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M405: Entrepreneurial & Corporate Skill Development

Sample Ques-Ans{short answers}

Ans A. Entrepreneur vs. Inventor

Entrepreneur is a French word that has come to mean a person who takes the initiative and
starts or sets up a business. He is the person who assumes all risks and organizes and operates
the business. He is also one to enjoy the fruits of an opportunity that he sees in the market. An
inventor, on the other hand, is a person who uses his brains to create a new product,
something that is of value for the society. Now, to start or initiate a business is not always
innovative though it always creates jobs for others and wealth for the business owner. Many
people confuse between an entrepreneur and an inventor though there are many differences
between the two categories of people.

An inventor is someone who first thinks of a novel idea. However, not all great ideas are
turned into useful products or services for the society, and it takes an entrepreneur to convert
the idea of an inventor into something of value thus generating profits for the entrepreneur.
You have to decide the sort of person you are. If brainstorming and coming up with an idea is
what interests you, you probably are more of an inventor. However, if you are good at
planning and visualizing how to put an idea into concrete shape, you are probably more of an
entrepreneur.

Ans B. Managerial Versus Entrepreneurial Decision Making

The difference between the entrepreneurial and the managerial styles can be viewed from
fivekey business dimensionsstrategic orientation, commitment to opportunity, commitment
of resources, control of resources, and management structure. Managerial styles are called
theadministrative domain.
a. Strategic Orientation
The entrepreneurs strategic orientation depends on his or her perception of the
opportunity.This orientation is most important when other opportunities have diminishing
returnsaccompanied by rapid changes in technology, consumer economies, social values, or
politicalrules. When the use of planning systems as well as measuring performance to control
currentresources is the strategic orientation, the administrative (managerial) domain is
operant, as is thecase with many large multinational organizations.
b. Commitment to Opportunity
In terms of the commitment to opportunity, the second key business dimension, the two
domainsvary greatly with respect to the length of this commitment. The entrepreneurial
domain is pressured by the need for action, short decision windows, a willingness to assume
risk, and fewdecision constituencies and has a short time span in terms of opportunity
commitment. Thisadministrative (managerial) domain is not only slow to act on an
opportunity, but once action istaken, the commitment is usually for a long time span, too long
in some instances. There areoften no mechanisms set up in companies to stop and reevaluate
an initial resource commitmentonce it is madea major problem in the administrative
(managerial) domain.
c. Commitment of Resources
An entrepreneur is used to having resources committed at periodic intervals that are often
basedon certain tasks or objectives being reached. These resources, often acquired
from others, areusually difficult to obtain, forcing the entrepreneur to maximize any
resources used. Thismultistage commitment allows the resource providers (such as venture
capitalists or privateinvestors) to have as small an exposure as possible at each stage of
business development and toconstantly monitor the track record being established. Even
though the funding may also beimplemented in stages in the administrative domain, the
commitment of the recourses is for thetotal amount needed. Administratively
oriented individuals respond to the source of the rewardsoffered and receive personal rewards
by effectively administering the resources under their control.
d. Control of Resources
Control of the resources follows a similar pattern. Since the administrator (manager)
is rewarded by effective resource administration, there is often a drive to own or accumulate
as manyresources as possible. The pressures of power, status, and financial rewards cause
theadministrator (manager) to avoid rental or other periodic use of the resource. The opposite
is true for the entrepreneur whounder the pressure of limited resources, the risk of
obsolescence,a need for flexibility, and the risks involvedstrives to rent, or otherwise
achieve periodic useof, the recourses on an as-needed basis.

e. Management Structure
The final business dimension, management structure, also differs significantly between the
twodomains. In the administrative domain,

the organizational structure is formalized andhierarchical in nature, reflecting the need for
clearly defined lines of authority and responsibility.The entrepreneur, true to his or her desire
for independence employs a flat organizationalstructure with informal networks throughout.

Ans C. Innovation
Simply stated, innovation is the process of creating something new. The last century has
witnessed explosive innovation with dramatic results. Innovation makes our lives easier,
enhances our productivity, improves our health, entertains us, and broadens our ability to
communicate and connect on a global scale. Virtually every improvement in the quality of
living in the past century can be traced back to innovation at some level.
Innovation is a broad, diverse, complex, unpredictable, and widely studied force in business.
Hundreds of books, articles, and research papers have been written by scholars devoted to the
study of innovation, its sources, objectives, trajectories, and lasting impact. Innovation serves
as the catalyst for growth in business and economics. Yet, far more reaching, its impact can
transform virtually any industry from government to education, even the delivery of health
care. Sources of innovation can be found across any business, service line, organization, or
industry.

Importance of Innovation

Studies have confirmed that all businesses want to be more innovative. One survey identified
that almost 90 per cent of businesses believe that innovation is a priority for them. The
conclusion is that the importance of innovation is increasing, and increasing significantly. In
the current day economic scenario, innovativeness has become a major factor in influencing
strategic planning. It has been acknowledged that innovation leads to wealth creation. Even
though efficiency is essential for business success, in the long run, it cannot sustain business
growth.

Most often planned and measured combination of ideas, objects and people leads to
innovation resulting in new business ideas and technological revolutions. In order to be
termed valuable innovations, new products and services need to be strong enough to progress
through rigorous commercialization processes and into the marketplace. Management
expert Peter Drucker said that if an established organization, which in this age
necessitating innovation, is not able to innovate, it faces decline and extinction.Many
organizations are adopting measures to strengthen their ability to innovate. Such companies
are creating a dependable operating system for innovation, an important indicator of
corporate sustainability.

Research has indicated that competition combined with strong demand is a major driver
of innovation. Intensity of competition is the determinant of innovation and productivity.
Innovation, besides products and services, also includes new processes, new business systems
and new methods of management, which have a significant impact on productivity and
growth.

Today, we need innovators more than any time before. Every organization and business is
feeling the impact of globalization, migration, technological and knowledge revolutions, and
climate change issues. Innovation will bring added value and widen the employment base.
Innovation is imperative if the quality of life in these trying circumstances is to improve.
Innovation will make the world a better place for the younger generation.

Ans D. Opportunities Analysis Plan

Opportunity analysis is very important to both the prospective entrepreneur and the existing
business owner. Every innovative idea and opportunity should be carefully research into.

This can be done by developing an opportunity analysis plan. An opportunity analysis plan is
not the same as a business plan. It main focus is on the idea and the opportunity for the idea
(i.e market). In layout and presentation, opportunity analysis plan is much shorter than the
business plan.
The primary objective of an opportunity analysis plan is to serve as a basis for the decision to
either act on the opportunity or wait until another better opportunity comes.

1. The Idea and its competition

2. The Market and the Opportunity

3. Entrepreneur and Team Assessment

4. The Next steps (How to achieve and implement)

Ans G. Key Differences between Merger and Acquisition


The points presented below explain the substantial differences between merger and
acquisition in a detailed manner:

1. A type of corporate strategy in which two companies amalgamate to form a new


company is known as Merger. A corporate strategy, in which one company purchases another
company and gain control over it, is known as Acquisition.

2. In the merger, the two companies dissolve to form a new enterprise whereas, in the
acquisition, the two companies do not lose their existence.

3. Two companies of the same nature and size go for the merger. Unlike acquisition, in
which the larger company overpowers the smaller company.

4. In a merger, the minimum number of companies involved are three, but in the
acquisition, the minimum number of companies involved is 2.

5. The merger is done voluntarily by the companies while the acquisition is done either
voluntarily or involuntarily.

6. In a merger, there are more legal formalities as compared to the acquisition.

Examples of Mergers and Acquisitions in India

Acquisition of Corus Group by Tata Steel in the year 2006.

Acquisition of Myntra by Flipkart in the year 2014.

The merger of Fortis Healthcare India and Fortis Healthcare International.

Acquisition of Ranbaxy Laboratories by Sun Pharmaceuticals.

Acquisition of Negma Laboratories by Wockhardt


Conclusion
Nowadays, only a few numbers of mergers can be seen; however, acquisition is getting
popularity due to extreme competition. The merger is a mutual collaboration between the two
enterprises in becoming one while the acquisition is the takeover of the weaker enterprise by
the stronger one. But both of them gain the advantage of Taxation, Synergy, Financial
Benefit, Increase in Competitiveness and much more which can be beneficial, however
sometimes adverse effect can also be seen like an increase in employee turnover, clashing in
the culture of organizations and others but these are rare to happen.

Ans H. Business Skills to Run Your Business


There are many business skills required to run your own business apart from the knowledge
of the marketplace.

If you're starting up on your own, you'll need to run everything from serving customers to
preparing your accounts, and this is often a tough requirement for anyone. Below are listed
the core skills required in running a business and how you might develop your core skill set
further.

Leadership Skills

From our early childhood, we followed leaders from our parents to inspirational figures that
provided a structure in our life and a sense of belonging. The best run businesses are not only
marketing led but have strong leaders at the helm who know what's required to attain set
goals.

They will motivate their team to perform well to meet the overall company objectives. These
leaders will not procrastinate in their decision making and will lead the company forward in
the right direction.

Some people are born leaders and know exactly what's required to run a successful business
but most of us are not. Therefore, training programmes have been developed to improve
leadership skills to lead strategy, lead teams of people, lead change management programmes
and adjust and manage the company politics that organisational change may disrupt.

Strategic Business Planning Skills

Every business follows a plan even if it's not written down in a document. But developing
and implementing strategic change is a skill all business owners need. Undertaking a strategic
audit and writing a business plan is the first step in this discipline.

Thinking strategically in your outlook is a rare skill amongst business owners and managers
as most people are focused on the daily operations and dealing with customer issues to be
able to sit back and think about the future. And before they know it another year has passed
and little real progress has been made.
Applying strategy in your business will help you step clear longer term goals that will meet
longer-term objectives (rather than just survival or a 1% increase in profits).

Marketing Skills

Perhaps at the heart of every successful business is a real marketing person who actually
understands that customers pay the bills and grow the business. Completely and utterly
running your business for your customers needs is where successful businesses come from.
Anyone can run a business during boom times, but it's those businesses that thrive during a
recession are the ones that clearly understand what their customers want and provide products
and services exactly matching those needs.

Marketing is a key skill to have and buy delivering what people want to buy is an obvious
requirement for running a business but not many people truly understand how to market a
business correctly. Marketing led organisations always buck the trend and tend to produce
more revenues and profits than their competitors.

There are many excellent introduction to marketing books that are worth a read or training
courses run by the Institute of Marketing.

Sales and Customer Relationships

Selling is almost an art form, and everyone has probably sold something in their lives already.
Whether you have an interview for a job (where you have to sell yourself), or you've sold a
house in the past, you may already have the basic skills required.

The skills required in sales are really to understand the selling process; from initial contact to
completing the sale. It's worth having a look at successful websites to see how the selling
process works. Many sites fail because they simply don't "ask for the order". Good sales
people rarely leave a meeting without an order or at least a commitment to continue
negotiations. Just dropping a few leaflets off at a prospect client without any follow-up
activity will not get you that sale.

The sales process has six basic steps as follows:

Prospecting for new leads.

Initial contact with the prospect.

Presentation of sales materials.

Objection handling.

Closing the sale.

Follow up/ after sales service.


As mentioned above, the objection handling and closing the sale are probably the most
important areas to perfect. These are the most difficult areas to overcome for those people
without a sales background.

Communication Skills

Communicating effectively with others is a skill that successful business owners possess
whether it be with their staff, directors or customers. Most people write on a daily basis even
if it's a short email, but the written word can often be misinterpreted because there is reduce
emphasis on phrases that the spoken word has. Using the right words in the right context is
key but perhaps writing is the last resort because speaking directly to people has a better
positive response.

You can find great examples of written communications in advertising messages and
magazine headlines. If this is new to you, it's best to employ a good copywriter rather than try
and do this in-house. Many people believe they are great copywriters, but this is rarely the
case. Using the right words can boost response rates by 2 or 3 times and copy skills are
critical for an improved call to action response.

Whether you're in a meeting or meet someone at a networking event, how you present
yourself dictates how the other person acts upon what you're saying. You'll need to not only
be confident but show you have knowledge of your subject matter. Not everyone needs real
public speaking skills, but remember that if you need to present to a wider audience they
want to learn from you. It's unlikely you'll get banter from those listening to you or heckled
and if you know your subject matter why should you?

There are plenty of courses to develop your communication skills but just immersing yourself
with other people on a daily basis will improve your confidence.

People Management and HR

If you have or are thinking of hiring staff, you'll need to be able to set them goals, motivate
them to perform to your standards and also follow all the associated employment laws and
regulations.

People management is part of the leadership skills set and staff need to be aware of where the
company is heading, their role within the company and their personal key objectives.

Finance and Accounting Skills

Perhaps the biggest headache in running a business is being able to manage your cash flow.
Cash is the lifeblood of any business and profitable businesses fail and go bust if they run out
of cash and can't pay their suppliers or their employees. Supplies soon dry up and they have
nothing to sell and the employees leave and find alternative employment.

You should also be aware of some of the details in your business such as the selling price of
each product, the cost of each product and, therefore, the margin. If you believe cash is
running dry, then you should speak with your bank or accountant in an attempt to get some
help before it's too late.

Taking time away from the business to plan ahead - even if it's only a couple of weeks - is
critical so you don't get any nasty surprises along the way.

You should also be aware of some of the details in your business such as the selling price of
each product, the cost of each product and therefore the margin. If you believe cash is
running dry then you should speak with your bank or accountant in an attempt to get some
help before it's too late.

Getting some basic grounding in accounting skills is another essential for running a
successful business

Ans I. The importance of the body language in business

Definition of Body language.


Body language is a language without spoken words, it is called non verbal communication .

We use it all the time in our social life and business life so it is all about gestures movements
and expressions made by people to deliver a specific message to other people .

The role of Body language.


When we connect with a person, we also have to make it clear to each other how the content
of a spoken message needs to be interpreted but sometimes we are unable to deliver our
messages by spoken or even written languages so we use the body language to supplement
what we want to say by gesturing, moving or even giving some facial expressions.

Body language in different cultures.


We should know that body language has different meanings in different cultures, so if we
need to travel abroad to a country that has different culture or traditions, we shoul read about
how people act there and study about their body language, especially when we need to
conduct a meeting there or if we are one of the participants in that meeting or other business
situations such as job interviews, because if we do not take this into account we may get
ourselves in some serious troubles.

Here are some examples of body language in different countries :

Eye Contact:
In the United States and Canada, INTERMITTENT eye contact is extremely important in
conveying interest and attention. In many Middle Eastern cultures, INTENSE eye contact
between the same genders is often a symbol of trust and sincerity however, between opposite
genders.

Handshakes:
In parts of Northern Europe a quick firm handshake is the norm while in parts of Southern
Europe, Central and South America, a handshake is longer and warmer.

Greetings:
In America, there is a standard greeting: Hello, my name is.. with a handshake.

In Japan, people bow while in Italy, people kiss cheeks.

Touching:
In some sects of Judaism, the only woman that a man will touch in his lifetime is the woman
he is married to. In Japan, Scandinavia, and England, touching is less frequent. In Latino
cultures, touching is encouraged.

Ans J. Venture capital


Startup or growth equity capital or loan capital provided by private investors (the venture
capitalists) or specialized financial institutions (development finance houses or venture
capital firms). Also called risk capital.Venture capital is a type of funding for a new or
growing business. It usually comes from venture capital firms that specialize in building high
risk financial portfolios. With venture capital, the venture capital firm gives funding to the
startup company in exchange for equity in the startup. This is most commonly found in high
growth technology industries like biotech and software.

5 Steps to Create a Marketing Plan

Everyone knows you need a business plan, yet many entrepreneurs dont realize a marketing
plan is just as vital. Unlike a business plan, a marketing plan focuses on winning and keeping
customers; it's strategic and includes numbers, facts and objectives. A good marketing plan
spells out all the tools and tactics youll use to achieve your sales goals. Its your plan of
actionwhat youll sell, who'll want to buy it and the tactics youll use to generate leads that
result in sales. And unless youre using your marketing plan to help you gain funding, it
doesnt have to be lengthy or beautifully written. Use bulleted sections, and get right to the
point.

Heres a closer look at creating a marketing plan that works:

Step 1: Begin with a snapshot of your companys current


situation, called a situation analysis.

This first section defines your company and its products or services, then shows how the
benefits you provide set you apart from your competition.

Target audiences have become extremely specialized and segmented. No matter your
industry, from restaurants to professional services to retail clothing stores, positioning your
product or service competitively requires an understanding of your niche market. Not only do
you need to be able to describe what you market, but you must also have a clear
understanding of what your competitors are offering and be able to show how your product or
service provides a better value.

Make your situation analysis a succinct overview of your companys strengths, weaknesses,
opportunities and threats. Strengths and weaknesses refer to characteristics that exist within
your business, while opportunities and threats refer to outside factors. To determine your
companys strengths, consider the ways that its products are superior to others, or if your
service is more comprehensive, for example. What do you offer that gives your business a
competitive advantage? Weaknesses, on the other hand, can be anything from operating in a
highly saturated market to lack of experienced staff members.

Next, describe any external opportunities you can capitalize on, such as an expanding market
for your product. Dont forget to include any external threats to your companys ability to
gain market share so that succeeding sections of your plan can detail the ways youll
overcome those threats.

Positioning your product involves two steps. First, you need to analyze your products
features and decide how they distinguish your product from its competitors. Second, decide
what type of buyer is most likely to purchase your product. What are you selling?
Convenience? Quality? Discount pricing? You cant offer it all. Knowing what your
customers want helps you decide what to offer, and that brings us to the next section of your
plan.

Step 2: Describe your target audience.

Developing a simple, one-paragraph profile of your prospective customer is your next step.
You can describe prospects in terms of demographicsage, sex, family composition,
earnings and geographic locationas well as lifestyle. Ask yourself the following: Are my
customers conservative or innovative? Leaders or followers? Timid or aggressive? Traditional
or modern? Introverted or extroverted? How often do they purchase what I offer? In what
quantity?

If youre a business-to-business marketer, you may define your target audience based on their
type of business, job title, size of business, geographic location or any other characteristics
that make them possible prospects. No matter who your target audience is, be sure to
narrowly define them in this section, because it will be your guide as you plan your media
and public relations campaigns.

Step 3: List your marketing goals.

What do you want your marketing plan to achieve? For example, are you hoping for a 20
percent increase in sales of your product per quarter? Write down a short list of goalsand
make them measurable so that you will know when you have achieved them.

Step 4: Develop the marketing communications strategies and


tactics you will use.
This section is the heart and soul of your marketing plan. In the previous sections, you
outlined what your marketing must accomplish and identified your best prospects; now its
time to detail the tactics youll use to reach these prospects and accomplish your goals.

A good marketing program targets prospects at all stages of your sales cycle. Some marketing
tactics, such as many forms of advertising, public relations and direct marketing, are great for
reaching cold prospects. Warm prospectsthose who've previously been exposed to your
marketing message and perhaps even met you personallywill respond best to permission-
based email, loyalty programs and customer appreciation events, among others. Your hottest
prospects are individuals who have been exposed to your sales and marketing messages and
are ready to close a sale. Generally, interpersonal sales contact (whether in person, by phone,
or email) combined with marketing adds the final heat necessary to close sales.

To complete your tactics section, outline your primary marketing strategies, then include a
variety of tactics you will use to reach prospects at any point in your sales cycle. For
example, you might combine outdoor billboards, print advertising and online local searches
to reach cold prospects but use email to contact your warm prospects.

To identify your ideal marketing mix, find out which media your target audience turns to for
information on the type of product or service you sell. Avoid broad-based mediaeven if it
attracts your target audienceif the content is not relevant. The marketing tactics you choose
must reach your prospects when they will be most receptive to your message.

Step 5: Set your marketing budget.

You will need to devote a percentage of projected gross sales to your annual marketing
budget. Of course, when starting a business, this may mean using newly acquired funding,
borrowing or self-financing. Just bear this in mindmarketing is essential to the success of
your business. In addition, with so many different kinds of tactics available for reaching out
to every conceivable audience niche, theres a mix to fit even the tightest budget.

As you begin to gather costs for the marketing tactics you outlined in the previous step, you
may find you have exceeded your budget. Simply go back and adjust your tactics until you
have a mix that is affordable. The key is to never stop marketingdo not concern yourself
with the more costly tactics until you can afford them.

Ans M. Ten Characteristics of Successful Entrepreneurs

Although there is no "one size fits all" theory for entrepreneurship, a few guidelines may
help those with a good idea become successful entrepreneurs. The following insights can help
you embark on your next entrepreneurial venture with due diligence.

1. Passion & Motivation

If there were one word that describes the fundamental trait in an entrepreneurship, it would be
passion.
o Is there something that you can work on repeatedly, without getting bored?

o Is there something that keeps you awake because you have not finished it yet?

o Is there something that you have built and want to continue to improve upon,
repeatedly?

o Is there something that you enjoy the most and want to continue doing for the rest of
your life?

Your demonstration of passion and motivation will determine your success in any
entrepreneurial venture. From building and implementing a prototype, to pitching your idea
to venture capitalists, success is a function of passion and determination.

2. Risk Taking

Entrepreneurs are risk takers ready to dive deep into a future of uncertainty. But not all risk
takers are successful entrepreneurs. What differentiates a successful entrepreneur from the
rest in terms of risk? Successful entrepreneurs are will to risk time and money on unknowns,
but they also keep resources, plans and bandwidth for dealing with "unknown unknowns" in
reserve. When evaluating risk, a successful entrepreneur will ask herself, is this risk worth the
cost of my career, time and money? Moreover, what will I do if this venture does not pay off?

3. Self-belief, Hard work & Disciplined Dedication

Entrepreneurs enjoy what they do. They believe in themselves and are confident and
dedicated to their project. Occasionally, they may show stubbornness in their intense focus on
and faith in their idea. But the flip side is their demonstrated discipline and dedication.

4. Adaptability & Flexibility

Its good to be passionate or even stubborn about what you do. But being inflexible about
client or market needs will lead to failure. Remember, an entrepreneurial venture is not
simply about doing what you believe is good, but also making successful business out of it.
Market needs are dynamic: changes are a recurring phenomenon. Successful entrepreneurs
welcome all suggestions for optimization or customization that enhances their offering and
satisfies client and market needs. A product you develop for yourself alone may qualify as a
hobby, but a product for the market should satisfy market needs.

5. Understand Your Offering And Its Market

Entrepreneurs know their product offering inside and out. They also know the marketplace
and its dynamics inside and out. Remaining unaware of changing market needs, competitor
moves and other external factors can bring even great products to failure (for example,
Blockbuster).

6. Money Management
It takes time to get to profitability for any entrepreneurial venture. Till then, capital is limited
and needs to be utilized wisely. Successful entrepreneurs realize this mandatory money
management requirement and plan for present and future financial obligations (with some
additional buffer). Even after securing funding or going operational, a successful
businessman keeps a complete handle on cash flows, as it is the most important aspect of any
business.

7. Planning (But not Over-planning)

Entrepreneurship is about building a business from scratch while managing limited resources
(including time, money and personal relationships). It is a long-term commitment, and
attempting to plan as much as possible at the beginning is a noble impulse. In reality,
however, planning for everything and having a ready solution for all possible risks may
prevent you from even taking the first step. Successful entrepreneurs do keep some dry
powder in reserve, but more importantly they maintain a mindset and temperament to capable
of dealing with unforeseen possibilities.

Do a feasibility analysis; identify time and capital thresholds; take the deep dive with your
limited resources. If your thresholds are crossed, look for alternatives and be prepared to take
the next exit.

8. Networking Abilities

How do you tap your network for solutions? Many people seek comfort in commiseration:
friends, colleagues and neighbours are happy to complain with you about "the global
slowdown, poor demand, or unfair competition; but that won't improve the bottom line.
What do successful entrepreneurs do? They reach out to mentors with more experience and
extensive networks to seek valuable advice.

Having such networking abilities, including more mentors that are experienced, is a key
characteristic of successful entrepreneurs.

9. Being Prepared to Take the Exit

Not every attempt will result in success. The failure rate of entrepreneurial ventures is very
high. At times, it is absolutely fine to take the practical exit route and try something new,
instead of continuing to make sunk cost investments in the same venture. Many famous
entrepreneurs weren't successful the first time around. However, they had the serenity and
foresight to know when to cut their losses.

10. Entrepreneurs Doubt Themselves But Not Too Much

You may ask yourself, am I an entrepreneur? Moreover, the very question may put you in
doubt about the answer. Even if you do not have the flair of Steve Jobs or the hair of Elon
Musk, if you have the courage to ask yourself intimidating questions Can I do this? Do
I want to do this? You have the stuff to be an entrepreneur.
Ans N. Entrepreneur and examples

Someone who exercises initiative by organizing a venture to take benefit


of an opportunity and, as the decision maker, decides what, how, and how
much of a good or service will be produced. An entrepreneur supplies risk
capital as a risk taker, and monitors and controls the business activities

Examples of Entrepreneurs

Bill Gates, founder of Microsoft. There are probably not many people that have not
been touched by one of his products, such as Microsoft Windows, Microsoft Office
and Internet Explorer.

Steve Jobs, co-founder of Apple computers, which produces Macs, iPods and
iPhones, as well as Apple TV.

Mark Zuckerberg, the founder of Facebook.

Pierre Omidyar, founder of eBay.

Arianna Huffington, founder of the Huffington Post, a well-known online news site.

Caterina Fake, co-founder of Flikr, which hosts images and videos on the Internet.

Ans P. Trend

A trend is the general direction of a market or of the price of an asset, and trends can vary in
length from short to intermediate, to long term.
As a general strategy, it is best to trade with trends, meaning that if the general trend of the
market is headed up, you should be very cautious about taking any positions that rely on the
trend going in the opposite direction. A trend can also apply to interest rates,
yields, equities and any other market that is characterized by a long-term movement in price
or volume.

Ans S. The Importance of Diversification

Diversification is a technique that reduces risk by allocating investments among various


financial instruments, industries and other categories. It aims to maximize return by investing
in different areas that would each react differently to the same event.

Most investment professionals agree that, although it does not guarantee against
loss, diversification is the most important component of reaching long-range financial goals
while minimizing risk. Here, we look at why this is true and how to accomplish
diversification in your portfolio.

Different Types of Risk


Investors confront two main types of risk when investing:

Undiversifiable - Also known as "systematic" or "market risk," undiversifiable risk is


associated with every company. Causes are things like inflation rates, exchange rates,
political instability, war and interest rates. This type of risk is not specific to a
particular company or industry, and it cannot be eliminated or reduced through
diversification; it is just a risk that investors must accept.

Diversifiable - This risk is also known as "unsystematic risk," and it is specific to a


company, industry, market, economy or country; it can be reduced through
diversification. The most common sources of unsystematic risk are business risk
and financial risk. Thus, the aim is to invest in various assets so that they will not all
be affected the same way by market events.

Ans T. Conceptual skills & its importance

Conceptual skills are probably some of the most important management skills. There are
some very basic principles behind conceptual skills. The inputs by people who are hired
especially for their exceptional conceptual skills often influence the decision-making process
in an organization, be it about something like a change in the employees dress code to
something as big as a revamped advertising campaign for a product. Some functions of these
skills are mentioned below. They might help you understand it better.

Establish Inter-relation
A person who has conceptual skills has the ability to carry out a detailed study of the possible
and probable inter-relation between various ideas and 'concepts'. It is a cognitive skill that
requires the person to have a deep understanding of what has to be studied, what can be
ignored and how to ascertain how much importance should be given to which concept. It also
relates to how to use the inter-relation between the various aspects of the matter and come up
with a concept or an idea to make it better. It is an integral part of how business management
actually goes about.
Problem Solving
A conceptual person can combine problem solving with the practice of conceptualizing a
practical issue. For instance, if there is group of people who are opposing the construction of
a bridge near their houses, the person will go deeper into the problem, find out why it is so,
how to convince them without offering them just money, get them to understand how the
bridge will in no way harm the peace and harmony of their homes, and finally get them to
agree to the construction.
Study as a Whole
A conceptual person will not look at the organization as a part of the industry. Using this skill,
he will look at it as a whole. The main focus will be on how to study, analyze, and develop
new strategies that will enable the smooth and better functioning of the organization as a
whole. He may compartmentalize each section within the organization and come up with
various concepts to help them individually, but the overall progress of the whole organization
is the ultimate goal.
Creative Thinking
Apart from problem solving, conceptual skills also play another very important part as far as
manager skills are concerned. This involves coming up with creative and innovative ideas
and concepts pertaining to the growth of the organization. For instance, a company needs to
boost the sales of its new product - a tangy tomato ketchup, with a hint of mint in it. A person
with conceptual skills is the one who will treat the 'increase of sales' as a concept rather than
a physical target. He will perform the important functions of management. He will study and
speculate, he will analyze and comprehend. He will then come up with a concept which will
use the distinct 'flavor' of the ketchup as its USP. As you can see from this, the person has
come up only with a concept of the flavor being different. The next step of forming a suitable
advertisement is the job of the ad department and the technically skilled managers will handle
the technical aspect of making the whole concept a reality.
You can come across conceptual skills examples in your day-to-day life too. They are not
restricted only to top level management in a big organization. They can be as simple as a
child wondering why clouds are formed and coming up with his own version of the reason.
Developing them is not difficult. You just need to hone the analyzing abilities that you
possess.

Ans U. Business Plan & the possible readers of Business Plans

A business plan is a formal statement of businessgoals, reasons they are attainable,


and plans for reaching them. It may also contain background information about the
organization or team attempting to reach those goals.

Who Reads Business Plans?

Business plans are detailed written overviews that outline the ways in which a business will
ideally be operated. Comprehensive plans include market research, competition analysis,
strategic marketing and operating objectives, financial outlooks and short- and long-term
goals. While many business plans are written for the express purpose of attaining small
business financing, they can be used for a variety of other purposes as well.

Lenders

Before authorizing a small-business loan, a financial institution will want to read a well-
crafted business plan. This helps the lender assess if the business objectives are sound and if
youve accurately anticipated various expenditures and projected revenue. The business plan
is usually read in conjunction with the business loan application, and the lender uses the plan
to help her judge whether your business represents a sound financial risk for the bank.

Investors

If you decide to take on investors at any point, they will want to read your business plan
before making a commitment. The business plan spells out anticipated revenue streams,
earning projections and researched plans for reaching your target demographic. It also details
the specifics of your products and services and the potential for growth and expansion, and
your financials reflect the performance of the business to date. Reading your business plan, in
essence, allows potential investors to get a glimpse into your businesss potential future.

Partners

If you decide to bring on a partner or hire someone in a high-level executive position, he will
want to read your business plan. Reading the plan will help a potential upper-echelon
employee understand your objectives, your operating procedures and his own potential for
career growth and development. This will help both you and your prospect decide if he is a
good fit for your organization and shares the same business philosophy and professional
approach.

Smart Business Owners

Ideally, you will regularly read and review your plan to help keep your small business on
track. Your business plan should contain goals, objectives and measurements that set the
course for your business. Regularly measuring the real-life progress of your business against
your business plan goals will help you determine what parts of your operation need to be
tweaked. For example, if revenues are not as strong as anticipated, revisit the marketing plan
and review the factors you based your initial projections on. Ask yourself if the market has
changed or if there are internal measures to take to redirect the business's course.

Ans V. Difference between Market Penetration and Market


Development

Market penetration is a strategy where the company sells existing products in the existing
market in order to obtain more market share. This is a highly competitive strategy that can
provoke competitors, thus is called a red ocean strategy.

E.g., McDonald has introduced McCafe by offering roasted and good coffee for an affordable
price and was adopting an aggressive marketing strategy against Starbucks.

Market development is a growth strategy that identifies and develops new market segments
for current products. The effects from current competitors are low in this approach, thus is
called a blue ocean strategy.

E.g. in 1961, Nestle entered Nigeria as a part of company strategy to lessen the focus on
developed countries and to increase the focus on developing markets

E.g. After Johnsons baby products became a popular choice for babies,
the company started advertising the products for adults under the tagline
Best for the baby-Best for you.
Market Penetration vs. Market Development
Market penetration is a strategy Market development is a strategy in
in which the company sells which the company sells existing
existing products in the existing products in a new market.
market in order to obtain more
market share

Strategy

Market penetration is referred to Market development is referred to


as a red ocean strategy. as a blue ocean strategy.

Risk

Market penetration is relatively a High risk is inherent in Market


low risk strategy since the development strategy as the
products are sold in familiar company is entering into unfamiliar
markets markets.

Type

Price adjustments, promotional Entering a new geographical market


strategies, and new distribution or targeting new customers in new
channels are types of market segments are ways in entering into
penetration new markets

Ans W. Importance of personality development

Personality development is essential because of a host of reasons. The main reason being is
that it is exceedingly important for one to have a sharpened image and personality to be able
to have an efficient socially viable, multi-faceted and impressive personality. Who will not
want to have the former listed personality traits? I am certain everyone who reads this will
find it desirable to have those qualities in their personality!

Personality development is gaining so much importance, that today, offices stress on


motivation and personality development almost as much as the work structural requirements
of the office. Personality development is important in any environment. At office: Personality
development is essential, because with the right personality and social skills, one can interact
effortlessly and well with colleagues and team-participation becomes simpler, as everyone
dwells into matters with positive approaches, due to the personality development.

At educational institutions: Students and teachers have good rapport, students have the
capacity to make more friends and be more affable. The students interact and present
themselves well. Teachers have different and multi-talented capacities that get enhanced by
personality development. At home: The home environment is pleasant when a person has a
vibration of positivity and when your personality is interesting and fun. Every environment
gets benefitted by a good and developed personality.

This is the case with every individual, barring none. The aspects of personality being
developed does not even necessarily have to do with words and communications verbally, it
is the essence of a personality that stands out, as being one that is developed, because of the
exuberance, that is denoted by that personality, with or without saying anything. Personalities
of actors, for instance, take SRK, or Tom Cruise, are super-charming, even with their mere
presence. They do not have to say anything for their personalities to shine. Similarly, a well-
rounded and developed personality, is one that does not always have to be tested by speech
and communication, a mere presence can be felt of a desirable personality, with proper
development.

The importance of a well developed personality cannot be stressed on enough. It is gaining


supreme importance and is one of the most important aspects of an individuals persona and
individuality, to gain add-ons and enhancements to their personality, for it to be noticed and
for it to make impressions that last! Make a splash, like taking paint and air-brushing the
flaws of personality with development.

What is a 'Marketing Mix'


A marketing mix usually refers to E. Jerome McCarthy's four P classification for
developing an effective marketing strategy: product, price, placement, or distribution,
and promotion. When it is a consumer-centric marketing mix, it is extended to include
three more Ps: people, process and physical evidence, and three Cs: cost, consumer
and competitor. Depending on the industry and the target of the marketing plan,
marketing managers may take various approaches to each of the four Ps

The of Marketing mix are as follows

1) Product in the Marketing mix

The first thing you need, if you want to start a business, is a product. Therefore Product is
also the first variable in the marketing mix. Product decisions are the first decisions you need
to take before making any marketing plan. A product can be divided into three parts. The core
product, the augmented product and the tertiary product. Before deciding on the product
component there are some questions which you need to ask yourself.

What product are you selling?

What would be the quality of your product?

Which features are different from the market?

What is the USP of the product?


Whether the product will be branded as sub brand or completely new?

What are the secondary products which can be sold along with primary
(Warranty, services)

Based on these questions, several product decisions have to be made. These product
decisions will in turn affect the other variables of the mix. For example You plan on
launching a car which will have the highest quality. Thus the pricing, promotions and placing
would have to be altered accordingly. Thus as long as you dont know your product, you
cannot decide any other variable of the marketing mix. However, if the product features are
not fitting in the mix, you can alter the product such that it finds a place for itself in the
marketing mix.

ALSO READ Marketing Mix Of Thums Up - Thums Up Marketing Mix

2) Pricing in the Marketing mix

Pricing of a product depends on a lot of different variables and hence it is constantly updated.
Major consideration in pricing is the costing of the product, the advertising and marketing
expenses, any price fluctuations in the market, distribution costs etc. Many of these factors
can change separately. Thus the pricing has to be such that it can bear the brunt of changes for
a certain period of time. However, if all these variables change, then the pricing of a
product has to be increased and decreased accordingly.

Along with the above factors, there are also other things which have to be taken in
consideration when deciding on a pricing strategy. Competition can be the best example.
Similarly, pricing also affects the targeting and positioning of a product. Pricing is used
for sales promotions in the form of trade discounts. Thus based on these factors there are
several pricing strategies, one of which is implemented for the marketing mix.

3) Place in the Marketing mix

Place refers to the distribution channel of a product. If a product is a consumer product, it


needs to be available as far and wide as possible. On the other hand, if the product is
a Premium consumer product, it will be available only in select stores. Similarly, if the
product is a business product, you need a team which interacts with businesses and makes the
product available to them. Thus the place where the product is distributed, depends on the
product and pricing decisions, as well as any STP decisions taken by a firm.

Distribution has a huge affect on the profitability of a product. Consider a FMCG company
which has national distribution for its product. An increase in petrol rates by 10 rs will in fact
bring about drastic changes in the profitability of the company. Thus supply chain and
logistics decisions are considered as very important costing decisions of the firm. The firm
needs to have a full proof logistics and supply chain plan for its distribution.
4) Promotions in the Marketing mix

Promotions in the marketing mix includes the complete integrated marketing


communications which in turn includes ATL and BTL advertising as well as sales
promotions. Promotions are dependent a lot on the product and pricing decision. What is the
budget for marketing and advertising? What stage is the product in? If the product is
completely new in the market, it needs brand / product awareness promotions, whereas if the
product is already existing then it will need brand recall promotions.

Promotions also decide the segmentation targeting and positioning of the product. The right
kind of promotions affect all the other three variables the product, price and place. If the
promotions are effective, you might have to increase distribution points, you might get to
increase the price because of the rising brand equity of the product, and the profitability
might support you in launching even more products. However, the budget required for
extensive promotions is also high. Promotions is considered as marketing expenses and the
same needs to be taken in consideration while deciding the costing of the product.

[Long answers]

Ans b. International versus Domestic Entrepreneurship

Although there is a similarity between international and domestic entrepreneurship about cost
, sales and profit but the variation of relative factors such as Economics, Politics, Cultures
and Technologies that differentiate Domestic from International Entrepreneurship.

Economics

In a Domestic business strategy , the entrepreneur focus on the specified level of economic
development in domestic country. Also , the whole nation is more or less well prepared in a
particular financial scheme with same exchange. On the other hand , in a International
business strategy , the entrepreneur has to deal with exchange assessments , distinctions in
level of financial improvement , management(Government) policies , banking , business
enterprise , capital advertising along with allotment arrangement. According to these issues
differentiate the business plan and method of domestic from international entrepreneurs.

Stage of Economic Development

Such fundamental infrastructures as roads , banking conveniences as well as schemes,


electricity ,communication systems , a well urbanized legal structures and industry or morals
and standards maybe the entrepreneur does not have to worry about in US .But in order to go
global as an international entrepreneur , have to make plans or method to deal with these
factors. Also, these factors are very grateful in other countries and successfully effect in
international business rather than domestic.

Balance of payments

A country's stability of expenses have an impact on the assessment of its exchange plus this
assessment of one nation's exchange have an effect on the commerce contracts among the
nation's .For example, Italy had been suffering from balance payments a few years ago and if
they stopped the inflation that would have been halted overnight . On the other hand the
principal rescuer US had been suffered the same problem. Also India and The Great Britain
had the same problem(Hazlitt,2011,p.2-40).

Type of Economics

The suitable negotiating is individual of the several complications that have an effect on in
doing commerce in developing as well as transit nations. For example, US weapons exporters
are alone estimated complete about $4 to $7 billion annually in defence offset transaction and
in that case for some , it may over time strengthen the foreign competitors and also it effects
the employment(Czinkota & Ronakeinen,2012)

Political-Legal Environment

One of the key problem of business plan in international marketing is combination of political
and legal environment . On the other hand , it can create market opportunity for industrialists
as well as for others too. For instance, US environmental have eradicated the opportunity of
importing several European cars models. Furthermore, pricing fluctuation is one of the events
that increase the prices of food , oil and other energy products. As an international
entrepreneur , it comes to an attention that each element of business strategy can affect by the
multiplicity of political legal environment. It hard to make move where as an international
entrepreneurs , pricing decision are different from the domestic country where may be with
no value added tax . Also , advertising strategy are different in different countries where
claiming and being sued comes to mind. Furthermore, product decision are hard to make for
an international entrepreneur in respect of labelling, packaging and ingredients. Also, the
regulations principal business appointments fluctuate deeply more than 150 dissimilar
authorized system as well as nationalized regulations.

Civilizing Environment
The cultures are different in different countries and it affects the business plans in doing
business global. For example , in US points of purchase are allowed but for other countries
are not allowed. Another example of Lenovo . when they went to US, so they were having
conversation to deal and at some point US were telling their terms and Chinese were like ,
"Shi,Shi,Shi" means "Yes, Yes,Yes".So US thought they were agreed to their term but it
turned out they said yes ,yes to carry on the conversation , they were
listening(Business+Strategy,2014). Some cultural environment bribes and corruption are
common. On the other hand , sometimes it hard to find a translator.

Technological Environment

Same as culture technological environment are different in some counties. Especially, if the
entrepreneur from develop country and go to developing country .Products normally created
which based on the country's infrastructure and condition operating in the country. For such
an instance, It seems European designer do not assume as US car designer that wider road
and less expensive gasoline.

Ans c. Good Sources of New Business Ideas

There are millions of entrepreneurs throughout the world and their testimonies suggest that
there are many potential, various sources of new viable business ideassuch as HyreCar, or
sources of entrepreneurship ideas/sources of business opportunities. Some of the more
useful great ways to generate business ideas are outlined below.

Hobbies/Interests

A hobby is a favorite leisure-time activity or occupation. Many people, in pursuit of their


hobbies or interests, have founded businesses. If, for example, you enjoy playing with
computers, cooking, music, traveling, sport or performing, to name but a few, you may be
able to develop it into a business. To illustrate this, if you enjoy traveling, performing and/or
hospitality, you may consider going into tourism which is one of the biggest industries in
the world.

Personal Skills and Experience

Over half of the ideas for successful businesses come from experiences in the work place, e.g.
a mechanic with experience in working for a large garage who eventually sets up his/her own
car repair or a used car business. Thus, the background of potential entrepreneurs plays a
crucial role in the decision to go into business as well as the type of venture to be created.
Your skills and experience are probably your most important resource, not only in generating
ideas but also in capitalizing on them.
Mass Media

The mass media is a great source of information, ideas and often opportunity. Newspapers,
magazines, television, and nowadays the Internet are all examples of mass media. Take a
careful look, for example, at the commercial advertisements in newspaper or magazine and
you may well find businesses for sale. Well, one way to become an entrepreneur is to respond
to such an offer. Articles in the printed press or on the Internet or documentaries on television
may report on changes in fashions or consumer needs. For example, you may read or hear
that people are now increasingly interested in healthy eating or physical fitness. You may also
find advertisements calling for the provision of certain services based on skills, for example
accounting, catering or security. Or you may discover a new concept for which investors are
required, such as a franchise.

Exhibitions

Another way to find the ideas for a business is to attend exhibitions and trade fairs. These are
usually advertised on the radio or in newspapers; by visiting such events regularly, you will
not only discover new products and services, but you will also meet sales representatives,
manufacturers, wholesalers, distributors and franchisers. These are often excellent sources of
business ideas, information and help in getting started. Some of them may also be looking for
someone just like you

Surveys

The focal point for a new business idea should be the customer. The needs and wants of the
customer, which provide the rational for a product or service, can be ascertained through a
survey. Such a survey might be conducted informally or formally by talking to people
usually using a questionnaire or through interviews and/or through observation. You may
start by talking to your family and friends to find out what they think is needed or wanted that
is not available.

Complaints

Complaints and frustrations on the part of customers have led to many a new product or
service. Whenever consumers complain bitterly about a product or service, or when you hear
someone say I wish there was or If only there were a product/service that could ,
you have the potential for a business idea. The idea could be to set up a rival firm offering a
better product or service, or it might be a new product or service which could be sold to the
firm in question and/or to others.

Brainstorming

Brainstorming is a technique or creative problem-solving as well as for generating ideas. The


object is to come up with as many ideas as possible. It usually starts with a question or
problem statement. For example, you may ask What are the products and services needed in
the home today which are not available? Each idea leads to one or more additional ideas,
resulting in a good number.
When using this method, you need to follow these four rules:
Dont criticize or judge the ideas of others.

Freewheeling is encouraged ideas that seem to be wild or crazy are welcome.

Quantity is desirable the greater the number of ideas, the better.

Combine and improve upon the ideas of others.

Reasons for generating business ideas:

Business idea generation is a sine-qua-non (inevitable) for business.

Ideas are generated to respond to market needs

Ideas are also generated to respond to changing fashions and requirements.

In order to stay ahead of competition

To be in tune with latest technology so as to do things better.

In response to product life cycle

In order to spread risk and allow for failure.

METHODS OF GENERATING NEW IDEAS


Even with the wide variety of sources available, coming up with an idea to serve as
the basis for the new venture can still be
a difficult problem. The entrepreneur can use several methods to help generate and testnew id
eas, including focus groups, brain storming and problem inventory analysis.

Focus groups
Group of individuals providing information in
a structured format is called a focus group. The group of 8
to 14 participants
is simulated by comments form other group members in creatively conceptualizing and
developing new product idea to fulfill a market need.

Brainstorming
A group method of obtaining new ideas and solutions
is called brainstorming. The brainstorming method
for generating new ideas is based on
the fact that people can be stimulated to greater creativity by meeting
with others an d participating with organized group experiences. Although most of
the ideas generated
from the group have no basis for further development, often a good idea emerges.
Problem inventory analysis
Problem inventory analysis uses individuals in
a manner that is analogous to focus groups to generate new
product ideas. However instead of generating new ideas themselves, consumers are provided
with a list ofproblems in
a general product category. They are then asked to identify and discuss products in this
category that have the particular problem. This method is often effective since it
is easier to relate known products to suggested problems and arrive at
a new product idea then to generate an entirely new idea by
itself.

Ans d. Difference between Entrepreneur and Intrapreneur.

BASIS FOR ENTREPRENEUR INTRAPRENEUR


COMPARISON

Meaning Entrepreneur refers to a Intrapreneur refers to an


person who set up his own employee of the organization
business with a new idea or who is in charge of
concept. undertaking innovations in
product, service, process etc.

Approach Intuitive. Restorative

Resources Uses own resources. Use resources provided by


the company.

Capital Raised by him. Financed by the company.

Enterprise Newly established. An existing one


Dependent
Dependency Independent.
Borne by the entrepreneur
Risk himself. Taken by the company.

Works for Creating a leading position in Change and renew the


the market. existing organizational
system and culture.

Ans e. Ten traits of the successful entrepreneur.

1. Disciplined
These individuals are focused on making their businesses work, and eliminate any hindrances
or distractions to their goals. They have overarching strategies and outline the tactics to
accomplish them. Successful entrepreneurs are disciplined enough to take steps every day
toward the achievement of their objectives.

2. Confidence

The entrepreneur does not ask questions about whether they can succeed or whether they are
worthy of success. They are confident with the knowledge that they will make their
businesses succeed. They exude that confidence in everything they do.

3. Open Minded

Entrepreneurs realize that every event and situation is a business opportunity. Ideas are
constantly being generated about workflows and efficiency, people skills and potential new
businesses. They have the ability to look at everything around them and focus it toward their
goals.

4. Self Starter

Entrepreneurs know that if something needs to be done, they should start it themselves. They
set the parameters and make sure that projects follow that path. They are proactive, not
waiting for someone to give them permission.

5. Competitive

Many companies are formed because an entrepreneur knows that they can do a job better than
another. They need to win at the sports they play and need to win at the businesses that they
create. An entrepreneur will highlight their own companys track record of success.

6. Creativity

One facet of creativity is being able to make connections between seemingly unrelated events
or situations. Entrepreneurs often come up with solutions which are the synthesis of other
items. They will repurpose products to market them to new industries.

7. Determination

Entrepreneurs are not thwarted by their defeats. They look at defeat as an opportunity for
success. They are determined to make all of their endeavors succeed, so will try and try again
until it does. Successful entrepreneurs do not believe that something cannot be done.

8. Strong people skills

The entrepreneur has strong communication skills to sell the product and motivate
employees. Most successful entrepreneurs know how to motivate their employees so the
business grows overall. They are very good at highlighting the benefits of any situation and
coaching others to their success.

9. Strong work ethic

The successful entrepreneur will often be the first person to arrive at the office and the last
one to leave. They will come in on their days off to make sure that an outcome meets their
expectations. Their mind is constantly on their work, whether they are in or out of the
workplace.

10. Passion

Passion is the most important trait of the successful entrepreneur. They genuinely love their
work. They are willing to put in those extra hours to make the business succeed because there
is a joy their business gives which goes beyond the money. The successful entrepreneur will
always be reading and researching ways to make the business better.

Successful entrepreneurs want to see what the view is like at the top of the business
mountain. Once they see it, they want to go further. They know how to talk to their
employees, and their businesses soar as a result.

Ans f. Business Plan & 6 Critical Questions Your Business Plan Must Answer
A business plan is a formal statement of business goals, reasons they are attainable,
and plans for reaching them. It may also contain background information about the
organization or team attempting to reach those goals.

Never underestimate the importance of your business plan. It is the backbone of your
company, a foundational pillar from which your enterprise will be built. Its going to serve as
the first impression for countless potential partners and investors, and its going to serve as a
roadmap for your whole business -- at least for the first several years.

In some ways, writing a business plan is easy -- there are no rules or requirements for length,
format, presentation, or even subject matter. But finding the right answers to the right
questions is critical if you want to lay the groundwork for a stable business and attract
sufficient attention from investors.

1. What need are you addressing?

This is an important question because it extends beyond the simple What does your business
do? Its one thing to outline your business in general, describing what products you make or
what services you offer, but if you want a solid business plan you have to take it to the next
level.

Its nice to imagine your business as providing something useful, and if youre excited about
the idea, its that much easier to think about people buying it. But you need to be logical and
critical when you consider the driving force behind your customers purchasing decisions:
what fundamental customer need is your business addressing? Youll want to back this up
with research that shows the need actually exists.

2. What makes you different?

Its a big world out there, and startups are constantly coming on and off the radar. Chances
are, there are multiple businesses out there who are already serving the crucial need you
outlined from question one. That doesnt mean you cant serve it better, or serve it in a
different way, but therein lies the challengefiguring out what makes you different.

First, youll need to acknowledge all the major players in your space, and this is going to
require some research. Acknowledge what theyre doing right, what theyre doing wrong, and
how theyre going about their business. Identify the differentiating factor that will allow you
to stand out, and emphasize it.

3. Who is your audience?

Heres a hint: the answer cant be everybody. No matter how useful or practical your
product or service is, theres no way youre going to be able to sell to everyone in the world.
Think about factors like age, sex, education, geographic location, working status, marital
status, and perform some preliminary market research to determine the best path forward.

Your key demographic may evolve over time, so dont stay too committed to one niche. Also
remember, that its easy to expand to other markets once youve established yourself in one,
so if you have multiple key demographics, it may be wise to focus on one to start things off.

4. How is your business going to make money?

This seems like an obvious question to answer, but youd be surprised how many
entrepreneurs fail to elaborate on their plan. The brief answer to this question is sell
products/services, but how are you going to sell? Where are you going to sell? How much
are you going to sell for?

The other side of the question is what are your operating expenses? Who are you going to
pay? What services or partners will you need to pay for? And ultimately, will the amount you
sell be able to surpass the amount you owe? When will you break even?

5. How will you promote your business?

Promoting your business is just as important as creating it. Otherwise, people will never
know who you are. Your marketing strategy should start off based on what similar businesses
before you have done. Do they rely on traditional advertising or online marketing? Do they
attend tradeshows and local events, or use technology to spread the word about their
existence?

6. What do you need to get started?


For many potential partners and investors, this is the bottom line. All businesses have to start
somewhere, but that starting line varies dramatically from industry to industry and from
entrepreneur to entrepreneur. Do you need any advanced equipment? Who will you need to
hire? How much will you need for an initial run? These questions should give you an idea
exactly how much capital and what resources you need initially.

It may seem counterintuitive, but answering these questions isnt a one-time process. Your
business plan should be a living, changing document that evolves along with your company.
Throughout your course of entrepreneurship, youre going to encounter new challenges, new
opportunities, and hundreds of factors you never considered as significant to your business
when you were writing the initial plan. To survive, youre going to have to revise your
answers to these questions and update your business plan accordingly.

Ans k. Essential skills required in modern business


You will require a number of skills to start and run a business. It is important to identify the
skills you need to develop or improve so that you can succeed in your day-to-day business
operations.

Financial management
Being able to effectively managing your finances is a critical. You will need to be able to
forecast your cash flow and sales, as well as, monitor your profit and loss. You will also need
to declare your income to the Australian Tax Office.

Having sound financial management skills will help you to run your business profitably and
protect your financial investment.

Find out more about managing your financials.

Marketing, sales and customer service


It is important to be able to promote your products or services effectively. Providing good
customer service and having a marketing strategy in place will help you to generate sales.

Find out more about marketing.

Communication and negotiation


You will need to communicate and negotiate with your suppliers, potential investors,
customers and employees. Having effective written and verbal communication skills will help
you to build good working relationships. Every communication should reflect the image you
are trying to project.

Leadership
If you employ people leadership will be a key skill. You must be able to motivate your staff in
order to get the best out of them and improve productivity. Allocate time to mentor and coach
your employees.

Find out more about employing staff.


Project management and planning
Starting a business means you will have to manage a range of projects, such as setting up a
website, arranging the fit-out of your premises and developing a range of policies and
procedures. Knowing how to effectively manage your resources, including time, money and
staff will help you to achieve your goals.

Delegation and time management


Failure to delegate is a trap many business owners fall in to usually because they are reluctant
to let go of control. Managing your time effectively may mean delegating responsibility to
someone else in the business or outsourcing. Identifying who you can delegate tasks to allows
you to concentrate on those tasks that generate revenue.

Problem solving
However much you plan, you will encounter problems in your business. This means you need
to be able to make good decisions, sometimes under pressure.

Networking
Building good relationships through networking will help you to grow your business and give
you the support youll need.

Consider joining an industry or business association to grow your network.