Entrepreneurship today

 

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Entrepreneurship Today

 

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Entrepreneurial Economics. If entrepreneurship remains as important to the economy as ever, then the continuing failure of mainstream economics to adequately account for entrepreneurship indicates that fundamental principles require re-evaluation. Entrepreneurial Economics is the study of the entrepreneur and entrepreneurship within the economy. The characteristics of entrepreneurial economy (regional or national level) are high level of innovation combined with high level of entrepreneurship which result in the creation of new ventures as well as new sectors and industries.

 

Entrepreneurial Economic Development

 

Mainstream economics does not include entrepreneurship not because there is no theory or analytical framework for entrepreneurship. Entrepreneurship does not belong in mainstream theory; in fact mainstream theory makes the entrepreneur an invisible man. The reason for that is that the construct of equilibrium models, which is central to mainstream economics, is exactly what by definition excludes entrepreneurship. Joseph Schumpeter and Israel Kirzner have argued in their writings, that entrepreneur does not tolerate equilibrium. According to Baumol, mainstream theory is not ‘wrong’ by excluding entrepreneurship it is irrelevant there.

Entrepreneurship has been perceived as a chaotic, unpredictable economic process, which cannot be modelled using the equilibrium based analytical methods used in mainstream economic theory.

It seems no longer possible to expect that only theoretical refinements and extending known principles can provide for a theory of entrepreneurship. Challenging 'fundamental principles' like equilibrium models, rational agent, maximization paradigm, the traditional production function, by applying insight from other disciplines like theoretical physics (thermodynamics, entropy) might be the way forward in the study of entrepreneurial economics. Coase surveys the field of economics and believes it has become a "theory-driven" subject that has moved into a paradigm in which conclusions take precedence over problems. "If you look at a page of a scientific journal like Nature," he said, "every few weeks you have statements such as, 'We’ll have to think it out again. These results aren’t going the way we thought they would.' Well, in economics, the results always go the way we thought they would because we approach the problems in the same way, only asking certain questions. Entrepreneurial Economics challenges fundamental principles, using insights from models and theories in the natural sciences.

See also

Learning Objective and Outcomes

This is a non-taught unit designed for self-directed study by those planning to start or grow their own business.

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After completing the course, student will be able to

 

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Entrepreneurship Today

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Entrepreneurship is the practice of starting new organizations, particularly new businesses generally in response to identified opportunities. Entrepreneurship is often a difficult undertaking, as a majority of new businesses fail. Entrepreneurial activities are substantially different depending on the type of organization that is being started. Entrepreneurship ranges in scale from solo projects (even involving the entrepreneur only part-time) to major undertakings creating many job opportunities. Many "high-profile" entrepreneurial ventures seek venture capital or angel funding in order to raise capital to build the business. Many kinds of organizations now exist to support would-be entrepreneurs, including specialized government agencies, business incubators, science parks, and some NGOs.

 

Corporate Entrepreneurship

 

 

Business

 

 

Small Businesses and the Internet Economy

Tutorials

 

Readings

A Small Business may be defined as a business with a small number of employees. The legal definition of "small" often varies by country and industry, but is generally under 100 employees in the United States while under 50 employees in the European Union (In comparison, the American definition of mid-sized business by the number of employees is generally under 500 while 250 is for that of European Union). These businesses are normally privately owned corporations, partnerships, or sole proprietorships.

 

However, other methods are also used to classify small companies, such us annual sales (turnover), assets value or net profit (balance sheet), alone or in a mixed definition. This criteria is followed by the European Union, for instance (headcount, turnover and balance sheet totals).

Small businesses are common in many countries, depending on the economic system in operation. Typical examples include: small shops, hairdressers, tradesmen, solicitors, lawyers, accountants, restaurants, guest houses, photographers, small-scale manufacturing etc. Small businesses are usually independent.

The smallest businesses, often located in private homes, are called microbusinesses (term used by international organizations such as the World Bank and the International Finance Corporation) or SoHos. The term "mom and pop business" is a common colloquial expression for a single-family operated business with few (or no) employees other than the owners. When judged by the number of employees, the American and the European definitions are the same: under 10 employees.

 Small Business Growth

 

 

 

See also

 

External links

Business Link

 

The Internet Economy refers to conducting business through markets whose infrastructure is based on the Internet and World-Wide Web. An Internet economy differs from a traditional economy in a number of ways, including: communication, market segmentation, distribution costs, and price.

 

Economic and Political Statistics

 

Ghosh (1998) states that businesses cannot avoid the Internet economy. They must recognize and understand that there are both global opportunities available as well as risks of not participating. They note that through the Internet, any participant in a value chain can usurp the role of any other participant.

In an early article, Iain Vallance (1993) sees communication between businesses and their customers as the key to success in the Internet economy. This results from integrating networks, software, and customers. Currie (2000) sees communications via the Internet as involving virtually no transmission cost. She also notes that distance has become irrelevant, and that any amount of content is instantly available.

Esther Dyson (1998) suggests that the ready availability of global information may make it necessary to artificially segment markets. In contrast, John Seely Brown and Paul Dugid (2000) point out that although the Internet enables exploitation of niche markets, many examples of success come from large firms with well-established networks, rather than niche firms.

From a cost perspective, Nicholas Negroponte (1996) indicates that although everything on the Internet appears to be free, even if a rational economic model were to be implemented, it would likely still cost only pennies to disseminate a million bits to a million people. However, Shapiro and Varian (1999) indicates that information is simply being provided at its marginal cost of zero.

Mondahl (1999) notes that price differences based on poor information or geographic distance will not survive in the Internet Economy. He also notes that businesses are likely to adjust their prices more frequently in response to Internet competition.

See Also

 

 

The Entrepreneur

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An Entrepreneur (a loanword from French introduced, loved and first defined by the Irish economist Richard Cantillon) is a person who undertakes and operates a new enterprise or venture and assumes some accountability for the inherent risks. Entrepreneurship is often difficult, as many new ventures fail. In the context of the creation of for-profit enterprises, entrepreneur is often synonymous with founder.

 

The world of the social entrepreneur

 

Most commonly, the term entrepreneur applies to someone who creates system to offer a product or service in order to obtain certain profit. Business entrepreneurs often have strong beliefs about a market opportunity and are willing to accept a high level of personal, professional or financial risk to pursue that opportunity. Business entrepreneurs are viewed as fundamentally important in the capitalistic society. Some distinguish business entrepreneurs as either "political entrepreneurs" or "market entrepreneurs."

 

See also

External links

 

 

Women-Owned and Minority-Owned Businesses

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Readings

Social Entrepreneurship is the work of a social entrepreneur. A social entrepreneur is someone who recognizes a social problem and uses entrepreneurial principles to organize, create, and manage a venture to make social change. Whereas business entrepreneurs typically measure performance in profit and return, social entrepreneurs assess their success in terms of the impact they have on society. While social entrepreneurs often work through nonprofits and citizen groups, many work in the private and governmental sectors.

 

 

Marketing in the social enterprise context: is it entrepreneurial?

 

Encouraging Minority Entrepreneurship

President George W. Bush sits with Bob Johnson, founder and chairman of the
RLJ Companies, and Kathy Boden, right, president and CEO of Blue House Water Solutions , during a meeting to discuss the economy with small business owners and community bankers, Monday, Oct. 23, 2006 at the Urban Trust Bank in Washington, D.C. White House photo by Eric Draper

Bush addresses Urban League in Detroit, courts black vote for '04

President George Bush spoke to The Urban League Conference on Friday, July 23 at the Renaissance Center in Detroit. Bush emphasized education, home-ownership and the importance of minority entrepreneurship. (TONY DING/Daily)

 

See also

 

External links

 

 

Family Businesses

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Readings

A Family Business is a company owned, controlled, and operated by members of one or several families. Many companies that are now publicly held were founded as family businesses. Many family businesses have non-family members as employees, but, particularly in smaller companies, the top positions are often allocated to family members.

 

Family Business

 

Family participation in a business can strengthen the business because family members are very loyal and dedicated to the family enterprise. However managing a family business, and particularly succession planning, can present some unique problems. Often family interests conflict with business interests, for example hiring a family member who is less competent than a non-family member or keeping an underperforming family member in a position when their performance is hurting the company. Psychologists are often consulted to help families successfully manage issues that affect both the family and the business.

 

The Family Business Triangle

An example of the conflict that can arise is demonstrated in a story, about Stew Leonard's Supermarket in Connecticut, about a family business owner whose son's performance was deemed unsatisfactory by his supervisor. The father told the supervisor that he would take care of it. The father asked his son to come to the family home for a talk in the hot tub. When they were settled in the tub the father put on a hat which he said was his 'Boss' hat and told his son that he was fired. He then removed that hat and put on another calling it his 'Father' hat. Then he said: "Son, I'm very sorry to hear that you lost your job. Is there anything I can do for you?"

 

See also

 

External links

 

 

 

Business Growth and the Entrepreneur

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Business Development includes a number of techniques designed to grow an economic enterprise. Such techniques include, but are not limited to, assessments of marketing opportunities and target markets, intelligence gathering on customers and competitors, generating leads for possible sales, followup sales activity, formal proposal writing and business model design. Business development involves evaluating a business and then realizing its full potential, using such tools as marketing, sales, information management and customer service. For a sound company able to withstand competitors, business development never stops but is an ongoing process.

 

The Business Growth Curve

 

Successful business development often requires a multi-disciplinary approach beyond just "a sale to a customer." A detailed strategy for growing the business in desirable ways is frequently necessary, which may involve financial, legal and advertising skills. Business development cannot be reduced to simple templates applicable to all or even most situations faced by real-world enterprises. Creativity in meeting new and unforeseen challenges is necessary to keep an enterprise on a path of sustainable growth.

Small to medium-sized companies often do not establish procedures for business development, instead relying on their existing contacts. Other times they assume that because they know people in high places that their business development problems are solved and that somehow new business will come to them. The ramifications of such thinking can be significant in the event they are unable to leverage those relationships, which very often are personal or weak. Then they will have no new business in the pipeline.

The pipeline refers to flow of potential clients whom the company is in the process of developing. Each potential client in the pipeline is given a percent chance of success with projected sales volumes attached. The weighted average of all the potential clients in the pipeline can be used for staffing to manage the new business when it comes in.

For larger and more well-established companies, especially in technology-related industries, business development often refers to creating and managing strategic relationships and alliances with other, "third party" companies. In these instances the companies will leverage one anothers' expertise, technologies or other intellectual property to expand their products, services, functionality and/or market reach without having to invest in building or acquiring these with internal resources. Revenues are typically shared in some sort of royalty arrangement. For example, a company with a successful technology will partner with a company that has an existing customer base and sales force, and together they will penetrate that market, sharing the proceeds.

 

External links

 

 

Home-Based Businesses

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Readings

A Home Business (or "home-based business" or "HBB") is a small business that operates from the business owner's home office.

In addition to their location, home businesses are usually defined by:

Having a very small number of employees, usually all immediate family of the business owner, in which case it is also a family business.

Lacking a shop frontage, customer parking and street advertising signs.

"Home-based" often evokes strong feelings and concerns about the serious matter of this business, yet the contrary seems to be more true: home businesses use the advantage of running on less expenses (e.g. house rent, commuting mileage) and grow over time and/or by demand.

Some examples of companies started as home-based business are: Microsoft Corporation, The Walt Disney Company, Apple Inc., Xerox Corporation.
Home/Work Balance

See also

 

External links

 

 

New Product Development

Tutorials

 

Readings

 

Product Innovation - Comes from the Greek word Production Innovationia; Productie - "Produce" + Innovatie - "Make"

The process of product innovation involves the introduction of a good or service that is new or substantially improved. This include, but are not limited to, improvements in functional characteristics, technical abilities, or ease of use.

External links

 

Innovation
Mastering Innovation

 

New Product Innovation

 

In business and engineering, New Product Development (NPD) is the term used to describe the complete process of bringing a new product or service to market. There are two parallel paths involved in the NPD process : one involves the idea generation, product design, and detail engineering ; the other involves market research and marketing analysis. Companies typically see new product development as the first stage in generating and commercializing new products within the overall strategic process of product life cycle management used to maintain or grow their market share.

 

Lean Product Development

 

See also

 

External links

 

 

Global Business

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Readings

A Business Environment is the social, technological, economic and political environment in which a business functions. The business environment affects organisational decisions, strategies, processes and performance.

 

Environmental Influences

  • Social environment
    • Labour market
    • Competition
  • Technological environment
  • Economic environment
    • Global economy (Macroeconomics)
    • Local economy (Microeconomics)
  • Political environment
    • Government actions
    • Legislation
Business Strategy

See also

 

External links

 

The adjective "Global" and the adverb "globally" are synonyms of worldwide and mean of or relating to or involving the entire world in the general sense or as the planet Earth. They are sometimes used as synonyms for international/internationally but this usage is not recorded in dictionaries and is usually considered incorrect:

1. "Global" implicitly implies the concept of "one world"

2. International is a broader term, in that it can refer to something involving all nations or as few as only two nations, but, presumably, all must be potentially involved before it becomes truly global.

3. Nations are concerned primarily with humanity's concerns, and that usually in a narrow time frame, whereas there are many global concerns that transcend species or generations.

Nonetheless, "global" has passed into common usage, especially in the media, academia, and the business world, and among left-wing supporters of a "one world" concept. Many use this term in situations where "international" would clearly be the more appropriate term, as there are few things that are truly global (even the much-touted "global economy" for example does not include Antarctica, North Korea, etc.). Nevertheless, just as its synonym "worldwide", "global" is often appropriate when one wants to emphasise that something affects the entire world even if not all nations or all parts of the earth are directly included. For example, Antarctica and North Korea and even isolated jungle tribes are very strongly affected by the global economy even if they do not actively participate in global trade.

 

Establishing Global Business

The usage of "global" is correct when referring to things which do involve the Planet Earth as one single unit, for example: global maps, global weather patterns, global satellite photos.

See also

 

 

Starting a New Business

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Readings

A Feasibility Study is a preliminary study undertaken to determine and document a project's viability. The results of this study are used to make a decision whether to proceed with the project, or table it. If it indeed leads to a project being approved, it will - before the real work of the proposed project starts - be used to ascertain the likelihood of the project's success. It is an analysis of possible alternative solutions to a problem and a recommendation on the best alternative. It, for example, can decide whether an order processing be carried out by a new system more efficiently than the previous one.

 

Project Feasibility

 

 

Market Analysis plays a major part in a firm's planning activities. It guides decisions on: inventory, purchase, work force expansion/contraction, facility expansion, purchases of capital equipment, promotional activities, and many other aspects of a company. Forecasts in these areas must be accurate and decision makers must understand how they were derived.

 

Market Share - Grocers

Not all managers are asked to conduct a market analysis, but all managers must make decisions using market analysis data and understand how the data was derived. So all managers need a reasonable understanding of the tools most used for making sales forecasts and analysing markets.

To understand a market analysis, managers need a basic understanding of statistics and some knowledge of computers.

A large number of market analysis techniques are related to sales forecasting, others are more general techniques for analysing markets. The literature defines several areas in which market analysis is important. These include: sales forecasting, market research, and marketing strategy. Sales forecasting and market analysis are complementary skills that any marketing manager should possess.

 

Research is the search for and retrieval of existing, discovery or creation of new information or knowledge for a specific purpose. Research has many categories, from medical research to literary research. Marketing Research is a form of business research. and Business-to-Business (B2B) Marketing Research, or Business Marketing Research, previously known as Industrial Marketing Research.

B2B Marketing Research investigates the markets for products sold by one business to another,
rather than to consumers.

Consumer Marketing Research is a form of applied sociology which concentrates on understanding the behaviours, whims and preferences, of consumers in a market-based economy. The field of consumer marketing research as a statistical science was pioneered by Arthur Nielsen with the founding of the ACNielsen Company in 1923.

In addition to marketing research, other forms of business research include:

Market research is broader in scope and examines all aspects of a business environment. It asks questions about competitors, market structure, government regulations, economic trends, technological advances, and numerous other factors that make up the business environment. (See Environmental scanning.) Sometimes the term refers more particularly to the financial analysis of companies, industries, or sectors. In this case, financial analysts usually carry out the research and provide the results to investment advisors and potential investors.

Product research - This looks at what products can be produced with available technology, and what new product innovations near-future technology can develop. (see New Product Development)

Advertising research - is a specialized form of marketing research conducted to improve the efficacy of advertising. copy testing, also known as pre-testing, is a form of customized research that predicts in-market performance of an ad before it airs by analysing audience levels of attention, brand linkage,motivation, entertainment, and communication, as well as breaking down the ad’s Flow of Attention and Flow of Emotion . Pre-testing is also used on ads still in rough (ripomatic or animatic) form. (Young, p213)

 

 

Buying an Existing Business

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Readings

Equity Investment generally refers to the buying and holding of shares of stock on a stock market by individuals and funds in anticipation of income from dividends and capital gain as the value of the stock rises. It also sometimes refers to the acquisition of equity (ownership) participation in a private (unlisted) company or a startup (a company being created or newly created). When the investment is in infant companies, it is referred to as venture capital investing and is generally understood to be higher risk than investment in listed going-concern situations.

 

See also

 

External links

 

A Takeover in business refers to one company (the acquirer, or bidder) purchasing another (the target). In the UK the term properly refers to the acquisition of a public company whose shares are listed on a stock exchange, in contrast to the acquisition of a private company.

 

 

See also
Hostile Takeover?

 

The phrase Mergers and Acquisitions (abbreviated M&A) refers to the aspect of corporate strategy, corporate finance and management dealing with the buying, selling and combining of different companies.

 

 

See also

 

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Corporate finance
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A Leveraged Buyout (or LBO, or highly-leveraged transaction (HLT), or "bootstrap" transaction) occurs when a financial sponsor gains control of a majority of a target company's equity through the use of borrowed money or debt.

 

Classification of Acquisitions

A leveraged buyout is a strategy involving the acquisition of another company using a significant amount of borrowed money (bonds or loans) to meet the cost of acquisition. Often, the assets of the company being acquired are used as collateral for the loans, in addition to the assets of the acquiring company. The purpose of leveraged buyouts is to allow companies to make large acquisitions without having to commit a lot of capital. In a LBO, there is usually a ratio of 70% debt to 30% equity, although debt can reach as high as 90% to 95% of the target company's total capitalization. The equity component of the purchase price is typically provided by a pool of private equity capital.

Typically, the loan capital is borrowed through a combination of prepayable bank facilities and/or public or privately placed bonds, which may be classified as high-yield debt, also called junk bonds. Often, the debt will appear on the acquired company's balance sheet and the acquired company's free cash flow will be used to repay the debt.

 

See also

 

External links

 

 

Franchising and Other Alternatives

Tutorials

 

Readings

Franchising (from the French for honesty or freedom[1]) is a method of doing business wherein a franchisor licenses trademarks and tried and proven methods of doing business to a franchisee in exchange for a recurring payment, and usually a percentage piece of gross sales or gross profits as well as the annual fees. Various tangibles and intangibles such as national or international advertising, training, and other support services are commonly made available by the franchisor, and may indeed be required by the franchisor, which generally requires audited books, and may subject the franchisee or the outlet to periodic and surprise spot checks. Failure of such tests typically involve non-renewal or cancellation of franchise rights.

A business operated under a franchise arrangement is often called a chain store, franchise outlet, or simply franchise.

According to Financial Times, if sales by US franchise businesses were translated into national product, they would qualify as the 7th largest economy in the world.

 

What isFranchising?



Business Plan

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Readings

The Business Plan: Introduction

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.

 

Business Plan

 

The business goals being attempted may be for-profit or non-profit. For-profit business plans typically focus on financial goals. Non-profit and government agency business plans tend to focus on service goals.

Business plans may also target changes in perception and branding by the customer, client, tax-payer, or larger community. A business plan that has changes in perception and branding as its primary goals is called a marketing plan.

Business plans may also be internally or externally focused. Externally focused plans target goals that are important to external stakeholders, particularly financial stakeholders. They typically have detailed information about the organization or team attempting to reach the goals. In the case of for-profit entities, external stakeholders would include investors and customers.[1]

External stake-holders of non-profits include donors and the clients of the non-profit's services.[2]

In the case of government agencies, external stakeholders would include tax-payers, higher-level government agencies, and international lending bodies such as the IMF, the world bank, various economic agencies of the UN, and development banks.

Internally focused business plans target intermediate goals required to reach the external goals. They may cover the development of a new product, a new service, a new IT system, a restructuring of finance, the refurbishing of a factory or a restructuring of the organization.

An internal business plan will often be developed in conjunction with a balanced scorecard or a list of critical success factors. This allows success of the plan to be measured using non-financial measures. Business plans that identify and target internal goals, but provide only general guidance on how they will be met are called strategic plans.

Operational plans describe the goals of an internal organization, working group or department.[3] Project plans, sometimes known as project frameworks, describe the goals of a particular project. They may also address the project's place within the organization's larger strategic goals.[4][5]

 

See also


The Business Plan: Marketing Plan

A marketing plan is a written document that details the actions necessary to achieve a specified marketing objective(s). It can be for a product or service, a brand, or a product line. It can cover one year (referred to as an annual marketing plan), or cover up to 5 (sometimes referred to as five) years.

 

How to Create a Marketing Plan

 

A marketing plan may be part of an overall business plan. Solid marketing strategy is the foundation of a well-written marketing plan. While a marketing plan contains a list of actions, a marketing plan without a sound strategic foundation is of little use.

 

See also

 

External links


The Business Plan: Management and Personnel

Management comprises directing and controlling a group of one or more people or entities for the purpose of coordinating and harmonizing that group towards accomplishing a goal. Management often encompasses the deployment and manipulation of human resources, financial resources, technological resources, and natural resources. Management can also refer to the person or people who perform the act(s) of management.

 

The verb manage comes from the Italian maneggiare (to handle — especially a horse), which in turn derives from the Latin manus (hand). The French word mesnagement (later ménagement) influenced the development in meaning of the English word management in the 17th and 18th centuries.[1]

 

See also

 

External links

 Integrated Systems Flowchart

 

Human resources has at least two meanings depending on context. The original usage derives from political economy and economics, where it was traditionally called labour, one of three factors of production. The more common usage within corporations and businesses refers to the individuals within the firm, and to the portion of the firm's organization that deals with hiring, firing, training, and other personnel issues. This article addresses both definitions.

 

Human Capital Center of Excellence

Human resource management serves these key functions:

  1. Hiring (recruitment)
  2. Compensation
  3. Evaluation and Management (of Performance)
  4. Promotions
  5. Managing Relations

 

It is the responsibility of human resource managers to conduct these activities in an effective, legal, fair, and consistent manner.

 

The objective of Human Resources (HR's raison d'etre) is to maximize the return on investment from the organization's human capital

"Human resource management aims to improve the productive contribution of individuals while simultaneously attempting to attain other societal and individual employee objectives." Schwind, Das & Wagar (2005)

In reality, human resources deals with two different worlds

1) Non-Unionized - Where management has the control, and
2) Unionized - Where there is shared control through a collective agreement - Management and a union negotiate a collective agreement with respect to terms and conditions of employment. The Union represents employees to management. (That is the Union speaks for employees, both collectively and individually)

Collective Agreements - Can cover any and all terms and conditions of employment. Collective agreements become "the Bible," the code and are binding in law. - Disputes of the collective agreement are resolved by arbitration.

 

See also

 

External links

 

The Business Plan: Startup Costs and Financing

Venture capital is a type of private equity capital typically provided by professional, institutionally-backed outside investors to new, growth businesses. Generally made as cash in exchange for shares in the investee company, venture capital investments are usually high risk, but offer the potential for above-average returns. A venture capitalist (VC) is a person who makes such investments. A venture capital fund is a pooled investment vehicle (often a partnership) that primarily invests the financial capital of third-party investors in enterprises that are too risky for the standard capital markets or bank loans

 

See also

 

External links

 
The Venture Capital Industry


The Business Plan: Projected Budgeting

Financial Statements (or financial reports) are formal records of a business' financial activities. These statements provide an overview of a business' profitability and financial condition in both short and long term. There are four basic financial statements:

1. Balance Sheet - also referred to as statement of financial condition, reports on a company's assets, liabilities and net equity as of a given point in time.
2. Income Statement - also referred to as Profit or loss statement, reports on a company's results of operations over a period of time.
3. Cash Flow Statement - reports on a company's cash flow activities, particularly its operating, investing and financing activities.
4. Statement of Retained Earnings - explains the changes in a company's retained earnings over the reporting period.

 

Financial Statement Analysis

Because these statements are often complex, an extensive set of Notes to the Financial Statements and management discussion and analysis is usually included. The notes will typically describe each item on the Balance sheet, Income statement and Cash flow statement in further details. Notes to Financial Statements are considered an integral part of the Financial Statements.

 

See also

 

External links

 

Cash Flow is an accounting term that refers to the amounts of cash being received and spent by a business during a defined period of time, sometimes tied to a specific project. Measurement of cash flow can be used

  • to evaluate the state or performance of a business or project.
  • to determine problems with liquidity. Being profitable does not necessarily mean being liquid. A company can fail because of a shortage of cash, even while profitable.
  • to generate project rate of returns. The time of cash flows into and out of projects are used as inputs to financial models such as internal rate of return, and net present value.
  • to examine income or growth of a business when is believed that accrual accounting concepts do not represent economic realities. Alternately, cash flow can be used to 'validate' the net income generated by accrual accounting.

Cash flow as a generic term may be used differently depending on context, and certain cash flow definitions may be adapted by analysts and users for their own uses. Common terms (with relatively standardized definitions) include operating cash flow and free cash flow.

 

See also

Cash flow problems persist after the recession

 

Budget (from French bougette) generally refers to a list of all planned expenses and revenues. A budget is an important concept in microeconomics, which uses a budget line to illustrate the trade-offs between two or more goods.

 

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External links


Forecasting is the process of estimation in unknown situations. Prediction is a similar, but more general term, and usually refers to estimation of time series, cross-sectional or longitudinal data. In more recent years, Forecasting has evolved into the practice of Demand Planning in every day business forecasting for manufacturing companies. The discipline of demand planning, also sometimes referred to as supply chain forecasting, embraces both statistical forecasting and consensus process...

Forecasting is commonly used in discussion of time-series data.

 

Sales Forecasting Theory and Practice

 

 

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External links

The Institute of Business Forecasting (IBF) is recognized worldwide as the premier provider of forecasting and planning education, training, and certification. This global organization’s membership includes many of the world’s largest and renowned companies; also, it is known for its flagship publication, the Journal of Business Forecasting (JBF). The IBF has helped organizations improve forecasting accuracy and overall performance for over 25 years. For more information, visit www.ibf.org

[1] The main source of information about forecasting on the internet is the Forecasting Principles site, forecastingprinciples.com. Forecasting Principles summarizes all useful knowledge about forecasting for researchers, practitioners, and educators. It is provided as a public service by the International Institute of Forecasters. The Institute publishes the journals International Journal of Forecasting and Foresight, and organizes International Symposia on Forecasting and forecasting workshops.

 

The Business Plan: The Legal Section

Commercial law or business law is the body of law which governs business and commerce and is often considered to be a branch of civil law and deals both with issues of private law and public law. Commercial law regulates corporate contracts, hiring practices, and the manufacture and sales of consumer goods. Many countries have adopted civil codes which contain comprehensive statements of their commercial law. In the United States, commercial law is the province of both the Congress under its power to regulate interstate commerce, and the states under their police power. Efforts have been made to create a unified body of commercial law in the US: the most successful of these attempts has resulted in the general adoption of the Uniform Commercial Code.

Various regulatory schemes control how commerce is conducted, privacy laws, safety laws (i.e. the Occupational Safety and Health Act in the United States) food and drug laws are some examples.

 

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Business law
Business organizations
Basic forms:
Sole proprietorship
Corporation
Partnership
(General · Limited · LLP)
Cooperative
USA:
Business trust · LLC · LLLP
Series LLC
Delaware corporation
Nevada corporation
Commonwealth/Ireland/UK:
Limited company
(By shares · By guarantee)
(Public · Proprietary)
Civil law countries:
AB · AG · ANS · A/S · A/S
K.K. · N.V. · OY · S.A. · GmbH
European Company Statute
Doctrines
Corporate governance
Limited liability · Ultra vires
Business judgment rule
De facto corporation and
corporation by estoppel
Piercing the corporate veil
Related areas of law
Contract · Civil procedure

 

The Business Plan: Insurance

Insurance, in law and economics, is a form of risk management primarily used to hedge against the risk of a contingent loss. Insurance is defined as the equitable transfer of the risk of a potential loss, from one entity to another, in exchange for a premium. Insurer, in economics, is the company that sells the insurance. Insurance rate is a factor used to determine the amount, called the premium, to be charged for a certain amount of insurance coverage. Risk management, the practice of appraising and controlling risk, has evolved as a discrete field of study and practice.

 

Business Insurance Timeline

 

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The Business Plan: Suppliers

A supply chain, logistics network, or supply network is a coordinated system of organizations, people, activities, information and resources involved in moving a product or service in physical or virtual manner from supplier to customer. Supply chain activities (aka value chains or life cycle processes) transform raw materials and components into a finished product that is delivered to the end customer. Supply chains link value chains.[1]

 

Inter-organisation Supply Chain

 

Today, the ever increasing technical complexity of standard consumer goods, combined with the ever increasing size and depth of the global market has meant that the link between consumer and vendor is usually only the final link in a long and complex chain or network of exchanges.

This supply chain begins with the extraction of raw material and includes several production links, for instance; component construction, assembly and merging before moving onto several layers of storage facilities of ever decreasing size and ever more remote geographical locations, and finally reaching the consumer.

Although many companies and corporations today are of importance not just on national or regional but also on global scale, none are of a size that enables them to control the entire supply chain, since no existing company controls every link from raw material extraction to consumer.

Many of the exchanges encountered in the supply chain will therefore be between different companies who will all generally seek to maximize company revenue within their sphere of interest but will have little or no basic knowledge or interest in the remaining players in the supply chain except those to which it is directly linked.

There are a variety of supply chain models, which address both the upstream and downstream sides.

The SCOR (Supply Chain Operations Reference) model, developed by the Supply Chain Council measures total supply chain performance. It is a process reference model for supply-chain management, spanning from the supplier's supplier to the customer's customer.[2]. It includes delivery and order fulfillment performance, production flexibility, warranty and returns processing costs, inventory and asset turns, and other factors in evaluating the overall effective performance of a supply chain.

The Global Supply Chain Forum (GSCF) introduced another Supply Chain Model. This framework [3] is built on eight key business processes that are both cross-functional and cross-firm in nature. Each process is managed by a cross-functional team, including representatives from logistics, production, purchasing, finance, marketing and research and development. While each process will interface with key customers and suppliers, the customer relationship management and supplier relationship management processes form the critical linkages in the supply chain.

The eight key processes are:

 

See also


The Business Plan: Risks, Assumptions, and Conclusions

In business, Enterprise Risk Management (ERM) are the methods and processes used to manage those risks, possible events or circumstances that can have influence on the enterprise in question. By identifying and proactively treating such potential effects, one protects the very existence, the resources (human and capital), the products and services, or the customers of the enterprise, as well as external effects on society, markets or the environment.

 

Dimensions of Safety Management

 

 

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External links

 

 

Recommended Texts

 

Entrepreneurship

Entrepreneurship
Third Edition
by
Peggy A. Lambing
Charles R. Kuehl

 

Check the availability and buy your books from our Bookshop

 

Effective Small Business Management

Effective Small Business Management,

Norman M. Scarborough, Presbyterian College
Thomas W. Zimmerer, Saint Leo University

Check the availability and buy your books from our Bookshop

 

 

Resources

 

 

 

 

Business with a social face

 

 

 

 

 

 

Business Ideas

 

Case Studies

Family Businesses

Ford Motor Company is an American multinational corporation and the world's third largest automaker after Toyota and General Motors, based on worldwide vehicle sales. In 2006, Ford was the second-ranked automaker in the US with a 17.5% market share, behind General Motors (24.6%) but ahead of Toyota (15.4%) and DaimlerChrysler (14.4%)[3]. Ford was also seventh-ranked American-based company in the 2007 Fortune 500 list, based on global revenues of $160.1 billion [4]. In 2006, Ford produced about 6.6 million automobiles[5], and employed about 280,000 employees at about 100 plants and facilities worldwide[6].

Based in Dearborn, Michigan, a suburb of Detroit, the automaker was founded by Henry Ford and incorporated in June 16, 1903. Ford now encompasses many global brands, including Lincoln and Mercury of the US, Jaguar and Land Rover of the UK, and Volvo of Sweden. Ford also owns a one-third controlling interest in Mazda.

Ford has been one of the world's ten largest corporations by revenue and in 1999 ranked as one of the world's most profitable corporations, and the number two automaker worldwide. Since 2000, Ford has not fared as well, having steadily lost market share in the U.S. since 1995[7].

Ford introduced methods for large-scale manufacturing of cars and large-scale management of an industrial workforce, especially elaborately engineered manufacturing sequences typified by moving assembly lines. Henry Ford's combination of highly efficient factories, highly paid workers, and low prices revolutionized manufacturing and came to be known around the world as Fordism by 1914.

 

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Tetra Pak

 

Tetrapak

 

Tetra Pak is a multinational food packaging company of Swedish origin. It was founded in 1951 in Lund, Sweden by Ruben Rausing and Erik Wallenberg. The company is part of the Tetra Laval group which also includes Sidel that specializes in PET bottles and DeLaval, a producer of dairy and farming machinery.

Overview

Tetra Pak's first product was a paper carton used for storing and transporting milk. The first product was called Tetra Classic. Rausing had been working on the design since 1943, and by 1950 had perfected techniques for making his cartons fully airtight, using a system of plastic coated paperboard. These initial cartons were tetrahedrons having 4 sides, leading to the company's name, which means "four" in Greek. In 1952 The first Tetra Classic package was launched, and later in 1963 the company introduced Tetra Brik, a rectangular carton.

Ruben Rausing's son Hans Rausing ran Tetra Pak from 1954 until 1985, taking the company from a seven-person concern to one of Sweden's largest corporations. Before his death in 1983, Ruben Rausing was Sweden's richest person.

External links

 

Data

 

 

Wal-Mart

 

Wal-Mart

Wal-Mart Stores, Inc. (NYSE: WMT) is an American public corporation, currently the world's largest retailer and largest corporation. It was founded by Sam Walton in 1962, incorporated on October 31, 1969, and listed on the New York Stock Exchange in 1972. It is the largest private employer in the United States (US) and Mexico. Wal-Mart is the largest grocery retailer in the United States, with an estimated 20% of the retail grocery and consumables business, and the largest toy seller in the United States, with an estimated 45% of the retail toy business, having surpassed Toys "R" Us in the late 1990s.

Wal-Mart operates throughout the United States, in Mexico as Walmex, in the United Kingdom as ASDA, and in Japan as The Seiyu Co., Ltd. – Wholly owned operations are located in Argentina, Brazil, Canada, Puerto Rico, and the United Kingdom. Wal-Mart's investments outside North America have produced mixed results. In 2006, Wal-Mart sold its retail operations in South Korea and Germany due to sustained losses and a highly competitive market.

Wal-Mart has been the target of much criticism for its policies and business practices by several community groups, women's rights groups, grassroots organizations, labour unions, religious organizations, and environmental groups. Specific concerns include the corporation's extensive foreign product sourcing, treatment of employees and suppliers, low wages, resistance to union representation, insurance benefits, sexism, child labour, environmental practices, the use of public subsidies, and the economic impact of stores on the communities where they operate.

 

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