DR M ASIF HASAN Assistant Professor DR M

DR. M. ASIF HASAN Assistant Professor DR. M. ASIF Mechanical Engg. HASAN Section University Polytechnic A. M. U

CHAPTER 3 DR. M. ASIF HASAN DECISION FRAMEWORK OF ENTREPRENEURSHIP

Entrepreneurship involves a few major decisions: (1) Decision to become an entrepreneur DR. M. ASIF HASAN (2) Identification and selection of an opportunity (3) Business plan formulation and its implementation (4) Entrepreneurial Continuum

(1) Becoming an Entrepreneur This may be reinforced by one or more of the following: --DR. To M. prove oneself ASIF HASAN --To be independent -- To do something unique --To utilize skills -- To acquire greater economic reward -- To excel

(2) Identification and selection of an opportunity Once decides to become an DR. M. ASIF HASAN entrepreneur, the individual starts searching for an opportunity – a unique project that could fulfil his dream

Project Identification through: looking around for different possibilities of business, reading DR. M. about ASIF them, HASAN meeting people who could give ideas and inspiration, and collecting information on several possibilities

Exploring Opportunities Certain indicators or guidelines that may help to identify and assess opportunities: (a) Environment DR. M. ASIF HASAN -- Basic features of an area and its resources -- Population, its composition, occupational pattern, socio-economic background, etc.

(b) Current Business Scenario -- Present pattern of trading and business activities in the area with DR. M. ASIF HASAN reference to local consumption and needs for industrial goods and services -- Emerging trends of trading and business activities

(c) Technology Change: DR. M. ASIF HASAN -- Anticipating new opportunities because of technology change like green energy and computers, etc.

Some of the Idea Sources for identifying business opportunities: (a) Resource based ideas: -- Industries based mineral, DR. M. ASIFon HASAN agriculture, marine and forest resources, etc. -- Waste based products such as agrowaste, metal waste, etc.

(b) Linkage related ideas: -- Backward and forward integration from existing lines of manufacture -- Ancillary industries project DR. M. ASIF HASAN -- Industries based on substitution i. e. products which are either obtained from outside the region or the country at large

(c) Export/Import related ideas: DR. M. ASIF HASAN -- Export oriented activity -- Import substitution

(d) Market shift or growth related ideas: Consumer and industrial products that DR. M. ASIF HASAN have growth potential as a result of: Increased population or changes in composition of population, purchasing power, changes in living style etc.

(e) Special product ideas: -- Research and Invention based products DR. M. ASIF HASAN -- Skill/Knowledge based products -- Products based on Institutional/Govt. purchases, Hospitals/Schools etc. -- Foreign collaboration

(f) Service Sector Ideas: -- Repair, maintenance and service facilities -- Establishments cater to industrial DR. M. to ASIF HASAN and household needs (g) Govt. policies, priorities and plans This will generate a lot of ideas

Project identification or selection involves addressing the following: STEP (i): -- What are the chances for diversification later on? ? DR. M. ASIF HASAN -- What is the technology level, return on investment, market potentiality? ? --What are my strength and weaknesses with regard to the project? ?

-- What is the life of my product? ? -- What industry group should I select? ? Electronics or Chemical or any DR. M. ASIF HASAN other? ? -- How much money can I invest? ? -- How attractive is the opportunity? ?

-- Have I explored all possible and suitable opportunities available within existing (given) conditions and environment; DR. M. ASIF HASAN -- Am I making the final decision about product or service after comparative analysis of opportunities available; consistent with entrepreneurial capabilities and their relative benefits

STEP (ii): -- Decide the size of the project depending upon your investment capacity and possibility of financial assistance DR. M. ASIF HASAN --Check govt. policies for special permissions, licences, regulations and controls, govt’s priority list of products/projects, special incentive scheme of govt. , etc.

(3) Making a Project Plan -- The next stage marks the movements in the direction of detailing of the project Firstly, a preliminary project report (PPR) of DR. M. ideas ASIF is. HASAN 3 or 4 potential prepared; And then a detailed project report (DPR) is prepared based on market survey/research of one or two most potential projects

-- Many decisions feasibility DR. M. regarding ASIF HASAN and profitability of the project needs consideration

(4) Entrepreneurial Continuum: Once the entrepreneur establishes the enterprise, he will have to manage it DR. M. ASIF HASAN well by mobilizing relevant production factors such as capital and human resources

The entrepreneurial continuum can be achieved through a series of entrepreneurial decisions and actions directed towards the following factors: DR. M. ASIF HASAN -- Perception of Expanding or Contracting opportunities -- Fund generation and allocation towards growth and expansion

-- Response to change as: Deletion of Activities; Modifications in Working and strategy -- New. DR. product development M. ASIF HASAN -- Product diversification or Expansion -- Research and Development

-- Strategic changes for Price, Marketing, New Client, etc. DR. M. ASIF HASAN -- Changes in Product design, specifications, quality, etc.

For entrepreneurs the whole framework of decision making may appear to be like a merry-go-around DR. M. ASIF HASAN There may be confusion as to where to start and where to end

A WORD OF CAUTION -- Do not plunge into a project only because someone else is doing well or someone has assured you to buy DR. products; M. ASIF HASAN Someone’s assurance may be a good reason to start, but not good enough to survive

-- It is important to generate product ideas, but one must make sure the capability of these ideas to be converted saleable product DR. into M. a. ASIF HASAN -- By all means consult experts & other people, but remember its you who will be responsible for the decision

-- It is advisable to start with a common product, rather than go for a very specialized product -- It is advisable to check if many DR. M. ASIF HASAN similar projects are coming up -- Select a project which has long-term possibilities of success and also possibility for diversification

-- As one may not get a project idea which is attractive on all counts e. g. if the market is very good, technology may be very complicated, DR. M. ASIF HASAN or if returns are very good, investments may be very high -- So, Select a project as per your own strengths and weaknesses

Classic example of an entrepreneurial decision making: A successful entrepreneur was asked DR. M. ASIF HASAN “How do you select your project” Reply: It is very simple. I select a project where raw materials are not easily available

His Explanation: “Once I have found out how to procure the raw materials, I am not worried about the market, DR. M. ASIF HASAN because it will always be good as not many people will go in this line on account of the scarcity of raw materials”

This entrepreneur has great strength in procuring the raw materials DR. M. ASIF HASAN Hence, the availability of raw material was the starting point of the project idea for him

DR. M. ASIF HASAN THANK YOU