Creativity and Entrepreneurial
Plan

Creativity
• Creativity relates to the ability to create an
idea for new product, service, methods or
process.
• The creativity in case of need does not only
create the degree of negotiation and business
and marketing ideas, but also plays a
remarkable role in solution of problems.

• In order to achieve success in
entrepreneurship, creativity is indispensable.
Its cope is dependable on some situation
factors, viz., (i) easy availability of data, (ii)
pressure of work, (iii) strict adherence to
control, (iv)outcome of failure and (v)
conditional thought.

Creativity Process
Creativity is recognized as a mental or internal
process.
Creative process has five stages:
Idea
Germination
Preparation Incubation Illumination Verification

Idea Generation and Screening
and Project Identification

Generation of Ideas
Someone with specialized technical knowledge
or marketing expertise or some other
competence feels that he can offer a product
or service which can cater to a presently
unmet need or serve a market where demand
exceeds supply or effectively compete with
similar products or services because of certain
favorable features like better quality or lower
prices.

Steps in Project Identification
1. SWOT Analysis
2. Clear Articulation of Objectives
* Cost Reduction
* Productivity Improvement
* Increase in capacity utilization
* Improvement in contribution margin
* Expansion into promising fields

3. Fostering a conducive environment
Bell Telephone Laboratory and 3 M Corporation and HUL
4. Monitoring the Environment
For purposes of monitoring, the business environment may be
divided into six broad sectors:
i. Economic
ii. Government Sector
iii. Technological Sector
iv. Socio-demographic Sector
v. Competition Sector
vi. Supplier Sector

5. Corporate Appraisal
Broad Areas:
i. Marketing and Distribution
ii. Production and Operations
iii. Research and Development
iv. Corporate Resources and Personnel
v. Finance and accounting

* Tools for Identifying Investment
Opportunities
i. Porter Model

ii. Life Cycle Approach
iii. The Experience Curve

6. Scouting for Project Ideas
i. Analyze the performance of existing industries
ii. Examine the inputs and outputs of various industries
iii. Review imports and exports
iv. Study plan outlays and governmental guidelines
v. Look at the suggestions of financial institutions and
developmental agencies
vi. Investigate local materials and Resources
vii. Analyze Economic and Social Trends
viii. Study new technological developments
ix. Draw clues from consumption abroad
x. Explore the possibility of reviving sick units
xi. Identify unfulfilled psychological needs
xii. Attend trade fairs
xiii. Stimulate creativity for generating new product ideas
xiv. Hope that chance factor will favor you.

7. Preliminary Screening
i. Compatibility with the promoter
ii. Consistency with governmental priorities
iii. Availability of inputs
iv. Adequacy of market
v. Reasonableness of cost
vi. Acceptability of risk level

Project
• Is one-shot, time limited, goal-oriented , a
major undertaking, requiring the
commitment of varied skills and resources.
• Project as the whole complex of activities
involved in using resources to gain benefits.

Characteristics of project
• Objective
• Life-span
• Single entity
• Teamwork
• Life-cycle
• Uniqueness
• Change
• Made to order
• Unity in diversity
• High level of sub-contracting
• Risk and uncertainty

Project classification
1.Quantifiable and non-quantifiable projects
2. Sectoral project
• Agriculture sector
• Irrigation sector
• Industry sector
• Transport sector
• Communication sector
• Social service sector
3. Techno-economic project
• Factor-oriented intensity
• Causation-oriented
• Magnitude oriented

Project Planning
• the method of determining future course of
action to achieve desired result i.e. for
fulfillment of predetermined targets with a
definite period of time.
• Project planning is predetermined planning
about project, by means of which a well-
designed and systematized structure of
functions is framed for the accomplishment of
objectives of a project.

Project planning is undertaken for accomplishing
the following task
• Direction of performance
• Acting as medium of communication
• Arousing consciousness about the importance
of work
• Providing control

Need for preparation of project
planning
• Direction of performance
• Rational classification of complex activities
• Possibility of investment
• Optimum utilization of resources
• Medium of communication
• Providing control
• Risk management

Preparation of project plan
1. Defining the objectives of project plan.
2. Action programming
3. Scheduling of resources and time
4. Feasibility study
5. Organization of project team
6. Budgeting
7. Designing the control system

Project Formulation
• Type of Objectives in Project formulation
i. General Objectives
ii. Operational Objectives
Stages of Project Formulation:
1. Feasibility Analysis
2. Economic Analysis
3. Technical Analysis
4. Input Analysis
5. Financial Analysis
6. Social cost-benefit analysis
7. Pre-investment analysis

Market analysis
Is to estimate potential size of the market for the
product proposed to be manufactured and get
an idea about the market share that is likely to be
manufactured.
Key steps involved in market and demand analysis:
1. Situation analysis and specification of objectives.
2. collection of secondary information
3. Conduct of market survey
4. Characteristics of the market
5. Demand forecasting
6. Market planning

Financial Analysis
• As the process of discovering economic facts
about an enterprise and project on basis of an
interpretation of financial data.
• F.A provides an insight into two important areas
of management- return on investment and
soundness of company’s financial position.
• F.A reveals where company stands with
profitability, liquidity, efficient use of its assets.

Significance of financial analysis
• Helps to find out whether project is attractive
enough to secure funds needed for its various
activities.
• Analysis of financial statement has become
significant due to widespread interest of various
parties in financial result of company.
• Number of techniques has been developed to
undertake analysis of financial statement in order to
reach conclusion about financial
health, profitability, efficiency of an
enterprise, compare enterprise with other similar
undertaking.

Utility of financial statement
• Regulatory provision
• Income-tax accounting
• Executives
• Bankers investors

Technical analysis
• The purpose is :
a) To ensure that the project is technically feasible
in the sense that all the inputs required to set
up the projects are available.
b) To facilitate the most optimal formulation of
project in terms of technology , size, location.

• Project Implementation
• Project Evaluation and Control
Social cost-benefit analysis is used to evaluate
the project