COVERAGE OF THE COURSE

The course is divided among major five units which define this course briefly in a precise manner:
UNIT 1: ELEMENTS OF ENTREPRENEURSHIP
UNIT 2: BUILDING THE RIGHT TEAM
UNIT 3: THE BUSINESS PLAN
UNIT 4: MARKETING STRATEGY
UNIT 5: FINANCING THE NEW VENTURE

UNIT 1: ELEMENTS OF ENTREPRENEURSHIP

Entrepreneurs assume the risk of creating an enterprise that will provide them with a return on the capital
employed. In this introductory unit, we will look more closely at small business creation and the history and
evolution of entrepreneurship. There is a study of various economists and their theories, assess entrepreneurial
characteristics, and learn about the phases of the entrepreneurial process. Finally, we will review ethics and social
responsibility as they relate to entrepreneurship before evaluating methods for launching a business geared
towards your target market.

1.1: THE HISTORY OF SMALL BUSINESS AND ENTREPRENEURSHIP

►The concept of entrepreneurship was first established in the 1700s, and the meaning has evolved ever since.
Many simply equate it with starting one’s own business. Most economists believe it is more than that.

►In the 20th century, economist Joseph Schumpeter (1883-1950). Focused on how the entrepreneur’s drive for
innovation and improvement creates upheaval and change.

▷ Business expert Peter Drucker (1909-2005) took this idea further, describing the entrepreneur as someone who
actually searches for change, responds to it, and exploits change as an opportunity.

► Most economists today agree that entrepreneurship is a necessary ingredient for stimulating economic growth
and employment opportunities in all societies.

1.2: INTRODUCTION TO ENTREPRENEURSHIP

Entrepreneurs are innovators, willing to take risks and generate new ideas to create unique and potentially
profitable solutions to modern-day problems. Entrepreneurship is not so much a skill as a habitual state of mind.

► When intrapreneurship describes activities within a firm or large organization, it is referred to as

entrepreneurship and may include corporate venturing, when large entities spin off organizations.

►Entrepreneurship employs what Schumpeter called the gale of creative

Destruction to replace wholly or partly inferior innovations across markets and
Industries. This destruction simultaneously creates new products and new
Business models.

► Entrepreneurship ranges in scale from solo projects (even involving the part- time entrepreneur) to major
undertakings that create many job opportunities. Entrepreneurial activities can be incremental or disruptive.
Incremental innovations are a number of small changes that transform process flows while disruptive innovations
are entirely new approaches.

1.3: TYPES OF ENTREPRENEURS

The entrepreneurial mindset is marked by imagination, initiative, and a readiness to undertake new projects. It is
perseverance and determination, risk-taking and daring, integrity, and honesty. The different types of
entrepreneurs are as follows:

1.Small Business Entrepreneurship – This type of entrepreneurship refers to any kind of small business that has
been created by one person, without the goal to expand or franchise. 1 by o

2 Intrapreneurship – Unlike an entrepreneur, who is also the founder, designer and manager of a business, an
intrapreneur is a self-motivated, and action-oriented employee who thinks out of the box and works as an
entrepreneur within a company Intrepreneurship is a way that companies can support and encourage employees
that have entrepreneurial spirit.

3.Large Company Entrepreneurship – Large company entrepreneurship refers to large companies(eg Google, Apple
Ltd, etc.) they keep innovating and offering consumers new products that are variants around their core product-
line. A distinguishing feature of this type of entrepreneurship is that it is not starting a new business, rather
creating new products or subsidiaries within an existing company, or acquiring smaller businesses

4.Innovative Entrepreneurship – Innovative entrepreneurs, as the name suggests, are constantly trying to come up
with the next big thing. If you have groundbreaking ideas of how to start a business or specific services and
products that can become business ventures, you might be an innovative entrepreneur.

5.Social Entrepreneurship-Social entrepreneurs are innovators whose main goal is to create products and services
that both benefit the world, and make money. Social entrepreneurship relates to nonprofit, for-profit, or hybrid
companies that are committed to social or environmental change.

1.4: CHARACTERISTICS & PRINCIPLES OF ENTREPRENEURSHIP

▷ Principles help guide the entrepreneur through the initial decision-making challenges that, when implemented
tactically, can lead to the rewarding success of business growth whereas;

► Characteristics are certain personal attributes that an entrepreneur possesses, they are subjective i.e. different
for different people.

CHARACTERISTICS

1.CREATIVITY
2.DEDICATION
3. LEADERSHIP
4 DETERMINATION
5. SELF CONFIDENCE

PRINCIPLES

1. MOTIVATION
2. REALISTIC VISION
3. ACCOUNTABILITY
4. STRATEGY
5. LEARNING

1.5: BUSINESS ETHICS

Business Ethics studies how to deal with corporate governance, whistle blowing. Corporate culture, and corporate
social responsibility. It emphasizes standard principles prescribed by governing bodies. Non-compliance with
business ethics leads to unnecessary legal actions.

Business ethics is the prescribed code of conduct for businesses. It is a set of guidelines for dealing with various
procedures ethically.

The discipline comprises corporate responsibility, personal responsibility, social responsibility, loyalty, fairness,
respect, trustworthiness, and technology ethics. It emphasizes sustainability, customer loyalty, brand image, and
employee retention.

The motive is to prevent unethical business practices, both deliberate and inadvertent. Some unethical practices
circumvent law enforcement. Even then, businesses risk paying a hidden cost-the loss of reputation.

A simple example of being ethical is avoiding plastic bags. Currently, corporate ethics strongly emphasize
sustainability-resources for future generations are at risk

UNIT 2: BUILDING THE RIGHT TEAM

Building an effective management team is one of the primary steps in launching a venture. Entrepreneurs must
explore their personal strengths and weaknesses and en determine the resources needed to fill the gaps.
Successful businesses require not only stellar executives and advisers but also employees who are a good fit for the
company. Thus, a manager must be able to delegate responsibility and make decisions for the team, but a leader
must be able to influence team behavior. For this reason, motivation is one of the most powerful tools that a leader
can use. A motivated team will be able to go above and beyond the call of duty.

2.1: LEADERSHIP, ENTREPRENEURSHIP AND STRATEGY

LEADERSHIP: If management is defined as getting things done through others, then leadership should be defined as
the social and informal sources of influence that you use to inspire action taken by others. It means mobilizing
others to want to struggle toward a common goal. Great leaders help build an organization’s human capital, then
motivate individuals to take concerted action. Leadership also includes an understanding of when, where, and how
to use more formal sources of authority and power, such as position or ownership,

▸ ENTREPRENEURSHIP: Entrepreneurship is defined as the recognition of opportunities (needs, wants, problems,

and challenges) and the use or creation of resources to implement innovative ideas for new, thoughtfully planned
ventures. Perhaps this is obvious, but an entrepreneur is a person who engages in the process of entrepreneurship.
We describe entrepreneurship as a process because it often involves more than simply coming up with a good idea
someone also has to convert that idea into
STRATEGY: When an organization has a long-term purpose, articulated in clear goals and objectives, and these
goals and objectives can be rolled up into a coherent plan of action, then we would say that the organization has a
strategy. It has a good or even great strategy when this plan also takes advantage of unique resources and
capabilities to exploit a big and growing external opportunity Strategic management is important to all
organizations because, when correctly formulated and communicated, strategy provides leaders and employees
with a clear set of guidelines for their daily actions

2.2: COMPONENTS OF A CORPORATE TEAM

BOARD OF DIRECTORS: A board of directors (B of D) is the governing body of a company, elected by shareholders in
the case of public companies to set strategy and oversee management. The board typically meets at regular
intervals. Every public company must have a board of directors. Some private companies and nonprofit
organizations also a board of directors.

EXECUTIVES: A business executive is a person responsible for running an organization, although the exact nature of
the role vanes depending on the organization. Executives run companies or government agencies. They create
plans to help their organizations grow Becoming an executive usually takes years of promotions and hard work
since the qualifications of this role needs hard working individuals with years of experience in multiple facets of the
business.

PARTNERS: A partner is an individual with a co-ownership interest within a company They often have equal equity
with other partners, but their role varies depending on the agreement. For example, a partner may not make
decisions, but they are eligible for a percentage of all profits made.

EMPLOYEES: An individual who works part-time or full-time under a contract of employment, whether oral or
written, express or implied, and has recognized rights and duties Also called worker.

2.3: METHODS OF RECRUITMENT

Recruitment of talented employees is an essential part of any company’s ability to maintain success and ensure the
achievement of standards within an organization. Recruiting workers consists of actively compiling a diverse pool of
potential candidates which can be considered for employment. There are two principal ways to recruit workers:
internally and externally Most companies will actively use both methods, ensuring opportunities for existing
employees to move up in the organization while at the same time fielding new talent.

1.Internal recruitment is often the most cost-effective method of recruiting potential employees, as I uses existing
company resources and talent pool to fill needs and therefore may not incur any extra costs. This is done in two
principal ways, Advertising job openings internally & using networking.

2.External recruitment focuses resources on looking outside the organization for potential candidates and
expanding the available talent pool. The primary goal of external recruitment is to create diversity among potential
candidates by attempting to reach a wider range of individuals unavailable through internal recruitment. External
recruitment can be done in a variety of ways. Traditional advertising. Job fairs & campus visits & Headhunters and
recruitment service.

3.Online recruitment The use of the Internet to recruit a talent pool is quickly becoming the preferred way of doing
so, due to its ability to reach such a wide array of applicants extremely quickly and cheaply. First, the use of the
company website can allow a business to compile a list of potential applicants who are supremely interested in the
company & another popular use of online recruiting is through career websites
2.4: TEAM BUILDING

Complex business problems that have emerged in the 21st century require unique expertise and innovative
solutions Rapid changes in technology have amplified the need for collaboration and coordination across multiple
platforms. The expanding global economy has brought to light new, multifaceted issues that require diverse teams
to pool their collective knowledge and expertise. These problems exemplify just how critical it is for us to
understand the importance of teamwork and develop new pathways to foster team-building. Team building refers
to the various activities undertaken to motivate the team members and increase the overall performance of the
team.

Characteristics of Team Building:

Teams that work well together often exhibit similar characteristics to other high functioning groups. Below is a list
of distinct team characteristics that you can look for in the future: Good communication, Clear goals, High
motivation, High collaboration. High satisfaction, High commitment, etc.

Team-Building Exercises;
There are several reasons for organizations to use team-building exercises. Most activities focus on building trust
and dependence, improving communications, fostering connections, strengthening problem-solving skills, and
enhancing decision-making. Below you’ll find a list of several simple and inexpensive team-building exercises: Make
connections, improve communications, Build trust, enhance problem solving, etc.

UNIT 3: THE BUSINESS PLAN

A strong business plan is one of the foundations of a successful business. It is the tool by which a great idea
becomes an opportunity. It is the creative process that allows the entrepreneur to document the project’s merits
and to articulate a narrative, addressing the venture’s risks and rewards, to his or her potential investors, partners,
and other stakeholders. This unit presents the outline of a business plan, explain the importance of each section,
and provide you with guidance as to how you can craft this information for your own ventures.

3.1: DEVELOPING A BUSINESS PLAN

A business plan is a document that defines in detail a company’s objectives and how it plans to achieve its goals. A
business plan lays out a written road map for the firm from marketing, financial, and operational standpoints. Both
start ups and established companies use business plans.

A business plan is an important document aimed at a company’s external and internal audiences. For instance, a
business plan is used to attract investment before a company has established a proven track record. It can also help
to secure lending from financial institutions,

Furthermore, a business plan can serve to keep a company’s executive team on the same page about strategic
action items and on target for meeting established goals.

Although they’re especially useful for new businesses, every company should have a business plan. Ideally, the plan
is reviewed and updated periodically to reflect goals that have been met or have changed. Sometimes, a new
business plan is created for an established business that has decided to move in a new direction,
3.2: DO’S AND DON’TS OF WRITING A BUSINESS PLAN

A business plan is an essential tool fog companies operating in today’s fast-paced, detail-oriented world. A well-
written business plan provides various audiences with details about here the company will operate and be
profitable.
A business plan is not only valuable to other it is also beneficial to the business owner. Also, business plans define
goals for the business and plans on how to achieve such goals, we will look at ten dos and dun’ts of writing a
business plan. The first section will outline the five dos, and the second section will outline the five don’ts of
writing an effective

DO’S
1. Write Your Own Plan and Seek Input
2. Include all eight sections in your business plan.
3. Conduct research and provide accurate numbers
4. Explain both strengths and weaknesses of your business
5. Review and update your plan regularly

DON’TS
1. Do not expect to write your business plan in one day.
2. Do not overestimate or underestimate numbers
3. Do not leave out pertinent details.
4. Do not reuse wording from business plan templates or software programs.
5. Do not assume your audience members are experts in the industry.

3.3: FINANCIAL PLANNING

Financial planning is the task of determining how a business will afford to achieve its strategic goals and objectives.
Usually, a company creates a Financial Plan immediately after the vision and objectives have been set. The financial
plan describes each of the activities, resources, equipment and materials that are needed to achieve these
objectives, as well as the time frames involved.

►The financial planning activity involves the following tasks:

1. Assess the business environment.
2. Confirm the business vision and objectives.
3. Identify the types of resources needed to achieve these objectives.
4. Quantify the amount of resource (labor, equipment, materials)
5.Calculate the total cost of each type of resource.
6. Summarize the costs to create a budget.
7.Identify any risks and issues with the budget set.

The role of financial planning includes three categories:

1. Strategic role of financial management
2. Objectives of financial management
3. The planning cycle
UNIT 4: MARKETING STRATEGY

A marketing strategy is a long-term plan for achieving a company’s goals by understanding the needs of customers
and creating a distinct and sustainable competitive advantage. It encompasses everything from determining who
your customers are to deciding what channels you use to reach those customers.

With a marketing strategy, you can define how your company positions itself in the marketplace, the types of
products you produce, the strategic partners you make, and the type of advertising and promotion you undertake.

Having a marketing plan is essential to the success of any business. Read on to learn how to create a successful
marketing strategy for your company.

4.1: MEANING & COMPONENTS OF MARKETING

►Marketing is defined by the American Marketing Association as “the activity, set of institutions, and processes for
creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and
society at large.

►There are four activities or components, of marketing:

1. Creating . The process of collaborating with suppliers and customers to create offerings that have value.
2. Communicating. Broadly, describing those offerings, as well as learning from customers.
3. Delivering. Getting those offerings to the consumer in a way that optimizes value.
4. Exchanging. Trading value for those offerings.

The traditional way of viewing the components of marketing is via the four p{s}
1. Product: Goods and services (creating offerings).
2.Promotion: Communication.
3.Place: Getting the product to a point at which the customer can purchase it (delivering).
4.Price:The monetary amount charged for the product (exchanging)

4.2:MARKETING RESEARCH AND TYPES

Market research is defined as the process of evaluating the feasibility of a new product or service, through research
conducted directly with potential consumers. This method allows organizations or businesses to discover their
target market, collect and document opinions and make informed decisions Market research can be conducted
directly by organizations or companies or can be outsourced to agencies that have expertise in this process

TYPES OF MARKETING RESEARCH ARE AS FOLLOWS

1. Primary Market Research (A combination of both Qualitative and Quantitative Research): Primary Market
Research is a process where organizations or businesses get in touch with the end consumers or employ a
third party to carry out relevant studies to collect data. The data collected can be qualitative data (non-
numerical data) or quantitative data (numerical or statistical data). Examples include surveys, interviews,
observations, and ethnographic research, etc.

2. Secondary Market Research: Secondary research uses, information that is organized by outside sources
like government agencies, media, chambers of commerce etc. This information is published in
newspapers, magazines, books, company websites, free government and nongovernment agencies and so
 on. The secondary source makes use of the following Data available on the internet, Government and non
government agencies, Public libraries, Educational Institutions, Commercial information sources, etc.

4.3: IMPORTANCE OF MARKETING STRATEGY

Marketing is essential to any good business. It helps you reach and connect with your target audience and
ultimately is how you will grow your business in the long run. Marketing is important because, without it, your
business simply will not go anywhere because it won’t be seen. But it’s one thing to market your business without
any direction, and it’s another thing to market your business with a clear plan. The results are quite different.

IMPORTANCE OF MARKETING STRATEGY ARE AS FOLLOWS:

1. Marketing strategy provides an organization an edge over it’s competitors.

2. Strategy helps in developing goods and services with best profit making potential.
3. Marketing strategy helps in discovering the areas affected by organizational growth and thereby helps in
creating an organizational plan to cater to the customer needs.
4. It helps in fixing the right price for organization’s goods and services based on information Collected by
market research.
5. Strategy ensures effective departmental co-ordination. 6. It helps an organization to make optimum
utilization of its resources so as to provide a sales message to it’s target market.
6. A marketing strategy helps to fix the advertising budget in advance, and it also develops a method which
determines the scope of the plan, i.e., it determines the revenue generated by the advertising plan.

UNIT 5: FINANCING THE NEW VENTURE

Every entrepreneur needs money. It is imperative that you understand the costs of launching and maintaining a
business, from start-up expenses to operating capital. The financial information and projections contained in a
business plan are vital because they demonstrate the potential for profit and serve as the guideline for managing
the business financial aspects. This unit teaches how to determine the costs for launching a new venture and
where to get those funds.

5.1: THE FINANCIAL PLAN

A financial plan is a useful tool for determining whether your business idea is viable. It will demonstrate the costs
and what is needed to finance them. And it is useful for convincing financiers to lend you money, and therefore
forms the basis for your financial pitch.

A financial plan helps determine if an idea is sustainable, and then keeps you on track to financial health as your
business matures. It’s an integral part to an overall business plan and is made up of three financial statements-cash
flow statement, income statement and balance sheet. In your plan, each of these will include a brief explanation or
analysis.

Building a financial plan can be the most intimidating part of writing your business plan. It’s also one of the most
vital. Businesses that have a full financial plan in place more prepared to pitch to investors, receive funding, and
achieve long-term success.
Creating a financial plan does not have to be complicated. Base it on your business plan and keep it simple.
Targeted market research and a sound marketing plan should be part of your business plan. These will help you
create a solid basis for your figures.

5.2: COMPONENTS OF FINANCIAL PLAN

Income statement: This shows how your business experienced profit or loss over a specific period usually over
three months. Also known as a profit-and-loss statement (P&L) or proforma income statement, it lists the following.

1) Cost of sale or cost of goods (how much does it costs to produce your goods or services?)
2) Operating expenses like rent and utilities
3) Revenue streams, usually in the form of sales
4) Amount of total net profit or loss, also known as a gross margin

Balance sheet: Rather than looking backward or peering into the future, the balance sheet helps you see where
you stand right now. What do you own and what do you owe? To figure it out, you’ll need to consider the following:

1) Assets: How much cash, goods and resources do you have available.
2) Liabilities: What do you owe to suppliers, personnel, landlords, creditors, etc.
3) Shareholder equity (the amount of money generated by your business.

Personnel plan: You need the right people to meet goals and retain a healthy cash flow, A personnel plan looks at
existing positions and helps you see when it’s time to bring on more team members, and whether they should be
full-time, part-time, or work on a contractual basis. It looks at compensations levels, including benefits, and
forecasts those costs. By looking at growth and costs you can see if the potential benefits that come with a new
employee justify the expense.

5.2: COMPONENTS OF FINANCIAL PLAN

Sales forecast: How much will you sell in a specific period? A sales forecast needs to be an ongoing part of any
planning process since it helps predict cash flow and the organization’s overall health. A forecast needs to be
consistent with the sales number within your P&L statement. Organizing and segmenting your sales forecast will
depend on how thoroughly you want to track sales and the business you have.

Cash flow projection: Perhaps one of the most critical aspects of your financial plan is your cash flow statement.
Your business runs on cash. Understanding how much cash is coming in and when to expect it shows the difference
between your profit and cash position. It should display how much cash you have now, where it’s going, where it
will come from and a schedule for each activity.

Break-even analysis: Your break-even point how much you need to sell to cover all your expenses will guide your
sales revenue and volume goals. Start by calculating your contribution margin by subtracting the costs of a good or
service from the amount you pay. In the case of a bicycle store, the sale price of a new bike minus what you paid
for it and the salary of your bike salesperson, your rent, etc. By understanding your fixed costs, you can then begin
to understand how much you’ll need to markup goods and services and what-sales and revenue goals to set in
order to stay afloat or turn a profit.
5.3:FUNDING & SOURCES OF FUNDING

Funding is the act of providing resources to finance a need, program, or project. While this is usually in the form of
money, it can also take the form of effort or time from an organization or company. Generally, this word is used
when a firm uses its internal reserves to satisfy its necessity for cash, while the term financing is used when the
firm acquires capital from external sources

When business owners do not have the capital to fund their endeavors they must seek financial assistance from
external resources. The type of business you operate has an impact on your funding options. The different sources
of business funding are as follows:-

1) Lenders: A lender is an individual, a group (public or private), or a financial institution that makes
funds available to a person or business with the expectation that the funds will be repaid,
Repayment will include the payment of any interest or fees
2) Banks: Banks are a very important part of our economy. They are the center of finance.
Commercial banks give loans to organizations in either cash credits, overdrafts, term loans,
purchase/discounting of bills, or issue of letter of credit. Banks help enterprises by providing
loans to produce goods and contribute towards industrial growth and generate employment
opportunities.
3) Venture Capitalists: Venture capital (VC) is a form of private equity and a type of financing that
investors provide to start up companies and small businesses that are believed to have long-term
growth potential. Venture capital generally comes from well-off investors, investment banks, and
any other financial institutions. However, it does not always take a monetary form; it can also be
provided in the form of technical or managerial expertise. Venture capital is typically allocated to
small companies with exceptional growth potential, or to companies that have grown quickly and
appear poised to continue to expand
4) Government Funding: Government funding refers to financial assistance received by non
government entities in the form of federal, state, or local government grants, loans, loan
guarantees, property, cooperative agreements, food commodities, direct appropriations, or other
assistance. However, government funding does not include tax credits, deductions, or
exemptions.
5) Customer financing: Consumer financing is when a lender and a consumer connect at or before
the point of sale to allow the consumer to break up a purchase into payments. This gives the
consumer more cash at their disposal at the moment, and comfort knowing that they have
flexibility in payments.

CONCLUSION

This course in small business management provides you with the skills needed for business planning, workforce
building, marketing strategies and business financing. It begins with how to build the right team for your
organization, explaining leadership, entrepreneurship and strategy as the three principal fields on which the
principles of management stand.

Writing an effective business plan is one of the first things an entrepreneur will encounter.
A business plan is the framework on which your business is built. It guides an entrepreneur in their decision making
and helps sell the business idea to investors, partners and other stakeholders.
Building a cohesive team is one of the primary steps in launching a venture and successful businesses require not
only top-notch executives and advisers, but also employees who are a good fit for the company.

The entire processes of marketing research design, planning and analysis form another very important aspect in
any organization

Acquiring the funds for your project is another important aspect of your start-up journey.

Lastly, you will be introduced to the concept of marketing and will understand how to develop an effective
marketing strategy, conduct research with surveys/questionnaires, and make accurate forecasts.