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Goal setting is the process of deciding what you want to accomplish and devising
a plan to achieve the result you desire. For entrepreneurs, goal setting is an
important part of business planning.
Successful people develop the habits of personal strategic planning. They sit
down and make a list of exactly what they want to accomplish in the short,
medium, and long term. They then use a powerful, seven-part goal-setting
methodology to create blueprints and plans of action that they follow every day.
In February 2003, USA Today reported on a study of people who had set New
Year’s resolutions the year before. They found that only 4 percent of the people
who had made New Year’s resolutions, but had not put them in writing, had
followed through on them. But 46 percent of those people who had written down
their New Year’s resolutions carried them out. This is a difference in success rates
of more than 1,100The seven-step formula
Many formulas and recipes exist for goal setting. As a rule, “any plan is better
than no plan at all.” Here is one of the best and most effective goal-setting plans
or formulas you will ever learn.
The seven-step formula
Step one: Decide exactly what you want in a certain area, and write it down
clear-ly, in detail. Make the goal measurable and specific.
Step two: Set a deadline for achieving the goal. If it’s a large goal, break it down
into smaller parts and set sub deadlines.
Step three: Make a list of everything you’ll have to do to achieve this goal. As
you think of new items, add them to your list until it’s complete.
Step four: Organize your list of action steps into a plan. A plan is a list of
activities organized on the basis of two elements, priority and sequence.
In organizing by priorities, you determine the most important things you can
possibly do on your list to achieve your goal. The 80/20 rule applies: 20 percent
of the things you do will account for 80 percent of your results. If you don’t set
clear priorities, you’ll “major in minors” and spend much of your time on small
and irrelevant tasks that don’t help you achieve your goal.
In organizing by sequence, you determine what must be done before something
else can be done. You create a checklist. There are always activities that are
dependent upon other activities being completed in advance. What are they, and
what is the logical order or sequence of completion?
Step five: Identify the obstacles or limitations that might hold you back from
achieving your goal, both in the situation and within yourself. Ask yourself, “Why
have I not achieved this goal already?”
Identify the most important constraint or limitation that’s holding you back, and
then focus on removing that limiting factor. It could be a certain amount of money
or a key resource. It could be an additional skill or habit you need. It could be
additional information you require. It could be the help or assistance of one or
more people. Whatever it is, identify it clearly and go to work to eliminate it.
Step six: Once you’ve determined your goal, developed your plan, and identi-fied
your major obstacle, immediately take action of some kind toward achieving your
goal. Step out in faith. Do the first thing that comes to mind. But do something to
start moving toward your most important goal.
Step seven: Do at least one thing every day that moves you toward your most
important goal. Make a habit of getting up each morning, planning your day and
then doing something, anything, that moves you at least one step closer to what’s
most important to you.
The habit of doing something every single day that moves you toward an
important goal develops within you the power of momentum. Daily action
deepens your belief that the goal is achievable and activates the law of attraction.
As a result, you begin moving faster and faster toward your goal, and your goal
begins moving faster and faster toward you.
Entrepreneurial Group Activities
Entrepreneurial activity is the enterprising human action in pursuit of the
generation of value, through the creation or expansion of economic activity, by
identifying and exploiting new products, processes or markets.
Understanding Entrepreneurial Activity
(a) enterprising human activity;
(b) the assembly of unique bundles of resources, identification of
market opportunities, and/or utilisation of innovative capabilities
(c) the significance of the business and wider environments, and
(d) the creation of value.
(a) enterprising human activity
The entrepreneur “cannot evade the law of the market. He can succeed only by
best serving the consumers. His profit depends on the approval of his conduct by
the consumers.
Entrepreneurs create new organizations through a dynamic process that involves
such activities as obtaining equipment, establishing production processes,
attracting employees and setting up legal entities.
b) Leveraging Creativity, Innovation and/or Opportunity
Resources include access to: (i) physical capital such as property or plant and
equipment
(ii)financial capital such as debt finance or equity
(iii) intangible resources such as intellectual property or technology. These
resources can typically be bought and sold by firms or individuals.
Changes in these resources can have dramatic implications for firm performance,
with changes in these resources typically resulting from (i) creative inventions or
discovery, or (ii) unusual and unique combinations of these resources such as
venture capital funding. Entrepreneurial activity in „creative resources‟ is
supported by the „entrepreneurial community‟, which includes venture
capitalists, debt providers, and intellectual property lawyers.
(c) the significance of the business and wider environments
In addition to the environmental factors, the business environment will impact
entrepreneurial activity. These factors could include industry structures, impacted
by bargaining power, threats and competitive rivalry. Policymakers can have
significant impact on these industry conditions.
(d) the creation of value
The entrepreneur creates extraordinary value in the sense that their
entrepreneurial activity results in sustained competitive advantage and super-
normal returns for a number of parties. Innovators (entrepreneurs) enjoy
“temporary monopoly power”. When imitators see a signal that above-normal
gains can be made, they enter and erode the entrepreneurs‟ profit and return the
market to equilibrium.
ENVIROLMENTAL SCANNING:
environmental scanning is defined the concept as "the way in which management
gathers relevant information about events occurring outside the company in order
to guide the company's future course of action." It is the search to identify trends
that create business opportunities and pose challenges to the continued success of
the organizations.
Environmental scanning is also more than gathering information. It is the process
of using environmental information in decision making. It is a means of
improving the organizational ability to deal with a rapidly changing environment.
The external environment of the firm refers to both its task environment
(competition, customers and suppliers), and general environment (economic,
regulatory, technological, and socio-cultural factors).
Entrepreneurs' knowledge is critical to building sustainable competitive
advantage in the 21st century. Because of increased globalization, rapid
technological changes, and increased competition, entrepreneurs are facing new
and unexpected challenges. These changes have significantly increased the
quality and quantity of information that entrepreneurs must consider when
making decisions. Entrepreneurs, therefore, must process and learn from the
information, and use the new knowledge for improved decision making. "New
knowledge is the key resource for creating a sustainable competitive advantage."
Despite the importance of the entrepreneurs' knowledge to new venture success,
many are faced with a capability gap because of the discrepancy between their
current knowledge and the information that is relevant to the current business
environment. To deal with this capability gap and to have the most up-to-date
information for decision making, entrepreneurs must increasingly acquire
information from outside the organization. One way of acquiring and using
outside information is through environmental scanning.
Most studies on environmental scanning were done with large organizations
while those done with small firms focused mainly on scanning practices. The lack
of conceptual work on the relationship among environmental scanning,
organizational learning, and entrepreneurial success is surprising. Scanning
allows the entrepreneur to learn from the environment; and individual and
organizational learning enhance the entrepreneur's' knowledge, and contributes to
the firm's success. The purpose of this paper is to contribute to the discussion by
examining the role of entrepreneurs environmental scanning and organizational
learning in entrepreneurial success.
Business opportunity: An idea for a business is the first step for any potential
entrepreneur who wants to start a business. Selection of a business is hard task
and an entrepreneur normally oscillates among opportunities.
Business opportunity basically exists in three sectors viz., Manufacturing, Service
and Trade. A naturally available basic material put into a process through
machines undergoes conversion to become a finished product is manufacturing.
Sand becomes bricks. Iron becomes nails or sheets. A product to which value is
added through a process using equipment’s are classified as service. Adding
value by painting a product. Simply buying and selling is called trading. A wise
and initial step will be to decide which of these sectors one has to choose.
Basic needs of human beings are Food, Shelter, Clothing. Today added to this
list is Education. A business in any of these needs is a sustaining model. It is also
true that this area faces stiff competition. A model with innovative idea, with
value added products, with high standard and quality and with a competitive price
may survive as the fittest.
A broad classification of business will be Agriculture and Non-Agriculture.
Agriculture again could be sub-divided as Direct Agriculture and Indirect
Agriculture. Direct Agriculture is in the actual fields. Growing and cultivation of
agri products of all nature. The support system to direct agriculture is indirect
agriculture, such as machineries and equipment’s for agri, cattle and cattle feed
etc.
Non-Agriculture we can find plenty of opportunities sector wise, such as,
Engineering, Civil, Mechanical, Electrical, Chemical, Information technology,
Communication, Education, Publications, Visual media and so on.
One can look for opportunities in new sunrise areas such as energy conservation,
healthy/organic/natural foods, waste conversion to wealth. More awareness is
being created in energy conversation where you may look for business
opportunities in solar technology, LED lights and products. Organic farming and
supply of organic food materials where plenty of opportunity exists. Waste to
wealth is a social need and where not more have ventured into though
opportunities are plenty.
PRODUCT SELECTION: The commencement of a business venture is a huge
investment in both material and human terms that it requires in depth planning.
Just as investment opportunities can be sourced from a number of sources, the
choice of products or services for the entrepreneur are very important. However,
selecting/choosing the appropriate product or service can be considered the
important building block of every business venture.
Methods of Selecting a New Product:
As a matter of fact, products serve the business as the most important and visible
first contacts with buyers i.e. end users. The physical nature of products to the
consumers typifies the psychological symbols of personal attributes, goal and
strategic pathways. In other words, consumers are most likely to form opinion
and perspectives for the entrepreneur.
Criteria and Factors to be Considered in New Product Selection Stages:
Supply- Demand gap
The size and scope of the potential and unsatisfied market demand, which forms
the bedrock of business opportunity, will dictate, to great proportions, the need to
settle for a particular product. One rule of thumb in developing a product selection
criteria template is that the product with the most frequency of need/demand
possesses the greater chance of bestowing success on the business, should be
selected. In plain terms, there must be existing demand (a market) for the chosen
product.
Financing
This is one of the most important factors associated with product selection. The
size of the funds that can be accessed is another important consideration in
choosing a method of product selection permitted. Adequate funding is required
to carry out pre-launch activities such as development, production, promotion,
marketing and distribution amongst others, of the selected product.
Availability of and Access to Starter Materials
Differences in products require different starter materials. Factors such as the
source of the materials, the quality to be achieved as well as the quantity of the
raw materials are key management decisions. Will the raw materials be available
in sufficient quantities, over a continual basis? Where are the locations of raw
materials needed? Are they accessible? Will it be important to situate the business
close to these sources of raw materials? In the event of local sources being
incapable of meeting demand, are there viable alternatives abroad? The
entrepreneur must embark on a thorough analysis of these limiting factors before
settling for a particular product for a markets.
Technical Considerations
The production route for the product bears a lot of weight when it comes to
product selection process in entrepreneurship. The technical dynamics of the
chosen product on the existing production line will be x-rayed against factors
such as available technology, power requirement and even the use of automated
processes or human labour.
In addition, the choice of a particular product may warrant either the acquisition
of new equipment or refurbishing of used machinery. The product must also be
deemed technically satisfactory to the user.
Profit viability/Marketability
As is often the case, the product that meets the criterion of giving the optimum
return on investment, will be selected. However, a product may be chosen on the
ground that it utilizes dormant capacity or helps with the sales of existing
products. The product must also bear the important characteristic of being
marketable.
Qualified and Skilled Personnel
Qualified personnel will be required to handle the production and marketing, on
an ongoing basis. The cost associated with manufacturing the product must be
kept to the barest minimum by reducing wastage. This is achievable through the
engagement of competent and skilled hands.
Government Policies and objectives
These product selection factors are often beyond the control of the entrepreneur.
The thrust of government policies on economics and commerce, over time, is
usually in the national interest, which may or may not be at odds with the
objectives of the business. For instance, the insistence of government on the use
of 100% locally sourced starter materials will greatly influence the decisions of a
business with regard to what business product to introduce to the market.
Standard global practices advocate identifying a number of criteria upon which
product selection can be carried out. Scores can be allocated to each criterion to
come up with an objective evaluation.
MARKET RESEARCH:
The process of gathering, analysing and interpreting information about a market,
about a product or service to be offered for sale in that market, and about the past,
present and potential customers for the product or service; research into the
characteristics, spending habits, location and needs of your business's target
market, the industry as a whole, and the particular competitors you face.
Market research provides relevant data to help solve marketing challenges that a
business will most likely face an integral part of the business planning process.
In fact, strategies such as market segmentation (identifying specific groups within
a market) and product differentiation (creating an identity for a product or service
that separates it from those of the competitors) are impossible to develop without
market research.
Market research involves two types of data:
Primary Information-This is research you compile yourself or hire someone to
gather for you. When conducting primary research using your own resources, first
decide how you'll question your targeted group: by direct mail, telephone, or
personal interviews. If you choose a direct-mail questionnaire, the following
guidelines will increase your response rate:
Questions that are short and to the point
A questionnaire that is addressed to specific individuals and is of interest
to the respondent
A questionnaire of no more than two pages
A professionally-prepared cover letter that adequately explains why you're
doing this questionnaire
A postage-paid, self-addressed envelope to return the questionnaire in.
Postage-paid envelopes are available from the post office
An incentive, such as "10 percent off your next purchase," to complete the
questionnaire
One of the most effective forms of marketing research is the personal interview.
They can be either of these types:
A group survey. Used mostly by big business, group interviews or focus groups
are useful brainstorming tools for getting information on product ideas, buying
preferences, and purchasing decisions among certain populations.
The in-depth interview. These one-on-one interviews are either focused or
nondirective. Focused interviews are based on questions selected ahead of time,
while nondirective interviews encourage respondents to address certain topics
with minimal questioning.
Secondary information-This type of research is already compiled and organized
for you. Examples of secondary information include reports and studies by
government agencies, trade associations or other businesses within your industry.
Most of the research you gather will most likely be secondary.
Secondary research uses outside information assembled by government agencies,
industry and trade associations, labour unions, media sources, chambers of
commerce, and so on. It's usually published in pamphlets, newsletters, trade
publications, magazines, and newspapers. Secondary sources include the
following:
Public sources. These are usually free, often offer a lot of good information, and
include government departments, business departments of public libraries, and so
on.
Commercial sources. These are valuable, but usually involve cost factors such
as subscription and association fees. Commercial sources include research and
trade associations, such as Dun & Bradstreet and Robert Morris & Associates,
banks and other financial institutions, and publicly traded corporations.
Educational institutions. These are frequently overlooked as valuable
information sources even though more research is conducted in colleges,
universities, and technical institutes than virtually any sector of the business
community.
MARKETING CHANNELS:
A marketing channel is the people, organizations, and activities necessary to
transfer the ownership of goods from the point of production to the point of
consumption. It is the way products and services get to the end-user, the
consumer; and is also known as a distribution channel. A marketing channel is a
useful tool for management, and is crucial to creating an effective and well-
planned marketing strategy.
Another less known form of the marketing channel is the Dual Distribution
channel. This channel is a less traditional form that allows the manufacturer or
wholesaler to reach the end-user by using more than one distribution channel. The
producer can simultaneously reach the consumer through a direct market, such as
a website, or sell to another company or retailer that will reach the consumer
through another channel, i.e., a store. An example of this type of channel would
be franchising.
Turnover Method:
(originally suggested by Nayak Committee for SSI units)
Example:
Applicable for limits upto Rs.6 crores:
(a) Projected sales = Rs. 10,00,000
(b) Working capital requirements: 25% of projected sales i.e.
Rs.2,50,000
(c) Margin (contribution of Owner): 5% of projected sales i.e. Rs.
50,000
(d) Working capital to be funded by bank: Rs.2,00,000
MPBF Method
(Tandon’s II method of lending)
• Working capital gap: Current assets – current liabilities (other than
bank borrowings)
• Minimum stipulated net working capital= 25% of current assets
(excluding exports receivables)
• Actual projected NWC