sms
.Asar
esul
t,bus
ines
sesar
efor
cedi
ntot
hei
nfor
malec
onomy
andyets
uchc
ount
riesar
eunabl
etoat
trac
tinves
tment
.Par
tic
ipat
ionoft
hepr
ivat
e
s
ect
ori
nthedec
isi
onmaki
ngpr
oces
sisal
sol
imi
ted.i
ii
)Gover
nmentec
onomi
cpol
icy:
Thef
ormul
ati
onanddel
iver
yofbus
ines
spol
icyi
sbas
edonanar
row c
onc
ept
ionof
c
onvent
ionalbi
g bus
ines
ses and a c
ons
equentl
ack ofs
pec
ifi
c at
tent
ion t
othe
c
irc
ums
tanc
esandneedsofent
repr
eneur
s.Mor
eover
,themaj
ori
tyofgover
nment
‘s
monet
aryandf
isc
alpol
ici
esar
eai
medatpl
eas
ingt
hedonoragenc
iesandmul
ti
lat
eral
f
inanc
iali
nst
itut
ions
,many t
imes at t
he expens
e of bus
ines
sin gener
aland
ent
repr
eneur
sinpar
tic
ular
.

I
nsens
iti
ve Gover
nment I
nst
itut
ions and depar
tment
s: Ent
repr
eneur
s bl
ame

66
gover
nment i
nst
itut
ions and depar
tment
s of havi
ng l
it
tle appr
eci
ati
on and
under
standi
ng of t
he i
mpor
tanc
e of bus
ines
s and bus
ines
sfor
mat
ion among
ent
repr
eneur
s.Thi
sli
mit
sent
repr
eneur
‘sac
ces
stot
hes
eins
tit
uti
onsass
uppor
t
mec
hani
smsorpot
ent
ialc
lient
s.

Exc
ess
ive,
Compl
exandAr
bit
rar
ytaxat
ion:t
het
axs
yst
emi
nSout
hSudani
scompl
icat
ed
vol
umi
nous
,conf
usi
ng,c
hangesr
api
dlyandi
nmos
tcas
esbeyondt
heunder
standi
ngof
t
heent
repr
eneur
.Thet
axadmi
nis
trat
ioni
sar
bit
rar
yandmanyt
imesmi
sunder
stood,
r
esul
ti
ngi
nadhoct
axadmi
nis
trat
ives
olut
ionswhi
chf
ost
err
ampantc
orr
upt
ion.Ver
y
hi
ght
axesal
sos
ervet
odi
scour
agepot
ent
ialent
repr
eneur
s.

8.
2.2Ec
onomi
cenvi
ronment
:
Lac
kofac
ces
stof
inanc
e:TheBanki
ngs
yst
em andpr
act
icesi
nSout
hSudani
mpos
e
i
mpos
sibl
edemandsonent
repr
eneur
s.Bankshavel
it
tlei
ncent
ivet
oext
endc
redi
t.The
t
ermsofc
redi
tar
eunr
eas
onabl
e,r
equi
ri
ngdi
ff
icul
tcol
lat
eral(
sec
uri
ty)andguar
ant
ee
t
osec
uret
hel
oan.Bor
rower
sdef
aul
tont
hei
rloans
,res
ult
ingi
nhi
ghi
nter
estr
ates
whi
char
eaver
yheavybur
dent
owoul
dbeent
repr
eneur
s.Addi
ti
onalbur
densi
ncl
ude
unr
eas
onabl
e demands f
or audi
ts,i
nspec
tions
, and doc
ument
ati
on and t
he
i
ncompet
enc
eandi
nsens
iti
vit
yofs
omebanki
ngs
taf
f.

Lowpur
chas
ingpower
:Lowi
ncomesandahi
ghr
ateofunempl
oymentl
imi
tthepur
chas
ing
powerofar
elat
ivel
ysmal
lSout
hSudanpopul
ati
on.Thi
smakesi
thar
dforbus
ines
sesi
n
gener
aland ent
repr
eneur
sin par
tic
ulart
o ac
qui
ret
he nec
ess
ary ec
onomi
esofs
cal
e
(
advant
agesgotasabus
ines
sexpands
).

Poori
nfr
ast
ruc
tur
e:Sout
hSudani
sst
il
lfac
edwi
thaver
ypoorphys
icalands
oci
al
i
nfr
ast
ruc
tur
eint
ermsofr
oads
,el
ect
ric
ity,
wat
er;br
idges
,sc
hool
sandhos
pit
als
.Thes
e
hi
nderbus
ines
sdevel
opmenti
nmanypar
tsoft
hec
ount
ry,
andac
tasabar
riert
omany
par
tsoft
hec
ount
ry Ec
onomi
cins
tabi
li
ty:Duet
ooverr
eli
anc
eondonoras
sis
tanc
e,
bor
rowi
ng,andoverr
eli
anc
eoni
mpor
ts;t
heSout
hSudanec
onomyi
sver
yfr
agi
leand
eas
ilydes
tabi
li
zedbyanys
mal
lshoc
ksi
nthei
nter
nat
ionalec
onomy
.

8.
2.3Soc
ialbar
rier
stoent
repr
eneur
shi
p
The s
oci
alenvi
ronment may al
so have c
ert
ain as
pec
tst
hat ac
t as hi
ndr
anc
es t
o

67
ent
repr
eneur
shi
p.Suc
hhi
ndr
anc
esi
ncl
udet
hef
oll
owi
ng:

• Ther
eisl
ackofadequat
esoc
ials
uppor
tgr
oupst
osuppor
ttheent
repr
eneur
sand
i
nnovat
orswhowantt
ost
artbus
ines
sent
erpr
ises
.

• Manys
oci
o-c
ult
ures
ett
ingsgets
tuc
kint
het
radi
ti
onalwaysandnor
ms.They
ar
enotwi
ll
ingt
ochanget
hes
enor
ms.Thi
ssi
tuat
iondi
scour
agespeopl
efr
om
t
ryi
ng anyt
hing new and ac
ts as a bar
rier t
ocr
eat
ivi
ty,i
nnovat
ion and
ent
repr
eneur
shi
p.

• I
nmanyofourc
ommuni
ti
es,t
her
eisas
tigma(
fear
)at
tac
hedt
ofai
lur
e.Peopl
e
l
ookdownuponf
ail
edat
tempt
s,pr
efer
ringc
opyi
ngt
hos
epeopl
ethatdonott
ry
at al
l.The s
tigma at
tac
hed t
ofai
lur
e di
scour
ages exper
iment
ati
on and
ent
repr
eneur
shi
p.

8.
3Bar
rier
sar
isi
ngf
romt
heempl
oyi
ngf
ir
m
Ther
ear
eal
soi
ssuesi
nter
nalt
otheor
gani
zat
ionst
hats
ervet
obl
ockent
repr
eneur
ial
t
endenc
ieswi
thi
nthef
ir
ms.Whenent
repr
eneur
shi
pwi
thi
nthef
irmsi
sobs
truc
ted,i
t
hasanegat
iveef
fec
tont
hegener
all
evelofent
repr
eneur
shi
pwi
thi
nthec
ommuni
ty.
Bar
rier
swi
thi
nthef
irmsi
ncl
ude:

• Toomuc
hbur
eauc
rac
y(whendec
isi
onsar
emademai
nlybyt
het
opof
fi
ci
als
)es
pec
ial
ly
i
nlar
geor
gani
zat
ions
.

• Wher
ether
eisi
nadequat
ecommuni
cat
ionandc
ons
ult
ati
ones
pec
ial
lywi
thi
nthel
arge
or
gani
zat
ion.

• Wheret
herei
sreluc
tancet
ochangewit
hint
heor
gani
zat
ion.
• St
rongandstr
ictpunis
hmentsfort
hosewhomakemi st
akesandt
hos
ewhodi
ver
t
f
rom t
heac
cept
ednor
msc
reat
eanaver
siont
ori
skandf
ail
ure.Peopl
ebec
omeaf
rai
d
t
omakebol
ddec
isi
onsands
tandoutf
romt
hec
rowd.
Empl
oyeesf
eart
hatt
heywi
llbe
bl
amedi
fthi
ngsgowr
ongandt
hati
tisbet
tert
okeept
hei
rheadsdown.

• Lac
kofr
esour
ces
• Poor and i
nequi
tabl
e r
ewar
d f
or ent
repr
eneur
ial ef
for
ttends t
o ki
llt
he
ent
repr
eneur
shi
pspi
ri
t.

68
9.
0ABUSI
NESSPLAN
• Abus
ines
spl
ani
sanes
sent
ialwr
itt
endoc
umentt
hatpr
ovi
desades
cri
pti
onand
over
viewofyourbus
ines
s’sf
utur
e.

• Al
lbus
ines
sess
houl
dhaveabus
ines
spl
an.
• Thepl
ans
houl
dexpl
ainyourbus
ines
sst
rat
egyandyourkeygoal
stogetf
romwher
e
youar
enowt
owher
eyouwantt
obei
nthef
utur
e.

I
mpor
tanc
eofabus
ines
spl
ant
oanent
repr
eneur
1.
Tar
getYourPr
obl
ems

Thei
mpor
tanc
eofabus
ines
spl
ant
oanent
repr
eneurbegi
nsbyhel
pingyout
oident
if
yyour
pos
sibl
epr
obl
emsandc
hal
lenges
.

I
t'
sonet
hingt
oai
mforagoalofbei
ngpr
ofi
tabl
eint
hef
irs
tyearofoper
ati
on,buthowwi
ll
youac
hievet
hat
?Abus
ines
spl
anf
orc
esyout
ogetr
eal
ist
icandl
ookatyournumber
s.

Thi
sdoc
umentof
tenhel
pspeopl
etos
eewher
ethei
rrealc
hal
lengesandobs
tac
lesl
ie,
maki
ngf
oramor
epr
agmat
icappr
oac
hast
hehar
dfac
tsmaket
hei
rwayi
ntot
hepl
an.

2.
GetBet
terAdvi
ce

Thei
mpor
tanc
eofabus
ines
spl
ant
oent
repr
eneur
shi
pcanal
sobei
nthewayi
tcr
yst
all
izes
j
ustwhatki
ndofhel
pyouneed.

Showi
ngabus
ines
spl
ant
hatout
li
nest
heexac
tdut
ies
,sal
ari
es,andexpec
tat
ionsyouhave
f
orempl
oyeesgi
vesf
armor
einf
ormat
ionf
orpeopl
etopr
ovi
deadvi
ceabout

3.
Organi
zeYourRes
our
ces
Abusi
nesspl
anisal
soess
ent
ialast
hepr
imar
ygui
def
orhowyouwi
lls
truc
tur
eandal
loc
ate
yourr
esour
ces
.

I
t'
sher
ethatyouwi
lls
eej
usthowf
eas
ibl
eiti
stoopenanof
fi
ce,
hir
eempl
oyees
,andl
ookat
oper
ati
ngc
ost
s.

4.
ToGi
veYourNewBus
ines
stheBes
tChanc
eofSuc
ces
s
Wr
iti
ngabus
ines
spl
anwi
llens
uret
hatyoupayat
tent
iont
othebr
oadoper
ati
onaland

69
f
inanc
ialobj
ect
ivesofyournewbus
ines
sandt
hes
mal
ldet
ail
s,s
uchasbudget
ingand
mar
ketpl
anni
ng.Thepr
oces
swi
llul
ti
mat
elymakef
oras
moot
hers
tar
tupper
iodand
f
ewerunf
ores
eenpr
obl
emsasyourbus
ines
sget
supandr
unni
ng.

5.
ToAt
trac
tInves
tor
s
Whet
heryouwantt
oshopyourbus
ines
stovent
urec
api
tal
ist
sorat
trac
tangeli
nves
tor
s,
youneedt
ohaveas
oli
dbus
ines
spl
an.

Apr
esent
ati
onmaypi
quet
hei
rint
eres
t,butt
hey'
llneedawel
l-wr
itt
endoc
umentt
heyc
an
s
tudybef
oret
hey'
llbepr
epar
edt
omakeanyi
nves
tmentc
ommi
tment
.

6.
It’
sas
oli
dfoundat
ionf
ors
trat
egi
cpl
anni
ng,
pri
ori
ti
zat
ion
Yourbus
ines
spl
ani
sagr
eatpl
acet
omaphow yours
alesandr
evenuegoal
sfi
twi
thyour
expens
ebudget
.

Dr
awi
ngac
learc
onnec
tionbet
weenwhatyou’
rei
nves
tingi
nandt
her
esul
tsyouhopet
o
ac
hievewi
llhel
pyoumakes
uret
hatyou’
res
ett
ingyour
sel
fupf
ors
ucc
ess
.

9.
2Component
sofabus
ines
spl
an

1.Exec
uti
ves
ummar
y

Theexec
uti
ves
ummar
yist
hef
ir
standoneoft
hemos
tcr
iti
calpar
tsofabus
ines
spl
an.
Thi
ssummar
ypr
ovi
desanover
viewoft
hebus
ines
spl
anasawhol
eandhi
ghl
ight
swhat
t
hebus
ines
spl
anwi
llc
over
.It
'sof
tenbes
ttowr
itet
heexec
uti
ves
ummar
ylas
tsot
hat
youhaveac
ompl
eteunder
standi
ngofyourpl
anandc
anef
fec
tivel
ysummar
izei
t.
Yourexec
uti
ves
ummar
yshoul
dinc
ludeyouror
gani
zat
ion'
smi
ssi
ons
tat
ementandt
he
pr
oduc
tsands
ervi
cesy
oupl
ant
oof
ferorc
urr
ent
lyof
fer
.Youmayal
sowantt
oinc
lude
whyyouar
est
art
ingt
hec
ompanyi
fthebus
ines
spl
ani
sforanewor
gani
zat
ion.

2.Bus
ines
sdes
cri
pti
on

Thenextpar
tofabus
ines
spl
ani
sthebus
ines
sdes
cri
pti
on.Thi
scomponentpr
ovi
desa
c
ompr
ehens
ivedes
cri
pti
onofyourbus
ines
sandi
tsgoal
s,pr
oduc
ts,s
ervi
cesandt
arget
c
ust
omerbas
e.Yous
houl
dal
soi
ncl
udedet
ail
sregar
dingt
hei
ndus
tryyourc
ompanywi
ll

70
s
erve,
andanyt
rendsandmaj
orc
ompet
itor
swi
thi
nthei
ndus
try.
Yous
houl
dal
soi
ncl
ude
youandyourt
eam'
sexper
ienc
eint
hei
ndus
tryandwhats
etsyourc
ompanyapar
tfr
om
t
hec
ompet
iti
oni
nyourbus
ines
sdes
cri
pti
on.

3.Pr
oduc
tsands
ervi
cesdes
cri
pti
on

Usethi
ssecti
ontofurtherexpandonthedetai
lsofthepr
oductsandservi
cesyour
companyoff
ersthatyouc over
edintheexecut
ivesummary.I
ncludeal
lrelevant
i
nformati
onaboutyourpr oduct
sandservi
cessuchashowyouwi l
lmanufacturethem,
howlongtheywilll
ast,whatneedstheywil
lmeetandhowmuc hitwi
llcosttocr
eate
them.

4.Loc
ati
onoft
hebus
ines
s

Thi
ssect
ionl
ooksatc
reat
inganunderst
andi
ngofhowyourbusi
nes
swi
llbepos
iti
onedand
whyyou’
rechoos
ingt
hatarea.
Theloc
ations
houl
dbestrat
egic
.

5.Mar
ketanal
ysi
sands
trat
egy

Thepurpos
eoft hemarketanal
ysisandst
rategycomponentofabus
inesspl
anisto
res
earchandidenti
fyacompany'spri
marytargetaudi
enceandwheretofi
ndthi
saudi
enc
e.
Fact
orstocoverint
hissect
ioni
nc l
ude:

• Wher eyourtargetmar ketisgeogr

aphicall
yloc ated
• Thepr i
marypainpoi nt
sexper i
encedbyyourt ar getcust
omers
• Themos tpromi nentneedsofyourtargetmar ketandhowyourpr oductsorser
vic
es
canmeett heseneeds
• Thedemogr aphi c
sofyourt ar
getaudi
enc e
• Wh ereyourtargetmar ketspendsmos toftheirt i
me,suchaspar
tic
ularsoci
almedia
platf
ormsandphys i
callocati
ons

Thegoalofthiss
ecti
onistocl
ear
lydef
ineyourt
argetaudi
encesothatyouc
anmake
str
ategicest
imati
onsastohowyourpr
oductorser
vicewil
lperf
ormwi t
hthi
saudi
enc
e.
6.Mar keti
ngandsalespl
an

Thi
spartofyourbus
inesspl
anshoul
dcovert
hes pec
ifi
csofhowyoupl
ant
omar
ketand
sel
lyourproduct
sandservi
ces
.Thi
ssect
ionshouldi
nclude:

• Youranti
c i
patedmarketingandpr omotions t
rat
egies
• Pri
ci
ngpl ansforyourcompany '
spr oductsandservi
ces
• Yourstr
ategiesformakings al
es
• Whyyourt argetaudi
ences houldpurchasefromyourc ompanyver
susyour
competi
tion

71
 • Youror
gani
zat
ion'
suniquesel
li
ngpr
oposal
• Howyouwil
lgetyourproduct
sands
ervi
cesinf
rontofyourt
argetaudi
enc
e

7.Compet
iti
veanal
ysi
s

Yourbusinessplans houl
dal soincl
udeadet ai
ledcompet it
iveanalysi
sthatcl
early
outl
inesac ompar i
sonofyouror ganizati
ont oyourcompet itor
s.Outli
neyourcompet itor
s'
weaknessesands trengthsandhowyouant ici
pateyourc ompanyt ocomparetothes e.
Thi
ss ec
tions houl
dal soincludeanyadvant agesyourc ompet i
ti
onhasinthemar ketplace
andhowyoupl antos etyourc ompanyapar t.Youshoul dalsocoverwhatmakesyour
busi
nessdifferentthanot hercompani esi
nt heindust
r y,aswellasanypotenti
alissues
youmayf acewhenent eringthemar ketplaceifappl
icable.

8.Managementandor
gani
zat
iondes
cri
pti
on

Thi
ssecti
onofyourbusinessplans houldcoverthedetai
lsofyourbusiness'
s
managementandor ganiz
at i
ons t
rategy.I
ntroduceyourcompanyleader sandthei
r
quali
fi
cat
ionsandresponsibi
lit
ieswithinyourbusines
s.Youcanalsoincludehuman
res
ourcesrequi
rementsandt helegalstruct
ureofyourc ompany.

9.Fi
nanc
ialpl
anandpr
ojec
tion

Thef i
nanc
ialsect
ionofyourbusi
nesspl
anshoulddetai
lhowyouant ic
ipat
ebri
ngi
ngin
revenueandt hef
undingyou'l
lneedtogetst
art
ed.Youshoul
di ncl
udeyourfi
nanc
ial
statements,
ananalysi
softhesestat
ementsandacashflowprojec
tion.

10.
Oper
ati
ngpl
an

Thi
spartofyourbusines
splanshoul
ddes c
r i
behowyouplantorunyourc ompany.Incl
ude
inf
ormati
onregardinghowandwher eyourcompanywilloper
ate,howmanyempl oyeesi
t
wil
lhaveandallotherpert
inentdet
ail
srelatedt
oyourorgani
zati
on'soperat
ions
.

12.
Exhi
bit
sandappendi
ces

Thefinalsect
ionofyourbusinessplanshoul
dincludeanyextr
ainformationt ofurt
her
supportthedetail
soutli
nedinyourpl an.
Youcanal s
oincl
udeexhibitsandappendi cest
o
supporttheviabi
li
tyofyourbus i
nessplanandgiveinves
torsaclearunderstandingof
theresearchthatbacksyourplan.Commoni nf
ormat i
ontoputinthissecti
oni ncl
udes:

• Resumesofc ompanymanagementandothers
takehol
der
s
• Mar keti
ngresearch
• Permi t
s
• Proposedorc urr
entmarketi
ngmat
eri
als
• Relevantlegaldocumentat
ion

72
 • Pi
ctur
esofyourproduc
t
• Fi
nanci
aldocuments

Coursework:Asanent
repr
eneur
shi
pst
udent
,ident
if
yanybus
ines
sideaanddevel
opa
bus
inesspl
anf ori
t.

Not
e:Cons
idert
hebas
icc
omponent
sofabus
ines
sPl
an

73