Final Presentation of Course

Name: Mahnoor Bahar

Class: MBA 5th

Roll No: 20

DEPARTMENT OF BUSINESS ADMINISTRATION

FACULTY OF MANAGEMENT SCIENCES
UNIVERSITY OF KOTLI AZAD JAMMU AND KASHMIR
 Who is an Entrepreneur?
Entrepreneur is one who creates a new business, taking certain risks
and uncertainty, for the purpose of achieving profit and growth, by
identifying opportunities and assembling the necessary resources.

Characteristics of Entrepreneur
• Desire for Responsibility
• Preference for Moderate Risk
• High level of Energy
• Future Orientation
• Skill at Organizing
Benefits of Entrepreneurship
• Opportunity to create your own destiny
• Opportunity to Make a Difference
• Opportunity to reach full potential
• Opportunity to reap more profits
• Opportunity to do what one enjoy

Mistakes of Entrepreneurship
• Management Mistake • Uncontrolled Growth
• Lack of Experience • Poor Location
• Poor Financial Control • Improper Inventory Control
• Weak Marketing Efforts • Incorrect Pricing
• Failure to develop a strategic plan • Inability to make entrepreneurial
 Creativity and Innovation
Creativity
The ability to develop new ideas and to discover new ways of looking at
problems and opportunities; thinking new things

Innovation
The ability to apply creative solutions to problems or opportunities to
enhance or to enrich people’s lives; doing new things.
Barriers To Creativity
• Searching for the one “right” answer
• Focusing on “being logical”
• Blindly following the rules
• Constantly being practical
• Viewing play as frivolous
• Becoming overly specialized
• Avoiding ambiguity
• Fearing looking foolish
• Fearing mistakes and failure
• Believing that “I’m not creative”
Enhancing Organizational Creativity
• Include creativity as a core company value
• Embrace diversity
• Expect creativity
• Expect and tolerate failure
• Create an organizational structure that nourishes creativity
• Encourage curiosity
• Create a change of scenery periodically
• View problems as opportunities
• Provide creativity training
• Provide support
• Develop a procedure for capturing ideas
Enhancing Individual Creativity
• Allow yourself to be creative
• Give your mind fresh input every day
• those in completely different markets
• Recognize the creative power of mistakes
• Notice what is missing
• Listen to other people
• Listen to customers
• Talk to a child
• Do something ordinary in an unusual way
• Keep a toy box in your office
• Take some time off
 Transformation
 Involves viewing both the similarities and the differences among the
information collected.
 Two types of thinking are required:

 Convergent – the ability to see the similarities and the connections

among various and often diverse data and events.
 Divergent – the ability to see the differences among various data

and events.
Incubation
 Allow your subconscious to reflect on the information collected.
 Walk away from the situation.
 Take the time to daydream.

 Relax – and play – regularly.

 Work on the problem in a different environment.

 Techniques for Improving Creative Process
Brainstorming:
The goal is to create a large quantity of novel and imaginative ideas.

Mind-mapping
A graphical technique that encourages thinking on both sides of
the brain, visually displays relationships among ideas, and
improves the ability to see a problem from many sides.
TRIZ
 A systematic approach designed to solve any technical problem.
 Relies on 40 principles and left-brained thinking to solve
problems.
 Protecting Your Ideas
 Patent: A grant from the Patent and Trademark Office to the
inventor of product, giving the exclusive right to make, use,
or sell the invention for 20 years from the date of
filing the patent application.
 Trademark – any distinctive word, symbol, design, name,
logo, slogan, or trade dress a company uses to identify the
origin of a product or to distinguish it from other goods on the
market.
 Service mark – the same as a trademark except that it
identifies the source of a service rather than a product.
 Copyright – an exclusive right that protects the creators of
original works of authorship such as literary, dramatic,
musical, and artistic works
 Strategic Management and Entrepreneur
Strategic Management
• Crucial to building a successful business.
• Involves developing a game plan to guide a company as it strives to
accomplish its mission, goals, and objectives, and to keep it on its
desired course.

Strategic Management and Competitive Edge

Developing a strategic plan is crucial to creating a competitive
advantage, the aggregation of factors that sets a company apart from its
competitors and gives it a unique position in the market.
 Strategic Management Process
Step 1: Develop a vision and translate it into a mission statement.
Vision is an expression of what an entrepreneur stands for and believes in.
A clearly defined vision provides direction, determines decisions and motivates
people.
The mission is a written expression of how the company will reflect the
owner’s values, beliefs, and vision.
Step 2: Define core competencies and target market and identify
desired market position.
Core Competencies is a unique set of capabilities a company develops in key
operational areas that allow it to vault past competitors.
Market segmentation – carving up the mass market into smaller, more
homogenous units and then attacking certain segments with a specific
marketing strategy.
Proper positioning – creating the desired image for the business in the
customer’s mind.
Step 3: Assess strengths and weaknesses.
Strengths
Positive internal factors that contribute to accomplishing the mission, goals,
and objectives.
Weaknesses
Negative internal factors that inhibit the accomplishment of the mission,
goals, and objectives.
Step 4: Scan environment for opportunities and threats.
Opportunities
Positive external factors the company can employ to accomplish its mission,
goals, and objectives.
Threats
Negative external factors that inhibit the firm’s ability to accomplish its
mission, goals, and objectives.
Step 5: Identify key success factors
Key success factors: relationships between a controllable variable and a critical
factor that influence a company’s ability to compete in the market.
Step 6: Analyze competition.
Analyzing key competitors allows an entrepreneur to:
• avoid surprises from existing competitors’ new strategies and tactics.
• identify potential new competitors and the threats they pose.
Step 7: Create goals and objectives
Goals – broad, long-range attributes to be accomplished.
Objectives – more detailed, specific targets of performance that are S.M.A.R.T.
• Specific
• Measurable
• Attainable
• Realistic (yet challenging)
• Timely
Step 8: Formulate Strategies
Strategy – a “road map” to guide the company through a turbulent environment
as it seeks to fulfill its mission, goals, and objectives. It is the company’s game
plan for winning.
Step 9: Translate Plans into Actions
Create projects by defining:
• Purpose
• Scope
• Contribution
Step 10: Establish Accurate Controls
The plan establishes the standards against which actual performance is measured.
Entrepreneur must:
• identify and track key performance indicators.
• Take corrective action.
 Conducting a Feasibility Analysis and Crafting a
Winning Business Plan
Feasibility Analysis
A feasibility study:
 Is not the same as a business plan.
 Serves as a filter, screening out ideas that lack the potential for building a
successful business before an entrepreneur commits the necessary
resources to building a business plan.
Industry and Market Feasibility
Analysis
Two areas of focus:
1. Determining how attractive an industry is overall as a “home” for a new
business.

2. Identifying possible niches a small business can occupy profitably.

 Five Force Model
Five forces interact with one another to determine the setting in which
companies compete and, hence, the attractiveness of the industry:
Rivalry among companies in the industry
 Strongest of the five forces
 Industry is more attractive when:
 Number of competitors is large, or, at the other extreme, quite small
 Competitors are not similar in size or capacity
 Industry is growing fast
 Opportunity to sell a differentiated product or service exists
Bargaining power of suppliers
 The greater the leverage of suppliers, the less attractive the industry.
 Industry is more attractive when:
 Many suppliers sell a commodity product

 Substitutes are available

 Switching costs are low

Bargaining power of buyers
 Industry is more attractive when:
 Customers’ switching costs are high
 Number of buyers is large
 Customers want differentiated products

Threat of new entrants

 Industry is more attractive to new entrants when:
 Advantages of economies of scale are absent.
 Capital requirements to enter are low
 Cost advantages are not related to company size
Threat of substitute products or services
 Substitute products or services can turn an industry on its head.
 Industry is more attractive to new entrants when:
 Quality substitutes are not readily available
 Prices of substitute products are not significantly lower than those of the
industry’s products
 Elements of a Feasibility Analysis
Product or Service Feasibility Analysis
Determines the degree to which a product or service idea appeals to
potential customers and identifies the resourced necessary to produce it.
 Primary research: Collect data firsthand and analyze it.
 Customer surveys and questionnaires

 Focus groups

 Secondary research: Gather data that already has been compiled and analyze it.

Financial Feasibility Analysis

 Capital requirements –an estimate of how much start-up capital is required to
launch the business.
 Estimated earnings – forecasted income statements

 Return on investment – Combining the previous two estimates to determine how

much investors can expect their investments to return.
 The Business Plan
The Business Plan
A business plan is the best insurance against launching a business
destined to fail or mismanaging a potentially successful company.
Two Essential Function
• Guiding the company by charting its future course and defining its
strategy for following it.
• Attracting lenders and investors who will provide needed capital.
Key Elements of a Business Plan
 Title Page and Table of Contents
 Executive Summary
 Mission Statement
 Company History
 Business and Industry Profile
 Business Strategy
 Description of Products/Services
 Guideline for Preparing Business Plan
 Remember: No one can create your plan for you
 Potential lenders want to see financial projections, but they are more interested

in the strategies for reaching those projections.

 Show how you plan to set your business apart from competitors; don’t fall

into the “me too” trap.

 Identify your target market and offer evidence that customers for your product

or service exist.

Tips on Preparing Business Plan

 Make sure your plan has an attractive cover. (First impressions are crucial.)
 Rid your plan of all spelling and grammatical errors.
 Make your plan visually appealing.
 Include a table of contents to allow readers to navigate your plan easily.
 Make it interesting.
 Presenting the Plan
 Demonstrate enthusiasm, but don’t be overemotional.
 Know your audience thoroughly.
 “Hook” investors quickly with an up- front explanation of the venture, its
opportunities, and its benefits to them.
 Hit the highlights; focus on the details later.
 Keep your presentation simple – 2 or 3 major points.
 Avoid overloading your audience with technological jargon.
 Use visual aids.
 Close by reinforcing the nature of the opportunity.
 Be prepared (with details) for potential investors’ questions.
 Follow up with every investor to whom you make your presentation.
 Form of Business Ownership
Sole Proprietorships
A business that is owned (and usually operated) by one person
Forming a Sole Proprietorship
Simplest form of ownership
Easiest to start
Owner decides to start business and begins
operations
Common in:
Retailing
Service
Agriculture
 Form of Business Ownership
Sole Proprietorships
A business that is owned (and usually operated) by one person
Forming a Sole Proprietorship
Simplest form of ownership
Easiest to start
Owner decides to start business and begins
operations
Common in:
Retailing
Service
Agriculture
 Advantages of Sole Proprietorship
 Ease of Start-up & Closure
 Pride of Ownership
 Retention of All Profits
 Flexibility of Being Your Own Boss
 No Special Taxes

Disadvantages of Sole Proprietorship

 Unlimited Liability
 Lack of Continuity
 Lack of Money
 Limited Management Skills
 Difficulty in Hiring Employees
 Partnership
 A voluntary association of 2 or more persons to act as co-owners of a business
for profit
 Much less common than sole proprietorship or corporation
 No legal maximum on number of partners
Advantages of Sole Proprietorship
 Ease of Start-Up
 Personal Interest
 Retention of Profits
 No Special Taxes
Disadvantages of Sole Proprietorship
 Unlimited Liability
 Management Disagreements
 Lack of Continuity
 Frozen Investment
 Corporation
 An artificial person created by law with most of the legal rights of a real
person, including the rights to start and operate a business, to buy or sell
property, to borrow money, to sue or be sued, and to enter into binding
contracts.”
Corporate Ownership
 Stock- shares of ownership of a corporation

 Stockholder- person who owns a corporation’s stock

 Closed corporation- a corporation whose stock is owned by relatively

few people and is not sold to the general public

 Open corporation- a corporation whose stock can be bought and sold by

any individual
 Forming a Corporation
 Consult a lawyer

 Where to incorporate

 Cost of incorporating

 Advantages/disadvantages of each state’s corporate laws & tax structure

 Corporate Location

 Domestic corporation- a corporation in state in which it is incorporated

 Foreign corporation- a corporation in any state in which is does business

except the one in which it is incorporated

 Organizational Meeting
 Corporate Structure
Board of Directors- top governing body of corporation, members are elected
by stockholders
Corporate Officers- chairman of the board, president, executive vice
presidents, corporate secretary, treasurer, and other top executive appointed by
board of directors

Advantages of Corporation
Limited Liability
Ease of Raising Capital
Ease of Transfer of Ownership
Perpetual Life
Specialized Management
 Disadvantages of Corporation
Difficulty and Expense of Formation
Government Regulation and Increased Paperwork
Conflict within Corporation
Double Taxation
Lack of Secrecy
S Corporation
S Corporation is a form of corporation that meets specific Internal
Revenue Code requirements. The requirements gives a
corporation with 100 shareholders or fewer the benefit of incorporation
while being taxed as a partnership.
 Criteria of S Corporation
 No more than 100 stockholders
 Stockholders must be individuals, estates or exempt organizations
 Only 1 class of stock
 Must be domestic corporation
 No nonresident-alien stockholders
 All stockholders must agree to S-corporation
Limited Liability Companies
Provides limited liability protection, taxed like a partnership
Advantages of LLC
 With 2 or more members = taxed as partnership avoiding double taxation,1
member = taxed as sole proprietorship
 Extends protection of personal assets
 More management flexibility when compared to corporations
 Criteria of S Corporation
 No more than 100 stockholders
 Stockholders must be individuals, estates or exempt organizations
 Only 1 class of stock
 Must be domestic corporation
 No nonresident-alien stockholders
 All stockholders must agree to S-corporation

Not-for-Profit Corporations
A corporation organized to provide a social, educational, religious, or
other service rather than to earn a profit
 Corporate Growth From Within
 Expand present operations
 Introduce/sell new related products
 Sale of present products to new geographic markets/groups of consumers
 Has relatively little adverse effect on firm

Corporate Growth Through Mergers

 Merger- purchase of one corporation by another
 Hostile takeover- situation in which management and board of
directors of firm targeted for acquisition disapprove of merger
 Corporate Raider
 Tender Offer
 Proxy Fight
Thank You