ENTERPRISE,

BUSINESS GROWTH
AND SIZE
OBJECTIVE
•Entrepreneurs and Enterprise
•Characteristics of successful entrepreneurs
•Business plans
•Contents of a business plan
•Why and how government support business
start-ups
•How to measure business size
•Why some businesses grow
•External growth and Internal growth
•Why some businesses fail
ENTERPRENEURSHIP •An individual who has an idea
for a business takes the financial
risk of starting and
managing new business.

•Entrepreneurs usually –
• Have an idea for a new
business
• Are prepared to invest their
own savings.
• Accept the risk of failure
• want to make all the
decisions about the
management of the business
ENTERPRISE The idea for an
enterprise- meaning a
project or business- may
be any of the following-
 A new idea for a good
or services.
 offering and existing
good or services in a
way that has not been
offered before.
 offering existing good
or services
in a new location
MARK
ZUCKERBERG

• Mark Elliot Zuckerberg is an American

businessman. He co-founded the social media
service Facebook and its parent company
Meta Platforms
PEYUSH BANSAL: FOUNDER OF LENSKART

Peyush Bansal, the visionary

behind Lenskart, established the
company in 2010. Lenskart is
India's largest online eyewear
retailer, serving over 500,000
customers.

2010

2023

It has become an essential part of

the lifestyle of these youngest
entrepreneurs in India 2023,
extending to offline stores in
major cities across the nation.
FA L G U N I N AYA R - F O U N D E R
OF NYKAA

• Falguni Nayar, founder and CEO of Nykaa, is one of

the youngest entrepreneurs in India 2023
• Falguni Nayar founded Nykaa in 2012 with the
vision of building a multi-brand omnichannel beauty-
focused retail business.
YOUNG ENTREPRENEURS IN INDIA

Vineeta singh Sugar cosmetics

Vijay Shekhar Sharma paytm

Byju Raveendran Byju

Nithin Kamath Zerodha

Raghav Chandra Urban company

Sachin Bansal and Binny Bansal Flipcart

  Independence- able to choose
how to use time and money.
 Able to put on ideas into
practice.
 May become famous and
successful if the business gain
success.
 Maybe profitable and the
income might be higher than
working as an employee for
another business.
 Able to make use of
BENEFITS OF personal interest and skill.

ENTREPRENEUR
DISADVANTAGES • Risk - many new entrepreneur
business is failed, especially if there
OF BEING is a poor planning.
ENTREPRENEUR • Capital- entrepreneur have to put
their own money into business and
possibly find other sources of
capital.
• Lack of knowledge and experience
in starting and operating a business.
• Opportunity cost lost income from
not being an employee of
another business.
CHARACTERISTIC
S OF SUCCESSFUL
ENTREPRENEURS HARD WORKING RISK TAKER CREATIVE

OPTIMISTIC SELF CONFIDENT INNOVATIVE

INDEPENDENT EFFECTIVE COMM

UNICATOR
 • A business plan is a
document containing the
business objectives and
important details about the
operations, finance and
owners of the new business.
• A business plan is a detailed
written document outlining
the purpose and aims of a
business which is often used
to persuade lenders or
investors to finance a
business proposal

BUSINESS PLAN
 1. Description of the
business
2. Product and services
3. The market
4. Business location and
how product will
reach customer
5. Organisation structure
and Management
Financial information
CONTENT OF A 6.

BUSINESS PLAN
DESCRIPTION OF THE BUSINESS
• Summary of the key features of the business.
• Objective of the business
• The market at which you are aiming.
• The specific benefits offered by your product or service
PRODUCT AND SERVICES
• Detailed and description of the product or service being produced and sold.
• How and where it will be produced who is likely to buy it, in what quantities.
• Strategy for continuing or developing product or services in the future to remain competitive.
• Detail of the distributor and manufacturer.
MARKET
• Describe the market research that has been carried out what it has revealed and details of prospective
customers and competitors.
• potential competitors
• Total market size
• predicted market growth
• predicted changes in the market in the future
• forecast sales revenue from the product.
• What makes the product superior or different
• Advertisement and promotion.
B USINESS L OC AT ION AND HOW PR ODUCTS WILL
R EAC H CUSTOM E R S
• Describe the physical location
• Cost of premises and the needs for equipment's and building.
• Describe how the firm delivered products and services to customers
• Distribution channel
ORGANISATION STRUCTURE AND MANAGEMENT
• Describe the organisation structure, management and details of employees required.
• Level of skills required for the employees.
• Summary of who are the owners and the degree of their control over the company.
• Evidence that the assembled team has the track record, experience and expertise to
achieve the goals.
FINANCIAL INFORMATION
• Financial analysis is important, but it is not the business plan
• Sources of capital for example owner’s capital ,revenue, bank loan and any other funding sources
• Predicted cost-fixed cost and variable cost
• Forecast cash flow and working capita
• Projection of profitability and liquidity ratio
• Projected future financial accounting statement for several years.
• Projected sales revenue and profit.
BUSINESS STRATEGY
• Explain how the business intends to satisfy customer needs and gain brand loyalty.
• Routes are open to realising a capital gain.
• A summary should be included to bring together all the points from the above that should
demonstrate the business will be successful
WHY GOVERNMENT SUPPORT
BUSINESS STARTUPS
Government are keen to encourage new startup business because of the benefits they bring to the
economy. These benefit include-
 Job creation- new business will often create jobs to help reduce unemployment.
 To increase competition- new business give consumers more choice and compete with already
establish businesses.
 To increase output- the economy benefits from increased output of goods and services.
 To benefit society- entrepreneurs may create social enterprise which offer benefits to society
other than jobs and profit
 Can grow further- or large businesses were small ones. By supporting today's new form, the
government may be helping some firms that grow to become very large and
important in the future
HOW GOVERNMENT
SUPPORT BUSINESS
STARTUP
Business idea and help- organising training for entrepreneurs that gives advises and
support session offered by experienced business people.

Premises - enterprise zone which provide low cost premises to start up business.

Finance- loan for small businesses at low interest rates. Grants a business startup in
depressed area of high unemployment.

Labour- grants to small business to train employees and help increase

their productivity.

Research- encouraging Universities to make their research facilities available to new

businesses entrepreneurs.

Tax- Lower taxation rates on Profit in the early years.

MEASURING
BUSINESS SIZE
•There are several ways of
measuring and comparing the
size of business the most
common methods are –
• Numbers of people
employed
• value of output
• value of sales
• value of capital employed
NUMBER OF
PEOPLE
EMPLOYED
•Larger businesses need to produce a much
greater output or provide their services to a
much larger market than smaller business.
They will also have more department and
manager. Therefore, larger business usually
employee many more employees than
smaller business in the same industry.
LIMITATION

PART TIME WORKERS CAPITAL-INTENSIVE- FIRM

VS TRADITIONAL METHOD
FIRM.
VALUE OF OUTPUT
Value of output

•The amount of business earned

from selling their products is
often used to compare the size
of business in the same
industry. Calculating the value
of output is a common way of
comparing business size in the
same - specially in
manufacturing industry.
LIMITATION
It is not a good major when comparing
businesses in different industries.
•A firm employing few people may produces several very
expensive watches each year this might give higher output
figure than from selling cheaper product but
employee more workers.
VALUE OF SALES
•This is often used when
comparing the size of
retailing business-
especially retailers selling
similar product for
example
food supermarkets
LIMITATION

• It could be misleading to use this measure when

comparing the size of businesses that sale very different
products for example a market stall selling sweets and a
retailer of luxury handbags or perfume
VALUE OF
CAPITAL
EMPLOYED

The total value of capital invested into

the business.
LIMITATION
• Like capital employed to compare the size of business in different industries is a problem because
some Industries such a car manufacturing need a very large capital investment in factory and
machinery others such as computer software design do not.
• Capital intensive firm vs. traditional method firm
MARKET SHARE

• The larger the share of the total market the larger

the business. However, this measure can
also misleading.
 WHY THE OWNERS
OF A BUSINESS MAY
WANT TO EXPAND
THE BUSINESS
•Higher profit
•more status and Prestige for the owners and
managers
• lower average cost
•large share of the market
•Greater power to control the market
DIFFERENT WAYS
IN WHICH
BUSINESS
CAN GROW
Different ways in which business can grow

Internal External
growth growth
INTERNAL Internal growth, occurs
when a business decides
GROWTH to expand its own
activities by launching
new and/or entering new
markets. Businesses do
this in order to improve
their chances of
increasing their
customers, revenues and
profits.
Internal growth
is slower than external
growth.
INTERNAL GROWTH

• Increasing the number of goods it can produce.

• developing new products.
• finding new market for their product
EXTERNAL GROWTH
EXTERNAL • External growth take place when a
business marges with or take over
GROWTH another business in the same or
different industries. The process is
known as integration. There are 4
main types of integration-
• horizontal integration
• forward vertical integration
• backward vertical integration
• conglomerate integration
HORIZONTAL INTEGRATION
HORIZONTAL • When one firm mergers with or takes over
another one in the same industry at the same
INTEGRATION stage of production.
 The merger reduce the number of competition in the industry.

 There are opportunities for economies of sale.

 The combined business will have a greater share of the total market

than either business before the integration.

VERTICAL
INTEGRATION
VERTICAL INTEGRATION
• When one business Merges with or takes over another in the same industry but at a different stage
of production.
• Vertical integration can be forward when a business integrates with another business which is at a
later stage of production (closed to the consumer)
• backward integration when a business integrates with another business at an earlier stage of
production ( closer to the raw material supplies ,in the case of manufacturing business)
BENEFIT OF FORWARD INTEGRATION.
• The merger gives an assured outlet for its product.
• The profit margin made by the retailer is observed by the expanded business.
• The retailer could be prevented from selling competing products.
• Information about consumer needs and preference can now be obtained directly by
the manufacturer
BENEFITS OF BACKWARD INTEGRATION

• The Merger gives an assured supply of important components.

• The profit margin of the supplier is observed by expanded business.
• The supplier could be prevented from supplying other manufacturers.
• Cost of components and supplies for the manufacturer could be controlled.
CONGLOMERATE MERGER
• When one businessman merges or take over a business in a completely different industry. This is
also known as diversification.
• One conglomerate merger example is Amazon and Whole Foods. Amazon is an online retailer,
while Whole Foods is a supermarket. The merger allowed Amazon to expand its grocery offerings
and increased the benefits provided to its Prime members.
WHY SOME
BUSINESSES
REMAIN SMALL
•There are several reason why many
businesses remain small including –
•The type of industry the business operate
in
• The market size
• The owner objective
CAUSES OF BUSINESS FAILURE
• lack of management skills
• changes in the business environment
• liquidity problem or poor my financial problem over expansion
• Lack of market demand
• Weak business plan.
• Leadership and management issue.
• Legal and regulatory challenges.