According to Kao, the most successful entrepreneur is one who adapts himself to the changing

needs of the environment and makes it hospitable for the growth of his business
enterprise. This
ECO (Entrepreneurship, creativity ad organization) analysis frame work developed
conceptualized by John J. Kao contributes a great deal to the emergence as wellas sustenanceand
of
entreprencurship and entrepreneurial talent in the prevailing business environment.
ldea Generation:
ldea gencration is the first step for any product development or business
planning process. It
involves generation of new concepts, ideas, products or services to existing
demands and futuredemands of the market. The various sources of new ldeas are:demands, latent
Consumers/Customers
Existing Companies
Rescarch and Development
Employecs
Dealers,retailers.
The various methods of generation of new Ideas:
a. Brainstorming, Reverse Brainstorming, Brain Writing
b. Group Discussion
C. Data collection through
dealers, retailers.
questionnaires/schedules etc. from consumers, existing companies,
d. Invitation of ideas through advertisements, mails, the
e. Market Research.
internet.
f. Commercializing inventions.
g. Answering the 5 W's & lH (Who, what, where, when
and why) help us to generate new
ideas.

Why
How who

What When
Where
 h. Problem plan Solution Process

Problem Plan Solution

Discover Define Develop Deliver

IDEA

i. SCAMPER

SSubstitute
C
Combine
R
Rearrange A
SCAMPER Adapt

Eliminate
M
P
Put to other uses

1. Substitute - Substitution technique refers to

with another to achieve even better replacing a part of your product, concept or process
outcome.
2. Combine - The combine technique explores the possibility to
more effective solution. combine two ideas into a single,
3. Adapt- Adaptation analyses the possibilities to make the process more
other similar increnmental improvements to the idea, flexible and focuses on
4. Modify- Modifying the idea looks at the problem or process, or concept.
aims for improving the overall results, not just the idea. opportunity from a bigger perspective and
5. Put to another use -This approach focuses on finding ways to use the idea or existing Sou
for another purpose and analyses the possible bene fits if appliedto other parts of the business.
6. Eliminate - The climination technique is quite straightforward: it examines the possi
outcomes if one or more parts of the concept were eliminated.
7. Rearrange- This action focuses on reversing the order of interchangeable clements of an idea.
ldentifying Opportunities and Evolution:
Opportunity identification and evaluation is a most difficult task. Entrepreneurship does not always
begin with the creative concept for a new product, service, or process. It often begins with the
entrepreneur's alertness to identify an opportunity. Whether the opportunity is identified by using
input from consumers, business associates, channel members, or technical experts, the
entrepreneur needs to identify and evaluate each opportunity. This evaluation of the opportunity
is perhaps the most critical element of the entrepreneurial process as it assesses whether the
specific product or service has the needed returns compared to the required resources.
I. Entrepreneurial Opportunity: It may be defined as an attractive project idea which an
entrepreneur accepts as a basis for his investment decision.
2. Sensing Entrepreneurial opportunities: It is a process of people and society and finding at
creative solutions.
a) Needs and Problems of people
b) Creative Solutions
) Entrepreneurial Opportunities
Environment Scanning for Opportunities Identification
Environmental Scanning: It is a close and careful study of different factors i.e. social- cultural,
economic, and political and so on prevailing in the surrounding in order to ensure that the perceived
entrepreneurial opportunity is compatible with them.
a) Social problems/Needs
b) Opportunity Identification
c) Evaluation if Ideas received
d) identification of product
e) Setting up of a Project
Eight ways to identifying Opportunities & Evolution
1. Speak to prospects you've lost
2. Talk to current customers
3. Competitor analysis
4. Understand the market
5. Explore indirect opportunities
6. Look at environmental factors
7. Analyseforeign markets
8. Investigate other industries
Building the Team and Leadership:
Team building refers to the activities undertaken by groups of people in order to increase
their motivation and boost cooperation.

Many people use phrases "Team building" and "Team work" interchangeably. However,
Team building places emphasis on the creation of groups and
Team work emphasizes the functions of these groups.
Leadership is the ability to build up confidence and zeal among people and to create an urge in
them to be led.
Nature:
1. Personal skill
2. Followers
3. Process of influence
4. Attaining Entrepreneurial objectives
5. Dynamic nature.

Types of Leaders / Styles of Leaders

1. Autoeratic style (leader expects complete obedience from his subordinates).
2. Laissez-faire or Free-rein style (Maximum freedom is given to subordinates).

3. Democratic or Participative Style (It is a comnpromise between two extremes of autocratic

and laissez-fair style).
4. Paternalistic Style (This leadership is based on sentiments and emotions of people. A
paternalistic leader is like a father to his subordinates).
5. Formal Leader (formally appointed or elected/ He enjoys organizational authority and is
accountable who elected him).

Theimportance of Team Building:

1. Building Trust: Trust play an essential role in building effective team. For teams to work
together they need to know they can trust each other. Trust make people feel safe. As a
result their team members know about the strength and weaknesses. They are more
proactive with their Ideas, take risks, listen to each other andthen consensus.

2. Regulate Communication: When employees work as a team, they communicate. They

talk to each other about the task at hand and the best way to achieve the desired result.
Communication also allows employees to understand their roles andwhat their peers are
doing. When employees know what their team members are doing,they can check up on
the progress made and help each other out if someone cannot reach their goal.
 individual's
3. Increase Productivity: The importance ofteam building is that ittimprovesthe
and the organization's productivity. Because individuals work in teams, they can Ps
onnew skills and sharpen their existing skills, This improves team performance.
them etficient and over time, more work gets completed in less time. As a resu
Organizations can generate more revenue when they achieve their targets and deiiver tmen
best.
. Bring People Together: As Margaret Carty rightly said, "The nicest thing about teamwork
face
is that you always have others on your side". Employees team up together to
adversaries and share the spotlight.
3. Fosters Creativity and Learning: Successful team building motivates employees to learn
from each other and build on each other's talents. As compared to working solo on a
project, teamwork allows room for fresh ideas and new perspectives. It brings together
individual experiences combined with new, inovative ideas. As a result, everyone can
bring something new to the table and learn from each other.

Strategic planning for Business:

Strategic planning is the art of creating specific business strategies, implementing them, and
evaluating the results of executing the plan, in regard to a company's overall long-term goals or
desires. It is a concept that focuses on integrating various departments (such
as accounting and finance, marketing, and human resources) within a company to accomplish its
strategic goals. The term strategic planning is essentially synonymous with strategic management.
The concept of strategic planning originally became popular in the 1950s and 1960s, and enjoyed
tavor in the corporate world up until the 1980s, when it somewhat fell out of favor. However,
enthusiasm for strategic business planning was revived in the 1990s and strategic planning remains
relevant in modern business.

Business Planning: It assists in determining the future course of action to be followed by

entrepreneur to work properly and smoothly. It is a decision in advanced and a process of thinking
before doing.
Strategic Planning Process er Strategic planning for Business
The development and execution of strategic planning are typically viewed as consisting of being
performed in three critical steps:
1. Strategy Formulation
In the process of formulating a strategy, a company will first assess its current situation by
performing an internal and external audit. The purpose of this is to help identify the organization's
strengths and weaknesses, as well as opportunities and threats (SWOT Analysis). As a result of
the analysis, managers decide on which plans or markets they should focus on or abandon., how to
best allocate the company's resources, and whether to take actions such as expanding operations
through a joint venture or merger.
Business strategies have long-term effects on organizational success. Only upper management
executives are usually authorized to assign the resources necessary for their implementation.
 2. Strategy Implementation
or goals related to
After astrategy is formulated, the company needs to eesstablish specific targets
he sucvessi
putting the strategy into action, and allocate resources for the strategy'sexecution. Tdoes
management in regard
the implementation stage is oflen determined by how good ajob upper
to clearly communicating the chosen strategy throughout the company and getting a
employees to "buy into" the desire to put the stratcgy into action.
framework, Tor
Effective strategy implementation involves developing a solid structure, or
and redirecting
implementing the strategy, maximizing the utilization of relevant resources,
marketing eftorts in line with the strategy's goals and objectives.
3. Strategy Evaluation
success tomorrow. AS
Any savvy business person knows that success today does not guarantee strategy after the
Such, it is important for managers to evaluate the performance of a chosen
implementation phase.
Strategy evaluation involves three crucial activities:
a. Reviewing the internal and external factors affecting the implementation of the strategy,
b. Measuring performance, and
C. Taking corrective steps to make the strategy more effective.
All three steps in strategic planning occur within three hierarchical levels: upper management,
middle management, and operational levels. Thus, it is imperative to foster communication and
interaction among employees and managers at alllevels, so as to help the firm to operate as a more
functional and effective team.

Benefits of Strategic Planning

The volatility of the business environment causes many firms to adopt reactive strategies rather
than proactiye ones. However, reactive strategies are typically only viable for the short-term, even
though they may require spending a significant amount of resources and time to execute. Strategic
planning helps firms prepare proactively and address issues with a more long-term view. They
enable a company to initiate influence instead of just responding to situations.
Among the primary benefits derived from strategic planning are the following:
1. Helps formulate better strategies using a logical, systematic approach
Some studies show that the strategic planning process itself makes a significant contribution to
improving a company's overall performance, regardless of the success of a specific strategy.
2. Enhanced communication between employers and employees
Communication is crucial to the sucçess of the strategic planning process. It is initiated through
participation and dialogue among the managers and employees, which shows their commitment to
achieving organizational goals.
Strategic planning also helps managers and employees show commitment to the organization's
goals. This is because they know what the company is doing and the reasons behind it. Strategic
planning makes organizational goals and objectives real, and employees can more readily
 compensation.
understand the relationship between their performance, the companyy's success, andcreative,
which
As aresult, both employees and managers tend to become more innovative and
fosters further growth of the company.
3. Empowers individuals working in the organization
The increased dialogue and communication across all stages of theprocess strengthens employees
sense of etfectiveness and importance in the company's overall success. For this reason, t
important for companies to decentralize the strategic planning process by involving lowerg
managers and employees throughout the organization. Agood example is that of the Walt Disney
planning
Co.,which dissolved its separate strategic planning department, in favor of assigning the
roles to individual Disney business divisions.
Features/Nature/ Characteristics of Strategic Planning Process:
Primary function of Entrepreneur.
t focuses on objectives.
Intellectual process.
Continues process
It secures efficiency.
Essentials of Good Business Planning:
It should define objectives
It should be simple.
Economical.
Clear.
Comprehensive.
Dynamic.
Steps in Strategic Planning Proces:
> Determination of Objectives.
> Constructing Planning Forecasts.
> Collection, Analysis and Classification of Information.
> Determination of Alternative cases.
Evaluation of selected course of action.
> Selection of best plan.
> Formation of subsidiary plans.
> Communication of plans.
> Controlling the plan.
Forms of Ownership:
An entreprencur nccds to take a decision on the form of ownership he plane to undertake.
Following are the form of ownership anmongst which he can
choose:
Sole Proprietorship: Sole proprietorship is that fom of business organisation which is
owned, managed and controlled by asingle individual who receives all the profit and risks
all his property in the success or failure of the
enterprise.
Advantages:
Simple and easy to start a business venture.
Secrecy of business.
Flexibility in operation.
Allthe efforts made by any the entrepreneur are linked to the profit he makes.
Science proprietor takes all the decision-making is faster than any form of
collective ownership.
Free from legal restrictions.
Disadvantages:
Only limited financial resources available.
Raising additional capital is also not easy.
Advantage of varied expertise is missing - growth limited to the ability of the
OWner.
Life of the company is limited by the life of owner.
Sole proprietorship has unlimited liability.
into existence on account
2. Partnership: Partnership, as a form ofbusiness enterprise, came Act 1932,
Partnership
of the severe limitations of sole proprietorship. Under section 4 of business carried on by
share profits of a
"the relation between persons who have agreed to
allor any of them acting for all".
contract, not by
Under section 5 of Partnership Act 1932, "the partnership is created by
status"
Four essential features of a partnership are:
1. That it is a result of agreement.
2. That it is organized to carry on abusiness.
of the business.
3. That the person concerned agree to share the profit them acting for all.
4. That the business is to be carried on by all or any of

Advantages:
Easy formation.
Large financial resources.
benefited.
Varied expertise can be pooled in and the business is
Burden of losses can be shared.
Taxation advantages of partnership firm can be available.
Division of Labor.
 Disadvantages:
Difference in opinions,
Approaches to solve the problem,
Decision making style,
Power-authority relationship leads to clashes and is one of the major reason
dissolution.
Enterprise dissolves upon the death of a partner.
Partners have unlimited liability.
J. imited Partnership: Under this type of partnership some of the partners have unlimited
liability while others have limited libility up to their individual share in the capital of the
Tm. The Partners having limited liability in the firm is known as special partner and others
having unlimited liability is called general partner.
4. Corporation Form of Ownership: Ajoint Stock Company means a"company having a
permanent paid up or nominal shares capital of fixed amount divided into shares, also o
IXed amount, held and transferable as stock and formed on the principle of having for its
members the holders of those shares or that stock and no other persons
Advantages:
Permanent Existence.
Limited Liability.
Transferability of Shares.
Financial Advantage.
Better Management.
Economies of Scale.
Diffusion of Risk.
Disadvantages:
Lack of personal interest.
Difficulty of Formation.
Lack of Prompt decisions.
Lack of Secrecy.
Conflict of interest

Franchising
the right
Franchising is an agreement where on party (franchiser) grants another party (franchisee)
touse its trademark or trade-name as well as certain business systems and processes, to produce
and market a good or serviced according to certain specifications.
Advantages:
Management Training Support.
Brand Name Appeal.
Standardized Quality of Products and Services.
National Advertising Programs.
Financial Assistance.
Disadvantages:
Franchise Fees and Ongoing Royalties.
Restrict to Standardized Operations.
Restrictionson Buying.
Limited Product Line.
Profit Sharing.
Types of Franchising:
the rignt O
l. Trade Name Franchising: Under this tyne of franchising. the franchisee buys exclusively
specific items
unlize the trade name of the franchisor without distributing
under the name of franchiso.
L. Product Distribution Franchising: In this type of arrangement, a franchisor proviaes
the brand name and trademark of
lcensing to a franchisee to sell particular articles under
franchisor through a selective limited distribution network.
provides a complete business Tormal
S. Pure Franchising: In pure franchising, franchisor services
Including a license for a trade name, the products or to be sold, the physical plant,
control process, a two-Way
the method of operation, a marketing plan, a quality the franchisee.
COmmunication system and the necessary business support services to
Franchise Contracts:
independent parties: Franchisor and
The Franchise Contract is an agreement between two legallythe Franchisee the exclusive right to
Franchisee. By means of this contract. the Franchisor grants
distribute its products (or services) in establishments which are uniformly equipped and furnished,
(brands,commercial signs, trade marks), while
as wellas the right to use industrial property rights
and commercial support for distribution
it also provides the whole Know-How and the technical
to be carried out correctly.
Franchisor as regards the presentation,
The Franchisee must follow the instructions given by the premises. In recognition of the services
commercialization and corporate image on the authorized
fees (Front-end fee, sales fee,
provided, the Franchisee pays the Franchisor a series of different
and advertising fee).
Franchise Contract should be used.
For international transactions the International
franchise, Federal Trade
Franchise Evaluation Checklist: Consumer guide to buying a
Commission/ prepared a checklist to evaluate the franchise:
commitment. Hence
Findthe franchise that fits you: Owning a franchise is a long-term
ask yourself
a What interests you, what you are good at, your goals, and your prior experience?
How much time can you commit?
b. Are you comfortable managing employees?
C. Isowning and operating the franchise going to give you the lifestyle you want?

Research about franchisors: Obtain direct information or research online.

a. What is their reputation?
 b. Do they have any lawsuitsor disputes? published bythe
C. Ifthe franchisor is publicly held, annual financial statements are
Securities and Exchange Commission.
franchisor for you.
The more information you have, the casier it will be to pick theright decide to
You can also write down alist of questions for your franchisor before you
buy.
usually disclose their financlal
Find a franchise that suits vour budget: Franchisors required can vary
requirements to potential investors. However, start-up payments
significantly from franchise to franchise.
feedback on the
Obtain franchisee feedback: Talk tothe existing franchisee and getttheeir
support they are receiving from the franchisor.
assistance from the franchisor?
a. Do they have sufficient training and marketing franchisor?
b. Willthey be willing to franchise again with the same

Examine the uniform franchise offering circular (UFOC): Many franchisors are
has applied for the franchise,
reluctant to share this document until the interested investor
and interviewed with the franchisor.
had his or her background and finances investigated,allows potential franchisees and their
The UFOCcontains a wealth of information that
attorneys to evaluate the franchise.
financial statenments, franchise fees and start
a. lt includes information about audited
regarding any litigation involving the
up payments required, information and any other contracts the franchisee has
ITranchisor, required franchise agreement,
to sign.
regarding the earnings of its
b. It also includes the franchisor's claims to evaluate earnings. Ask
franchises. Make sure you receive enough informationgeographical area.
for information on the results of franchises in the same for a good
provide the information needed
C. If the franchisor is reluctant to franchisors allow at least 10
evaluation, it's a red flag. Federal law requires that
days for the potential franchisee to review the UFOC.
Financing entrepreneurial Ventures:
parts: Equity
Sources of Financing for smallbusiness or startup can be divided into two
business is
Financing and Debt Financing. Some common source of financing
commercial
Personal investment, business angels, and assistant of government,
bank loans, financial bootstrapping, and buyouts.
Managing Growth
Growth is always essential for the existence of a business enterprise whether big or small. A
business organisation is bound to die in absence of expansion of its activities. Business growth is
a natural and on-going process. Many business enterprises started initially small and have become
big through continuous growth.
Stages of Growth:
1.
Introduction
small profits). stage: also known as start-up stage (limited production, no competition,
2. Growth Stage: In stage,
production and salesthisincreases,
market.
enterprise
profits startis toknown
increase and market
to the competitors start toaccepted,
and widely enter the
3.
Expansion Stage: business enterprise starts expanding by opening its branches,
4.
introduction of new product, and diversification of
business starts.
Maturity stage: sales increases but at a decreasing rate due to strong competition, profits
decline.
Deeline Stage: business fnds difficult to survive sales drop
Incurring losses, enterprise usually prefers to close down the abruptly, business Stalt
Introduction shuttes.
Growth Expansion Maturity Decline
stage
Stage Stage stage Stage

Types of Growth Strategies:

A. Expansion: Expansion esults from the gradual increase in the activities of the concerm.
(EXpand production capacity, entering in new fields with the products, by rais1ng more
finance).
B. Diversification: Diversification is a process of adding more products or markets O
services to the existing product line.
C. Merger or Amalgamation: A merger is a combination oftwo or more companies into one
Company. lt may be in the form of one or more companies being merged into an existing
company.
D. Joint Ventures: It is a type of external growth strategy adopted by business firms. It iS a
restricted partnership between two or more firms to undertake jointly to complete a specific
venture.
E. Sub- contracting: It refers to engaging other firms to perform certain manufacturing
process instead of doing it by the firm itself.
Valuation of new Companv:
Abusiness valuation is a general process of determining the economic value of a whole business
or company unit. Business valuation can be used to determine the fair value of abusiness fora
variety of reasons, including sale value, establishing partner ownership, taxation, and even
divorce proceedings. Owners will often turn to professional business evaluators for an objective
estimate of the value of the business.
There are numerous ways a company can be valued. We'll learn about several of these methods
below.

1. Market Capitalization: Market capitalization is the simplest method of business

valuation. It is caleulated by multiplying the company's share price by its total number of
shares outstanding. For example, as of January 3, 2018, Microsoft Inc. traded at
$86.35. With a total number of shares outstanding of 7.715 bilion, the company could
then be valued at $86.35 x 7.715 billion =$666.19 billion.
 stream of
method, a depends
valuation
2. Time Revenue Method: Under the times revenue business
to a multiplier which
may be
valued
revenues generated over a certain period of time is applied company
atech.
on the industry and economic environment. For example, revenue.
at 3x revenue, while aservice firm may be valued at 0.5x
multiplier may
method, the earnings company's
3. Earnings Multiplier: Instead of the times revenue of a company, since a is. The
be used to get a more accurate picture of the real value sales revenue
success than at the
profits are a more reliable indicator of its financial
flow that could be invested
carnings multiplier adjusts future profits againstcash
current interest rate over the same period of time.
similar
method of business valuation is which
4. Discounted Cash Flow(DCE) Method: The DCF projections offuture cash flows,
between
to the carnings multiplier. This methoddis basedI on The main difference inflation
company.
are adjusted to get the current market value of themultiplier takes
method isthat it
the discounted cash flow method and the profit
into consideration to calculate the present value. the
as shown on
equity of a business liabilities of a
5. Book Value: This is the value of shareholders thetotal
statement. The book value is derivedlby subtracting
balance sheet
company from its total assets.
if its
cash that a business will receive
6. Liquidation Value: Liquidation value is the net
off today.
assets were liquidated and liabilities were paid

Harvesting &Exit Strategy

private equity
business plan for investors such as venture capitalists or the
Harvest strategy refers to acommonly referred to as an exit strategy, as investorS Seek to eXit
Investors. This method is
investment after its success.
kinds on a
deliberate decision to cut back expenditure of all from
in order to maxim ize profit
Harvest strategy also refer as a
decline stage of its life cycle)
particular product (usually in the to lose market share.
continues
it, even if in doing so it
harvesting
Strategies to be considered for
Focus on a narrow,
well-defined segment.
margins and profits.
Control costs and focus on higher
in order.
Get allfinancial statements
Prepare management documentation.
equipment.
Assess the condition of capital
Get tax advice.
employees
Get nondisclosures from key
Business exit strategies
businesses combine into one.
Merger. In a merger, two
 Acquisition. An acquisition is when a company buys another business. someone
business live on under
Sell to you know. You may want to see your
someone
else's ownership.
Initial public offering.
Liquidation.
An exit strategy plan will have seven core elements:
Detailed statement of your objectives in terms of
Price,
Expected dates,
Minimum requirements
Deal breaker terms.
An assessment of the value of a business.
Readiness for sale.
Opportunities to increase the business valuation.
Corporate Entrepreneurship
Corporate Entrepreneurship is thought of as rejuvenating and revitalizing existing companies. It is
brought into practice as a tool for business development, revenue, growth, profitability
enhancement and pioneering the development of new products, services and processes.
Characteristics:
Start of new business within existing business.
Restructuring of organisations through a renewal of important areas of business.
Creativity, innovation and renewal within an existing organisation