Transcript Sense of Initiative and Entrepreneurship

Lesson 1
• Basic steps on how to set up a business
This project has been funded with support from the European Commission. This [publication]
communication reflects the views only of the author, and the Commission cannot be held
responsible for any use which may be made of the information contained therein.
Sense of Initiative and Entrepreneurship
Sense of Initiative and
Entrepreneurship
• First Step
– Business objective
• At first, you should make a decision in which
sphere you will run your business, which
means to choose your business objective or
objectives. You can find some useful
information on the web pages of Register of
companies or Trade register. It is necessary
to notice business objectives of individual
entrepreneurial subjects.
This project has been funded with support from the European Commission. This [publication]
communication reflects the views only of the author, and the Commission cannot be held
responsible for any use which may be made of the information contained therein.
Sense of Initiative and Entrepreneurship
Basic steps to set up a business
• Second Step
– Types of trades
• If you have a conception of your business
objective, it is necessary to find out whether
you are required to fulfil certain conditions
(education, experience, etc.) to carry on the
chosen business. A district authority
(department of trades) provides information
regarding the required conditions.
This project has been funded with support from the European Commission. This [publication]
communication reflects the views only of the author, and the Commission cannot be held
responsible for any use which may be made of the information contained therein.
Sense of Initiative and Entrepreneurship
Basic steps to set up a business
• We distinguish between two basic
types of trades
– Registry Trade
– Licensed Trade
• A registry trade can be:
– Craft trade
• You are supposed to prove your vocational
qualification with an official certificate and to
have a document about at least three- year
practice in the craft. If you meet this
mentioned condition, you can run a craft
business by registering.
This project has been funded with support from the European Commission. This [publication]
communication reflects the views only of the author, and the Commission cannot be held
responsible for any use which may be made of the information contained therein.
Sense of Initiative and Entrepreneurship
Basic steps to set up a business
– Bound trade
• There are specific regulations for running this
trade type. The condition you are required to
meet is professional knowledge.
– Free trade
• To run a free business you are not asked to
prove your professional knowledge. There is
no condition to have any documents
regarding your qualification and knowledge.
This project has been funded with support from the European Commission. This [publication]
communication reflects the views only of the author, and the Commission cannot be held
responsible for any use which may be made of the information contained therein.
Sense of Initiative and Entrepreneurship
Basic steps to set up a business
• Licensed Trades
– You can run a licensed trade based on a license. Licensed trades are
for example: Road transport, repairs, modifications, exchange offices,
etc. Specific directives regulate professional eligibility for licensed
trades.
– Special condition for running a licensed trade is reliability that
assesses in connection with business objective with respect to life
protection, health protection, protection of ownership and other rights
of people and public interest. Trade authority can impose some
conditions regarding running the trade.
– Particularly it is allowed to limit the territory of running the trade
because of public interest reason or it can authorize the trade for
limited period.
This project has been funded with support from the European Commission. This [publication]
communication reflects the views only of the author, and the Commission cannot be held
responsible for any use which may be made of the information contained therein.
Sense of Initiative and Entrepreneurship
Basic Steps to set up a business
• Third Step
– Required Documents:
• To issue a trade, you will need a statement of
crime register. You are supposed to
demonstrate your either ownership or rental
of either a real estate, which is the place of
your business or your operation with
ownership certificate (if you are the owner) or
having a rent contract (if you rent the building
or premises). In the case of renting a letter
of approval of the owner of the real estate
form instead of the contract it is acceptable.
If special certificates are required to run
a business, you are supposed to demonstrate
them as well (such as a diploma).
This project has been funded with support from the European Commission. This [publication]
communication reflects the views only of the author, and the Commission cannot be held
responsible for any use which may be made of the information contained therein.
Sense of Initiative and Entrepreneurship
Basic steps to set up a business
• Fourth Step
– Trade authority
• The next step is arranging a trade license.
–
Sole trader
• Those who want to start a business are obliged to report to respective
local trade authority according to permanent address of the trader.
–
Corporate body
• Those who want to carry on a licensed trade are obliged to ask Trade
Office to issue a concession. Those who want to run a registry trade
are obliged to announce that to a respective local trade office
according to the address of place of business of the corporate body.
This project has been funded with support from the European Commission. This [publication]
communication reflects the views only of the author, and the Commission cannot be held
responsible for any use which may be made of the information contained therein.
Sense of Initiative and Entrepreneurship
Basic steps to set up a business
• Fifth step
– Health Insurance and social security insurance company
• As a self-employed person you are supposed to pay health insurance
contributions so after establishing your business you should register
as a self-employed person in your health insurance company.
• Regarding social security (pension contributions, unemployment
contributions) you are supposed to report to Social security insurance
company the commencement date of your business. You must be
informed on the legislation of your country regarding the social
insurance.
This project has been funded with support from the European Commission. This [publication]
communication reflects the views only of the author, and the Commission cannot be held
responsible for any use which may be made of the information contained therein.
Sense of Initiative and Entrepreneurship
Basic steps to set up a business
A business plan is an essential step for any prudent entrepreneur to take,
regardless of the size of the business.
• How to set up a business plan
– There is no generally accepted rule of how to
structure a business plan, but frequently
business plans consist of the following items:
• Executive summary (short summary of the
project)
• Starting position / Actual analysis (of
enterprise, business
environment, business team)
• Marketing plan
• Project plan
• Investment analysis and assessment of
economic efficiency
• Financial plan
• Appendix / Notes to the business plan
This project has been funded with support from the European Commission. This [publication]
communication reflects the views only of the author, and the Commission cannot be held
responsible for any use which may be made of the information contained therein.
Sense of Initiative and Entrepreneurship
Structure of a business plan
– Executive Summary
• Decision makers often have little time and
secondly, too little interest to be bothered
with details. They want to receive a quick
overview, which is their first criterion in
deciding whether to deal with the project
personally or delegate it to others.
– Starting position / Actual analysis (of
enterprise, business environment, business
team)
• Only a person who knows about his present
position can set realistic goals and take
appropriate steps to realize them. This is why
any business plan needs to start from a solid
actual analysis.
This project has been funded with support from the European Commission. This [publication]
communication reflects the views only of the author, and the Commission cannot be held
responsible for any use which may be made of the information contained therein.
Sense of Initiative and Entrepreneurship
Structure of a business plan
• Marketing plan
– Eventually projects must also be marketed, so
that they reach the customer and contribute
their share to the success of the business
organisation. A thorough marketing plan ought
to take care of the following items in detail:
• consider the needs of the customers
• design a product suitable to meet those
needs
• work out a pricing strategy / figure out the
associated costs
• communicate the project, i.e. develop a
strategy that makes the customers accept the
project
This project has been funded with support from the European Commission. This [publication]
communication reflects the views only of the author, and the Commission cannot be held
responsible for any use which may be made of the information contained therein.
Sense of Initiative and Entrepreneurship
Structure of a business plan
• Project Plan
– Realizing a project needs detailed planning of
time and the necessary resources. A project
plan must present and explain the major
project stages as milestones and must not
ignore possible restraining factors.
This project has been funded with support from the European Commission. This [publication]
communication reflects the views only of the author, and the Commission cannot be held
responsible for any use which may be made of the information contained therein.
Sense of Initiative and Entrepreneurship
Structure of a business plan
• Investment analysis and assessment of exonomic
efficiency
– A project should always yield more than it costs. It should be
profitable. It is the task of an investment analysis and/or an
assessment of economic efficiency to demonstrate just that. Methods
include a number of different procedures, which range from the
simple static calculation of the break-even point to the construction of
sophisticated dynamic models by means of the calculus of probability.
• Financial Plan
– The best ideas and the most profitable investments cannot be realized
if the enterprise cannot afford them. It happens quite often that a
firm runs out of financial means and has to step on the brake when it
is only half way through a project. It is therefore crucial to determine
whether or not there will be sufficient funding for the project.
This project has been funded with support from the European Commission. This [publication]
communication reflects the views only of the author, and the Commission cannot be held
responsible for any use which may be made of the information contained therein.
Sense of Initiative and Entrepreneurship
Structure of the business plan
• Appendix- Notes to the business plan
– In order to keep the core of a business plan
concise, additional information should be added
in an appendix.
This project has been funded with support from the European Commission. This [publication]
communication reflects the views only of the author, and the Commission cannot be held
responsible for any use which may be made of the information contained therein.
Sense of Initiative and Entrepreneurship
Structure of the business plan
Strengths/ Weaknesses Analysis
Performing such an analysis, which focuses on an enterprise’s internal strengths and
weaknesses is easy and comprises the following steps:
• Step 1: Analyse strengths and
weaknesses
– In addition, you may try to determine and
categorize the significance or weight of
individual strengths and weaknesses.
– Example: 1 = highly significant, 4 =
insignificant
• Step 2: Plan measures to reinforce
your strengths and eliminate or
mitigate your weaknesses
This project has been funded with support from the European Commission. This [publication]
communication reflects the views only of the author, and the Commission cannot be held
responsible for any use which may be made of the information contained therein.
Sense of Initiative and Entrepreneurship
Analytical & planning instruments
Opportunities / Threats
The opportunities/threats analysis which focuses on external aspects is developed
in a similar manner as the strengths/weaknesses analysis and comprises the
following steps:
• Step 1: Analyse opportunities and threats
– At this point you may categorize according to two criteria:
• a) Significance: How important is the opportunity / how serious is the
risk for the future of the enterprise?
• b) Probability: How likely is the opportunity / the risk to occur?
– 1 = highly significant / highly probable
– 4 = insignificant / highly unlikely
• Step 2: Plan measures to seize the opportunities and
avoid risks
This project has been funded with support from the European Commission. This [publication]
communication reflects the views only of the author, and the Commission cannot be held
responsible for any use which may be made of the information contained therein.
Sense of Initiative and Entrepreneurship
Analytical & planning instruments
SWOT Analysis
It is a combination of the strengths / weaknesses analysis and the
opportunities / threats analysis.
Both analyses are presented in a so-called SWOT matrix that is designed as
follows:
This project has been funded with support from the European Commission. This [publication]
communication reflects the views only of the author, and the Commission cannot be held
responsible for any use which may be made of the information contained therein.
Sense of Initiative and Entrepreneurship
Analytical & planning instruments
This project has been funded with support from the European Commission. This [publication]
communication reflects the views only of the author, and the Commission cannot be held
responsible for any use which may be made of the information contained therein.
Sense of Initiative and Entrepreneurship
Analytical &Planning Instruments
Portfolio analysis
This important planning instrument of business management can, for instance,
help anyone towards better time management. We want to approach it by first
explaining what an ”importance / urgency portfolio or matrix” is.
• An importance-urgency matrix may help in such cases.
It requires the following steps to be taken:
– Step 1: Prepare a to-do list.
– Step 2: Evaluate the importance of the to-do items.
– Step 3: Evaluate the urgency of the to-do items
This project has been funded with support from the European Commission. This [publication]
communication reflects the views only of the author, and the Commission cannot be held
responsible for any use which may be made of the information contained therein.
Sense of Initiative and Entrepreneurship
Analytical &Planning Instruments
• The marketing mix consists of four
basic elements called the four Ps
– Product: representing the actual product.
– Price: represents the process of determining
the value of a product.
– Place: represents the variables of getting the
product to the consumer like distribution
channels, market coverage and movement
organization.
– Promotion: is the last P for which is the
process of reaching the target market and
convincing them to go out and buy the
product.
This project has been funded with support from the European Commission. This [publication]
communication reflects the views only of the author, and the Commission cannot be held
responsible for any use which may be made of the information contained therein.
Sense of Initiative and Entrepreneurship
Marketing Mix
• Virtually any medium can be used for
advertising.
– Commercial advertising media can include
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wall paintings,
billboards,
street furniture,
components,
printed flyers and rack cards, radio,
cinema and
television adverts,
web banners,
mobile telephone screens,
•shopping carts,
•web popups,
•skywriting,
•bus stop benches,
•human billboards,
•magazines,
•newspapers, town criers,
sides of buses, banners
attached to or sides of
airplanes
This project has been funded with support from the European Commission. This [publication]
communication reflects the views only of the author, and the Commission cannot be held
responsible for any use which may be made of the information contained therein.
Sense of Initiative and Entrepreneurship
Types of advertising
• Other advertisements
• Ιn-flight advertisements on seatback tray tables or overhead storage
bins, taxicab doors, roof mounts and passenger screens, musical
stage shows, subway platforms and trains, elastic bands on disposable
diapers, doors of bathroom stalls stickers on apples in supermarkets,
shopping cart handles (grabertising), the opening section of streaming
audio and video, posters, and the backs of event tickets and
supermarket receipts.
– Any place an "identified" sponsor pays to deliver their
message through a medium is advertising.
This project has been funded with support from the European Commission. This [publication]
communication reflects the views only of the author, and the Commission cannot be held
responsible for any use which may be made of the information contained therein.
Sense of Initiative and Entrepreneurship
Types of advertising
You have successfully completed this
section.
Thank you for participating in this
learning session and remember
never stop engaging in learning
situations
This project has been funded with support from the European Commission. This [publication]
communication reflects the views only of the author, and the Commission cannot be held
responsible for any use which may be made of the information contained therein.
Sense of Initiative and Entrepreneurship
Thank YOU