MILLENNIUM INSTITUTE-JUBA SOUTH

SUDAN

DEPARTMENT OF MANAGEMENT SCIENCE

YEAR 1
2026

COURSE UNIT: ENTREPRENEURSHIP

PREPARED BY: MOI EMMANUEL

TEL: +211925601279

Email: moiemmanuel4@[Link].

COPY RIGHT RESERVED BY THE AUTHOR

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ENTREPRENEURSHIP PREPARED BY MOI EMMANUEL
 INTRODUCTION
Entrepreneurship; refers to a process of creating difference with value; developing the
necessary effort and time in order to receive the monetary rewards and personal benefits.

An entrepreneur; is a business person who not only conceives and organizes ventures
but also frequently takes risks in doing so. Not all independent business people are true
entrepreneurs and not all entrepreneurs are created equal.

Entrepreneurship is the art of being an entrepreneur or one who undertakes innovations,

finance and businesses in an effort to transform innovations into economic goods. For
Frank H. Knight (1921) and Peter Drucker (1970) entrepreneurship is about taking risk.

An entrepreneur therefore;
 A person who leaves his/ her place work as an employee and sets up his /her own
business due to unfair working conditions in the former job.
 Is a person who has of the qualification to take on an enterprise/productive
activity but only lacks a few resources and so ends up being an employee.
 Is the practice of being and developing a new business venture within the
structure of an existing organization.
 Is a person who bears-uncertainties and undertakes risks.
CHARACTERISTICS AND TRAITS OF AN ENTREPRENEUR
Although there has been controversy about whether traits arid characteristics tire a
sufficient measure of enterprise or ability to be entrepreneurial, attempts are being made
to describe specific characteristics that could be used in predicting entrepreneurship. This
is based on the premise that if successful entrepreneurs are studied and the characteristics
and traits analyzed-
An entrepreneur has been defined as;
 A calculated risk taker
 Resilient with enormous ability to bound back
 An organized and disciplined person
 Shrewd

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  Persistent and willing to try again and again
 An entrepreneur should be determined
 Able to take control of situations and solve problems
 An innovator
 A curious person who is continually searching for information
 A leader rather than a follower
 Enterprising
 Having initiative and total commitment
 Independent
 Perennial optimism about the future
 Goal (results) oriented
 A good manager of man and machine
 Dynamic
 Action oriented
 Highly motivated
However, the three most often accepted essentials for entrepreneurship are;
 High need for achievement
 An inner locus of control
 High energy
TYPES OF ENTREPRENEURSHIP
Innovators
These are entrepreneurs who always create or come up with new ideas and products in
the market.
Fabians
\ These are entrepreneurs who only imitate copy such business ideas or products
that he/she is sure will cause a positive change to him/ her (they always deal in the
production of cultural products like conscious, rosaries , Muslim huts, and so on).
Imitators
These are entrepreneurs who imitate copy other entrepreneur’s ideas and skills and later
put them into practice.
Drone entrepreneurs

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These are entrepreneurs who do not adopt to change or introduce new products but
remain constant.
OTHER TYPES OF ENTREPRENEURS
Social entrepreneurs
A social entrepreneur is motivated by a desire to help, improve and transform social,
environmental, educational and economic conditions.
Serial entrepreneur

A serial entrepreneur is one who continuously comes up with new ideas and starts new
businesses. In the media, the serial entrepreneur as represented as n higher propensity for
risk, innovation and achievement.

Life style entrepreneur

A life style entrepreneur places passion before profit when launching a business in order
to combine personal interests and talent with the ability to earn a living. In contrast, a
lifestyle entrepreneur intentionally chooses a business model intended to develop and
grow their business in order to make a long term, sustainable and viable living working in
a field where they have a particular interest, passion, talent , knowledge or high degree of
expertise.

Cooperative entrepreneur
A cooperative entrepreneur doesn’t just work alone, but rather collaborates with other
cooperative entrepreneurs to develop projects, particularly cooperative projects. Each
cooperative entrepreneur might bring different skill to the table, but collectively they share in the risk
and success of the venture

WAYS OF BEING INNOVATIVE

Technical innovation
This is a way of improving/adding value more necessary modification or adjustments to
an existing product so as to make it look, a new product different from an existing one.
For example Japanese cars (Pajero and Prado)
Administrative innovation

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This is the way of improving/advancing the way of doing things so as to ensure better
service delivery. Through packaging, containerization, post office, credit supplies,
SACCOs, hawking, shift, and so on.
Ascillary innovation
This IS the innovation that goes beyond/outside the boundaries of an organization
including competitors and customers. For example UTODA and police while dealing on
traffic, Nile breweries and Uganda breweries exchange brew for bottles between each
other, new vision and monitor and many others.

CHALLENGES TO ENTREPRENEURS

Lack of continuity/death of owners

Very few firms/in Uganda is known to survive after the death of their owners (founders
since very few entrepreneurs have the opportunity to pass on their enterprises to new
generations.
Political instability
This has robbed many entrepreneurs live, time, and business most especially in northern
and north-eastern parts of Uganda.
Poor administration procedures
In most cases, businesses are dominated by complex and burdensome regulation.
Favoritism poor, communication channels, corruption, and so on which may prohibit a
scare away foreign investors and participation of the private sector.
Poor infrastructures
This is in form of roads, railways dams and so on to facilitate transportation and delivery
of products to target markets.
Lack of business know how
Some entrepreneurs do not know how businesses are operated and developed hence end
up sitting on their talents.

Complacency (lack of motivation)

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Most entrepreneurs in South Sudan today do not have a driving factor to instigate their
dreams come true due to the fact that even current entrepreneurs operating are collapsing
and deteriorating hence a barrier, for example OTV, among others.
Lack of mobility and exposure
Many South Sudanese are not exposed to many revelations of new idea& that shape
creativity and innovation in form of travelling, wide reading, research, investigation,
among others and as a result, even the educated ones remain narrow minded.
Lack of role models
This limits the number of people who willingly aspire for a career in entrepreneurship.
The few who exist are considered to be unlucky and can only-he admired but not
emulated. Most are just forced into entrepreneurship as a last resort without enough
interest, commitment and inspiration.
Lack of business ethics
This is in form of substandard goods, tax evasion, corruption, smuggling, unpaid or
highly exploited staff, unpaid suppliers, and unpaid loans and so on hence leading to
business failure.
Poor government policies
This is in form of high taxes, bureaucratic tendencies on registration of businesses; lack
of attention to entrepreneurs and among others.
SOLUTIONS TO ENTREPRENEURSHIP BARRIERS
Provision of loan schemes
This can be provided by banks, cooperative societies, government, NGOs, at relatively
subsidized interest rates to entrepreneurs.
Conducting entrepreneurial sensitizations
Entrepreneurs should be informed of the availability of new business ventures, ideas,
capital sources like bank loans, government entrepreneurship programs and so on.
Conducting market survey
Entrepreneurs should always first study the market environment, ascertain their likes and
dislike: threat and opportunities involved before putting out their ideas and products to
avoid market unfamiliarity problem
Improving on educational curriculum/syllabus

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 The government should encourage education of all nationals and majorly concentrate on
practical subjects/ courses than are so as to create job makers than job seekers. Such
courses may include engineering, agriculture, carpentry arid many others.
The managerial perspective which should be adopted by the entrepreneurs
Those with a managerial outlook are often in a great position to succeed as entrepreneurs,
expected for two big misconceptions that lead to massive problems. Many managers
believe that if a business is not working, the solution lies in hiring more employees.
OTHER SOLUTIONS
 Local incubator companies (lack of viable concept, skills).
 Capable local manpower (lack of technical skills)
 Technical education and support (lack of technical skills)
 Supplier assistance and credit (lack of seed capital)
 Local venture capitalists (lack of seed capital]
 Venture- savvy bankers (lack of seed capital)
 Capable local advisors (lack of business knowhow)
 Entrepreneurial education (lack of business knowhow, non-motivation)
 Successful role models (complacency, non-motivation)
NB: Above are other solutions to the respective challenges indicated in brackets.

SMALL BUSINESS
Small business refers to one man business managed by the owner, utilizing mainly family
labor and one or two employees.

THE ROLE OF THE SMALL BUSINESS TO DEVELOPMENT

The small firm has been associated with entrepreneurship for several reasons;
 Most of businesses start small, usually exploiting those markets which large firms may
not be- able to exploit profitably because of higher overheads. Therefore, small firms
offer a good proportion of the new firms created in an economy

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 Stepping stone. The small firm is a stepping stone in business growth in the sense that
small firms act as training-ground for entrepreneurs as they, experiment with ideas and
techniques.
 Ventures for risk-taking. The small firm offers the entrepreneur the opportunity to take
risk while getting to know and understand the product and factor markets.
 Increases entrepreneurial activity. Small firms are associated with increased
competition in the economy first by their numbers in a given market, and also by the
intensity of their activity, thus contributing to entrepreneurial activity.
 Contributes to economic growth. Small firms have been documented in Japan to
contribute to national output through linkages with high volume large firms in
subcontracting activities.
 Creates employment opportunities. Much of the literature focusing on small
firms revolves around employment generation,-especially self-employment.
 Easy to manage due to small capital requirement. In developing countries, the
shortage of capital and labour surpluses have been meant that small businesses are more
feasible since they require lower levels of capital input.
 Promotes innovation. In countries like Germany, small firms have been found to be
more innovative than larger ones, thus offering entrepreneur's a more
appropriate environment, given that most entrepreneurs tend to be innovative.

Why the link between entrepreneurship and small business?

The experiences of developed countries have linked entrepreneurship with small business
for two reasons:
 Because entrepreneurs progress gradually from ideation, commercialization to
expansion. Most businesses start at small scale and gradually grow as they take
advantage of experience.
 It can be argued that smaller risks are more tolerable in the extreme conditions of
uncertainty which entrepreneurs operate in.
In both cases therefore, the small from has continued to offer the environment within
which the activities of the entrepreneurs take place. It has followed that when searching

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for mechanisms; to increase entrepreneurship, the, small business and the self-employed
owner (manager) have received a lot of attention.
Other reasons for the study of small firms are specific to the economic renditions and the
technological levels pertaining in the relevant setting. In developing countries, in
particular, the shortage of capital and the growing Iabour have been at the centre of the
choice to develop small enterprises.

THE ENTREPRENEURIAL PROCESS

Entrepreneurial Process -A Framework
Framework
Of course, there are many ways to organize the effort of planning, launching and building
a venture. But there are a set of fundamentals that must be covered in any, approach. We
offer the following as a way to break down the basic activities necessary.

It is useful to break the entrepreneurial process into five phases: idea generation,
opportunity evaluation, planning, company formation/launch and growth, these phases
are summarized in this table, and the Opportunity Evaluation and1 Planning steps are
expanded in greater detail below
1. Idea Generation: every new venture begins with an idea. In our context, we take
an idea to be a description of a need or problem of some constituency coupled
with a concept of a possible solution, (A characterization of this phase is still
work in process on this site.)
2. Opportunity Evaluation: this is the step where you ask the question of Whether
there is an opportunity worth investing in. Investment is principally capital,
whether from individuals in the company or from outside investors, and the time
and energy of a set of people. But you should also consider other-assets such as-
intellectual property, personal relationships, physical property, etc.
3. Planning: once you have decided that an opportunity, you need a plan for how to
capitalize on that opportunity. A plan begins as a fairly simple set of ideas, and
then becomes more, complex as the business takes shape. In the planning phase
you will need to create two things: strategy and operating plan.

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 4. Company formation/launch: Once there is a sufficiently compelling
opportunity and plan, the entrepreneurial team will go through the process of :
choosing the right form of corporate entity and actually creating the venture as a
legal entity.
5. Growth: After launch, the company works toward creating its product or service,
generating revenue and moving toward sustainable performance. The emphasis
shifts, from planning to execution. At this point, you continue to ask questions but
spend more of your time carrying out your plans.

WHERE TO SEARCH FOR BUSINESS IDEAS (SOURCES OF BUSINESS

IDEAS)
As reflected in the stories of the millions of entrepreneurs throughout the world, there are
many possible sources of ideas. Some of the more- useful ones final consumers, existing
companies, distribution channels, that federal government and research & development.

Existing companies: Entrepreneurs should also establish a more formal method for
monitoring and evaluating the products and services being offered by existing or new
companies. Frequently this analysis uncovers ways to improve on these new present
offerings, resulting in a new venture being farmed.
Distribution channels: Members of the distribution channels are also excellent sources
for new ideas. Because of their familiarity with the needs of the market, channel members
frequently have suggestions for completely new products. These channel members can
also be a source of help in marketing the new idea once it is developed by the
entrepreneur.
Federal government: The federal government can be helpful in finding and developing
new product ideas in two ways. First, the files of the patent office contain numerous new
product possibilities. Although the patents themselves may not be feasible new product
introductions, they can frequently suggest other, more marketable, new product ideas.
There are several government agencies and publications that can be helpful in this patent
monitoring. The office gazette, government-owned inventories available for license,
office of technical services and many others. Second, new product ideas can come from

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government regulations. For example, the occupational safety and health act (OSHA),
aimed at eliminating unsafe working conditions in industry, and mandated that first-aid
kits be in business establishments employing more than three people.
Research and development: The largest source for new ideas is the entrepreneur's own
research and development department, whether this is a more formal endeavor connected
with current employment or an informal lab in the basement or garage. Of course the
more formal research and development departments are often better equipped to produce
successful new product ideas.

METHODS OF GENERATING IDEAS

Frequently, there is a problem in coming up with a new idea. There are several methods
available that the entrepreneur can use to help generate and lest new ideas. Some of the
useful methods include focus groups, brainstorming, and problem inventory analysis.

Focus groups; Focus group interviews have been used in many different areas since the
1950s. This method consists of a moderator focuses the discussion of the group on the
new product area in either a directive or a nondirective manner. In addition to generating
a new idea, the focus group is an excellent method for initially screening ideas and
concepts.
Brainstorming: The brain storming method is based on the fact that people can be
stimulated to greater creativity by meeting with others and participating in organized
group experiences. The entrepreneur can gather a group of people to discuss and generate
new ideas.
Problem inventory analysis: problem inventory analysis is another method of
generating new ideas, uses individuals in a manner analogous to focus groups; however,
instead of generating new ideas themselves, consumers are provided with a list of
problems from a general product category. They are then asked to identify, and discuss
products in this category that have the particular problem.
This method is often very effective as it is easier to relate known products to suggested
problems and arrive at a new product idea than to generate an entirely new product idea
by itself.

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METHODS OF SCREENING IDEAS
The tool for screening ideas is called idea rating index
To develop idea rating index we go through five steps
 Identify-the suitable factors
 Identify suitable weights and assign them to the factors
 Identify suitable ranking scales and assign ranks to each of the factors you have
already chosen,
 Multiply the factor weights and the factor ranking
 You sum up all the factor stores and get the total score

LOCATION OF A BUSINESS
There are several reasons' why an organization might decide to open new branches or
relocate its existing operations. It might want to expand the business, so it will open
branches in cities where the organization did not previously have a presence.

A business might also want to restructure or modernize its operations. It might do this by
bringing together some existing departments into new purpose built premises. It might
decide to shut its less profitable operations and open branches in locations that offer,
more business potential,

FACTORS AFFECTING LOCATION

1. Economic factors
a) Capital:
Capital is one of the most important prerequisites to establish an enterprise.
Availability of capital helps an entrepreneur to bring together the land, machines, and
raw material to combine them to produce goods, Therefore, capital is regarded as
lubricant to the production process. Basically, capital is the life blood of any activity. If
capital is available, people who have innovative ideas would like to put them into reality.
(b) Labour:
The quality and quantity of labour is another factor which influences the emergence of
entrepreneurship. Availability of labour makes entrepreneurship attractive. More than

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abundantly available labour the presence of skilled labour force is very important because
such a workforce is generally less mobile than other resources. If entrepreneurial
activities are initiated near areas where labour is available, then it is easy to carry out the
business more comfortably-and profitably at low cost.

c) Raw Materials: Raw materials are required for establishing any industrial activity
and therefore have an influence in the emergence of entrepreneurship. In the absence of
raw materials, neither any enterprise can be established; nor can an entrepreneur emerge.
In some cases technological innovations can compensate for raw material inadequacies.
The supply of raw materials is not influenced by themselves but becomes influential
depending upon other opportunity conditions, The more favorable these conditions are,
the more likely is the raw material to have its influence on entrepreneurial emergence.
(d) Market:
It is not only the availability of capital, labour and raw materials but a readily available
market that attracts entrepreneurial activities. Ultimately, it is the market that fetches
revenue for any business. If sufficient market is not there, people will naturally hesitate to
do business in a sector where there is no market, In addition to market opportunities, it is
equally important to ensure future market, opportunities for the emergence of
entrepreneurial .activities.

2. Social Factors:
Development of entrepreneurship in a society may take place not just because of better
economic factors but because of the presence of positive-social factors. The following
social factors influence the development of entrepreneurship in a society
(a) Social norms and values:
A society sets certain norms and values for the behaviour of people who are part of that
society. If people violate or overstep these norms and values, certain restrictions are
likely to be imposed on them. As a result, many people are forced to accept certain types
of jobs and tasks that reflect the social environment. If the society has an open and
flexible approach towards various types of jobs and works, then people will feel free to

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do whatever they like and even go in for innovation and creativity. When there is more
openness and flexibility, entrepreneurship will not only emerge but also thrive.
(b) Role models:
Societies that celebrate entrepreneurship and felicitate successful entrepreneurs in a way
encourage many future generations to take up entrepreneurial activities. This is because
successful businessmen prove to be role models for the society at large. For instance,
states like Gujarat, Maharashtra and to some extent Tamil Nadu and Haryana have
experienced better industrial development as a result of higher concentration of
entrepreneurs compared to lesser industrialized states such as Orissa, Chattisgarh,
Madhya Pradesh and other Northeastern states.
(c) Social pressure:
At times, entrepreneurship can emerge in a society due to social restriction too. If a
society is orthodox, close and imposes a lot of restrictions, then it is likely to backfire,
People who are at the receiving end are likely to react strongly and go in for change. In
other words, because of negative pressure, more number of people would like to become
entrepreneurs as a means of improving their status. It has been noticed that where people
were marginalized, they became entrepreneurs just to prove their abilities and establish
an identity in the society.
(d) Respect and Status:
If societies accord recognition and respect to people who dare to do something different
and creative, it proves to be an encouragement for other to do something enterprising.
Therein lies the emergence of entrepreneurship. In the traditional societies, people were
looked down upon rather than encouraged for deviating from the set norms or regular
occupation. This means there was no respect for change. Thus, societies where there is
respect and recognition for people to do something different are more likely to see the
development if entrepreneurial activities.
(e) Security:
The view regarding role of social security in encouraging entrepreneurship development
is rather divided. One school of thought is of the view that people are more prone to take
entrepreneurial risks in secure social environments. On the other hand, there are others

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who argue that entrepreneurship will more likely emerge if there are turbulent conditions.
In both cases, there is scope for entrepreneurship development.
3. Psychological Factors
(a) Need Achievement:
According to David McClelland's theory of need achievement, a constellation of
personality characteristics which are indicative of high need achievement is the major
determinant of entrepreneurship development. Therefore, if the average level of need
achievement in a society is relatively high, one would expect u relatively high amount of
entrepreneurship development in that society. McClelland gives the psychological
concept of achievement motivation to account for the differences in response to similar
conditions. Referring u the encouraging impact of achievement motivation training
programmes organized by the Small Industries Extension Training Institute (SIET).
Hyderabad McClelland argues that the need achievement can be developed through the -
intensive training programmes.
(b) Withdrawal of Status Respect:

E.E Hagen attributed the withdrawal of status respect of a group to the genesis of
entrepreneurship Giving a brief sketch of history of Japan, he concludes that she
developed sooner than other non-Western society except Russia due to two historical,
differences. First, Japan had been free from colonial disruption' and secondly, the
repeated long continued withdrawal of expected status important groups (Samurai) in her
society drove them to increase which caused them to emerge alienated from traditional
values with increased creativity. This very fact led them to the technological progress
entrepreneurial roles.
4. Government Actions
The government by its actions or failure to act also does influence both the economic and
non-economic factors for entrepreneurship. Any interested Government in economic
development can help, through its clearly expressed industrial policy, promote
entrepreneurship in one way or other. By creating basic facilities, services and
utilities and by providing incentives and concessions, the Government can provide
the prospective entrepreneurs a facilitative socio-economic setting. Such conducive

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letting minimizes the risks which the entrepreneurs are to face. Thus, the supportive
actions of the
Government appears as the most conducive to the entrepreneurial growth.

FEASIBILITY STUDY
The feasibility study is an evaluation and analysis of the potential of a proposed, project
which is based on extensive investigation and research in support to the process of
decision making.
Overview
Feasibility studies aim to objectively and rationally uncover the strengths and weaknesses
of an existing business or proposed venture, opportunities amid threats present in the
environment, the resources required to carry through, and ultimately the prospects for
success. In its simplest terms, the two criteria to judge feasibility are cost required and
value to be attained.

A well-designed feasibility study should provide a historical background of the business

or project, a description of the product or service, accounting statements, details of
the operations and management, marketing research and policies, financial data, legal
requirements and tax obligations. Generally, feasibility studies precede technical
development and project implementation.
A feasibility study evaluates the project's potential for success; therefore, perceived -
objectivity is an important factor in the credibility of the study for potential investors and
lending institutions. It must therefore be conducted with an objective, unbiased approach
to provide information upon which decisions can be based

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Feasibility study topics echo
Common factors
The acronym TELOS refers to the five areas of feasibility Technical, Economic, Legal,
Operational, and Scheduling.
Technology and system feasibility
The assessment is based on an outline design of system requirements to determine
whether the company has the technical expertise to handle completion of the project.

Legal Feasibility
Determines whether the proposed system conflicts with legal requirements, e.g. a data
processing system must comply with the local Data Protection Acts.
Operational Feasibility
Operational feasibility is a measure of how well a proposed system solves the problems,
and takes advantage of the opportunities identified during scope definition and how it
satisfies the requirements identified in the requirements analysis phase of system
development.

Economic Feasibility
The purpose of the economic feasibility assessment is to determine the positive economic
benefits to the organization that the proposed system will provide. It includes
quantification and identification of all the benefits expected. This assessment typical
involves a cost/ benefits analysis.
Technical Feasibility
The technical feasibility assessment is focused on gaining an understanding of the present
technical resources of the organization and their applicability to the expected needs of the
proposed system. It is an evaluation of the hardware and software and how it meets the
need of the proposed system.
Preparing an outline for writing your technical feasibility study
The order that you present technical information is not as important us making sure you
have all the components to show how you can run your business.

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You do not have to include specific financial information in the technical portion of your
feasibility study, but all information in this component must support your financial data
represented elsewhere. Basic things that most businesses need to include in their
technical feasibility study include:
 Materials
 Labor
 Transportation or shipping
 Physical location
 Technology
 Production process

Schedule Feasibility
A project will fail if it takes too long to be completed before it is useful. Typically this
means estimating how long the system will take to develop, and if it can be completed in
a given time period using some methods like payback period. Schedule feasibility is a
measure of how reasonable, the project timetable is. Given our technical expertise, are the
project deadlines reasonable? Some projects are initiated with specific deadlines. It is
necessary to determine whether the deadlines are mandatory or desirable.

OTHER FEASIBILITY FACTORS

Market and real estate feasibility
Market feasibility studies typically involve testing geographic locations for a real estate
development project, and usually involve parcels of real estate land. Developers often
conduct market studies to determine the best location within a jurisdiction, and to test
alternative land uses for given parcels. Jurisdictions often require developers to complete
feasibility studies before they will approve a permit application for retail, commercial,
industrial, manufacturing, housing, office or mixed-use project. Market Feasibility takes
into account the importance of the business in the selected area.

Resource feasibility

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This involves questions such as how much time is available to build the new system,
when it can be built, whether it interferes with normal business operations, type; and
'amount of resources required, dependencies, and developmental procedures with
company revenue prospectus.

Cultural feasibility
In this stage, the project's alternatives are evaluated for their impact on the local and
general culture. For example, environmental factors need to be considered and these
factors are to be well known. Further an enterprise's own culture can clash with the
results of the project.
Financial feasibility
In case of a new project, financial viability can be judged on the following parameters:
 Total estimated cost of the project
 Financing of the project in terms of its capital structure, debt equity ratio and
promoter's share of total cost
 Existing investment by the promoter in any other business.
 Projected cash flow and profitability
The financial viability of a project should provide the following information:
 Full details of the assets to be financed and how liquid those assets are.
 Rate of conversion to cash-liquidity (i.e. how easily can the various assets be
converted to cash?).
 Project's funding potential and repayment terms.
 Sensitivity in the repayments capability to the following factors:
 Time delays.
 Mild slowing of sales.
 Acute reduction/slowing of sales.
 Small increase in cost.
 Large increase in cost.
Adverse economic conditions
Market research study and analysis
This is one of the most important sections of 'the feasibility study as it examines the
marketability of the product or services and convinces readers that there is a potential

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market for the product or services.[citation needed] If a significant market for the product
or services cannot be established, then there is no project.

BUSINESS PLAN DEVELOPMENT

A business plan is a formal statement of a set of business goals, the reasons they are
believed attainable, and the plan for reaching those goals. It may also contain background
information about the organization or team attempting to reach those goals. Or a business
plan is a document that shows and explains the activities and resources required to form a
new business. It -shows how, when, where, what and which resources should be used to
start up a business.
A business plan is a document that shows and explains the activities and resources
required to form a new business. It shows how, when, where, what and which resources
should be used to start up a business.

Business plans may be internally or externally focused. Externally focused plans target
goals that are important to external stakeholders, particularly financial stakeholders. They
typically have, detailed information about the organization or team attempting to reach
the goals. With for- profit entities, external stakeholders include donors and the clients of
the non-profit's services. For government agencies, external Stakeholders include tax-
payer, higher-level government agencies, and international lending bodies such as the
international monetary fund, the World Bank, various economic agencies of the United
Nations, and development banks,

A business plan represents all aspects of business planning process declaring vision and
strategy alongside sub-plans to cover marketing, finance, operations, human resources as
well as a legal plan, when required. A business plan is a summary of those disciplinary
plans.

For example, a business plan for a non-profit might discuss the fit between the business
plan and the organization's mission. Banks are quite concerned about defaults, so a
business plan for a bank loan will build a convincing case for the organizing ability to
repay the loan. Venture capitalists are primarily concerned about initial investment,
feasibility, and exit valuation. A business plan for u project requiring equity financing

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ENTREPRENEURSHIP PREPARED BY MOI EMMANUEL
will need to explain why current resources, upcoming growth opportunities, and
sustainable competitive advantage will lead to a high exit valuation.

STEPS/STAGES OF STARTING A BUSINESS PLAN

 Decide whether you really want to start a business for yourself
 Identify the product that you want to provide to the market. This can be in form of
tangible and intangible nature.
 Select methods of obtaining information about the- product. Here we discuss
about market information sources (MIS) i,e, sources of ideas and how to generate
them.
 Study the market for the product/carry out the .market survey. This is so in order
to establish the quality, quantity, price, time and resources required to meet
customer demands.
 Decide whether to buy an existing business idea or to Stan up an entirely
different/new business idea.
 Set a plan for operating a business. This can be in form of location, operations,
physical facilities like roads, buildings, vehicles, sources of raw materials, staff
quality, and structure of the business and so on.
 Estimate income and expenditure. The amount of capital (income) and its
expenditure pattern should be clearly known to avoid inadequate, unnecessary and
unplanned expenses.
 Estimate initial investments (startup capital) required. This can be in form of
money, assets like machinery, buildings, vehicles and many others.
 Identify the sources of startup/ initial capital. This may be inform of loans,
donations, friends, assets, sales or government.
 Set a business plan. This is a document that shows and explains the activities and
resources required to form a new business. It shows how, when, where, what and
which resources should be used to start up a business.
 Implementation of the plan. i.e. put your ideas and resources into practice by
starting off the business.

PURPOSE/ ADVANTAGES OF A BUSINESS PLAN

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ENTREPRENEURSHIP PREPARED BY MOI EMMANUEL
  It acts as a guide/direction tool to an entrepreneur so as to keep him or her on
track/target. For obtaining loans from lending institutions.
 It helps to show the product in which the entrepreneur is intending to deal or is
dealing in. it also indicates the expected markers the entrepreneur is targeting
and expecting, it also shows the strength and weaknesses of the firm and how it
expects to overcome them.
 It identifies the planned marketing strategies, channels and how they are to be
performed. For example through advertising, promotions, pricing, distribution,
and many others. Operation/ production methods can also be established for
example through mechanical or manual approach.
 Helps to state the-amount of resources and funds required to operate the business
in terms of financial aspects, labor, rent, profits/losses expected, cash flow, and
many others. Government can be able to determine the amount of tax for a firm
basing on its income/capital and production.
 The business plan also helps to identify existing and potential business
competitors and hence set strategies on how to overcome them among other-
marketing mix factors.
 Helps to identify the dissolution date (operational period) for a company, The
time for which the firm is to operate in the market is also shown in the business
plan; it may be long-term or short term period.
 A good business plan can help to make a good business credible, understandable,
and attractive to someone who is unfamiliar with the business. Writing a good
business plan can't guarantee success, but it can go a long way toward reducing
the odds of failure.
 Business plans are decision making tools. There is no fixed, content for a business
plan. Rather, the content and format of the business plan is determined by the
goals and audience,

COMPONENTS OF A BUSINESS PLAN

Cover sheet/ a letter of transmittal: This consists of business name, address, phone
numbers, and principals of the company and the date of commencement of the company.

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ENTREPRENEURSHIP PREPARED BY MOI EMMANUEL
Executive summary: This consists of the brief summary of the plan, objectives of the
firm, how they can be achieved, product or service description, marketing strategies and
financial projections.

Table of contents: This describes each section, sub-headings, among others.

The history of the proposed business: this explains/the origin/ background of the
company's ideas, background of the founders.

Definition of the business: In your view, include details regarding your businesses
history, vision and/or mission, objectives, and your ownership structure.

Definition of the market: this entails the target markets, market penetration strategies
and procedures (pricing, promotions, advertising, product quality, etc), analysis of the
potential competitors,
Product/service description: This states what is to be developed or sold, status of
research and development, patent rights, trade marks, copy rights, photographs or
technical information.

Management structure: This covers subjects like who will enact the plan,
organizational structure/ organization employee policies, resources, etc

Objectives and goals

Financial data
Appendices: Issues discussed here include narrative history of a firm in details,
management structure (charts, resumes, -etc), major assumptions, brochures describing
products, letters of recommendation -endorsement, historical financial information (at
least 3 years), details of objectives and goals, products and services provided, research
and development methods used, marketing and manufacturing procedures, administration
system and financial details.

RESOURCE MOBILIZATION

EQUITY FUND

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ENTREPRENEURSHIP PREPARED BY MOI EMMANUEL
An equity fund is an open or closed-end fund that invests primarily in stocks allowing
investors to buy into the fund arid thus buy a basket of stocks more easily than they could
purchase the individual securities.
SOURCES OF FINANCE
Different ways a business can obtain money
Sources of finance can be classified into:
 Internal sources (raised from within the organization)
 External (raised from an outside source)

INTERNAL SOURCES
1. Owner's investment
This is money which comes from the owner/s own savings. It may be in the form of
startup capital - used when the business is setting up. It may be in the form of additional
capital- perhaps used, for expansion. Thin is a long-term source of finance.

2. Retained profits
In accounting, retained earnings refer to the portion of net income of a corporation that is
retained by the corporation rather than distributed to shareholders as dividends. Similarly,
if the corporation incurs a loss, then that loss reduces the corporation's retained earnings
balance. If the balance of the retained earnings account is negative it may be called
retained losses, accumulated losses or accumulated deficit, or similar terminology.
Retained earnings and losses are cumulative from year to year. This is a medium or long-
term source of finance
3. Stockholders' equity
When total assets are greater than total liabilities, stockholders have a positive equity
(positive book value). Conversely, when total liabilities are greater than total assets,
stockholders have a negative stockholders' equity (negative book value) — also
sometimes called stockholders' deficit. A stockholders' deficit does not mean that
stockholders owe money to the corporation as they own only its net assets and are not
accountable for its liabilities, though it is one of the definitions of insolvency.

4. Sale of stock

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ENTREPRENEURSHIP PREPARED BY MOI EMMANUEL
This money comes in from selling off unsold stock. This is what happens in the January
sales. It is when the profits made are ploughed back into the business. This is a short-term
source of finance

5. Sale of fixed assets

This money comes in from selling off fixed assets, such as: a piece of machinery that is
no longer needed. Businesses do not always have surplus fixed assets which they can sell
off.
There is also a limit to the number of fixed assets a firm can sell. This is a medium-term
source of finance
6. Debt collection
A debtor is someone who owes business money. A business can raise finance by
collecting the money owed to them (debts) their debtors. Not all businesses have debtors
i.e. those who deal only in cash. This is a short-term source of finance.

EXTERNAL SOURCES
1. Bank loan
This is money borrowed at an agreed rate of interest over a set period of time.
This is a medium or long-term source of finance.
2. Bank overdraft
This means they can still write cheques, even if they do not have enough money in the
account. This is a short-term source of finance.

3. Additional partners
This is sources of finance suitable for a partnership business. The new partner/s can
contribute extra capital
4. Shares
When a company sells shares to other investors, it gives up a-piece of itself as a way to
raise money to finance growth. Small, privately held companies sell shares to private
investors, who then hold equity in the company. Companies that are more ambitious open
their shares up to the public. When a company goes public and sells shares of stock, it's

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ENTREPRENEURSHIP PREPARED BY MOI EMMANUEL
selling many pieces of itself to whoever wants to buy. In most cases this is the quickest
way to amass large amounts of cash to finance growth.
5. Share issue
This is sources of finance suitable for a limited company. Involves issuing more shares.
This is a long-term source of finance.

6. Ordinary shares (Equity)

Ordinary shares are issued to the owners of a company equal to the market value of a
quoted company shares bears no relationship to them normal, value except that when
ordinary shares are issued for cash, the issues price must be equal to or be more than the
normal value of the shares.

Equity finance sometimes are more appropriate than other sources of finance like bank
loans but it can place different demands on you and your business

7. Leasing
This method allows a business to obtain assets without the need to pay a large-lump sum
up front. It is arranged through a finance company Leasing is like renting an asset. It
involves making set repayments. This is a medium-term source of finance
8. Mortgage
This is a loan secured on property. Repaid in installments over a period of time typically
25 years. The business will own the property once the final payment has been made. This
is a long-term source of finance.

9. Trade credit.
Trade credit is the credit extended by one trader to another for the purchase of goods and
services. Trade credit facilitates the purchase of supplies without immediate payment.
Trade credit is commonly used by business organizations as a source of short-term
financing. Trade credit is summed up by the phrase: buy now pay later. Typical trade
credit period is 30 days. This is a short-term source of finance.
10. Government funding

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ENTREPRENEURSHIP PREPARED BY MOI EMMANUEL
Here the government provides finance to companies in cash grants and others forms of
[Link] assistance as part of its policy of helping to develop the national economy
especially in high technology industries and in areas of high unemployment.

11. Government grants

Government organizations such as Invest NI offer grants to businesses, both established
and new. Usually certain conditions apply, such as where the business ha£ to locate

12. Bank borrowing / debt financing

Debt is-borrowing money from an outside source with the promise to return (he
principles in addition to an agreed-upon level of interest, in finance debt is also referred
to as leverage, the most popular source of debt financing is the banks, but debt can also
be issued by a private company or even a friend or family members. Borrowing from
bank is mainly short-term although medium-term is quite common these days

FACTORS AFFECTING CHOICE OF SOURCE OF FINANCES

The source of finance chosen will depend on a number of factors

 Purpose - what the finance is to be used for

 Time Period - how long the finance will be needed for
 Amount-how much money the business needs
 Ownership and Size of the business

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ENTREPRENEURSHIP PREPARED BY MOI EMMANUEL
BUSINESS RISK MANAGEMENT
A risk is an event or condition that if it occurs, could have a positive or negative effect
on a project's objectives.

Risk Management is the process of identifying, assessing, responding to monitoring and

controlling, and reporting risks.
The four phases of risk management and challenges of each phase;

Risk management

Identification Assessment Response Documentation

1. Identification
During risk identification, risks are identified and a solid understanding of the risk is
developed. This includes any risks with the potential to significantly affect the
achievement of objectives at various levels of the organization depending on the context
of the risk identification activity.

The most challenging aspect of risk identification is in defining issues at an appropriate

level of detail. Issues defined too vaguely or lumped into gross generalizations are hard to
assess.

The challenge when collecting data is that the process can be highly subjective. People
can have radically different ideas about what should be defined as a risk and what should
not. As a result, the risk definition process in a single location can result-in significantly
different results depending on who is consulted and what approach.-is employed.
2. Assessment
Having identified the risks involved, they need to be assessed or measured in terms of the
chance (likelihood) they will occur and the severity or amount of loss damage (impact)
which may result if they do occur.

Likelihood x Impact = Risk level

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ENTREPRENEURSHIP PREPARED BY MOI EMMANUEL
Challenges of risk analysis
Multi risk assessments are difficult to accomplish due to the different approaches in
assessing individual risk, Risk assessment is not usually visible and not a priority for
decision makers.

3. Risk Response
After potential risk events are identified and a quantitative risk, analysis is performed
resulting in prioritized risk events. The next step is to develop risk response strategies by
assigning risk response actions to project team members.

The main challenge in this phase is the response of emergency project risk. Project
managers and design team members find a great challenge to take action in response to
the identified project risks, focusing on risks of most significance, in order to shift the
odds in favor of project success.

4. Documentation of Response Actions

In this phase, response action to the project risk is documented by describing the action,
which work activities it will affect and the cost of the response action and also identify
the person responsible for successful implementation of the response action.

The main challenge in documentation is to keep the documentation up to date and

synchronized with the shorter release cycles.

Scope constraint, the risk planning, analysis and response planning efforts are rarely
integrated into the overall project plan; As a result, risk documentation is not a priority
for the project team, and adequate resources are not allocated to address issues caused by
risk events.

In conclusion, risk management helps in making better decisions by forecasting important

threats and opportunities of a project or business. While some benefits are realized from
the initial phases of a project, the hidden benefits often surface much later. There's no
doubt that a good risk management plan is the cornerstone of successful enterprises.

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ENTREPRENEURSHIP PREPARED BY MOI EMMANUEL
ENTREPRENEURSHIP DEVELOPMENT IN SOUTH SUDAN
THE ROLES OF ENTREPRENEURS IN ECONOMIC DEVELOPMENT

 Promotes capital formation

Entrepreneurs by placing profitable business proposition attract investment to ensure
private participation in the industrialization process. The otherwise idle savings are
channelized for investment in business; ventures which in turn provides return. Again
the savings are invested giving a multiplier effect to the process of capital formation.

 Creates large-scale employment opportunities

Entrepreneurs provide immediate large-scale employment to the unemployed which
is a chronic problem of underdeveloped nations. With the setting up of more and
more units by entrepreneurs, both or small and large scale numerous job opportunities
are created for others.
 Promotes balanced regional development
Entrepreneurs help to remove regional disparities through setting up of industries in
less developed and backward areas. The growth of industries and business in these
areas lead to a large number of public benefits like road transport, health, education,
entertainment, and so on.

 Reduces concentration of economic power

Economic power is the natural outcome of industrial and business activity, industrial
development normally leads to concentration of economic power in the hands of a
few individuals which results in the growth of monopolies. In order to redress this
problem a large number of entrepreneurs need to be developed which will help to
reduce the concentration of economic power amongst the population.

 Wealth creation and distribution

It stimulates equitable redistribution of wealth and income in the interest of ne
country to more people and geographic areas, thus giving benefit to larger sections of
the society. Entrepreneurial activities also generate more activities and give a
multiplier effect in the economy.

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ENTREPRENEURSHIP PREPARED BY MOI EMMANUEL
  Increasing gross national product and per-capita income
Entrepreneurs are always on the lookout for opportunities. They explore and exploit
opportunities, encourage effective resource mobilization of capital and skill, bring in
new products and services arid develop markets for growth of the economy. In this
way, they help increasing gross national product as well as per capital income of the
people in a country. Increase in gross national product and per capita income of the
people in a country, is a sign of economic growth.

 Improvement in the standards of living

Increase in the standards of living of the people is a characteristic feature of economic
development of the country. Entrepreneurs play a key role in increasing the
standard of living of the people by adopting latest innovations in the production of
wide variety of goods and services in large scale that too at & lower cost. This
enables the people to avail better quality goods at lower prices which results in the
improvement of their standard, of living.

 Promotes country's export trade

Entrepreneurs help in promoting a country's export-trade, which is an important
ingredient of economic development. They produce goods and services in large scale
for the purpose of earning huge amount of foreign exchange from export in order to
combat the import dues requirement. Hence import substitution and export promotion
ensure economic independence and development.

 Induces backward and forward linkage's

Entrepreneurs like to work in an environment of change and try 10 maximize profits
by innovation. When an enterprise is established in accordance with the changing
technology, it induces backward, and forward linkages which stimulate the process
of economic development in the country.

 Facilitates overall development

Entrepreneurs act as catalytic agent for change which results in chain reaction. Once
an enterprise is established, the process of industrialization is set in motion. This unit

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ENTREPRENEURSHIP PREPARED BY MOI EMMANUEL
 will generate demand for various types of units required by it and there will be so
many other units which require the output of this unit. This leads to overall
development of an area due to increase in demand and setting up of more and more
units: In this way, the entrepreneurs multiply their entrepreneurial activities, thus
creating an environment of enthusiasm and conveying an impetus for over all
development of the area

 General employment
This is the real charm of being an entrepreneur. They are not seekers but job creators
and job providers. With the globalization process the government jobs are shrinking
leaving many unemployed. In the circumstances, the entrepreneurs and their
enterprises are the only hope and source of the direct and indirect employment
generation.

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THE VARIATIONS OF PRODUCTS
A product varies in terms of whether it is a consumer or industrial good. For most
organizations the product decision is not made in isolation because companies often offer
a range of products. To better appreciate the product decision, let's first define some
terms pertaining to products.

PRODUCT LINE AND PRODUCT MIX

A product line is a group of products that are closely related because they satisfy a class
of needs, are used together, are sold to the same customer-group, are distributed through
the same type of outlets, or fall within a given price range. Polaroid has two major
product lines consisting of cameras and film; Adidas' product lines are shoes and
clothing. Each product line has its own marketing strategy.

Within each product line is the product item, a specific product as noted by a unique
brand, size or [Link]. For example, downy softener for clothes comes in 12-ounce and 22-
ounce sizes; each size is considered a separate item and assigned a distinct ordering code,
or stock keeping unit (SKU). The third way a company looks at its products is by the
product mix, or the number of lines it carries. Cray research has a single product line
consisting of supercomputers, which are sold mostly to governments and military
agencies. American [Link] however, has many product lines consisting of cigarettes
(Pall Mall), sporting equipment (titleist golf balls), distilled beverages (Jim beam
liquors), and. even services (pinker ton security) among others.

CLASSIFYING PRODUCTS

 Both the federal government and companies classify products but for different
purposes.
 The government's classification method helps it collect information on industrial
Activity.
 Companies classify products to help develop similar marketing strategies for the
wide range of products offered.

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ENTREPRENEURSHIP PREPARED BY MOI EMMANUEL
Two major ways to classify products are;
 By degree of product tangibility and
 By type of user. ,:
DEGREE OF TANGIBILITY
Classification by degree of tangibility divides products into one of the three categories.
 First is a nondurable good, an item consumed in one or a few uses, such as food
products and fuel.
 A durable good is one that usually lasts over an extended number of uses, such as
appliances, automobiles, and stereo equipment.
 Services are defined as activities, benefits, or satisfactions offered for sale, such
as marketing research, health care, and education.
Note: Services are intangible. According to this classification, government data indicate
that the United States is becoming a service company.

This classification method also provides direction for marketing actions.

 Nondurable products such as Wrigley's gum are purchased frequently and at
relatively low cost
 Advertising is important to remind consumers of the item's existence, and wide
distribution in retail outlets is essential.
 A consumer wanting Wrigley's spearmint gum would most likely purchase
another brand of spear print gum if Wrigley's; were not available.
 Durable products, however, generally cost more; than nondurable goods and last
longer, so consumers usually deliberate longer before purchasing them
 Therefore, personal selling is an important component in durable product
marketing because it assists in answering consumer questions and concerns.
Marketing is increasingly being used with services. Services are intangibles, so a major
goal in marketing is to make the benefits of purchasing the product real to consumers.
Thus northwest airlines show the fun of a Florida vacation or the joy of seeing
grandparents.
People who provide the service are often the key to its success in the market because
consumers often evaluate the product by the service provider they meet the hertz

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ENTREPRENEURSHIP PREPARED BY MOI EMMANUEL
reservation clerk, the receptionist at the university, admission office, or the nurse in the
doctor's office.

TYPE OF USER:
The second type of product classification is according to the user.
 Consumer goods are products purchased by the ultimate consumer.
 Industrial goods are used in the production of other products for ultimate
consumers. In many instances the difference are distinct. There are difficulties,
however, with this classification because some products can be considered both
consumer and industrial items.
CLASSIFYING CONSUMER AND INDUSTRIAL GOODS

Because the buyer is the key to marketing, consumer and industrial product
classifications are discussed in greater detail.
CLASSIFICATION OF CONSUMER GOODS
Convenience, shopping, specialty, and unsought products are the four types of consumer
goods. They differ in terms of;
 The effort the consumer spends on the decision
 The attributes used in purchase
 The frequency-of purchase
 Convenience goods: These are items that the consumer purchaser frequently,
conveniently, and with a minimum of shopping effort.
 Shopping goods: These are the type for which the consumer compares several
alternatives on criteria such as price, quality, or style.
 Specialty goods: Are those items, such as a Rolex watch, that a consumer
makes a special effort to search out and buy.
 Unsought goods; are those products which the consumer either does not know
about or knows about but does not initially want.
The classification of a consumer product into one of these four types results in different
aspects of the marketing mix being stressed. Different degret's of brand loyalty and
amounts of shopping effort, are displayed by the consumer for a product in each of the
four classes,

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ENTREPRENEURSHIP PREPARED BY MOI EMMANUEL
The manner in which a consumer good is classified depends on the individual. One
person may view a camera as a shopping good and visit several stores before deciding on
a brand, where as a friend may view cameras as a specialty good and will only buy a
Nikon.
The product classification of a consumer good can change the longer n product, is on the
market, When.-first introduced, the Litton microwave oven WBH unique, a specialty
good. Now there are several competing brands on the market, and microwaves are a
shopping good for many consumers.

CLASSIFICATION OF INDUSTRIAL GOODS

A major characteristic of industrial goods is that sales of items are often the result of
derived demand; that is, sales of industrial products frequently result (or are derived)
from the sale of consumer goods.
For example, if consumer demand for fords (a consumer product) increases, the firm
may increase its demand for paint spraying equipment (industrial goods). Industrial goods
are classified not only on the attributes the consumer, but also on how the item is to be
used. Thus industrial products may be classified as production or support goods.

PRODUCTION GOODS: Raw materials such as grain or lumber are production goods,
which center the manufacturing of the final product. Also included in this category are
component parts.
For example, a company that manufactures door hinges used by GM in its car doors is
producing a component part.
NOTE; the marketing of production goods is based on factors such as price, quality,
delivery, and service. Marketers of these products tend to sell directly in industrial users,
SUPPORT GOODS; The second class of industrial goods, support goods, includes
installations, accessory equipment, supplies, and services, which are purchased to assist
in the production of finished product.
Installations consist of buildings and fixed equipment. Because a significant
amount of capital is required to purchase installations, the industrial buyer deals
directly with the manufacturer through sales representative. The pricing of installations
is often by competitive bidding.

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ENTREPRENEURSHIP PREPARED BY MOI EMMANUEL
Necessary equipment includes tools and office equipment and is usually purchase in
small-order sizes by buyers. As a result, instead of dealing directly with buyers, sellers of
industrial accessories use distributors to contact large number of buyers.

Suppliers are similar to consumer convenience goods and consist of products such as
stationery, paper clips, and brooms. These are purchased with little effort, using the
straight re-buy decision sequence. Price and delivery arc major attributes considered by
the buyers of supplies.
Services are benefits provided to assist the ongoing activities of the industrial buyer. This
category can include maintenance and repair services and advisory services such as tax or
legal counsel. The reputation of the seller of services, is a major factor in marketing these
industrial goods,

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ENTREPRENEURSHIP PREPARED BY MOI EMMANUEL
NEW PRODUCTS AND WHY THEY FAIL

 Too small a target market: The market for the product is too small to warrant
the R&D, production, and marketing expenses to reach it.
 Insignificant point of difference: The expected benefit or point of difference
compared with competitive offerings is not that important in consumer's eyes.
 Poor product quality: The quality of the product sold is either poor in absolute
sense or worse than first buyers had expected, leaving them disappointed.
 No access to consumers: manufacturers of potentially better products can't
communicate this to prospective buyers or gain retail shelf space, Dozens of
useful computer software programs can't get the.-attention of prospective buyers
or the space in computer stores.
 Bad timing: the product is introduced too soon, too late, or at a time when
consumer tastes are shifting dramatically. Dozens of creative video games
appeared for charismas 1983, when consumers were getting bored with most
video games.
 Poor execution of the marketing mix: one or more elements in the marketing
mix- besides the product element mentioned separately in number 3 above- aren't
right. .-.;.
THE NEW PRODUCT PROCESS

New product strategy development

Companies in the stage of new product strategy development define: the role for new
products in terms of their overall corporate objectives. This step in the new product

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ENTREPRENEURSHIP PREPARED BY MOI EMMANUEL
process has been added by many companies recently to provide a needed focus for ideas
and concepts developed in later stages.
Objectives
 Identify markets and strategic rules
 Proactive and reactive new product strategies
 Reactive strategies

The following are different stages in the new product process

 Idea generation
Developing a pool of concepts as candidates for new products or idea generation, must
build on the previous stage's results. New product ideas are generated by consumers,
employees, basic R&D, and competitors.
 Consumer suggestions
 Employee and co-worker suggestions
 Research and development breakthrough
 Competitive products
 Screening and evaluation
The purpose of the second stage, screening and evaluation, is a quick analysis to eliminate
ideas that do not warrant further effort. Companies often use an internal and external
approach to screening
Internal approach: internally, the firm evaluates the technical feasibility of the proposal
and whether the idea meets the new products strategy objectives.
 For internal screening and evaluation in its search for new products,
Medtronic has developed the weighed point system which establishes screening
criteria and assigns heights to each one used to evaluate new product ideas.
 The 17 specific factors are grouped into 5 of the categories cited earlier for new
product failures. -(The sixth category, poor execution of the marketing mix,
enters the new product process later)

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ENTREPRENEURSHIP PREPARED BY MOI EMMANUEL
 External approach: concept tests are external evaluations that consist of preliminary
testing of the new product idea (rather than the actual product) with consumers.
Concepts tests usually rely on written descriptions of the product but may be
augmented with sketches, mock-ups, or promotional literature.
 Business analysis
It involves specifying the features of the product and the marketing needed to
commercialize it/ and making necessary financial projections. This is the last check point
before significant' capital is invested in creating a prototype of the product. Economic
analysis, marketing strategy review, and legal examination of the proposed
product are conducted at this stage.

 Development
Product ideas that survive the business analysis proceed to actual development,
turning the idea on paper into a prototype a demonstrable, producible product in
hand.

 Market testing
The market testing stage of the new product process involves exposing actual products to
consumers under realistic purchase conditions to see if they will buy. Often a product is
developed, tested, refined, and then tested again to get consumer reactions through either
test marketing or purchase laboratories.

 Commercialization
Finally, the product idea is brought to the point of commercialization launching the
product in full-scale production and sales. Because new product introductions are so
expensive^-they often involve huge risks that may result in long delays between the'
development of the original Idea and the appearance of the idea as a new product in the
market.

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 REFERENCES

BERKOWITZ, E., Kerin, R., and Rudulius, IRWIN. (1989):

DRUCKER, P. (2004). Innovation and entrepreneurship. Practice and principles. Elsevier

GUPTA C.B. (2000): Entrepreneurial development. Sultan Chand R& Sons

HISRICH D. ROBERT & PETERS. P. MICHAEL (1989): Entrepreneurship: starting,

developing and managing a new enterprise, IRWIN.

KIBERA, F., EDS (1996): Introduction to business: A Kenyan- perspective, Kenya

literature bureau, specifically read chapter 7, pp 67-81 7

MEGGINSON, L., SCOTT, C., TRUEBLOOD, 1., & MEGGINSON, W. (1988):

successful small business management. IRWIN

NICKELS, W., (1987): understanding business. IRWIN, specifically read chanter 6, pp

145-164

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Nickels, W,, McHugh, J and Mchugh S., (1996): Understanding .business. IRWIN,
specifically read chapter 6, pp 176-209

Pretice hall (1993); small business survival guide: a blue print for success Prentice- Hall

Steinhoff, D., and burgess, J. (1993): small business fundaments. McGraw-hill

Timmons, J.(1985): New venture creation: a guide to entrepreneur-ship IRWIN.

Timmons, J., and Stephen, S,, (2004): New venture creation: a guide to entrepreneurship
IRWIN for the 21st century. McGraw-hill, IRWIN

Wavamuno B.K. Gordon (2001): the story of'an African Entrepreneurship Wavah books
read the business section of major local daily/weekly newspapers find relevant articles on
the internet.

COURSE WORK QUESTIONS

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1. (a) Describe the different categories of disadvantaged entrepreneurs that exist in South
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