1)How the entrepreneurial plan or business plan is developed?

* Planning as Part of the Business / Entrepreneurship Operation

1. Planning is a process that never ends for an entrepreneurship
2. As the venture grow up to mature entrepreneurship, planning will continue

*Entrepreneurial Plan or Business Plan

1. A business plan is a written document that describes all the relevant internal
and external elements and strategies for starting a new venture.
2. It is an integration of functional plans such as marketing, finance,
manufacturing, sales and human resources.

3. The business plan should be prepared by the entrepreneur

4. The entrepreneur may consult with lawyers, accountants, marketing
consultants, and engineers in its preparation
5. The business plan may be read by employees, investors, bankers, venture
capitalists, suppliers, customers, advisors, and consultants.

6. There are three perspectives should be considered in preparing the plan :

o Perspective of the entrepreneur

o Marketing perspective
o Investor’s perspective
7. The business plan is valuable to the entrepreneur, potential investors, or even
new personnel, who are trying to familiarize themselves with the venture, it
goals, and objectives.

8. It provides guidance to the entrepreneur in organizing his or her planning

activities
9. It serves as an important tool in helping to obtain financing.
10. It is often necessary for an entrepreneur to orally present the business plan
before an audience of potential investors.
11. Before committing time and energy to preparing a business plan, the
entrepreneur should do a quick feasibility study of the business concept to see
whether there a any possible barriers to success.

(2)Describe the outline of entrepreneurial plan.

*Outline of the Entrepreneurial Plan

1. Introductory Page
• Name and address of business
• Name(s) and address(es) of principal(s)
• Nature of business
• Statement of financing needed
• Statement of confidentially of report
2. Executive Summary – Three to four pages
• What is the business concept or model?
• How is this business concept or model unique?
• Who are the individuals starting this business?
• How will they make money and how much?
3. Environmental and Industry Analysis
• Future outlook and trends
• Analysis of competitors
• Market segmentation
• Industry and market forecasts
4. Description of Venture

• Product(s)
• Service(s)
• Size of business
• Office equipment and personnel
• Background of entrepreneurs
5. Production Plan
• Manufacturing process (amount subcontracted)
• Physical plant
• Machinery and equipment
• Names of suppliers of raw materials
6. Operational Plan
• Description of company’s operations
• Flow of orders for goods and/or services
• Technology utilization
7. Marketing Plan
• Pricing
• Distribution
• Promotion
• Product forecasts
• Controls
8. Organizational Plan
• Form of ownership
• Identification of partners or principal
shareholders
• Authority of principals
• Management-team background
• Roles and responsibilities of members of
organization
9. Assessment of Risk
o Evaluate weakness of business
o New technologies
o Contingency plans
10. Financial Plan
o Pro forma income statement
o Cash flow projections
o Pro forma balance sheet
o Break-even analysis
o Sources and applications of funds
11. Appendix (contains backup material)
o Letters
o Market research data
o Leases or contracts
o Price lists from suppliers.

*Using and Implementing Entrepreneurial Plan

• The business plan is designed to guide the entrepreneur through
the first year of operations.
• Implementation of the strategy contain control point to ascertain
progress and to initiate contingency plan if necessary.
• Business plan not end up in a drawer somewhere once the
financing has been attained and the business launched.

*Measuring Plan Progress

• Entrepreneur should check the profit and loss statement, cash flow
projections, and information on inventory, production, quality,
sales, collection of accounts receivable, and disbursements for the
previous month.
– Inventory control
– Production control
– Quality control
– Sales control
– Disbursements – paying out money

*Updating the Plan

• The most effective business plan can become out-of-date if
condition change.
• If the changes are likely to affect the business plan, the
entrepreneur should determine what revisions are needed.
• In this manner, the entrepreneur can maintain reasonable targets
and goals and keep the new venture on a course that will increase
probability of success.

(3)Briefly explain the reasons for the failure of an entrepreneurial

plan.

*Entrepreneurial Plan Failure

• Goals set by the entrepreneur are unreasonable.
• Goals are not measurable
• The entrepreneur has not made a total commitment to the
business or to the family.
• The entrepreneur has no experience in the planned business.
• The entrepreneur has no sense of potential threats or weaknesses
to the business.
• No customer need was established for the proposed product or
service.

(4)Differentiate between ideas and opportunities.

*Idea –is a thought about or mental picture of something such as

future or a possible event. It could be a concept that exists in the
mind only. It is also a mental image that reflects reality.
*Opportunity is a chance, especially one that offers some kind of
advantage.

* A favourable conditions, circumstances or situations. Ideas Start

With Solving Problems
o Remember… Ideas Start With Solving Problems
o Any Problems are Big Opportunities.
o No Problems, No Solutions, & No Reasons for Firms to Exist.
o No One Pays You to Solve a Non-exist Problem (Vinod Khosla, Sun
Microsystems)
o Take care with this use of the word “problem”…
o The normal use of this word might suggest that there is something
wrong
o In a business context, we might use the word simply to represent
something which makes the customer’s activities less
efficient/enjoyable/simple
o So, a “problem” might be something quite trivial, everyday or
simple – however, by providing a cost effective solution, we please
our customer and make money

(5)When ideas will change to opportunities?

“An opportunity has the qualities of being attractive, desirable and

timely and is anchored in a product or service which creates value
for buyer or end user”
• A new or improved product
• A new service
• A new means of production
• A new way of distributing the product or service
• An improved service
• New combinations
• Or a hybrid of the above

*Recognizing an Opportunity
• Opportunities are not like raindrops they do not fall at our feet.
• Well, not usually! From time to time something might just happen
which allows an entrepreneur to move forward.
• However, if we wait for an opportunity turn up, we will probably
never succeed.
• As creative business people we seek or develop opportunities.

*Do Ideas = Opportunities? & Do Problems = Opportunities?

• Reality - An Idea is Only an Opportunity when It:
• Adds Value to Consumer
• It Solves a Problem
• It Can Make Some Money (Communicate Some Value to Other
Stakeholders)
• It is a Good “Fit” with the Entrepreneurial Team

*Factors Influencing the Discovery of Opportunities

• Prior knowledge
• Education
• Work experience
• Enculturation
• Family and friends
• Other personal events or other means

(6)Explain the commercialization of technology-based innovation.

*Commercialization
Commercialization is the process of introducing a new product or
production method into commerce—making it available on the
market. The term often connotes especially entry into the mass
market but it also includes a move from the laboratory into (even
limited) commerce.
The "development" segment of the "research and development"
spectrum requires time and money as systems are engineered with
a view to making the product or method a paying commercial
proposition.
The product launch of a new product is the final stage of new
product development – at this point advertising, sales promotion,
and other marketing efforts encourage commercial adoption of the
product or method.

Beyond commercialization (in which technologies enter the

business world) can lie consumerization (in which they become
consumer goods, as for example when computers went from the
laboratory to the enterprise and then to the home, pocket, or body.

(7)Explain the formation and development of technology based new

enterprises in detail.
• Formation is the process of creating something or coming into
existence.
• Development is the process of changing and becoming larger,
stronger, or more impressive, successful or advance, or causing
enterprise to change.
• Growth is an increase in numbers, size, power, or intensity of
enterprise.

*Formation and development of Technology based ventures

Entrepreneurship studies have identified three critical factors
linked to successful creation of technology ventures:
• technology
• talent
• capital.
• The strategic focus of new ventures is to facilitate the effective
fusion of innovative technology, strong scientific, entrepreneurial
and management talent, and investment capital to create a
successful venture. technology, strong scientific, entrepreneurial
and management talent, and investment capital to create a
successful venture.
* National policies and strategies are at the heart of development
programs
• Government policies:
1. Credit programme with State-subsidized rates
2. Share programme by Government venture-capital companies
3. Grants by the government, especially for creating jobs and for
research
4. Security programme by the Government for taking over part of
the risk of the credit institutions for enterprises
5. Advisory services.
6. Other support activities for enterprises with both public and
private sector involvement, include:
(a). Business consulting services: Assistance with business
development, developing business plans, tax advice, and so forth.
(B). Technical consulting services: More specialized services are
provided such as networking assistance between enterprises and
science and technology organizations, technology transfer, the
exchange of similar experiences and the identification of potential
for cooperation.
• Financing Support Activities
(a) Offer optimal conditions to enterprises in terms of rent and costs
of spaces, infrastructure and services. Offer also assistance with
accessing and using financial sources such as corporate financing,
business angels, venture capital, and so forth
(8)Discuss the factors helping growth of technology based new
enterprises.
*Growth of Technology-based New Enterprises
1. The innovative capacity of an entrepreneur and more accurately,
of companies operating in that field, is a key determinant of its
capability to enhance the economic development and to upgrade the
standard of living of a country. It is widely accepted that one of the
indicators of this innovative capacity is the rate of creation of New
Technology-Based firms (NTBF).
2. The nurturing of small firm formation and growth has become
increasingly important to the health of developed economies in
general, and to the creation of new innovative industrial sectors in
particular.
3. Strengthening and promoting technology-based ventures through
incubation programme for new technology-based enterprises is
necessary for them to survive in a competitive society.
4. Technology incubators, which play a role in accelerating the
commercialization of R&D outputs and the transfer of technology,
have contributed to start-ups of high technology-based enterprises
in the newly industrializing economies of developing and developed
economies of the world