Entrepreneurship

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Rahool Kr Talwar Entrepreneur - Technocrat & Principal Consultant - Food Service Facilities Planning
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Topics we will cover

Who is an Entrepreneur? Types of Entrepreneur The Challenges Scope within The Hospitality & Tourism Industry Life Cycle of a Successful Entrepreneur

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Who is an Entrepreneur ?

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Who is an Entrepreneur ?
An entrepreneur is an individual who holds a vision, sprit & intelligence & an art of making an enterprise run successfully An individual who rather than working as an employee runs a small business & assumes all the risk & 4/16/12

An entrepreneur is a person who is bent towards innovation & creativity & also posses the right mix of the general management skills, business know how & networking. Current thinking on entrepreneurship :1.
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Its a process or behaviour, not a person. An approach to management that

2.

Why become an Entrepreneur

To be their own Boss Person Dependant To avoid workplace drama To avoid discrimination To avoid being taken advantage of To create something new Its prestigious to some

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Characteristics of Successful Entrepreneurs

Passion, Vision & Imagination Ability to Lead and Inspire Desire for responsibility Self Confident High Level of energy motivation & enthusiasm Willingness to learn from failure Effective Communicators 4/16/12

Managerial Vs Entrepreneurial Behaviour

Entrepreneur
Opportunity Driven Quick & Short Minimal, Multi-Stage Use or Rent Networks, Little Hierarchy Value & Team Based 4/16/12 Strategic Orientation Commitment to Opportunity Commitment to Resources Control of Resources Management Structure Compensation & Rewards

Manager / Bureaucrat
Resource Driven Long & Slow Single-Stage Own or Employ Formalised Hierarchy Individual & Hierarchical

Entrepreneurship Vs Small Business

Entrepreneurial Ventures differ from small business in these ways Entrepreneurship Creates Substantial wealth typically in excess of several million Rupees as profits Wealth creation is often rapid. Eg. Within 5 years Very High Risk Substantial innovation that creates competitive advantage 4/16/12 Small Business Simply creating an income stream & use traditional employment Can generate several million rupees over a period of a lifetime Usually low risk

Amount of Wealth Creation

Speed Of Wealth Creation Risk

Innovation

Low or no Innovation

Types of Entrepreneur

Social Entrepreneur Serial Entrepreneur Lifestyle Entrepreneur Real Estate Entrepreneur Internet Entrepreneur Infopreneur

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Social Entrepreneur

Social Entrepreneurs act within a market aiming to create social value thro the improvement of goods & services offered to the community. Predominantly run as non profit schemes
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Social Entrepreneur

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Anita & Shalabh Ahuja

Serial Entrepreneur

A serial entrepreneur is one who continuously comes up with new ideas and starts new businesses. A serial entrepreneur possesses a higher acumen for risk, innovation & achievement.
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Serial Entrepreneur

Vinod Khosla

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Lifestyle Entrepreneur

A lifestyle entrepreneur places passion beforeprofitwhen launching a business in order to combine personal interests and talent with the ability to earn a living. Manyentrepreneurs may be primarily motivated by the intention to make their business profitable in order to sell toshareholders. In contrast, a lifestyle entrepreneur intentionally chooses abusiness model intended to develop and grow their business in order to make a long-term, sustainable and viable living working in a field where they have a particular interest, passion, talent, knowledge or high degree of expertise.
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entrepreneur may decide to becomeself-

Lifestyle Entrepreneur

A lifestyle entrepreneur may combine a hobby with a profession or they may specifically decide not to expand their business in order to remain in control of their venture. Common goals held by the lifestyle entrepreneur include earning a living doing something that they love, earning a living in a way that facilitates selfemployment, achieving a goodwork/life balanceand owning a business without shareholders. Many lifestyle entrepreneurs are very dedicated to their business and may work within thecreative industriesortourism industry, where a passion before profit approach toentrepreneurship 4/16/12 often prevails. While many entrepreneurs may

Lifestyle Entrepreneur

Lifestyleentrepreneurship is becoming increasing popular as technology providessmall businessowners with the digital platforms needed to reach a largeglobal market. Younger lifestyle entrepreneurs, typically those between 25 and 40 years old, are sometimes referred to as Treps. Eg:- The guy standing in front of you

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Real Estate Entrepreneur

Areal estate investoror areal estate entrepreneurto a lesser extent is someone who actively or passivelyinvestsinreal estate. An active investor may buy aproperty, make repairs and/or improvements to the property, and sell it later for a profit. A passive investor might hire a firm 4/16/12 to find and manage an investment

Real Estate Entrepreneurs

Arnold Alois Schwarzenegger

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Paul Allen

Internet Entrepreneur

AnInternet entrepreneuris anentrepreneur that applies innovation to create new businesses on theInternet. Internet entrepreneurs are part of the more general category of digital entrepreneurs.

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Internet Entrepreneurs

Lawrence Page & Sergey Brin Founders Google

William Henry Bill Gates & Paul Allen Founders Microsoft & MSN

Mark Elliot Zuckerberg, Chris Hughes, Dustin Moskovitz & Eduardo P. Saverin 4/16/12 Founders of Facebook

Infopreneur

Infopreneuris a person whose primary business is gathering and selling electronic information. An infopreneur is generally considered anentrepreneurwho makes money sellinginformationon the Internet. They use existing data and target an audience.
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Before the explosive popularity of the

Infopreneur
As the infopreneur is his/her own developer, marketer, producer, and distributor - some infopreneurs consider themselves being in thepublishingbusiness. Unlike in traditional print publishing, the infopreneur puts down, in electronic form, what he/she knows from experience or what he/she learned and passes them on to the world through publishing on websites, blogs, eBooks, emails, etc..

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The Challenges

Selection of business Choice of form of business enterprise

1.

Proprietorship Partnership Private Limited Limited / Public Limited

2.

3.

4.

Financing Location
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Size of unit

The Challenges
Personal Challenges

Personal Finance Negative Mindset Overwhelming Feelings Lack of Support Growing of Business Feeling of wanting to give up

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The Challenges

Personal challenges faced by an Indian Entrepreneur.

A video clip from the movie - 3 Idiots

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Scope within The Hospitality & Tourism Industry

Great Potential (MOT, GOI report on this sector projects a shortage of over 2.70 Lac Skilled Workforce) Few Eg:1.

Starting up own Hotels, Resorts, Restaurants, Lodges, PG Start up outsourcing facilities Facility Planning / Project Management Internet Business ( Like GDS, Travel Sites) Travel Agents / Tour Operators

2. 3. 4. 4/16/125.

Life Cycle of a Successful Entrepreneur

Entreprene ur Life Cycle

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Life Cycle of a Successful Entrepreneur

Stage 1 - Opportunity Recognition

This gestation period is quite literally the pre-start analysis. It often occurs over a considerable period of time ranging from one month to ten years. At this stage it is important to research and understand the dimensions of the opportunity, the concept itself, and determine how to decide whether it is attractive or 4/16/12 unattractive. The individuals need to look

Life Cycle of a Successful Entrepreneur

Stage 2 - Opportunity Focusing

This is a sanity check, a go/no-go stage gate for part-time entrepreneurs because it fleshes out shaky ideas and exposes gaping holes. Venture capitalist Eugene Kleiner, of Kleiner Perkins Caufield & Byers, says, Focus is essential; there can be the possibility of the business branching out later, but the first phase of a 4/16/12 company should be quite narrowly

Life Cycle of a Successful Entrepreneur

Stage 3 - Commitment of Resources

Most entrepreneurs see commitment as incorporating their business or quitting their day job. But this stage actually starts with developing the business plan. There is a huge difference between screening an opportunity and researching and 4/16/12 writing a business plan. Writing an

Life Cycle of a Successful Entrepreneur

Stage 4 - Market Entry

Profitability and success define the market entrystage. The entrepreneur is committed with a very simple organization, the resources were correctly allocated according to the business plan, and the first sales were made. This is what defines success in the very early stages. If the business modelwas profitable, reasonable objectives were met, and the venture is on track for attaining true economic 4/16/12

Life Cycle of a Successful Entrepreneur

Stage 5 - Opportunity Recognition

At this stage, the entrepreneur needs to choose a particular high-growth strategy. Upon considering such alternatives, quite often the entrepreneur chooses to remain a small business and never passes this stage or perhaps opts to remain operating as a sole proprietor. Or the venture could remain small for the simple fact that not all small ventures can or will become big companies. They are 4/16/12

Life Cycle of a Successful Entrepreneur

Stage 6 - Liquidity Event

Now the venture is a market leader at cruising altitude. The growth becomes a natural extension of the venture through professional management practices. This professional management team is implementing the ventures growth strategy through global expansion, acquisitions, and mergers as cash is plentiful and inefficiencies are completely flushed out.
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Life Cycle of a Successful Entrepreneur

Stage 7 - Maturity and Expansion

This harvesting stage is focused on capturing the value created in the previous stages through a business exit. Typical exits are an initial public offering (IPO)or being acquired by a larger publicly traded corporation. Unfortunately, most of the literature in 4/16/12 entrepreneurship has concentrated on

Business Plan
A business plan is

a formal statement of a set of business goals, the reasons why they are believed attainable, and the plan for reaching those goals. It may also contain background information about the organization or team attempting to reach those goals.
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Business Plan
Writing a Business Plan forces you into disciplined thinking, if you do an intellectually honest job. An idea may sound great, but when you put down all the details and numbers, it may fall apart Eugene Kleiner, Kleiner Perkins Caufield & Byers (KPCB) co-founder of Fairchild Semiconductor An honest selling document that explains clearly and concisely how and when you will make 4/16/12

Business Plan
Importance

Internal value
1. 2. 3. 4.

Forces you into disciplined thinking Make visible risk factors alternative? Reality check are you fooling yourself? Aligns goals within the team

External value
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Presentation to investors

Finance Management

Financial Bootstrapping External Finance

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Finance Management

Financial Bootstrapping

Financial bootstrapping is a term used to cover different methods for avoiding using the financial resources of externalinvestors. Bootstrapping can be defined as a collection of methods used to minimize the amount of outside debt and equity 4/16/12 financing needed from banks and

Finance Management

The bootstrappers mantra. Never buy new what can be bought second-hand Never buy what can be rented Never rent what can be borrowed Never borrow what can be begged
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Never beg what can be salvaged

Finance Management

External Financing Many businesses need more capital than can be provided by the owners themselves, and in this case a range of options are available including:
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Angel Investors Venture capitalinvestors Crowd funding

Finance Management

Angel Investor

Anangel investororangel(also known as abusiness angelorinformal investor) is an affluent individual who provides capital for a businessstart-up, usually in exchange forconvertible debt/bondorownership equity
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Finance Management

Crowd funding

Crowd fundingdescribes the collective cooperation, attention and trust by people who network and pool their money and other resources together, usually via theInternet, to support efforts initiated by other people or organizations. Crowd funding occurs for any variety of purposes, 4/16/12

Entry & Exit Strategy

Refer Life Cycle

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Management & Support System

Why is it Important?? Almost impossible to raise formal equity without a team Alone, you wont have enough time! Mix/depth of functional skills Diversity of perspectives superior decision making(?) Management of complexity Contribution to your capital mix

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Management & Support System

A+ Leadership Passionate Founders (personality) Large, Fast Growing, Under-seved Market Leveraging network effect (social capital) Building a trusted brand Obsess on customer experience Reasonable Financing Sense of Urgency (personality)
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Missionary, not mercenaries (personality)

Management & Support System

The Team Should Consist of

Clarifier Ideator Developer Implementer Intergator

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Management & Support System

What is a CLARIFIER?

Clarifies the problem Not quick to move to solutions Wants to address the right problem Gathers the information Looks at details May over analyze and not move forward

What is an IDEATOR?

Looks at the big picture Toys with ideas and possibilities Stretches the imagination 4/16/12

Management & Support System

What is a DEVELOPER?

Puts together workable solutions Plans steps to implement an idea Analyzes and compares potential solutions Examines the pluses and minuses of an idea May get stuck in developing the perfect solution

What is an IMPLEMENTER?

Gives structure to ideas

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Brings ideas come to fruition

Management & Support System

Try to be an also an INTEGRATOR!

Even energy across four preferences Concerned about group harmony Bridges style differences and plugs gaps In the end the most important is to ALIGN THE GOALS

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Thank You
A special Thank You to Chef Mathew for giving me this opportunity My Parents, My Family & My Teachers for making who I am today. To my Friends & Seniors who have stood by me during testing times. To my alma mater, this very college IHM Chennai. To Ms. Mohan from Imperial 4/16/12 College of London for her kind help