Enterprise, Business Growth, and size By: Michelle Lee

Objectives : In this chapter you will study about :  Entrepreneurs and Enterprise  Characteristics of successful entrepreneurs  Business plans  Contents of a business plan  How to measure business size  Why some businesses grow  External growth and Internal growth  Why some businesses fail

Entrepreneurs and Enterprise  An Entrepreneurs is someone who has an idea for a business and take the risk of setting up and running the business.  Enterprise meaning a project.

Characteristic of Successful Entrepreneurs  Innovative : good thinking up new ideas  Self-confident : have a strong belief in their own ability an ideas  Leadership skills : able to motivate other people (good decision maker)  Multi-skilled : able to do many tasks  Initiative : able to developed a good plan to achieve the objectives of a business  Risk taker : ready to take risks  Result driven : focus on achieving result  Self-motivated/determine : have the drive to keep going  Good at networking : have many friends

Business Plan  Business plan : it’s a detailed written document shows the purpose and aims of a business which is often used to persuade lenders/investors to finance a business proposal.

Contents of a business plan  The business : show the details of entrepreneurs, the idea of business, and managers/workers who will be recruited  The business opportunity : show the information about the products. It’s also includes market research  The market : shows the current size, potential for growth and competitors  The objectives : show that the business hopes to achieve  Financial forecast : show a cash flow forecast, projected sales, revenue, and profit for at least the first year of trading Revenue : the amount a business earns from the sale of it’s products

How to measure the business size  There are several ways of measuring and comparing the size of business :  Capital employed  Market share  Number of employees  Value of output  Sales

Reason to grow business  Increase the profit  Increase the market share  Economies share :  Trading economies : buying raw materials  Financial economies : can have a greater access  Managerial economies : a business can hire/ employ specialist/professional manager  Technical economies : a business can purchase expensive machinery/equipment

External growth and Internal growth  External growth (take over/merger)  Horizontal integration  Forward integration  Backward integration  Conglomerate integration  Internal growth (organic growth)  Developing new products  Finding new market for their products  Increase the output

Why some businesses fail  Poor planning and lack of objectives  Poor cash management  Poor choice of location  Poor management  Failure to invest in new technologies  Poor marketing  Lack of finance  Competition