Entrepreneurship as Career Option

January 7, 2011

By

Muhammad Javed Afzal

Manager Training Services, SMEDA
 Scheme of Presentation

 Introduction to Entrepreneurship

 Role of Academia in promoting

Entrepreneurship

 Role of SMEDA in Enterprise

Development
 Introduction to
Entrepreneurship
Introduction to Entrepreneurship

Entrepreneurship is the practice of starting

new organizations or revitalizing mature
organizations, particularly new businesses
generally in response to identified
opportunities.
(Wikipedia)
 Why to Become an Entrepreneur?

 Limited Employment Opportunities

 Unfulfilled Market Needs
 Limited Compensation as an
Employee
 One Can Make Own Decision
If you have a Boss…….
Keep praying………..

Give me the wisdom to understand

my Boss

Give me the love to forgive him

Give me the patience to understand

his deeds
But Dear God, Don’t give me Power

Because if you give me the Power

I WILL BREAK HIS

HEAD …….!!!!!!!!!!!
 Remember Ever-famous 2-Point Universal Rule
for Doing a Job Successfully

Point No. 1 Boss is ALWAYS RIGHT

Point No. 2 If Boss is WRONG, Go to

Point No. 1
 Who are Entrepreneurs?
 Prefer for moderate risk
 Confidence in ability
 Creative thinking
 Act on needs & opportunities
 Ability to interact with people
 Desire for feedback
 High level of energy
 Future orientation
 Ability to organize
 Values achievement over money
Potential Limitations of Entrepreneurs

• Uncertainty of income

• Risk of losing your entire invested capital

• Long hours and hard work

• Lower quality of life until the business gets

established

• Complete responsibility
 Entrepreneurship Cycle
• Decision to become an Entrepreneur
• Generation of Ideas
• Validation and Selection of Business
• Developing Business Plan
• Getting Resources and Start up
• Management of Resulting Products/Services
• Expanding Business -- Growth
 Process of Entrepreneurship 1/2

1. Sources of Idea Generation

2. Validation & Selection of Idea Sources
3. Important Consideration in Validation &
Selection of Idea
4. Types of Businesses
5. Business Plan
6. Market Analysis
7. Competition Analysis
Process of Entrepreneurship 2/2

8. Selection of Location
9. Inputs (Raw Material & Services)
10. Technology & Machinery
11. Process Design
12. Human Resource
13. Marketing the Product/Service
14. Selecting the Right Distribution Channel
 Types of Businesses
 Manufacturing
• Part
• Whole
 Assembly
 Trading
 Distribution
 Services
• Part
• Whole
 Business Plan
• Executive Summary
• Profile of Entrepreneur (s)
• Project Brief (Capacity, Process Flow, Raw M/t, Project Cost)
• Industry Analysis
• Product or Service Description
• Target Market Analysis
• Marketing Plan/Techniques
• Strategic Position & Risk Assessment
• Technology Plan
• Management & Organization
• 5 Year Financials (I S, C F S, B S, IRR, Payback, NPV)
• Graphs and Charts Pre-Configured with Financial Data
• Appendices
Can I Become an Entrepreneur ?

Conduct a Self-SWOT-Analysis

Analyse Yourself with Respect to Your:

Strengths and Weaknesses
So as to:
Identify Opportunities for yourself
and
Avoid potential Threats for yourself
 Role of Academia in
Promoting Entrepreneurship
 Gap between Academia & Industry

• Mismatch of HEIs pass-outs & Industry Need

• Lack of competency based curriculum development
• Supply driven programs
• Academia’s capacity in action oriented research
• Lack of On-the-Job Training (OJT)
• Industry doesn’t realize the use of trained workforce
as a competitive tool
• Industry not willing to invest in R & D
 Role of Academia In Promoting
Entrepreneurship
 Surveys for HR needs
 EDCs, Business Incubators
 Networking Groups - Shell Livewire, Active Citizens Program
 Entrepreneurship Forums
 Business Mentoring
 R & D (with Industry)
 Promote Entrepreneurship “Beyond the Classroom”
 Competitions for Business Plan, Business Ideas & Projects etc.
• Compulsory OJT & Internship
• Sector Specific Research Oriented Projects
 Role of SMEDA in
Enterprise Development
 SMEs in Pakistan

 Estimated Number: 3.2 million (99% SMEs)

 Value Addition in Manufacturing: 35%
 Contribution to GDP: 30%
 Share in Exports: 25%
 Contribution in Employment: 78%
 Enterprises by Employment Size

200 & above 0.09%

0.1%
100 to 199

0.23%
50 to 99

2.50%
10 to 49
97%
1 to 9

0% 20% 40% 60% 80% 100%

Source: Census of Establishments

 Major Problems of SMEs
 Technology ~ Low Technology Base
 Financing ~ Lack of Access to Finance
 Marketing ~ Lack of Market Information
 Human Resources ~ Limited HRD – Skill Development
 Regulatory ~ Govt. Rules – Impediments
 Low Value Addition
 Operational Strategy
Building a Conducive Environment
 Proposing and facilitating changes in Policy and Regulatory Environment
 Reducing the Cost of Doing Business
 Facilitating Government-SME Interface

Developing Clusters and Sectors

 Sector Studies, Strategies and Implementation
 Cluster Development
 Common Facility Centers (CFCs)

Provision and Business Development Services

 Investment Facilitation
 Technology, Training, Finance, Business Information, Marketing, and Legal Support

 Productivity and Competitiveness Improvement

Enterprise Development Activities
 Pre-feasibilities / Business Plans
 BDS in Financial, Training, Marketing, Technical etc.
 Cluster Development
 Sector Development
 Industry Support Cell
 Legal and Regulatory Support --- Operational matters
 Business Matchmaking --- Potential partners
 SMEDA Accounting Package (SMAP)
 Public Sector Development Programs
 Regional Business Offices
 04 Provincial Offices
 22 RBCs in major cities all over the country.
 Functions of SMEDA RBC
• Business Counseling
• Project Identification / Implementation
• Business Development Services
• Business Information
• Business Match Making
• Assistance in Fund Raising
• Legal and regulatory procedures
 SMEDA Publications
 Trade Secrets
 Secrets of E-Commerce
 How to Approach Banks
 Making a Mark
 Looking Good
 Creative Expression
 A Stitch in Time
 Inventing the Future
 Trade in Services
 Off-Shoots of SMEDA
• BSF • PGJDC
• CSF • PASDAC
• PHDEC • Furniture Pakistan
• TUSDEC • AHAN
• Dairy Pakistan
 Technology Up-gradation
Technology Up-gradation in
Electrical Fittings Cluster,
Sargodha
 Help in up-gradation of bakelite
electrical products manual press
being used by industry
 Development of Automatic
Model Press through Private
Consultant
 Awareness Workshop and
Physical Demonstration to
SMEs
Common Facility Centers (CFCs) 1/2
 Computerized Pattern Designing, Sialkot
 Artificial Insemination, Burj Attari
 CFC for Light Engineering Cluster, Gujranwala
 Auto Parts Design & Inspection Center , Lahore
 Electrical Fittings Support Center (Bakelite) Sargodha
 Wooden Furniture Support Center , Chiniot
Common Facility Centers (CFCs) 2/2
 Gujranwala Business Centre
 Agro-Food Processing Facility, Multan
 S I D C, Sialkot
 Revival of CIP
 WBIC, Lahore & Peshawar
 HLFC, Hyderabad
 GPDMC, Hyderabad
 Red Chilies Processing Center
 CFC Matta Mughal Khel
 SME Sub-Contracting Exch. Gujranwala
 Chromite Beneficiation Plant
 Lending Programs
 Power Loom Up-gradation, Faisalabad
• Rs.226 million disbursed by PSIC, SME Bank and
Union Bank
• 150 entrepreneurs benefited
 Support Services for Agriculture Credit, Pattoki,
Sheikhupura & Phool Nagar
• Rs.77.45 million disbursed
• 252 farmers got benefit
 Cutlery Sector, Wazirabad
• 40 applications submitted to Bank of Punjab
• 15 million approved for 20 applicants
 Plastic & PVC Pipes Sector, Lahore under Process
 Marketing Services
 Website for Gems & Jewelry Sector
 Website for Cutlery Cluster, Wazirabad
 Website for Mango Cluster, Multan
 Indian Consultant for Sportswear Cluster, Sialkot and
Plastic Cluster Lahore
 Women Entrepreneurs Information Network (WIN),
www.win.org.pk
 Women Entrepreneurs Association, Multan
 Pak – German Auto Network
 Industrial Information Network (IIN) B2B Portal
Glimpse of SMEDA Training
 Concluding Thoughts

 Entrepreneurship, as Way Forward for

Repositioning Economy

 Role of Academia in promoting

Entrepreneurship

 Role of SMEDA in Enterprise Development

 Expectations from the Youth

 12 Steps to Startup
 Take a Skills and Interests Inventory
 Research and Evaluate Your Idea
 Calculate Your Costs
 Write Your Business Plan
 Identify Source of Startup Financing
 Choose a Business Structure & Name Your New Business
 Work Through the Startup Paperwork Maze
 Develop Your Marketing and Customer Service Plan
 Court Your First Customers
 Develop and Hire Support Team
 Execute Your Marketing Plan
 Hang Out Your Shingle
 Sources of Idea Generation
 Family & friends
 Current employer
 Chambers and trade associations
 Government institution like SMEDA, TDAP, BOI,
PCSIR
 Research Institutes and Universities
 Industry leaders/unit owners
 International development agencies
 Seminars, training programs and workshops
 Internet
Validation & Selection of Idea Sources
 Friends & Family
 Existing Entrepreneur in the selected sector
 Consumers of proposed product and services
 Chambers, Trade Associations
 Government Institutions
 Consultants
 Validation & Selection of Idea
Important Consideration
 Personal and Family background
 Education background
 Attitude
 Estimate of market needs and volume
 Ability to manufacture or deliver a service
 Government policies and incentives
 Investment size
 Growth opportunity
 Location
 Availability of inputs
 Market Analysis

Does the market exist?

 Consumption pattern of similar products
 Market Research
 Product / Idea testing
 International trade data
 Market Analysis
Market Volume and Characteristics?
 FBS Data
 Current production levels
 Population growth
 GDP and Income Levels
 Government Policies Tariff Structure, duties, Subsidies
 Focus Group discussions
 Trends in Allied Products
 Trends in Substitute Products
 Distributor Retailer Feedback
 International Trends
 International Trade Regulations
 Foreign trade office in Pakistan and Pakistani Missions
Abroad
 Competition Analysis

 Number of competitors
 Location and Size
 Marketing distribution and promotion
 Pricing
 Consumer loyalty
 Comparative advantage
 Selection of Location
 Proximity to market
 Proximity to suppliers of inputs
 Government incentive packages
 Land price
 Availability of infrastructure
 Law and order situation
 Access to Airport, Dry Port, Sea Port etc.
 Proximity to Established Trade Routes
 Location of Competitors
 Credit cycle in the area