Enterprise, Business Growth, and size By : Igor Roitburg
Objectives : In this chapter you will study about : ! Entrepreneurs and Enterprise ! Characteristics of successful entrepreneurs ! Business plans ! Contents of a business plan ! How to measure business size ! Why some businesses grow ! External growth and Internal growth
! Why some businesses fail
Entrepreneurs and Enterprise ! An Entrepreneurs is someone who has an idea for a business and take the risk of setting up and running the business.
! Enterprise meaning a project.
Characteristic of Successful Entrepreneurs
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Initiative : able to developed a good plan to achieve the objectives of a business
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Risk taker : ready to take risks
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Result driven : focus on achieving result
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Self-motivated/determine : have the drive to keep going
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Good at networking : have many friends
Multi-skilled : able to do many tasks
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Leadership skills : able to motivate other people (good decision maker)
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Self-confident : have a strong belief in their own ability an ideas
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Innovative : good thinking up new ideas
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Business Plan ! Business plan : it’s a detailed written document shows the purpose and aims of a business which is often used to persuade lenders/investors to finance a business proposal.
Contents of a business plan ! The business : show the details of entrepreneurs, the idea of business, and managers/workers who will be recruited ! The business opportunity : show the information about the products. It’s also includes market research ! The market : shows the current size, potential for growth and competitors ! The objectives : show that the business hopes to achieve ! Financial forecast : show a cash flow forecast, projected sales, revenue, and profit for at least the first year of trading
Revenue : the amount a business earns from the sale of it’s products
How to measure the business size ! There are several ways of measuring and comparing the size of business : Capital employed
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! Market share ! Number of employees ! Value of output
! Sales
Reason to grow business ! Increase the profit ! Increase the market share ! Economies share : ! Trading economies : buying raw materials ! Financial economies : can have a greater access ! Managerial economies : a business can hire/ employ specialist/professional manager
! Technical economies : a business can purchase expensive machinery/equipment
External growth and Internal growth ! External growth (take over/merger) ! Horizontal integration ! Forward integration ! Backward integration ! Conglomerate integration
! Internal growth (organic growth) ! Developing new products ! Finding new market for their products
! Increase the output
Why some businesses fail ! Poor planning and lack of objectives ! Poor cash management ! Poor choice of location ! Poor management ! Failure to invest in new technologies ! Poor marketing ! Lack of finance
! Competition
Thank You