MPC 552 Entrepreneurship and Communication (1).pptx

MPC 552: ENTREPRENEURSHIP AND COMMUNICATIONS IN AGRICULTURE DR (MRS) GIFTY BOAKYE APPIAH DEPARTMENT OF AGICULTURAL ECONOMICS, AGRIBUSINESS AND EXTENSION  EXPECTATIONS OF STUDENTS What came to mind when you registered the course? 1. ……………...

MPC 552: ENTREPRENEURSHIP AND COMMUNICATIONS IN AGRICULTURE DR (MRS) GIFTY BOAKYE APPIAH DEPARTMENT OF AGICULTURAL ECONOMICS, AGRIBUSINESS AND EXTENSION  EXPECTATIONS OF STUDENTS What came to mind when you registered the course? 1. ……………………… 2. ……………………… 3. ……………………… What do you expect from the course instructor? 4. ……………………… 5. ……………………… 6. ………………………  Course Objectives To help students understand the fundamental issues in entrepreneurship. To help students to identify and evaluate business opportunities within agricultural value chains To equip students with the necessary entrepreneurial skills for starting and growing a new business or for use within the settings of an existing business or organization. To equip students with the skills and the technical know-how to develop a viable business plan. Learning Outcomes Explain key issues/theories of entrepreneurship in the context of agriculture Identify and evaluate business opportunities within agricultural value chains Apply the knowledge, skills and the technical know-how to start and maintain viable agribusiness businesses Develop the skills and the technical know-how to develop a viable business plan.  Course Outline 1. Fundamentals of Entrepreneurship in Agriculture 2. Entrepreneurial challenges and challenges of MSMEs 3. The identification and evaluation of entrepreneurial opportunities 4. Classification of entrepreneurs 5. Functions of entrepreneurs 6. The entrepreneurial process a. The identification and evaluation of entrepreneurial opportunities b. Development of a viable business plan c. Determination and acquisition of resources d. Managing a new business venture 7. Legal issues for entrepreneurs 8. Types of intellectual property Approaches to teaching, learning and students’ responsibilities A combination of approaches would be used to enhance teaching and learning. These include but not limited to: Students are Interactive therefore lecture expected to sessions: actively participate in instructor and all discussions students are and make equally meaningful involved in this and interaction. thoughtful contributions. www.knust.edu.gh [email protected] 6 Assessment of students Continuou s assessme End of nt Semester 30% 70% www.knust.edu.gh [email protected] 7  References 1. Kuenyehia, E. N. (2012). Kuenyehia on Entrepreneurship. Accra: Flipped Eye Publishing. 2. Bygrave, W. D. and Zacharakis, A. (2004), The Portable MBA in Entrepreneurship. 3rd Edition. John Wiley and Sons, Inc., Hoboken, New Jersey, USA. 3. Derammelaere, S. and De Thomas, A. (2008), Writing a Convincing Business Plan. 3rd Edition. Baron’s Educational Series Inc., New York, USA. 4. Dorf, C. D. and Byers, T. H. (2008), Technology Ventures: From Idea to Enterprise. 2nd Edition. McGraw-Hill Companies Inc., New York, USA. 5. Clason, G. S. (1955). The Richest Man in Babylon. New York, Hawthorn. 6. Any other relevant material on entrepreneurship. 7. Alexis, T. (1985). Mass Communication theories and research. 2nd Edition, John Wiley & Sons, New York, USA. 8. Santucci, M. (2005). Strategic Communication for Rural Development In collaboration with the Communication for Sustainable Development in Operations Unit Development Communication Division, External Affairs, Vice- Presidency, The World Bank. 9. McQuail, D. (2005). Mass Communication Theory. 5th Edition, Sage Publications Ltd., London. 10. Van den Ban, A. W. and Hawkins, H. S. (1988). Introduction Agricultural Extension, John Wiley & Sons, New York, USA. 11. Richardson, D. (2006). ICTs – Transforming Agricultural Extension? Report of the 6th Consultative Expert Meeting of CTA’s Observatory on ICTs Don Richardson, TeleCommons Development. www.knust.edu.gh [email protected] 8 How do you understand Entrepreneurship? www.knust.edu.gh 9  What is Entrepreneurship? Entrepreneur is derived from the French entreprendre, meaning “to undertake”. It is a process of recognizing or identifying an opportunity (idea) and converting it into an enterprise with a view to make profit www.knust.edu.gh 10  What is entrepreneurship? Entrepreneurship is a way of life: It’s a powerful force deep down inside, driving you to achieve your dreams, despite the odds and the doubts of others. Dreams give us the strength that carries us through. It is the dream that drives entrepreneurs. www.knust.edu.gh 11 What is Entrepreneurship? (1/2) Entrepreneurship is the process of creating something new with value by devoting the necessary time and effort, assuming the accompanying financial, psychological, and social risks, and receiving the resulting rewards of monetary and personal satisfaction, and independence (Hisrich et al., 2005). www.knust.edu.gh 12  What is Entrepreneurship? (2/2) Entrepreneurship is the tendency of a person to organize his own business and run it profitably by exploiting the qualities of leadership, decision making and managerial skills. www.knust.edu.gh 13 What is Agripreneurship? (Adapted from Hisrich et al., 2005). The process …and of creating …by devoting assuming the accompanyin innovative the necessary g risk with solutions to time and effort the hope of agricultural being problems… rewarded www.knust.edu.gh [email protected] 14  Open Discussion What is the benefit of entrepreneurship to you and in Ghana’s economic development? In order words, why MUST we all take entrepreneurship seriously? www.knust.edu.gh 15  Ghana has a serious problem with (youth/graduate) unemployment. Unfortunately, Increasing Limited Macro- Worsening of a The most space economic it appears number of for conditions bad situation by COVID-19, realistic & graduates do not viable option the situation yearly (over public support the Ukraine war, and the recent is to go sector is getting 300,000* growth of employ the private IMF entrepreneu annually). programme. rial worse ment sector. www.knust.edu.gh What is the role of entrepreneurship in Ghana’s economic development? 1. Job creation/Employment 2. Drives economic growth: contribute to GDP, receipt of foreign currency etc. 3. Drives competition and innovation which in turn gives value to consumers. 4. Increases productivity: improves production efficiencies, cut waste etc. 5. Revenue to the state through tax. 6. Higher quality of life. 7. Reduced societal unrest. 17 Entrepreneurial challenges in Ghana Why do you think the youth find it difficult to start and grow their own businesses? www.knust.edu.gh 18  Entrepreneurial challenges in Ghana 1. Structure and focus of Ghana’s education system 2. High cost of living and high cost of doing business in Ghana 3. Institutional bureaucracy unfriendly to entrepreneurship 4. Limited access to finance for businesses (especially, agribusinesses) www.knust.edu.gh 19 Entrepreneurial challenges in Ghana 5. Low income and low savings 6. Limited access to information 7. Limited knowledge about entrepreneurship. 8. Poor infrastructure 9. Limited governmental policies that support entrepreneurship www.knust.edu.gh 20 WHO IS AN ENTREPRENEUR? www.knust.edu.gh 21 Can everyone be an entrepreneur? www.knust.edu.gh [email protected] 22  Are entrepreneurs born or made? “Entrepreneurship is not genetic; it can be learned. I make things happen because of my own will, skill, knowledge, and personal power. These are traits you can learn and improve with practice” (Donald Trump) www.knust.edu.gh [email protected] 23  The entrepreneur is someone who perceives opportunities or identifies problems/needs, creates solutions (product/service), and is willing and able to take reasonable risk to build something of value. www.knust.edu.gh 24 Entrepreneurial Orientation Anyone with entrepreneurial orientation is not afraid to take risk Anyone with Risk Taking entrepreneurial orientation is Innovative Innovation Pro-activeness Anyone with entrepreneurial orientation is Proactive www.knust.edu.gh 25 Characteristics of entrepreneurs? www.knust.edu.gh 26  Key Characteristics of Entrepreneurs 1. Passion and action oriented  Passion is what entrepreneurs must have, first, and foremost.  The sheer magnitude of the odds that are stacked against entrepreneurs requires a special kind of irrational exuberance to overcome.  Without passion, resources will never be enough and they will quickly dissipate into thin air.  But your passion will always find a way, even when probabilities conspire against your dream.  NB: 99% of people bitch about problems and the other 1% do something about them Entrepreneurs are usually few!! 27  2. Focus and discipline  Many people are creative, but lack discipline Entrepreneurs have both qualities.  An entrepreneur identifies a path towards a solution and follows that path, notwithstanding the frequent temptation to take sideroads leading to seemingly newer, more exciting destinations. 28  Focus and discipline cont’d The entrepreneur knows that most of the journey down the chosen path is checkered with drudgery, yet he continues down the path unwaveringly, confident that there will be a reward at the end. The entrepreneur also knows that the side roads along the way may appear appealing at first glance, but will quickly become as checkered with drudgery as the originally chosen path and likely lead to a dead end. www.knust.edu.gh 29 3. Courage  Courage is a defining trait of entrepreneurs  To understand the odds against success and still forge ahead, knowing many battles will be lost on the way, requires a certain amount of fearlessness.  They regularly face daunting challenges that can spell disaster for their business ventures if they fail to overcome.  Their ability to face these challenges without fear enables entrepreneurs to succeed where others cannot.  Courage enables them to take risk (calculated risk)  Other Characteristics of an entrepreneur cont’d  Has the initiative, drive and ability to identify and take advantage of opportunities;  Is always looking for opportunities to improve and expand his businesses;  Thrives on change and copes well with risk and uncertainty;  Knows how to identify and evaluate risks and is willing to take calculated risks, while accepting responsibility for both profits and losses;  Other Characteristics of an entrepreneur cont’d  Is a creative problem-solver, understands the decision-making process and enjoys making decisions;  Establishes strong partnerships and other relationships and works well with other people; and  Is an innovator who is always looking for better and more profitable ways to do things. 32 Other Characteristics of an entrepreneur cont’d They are HARDWORKING Curiosity- Rather than settling for what they think they know, they ask challenging questions and explore different avenues. Self-reliance and desire for independence. Entrepreneurs are not followers. They are leaders who can take an idea and develop it and inspire employees to work and stay with them. Tolerance, adaptability and persistence Decisiveness. This doesn’t mean being correct. It means having the confidence to make challenging decisions and see them through to the end. 33 Other Characteristics of an entrepreneur cont’d Team builder High need for achievement. High energy level. Comfortable with failure.  Nearly 75% of new start-ups fail. Rather than let fear hold them back, they allow the possibility of success to propel them forward. Innovative – although innovation is a characteristic some, but not all entrepreneurs possess, it is a type of mind set that can be cultivated. By developing your strategic thinking skills, you can be well-equipped to spot innovative opportunities. Long term focus HOW DO YOU COME UP WITH AN IDEA? www.knust.edu.gh 35 www.knust.edu.gh 36 How to come up with ideas 1. Look at all the things that bug/frustrate you. Frustration is the biggest driver for problem solving and innovation  Become an expert in the things that make life difficult for people. Every properly ambitious business is in some way trying to fix things for other people. The bigger and more original what you are trying to fix, the more successful your business can be.  Every unhappiness as a customer is actually a new business in waiting to be born. Your frustrations is an inexhaustible source of raw material out of which businesses can be built.  While there may be plenty of say, breakfast/food joints, print houses, there is so much that frustrates us. So learn to study your own unhappiness. 2. Help from friends- Steve Jobs knew nothing about computers. He was just a mere communicator and marketer. His friend Steve Wozniak who is a tech engineer is the brain behind Apple Tech. So why is Steve Jobs extremely popular even more than Wozniak? You can make more money recognizing someone else’s idea than creating one yourself. 38 3. Tap your interests. Many people have turned their hobbies into successful businesses. Mark Zuckerberg. When he started a small social media website for students whiles at the Harvard University, it was just a hobby. Today we have Facebook. 4. Save people money and time – e.g. Uber, Amazon, tonaton.  Create a benefit or solution that removes the frustrations, difficulties, problems, challenges or impossibilities from a customer’s life to achieve a defined goal or outcome at an affordable cost 5. Travel A lot of the businesses you see in Ghana today are ideas taken from Europe and the developed countries. E.g. (Fast foot joint, pharmacies/mart, couriers etc.)  Domino’s pizza is an American multinational pizza restaurant chain founded in 1960. Leopoldo Fernandez travelled to United States, got impressed with the fast food operation of Domino’s pizza and went back to Spain and launched his own version called TelePizza in 1986.  His company now registers $260 million in sales www.knust.edu.gh and employs 13000 people in 12 countries. 40  Others: Keep your eyes open- when you see something that piques/arouses your interest, ask yourself what it is about this situation that’s special. Then narrow your focus so you home in the idea. You can create a niche market. Examine old mousetraps, then build a better one. Begin to explore the modules and operations of existing businesses. Go online- Surf on the web for potential business ideas. Make it a point to check out various sites daily. It may trigger an idea or concept. www.knust.edu.gh 41  Elements of a good business opportunity  There is demand in the market for the product;  The product meets a need or solves a problem;  The business opportunity works in a particular location;  The entrepreneur has the resources to take on the business opportunity;  The entrepreneur can provide the product at the right price that attracts customers, while making a profit; and  The timing for the business is right. What factors would influence your choice of a particular business opportunity? www.knust.edu.gh 43  Criteria for Selecting a Particular Business Opportunity 1. Market availability for the product/service 2. Investment size (Do you have the financial resources?) 3. Human Resource 4. Location/site (land) 5. Technology (is the technology available?) 6. Availability of Equipment & other facilities etc www.knust.edu.gh 44  Options for funding your small business 1. Family and friends. It is important to prove that your concept can be successful to the point where you can seek other funding. It is a quick funding process with flexible terms  NB: be truthful and diligent. This approach has damaged relationships. 2. Business angels/Angel Capital Angel investors are wealthy individuals who provide funding in exchange for a share in your business. If you want to retain 100% control in your business then this is not suitable for you.  NB: Apart from giving you cash, angel investors will have experience and should be able to offer valuable business 45  Options for funding your small business 4. LOANS????? Strict conditions to meet, rate of interest can be extremely high and costs can quickly mount up. As much as possible avoid loans.  NB: You need relationships before asking for money  If you want money ask for advice  Build trust before asking for money  Use customer money to fund the business www.knust.edu.gh 46 Open discussion  What is the driving force behind your wish to set up your own business? Classification of Entrepreneurs www.knust.edu.gh 48  Types of Entrepreneurs 1. Classical or Economic entrepreneurs The primary motivation or objective for these entrepreneurs is commercial or to make profit. These types of entrepreneurs may have ended up in entrepreneurship either because they had no other alternative source of livelihood or might have seen an opportunity. www.knust.edu.gh 49 2. Social Entrepreneurs Social entrepreneurs are motived by the need to solve societal problem by applying innovative solutions. Unlike classical entrepreneurs that are primarily commercial oriented, … …social entrepreneurs are more focused on bringing positive change in society and creating impact rather than wealth creation. www.knust.edu.gh 50 3. Intrapreneurs These are entrepreneurs who are working within the confines of already existing businesses. They identify problems/opportunities, create solution and build something of value, as in the case of all entrepreneurs. However, they do so within the firm they are working for and uses resources of the employer. These individuals are mostly very loyal employees 4. Extrapreneurs These are individuals, unlike intrapreneurs, who break off from a business they are working for to set up their own related firm. This may happen if they feel that the current organization is not giving them the needed recognition or there are customer pains or problems that the employer’s firm is not addressing. The resulting new firm may end up being a competitor, a customer or a supplier of the previous firm he/she was working for.  5. Religious Entrepreneurs Simply put, religious entrepreneurs are individuals who make enterprises out of the gospel or other religious activities. They apply entrepreneurial principles to create thriving organizations that run on sound business and managerial principles. They identify problems, gather resources, assume risk, promote the solutions they offer and expect some gains. Religious entrepreneurs may either be genuinely called or charlatans. www.knust.edu.gh 53 6. Political Entrepreneurs These are individuals who invest resources (money, time, expertise) in political activities such are campaigns with the hope of receiving benefits when their sponsored party or individuals get to decision making positions. These are referred to as entrepreneurs because: 1. they identify problems or opportunities (i.e. the need to win elections), 2. offer solutions (by providing either cash, expertise and campaigning), 3. take on risk (the possibility of losing the election, the cash, reputation etc.) 4. with an expectation to be rewarded (with a contract, an appointment, recognition etc.) www.knust.edu.gh 54  Rewards of Nature of reward The entrepreneur entrepreneurship Wants to do something different and wants to Personal satisfaction choose his own way of doing things. Sees an opportunity to make a profit by starting Financial gain up his own business enterprise Seeks the opportunity to make his/her own Independence decisions and to set his/her own targets and standards Wants to use his own skills and abilities more Self-fulfilment meaningfully and profitably www.knust.edu.gh 55  Assessing readiness for entrepreneurship Problem-  Do you come up with solutions to problems  Yes/No solving: in your current operations or do you ask for help? Facing  Do you see failure at a task as a challenge  Yes/No challenges: or do you give up? Money  Do you believe hard work will pay off?  Yes/No matters: Communicatio  Can you explain processes and procedures  Yes/No n: to others?  Can you express yourself clearly when  Yes/No communicating with your suppliers, buyers and other role players?  Functions of Entrepreneur Business Decision making  Decide on the nature and type of business to undertake  Decide on the nature and type of goods that must be produced or services that must be provided to customers  Decide on size of business, its location and techniques of production  Etc. Managerial Functions 1. Planning 2. Organizing 3. Controlling 4. Directing www.knust.edu.gh 57  Individual Exercise Take a closer look at yourself and how you do things Do you have entrepreneurial spirit/tendencies? Some individuals can share their views and open up for general class discussion Entrepreneurial Process Ideas are the building blocks of the whole process.  Dreaming, or having an idea or even IDEAS is an EASY process that “everyone” can do but......turning you ideas in successful ventures is a different story altogether. www.knust.edu.gh So, what then does the entrepreneurial [email protected] 59 The entrepreneurial process has four distinct phases: 1. Identifying and evaluating opportunities. 2. Developing a business plan. 3. Acquiring resources required for implementation. 4. Managing the resulting enterprise and harvesting the rewards.  Although the phases proceed progressively, none is dealt with in isolation or...... is totally completed before the commencement of other stages. www.knust.edu.gh [email protected] 60 Opportunity identification An opportunity is a timely and favourable juncture of circumstances providing a good chance for a successful venture. Good opportunities are usually disguised so most people don’t easily recognise them. Opportunity identification and evaluation is perhaps the most difficult task in the whole process. Opportunities are the problems, gaps and pains that the potential customers are ready to pay you solve. www.knust.edu.gh [email protected] 61 Good ideas are not always good investment opportunities. What then makes an attractive opportunity then? www.knust.edu.gh [email protected] 62  Identifying the ‘sweet The spot’ “sweet spot” is when there is a convergence between three variables: 1. Attractive opportunity: solvable, timely, important, profitable and within favourable context. 2. Capabilities and skills of the entrepreneur or entrepreneurial team: the entrepreneur has the needed skills to perform the tasks or is willing to learn. 3. Interest, passions and commitment: the entrepreneur by default like to do the tasks involved, likes challenges and is committed to what is necessary for the firm to succeed. www.knust.edu.gh [email protected] 63 Other models for evaluating opportunities are available www.knust.edu.gh [email protected] 64 An idea versus opportunity (Source: Kuenyehia) An idea may be considered an opportunity, or capable of creating an opportunity if: 1.It meets or fulfils customers’ need. 2.Creates value for customers: customers must be willing to pay for again and again. 3.Creates value for stakeholders (entrepreneur, employees, investors, suppliers, creditors, the society). 4.Be the right fit (reflects entrepreneur’s values, interest, aspirations and match his/her resources and skills). 5.Realistic: would be possible to develop the idea into a profitable business considering possible limitations?  The RAMP model for evaluating an opportunity R - Return on investment Profitability: Will your revenues be higher than your expenses? Breaking Even: How long before cash flow becomes positive? How long until the company begins to have an aggregate net income? Investment Needed. How much money will it take to start-up this venture? www.knust.edu.gh [email protected] 66  The RAMP model for evaluating an opportunity A - Advantages Cost structure: What each element will cost to source or manufacture? Barriers to entry: Are there large competitors, regulations, patents, large capital requirements? The higher the barriers to entry, the more disadvantaged you will be. Intellectual Property: Do you have a proprietary advantage such as a patents or exclusive licenses on what you will be selling? www.knust.edu.gh [email protected] 67  The RAMP model for evaluating an opportunity M - Market The Need: Is there a big need for this product or service? Try to avoid ideas that sound good but that there is no real need for. Target market: Who are you selling to? Businesses? Consumers? What demographics? Analyze market size. Pricing: What will be the price? Will customers buy at that price? Will the price allow you to make the desired margin? www.knust.edu.gh [email protected] 68  The RAMP model for evaluating an opportunity P - Potential Risk vs. Reward: Will there be a high reward for the founders and investors if the company succeeds? The Team: Is the team right for the business? Do you have knowledge in the chosen field or can you assemble one? Timing: Is the market ready for your product? Goal Fit: Does the business concept fit the goals of the team to create a high potential or lifestyle business? www.knust.edu.gh [email protected] 69 Development of a viable business plan www.knust.edu.gh [email protected] 70 What is a business plan? www.knust.edu.gh [email protected] 71  Luke 14:28-30 New International Version (NIV) 28 “Suppose one of you wants to build a tower. Won’t you first sit down and estimate the cost to see if you have enough money to complete it? 29 For if you lay the foundation and are not able to finish it, everyone who sees it will ridicule you, 30 saying, ‘This person began to build and wasn’t able to finish.’ 31 “Or suppose a king is about to go to war against another king… www.knust.edu.gh [email protected] 72  Business plan, what is it? A document that details what the business or business concept is, what is expected from the business, the vision of the entrepreneur, how management intends to get the firm to that point, and the specific reasons why it is expected to succeed. www.knust.edu.gh [email protected] 73  Business planning seeks to address the following issues or 1. Who are you? questions: 2. What are you going to do/doing? 3. Where are you going? 4. How are you going to get there? 5. How will you ensure success and returns on investment? www.knust.edu.gh [email protected] 74 The purposes of the business plan 1.Helps you think through the venture and ensure that you have considered all options and anticipated any potential difficulties. 2.Serves as an operating guide/blueprint as you turn your ideas into a viable business. 3.Helps to evaluate the feasibility of the business concept and identify factors that will determine the firm’s success of failure. www.knust.edu.gh [email protected] 75  The purposes of the business plan 4. Helps to examine the strengths and weaknesses of the firm relative to its industry, market, competition and customers. 5.Helps in arranging strategic alliances/partnerships and obtaining contracts. 6. Helps in convincing potential funding programs, lenders and investors that the proposed venture has merits and that you are in control of the project. www.knust.edu.gh [email protected] 76 Who will use your business plan? www.knust.edu.gh [email protected] 77  Who will use your business plan? 1.Internal users: the entrepreneur and her team/partners, key employees. 2.External users: individuals or institutions outside your firm who will require information about your business before they can make informed decisions on whether to invest in your business, partner you, enter into contract with you or have any form of (business) relationship with your firm. www.knust.edu.gh [email protected] 78 When in the life of the business do you need a business plan? www.knust.edu.gh [email protected] 79  When do you need a business plan? 1. When you want to open a new business. 2. When your business has grown and needs expansion. 3. When you want to introduce a new product or want to enter a new market. 4. You want to acquire a new business or enter into a franchise agreement. www.knust.edu.gh [email protected] 80  Outline of a business 1. Title/cover page plan 2. Confidentiality agreement (if necessary) 1, 2, 3 = Packaging 3. Table of content 4. The executive summary 5. Opportunity, Product(s) or Service(s) 6. The Customer 7. Business Description 8. Vision, Mission, Objectives and Strategies 9. Analysis of Industry and competition 10.Marketing and sales plan 11.Production/operations plan 12.Management Plan 13.Financial Plan 14.Risk assessment & Management www.knust.edu.gh [email protected] 81  Sections of the business plan 1. Packaging  Four major items go into the packaging of the business plan:  (the cover letter),  the title/cover page,  confidentiality agreement and  table of content  Good packaging sends an important message about the care and diligence used in preparing the plan as well as the future management of the business www.knust.edu.gh [email protected] 82  2. The executive summary A synopsis of the key issues in the business plan that are of primary interest to the intended reader. The aim should be to spark the reader’s interest by highlighting why the business will succeed… …and encourage further examination of the complete plan. www.knust.edu.gh [email protected] 83 Opportunity, Product or Service This section forms the core of the business plan since it describes the offer you make, the solution you provide to customers’ pain. Be unequivocally clear on the identified needs your product/service seeks to address and the value it creates for the customer. Every good problem statement talks about the current situation, the cause and the effect. Opportunity, Product or Service Cont’d  What is the differentiating feature about your product/service and why do you think yours will be the most preferred?  What are the critical success factors for the business opportunity?  What is the current state of the product’s development?  4. The customer This section should define your customer base and explain to the reader that you understand the customers, their needs and desires. Characteristics of your potential customers; the size, scope and location of the market for your product/service; Why will customers want to purchase from your business. Explain whether your customer base is expected to grow; and, how you intend to generate and maintain customer satisfaction. www.knust.edu.gh [email protected] 86  5. Business description What type of business are you in? What is the current status of the business? Where will your business be located and why? The legal form, ownership, principals and directors (if any) of the business. What is the proposed business name and is it registered? What licenses or permits will you be required to obtain or have you obtained? www.knust.edu.gh [email protected] 87 6. Vision, Mission, Objectives and Strategies a. Vision: An informed and forward-looking statement of purpose that defines the long-term destination of the firm at a clearly defined time. b. Mission: It describes what the organization stands for and why it exists. c. Objectives: Give direction for future activities and provide a benchmark against which to measure the success of the operation. d. Strategies: These are the means to achieving the ends. They should be consistent with the vision, mission and objectives. www.knust.edu.gh [email protected] 88  7. Analysis of Industry and competition  In conducting the industry analysis, factors that can determine the firm’s ability to generate sales (commercial success) and positive cash flows (financial success) should be considered. 1. A description of the PEST(EL) factors. 2. Analysis of the firm’s Strengths, Weaknesses, Opportunities & Threats (SWOT). 3. Analysis of competitive structure of the industry www.knust.edu.gh [email protected] 89  Analysis of competitors  Include all pertinent information about your competitors, including the length of time they have been in business, their location, and their average annual sales.  How will you beat the competition? – Will you offer a better location, greater convenience, better prices, later hours, better quality, better service, or some other advantage? Analyse the following: What they do right and wrong How customers’ needs are and are not being met by your competitors How you will lure their customers away www.knust.edu.gh [email protected] 90  8. Marketing and sales plan For a firm to obtain commercial success (generate sales), its industry must provide a strategic opportunity and its market must provide a profitable niche. A market analysis is a study of the basic factors that define the market for the firm’s product or service and how the firm must position itself to take advantage of the opportunity that is available. www.knust.edu.gh [email protected] 91  Marketing and sales plan What is your plan to reach and attract potential customers? What will be or is the sales prices and what is the basis for such a price? How do you intent to promote or advertise your product or service? What distribution channel(s) do you intend to use www.knust.edu.gh [email protected] 92  9. Production or operations plan The operations plan serves as a means of furnishingthe reader with the process that creates value and how the process contributes to the success of the firm. The operating plan describes what the firm will go through in order to achieve its goals and fulfill its mission. The operating plan serves to address the following issues: What value does the firm creates? How does the operation contributes to the firm’s overall success? www.knust.edu.gh [email protected] 93  Production or operations plan What is your plan going forward, in terms of production capacity and plans for expansion or scaling up? What is your planned capacity for the first production cycle, first year, first three years etc.? Business with very big vision may start small. That is excellent. However, there must be a solid plan for rolling out or working towards your vision. www.knust.edu.gh [email protected] 94  10. Management Plan A firm is as good as its managers and employees. It is therefore important to assemble the best human resources that will ensure the firm successfully makes the transition from its current state to the desire future. Who are the key personnel and what will be their roles? What experiences do they bring on board and what makes them unique? Who will be part of your board or directors and what do they bring on board? How do you intend addressing the weaknesses of your key management members and members of board of directors? www.knust.edu.gh [email protected] 95  Guides in choosing a team (Source: Kuenyehia) 1. Potential members of the team should share in the vision or there should be a common vision. 2. Potential members of the team should possess complementary skills, attributes and strengths. 3. The team should be as lean as practical to minimise production cost. 4. The team should be resilient and should be able to stay together through the thick and thin. 5. Members should get along well with each other. www.knust.edu.gh [email protected] 96  11. Financial plan The financial plan details the financial needs of the business, the proposed plan to meet these needs and should show the actual and potential financial targets of the business. The financial plan needs to be streamlined with other parts of the business plan. The entrepreneur should first state the financial needs and capital requirements of the business. Make it clear how much you have already committed into the business. www.knust.edu.gh [email protected] 97  The following financial statements should be provided Balance sheet: If your business is a start-up, include a personal balance sheet summarizing your personal assets and liabilities. Profit and loss statements: Include a three year-summary that gives profit/loss details by month for the first year and by quarters for the second and third years. Provide assumptions upon which the projections are based. Provide a brief analysis of the statements. Cash flow projections: This will show how much money you will need and when, and will indicate where the money will come from. Break-even analysis: Discuss at what point of sales in any given time period you will recover your expenses. At what point will your business show a profit? www.knust.edu.gh [email protected] 98  12. Risk Assessment and Rewards The following must be addressed: 1. What potential internal and external risks exist for this business? – Market, regulatory, competition, technological etc. 2. How will your business minimize the potential impact of these risks? What plans have you made in the event that the problem materializes? 3. How would investor harvest their rewards? a. Through IPOs b. Dividend payments c. Sale of business www.knust.edu.gh [email protected] 99  Appendices Balance sheet, P/L accounts, cash flow statements and other relevant financial records. C. V. and other supporting documents of the entrepreneur and key employees. Other certificates, license etc. www.knust.edu.gh [email protected] 100 Legal issues in entrepreneurship www.knust.edu.gh [email protected] 101  Legal issues for the entrepreneur One way of dealing with competition is to raise the barriers to entry. To raise the barriers to entry, one can: 1. Pre-empt the use of scare resource 2. Increase the buyer switching cost 3. Undertake destructive price cut 4. Use intellectual property (IP), which is one of the surest ways www.knust.edu.gh [email protected] 102  What is an intellectual property (IP)? An IP is a creation of the mind: inventions, literary and artistic works, symbols, names, images and designs used in commerce (WIPO) So how different is an intellectual property from a physical property An IP is different from a physical property regarding:  Its use by different parties  Physical depreciation  Protection and enforcement from encroachment www.knust.edu.gh [email protected] 103 Types of intellectual property Patents Trade marks Copyrights Design rights Trade secrets www.knust.edu.gh [email protected] 104  Patent A patent is an exclusive right granted for an invention, which is a product or a process that provides, in general, a new way of doing something, or offers a new technical solution to a problem. A patent offers you the right to be the only person/party to make, use, or sell an invention or a product for a limited time period. The exclusive right conferred by a patent implies, that no one may, without the consent of the patent holder exploit the invention by: – Offering, putting on the market or making use of a product that has been produced by a process protected by the patent or importing or possessing the product for these purposes. www.knust.edu.gh [email protected] 105  Patent cont’d The patent owner may give permission to, or license, other parties to use the invention on mutually agreed terms. The owner may also sell the right to the invention to someone else, who will then become the new owner of the patent. A patent generally lasts for 20 years from the date of the patent application as long as the prescribed renewal fees are paid. Once a patent expires, the protection ends, and an invention enters the public domain, that is, the owner no longer holds exclusive rights to the invention, which becomes available to commercial exploitation by others. www.knust.edu.gh [email protected] 106 Refer to… Patent Act, 2003 (Act 657) of the Republic of Ghana for further reading www.knust.edu.gh [email protected] 107  Trademarks A trademark is a distinguishing word, name, or symbol used to identify a product and that cannot be used by anyone else. A trademark is a distinctive sign which identifies certain goods or services as those produced or provided by a specific person or enterprise. Specifically words, names, figures, letters, numbers, shapes, ornamentals, packages, sounds, scents, colours may all the given trade mark protection. A trademark provides protection to the owner of the mark by ensuring the exclusive right to use it to identify goods or services, or to authorize another to use it in return for payment. www.knust.edu.gh [email protected] 108  Trademarks cont’d Obtained through registration® A trademark can also be protected in some countries (such as Sweden) through establishment (usage) TM. It is however safest to apply for registration, as you can then prove your exclusive right with the Certificate of Registration. A sign shall be considered to have become established on the market when it is within a significant portion of the circle for which www.knust.edu.gh it is intended. [email protected] 109  Examples of Trademarks Brand Name: Icycup, Blueskies, COCA COLA, Mandy Agro Foods, etc. A slogan: “With PROVIDENT….” A logo: KNUST logo, Specific shape: The Coca Cola bottle www.knust.edu.gh [email protected] 110  Trademarks cont’d A trademark protection may not be given if the proposed mark is: 1. Not distinctive 2. Confusingly similar: SONNY, SONY, SUNNY, SÒNY 3. Is part of a state emblem, or international emblem or such a local authority coat of arms which under existing law cannot be used without authorization. 4. Contrary to public order or morality An eternal right as long as the fees are paid Can be invalidated if – it is deceptive, no longer distinctive, or contrary to public order or is likely to cause offence. – If it has not been used for 5 consecutive years www.knust.edu.gh [email protected] 111 Refer to… Trademarks (Amendment Act, 2014 (Act 876) For further reading www.knust.edu.gh [email protected] 112  Copyrights Copyright is a legal term describing rights given to creators for their literary and artistic works (WIPO). The kinds of works covered by copyright include: 1. literary works such as novels, poems, plays, reference works, newspapers and computer programs; 2. databases; films, musical compositions, and choreography; 3. artistic works such as paintings, drawings, photographs and sculpture; 4. architecture; 5. and advertisements, maps and technical drawings. www.knust.edu.gh [email protected] 113  COPYRIGHTS cont’d The original creators of works protected by copyright, and their heirs, have certain basic rights. They hold the exclusive right to use or authorize others to use the work on agreed terms. The creator of a work can prohibit or authorize: a. its reproduction in various forms, such as printed publication or sound recording; b. its public performance, as in a play or musical work; c. recordings of it, for example, in the form of compact discs, cassettes or videotapes; d. its broadcasting, by radio, cable or satellite; e. its translation into other languages, or its adaptation, such as a novel into a screenplay. www.knust.edu.gh [email protected] 114  COPYRIGHTS cont’d Copyright protection extends only to expressions, and not to ideas, procedures, methods of operation or mathematical concepts as such. Copyrights are not dependent on registration*. However, registration of works are done for the purposes of, for example, identifying and distinguishing titles of works. In certain countries, registration can also serve as prima facie evidence in a court of law with reference to disputes relating to copyright. Valid up to 75 years after the author or the last author dies. Right is limited when limited copies are made for www.knust.edu.gh educational purposes, first party private purposes, for [email protected] 115 Refer to… Copyright (Amendment) Act, 2009 (Act 788)) For further reading www.knust.edu.gh [email protected] 116  TRADE SECRETS Secrecy is a state of concealment or being concealed or maintained as a secret A secret is only known to one or few people and intentionally withheld from general knowledge (Dorf and Byers, 2007). A “trade secret” means such information concerning the business or industrial relations of a person conducting business or industrial activities which that person wants to keep secret and the divulgation of which would be likely to cause a damage to him from the point of view of competition” (Swedish Act 1990:409, Section 1) The secret will have a life as long as the idea or process remains a secret. Protection by confidentiality statement or physical barriers. www.knust.edu.gh [email protected] 117  DESIGN RIGHTS Obtained through registration or usage The design right can be obtained only if the design is new/ novel and has an individual character. A design shall be considered new if no identical design has been made available to the public before the date of filing for registration. A design shall be considered to have an individual character if the overall impression it produces on the informed user differs from the overall impression produced by any other design which has been made available to the public. www.knust.edu.gh [email protected] 118  DESIGN RIGHTS cont’d Design rights only protects the appearance not the technical function. Limitations in the Rights Granted 1.Private and non-profit 2.Experimental use 3.Citation or education 4.Exhaustion of rights 5.Only visible parts in complex products www.knust.edu.gh [email protected] 119 LICENSING www.knust.edu.gh [email protected] 120  What is a license? A license is a contractual arrangement giving rights to others to use an intellectual property in return for royalty or fees. A licensor (owner of IP) may grant rights of an IP to a licensee either expressly or impliedly, by a document under the seal, by an ordinary written agreement, or just by word of mouth. Licensing has significant value of marketing strategy to holders to grow their business. Licensing opportunities also represent ways to minimize risk, expand a business, or complement an existing product line. www.knust.edu.gh [email protected] 121  LICENSING cont’d The scope of a license defines what the licensee may do, exclusively or non-exclusively, without infringing the intellectual property under which he is licensed (Lewin & Nordell, 1996) TYPES OF LICENSE – Exclusive license – Sole license – Non-exclusive license – Compulsory license – Cross license – Sub-license www.knust.edu.gh [email protected] 122  LICENSING cont’d EXCLUSIVE LICENSE A licensor who grants an exclusive license covenants with his licensee not to license the licensed property in the territory admitted to the licensee to other party. Also, the licensor agrees on not to exploit the property in this territory herself or by her agents. SOLE LICENSE In this license, the licensor reserves herself and her agents, and usually her assigns, a right to make, use or sell the licensed product or process in the licensed territory. www.knust.edu.gh [email protected] 123  LICENSING cont’d NON-EXCLUSIVE LICENSE With this the licensor, or her assign, is free to exploit the licensed property in the licensed territory, either directly by herself or through an agent or indirectly by granting other licenses. INVOLUNTARY OR COMPULSORY LICENSE This is to prevent or reduce the risk that a patent or a monopoly right that a proprietor, through her right, might inhibit industrial development or hold consumers at ransom. To deter abuses of statutory monopolies and to strengthen the bargaining positions of those seeking licenses to exploit the technology. www.knust.edu.gh [email protected] 124  LICENSING cont’d CROSS-LICENSE If the prospective licensee owns an IP that is of interest to the licensor, cross-licensing can be used to grant both parties access to the technologies, products or know-how of interest. Usually no payments are involved (Megantz, 1996) but of course , it depends on the value of both technologies. www.knust.edu.gh [email protected] 125  LICENSING cont’d SUB-LICENSE “As a general matter, a sub-license amounts to a grant by a licensee of certain licensed rights to a third party, the sub- licensee. That is, the license in effect transfers or licenses some or all of his or her rights to the sub-licensee, which means that the sub- license has similar incidents to the primary license, including the right to exercise independently certain rights enjoyed by the licensee in pursuant to its license” (Justice Lacobucci of Canada’s Supreme Court) www.knust.edu.gh [email protected] 126  FRANCHISING Franchising is a business model in which many different owners share a single brand name. A parent company (franchisor) allows entrepreneurs (franchisee) to use the company's strategies and trademarks; in exchange, the franchisee pays an initial fee and royalties based on revenues. The parent company also provides the franchisee with support, including advertising and training, as part of the franchising agreement*. Franchising agreements usually require the franchisee to pay an initial fee plus royalties equal to a certain percentage of the store's monthly or yearly sales. www.knust.edu.gh [email protected] 127 Q&A www.knust.edu.gh 128 THANK YOU