Introduction to Entrepreneurship in Oman (39

Introduction to Entrepreneurship
Lesson-1
Dr. Manishankar Chakraborty
Entrepreneurship
Fall 2014-2015

Introduction
• Oman a gulf country developing very fast.
• Oil resources discovered in 60’s followed by oil
export.
• Huge reserves of natural resources.
• Stunning growth in the last 50 years.
• Future plan engrossed in vision 2020
9/22/2014 Dr. Manishankar Chakraborty, ICT, Oman 2

Essence of Vision : Oman 2020
• Develop Omani people to cope with technological
progress and attain international
competitiveness.
• Develop the private sector for optimally using
human and natural resources.
• Promote the use of natural resources.
• Distribute benefits of development with all
regions and citizens
• Safeguard and build on the achievements of last
25 years.

Challenges facing Oman
• Growing youth population.
• Increased rate of unemployment.
• Expected gradual decline in oil resources.
• Low level of savings.
• Low level of national labor participation/low
productivity
• Slow pace of national labor to cope with rapid
technological developments.

Solutions to the challenges facing
Oman
• Entrepreneurship as a solution can help in-
• Generating employment for others.
• Produce goods and service for exporting.
• Businesses other than oil and gas.
• Reduce dependency on oil and gas.
• Utilize all other natural resources of Oman.

Definition
• Entrepreneurship is a systematic process of
applying creativity and innovation to needs
and opportunities in the marketplace.
• It involves the using of new ideas to create a
product that satisfies customer needs.

Creativity and Innovation
• Creativity-Something made for the first time,
result of a creative process.
• Innovation- Making changes in terms of sizes,
shapes and colors.
• E.g. First hand held mobile phone by Dr.
Martin Cooper of Motorola in 1973
(Creativity)
• 1G, 2G,3G and I-Phones (Innovation)

Lesson-12
Things to remember in writing a business
plan
• (1) Make Strategic Plans (For franchised
businesses, its made by the franchiser)
• Setting of Vision/Mission Statements
• Establishing Goals and Objectives
• Identifying Strategies
• (2)Make Operational Plans(For franchised
businesses this is prepared by franchiser)

Things to remember in writing a
business plan
• First Part
• Setting up policies, methods, procedures and
budget
• Second Part
• Choosing location
• Planning operation and physical facilities
• Developing sources of supply for goods and
materials
• Planning human resource requirements

business plan
• Setting up legal and organizational structure
• Determining approach to the market
• Establishing efficient record system
• Setting up time schedule
• Make financial plans
• Financial planning involves determining what
funds are needed, where they can be
obtained, and how they can be controlled.

business plan
• Financial plans involve-
• Important aspects of the financial plan
• Estimating income and expenses
• Estimating initial investment required
• Locating sources of funds
• 4. Implement the plan
• Start the business

Lesson-13: What is Feasibility
Analysis?
• It is the process of determining whether a
business idea is viable (practical and possible
to do).
• It is the preliminary evaluation of a business
idea, conducted for the purpose of
determining whether the idea is worth
pursuing (following, doing)

Analysis?
• When to conduct a feasibility analysis?
• The proper time to conduct a feasibility
analysis is early in the thinking process of
opening a new venture.
• The thought is to screen ideas before a lot of
resources are spent on them.

Analysis?
• Components of a properly conducted
feasibility analysis
• It includes four separate components-
• (1)Product/Service feasibility
• (2)Industry/Target Market Feasibility
• (3)Organizational Feasibility
• (4)Financial Feasibility

Analysis?
• (1) Product/Service Feasibility Analysis
• Purpose:
• It is an assessment of the overall appeal of the
product or service being proposed.
• Before a prospective firm rushes a new
product or service into the department, it
should be sure that the product or service is
what prospective customers want.

Analysis?
• Components of product/service feasibility
analysis
• Product/Service Desirability:
• The following questions should be asked to
decide the basic appeal of the product or service:
• Does it make sense, Is it reasonable?
• Does it solve a problem or take advantage of a
gap in the marketplace?
• Is this a good time to introduce the product or
service in the market?

Analysis?
• Product/Service Demand:
• Assess the demand for a product or service, by
conducting buying intention survey, library
and internet research.
• One of the most effective things an
entrepreneur can do is to conduct a thorough
product/service feasibility analysis is to hit the
streets and talk to potential customers.

Analysis?
• (2) Industry/Target Market Feasibility Analysis
• Purpose:
• It is an assessment of the overall industry and the
target market for the proposed business.
• Industry:
• An industry is a group of firms producing a similar
product or service.
• A firm’s target market is the limited portion of the
industry it plans to sell their products.

Analysis?
• Components of industry/target market
feasibility analysis
• Industry attractiveness:
• Industries varies in terms of their overall
attractiveness. In general, the most attractive
industries have the characteristics like growing
or shrinking, sell products or services that
customers “must have” rather than “want to
have”.

Analysis?
• Target Market Attractiveness
• It is to find a market that is large enough for the
proposed business but is yet small enough to avoid
attracting larger competitors.
• Organizational Feasibility Analysis
• Purpose:
• It is conducted to determine whether a proposed
business has sufficient management expertise,
organizational competence, and resources to
successfully launch a business.
• Focus on non-financial resources.

Analysis?
• Components of organizational feasibility
analysis
• Management Competence:
• A firm should evaluate its ability, of its
management team to satisfy itself that
management has the necessary expertise to
launch the venture.

Analysis?
• Resource Sufficiency
• An assessment of whether an entrepreneur
has sufficient resources to launch the
proposed venture or not.
• If critical resources are not available in certain
areas, it may be impractical to proceed with
the business idea.

Analysis?
• Financial Feasibility Analysis
• Purpose:
• It is the final component of a comprehensive
feasibility analysis. This helps in seeing
whether the business venture is financially
viable or not.

Analysis?
• Components of financial feasibility analysis
• Total Start-up Cash Needed:
• It is to determine if the proposed venture is
realistic or not given the total start-up cash
needed.
• Financial Performance of Similar Businesses:
• Estimate the proposed start-up’s financial
performance by comparing it to similar,
already established businesses.

Analysis?
• Overall Financial Attractiveness for the
proposed venture
• A number of other financial factors are
associated with promising business startups
such as:
• Steady and rapid growth in sales during the
first 5 to 7 years in a clearly defined market
niche.

Analysis?
• High percentage of recurring revenue
• Ability to forecast income and expenses with a
reasonable degree of certainty
• Internally generated funds to finance and
sustain growth.
• Availability of an exit opportunity for
investors.

Analysis?
• Role of feasibility analysis in developing
business ideas/plan
• Explain from handout.

Lesson-14: What is a Business Plan?
• Business Plan
• It is a written document prepared by the
entrepreneur that describes the external and
internal elements involved in starting a new
venture.
• It is a written narrative that describes what a
new business plans to accomplish.

• Who reads the business plan and what are
they looking for?
• Most of the new ventures use it for dual
purpose, for internal and external use.
• There are two primary audiences for a firm’s
business plan-
• A Firm’s Employees(Internal)- Helps all
employees to work in sync and move forward
consistently and purposefully.

• Investors/Other stakeholders(External)- To
show the business is a good base for investors
to invest money, as well as draw the attention
of society and government.
• Guidelines for writing a business plan
• (a) Structure of a Business Plan
• To make the best impression a business plan
should follow a conventional structure such as
the outline for the business.

• As investors are busy people and want a plan
where they can easily find critical information.
• Apart from facts and figures, a business plan
needs to project a sense of
readiness(keenness) about the possibilities
that surround a new venture.

• (b) Content of the Business Plan
• It should give clear and concise information on
all the important aspects of the proposed
venture.
• It must be long enough to provide sufficient
information, yet short enough to maintain
reader interest.
• Most plans are made in 25 to 35 pages.

• (c) Recognizing the elements of the plan may
change
• It is important to recognize that the plan will
usually change while being written.
• New information emerging while an
entrepreneur or a team of entrepreneurs are
involved in writing the plan and while seeking
feedback.

Lesson-15: Outline of a Business Plan
• An entrepreneur decides what should be
included in the business plan.
• Elements of a Business Plan
• Section 1-Executive Summary
• Section-2-Company Description (Description,
History, Mission, Products & Services, Current
status, Legal status and ownership, Key
partnerships)

• Section-3- Industry Analysis (Size, Growth rate,
sales projections, trends, long term prospects)
• Section-4- Market analysis (Market
segmentation, Target market selection, Buyer
behavior, Competitor analysis)
• Section-5- Market Plan (Overall marketing
strategy, product, price, promotions and
distribution)

• Section-6-Management team and company
structure (Management team, Board of directors,
company structure)
• Section-7-Operations Plan (General approach to
operations, business location, facilities and
equipment)
• Section-8- Product/Service Design and
Development plan (Development status and
tasks, challenges and risks, intellectual property)

• Section-9-Financial projection (Sources and
uses of funds statement, assumption sheet,
pro forma of income statements, pro forma of
balance sheets, pro forma of cash flows

Introduction to Entrepreneurship in Oman (39

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