Term project entreprneurship (94255)-fall 2016-social entrepreneurship-a new dimension-entrepreneurs development incubator company-paf-kiet (city campus)

Term ProjectSocial Enterprise-A New Dimension of Entrepreneurship

And Entrepreneurial Development Incubator CompanySubmitted To:

Course Instructor: Mr. Naeem BhojaniCurse Title: EntrepreneurshipCourse ID: 94255

Submitted By:Name of Student: Muhammad Asif KhanStudent ID: MB-2-05-51271Program: MBA-RegularSemester: Fall 2016Campus: PAF-Karachi Institute of Economics & Technology (KIET)-City Campus

Submission Date: November 27, 2016

Social Enterprise- A New Dimension of Entrepreneurship

What is Social Entrepreneurship?•The idea of Social Entrepreneurship has got increasing attention of scholars as social problems in our complex modern society have grown tremendously. •Social Entrepreneurship seeks to exploit the practical dynamism of the successful businessmen to enrich and help society, especially in developing countries which are overwhelmed with problems of dire poverty and lack of opportunities.•They may, like any other business entrepreneurs, be interested in profit, but their emphasis is on social change. •They are often driven, creative individuals who exploit new opportunities, question accepted norms, and refuse to give up until they have remade the world for the better.


Origin And Growth Of Social Entrepreneurship•Although the terms - social entrepreneurs and social entrepreneurship- seem relatively new, the practices related to the field can be found throughout the history.•Several business entrepreneurs had become the most successful social entrepreneurs by combining effectively the civic, governmental and business worlds during 19 and 20 centuries and promoted mainstream public services in welfare, schools, and health care. A few of them to mention are:

Florence Nightingale, founder of the first nursing school and developer of modern nursing practices,

Robert Owen, founder of the cooperative movement etc.


Origin And Growth Of Social Entrepreneurship•Social Entrepreneurs and social enterprises have been in existence for many centuries, but became prominent in recent decades after the word “social entrepreneurship”.•The terms social entrepreneur and social entrepreneurship were used first in the literature on social change in the 1960s and 1970s to describe Robert Owen.•The widespread use came during 1980s and 1990s and promoted by Bill Drayton, the founder of Ashoka innovators for the Public and others such as Charles Lead beater.


ORIGIN And Growth Of Social Entrepreneurship

•From the 1950s to the 1990s Michael Young was a leading promoter of social enterprise.•Professor Daniel Bell of Harvard was the world's most successful entrepreneur of social enterprises during 1980s as he created more than sixty new organizations worldwide, including the School for Social Entrepreneurs (SSE) which supports individuals to realize their own potential and to establish social enterprises and social businesses.


Origin And Growth Of Social Entrepreneurship

•Muhammad Yunus, founder of Grameen Bank, is well known contemporary social entrepreneur, who was awarded a Nobel Peace Prize in 2006. The work of Yunus and Grameen emphasize the enormous synergies and benefits when business principles are unified with social ventures. •J. Gregory Dees, popularly known as the “Father of Social Entrepreneurship Education”, and Beth Anderson categorize the plurality of Social Enterprise definitions into two main types namely Social Enterprise and Social Innovation.


Opportunities And Challenges•The most urgent challenge for national governments, local authorities, policy makers and economic stakeholders is to promote sustainable economic and social development so that once the economy has recovered; the benefits can be widely diffused. •Social entrepreneurship and social innovation are part of the solution, as they both explicitly aim at providing innovative solutions to unsolved social problems.•Social value creation should be at the heart of their mission in order to improve individuals‟ and communities‟ lives and increase their well-being.


Social Entrepreneur•Social entrepreneurs are often driven, creative individuals who exploit new opportunities, question accepted norms, and refuse to give up until they have remade the world for the better.•Social entrepreneurs are individuals with innovative solutions to society’s most pressing social problems. •They are ambitious and persistent, tackling major social issues and offering new ideas for wide-scale change. •Rather than leaving societal needs to the government or business sectors, social entrepreneurs find what is not working and solve the problem by changing the system, spreading the solution, and persuading entire societies to take new leaps.


Social Entrepreneur•They are both visionaries and ultimate the practical implementation of their vision above all else.•Social entrepreneurs have the same core temperament as their business peers but use their talents to solve global social problems.•A business entrepreneur might create entirely new industries, a social entrepreneur comes up with new solutions to social problems and then implements them on a large scale.


Social Entrepreneur•Just as entrepreneurs change the face of business, social entrepreneurs act as the change agents for society, seizing opportunities others miss and improving systems, inventing new approaches, and creating solutions to change society for the better.

Social Entrepreneurship And Higher Education•A growing number of colleges and universities are establishing programs focused on educating entrepreneurs. As a scholarly field of inquiry, social entrepreneurship is in its embryonic stage of development.


Social Entrepreneurship And Higher Education•Social entrepreneurship has been a topic of academic inquiry for nearly 20 years, yet relatively little scholarly output has appeared in mainstream management and entrepreneurship journals.•Future research would benefit from the incorporation of multivariate methods to complement the case study techniques that have dominated previous efforts.


Social Entrepreneurship CharacteristicsAmong the innate characteristics or psychological factors in the case of social entrepreneurs, Nga and Shamuganathan (2010: 260-261) highlight as main characteristics: Extroversion: The ability to make good contacts and express own beliefs or feelings with ease,Openness:A natural position of openness to the surrounding environment or exterior phenomena,Agreeableness:Being easily accepted through being pleasant and friendly .


Social Entrepreneurship CharacteristicsNeuroticism:The tendency to obsess about things considered important ; and Conscientiousness:Reliability and conscientious and thorough development of the task itself (conscientiousness).•As for the practices that characterize social entrepreneurs, social entrepreneurship includes those that deepen the company's corporate social responsibility and those that refer to the variations in company executives' concerns with social problems. Some of these practices are:


Social Entrepreneurship Practices•Taking ethical components into account when formulating the strategy;•Maintaining management commitment to surrounding social problems;•Some company or management objectives of a social, rather than merely an economic nature;•Seeking information on business projects that can also have a social benefit; and•The company dedicates part of its budget and its activity to obtaining economically viable goods and services that also benefit the neediest sectors of society.

Development of Business Incubator CompanyIntroduction

•The basic purpose to develop the company is to provide workspace, coaching, and support services to potential entrepreneurs at early-stage of their entrepreneurial careers.•Our core objective is to encourage and support the rural area population male and female (domestic women) to take initiative and commence their own venture though effectively utilizing the available resources and their skills.•For the attainment of this objective at initial I have decided to develop an organization in individual capacity which serves as a business incubator for the upcoming and tentative entrepreneurs.

Development of Business Incubator Company

Entrepreneurial Development Incubator Company


Executive Summary•This company will be formed and developed to materialize the concept of Social Entrepreneurship in its true spirit.•The purpose is not to run a business and to earn profit but to passionately participate in the socio-economic development of the country through developing entrepreneurs at micro level.•It will not only help the country to move towards the economic growth & sustainability but will also help us to bring the economic prosperity among the neglected class of the society.

Development of Business Incubator CompanyBusiness ConceptThis business incubator company will work in diversified business areas. First and foremost objective is to formalize a strong marketing activity and bring the orders from the local and foreign buyers in the following product categories:

Livestock (Meat Products)Fisheries Honey & Allied ProductsGem & Jewelries Including the Precious

StonesHandy CraftsApparel Products (Knitted / Woven)


Revenue SourcesIn the beginning we will be marketing ourselves as one of the reliable supplier and trader of the following products:

Edible Products Apparel MerchandisesMeat Products Knitted / HosieryGrains / Wheat / Rice / Pulse Woven FruitsSea Food Products

Antiques and Valuable Handy CraftsGems & Jewelry ProductsArtificialOriginal


Competitor Analysis•We are trying to enter in to the markets which possess a high competition, where already manufacturer and traders are dealing in the same product categories.•They are well established and successfully serving the markets and they are already penetrated.•We are going to face a lot of resistance and competition from global and local in market


TOWS Analysis Threats:•Improper infrastructure of the rural areas and the availability of insufficient resources.•Lack of coordination among the different governmental organizations.•Resistance from the external environment.•Financial constraints that can limit the required pace of growth.•Depending on human capabilities rather on technological equipments.•A threat of quick imitation of the strategy.•Logistics Cost will be the vital.


TOWS Analysis Opportunities:•Availability of sufficient human resource with the right attitude which can lead us towards attainment of our goals & objective.•No direct competition in the global market and we can capitalize the idea through effective planning.•We can achieve rapid growth with effective utilization of diversified workforce.•Our effective public relation activities will help us to develop effective relationship with the governmental organization and other relevant non-government which can help us to effectively implement and our entrepreneurial development program.•If we will be able to effectively serve our primary purpose of the foundation then foreign buyers will definitely extend their cooperation for further expansion of business.

Development of Business Incubator CompanyTOWS Analysis

Weaknesses:•A unique idea and cause without adequate experience.•If persistency will not be shown the failure is evident.•Time constraint is the factor which will limit the rapid expansion.•There are very vital chances that Initial working years will be with low profit margins or without profits.•We have to imitate every project from the basics under our Entrepreneurial Development Program.•In past it has been observed that the Micro Level Enterprise has short span of life.•Mushroom growth of the Micro Level Enterprise will be harmful for the progress.


TOWS AnalysisStrengths:•We are confident that our steering team has an ability to produce results.•Self-driven policies for the attainment of objectives.•Rather acquiring we are focusing to develop.•Our efficient marketing team can transform the idea into reality through effectively enhancing the global customers’ network.


Marketing Strategy


Marketing StrategyLocal Markets:•The local market will comprise on the markets which will be similar to our markets in terms of culture, traditions and behaviors. •Initially we have included the following regions into this category:

South Asian Middle East Far East

Development of Business Incubator CompanyMarketing StrategyGlobal Markets:•All potential markets existing other than the above define local markets will be considered as Global Market.

•We can distinguish this market into following regions:European

Western EuropeEastern Europe

North AmericaAfricaAsia


Business OperationsOur operational activities can be divided as follows:

Marketing

Operations

Finance & Accounts Department

Human Resource Department

Entrepreneurial Development Program

Development of Business Incubator CompanyEntrepreneurial Development Program:


Entrepreneurial Development Program:•Selection of the high potential individuals those who has an ability and they keen to commence their professional career as an entrepreneur.•They must be hard working and able to interact with the people highly social can work under stress.•They must be able to develop and lead team.•A comprehensive education, learning and training program will be inaugurate to fully equip them with the appropriate knowledge skills and abilities to run their own venture in their respective area of interest and ease to doing business in their respective locality.


Entrepreneurial Development Program:•They will be continually monitored and all the necessary assistance will be provided to them whenever required.•They will encourage supporting others for the development of their own ventures.•All the new ventures (Micro Level Enterprises) will be develop on the basis of BOTT (Built Operate Train & Transfer).


ManagementChief Executive

Human Resource

Department

Marketing Department

Operations Department

Finance & Accounts

Department

Development of Business Incubator CompanyManagementOur management practices will be based on the following principles:

Cooperative Decision Making:We believe in collective wisdom and well come all the suggestions and criticism for the betterment and improvement.

Employee Empowerment:We believe that our employees should be motivated towards the cause and empower them to take initiative for the cause.

Innovation:We welcome and encourage the input from our employees and from those who have been directly associated with us and provide them opportunity to materialize their creative ideas and innovation.


ManagementSympathy:We believe that our all acts will be towards the betterment of the society and our actions will reflect the sympathy and affection toward others. Ownership:We believe that our employees will take the responsibility of their decisions and face the outcomes as an owner.


Revenue Model

Acquisition of the

Orders from the local and foreign

buyers in the defined

product Categories

Outsourcing of orders for manufacturi

ng

Developing value chain

through EDP

Order fulfillment through

effectively maintainin

g the specified quality level by

the customers

Organization

Growth and

Profitability

through expandin

g


Arrangement of Seed Capital for the Venture:

1. Angel Funding

2. Financial Institutions Funding

3. Donor Agencies & Governmental Institutions


Financial Analytics:Projected Sales Forecast

(All amounts are in million rupees)

Product CategoriesBase Year Year 2 Year 3 Year 4 Year 5

G L T G L T G L T G L T G L T

Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs.

1) Apparel Merchandise6 2 8 7 2 9 9 2 11 10 3 13 12 3 16

2) Edible Products 5 3 7 5 3 8 6 4 10 8 4 12 9 5 15

3) Antiques & Handy Crafts1 0 1 1 0 1 1 0 1 1 0 1 2 0 2

4) Gems & Jewellery Products2 0 3 3 1 3 3 1 4 4 1 5 5 1 6

5) Miscellaneous Goods 2 1 2 2 1 2 2 1 3 3 1 3 3 1 4

Total Sales 15 5 20 18 6 24 22 7 29 26 9 35 31 10 41



Proforma Balance SheetBalance Sheet

(Amount in Million Rupees)

Base Year Year 2 Year 3 Year 4 Year 5

Assets Fixed Assests: Furnriture And Fixtures 0.50 0.50 0.50 0.50 0.50

Less: Accumulated Depricaition 0.03 0.475 0.05 0.45 0.08 0.43 0.10 0.40 0.13 0.38 Vehicle 0.50 0.50 0.50 0.50 0.50

Less: Accumulated Depreciation 0.03 0.475 0.05 0.45 0.08 0.43 0.10 0.40 0.13 0.38 Total Fixed Assets 0.95 0.90 0.85 0.80 0.75 Current Assets: Cash 3.82 4.86 4.76 5.00 4.38

Prepaid Rent of Warehouse and Office 0.70 0.70 1.00 1.00 1.00

Accounts Receivable (5% of Sales) 0.90 5.42 1.20 6.76 1.44 7.20 1.73 7.73 2.07 7.45 Total Current Assets 5.42 6.76 7.20 7.73 7.45 Total Assets 6.37 7.66 8.05 8.53 8.20

Equities Liabilites Long Term liabilities: Loan Payable 5.00 5.00 5.00 5.00 5.00

Less: Loan Insltallment 0.50 4.50 1.00 4.00 1.50 3.50 2.00 3.00 0.50 4.50 Long Term liabilities 4.50 4.00 3.50 3.00 4.50 Short Term Liabilities:

Acoutns Payable (10% of Sales) 1.05 2.40 2.88 3.47 4.15 Total Short Term Liabilites 1.05 2.40 2.88 3.47 1.05 Owner's Equity: Personal Contibution 0.50 0.50 0.50 0.50 0.50

Add: Net Profit 0.52 0.86 1.27 1.76 2.35 Less: Personal Drawings 0.20 0.10 0.10 0.20 0.20

Total Owner's Equity 0.82 1.26 1.67 2.06 2.65 Total Equities 6.37 7.66 8.05 8.53 8.20


Proforma Income StatementProforma Income Statement

(All Amounts Are in Miilion Rupees)

Base Year Year 2 Year 3 Year 4 Year 5 Sales 20.00 24.00 28.80 34.56 41.47

Less: Cost of Goods Sold

Produrment Cost (70 % of Sales) 14.0 16.8 20.16 24.2 29.03

Direct Logisitcs (3% of Sales) 0.6 0.72 0.86 1.04 1.244

Direst Support Services (3% of Sales) 0.6 0.72 0.86 1.04 1.244

Warehouisng Cost (3% of the sales) 0.6 15.8 0.72 19 0.86 22.75 1.04 27.3 1.244 32.76

Gross Profit 4.2 5.04 6.05 7.26 8.71

Less: Marketing Expenses (2.5 % of Sales) 0.50 0.60 0.72 0.86 1.04

Human Rsources Expenses (2.5% of Sales) 0.50 0.60 0.72 0.86 1.04

Opeational Expenses (2.5% of Sales) 0.50 0.60 0.72 0.86 1.04

Utiltiy Charges (3% of Sales) 0.60 0.72 0.86 1.04 1.24 Rent Expenses (1 % of Sales) 0.20 0.24 0.29 0.35 0.41 Loan Reimbursement 0.50 0.50 0.50 0.50 0.50 Depricaiteion Expenses 0.05 2.85 0.05 3.31 0.05 3.86 0.05 4.52 0.05 5.32

Earning Before Interest & Taxes 1.35 1.73 2.19 2.73 3.39

Less: Interest Expense 0.70 0.70 0.70 0.70 0.70 Estimated Income Tax 0.14 0.17 0.22 0.27 0.34

Earning After Interest & Taxes 0.52 0.86 1.27 1.76 2.35


Time Line• If we get the required finance to commence the venture

then I am confident that the venture will be fully operative and striving towards its goals within the initial three years.

• Our venture will be transform into the public limited company at the end of the fifth year.

• It is evident that we will be able to develop an effective value chain with the through developing the Micro Level Enterprises under our Entrepreneurial Developing Program.


Harvest StrategyInitial Public Offering (IPO):• As I have earlier mentioned that the venture will be

transform into the Public Limited Company and the equity offering will be as followed:

• The 25 % shares will be offer to the angle financers / financial institutions.

• The 24 % will be offer to the public and in case of the debt financing of the 49% shares will be offer publicly.

• The 51% shares will be owned and retained by the company.


Critical Risk

• Unable to get finance for the venture.• Marketing Department will unable to produce desired

results.• Global Business Environment will be affected due to

unavoidable circumstances.• Unable to develop value stream through Micro Level

Enterprise Development.


Conclusion

• Under the entrepreneurial development program the interested and the capable individuals will be selected from different rural areas and they will be trained in their respective area in accordance with the conditions, ease to do business and the resources available in their locality.

• To attain this objective we will be closely in correlation with governmental departments those who have been already responsible to provide training the individuals in different meadows.


Questions And

Answers


Small Business & Entrepreneurship

Term project entreprneurship (94255)-fall 2016-social entrepreneurship-a new dimension-entrepreneurs development incubator company-paf-kiet (city campus)