Department of Mechanical Engineering

PREPARING FOR THE NEW VENTURE

LAUNCH: EARLY MANAGEMENT
DECISIONS
Instructor
Engr. Waheed Gul
MSc. Mechanical Engineering (Dynamics & Control)
PhD (Automation & Control) in progress
Cell # +923008363243,+923481359349
Email: waheedciel@gmail.com
 Record Keeping
Department of Mechanical Engineering

It is necessary to have good records for effective control and for tax
purposes.

The entrepreneur should be comfortable and able to understand

what is going on in the business.

With software packages, much of the record keeping can be

maintained on a personal computer.

The goals of a good record keeping system are to identify key

incoming and outgoing revenues that can be effectively controlled.
 Sales (Incoming Revenue)
Department of Mechanical Engineering

It is useful to have knowledge about sales by customer both in terms

of units and dollars.
Customers’ e-mail addresses can be requested so the customer can
be notified of sales.
Some Internet firms have established a free membership as a
means of following up.
In a service venture, records would need to be maintained on when
a customer paid their monthly fee.
As cash flow problems are the most significant cause of new venture
failure, good payment records are necessary.
Record keeping of payments can either be handled by a computer
software package or a simple card file system. If payments are late
beyond a reasonable time, it may be necessary to hire a collection
agency, but only as a last resort.
 Expenses/Costs (Outgoing
Revenue
Department of Mechanical Engineering

▪Records of expenses are easily maintained through the checking

account.

▪It is good business practice for the entrepreneur to use checks as

payment for all expenses in order to maintain records for tax
purposes.

▪ Canceled checks provide proof of payment. In the early stage, it

may be desirable to make all payments on time to establish
credibility with suppliers.

▪ The entrepreneur should maintain information about employee

either in a software program or in a card file.

▪It may be necessary to maintain records on all assets owned by the

business.
 Other Records
Department of Mechanical Engineering

▪The entrepreneur should maintain information about employees

either in a software program or in a card file.

▪ Records on all assets owned may be needed.

▪With a good record keeping system it is easy to maintain controls

over cash disbursements, inventory, and assets.
 Recruiting and Hiring new
Employees
Department of Mechanical Engineering

▪The entrepreneur will generally need to establish procedures and

criteria for hiring new employees.

▪ Advertising in local newspapers and referrals from friends and

associates is most effective for entry-level positions.

▪For senior management the most effective strategy is networking

with friends and business associates.

▪Personnel agencies may also be considered if there are no other

effective options.
 Recruiting and Hiring new
Employees
Department of Mechanical Engineering

▪Once resumes have been collected some basis of determining each

candidate’s strengths should be made.
▪Some criteria must be used in the resume evaluation. Factors such
as education, prior experience, entrepreneurial activities, and
interests can be used to assess candidates.

▪ From the initial screening of resumes, a few candidates can be

invited in for an interview.

▪Most firms use an interview form with critical factors listed for
evaluating the interview candidates.

▪The goal should be to hire not only the best candidate but also
someone who will perform well in the entrepreneurial environment
and provide a long-term solution to the available position.
 Recruiting and Hiring new
Employees
Department of Mechanical Engineering

▪Once resumes have been collected some basis of determining each

candidate’s strengths should be made.
▪Some criteria must be used in the resume evaluation. Factors such
as education, prior experience, entrepreneurial activities, and
interests can be used to assess candidates.

▪ From the initial screening of resumes, a few candidates can be

invited in for an interview.

▪Most firms use an interview form with critical factors listed for
evaluating the interview candidates.

▪The goal should be to hire not only the best candidate but also
someone who will perform well in the entrepreneurial environment
and provide a long-term solution to the available position.
 Recruiting and Hiring new
Employees
Department of Mechanical Engineering

▪Once resumes have been collected some basis of determining each

candidate’s strengths should be made.
▪Some criteria must be used in the resume evaluation. Factors such
as education, prior experience, entrepreneurial activities, and
interests can be used to assess candidates.

▪ From the initial screening of resumes, a few candidates can be

invited in for an interview.

▪Most firms use an interview form with critical factors listed for
evaluating the interview candidates.

▪The goal should be to hire not only the best candidate but also
someone who will perform well in the entrepreneurial environment
and provide a long-term solution to the available position.
 Recruiting and Hiring new
Employees
Department of Mechanical Engineering

▪The interview:

▪The interviewer should ask all of his or her questions at the

beginning of the interview.

▪ It allows the interviewer to evaluate the candidate’s behavior. It

avoids talking too much and not listening.

▪Upon completion of the interview, the firm should be sure to check

all of the candidate’s references.
 Recruiting and Hiring new
Employees
Department of Mechanical Engineering

▪Acquiring senior talents can be critical to the venture’s ability to

successfully meet its growth goals. Recruiting for upper
management in an entrepreneurial firm

▪Many executives choose to become part of the entrepreneurial

process rather than continue working in structured big business.

▪The entrepreneur should use all his or her contacts and recognize
that every potential candidate is different.
 Motivating and leading the
Team
Department of Mechanical Engineering

▪The entrepreneur will usually be a role model for any other

employees.
▪
▪It is important that the founder assume the role of leader to the
management team and employees.
▪
▪ Communication with managers and employees is one of the most
important leadership qualities.
 Motivating and leading the
Team
Department of Mechanical Engineering

▪The entrepreneur will usually be a role model for any other

employees.

▪ Good work ethic will go a long way toward achieving financial and
emotional success.

▪ During the early stages employees need incentives to remain

committed and loyal to the long run success of the new venture.
 Motivating and leading the
Team
Department of Mechanical Engineering
▪It is important that the founder assume the role of leader to the
management team and employees.
▪ Leadership is also influencing and inspiring others in the
organization to strive to meet the mission of the venture.
▪ Below are some behaviors that can exhibit the leadership qualities
necessary for the new venture.
▪Set an example with an ethical set of values for other managers and
employees.
▪Show respect and concern for the personal well being of employees.
Don’t try to do everything yourself.
▪ Recognize the diversity of employees and how they should be
treated.
▪ Encourage and praise others in the organization when deserved.
Provide incentives and awards for quality work effort and new
ideas.
▪Recognize the importance of employees having fun at their jobs. Be
aware of the need for future strategic planning.
 Financial Control
Department of Mechanical Engineering

▪The entrepreneur will need some knowledge of how to provide

appropriate controls to ensure that projections and goals are met.

▪ Financial skills are needed for the entrepreneur to manage during

early years.

▪ The cash flow statement, income statement, and balance sheet are
key areas needing careful management and control.

▪ Some financial skills are necessary for the entrepreneur to manage

the venture during the early years.
 Managing Cash Flow
Department of Mechanical Engineering

▪An up-to-date assessment of cash position, such as a monthly cash

flow statement, is needed.
▪The cash flow statement may show the actual amounts next to the
budgeted amounts.
▪ It is useful for adjusting the pro forma and indicating potential cash
flow problems.
▪ A cash flow crisis can occur suddenly and unexpectedly.
▪ For the very new venture it may be necessary to prepare a daily
cash sheet.
▪ Comparison of budgeted or expected cash flows with actual cash
flows can provide an assessment of potential cash needs and
indicate possible problems in the management of assets and control
of costs.
 Managing Assets
Department of Mechanical Engineering

▪In addition to cash management, other items such as accounts

receivable and inventory also need to be controlled.
▪ An inventory control system allows the company to monitor key
figures, such as inventory turnover and percentage of customer
complaints.
▪Most firms use a FIFO(first-in, first-out) system since it reflects truer
inventory and cost values.
▪There are good arguments for the use of LIFO (last-in, first-out) in
times of inflation.
▪ The decision to convert from a FIFO to a LIFO system is complex and
requires careful evaluation.
▪ It is necessary to decide if inventory is to be grouped into categories
or to cost each item individually.
▪All inventories must be costed by searching through historical
records. An average inventory cost must be calculated.
 Managing Assets
Department of Mechanical Engineering
 Case Study / Research Papers
20 % Marks
Department of Mechanical Engineering

1. Modeling of Digital Entrepreneurship Structure for the

Development of Pakistan economy
2. Modeling of Entrepreneurship education & Training in Pakistan /
Entrepreneurship education and training needs to be developed in
Pakistan
3. The Social, Physiological and economic dimensions of entrepreneurship in
Pakistan
4. The Current status and Future development of entrepreneurship in Pakistan
Department of Mechanical Engineering