Faculty of Engineering & Technology

Manav Rachna International Institute of

Research & Studies
Deemed to be University (NAAC Accredited ‘A’
Grade University

Subject: Entrepreneurship Development

Subject Code: COM-O306
Academic Session: January- July 2019
 COM-O306: Entrepreneurship Development
  Module 1: Starting the Journey
•Introduction to entrepreneurship;
•Different forms of business;
•Generating new business ideas;
•The process of product development;
•Crafting value proposition and reaching out to prospective customers
Module 2: Market Analysis
•Fundamentals of Market Research;
•Scanning Business Environment
•Industry and competitor analysis;
•Demand estimation and forecasting.
Module 3: Setting the Business Model
•Technical feasibility and financial viability analysis;
•Assessing and incorporating risk in startups;
•Drawing a business plan and preparing a project report;
•Legal aspects of business.
 COM-O306: Entrepreneurship Development
  Module 4: Management
•The basic process of Management;
•Manpower planning and staffing decisions
•Building and managing teams
•Business leadership and Control
Module 5: Finance
•Alternative sources of finance
•Arranging seed money for new ventures;
•Obtaining equity funding from business angels/venture capitalists;
•Arranging debt finance
Our future
is in our
hands…..

Let’s keep
it safe…..
 Learning Objectives
Who is an entrepreneur?
Characteristics of an entrepreneur
Working profile of an entrepreneur
Functions of an entrepreneur
Planning to be an entrepreneur
Growth pressures, managing a family business, and corporate
entrepreneurship

“There is nothing so useless as doing efficiently that which should

not be done at all.” …………..Peter
………….. F. Drucker
 Entrepreneurship
“Don’t be afraid to take your time to learn. Its good to work for others. I worked for
others for 20 years. They paid me to learn.” Vera Wang
Question is
Why Today
every one is
talking about
Entrepreneurs
hip
ANSWER IS UNEMPLOYMENT
The total population in the world is 7.4

billion.

1 in 6 of us is unemployed.

4 billion of us, live on less than$ 10 a day.

3 billion of us, live on less than$ 2.50 a day.

ANSWER IS UNEMPLOYMENT
• As of 2014, 58% of the total population

were living on less than $3.10 per day.

• It is quite impossible for any government to

provide jobs for their livelihood.

• In such a situation there is a demand from

the society where the people are

encouraged for the entrepreneurship
Think
10th pass - 10 years

12th pass - 12 years

Graduate - 15 years

Post Graduate - 17 years

Advertisement and Intensive campaigns
Mind set of the society should be Changed

Students

Family

School / Colleges / Institutes / University

Society
RECOGNITION IN SOCIETY
Society should accept the entrepreneurship as

career opportunities like other Doctor,

Engineer, CA and Banker etc.

Social recognition and reward should be more

and more for innovative activities.

Synergy is Needed
In this social cause a single agency can
never make the programme successful
unless the other government and other
development agency come forward with
helping hands.
The only we can promote entrepreneurship
and aware the students about
entrepreneurial opportunities.
 Entrepreneurship...
...tons & tons of definitions

Schumpeterian distinguish between “replicative entrepreneurs”

(who set up small businesses much like other small businesses) and
“innovative entrepreneurs” (who upset and dis-organise the
existing way of doing things).

He also distinguish between “small businesses” and “high-growth

businesses”.

Both sorts have an important role in a successful economy.

“Innovative entrepreneurs” typically focus on
the 4 basic principles of value creation & market
disruption…

Untapped Markets Crashing Costs

Disintermediation Intermediation
 TRAVEL GLOBAL CUSTOMERS

SOCIAL & GAMING

LISTINGS B2B SERVICES/ SME MARKETS

MOBILE

ECOMMERCE / RETAIL
AD TECH / MEDIA
 Introduction
Entrepreneurship is a dynamic process of vision, change
and creation. 
Vision is to recognize the opportunity where others see
chaos, contradiction and confusion.

It requires an application of energy and passion towards

the creation and implementation of new ideas and
creative solutions. 

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 Vision

Change Creation

ENTREPRENEURSHIP

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 Essential Ingredients
The willingness to take calculated risks- in terms
of time, equity, or career;
The ability to formulate an effective venture team;

The creative skill to marshall needed resources;

The fundamental skills of building a solid business

plan, and
Finally, the vision to recognize opportunity.

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 Concept of Entrepreneurship

Entrepreneur Entrepreneurship Enterprise

Person Process of Action Object

 What is Entrepreneurship?
 Entrepreneurs are …
Founders of businesses that become large-
scale enterprises.
People who:
Buy a local franchise outlet
Open a small retail shop
Operate a self-employed service business
People who introduce a new product or
operational change in an existing organization.
The basic concept involves three basic elements:

Entrepreneur: An Entrepreneur is someone who

perceives an opportunity and creates an organization to
pursue it.
Entrepreneurship: The capacity & willingness to
develop, organize & manage a business venture along with
any of its risks in order to make a profit.
Enterprise: It is an unit/organization which deals with
some Value Addition Process (like Manufacturing/Service
etc.)
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 Reasons for Growth of Entrepreneurship
New technologies Easier access to resources
Deregulation and privatization Entrepreneurial education

Formation of new business Return on innovation

communities Self-employment is highly
Increasing demand for variety valued
Rising dissatisfaction at job
Government incentives and
subsidies
Increasing flow of information
 Why Entrepreneurship is required
Development of Managerial Capabilities
The biggest significance of Entrepreneurship lies in
the fact that it helps in identifying and developing
managerial capabilities of entrepreneurs.
An Entrepreneur studies a problem, identifies its
alternatives, compares the alternatives in terms of cost
and benefits implications, and finally chooses the best
alternative.

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 Importance of Entrepreneurship
Continued..
Creation of Organizations
Entrepreneurship results into creation of organizations when
entrepreneurs assemble and coordinate physical, human and
financial resources and direct them towards achievement of
objectives through managerial skills.

Improving standards of living

By creating productive organizations, Entrepreneurship
helps in making a wide variety of goods and services
available to the society which results into higher standards
of living for the people.
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 Entrepreneurial Process
Entrepreneurship is a process, a journey, not the
destination; a means, not an end.

All the successful entrepreneurs like Bill Gates

(Microsoft), Warren Buffet (Hathaway), Gordon
Moore (Intel) Steve Jobs (Apple Computers), Jack
Welch (GE) GD Birla, Jamshedji Tata and others all
went through this process.

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 The Entrepreneurial Process
1. Deciding to become an
entrepreneur
2. Developing successful business
ideas
- Recognizing opportunities
and generating ideas
- Feasibility analysis
- Writing a business plan
- Industry and competitor
analysis
- Developing an effective
business model
3. Moving from an idea to an
entrepreneurial firm
-Preparing the proper ethical
and legal foundation
-Assessing a new venture's
financial strength and viability
-Building a new venture team
-Getting funding
4. Managing and growing the
entrepreneurial firm
-Marketing Issues
-Importance of intellectual property
-Preparing for and evaluating of
growth
-Strategies for firm growth
 Entrepreneurial Process
IDEA GENERATION Germination Preparation

Incubation

FEASIBILITY
STUDY

Illumination Verification

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 Entrepreneurial Process
IDEA GENERATION
To generate an idea, the entrepreneurial process has to pass
through three stages:

Germination
This is like seeding process, not like planting seed. It is
more like the natural seeding. Most creative ideas can be
linked to an individual’s interest or curiosity about a
specific problem or area of study.

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 Entrepreneurial Process
Preparation
Once the seed of interest curiosity has taken the shape of a
focused idea, creative people start a search for answers to
the problems.

Incubation
This is a stage where the entrepreneurial process enters the
sub­conscious intellectualization. The sub-conscious mind
joins the unrelated ideas so as to find a resolution.

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 Entrepreneurial Process
FEASIBILITY STUDY
Feasibility study is done to see if the idea can be
commercially viable.
It passes through two steps:

Illumination
After the generation of idea, this is the stage when the idea
is thought of as a realistic creation. The stage of idea
blossoming is critical because ideas by themselves have no
meaning.

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 Entrepreneurial Process
Verification
This is the last thing to verify the idea as realistic and
useful for application. Verification is concerned about
practicality to implement an idea and explore its
usefulness to the society and the entrepreneur.

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FACTORS AFFECTING ENTREPRENEURSHIP
PERSONALITY ENVIRONMENTAL
FACTORS FACTORS
Initiative • Political Climate
Proactive • Legal System
Perseverance • Economic and Social Conditions
Problem-solver • Market Situations
Persuasion • Frequent Political Protests
Self-confidence • Strikes
Self-critical • Hinder Economic Activity
A Planner • Unfair Trade Practices
Risk-taker • Irrational Monetary and Fiscal
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Policies
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Impact of Entrepreneurial Firms
 Job Creation
 Economic growth
 New Technology
 Serving small markets

Why Start a Business?

Control
The idea
Flexibility
Money
Difference between Entrepreneurship and Entrepreneurs
 Entrepreneurship
Strategic thinking and risk-taking Entrepreneurs
behavior that results in the creation Risk-taking individuals
of new opportunities for individuals who take actions to pursue
and/or organizations. opportunities and
A process by which individuals situations others may fail
pursue opportunities without regard to recognize or may view
to resources they currently control as problems or threats.
The Entrepreneur: entreprende, which means – ‘to
undertake’
Webster dictionary – one who organizes, manages and assumes the risks of
a business or enterprise
Richard Cantillion – an entrepreneur is someone who takes the risk of
running an enterprise by paying a certain price for securing and using
resources to make a product and reselling the product for an uncertain
price.
Joseph Schumpeter - an innovator playing the role of a dynamic
businessman adding material growth to economic development
Timmons - Entrepreneurship is the process of creating or seizing an
opportunity and pursuing it regardless of the resources currently controlled
 Who is an Entrepreneur?
 The word ‘Entrepreneur' is derived from the French word
‘Entreprendre’ which means ‘to undertake’.

In the early 16th century the French men who organized and
led military expeditions were referred to as ‘Entrepreneur'.

After 1700, the term was applied to other types of

adventures, mainly civil engineering like constructions of
roads etc.

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 Who is an Entrepreneur?

Entrepreneur: A person who organizes and

manages an enterprise, especially a business, usually
with considerable initiative and risk.
 Initiative: Readiness and ability in initiating action.
 Risk: The hazard or chance of loss.

 “An Entrepreneur is someone who perceives an

opportunity and creates an organization to pursue it.“

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 Functions of an Entrepreneur
Go against the crowd………

FUNCTIONS
1.Innovations: J. Schumpeter has made substantial contribution to
the literature of entrepreneurship. The process of innovations may
be in the form of:
a)Introduction of a new product.
b)Use of new methods of production.
c)Opening of a new market.
d)The conquest of new source of supply of raw material.
e)A new form of organization.
 

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2. Risk-Taking: An entrepreneur is buy the product/services at
certain prices and sells them at uncertain prices.

The entrepreneur performs the function of reducing uncertainty in

his plan of investment and expansion of the enterprise.

3. Organization and Management: When an organization grows

bigger, the entrepreneur effectively delegates authority and finds
responsibility at various levels of management. The network of
decision making becomes more complex.

The functions of organization and management includes:

a)Planning of an enterprise,
b)Co-ordination, administration and control,
c)Routine type of supervision.
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 4. Decision Making: Entrepreneur as a decision maker describes
the following functions of an entrepreneur.
a)The determination of objectives of an enterprise and the change
of those objectives as conditions required or made advantageous,
b)The development of an organization including efficient relations
with subordinates and all employees,
c)Securing adequate financial resources, the relations with existing
and potential Investors,
d)The acquisition of efficient technological equipment and the
revision of it as new machinery appears,
e)The development of a market for the products and the devising
of new products to meet or anticipate consumer’s demand,
f)The maintenance of good relations with public authorities and
with society at large.

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 Entrepreneurial
Sr. Characteristics Question that need to be addressed
No. Characteristics
1 Need to Achieve Do you have strong desire to be winner?
2 Pursuance Do you have quality to stick with the
goals?
3 Moderate Risk-Taker Do you have moderate view of risky
situation?
4 Ability to spot & Are you alert for opportunities?
explore Opportunity Does you possess the ability to convert
(Opportunity Obsession) the opportunities in advantages?

5 Analytical Availability Do you have any personal bias while

analyzing the situation with data?
6 Utilizing Feedback Do you think, is it important to know
Department of M.E./ F.E.T./ Manav Rachna
44 Mechanism
International (Peer View)
University/ Faridabadwhat you doing?
 Entrepreneurial Characteristics Continued
Sr. Characteristics Question that need to be addressed
No.
7 Facing Uncertainty Does you welcome to tackle the unfair
situations?
8 Urge for Independence Do you have dislike for working for
others?
9 Flexible Are you flexible in decision?
10 Planner Do you think ahead, plan your future &
work?
11 Entrepreneurial Skill Are you comfortable at dealing with
people at all levels?
12 Motivation to excel Are you able to influence others?

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 Entrepreneurial Characteristics Continued
Sr. Characteristics Question that need to be addressed
No.
13 Stress Taker Do you think, you can work for long
hours?
14 Self Confident Are you aware of yourself?
15 Future Orientation Do you tend to think ahead?
16 Decision Making Do you believe in quick decision making?
17 Physical Fit Are you physically fit for the work?
18 Innovative
19 Leadership Do you like to lead the mob?
20 Technology Savvy Are you comfortable with technology
(Technically Competent) driven activities?

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 Entrepreneurial Characteristics
1. Commitment and determination;
2. Tolerance of risk, ambiguity and uncertainty;
3. Creativity, self-reliance and ability to adapt; and
4. Creative
5. Achievement Motivated
6. Socially Responsible
7. Optimistic
8. Equipped with Capability to drive
9. Blessed with Mental Ability
10. Human Relations Ability
11. Communication Ability
12. Visionary
 Personal traits and characteristics
of entrepreneurs.

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Entrepreneurial Skills
Creativity and Opportunity Evaluation
Real-time Strategy and Decision Making
Comfort with Change and Chaos
Teamwork
Evangelism, Selling, Negotiation, and Motivation through
Influence and Persuasion
Oral and Written Communication
Basics of Start-Up Finance, Accounting and Law
Entrepreneurial Attitudes
 Comfortable with lifestyle changes
 Willingness to break / bend / stretch laws
 Patience to start small
 Prepared to make enemies
 Comfort with confrontations
 Dealing with failure
 Willingness to learn
 WORKING PROFILE OF ENTREPRENEUR
Characteristics Traits
• Self-confidence
• Confidence, Independence, Optimism,
Individuality.
• Drive • Responsibility,Vigour, Initiative,
persistence, Ambition.
• Need for achievement, Profit-oriented,
• Task-result oriented Energy.
• Risk-taker • Risk taking ability, Likes challenges.
• Mental Ability • Overall intelligence(IQ),Creative
thinking, Analytical thinking ability.
• Leadership behaviour, Gets alongwith
• Leadership others, Responsive to situations,
• Human Relations Ability Criticism.
• Emotional stability, Healthy personal
relations, Sociability, Tactfulness,
Consideration.
• Originality • Innovative, Creative, Resourceful,
knowledge.
• Communication Ability • Perceptive, Foresight, Future oriented.
Types of Entrepreneurs
1.Based on Timing of Venture Creation:
 Early starters
 Experienced
 Mature

2. Based on business scale

i. Large scale industry entrepreneur
ii. Medium scale industry entrepreneur
iii. Small scale industry entrepreneur
iv. Tiny industry entrepreneur
 3. Based on type of Business
i. Business entrepreneur: Business entrepreneurs are those entrepreneurs
who conceive the idea of a new product or service and then translate their
ideas into reality.
ii. Trading entrepreneur: As the very name indicates trading entrepreneur
is concerned with trading activities and not manufacturing.
iii. Industrial entrepreneur: As the very name indicates, an industrial
entrepreneur is one who sets up an industrial unit.
iv. Corporate entrepreneur: Corporate entrepreneur is the one who plans,
develops and manages a corporate body.
v. Agricultural entrepreneur: Agricultural entrepreneur is the one who is
engaged in the agricultural activities.
4. According to Motivation
i. Pure entrepreneur: Pure entrepreneur is one who may or may not possess an
aptitude for entrepreneurship but is tempted by the monetary rewards or
profits to be earned from the business venture.
ii. Induced entrepreneur: Induced entrepreneur is attracted by the various
incentives, subsidies and facilities offered by the government.
5. According to the Use of Technology
i. Technical entrepreneur: Concentrates more on production than on marketing.
ii. Non-technical entrepreneur: Not concerned with the technical aspect and
spent more time in developing alternative strategies of the marketing and
distribution to promote his business.
iii. Professional entrepreneur: Interested in floating a business but does not want
to manage or operate it.

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6.According to stages of Development
i. First generation entrepreneur: Do not possess any entrepreneurial
background.
ii. Second generation entrepreneur: Inherit the family business firms and
pass it from one generation to another.
iii. Classical entrepreneur: A stereotype entrepreneur whose aim is to
maximize his economic returns at a level consistent with the survival of
the unit but with or without an element of growth.
7 According to Gender and Age
i. Man/Woman entrepreneur
ii. Young entrepreneur
iii. Old entrepreneur
iv. Middle-aged entrepreneur
8. Classification Given by Danhof
i. Innovating entrepreneur: Generally aggressive and possess the art of
cleverly putting the attractive possibilities into practice.
ii. Imitative entrepreneurs: Characterized by readiness to adopt
successful innovations inaugurated by successful innovating
entrepreneurs.
iii. Fabian entrepreneur: Fabian entrepreneurs are cautions and skeptical
in experimenting change in their enterprises. Such entrepreneurs are
shy, lazy and lethargic.
iv. Drone entrepreneur: Drone entrepreneurs are characterized by a
refusal to adopt opportunities to make changes in production
formulae even at the cost of severely reduced returns.
9. According to Capital ownership
i. Private entrepreneur: When an individual or a group of individuals set
up an enterprise, arrange finance, bear the risk and adopt the latest
techniques in the business with the intention to earn profits, he or the
group is called as private entrepreneur/entrepreneurs.
ii. State entrepreneur: As the name indicates, state entrepreneur means the
trading or industrial venture undertaken by the state or the government
itself.
iii. Joint entrepreneur: Joint entrepreneur means the combination of private
entrepreneur and state entrepreneur who join hands.
10. According to Area
i. Urban entrepreneur
ii. Rural entrepreneur
 Reasons for Entrepreneurial Failure
 Lack of experienced management
 Few trained or experienced human resource
 Poor financial management
 Rapid growth
 Lack of business linkages
 Weak marketing efforts
 Lack of information
 Incorrect pricing
 Improper inventory control
 Short term outlook
Eight reasons why many small
businesses fail.
 Tips to Become a Successful Entrepreneur
1. Acquire sufficient and all-round knowledge about an
enterprise you intend to start.

2. Be conservative in calculating income and lavish in

calculating expenditure.

3. Don’t expect quick and easy returns from your venture.

4. Be prepared for delegation of work when needed.

5. Take moderate risks; neither too high nor too low.

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 Tips to Become a Successful
Entrepreneur Continued….
6. Plan systematically and march ahead step by step
according to the plan to achieve your goal.
7. Time management is necessary to maximum
utilization of your resources.
8. Collect maximum information about your
competitor on continuous basis.
9. Don’t avoid or run away from problems.
10. Take the help of experts and experienced persons or
entrepreneur, when in doubt.

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 Some Successful Stories
Age:21
Popular As: Founder and CEO of OYO Rooms
The Journey: Ritesh is known to be one of the youngest
CEO in the Indian hotel industry, besides, he is also the
first resident Indian to be awarded with Thiel Fellowship.
His dream of getting into the entrepreneurial world started
at the tender age of 17. After his 12th standard, he
enrolled in Indian School of Business and Finance, Delhi,
but after a little while, he dropped out of the college to
start his own venture. He formed Oravel Stays at the age
of 18, which eventually led to the creation of OYO
Rooms, the largest network of Indian branded hotels.
Today, his business operates in more than 100 Indian
cities and for the same, he has been presented numerous
awards, one out of which is the ‘Business World Young
Entrepreneur Award’. He is often seen attending various
institutes and entrepreneurial conferences as a guest
speaker.
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 Some Successful Stories
 Name: Arjun Rai
 Age: 22

Popular As: COO of Odyssey Ads

The Journey: When kids’ lives center around toys and
mischief's at 7, this boy started showcasing his
entrepreneur skills. He started his garage sale, and
started selling the gears that he found around his
house. Later, he set up his shop where he sold
wedding leftover wildflower necklaces. By 2010, he
became the COO of an online advertising company,
and later he set up his own venture, odyssey Ads.

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 Some Successful Stories
 Namrata Sharma
 Founder of 3D animation studio Krayon Pictures
 She has over 14 years of experience in the Animation
and Software Industry. Having traveled across Asia,
she has worked with companies like Advedi Creations -
Hong Kong, Disney - Hong Kong, Weta Digital - New
Zealand, Maya Entertainment - Mumbai etc. She has
worked in various roles right from hands on animation
to assists the management of full length animated
feature films.
 It was in 2006 that Sharma started Antariksh, a studio
that developed video games. A year later, she got an
opportunity to produce a full-fledged Bollywood
animation film. And that's how Krayon Pictures was
born on 1st of April 2007 with a vision of creating a first
of its kind 3D animation studio in India- based on the IP
model. 

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 Conclusion
•An Entrepreneur performs various types of functions.
Growth of his enterprise depends upon the way, he
performs various functions like innovation, risk-taking,
decision-making, organization and management.

•In nutshell, Entrepreneurship can be viewed as

recognizing change, pursuing opportunity, taking on risk
and responsibility, innovating, making better use of
resources, creating new value that is meaningful to
customers and doing it all over again and again.
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 Closing Thoughts
“I find that the harder
I work, the more
luck I seem to
have.” Thomas
Jefferson

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 Closing Thoughts
“Whether you think
you can, or that you
can’t, you are
usually right.”
Henry Ford

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 Closing Thoughts
“I have not failed. I
have just found
10,000 ways that
won’t work.”
Thomas Edison

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he reality is not as glamorous.
 Lesson #1

It’s tough long hours & grit.

Its about creating an innovative new business model.

In uncharted territory, mistakes will happen & if you don’t

learn, failure is inevitable.
 Lesson #2

Every start-up begins as a small

business. You need to have the
business skills to make it function at
scale. Execution is the difference
between winning & failing.
To VC or Not to VC?
Moonshot (n):
Awesome, fantastic, almost impossible to
achieve, the best, the reason for success, reaching
the highest point, right on target
a. more acceleration?
b. timing? model?
c. survival rates?
 Lesson #3

Raising funds is not always the

right solution. Raising the stakes
often accelerates failure.

Funds make sense when you need

to accelerate beyond your own
capability, not to dilute your risk!
 A career today is 45 years. Take time to
visualize where you want to be, invest time
to build the skills you need to succeed &
listen for opportunity knocking!
 Always remember that a
career is not your life and
your life is not your career.
thank you & all the best!
Between 2010-2030, India will add 241 Million people in working-age population (and that
means the children who are currently in our education system), Brazil will add around 18
million, while China will add a meager 10 million people during the same time.
Indian Scenario
With One estimate India’s 42 Crore Population is below the age of 20
years.
That means about 1.5 to 2 Crore people will be looking every year for
their career avenues.
Another statistics says that only 30% people coming out from college are
employable.
Big Question

What is a solution to ever increasing population of youths in

India?
By 2015, World Bank estimates that there will be about 3 billion youths
under 25 years old and a big portion of that will be in India.
Today, over 35% of our population is below the age of 20.
By 2020, it is expected that 325 million people in India will reach
working age, which will be the largest in the world.
This will come at a time when the rest of the developed world will be
faced with an ageing population. It is estimated that by 2020, US will be
short of 17 million people of working age, China by 10 million, Japan by
9 million and Russia by 6 million. At the same time, India will have a
surplus of 47 million working people.
This group is healthier, more urbanized, and better educated than
earlier generations.
 Typical entrepreneurial backgrounds and experiences:
Parents were entrepreneurs or self-employed.
Families encouraged responsibility, initiative, and independence.
Have tried more than one business venture.
Have relevant personal or career experience.
Become entrepreneurs between 22 and 45 years of age.
Have strong interests in creative production and enterprise
control.
Seek independence and sense of mastery.

 Reasons for women becoming

entrepreneurs:
Being motivated by a new idea.
Doing for themselves what they were already
doing for other employers.
Seeking a pathway to opportunity.
 Common myths about entrepreneurs:
Entrepreneurs are born, not made.
Entrepreneurs are gamblers.
Money is the key to entrepreneurial success.
You have to be young to be an entrepreneur.
You must have a degree in business to be an entrepreneur.
 Pros & Cons of an Entrepreneur
Pros
You are the boss
All profits are yours
There will be great variety in
roles and tasks
Increases self confidence
Work can be very satisfying
Success will give you immense
satisfaction
Cons
You are alone
All decisions are yours
All losses are yours
Work may not be satisfying
You will need to put in long
hours
Lack of success will effect self
esteem
Exiting the business is difficult
Pressures will affect social and
family life
Successful and Unsuccessful Entrepreneurs
Successful Unsuccessful
Creative and Innovative Poor Managers
Position themselves in Low work ethic
shifting or new markets Inefficient
Create new products
Failure to plan and
Create new processes
Create new delivery prepare
Poor money managers
 Key Personal Attributes
1. Entrepreneurs are Made, Not Born!
 Many of these key attributes are developed early in life, with the family
environment playing an important role
 Entrepreneurs tend to have had self employed parents who tend to support and
encourage independence, achievement, and responsibility
 Firstborns tend to have more entrepreneurial attributes because they receive
more attention, have to forge their own way, thus creating higher self-confidence
2. Need for Achievement
A person’s desire either for excellence or to succeed in competitive situations
 High achievers take responsibility for attaining their goals, set moderately
difficult goals, and want immediate feedback on their performance
Success is measured in terms of what those efforts have accomplished
3. Entrepreneurial Careers
 The idea that entrepreneurial success leads to more entrepreneurial activity may
explain why many entrepreneurs start multiple companies over the course of their
career
 Corridor Principle- Using one business to start or acquire others and then
repeating the process
 Serial Entrepreneurs- A person who founds and operates multiple companies
during one career
4. Desire for Independence
 Entrepreneurs often seek independence from others
 As a result, they generally aren’t motivated to perform well in large, bureaucratic
organizations
 Entrepreneurs have internal drive, are confident in their own abilities, and possess
a great deal of self-respect
5. Self-Confidence
Because of the high risks involved in running an entrepreneurial
organization, having an “upbeat” and self-confident attitude is essential
A successful track record leads to improved self-confidence and self-esteem
Self-confidence enables that person to be optimistic in representing the
firm to employees and customers alike
6. Self-Sacrifice
Essential
Nothing worth having is free
Success has a high price, and entrepreneurs have to be willing to sacrifice
certain things
7. Technical Proficiency
Many entrepreneurs demonstrate strong technical skills, typically
bringing some related experience to their business ventures
For example, successful car dealers usually have lots of technical
knowledge about selling and servicing automobiles before opening
their dealerships
Especially important in the computer industry
NOT ALWAYS NECESSARY
Questions To Keep In Mind
What are my motivations for owning a business?

Should I start or buy a business?

What and where is the market for what I want to sell?

How much will all this cost me?

Should my company be domestic or global?

 Generating new business
ideas

95
 Generating new business ideas

Warren Buffet says, “Today’s successful companies live and die according
to the quality of their ideas”.

Peter Drucker, “Innovation is the specific instrument of entrepreneurs, the

means by which they exploit change as an opportunity for a different
business”
The Process The Process - is like a funnel!

Creative / Soft-Thinking (Right

Brainstorming
Brain)
New Product -brainstorm new product
Innovations innovations
Screening Those Logical / Hard-Thinking (Left
Ideas Brain)
Business Plan -formal business planning
Implementation (opportunity screening,
market forecasts,
financial forecasts)
Left-Mode and Right-Mode Characteristics
Left-Mode Right-Mode
(Hard-thinking) (Soft-thinking)
Verbal
Nonverbal
Analytic
Synthetic
Symbolic
Concrete
Abstract
Analogic
Temporal
Nontemporal
Rational
Nonrational
Digital
Spatial
Logical
Intuitive
Linear
Holistic

Source: Betty Edwards, “Drawing on the Right Side of the Brain”

 Brainstorming
Requires creative thinking (soft-thinking)
Here are some suggestions to improve the brainstorming process:
1. Choose a facilitator
2. Brainstorm spontaneously, copiously
3. No criticism, no negatives
4.Record ideas in full view
5. Invent to the “void”
6.Resist becoming committed to one idea
7.Identify the most promising ideas
8.Refine and prioritize
Sources of Business Ideas
Past work experience
Hobbies and interests
Strengths and abilities
Friends and family
Distribution channels
Travel
Books and magazines
Current trends
Research organizations
The web
Brainstorming Vision
Some of the important ‘rules’ are as follows:
Focus on quantity.
Postpone criticism.
Build on others’ ideas.
Encourage crazy ideas.
Work with a deadline.
 Key to Brainstorming - Creativity
Ten mental locks or attitudes that discourage creative thinking:
“The Right Answer”
 “That’s Not Logical”
 “Follow the Rules”
 “Be Practical”
 “Avoid Ambiguity”
 “To Err is Wrong”
 “Play is Frivolous”
 “That’s Not My Area”
 “Don’t Be Foolish”
 “I’m Not Creative”
Preliminary Research
Cost structure
Market structure
Technology
HR issues
Government regulations
Five Questions Framework
Q1. Which market segment is being
targeted?
Q2. What is the business model?
Q3. How big is your market?
Q4. How can you protect your business?
Q5. What are you getting out of it?
The process of product
development
Types of New Products
 New-to-the-world products
 New product lines
 Additions to a product line
 Improvements and revisions of existing
products
 Repositioning
 Cost reduction
Failure Rate of New Products
The NPD Process
 Opportunity identification
 Concept generation
 Concept evaluation
 Technical Development
 Launch
 Life Cycle Management
Product Testing
Alpha testing
Beta testing
Gamma testing
The Adoption Process
1. Awareness
2. Interest
3. Evaluation
4. Trial
5. Adoption
Adopter Groups
According to Rogers, the adopter groups are:
1. Innovators
2. Early adopters
3. Early majority
4. Late majority
5. Laggards
 Adopter Categories

Time of Adoption of
Innovation

131/2% 34% 34% 16%

21/2%
Early Early Late Laggar
Innovators
adopte majo majorit ds
rs rity y
 Communicate with the customer
 Tap employees for ideas
 New product team
 Budgeting
 Letting go
Involving the Customer
 Lead user method
 Mapping the consumption chain

Entrepreneurship
© Oxford University
Press 2011
Barriers to NPD
Shortage of funds
Limited scope in some product categories
Lack of time
Restrictive laws and regulations
Small markets
Changing technology
Changing consumer preferences
Common Mistakes in NPD
 No market research
 Hasty commercialization
 Focus on product
 Lack of communication
 Product availability
 Pricing it high
 Pricing it low
Crafting value proposition and
reaching out to prospective
customers
 Where are the opportunities?
Opportunities are spawned in
changing circumstances
chaos
confusion
inconsistencies
lags or leads
knowledge and information gaps
vacuums in industry or markets
 Strategies for Spotting New Opportunities
Look for opportunities in the following:
 things that ‘bug’ you
 things that bother others or stop people from doing what they want, when
they want, and the price they want
 new advances in science and technology
 look for problems that need to be solved
 changes in our world whether those changes be in:
 demography
 society
 technology
 science
 politics
 etc.
 Importance of Lateral Thinking
When brainstorming, start to combine ideas. Use each as stepping
stone to something else. Don’t be afraid to experiment.

Example:
Two ideas: pealing paint and gun powder
----I hate scraping old paint off the exterior of my house…..I wish
sometimes that I could blast it off!!! (Of course, that would destroy
the house….but…)
- maybe there is an additive that could be put in the paint before it
is applied, that would allow us to trigger it’s easy removal.
 Importance of Metaphorical Thinking
(Looking at something )
Metaphors often give us ideas or insights that logical thinking cannot.
When ever you compare something and use the following sentence structure
you are doing metaphorical thinking.
Life is like riding a bike.
Different metaphors will give you a whole new perspective on what it is that
you are examining.
Life is like a beach.
Use the insight provided by different metaphors to look for ideas!

Example: Dolby is like a sonic laundry. It washes out all the noise or dirt
from the sound without hurting the sound.
 Other Creative Thinking Techniques
Use “What if” Questions
Play with the idea
Challenge the rules associated with the problem
Be a magician
Be a child
Be ambiguous…and look for the possibilities (geeh…that pen is a pen, but
it could be a pointer, a digging implement or even a weapon or projectile)
Go “hunting” for ideas from other fields…ideas that could be creatively
applied to your field of interest. (Like Guttenberg who used the coin
punch and wine press ideas to invent the printing press.)
 When are you open to Creativity?
At the edges of human experience: (at extremes)
when you are tired
when you are at rest
when you are pressed by a deadline or are stressed
when you are playing
when you are on vacation
when you are exercising
Usually NOT when you are doing routine things!!!!
Try doing something differently…live your day backwards…
break the routine!
Necessity is the Mother of Invention…but play must be the Father!
 Idea Screening
Out of 100 ideas or more, there may be only one or two real opportunities.
Superior business ideas that have the potential to become opportunities
have 4 anchors:
1. They create or add significant value to a customer or end user.
2. They do so by solving a significant problem, or meeting a significant
want or need, for which someone is willing to pay a premium.
3. They therefore have a robust market, profit margin, and
moneymaking characteristics.
4.They are a good fit with the founder(s) and management team at the
time and in the marketplace with a risk/reward balance.
 Characteristics of the "Ideal" Business Idea

Ø   Requires no initial investment Ø      Buyers purchase frequently

Ø      Has a recognized, measurable
market
Ø   A perceived need for the product
or service is present
Ø   A dependable source of supply
for the required inputs is available
Ø   No government regulation
Ø   Requires no labour force
Ø Provides 100 percent gross margin
Ø      Receives favourable tax treatment
Ø      Has a receptive, established
distribution system
Ø      Has great publicity value
Ø      Customers pay in advance
Ø      No risk of product liability
Feasibility analysis
Product or service feasibility
-Product / service desirability
- Product/ service demand
Industry / market feasibility
-Industry attractiveness
-Target market attractiveness
Organizational feasibility
-Management prowess
- Resource sufficiency
Financial Feasibility
-Total stat up cash needed
-Financial performance of similar business
- Overall financial attractiveness
Basic items that should be included in a
business plan:
Executive summary
Industry analysis
Company description
Product and services description
Market description
Marketing strategy
Operations description
Staffing description
Financial projection
Capital needs
Milestones
 How does one start a new venture?
 Important issues in new venture creation:
Does the entrepreneur have good ideas and the courage to give them a chance?
Is the entrepreneur prepared to meet and master the test of strategy and
competitive advantage?
Can the entrepreneur identify a market niche that is being missed by other
established firms?
Can the entrepreneur identify a new market that has not yet been discovered
by existing firms?
Can the entrepreneur generate first-mover advantage by exploiting a niche or
entering a market before competitors?
 Contd….
 Questions that keep a new venture focused on its customers …
Who is your customer?
How will you reach key customer market segments?
What determines customer choices to buy or not buy your
product/service?
Why is your product/service a compelling choice for the customer?
How will you price your product/service for the customer?
How much does it cost to make and deliver your product/service?
How much does it cost to attract a customer?
How much does it cost to support and retain a customer?
 Contd….
 Life cycle of entrepreneurial firms
Birth stage
Breakthrough stage
Maturity stage
 Each stage poses different managerial challenges and requires
different managerial competencies.
Stages in the life cycle of an entrepreneurial firm.
 How to claim ownership in business?
 Forms of legal ownership
Sole proprietorship
Partnership
General partnership
Limited partnership
Limited liability partnership
Corporation
Limited liability corporation (LLC)
 Who can invest in your business plan?
 Financing the new venture
Sources of outside financing
Debt financing
Equity financing
Equity financing alternatives
Venture capitalists
Initial public offerings
Angel investors
 What resources support entrepreneurship and
business development?
 Promoting entrepreneurship in large
enterprises
Intrapreneurship
Skunk works

 Business incubators
 Small Business Development Centers
The Business Plan
Purposes:
fully examine the potential of an opportunity
identify key success factors
identify critical risk factors
guide the entrepreneur in start-up
raise capital

A Good Business Plan is...

complete
short
integrated
prepared for the audience
organized
 Business Plan Do’s
 Involve all of the management team in
its preparation
 make the plan logical, comprehensive
and readable - and short as possible
 demonstrate commitment
 identify critical risks and assumptions
 disclose and discuss any current or
potential problems in the venture
 identify several alternative sources of
financing.
 Spell out the proposed deal and how
investors will win.
 Be creative in gaining the interest of
potential investors.
 Remember the plan is not the
business.
 Know your targeted investor group.
 Let realistic market and sales
projections drive the assumptions
underlying the financial forecasts,
rather than the reverse.
Business Plan Don’t
Don’t have unnamed, mysterious people on the management team.
Don’t make ambiguous, vague or unsubstantiated statements such
as estimating sales on the basis of what the team would like to
produce.
Don’t describe technical products using jargon that only an expert
can understand.
Don’t spend money on developing fancy brochures, or other ‘sizzle’
- instead, show the “steak”
 Contents of B-Plan
Executive summary
Company description
Industry analyses
Market analysis
Marketing plan
Management team and company structure
Operations plan
Product or service design
Financial projection
First Mover
Advantages Disadvantages
 Technological  Reveal underlying

leadership: can also business concept

 Others can try different
lead to
 Cost advantages resource combinations
 Economies of scale  Investments in

 Obtain and secure resolving problems:

others can benefit from
scarce resources learnings
before crowding  Inertia makes it difficult
 Impose switching to abandon strategy no
costs on buyers longer effective
Characteristics of Entrepreneurial
Firms
Limited resources
Small size
Newness

Entrepreneurship
© Oxford University
Press 2011
Entrepreneurial Marketing
Proactive orientation
Innovativeness
Customer focus
Opportunity focus
Risk management
Value creation
Attractiveness of a Segment
Is your product able to deliver the value
sought by a segment, better than the
competition?
Can the segment be easily identified?
Is the segment big enough in terms of
potential revenue?
How easy is it to reach the segment with
the positioning communication and with
the product?
Branding
Strategic brand building
Identity-building brand exposure
Involve the customer in the brand
building experience
Borrow practices from across industries
Pilot test novel ideas
Have a ‘brand manager’
Monitor results
Do not outsource
Costs and Pricing
Producers costs indicate a floor price
Customers cost indicates price sensitivity
Competitor’s costs indicate their strength
 Pricing
• Assess what value customers place on the
product.
• Look for variations in the way customers value
the product.
• Identify a pricing structure.
• Consider competitor’s reactions.
• Monitor realised prices.
• Assess customer’s emotional response to
prices.
Distribution Alternatives
Go directly to the consumer
Go directly to the retailer: bypass
distributor
Use sales agents
Participate in establisher channel structure
Set up your own intermediaries
Distribution Tasks
Buzz Marketing
 Most recent studies show that word-of-mouth is
10 times more effective than other media
 Media is getting fragmented and ad clutter is
rising. Companies feel the need to stand apart
 Traditional forms of media are rising in cost. A
30 second slot during a cricket match on a TV
channel can cost over seven lakhs.
 Too many marketers are making conflicting
claims. The common man’s trust in ads is
coming down.
 Many new technologies provide the impetus for
the acceleration of buzz marketing.
Promotion
Objectives in a promotional campaign:
SALES
Increase in distribution outlets
Increase in shelf space
Increased in-store presence
Expand the selling season
Increase purchase frequency
Increase usage occasions
Increase average transaction size
Induce trial
Types of Promotions
Contests
Coupons
Discounts
Continuity
Point Of Purchase
Sampling
Event
Free gift
Trade Promotions
Any Query
152