1. Factors affecting entrepreneurial growth?

Ans: Entrepreneurship does not emerge and grow spontaneously. Rather it is dependent upon
some factors that affect entrepreneur growth. It these factors are positive then the growth is
more on the contrary less. These factors are mainly environmental factors.
(1). Economic Factor:
Economic environment exercises perhaps the most direct and immediate influence on
entrepreneurship. It has some conditions which are following below.
(a). Markets: The size are composition of market both influence entrepreneurship in their own
ways. Practically, monopoly in a particular product in the market becomes more influential for
entrepreneurship than a competitive market.
(b). Capital: Availability of capital help to bring together the labour at one, machine of another
and raw material of yet another to combine them to produce product.
(c). Labour: Labour is the most important factor of economic condition of entrepreneurship. It
appears that the labour problem cant protect entrepreneurship from emerging.
(d). Raw materials: Without raw materials business cant be started, because production isnt
possible.
(e). Industrial policy: It includes rules, incentives.
(f). Fiscal policy: It include tax, vat.

(2). Social Factors:

Social environment in a country exercises a significant impact on the emergence of
entrepreneurship. The main components at social environment are as follows:(a). Social Mobility: It means the people of society transfers from one place to another exchange
culture, attitude etc. If mobility is positive then growth is also positive.
(b). Security: Entrepreneurship security is an important facilitator of entrepreneurial behavior.
Insecurity doesnt hinder entrepreneurship, but rather that different kinds of insecurity will result
in different kinds of entrepreneurship.
(c). Legitimacy of entrepreneurship: Illegal activities are not under business as well as
entrepreneurship. High degree of legitimacy support to start business.

(3). Political Factor:

It is also a important factor to the entrepreneur. A countrys economic growth depends on its
political factors. The political factors are as follows:(a). Political stability:
(b). Political ideology of government: Political ideology of government influences the
development of entrepreneurship. It political ideology is favorable to bus growth then
entrepreneurship takes new initiative to from business.
(c). Nature of change in political ideology: Due to the change of government the political
ideology also changes again and again. As a result new sectors arise by declining the previous
sectors.

(4). Psychological Factor:

Many entrepreneurial theorists have propounded theories of entrepreneurship that concentrate
especially spontaneously psychological factors. These factors are following:
(a) Need for achievement: Need for achievement motivate to enhance business tasks for
success it is psychological power.
(b) Perception and motivation: Eternally support entrepreneurial behavior. Especially perception
and motivation with positive forces to enter into business.
(c). Learning and personality: More learning about business increases business efficiency.
Different personality including reformist, innovator, ret realists, retails affect business.

(5). Legal factor:

It means the countrys law and order situation. It the law order situation keep calm and quiet the
entrepreneurial growth may be high. Various types of legal factor are as follows:
(i).

Income tax law.

(ii).

Labor law.

(iii).

Wage law.

2. Women entrepreneurs growth & hurdles?

Ans: Problems faced by Women Entrepreneurship:1. Lack of confidence: A women is accepting a subordinate status, as a result they lack
confidence of their own capabilities. Family members do not have much faith in women abilities
of decision making.
2. Lack of working capital: The major hurdle that the women face during starting and running a
company generally come from financing and balancing of life. Before marriage she has to
depend on father and after marriage she has to follow the footsteps of her husband. They have
limited access over external sources of funds. Even getting loans from either a bank or financial
institution is more difficult.
3. Socio-cultural barriers: In our society, more importance is given to male child as compared to
female child. India is a male dominated society. Women are not treated equal to men. This in
turn, becomes as a barrier to women entry into business.
4. Stiff Competition: Women entrepreneurs have to face a stiff competition with the men
entrepreneurs who do not have organisational set - up to invest a lot of money for advertisement
and development area and carry out easy marketing of their product with the both organised
sector and their male entrepreneurs. Such a competition ultimately result in the liquidation of
women enterprises.
5. Less Mobility: Unlike men, women mobility in India is highly limited due to various reasons.
One of the biggest handicaps for women entrepreneurs is mobility of travelling from place to
place.
6. Family Responsibility: In India, it is mainly a womens duty to look after the children and other
members of the family. The success of a married woman depends upon supporting husband
and family. Support and approval is necessary from taking prompt decision in business.
7. Lack of Education: In India literacy among women is very low. Around three-fifths (60%) of
women are still illiterate. Lack of education causes low achievement motivation among women.
Women face the many problems for setting up and running of business enterprises.

8. Access of Technology: Co-ordinating factors of production are really challenging to women

entrepreneurs. Women who aspire do become entrepreneurs cannot keep pace with technology
advancement.
9. Marketing Skills: Women entrepreneurs have the problem of access to markets as their
marketing skills are weak compared to male entrepreneurs.
10. Other factors: It includes gender discrimination, inaccessibility to information, training
opportunities , infrastructure etc

3. Business expansion strategies to make business grow?

Ans:
Ans: The expansion of a concern may be in the activities or acquisition of ownership
and control of other concerns. Thus, expansion may be;
Internal Expansion
External Expansion
i)

Internal expansion: Internal expansion results from the gradual increase

in the activities of the concern. The concern may expand its present
production capacity by adding more machines or by replacing old
machines with the new machines with higher productive capacity. The
internal expansion can also be undertaken by taking up the production of
more units or by entering new fields on the production and marketing
sides. Internal expansion may be financed by the issue of more share
capital, generating funds from old profits or by issuing longterm
securities. The net result of internal expansion is the increase in business
activities and broadening the present capital structure.

ii)

External expansion or business combination: External expansion

refers to business combination where two or more concerns combine and
expand their business activities. In the process of combination, two or
more units engage in similar business or related process or stages.
Sometimes stages of the same business join with a view to carry on their

activities or shape, their polices on common basis some other or in

coordination for mutual benefit or maximum profits. The combination may
be among competing units or units engaged in different processes. After
combination, the constituted firm pursues some common objectives or
goals. In this unit, we will focus on the main forms of external expansion
which are
a) Franchising
b) Mergers and Acquisitions

4. Meaning, features, types, advantages, and disadvantages of

franchising?
Ans: Franchising is the practice of the right to use a firm's successful business model and
brand for a prescribed period of time. The word "franchise" is of Anglo-French derivationfrom
franc, meaning free
Features, advantages

1. Well established business: A franchise is a readymade and well established business that
needs expansion. It is a ready form of business seeking expansion in new market areas with the
help of a local representative.
2. Needs limited investment: As franchise business is already set up by the franchisor, the
initial investment required by the franchisee to enter and establish is relatively low.
3. Easy entry in new markets: As the goodwill and reputation is already set up in other
countries, franchisor does not require more efforts to enter in new markets. He is easily
accepted in the new markets.
4. Business has large establishments: Franchise has large establishments around the world
and operates through a network of local representatives in different market areas.
5. Helps in diverting business risks: By establishing outlets in different parts of the world
franchise helps the owner of the firm to diversify his business risks.
6. Results in a large turnover: Franchise results in large volume of sales. Society is benefited
by the management of franchisor and service skills of franchisee. Brand name and bumper
publicity results in a large turnover.
7. Separates labour and specialization: Franchise results in division of labour and
specialisation. The franchisor concentrates on production, whereas franchisee looks after

distribution and service at a unit level. The advantages of division of labour and specialization
benefits both.
8. Allows use of brand name and trademark: In franchise selling the franchisor allows the
franchisee to use his brand name, trademark, and service mark and management skills for
developing and expanding franchise business.
9. Business is based on mutual agreement: Franchise business is based on mutual
agreement or contract setting out terms and conditions for franchising. Agreement is based on
the understanding between franchisor and franchisee. To avoid disputes, agreement should be
drafted in a detailed manner.
10. Success needs a long-term relationship: For the successful functioning of a franchise
business, both franchisor and franchisee have to remain committed in their long-term
relationship, only then business will be mutually rewarding. Strong franchisee relationship
enables the franchisor to sell a franchise more effectively, introduce needed changes into the
system very easily and motivate franchisee and their managers to provide a consistent level of
products and services to their customers.
Disadvantages

Costs may be higher than you expect. As well as the initial costs of buying the franchise,
you pay continuing management service fees and you may have to agree to buy products from
the franchisor.
The franchise agreement usually includes restrictions on how you can run the business.
You might not be able to make changes to suit your local market.
The franchisor might go out of business.
Other franchisees could give the brand a bad reputation, so the recruitment process
needs to be thorough
You may find it difficult to sell your franchise - you can only sell it to someone approved
by the franchisor.
All profits (a percentage of sales) are usually shared with the franchisor.
Types of franchising
Before you dive head first into your franchise business opportunity search, its important that
you understand the four different types of franchising opportunities available to you.
Product franchise business opportunity: Manufacturers use the product franchise to
govern how a retailer distributes their products. The manufacturer grants a store owner
the authority to distribute goods by the manufacturer and allows the owner to use the
name and trademark owned by the manufacturer. The store owner must pay a fee or
purchase a minimum inventory of stock in return for these rights. Some tire stores are
good examples of this type of franchise.
Manufacturing franchise opportunity: These types of franchises provide an
organization with the right to manufacture a product and sell it to the public, using the
franchisor's name and trademark. This type of franchise is found most often in the food
and beverage industry. Most bottlers of soft drinks receive a franchise from a company
and must use its ingredients to produce, bottle and distribute the soft drinks.
Business franchise opportunity ventures: These ventures typically require that a
business owner purchases and distributes the products for one specific company. The
company must provide customers or accounts to the business owner, and in return, the

business owner pays a fee or other consideration as compensation. Examples include

vending machine routes and distributorships.
Business format franchise opportunity: This is the most popular form of franchising.
In this approach, a company provides a business owner with a proven method for
operating a business using the name and trademark of the company. The company
usually provides a significant amount of assistance to the business owner in starting and
managing the company. The business owner pays a fee or royalty in return. Typically, a
company also requires the owner to purchase supplies from the company.

5. Mergers and acquisitions?

Ans: Mergers
A merger is a combination of two companies into one larger company. This action
involves stock swap or cash payment to the target. In merger, the acquiring
company takes over the assets and liabilities of the merged company. All the
combining companies are dissolved and only the new entity continues to operate. In
general, when the combination involves firms that are of similar size, the term,
consolidation, is applied. When the two firms differ significantly by size, the term
merger is used. Merger commonly takes two forms. In the first form amalgamation,
two entities combine together and form a new entity, extinguishing both the
existing entities. In the second form absorption, one entity gets absorbed into
another. The latter does not lose its entity. Thus, in any type of merger at least one
entity loses its entity. Hence, A + B = A, where company B is merged into company
A (Absorption) A + B = C, where C is an entirely new company (Amalgamation or
Consolidation) Usually, mergers occur in a consensual setting, where executives
from the target company help those from the purchaser in a due diligence process
to ensure that the deal is beneficial to both the parties. In a merger, the boards of
directors of the two firms agree to combine and seek stockholder approval for the
combination. In most cases, at least 50% of the shareholders of the target and the
bidding firms have to agree to the merger. The target firm ceases to exist and
becomes part of the acquiring firm.
Types of mergers

Acquisition
Acquisition is a more general term, enveloping in itself a range of acquisition
transactions. It could be acquisition of control, leading to takeover of a company. It
could be acquisition of tangible assets, intangible assets, rights and other kinds of
obligations. They could also be independent transactions and may not lead to any
kind of takeovers or mergers. Meaning: A corporate action in which a company buys
most, if not all, of the target company's ownership stakes in order to assume control
of the target firm. Acquisitions are often made as part of a company's growth
strategy whereby it is more beneficial to take over an existing firm's operations and
niche compared to expanding on its own. Acquisitions are often paid in cash, the
acquiring company's stock or a combination of both. An acquisition, also known as a
takeover, is the buying of one company (the target) by another.
Types There are four types of acquisitions:
1. Friendly acquisition: Both the companies approve of the acquisition under
friendly terms. There is no forceful acquisition and the entire process is
cordial.
2. Reverse acquisition: A private company takes over a public company.
3. Back flip acquisition: A very rare case of acquisition in which the
purchasing company becomes a subsidiary of the purchased company.

4. Hostile acquisition: Here, as the name suggests, the entire process is done
by force. The smaller company is either driven to such a condition that it has
no option but to say yes to the acquisition to save its skin or the bigger
company just buys off all its share, thereby establishing majority and hence
initiating the acquisition.

6. Social entrepreneurs: meaning, features, social entrepreneurs

v/s commercial entrepreneurs?
Ans: meaning
A person who pursues an innovative idea with the potential to solve a community problem.
These individuals are willing to take on the risk and effort to create positive changes in society
through their initiatives.
Examples of social entrepreneurship include microfinance institutions, educational programs,
providing banking services in underserved areas and helping children orphaned by epidemic
disease. The main goal of a social entrepreneur is not to earn a profit, but to implement
widespread improvements in society. However, a social entrepreneur must still be financially
savvy to succeed in his or her cause.

The main characteristics of social entrepreneurship, outlined in diverse theoretical resources,

are:

Explicitly formulated mission to create and sustain social value and to benefit the
communities;
High degree of economic risk and autonomy in activities related to producing goods
and/or selling services;
Pursuit of new opportunities and exploration of hidden resources to serve that
mission;
Quest for sustainable models, based on well elaborated feasibility study;
Ongoing engagement in innovation, adaptation and learning;
Decision-making power not based on capital ownership;
Participatory and collaborative nature involving various stakeholders;
Limited distribution of profit and minimum amount of paid work;
Change opportunities lying in the hands of every individual.

Commercial
entrepreneur

Social entrepreneur

Profit motive
training of one kind or another in:
specific job-related skills, e.g.
graphic design, engineering,
accountancy generic management
skills, e.g. human resource
management, project management,
financial management
access to loans and other financial
opportunities made available from
mainstream sources, e.g. high street
banks, finance companies
entrepreneurs
Appropriate premises

Social development
lack of training in generic
management skills

Trained, experienced staff

A supportive administrative
framework, e.g. someone to answer
the telephone, do the books, sort
out the invoices
A social and business environment
which is geared towards helping
commercial entrepreneurs gain the
competitive edge, make money,
increase profits, satisfy shareholders

Access to grants and loans made

available from government, local
authority and other sources, usually
in completion with other social
Dilapidated, run down premises,
often in need of refurbishment
Volunteers, often without training or
experience
A lack of regular administrative
support at the very start of the
enterprise
Red tape, bureaucracy, resistance to
change

Distinguish between social and commercial

Emphasis on Team Vs. Individual
The "Stanford Social Innovation Review" notes that venture capitalists invest in private business
on the basis of a new company's leadership team and the organization that supports it.
Philanthropists -- individuals who raise and donate money for charitable causes -- rather than
venture capitalists are often the primary investors in social entrepreneurs' projects. They're
more likely to gauge the viability of a project based on the individual at the helm. The review
challenges the focus on the individual in light of research showing that successful change
depends on a range of competencies -- competencies that require strong leadership but that
rarely can be undertaken by a sole individual.

Perceptions of Value
For the business entrepreneur, value lies in the profit the entrepreneur and investors expect to
reap as the product establishes itself in a market that can afford to purchase it. The business
entrepreneur is accountable to shareholders and other investors for generating these profits. To
the social entrepreneur, there's also value in profits, as profits are necessary to support the
cause. That said, value for the social entrepreneur lies in the social benefit to a community or
transformation of a community that lacks the resources to fulfill its own needs.
Measure of Profitability
The ventures of business entrepreneurs are always designed to turn profits that benefit
stakeholders, such as shareholders or private investors. Social entrepreneurs also may engage
in for-profit activities. However, they often structure their organizations as nonprofits, or they
donate their profits to the causes they support. NIKA Water, for example, is a for-profit company
that sells bottled water. According to "Entrepreneur," 100 percent of the company's profits
support clean-water projects in Uganda, Kenya, Sri Lanka and Nicaragua.
Approach to Wealth Creation
Although the business entrepreneur and the social entrepreneur are similarly motivated to
change the status quo, their missions differ significantly. The business entrepreneur is driven to
innovate within a commercial market, to the ultimate benefit of consumers. If successful, the
innovation creates wealth. The venture's success is gauged by how much wealth it creates. To
the social entrepreneur, wealth creation is necessary, but not for its own sake. Rather, wealth is
simply a tool the entrepreneur uses to effect social change. The degree to which minds are
changed, suffering is alleviated or injustice is reversed represents the organization's success.

7. Kakinada experiment?
Ans: Kakinada Experiment/Experience at Kakinada:
According to David McClelland the role of n Ach is the critical factor for
entrepreneurial development, which in turn leads to accelerate the tempo of economic
development. According to him if the inner spirit which is the need for motivation is higher it
would produce more energetic entrepreneurs who can speed economic development. He feels
that the achievement motivation is nourished by ambition. In order to prove this fact, he
conducted several experiments with different groups of businessmen in America, Mexico,
Bombay & Kakinada in Andhra Pradesh. He tried to induce achievement motivation in adults.
His aim was to provide an urge in them to improve their condition. Through the experiments he

tried to induce the spirit of achievement motivation in adult & urged them to take up
entrepreneurial ventures. Such an inducement was, in fact, essential to increase their level of
aspirations & to give rise to confidence building character in them.
In January, 1864, a full-fledged training was organized by David McClelland at
Kakinaka (Andhra Pradesh) an industrial town with high literacy with a total intake of 52 persons
drawn from business & industrial community. The objectives of such programme were;
1.

To induce achievement motivation.

2.

To break the barrier of limited aspirations.

They were given orientation through the Small Industries Extention & Training Institutes
(SIET), Hyderabad. The Achievement Motivation Training (AMT) included the following basis
which were supposed to be accomplished by the trainees. The entrepreneurs attending the
programme were encouraged to introspect, their imagination stimulated so that they could
develop community goals & achieve personal motivation.
Four main items constituted the achievement development course.

1.

The trainee entrepreneurs were asked to control day dreaming & develop a positive
attitude among themselves.

2.

The participants imagined themselves in need & the challenge set before themselves
was to have realistic & carefully planned goals.

3.

They tried to attain concrete & frequent feedback.

4.

They watched models heroes who performed well & tried to imitate them.
McClelland introduced TAT ( thematic appreciation test) where vague pictures were shown.
The trainees were asked to interpret what they saw & explain what was happening in the
picture. Achievement related themes were then counted & the final score showed the individuals
desire for high achievement.
This training tries to encouraged those who have great desire to achieve something in lifer
faster. The trainees exhibited a more active business behavior & to achieve they asked for
longer hours too.
This Kakinada experiment is used to set up new enterprises. This is part of EDP which
trains the entrepreneurs.
Conclusion
Traditional beliefs do not inhibit an entrepreneur - Suitable training can provide necessary
motivation to an entrepreneur - The achievement motivation had a positive impact on the
performance of the participants It was the Kakinada experiment that made people realise the

importance of EDP (Entrepreneurial Development Programme) to induce motivation and

competence in young, prospective entrepreneurs

8. Roles of SHGs?
Ans: Self help groups are necessary to overcome exploitation, create confidence for the
economic self-reliance of rural people, particularly among women who are mostly invisible in the
social structure. These groups enable them to come together for common objective and gain
strength from each other to deal with exploitation, which they are facing in several forms. A
group become the basis for action and change. It also helps buildings of relationship for mutual
trust between the promoting organization and the rural poor through constant contact and
genuine efforts. Self help groups plays an important role in differentiating between consumer
credit and production credit, analyzing the credit system for its implication and changes in
economy, culture and social position of the target groups, providing easy access to credit and
facilitating group/organization for effective control, ensuring repayments and continuity through
group dynamics; setting visible norms for interest rates, repayment schedules, gestation period,
extension, writing of bad debts; and assisting group members in getting access to the formal
credit institutions. Thus, self help group disburses microcredit to the rural women for the
purpose of making them enterprising women and encouraging them to enter into entrepreneurial
activities. Credit needs of the rural and urban poor women are fulfilled totally through the SHGs.
SHGs enhance equality of status of women as participation, decision-makers and beneficiaries
in the democratic, economic, social and cultural spheres of life.
The rural poor are in-capacitated due to various reasons such as; most of them are socially
backward, illiterate, with low motivation and poor economic base. Individually, a poor is not
weak in socio-economic term but also lacks access to the knowledge and information, which are
the most important components of today's development process. However, in a group, they are
empowered to overcome many of these weaknesses, hence there are needs for SHGs which is
specific terms are as under :

To mobilize the resources of the individual members for their collective economic
development.

To uplift the living conditions of the poor.

To create a habit of savings, utilization of local resources.

To mobilize individual skills for group's interst.

To create awareness about right.

To assist the members financial at the rime of need.

Entrepreneurship development.

To identify problems, analyzing and finding solutions in the groups.

To act as a media for socio-economic development of village.

To develop linkage with institution of NGOs.

To organize training for skill development.

To help in recovery of loans.

To gain mutual understanding, develop trust and self-confidence.

To build up teamwork.

To develop leadership qualities.

To use it as an effective delivery channel for rural credit

9. Incentives offered by government and other agencies to

promote entrepreneurship in India?
Ans:

10.

Reasons for failure of new products?

ans: Mistakes Before the product launch

1.

Failed to do market research to create a new product. We dont know how many customers
need the solution for the problem our product can solve.

2.

How many people ready to pay for the solution for the problem they had in the market.

3.

Fail to narrow done your niche product development in the competitive area. We cant offer
solution for the wider problems from single product. So we need to pick one problem for
developing the product.

4.

No proper planning on the cost of product development. Most of the money was used to
create the product. Only small amount used for remaining thing like launching,
marketing, and selling the product.

5.

Our product has the interesting features but we dont express it in the market place.

6.

We need to be focus biggest benefit of the product in headline which gives emotional
response from the customer. We failed on this.

7.

If our product created in the new category from the ordinary we need to educate the
customer about the category before launching the product.

8.

The affiliate does not believe in your product we have created. Ie) It doesnt mean that our
product is not worthy. We need to give clear information about the product to the affiliates and
the people who promote our product.

9.

Try to sale the product in wider range of the customer in the competitive niche market.

10.

The product development and execution of launch has delayed by a reason. So the product
launched in wrong trends.

11.

The product was not tested inside the organization by pre-pre launch and failed to collect
feedback.

12.

Failed to correct the feedback from organization peoples. And the pre launch the product
again to limit customer in particular area and getting feedback from them before the mail product
launch.

13.

Failed to offer instant support in three forms text, voice and video without delaying customer
for the response for the pre sale questions.

14.

The sales person will not educated with our product fully. They lack to delivers our product
value to the customer.

15.

Marketing plan was created by the product developer without the knowledge of the market
trends.

16.

We need to provide proper product description depends on the media in which we want to
promote our product. The product description unclear for different types of promotion media.

17.

Spending more time to market our product in secondary Medias. We need to prioritize our
marketing sources like website, blogs, and social media.

18.

Crating a product without promotion plan and timing to market the product.

Mistakes During Product launch

1.

Over estimated by customer and under deliver by the product.

2.

Product launched without any indication to the public. The buzz where not created during the
pre launch.

3.

Failed to respond all customer issue. Take time to respond all customers with first in first out
method.

4.

Product launched in the same time in wide range of customer. We need to launch the
product to targeted people say for example we need to launch the product to our email list at
least some hours before the main launch.

5.

Product launched with too hesitation about the number of sales.

6.

The supply for the product insufficient for the support team.

7.

The test launch targeted to wrong customer and delaying the main product launch.

8.

Over promised by the product promoters and under delivered by the product.

9.

Product given to limited trial and retail without any public customers and no promotion made
for the trail of the product.

10.

Product launch done without having any backup data for the product.

11.

Failed to document the product launch process and product development process.

12.

Our product doesnt match with the key point of selling.

13.

Product has no trained people to communicate with the affiliates and other people who
promote our product.

14.

Product launch budget in sufficient to promote the product if we find new product promotion
source.

15.

No strategic planning during the product launch time for promotion.

16.

Product owners launch the product before it distributed to the regular promoters and
affiliates.

17.

Product owners keep promise on product will hit the market instantly after the product launch
without considering the time taken for the product to reach the customer place.

18.

Without proper creation and management of advertisement about the product before the
launch.

19.

The product launch depends on only few sources of promotion to sell the product in the
market.

20.

Product owners have the lacks to promote the product via social media like twitter and
facebook.

21.

Company a lot budget for only marketing there is no proper plan for the budget for ad
management and video promotion. And info graphics about the product benefits.

22.

The product priced too high for the targeted audience.

23.

Product launch without and bonus and offers. Because people were expecting at least 4x
amounts they had spend.

Mistakes after the Product launch

1.

No immediate response to the customer once they have purchased the product.

2.

Unclear video support about our product usages.

3.

There are No follow up messages after the product has been purchased. Definitely we need
to send instruction about using the product via email once the sales completed successfully. We
know we can make more money from the existing customer.

4.

No clear description about Incentives and commission for the promoters and affiliates.

5.

All the data and banner information not available in the affiliate or partner pages with the
benefits of promoting the product.

6.

No tracking and documentation after the product launch. It may helpful for the secondary
promotion planning.

7.

Ad campaign launched before the prober description given to the promoters and the affiliate.
Because of this customer will know more than the promoters about the product.

8.

Offers and special bonuses and trail periods not properly explained to the promoters and ad
campaigns. So it will not reach the customer until they reach sales letter.

9.

There is no social proof and guarantee in the sales letter it will reduce the customer
confidence level to purchase the product.

11.

Venture capital meaning, importance, challenges etc?

Ans:

12.

Importance of innovation and creativity for

entrepreneurship (Schumpeters theory)?

Ans:

13.

Sick units: meaning, measures taken for revival?

Ans: Sick industrial unit is defined as a unit or a company (having been in existence for not less
than five years) which is found at the end of any financial year to have incurred accumulated
losses equal to or exceeding its entire net worth. The net worth is calculated as sum total of paid
up capital and free reserves of a company less the provisions and expenses, as may be
prescribed. An industrial unit is also regarded as potentially sick or weak unit if at the end of any
financial year, it has accumulated losses equal to or exceeding 50 per cent of its average net
worth in the immediately preceding four financial years and has failed to repay debts to its
creditor(s) in three consecutive quarters on demand made in writing for such repayment. The
two basic factors which may result in sickness of an industrial unit are:

Internal factors are those which arise within an organisation. They include:

Mismanagement in various functional areas of a company like finance,

production, marketing and personnel;

Wrong location of a unit;

Overestimation of demand and wrong dividend policy;

Poor implementation of projects which may be due to improper planning or

managerial inefficiency;

Poor inventory management in respect of finished goods as well as inputs;

Unwarranted expansion and diversion of resources such as personal

extravagances,excessive overheads, acquisition of unproductive fixed
assets,etc.;

Failure to modernise the productive apparatus, change the product mix and other
elements of marketing mix to suit the changing environment;

Poor labour-management relationship and associated low workers' morale and

low productivity,strikes,lockouts, etc.

External factors are those which take place outside an organisation. They
include:

Energy crisis arising out of power cuts or shortage of coal or oil;

Failure to achieve optimum capacity due to shortage of raw materials as a result

of production set-backs in the supply industries, poor agricultural output because
of natural reasons,changes in the import conditions,etc.

Infrastructural problems like transport bottlenecks;

Credit squeeze;

Situations like market recession, changes in technology,etc;

International pressures or circumstances, etc

REVIVAL OF SICKNESS
When an Industrial Unit is identified as sick a viability study should be conducted to assess the
unit, it covers:

Market

Operations

Finance

Human Resource

Environment

The viability study may suggest one of the following measures:

Debt restructuring

Infusion of funds

Replacement of existing management

REVIVAL PROGRAMME

14.

Settlement with creditors

Disinvestment and disposal

Strict control over costs

Streamlining of costs

Improvement in managerial systems

Workers participation

Change of management

Merger with a healthy company

Components of business plan?

Ans: A business plan is actually a compilation of several sub-plans. A simplified business plan
can be prepared within the municipality to consist of:

title page and table of contents;

executive summary and business profile;
marketing plan;
operations plan;
human resources plan; and
Financial plan.

Preparing a business plan means developing a comprehensive set of operational activities

arising from the strategic plans. It is an essential step in the preparation for PPPs to ensure that
municipalities know:

what the objectives are;

how the PPP option will be managed; and

How the PPP goals will be attained.

A. Title page and table of contents

The title page should include the name of the partnership, the period of time that the plan
covers, the date that the plan was prepared as well as a contact person, phone number and
address. The title page should look professional: it is the first page a reader sees and first
impressions are important.
The table of contents lists the topics covered by the plan. As a road map, it allows the reader to
jump immediately to those sections that are of most interest.
B. Executive summary and business profile
The purpose of the executive summary is to capture the highlights of the business plan and
serve as a quick reference. The summary is usually completed after the remainder of the plan
has been written and should preferably be about 1 or 2 pages long. It should include:

a brief description of the service, potential customers and markets;

purpose and concept of the partnership (or why the marketplace needs the services of
the partnership);
business targets (projections in terms of units and monetary volumes during the time
period that the plan covers) and how it can be attained;
required financing and sources, how the funds will be used and how the funds will be
repaid; and
Linkages to the partnerships strategic plan.

Along with this, a brief description of the partnership organisation and ownership should be
provided. Other useful information includes management, previous financing (by whom), the
proposed start-up date of operations, important details of the partnership's current market area,
customers and trends that the proposed business can build upon.
C. Marketing plan
The marketing plan describes, in general terms: the industry in which the partnership intends to
operate and the strategy to penetrate or develop the target market; how much is planned to be
sold; who the customers are; how the services will be priced; and how the services will be
promoted. A full marketing plan and strategy need not be included in the business plan but a
number of alternatives need to be considered and evaluated in the planning process before the
marketing plan is finalised.
There are various exercises that can be helpful in the planning process:

SWOT analysis strengths, weaknesses, opportunities and threats;

PEST analysis political, economic, social and technological;
Balanced scorecard analysis of the impact of achieving objectives from a financial
perspective, a customer perspective and an internal perspective, and of innovation and

learning, together with identification of critical success factors and performance

measures; and
Brainstorming for alternative scenarios, opportunities and strategies.

The marketing plan must cover/include:

evidence that the partnership is aware of market conditions (size and structure), the
general economy and competition;
the implications of change (or trends), new technologies, new products, different
lifestyles, ability of customers to afford the service;
the implications of legal or political constraints on how the services are produced and
delivered;
the competitive advantage of the particular service to be provided or if it fills a particular
niche in the marketplace;
the basis for pricing the service based on costs, the competition or what the market will
bear;
the geographic location in which the partnership will concentrate its promotions; and
the best way to distribute the service to customers.
In formal terms, the marketing plan should address the four P's of marketing: product, price,
promotion and place (distribution). It should also identify strategically where the partnership is
at, where it wants to go, and how it will get there. A critical component will be a projection of
sales. Where it is required to make forecasts, at least three sets of projections should be
considered:
"optimistic",
"pessimistic",
and
"most
likely"
scenarios.

D. Operations plan
The operations plan is a brief outline of the basic operation of the PPP option. This may be
obvious to some people, but not necessarily to every stakeholder. The following need
consideration:

how the service is to be provided;

where the supplies and materials will be purchased and how the service is to be
delivered;
what after-sales service is required (repairs and so on);
what land, buildings, facilities and equipment are required, including costs and financing
(for lease or ownership), renovations, local taxes and utility costs;
what employee and management plans are required, including how skilled labour can be
accessed if required;
the business location that is chosen and an explanation of why it should serve the
partnerships needs, proximity to customers, suppliers, transportation costs and location
of competitors; and
The production capacity, turnover rates or services that can be achieved realistically with
the existing or proposed plan and staff.

E. Human resources plan

Management is critically important to the success of any PPP option. Investors or lenders are
looking for a balanced team of people to cover the important areas of management, marketing,
accounting and the technical skills to deliver on the business plan. Human resource
management requires thinking about how the partnership will recruit, screen, motivate, train and
discipline the staff needed to work. The human resources plan should cover/include the points
below:

It should name the key people operating the PPP option, and outline the education or
experience each of them brings to it.
It should explain how key areas of the operation are handled and by whom. An
organisational chart may be useful in this regard. Contingency plans should be indicated
if a key person cannot work for an extended period of time.
It should indicate any weaknesses in the management team and the strategy to
overcome them and in what time frame. Training existing staff, recruiting new employees
or hiring outside advisors are some of the possibilities.
It should indicate whether salary and compensation of managers and employees are
competitive within the industry and whether incentives such as commissions, bonuses or
profit sharing are being offered.
It should name the board of directors or professional advisors and indicate how
management will use their experience and guidance. The timing and frequency of board
meetings should also be indicated.

Recognition of the contribution made by employees to an organisation is one key to the growth
and success of a partnership. The plan should outline how the municipal management intends
to identify, recruit or promote key people and maintain a strong sense of collective achievement
with all employees.
F. Financial plan
The financial plan is a key component of the business plan. This is because the process of
creating financial projections for the PPP option revenue and expenses, cash flow and financial
position will force the team preparing the business plan to examine all of the other key
components of the plan. In doing this, they will be able to describe their plan in monetary terms
and detect any discrepancies, gaps or unrealistic assumptions made earlier. The financial plan
is also a valuable tool for creditors or government agencies when evaluating the partnerships
needs
and
use
of
funds.
The financial plan consists of: an income statement; a cash flow summary; the balance sheet;
capital sales and purchases; and a financing schedule.
Income statement
The purpose of the income statement is to disclose the annual revenues and expenses of a
business over the period of time that the plan covers. For an existing business, information for
at least the last one or two years is necessary.

Cash flow summary

Of all the supporting documents, the cash flow projection is one of the most difficult to prepare.
Basically, it is an educated guess about when and how much money will be coming into and
going out of partnership option. The cash flow forecast enables managers to decide what can
be afforded, when it can be afforded and how the partnership will be kept operating on a monthto-month basis. This information is useful to indicate the projected increases or decreases of a
bank loan that may be required during the year. Quarterly summaries are often adequate, but
occasionally monthly summaries are required for the first year of operation.
The balance sheet
The balance sheet describes the assets, the liabilities and the equity of the partnership at a
particular point in time. It is a widely used accounting statement that indicates the economic
resources of the organisation and the claim on those resources by creditors. This information is
useful in that it allows management and creditors to compare the partnerships estimates, as
well as its past performance, against industry averages.
Capital sales and purchases
Investors and lenders will require detailed information on the capital purchases that are
anticipated during the planning period, as well as information on how these assets are to be
financed and the expected useful life of the assets. Capital assets include land, buildings and
equipment.
Financing schedule
The financing schedule or loan summary should provide the reader with a snapshot view of
existing and new loans that will be held by the partnership. Information should outline the
interest rate being paid, frequency of payments, security given, type of loan (amortised versus
non-amortised) and the expected term of the loan. For existing loans, the name of the financial
institution should be indicated.
No one expects a new partnership to make a profit in the first month, quarter or in some cases
year. However, there should be light at the end of the tunnel. Interest on loans is repayable from
the first day of operation, and the partnership must show a return on the investment, in terms of
both time and money, within a realistic time frame if it is to be viable.

15.

Feasibility analysis its need and importance?

Ans: As the name implies, a feasibility study is an analysis of the viability of an idea. The
feasibility study focuses on helping answer the essential question of should we proceed with
the proposed project idea? All activities of the study are directed toward helping answer this
question.

Before you begin writing your business plan you need to identify how, where, and to
whom you intend to sell a service or product. You also need to assess your competition
and figure out how much money you need to start your business and keep it running
until it is established.

Feasibility studies address things like where and how the business will operate. They
provide in-depth details about the business to determine if and how it can succeed, and
serve as a valuable tool for developing a winning business plan.

Important of Feasibility Studies

List in detail all the things you need to make the business work;

Identify logistical and other business-related problems and solutions;

Develop marketing strategies to convince a bank or investor that your business is worth
considering as an investment; and

Serve as a solid foundation for developing your business plan.

Even if you have a great business idea you still have to find a cost-effective way to
market and sell your products and services. This is especially important for store-front
retail businesses where location could make or break your business.

For example, most commercial space leases place restrictions on businesses that can
have a dramatic impact on income. A lease may limit business hours/days, parking
spaces, restrict the product or service you can offer, and in some cases, even limit the
number of customers a business can receive each day.

If the results show that the project is not a sound business idea, then the project should
not be pursued. Although it is difficult to accept a feasibility study that shows these
results, it is much better to find this out sooner rather than later, when more time and
money would have been invested and lost.

Other importance

Market Viability
A feasibility study typically includes a market analysis that looks at the current state and direction of
a market and whether a new venture would be viable in the market. For example, if an inventor
creates a new type of skateboard, market research he conducts as part of a feasibility study might

show little interest exists for the new design. In this case, the inventor might save himself time and
money by scrapping the project.

Financial Viability
Even if consumers are interested in a new product or service, a business can't succeed unless it
can produce and deliver the product to customers at a price that is profitable. A feasibility study can
assess the start-up and operational costs of a venture and make revenue projections to estimate
whether a project is likely to be profitable. If a product is too expensive to produce to be profitable,
managers can look into ways to cut costs to make it financially feasible.

Identifying Threats
Many external factors can harm the profitability of a business. Conducting a feasibility study can help
managers identify threats such as market competition, unfavorable laws and new technologies that
might affect a project's chances of success. Identifying threats early on gives managers the
opportunity to take action to mitigate the impact they might have on a business as a new venture
proceeds.

Identifying Opportunities
Small businesses often focus on selling products and services to small segments, or niches, within
larger markets that have specific needs and preferences. A feasibility study can help business
managers identify niches in markets. For instance, a feasibility study might reveal that certain
demographic groups within a market are willing to pay extra for product features that are not
currently available, giving a new company the chance to profit by fulfilling the need.