ENTREPRENEURSHIP
Resource Mobilization
FACTS THAT MATTER -
❖ Resources are the life blood of any economic activity. “Anything or means (physical tangible/ non-physical-tangible)
required orrequired to support the activities of organisation to achieve predetermined organizational goals are
referred as Resources.
❖ Planning out effective “Resource Mobilization”.
● Evaluate and judge the need for resource.
● Identify the type of resource required.
● Locate the availability of resource.
● Effective communication with the suppliers of resources.
● Evaluate the quality and quantity of resources required.
● Identify problems pertaining to mobilization of resources.
● Arrange funds for acquisition of resources.
● Plan out inventory management for the procured resources.
❖ Basic Resources are:
● Land
● Labour
● Capital
❖ Other Resources vary from enterprise to enterprise, but commonly comprise of:
● Entrepreneurship
● Energy
● Expertise
● Information
● Management
● Machines
● Materials and Methods
❖ The requirement of resources depends upon:
● Nature of activity
● Size of activity
● Product specification
● Type of business activity
❖ Business resources can be grouped as:
● Physical
● Material
● Human
● Intangible
● Financial
❖ Physical Resources: Meaning, examples and selection process
❖ Material Resources: Meaning, examples and important decisions regarding the arrangement of material resources.
Points to be considered by an entrepreneur for financial resourcing:
● How much finance is needed?
● Terms for which finance is required-long term, short-term and medium term
● Sources of generating finance-Owners fund’s and borrowed fund’s
● Intangible resources
❖ Financial Planning: Financial planning is the process of determining objectives, policies, procedures, programmes and
budgets to deal with financial activities of an organisation.
❖ Objectives of Financial Planning: Raising of funds, deployment of surplus funds.
❖ Importance of Financial Planning: Availability of funds at right time, cost effectiveness, Optimum use of funds, Coordination
among different business functions, Avoidance of wastages of resources.
❖ Types of Capital Requirement: Fixed Capital requirement (invested in fixed assets). Working Capital requirement
(invested in current assets for day-to-day operations). Factors affecting working capital requirements and its arrangements:
● Capitalization
● Capital Structure:
Types of sources of finances:
⮚ Equity Financing/Ownership financing
⮚ Personal Financing
⮚ Venture Capital
⮚ Debt Financing: Meaning and sources of raising funds.
❖ Types of Mentoring:
● On the basis of construction mode:
⮚ Formal Mentoring
⮚ Informal mentoring
● On the basis of delivering mode:
⮚ One to One mentoring
⮚ Online Mentoring
⮚ Group Mentoring
⮚ Peer Mentoring
● Information normally comes from:
⮚ Government Agencies
⮚ The Private Sector
Information resources centre Primary, Secondary, Tertiary Methods of collecting data: Census method and
Sample method.
Words That Matter -
❖ Resources are the life blood of any economic activity. “Anything or means (physical tangible/ non-physical-tangible)
requiredor required to support the activities of organisation to achieve pre-determined organizational goals are
referred as resources.”
❖ A mentor is a trusted guide, advisor, wise, intellect person who uses his mind creatively especially in occupational settings.
❖ Mentorship is a developmental partnership through which one person shares knowledge, skills, information and perspective to
foster the personal and professional growth of someone else.
❖ Business Mentor: The person, well established, capable and willing to offer invaluable advice, support and guidance to a new
entrepreneur is referred as ‘Business Mentor’. The term business cycle is also called as economic cycle or boom-bust cycle.
❖ Owner’s Fund: This is that part of capital that belongs entirely to the entrepreneur.
❖ Borrowed Funds: Entrepreneur can if required raise capital from outsider.
❖ Material: All those inputs which are used through a process and output is produced.
❖ Goodwill: The difference between the value of the tangible assets of the business and the actual value of the business
(some one who is ready to pay for it.)
❖ Trade credit: It refers to the credit extended by the supplier (seller) to the buyer. Under this arrangement, credit is
not granted in cash. The goods are sold on credit.
❖ Gestation Period: The period between the time of initial investment and commercial production.
❖ Reputation: It is how your business is perceived through the eyes of your customers, suppliers, employees and other
interested parties, such as your bank manager or a potential investor.
❖ Finance: It may be defined as the provision of money at the time it’s wanted.
❖ Business Finance: It refers to the acquisition and utilization of capital funds in meeting the financial needs.
❖ Financial Planning: Financial planning is the process of determining objectives, policies, procedures, programmes and budgets
to deal with financial activities of an organisation.
❖ Fixed Capital: It is the funds required for the acquisition of those assets that are to be used over and over for a long period.
❖ Working Capital: It refers to that part of the capital which is needed for meeting out day- to-day operational expenses.
❖ Capitalization: It is the long-term funding that allows a business firm to operate Capital Structure: “The makeup of a firm’s
capitalization” is capital structure. (OPM) OTHER PEOPLE’S MONEY-sources of finances from other sources.
❖ Equity: It refers to the capital invested in an enterprise by its owners.
❖ Retained Profits: It is undistributed profits of the business or retained with the business.
❖ Preference Shares: Those shares which are entitled to a priority in the payment of dividend and repayment of capital.
❖ Seed Capital: It is initial capital of the enterprise provided to an entrepreneur to prove the feasibility of a project.
❖ Start Up: Product development and initial marketing, but with no commercial sales yet funding to actually get
company operations started.
❖ Personal Financing: The initial investment made by an entrepreneur through his personal cash or converts his assets
into cash for investment.
❖ Venture Capitalist: These are investors and investment companies whose specialty is financing new, high-technology
oriented entrepreneurial ventures.
❖ Debt-financing: It is a financing method involving an interest-bearing instruments or it is a loan, the entrepreneur is to
pay back the amount of funds borrowed and interest amount within the term period.
❖ Debentures: A debenture is a written instrument acknowledging a debt containing fixed rate of interest and repayment
of debt after specific period.
❖ Public Deposits: When an entrepreneur invests the general public to deposit their savings with his company, for a
period not exceeding 36 months with some rate of interest.
❖ Overdraft: A temporary arrangement in the form of a permission granted to the customers to withdraw more than the
amount standing to his account.
❖ Discounting of bills: It is an arrangement, where the bank encashes the customer’s bills before maturity date.
❖ Loans and Advances: A loan is a lump sum advance made for a specified period by bank or other financial institutions
with certain rate of interest.
❖ Grants: When government makes financial assistance available to an entrepreneur encourage enterprise,
(tax revenue through payers).
❖ Small-Scale (SSI): It means that industrial unit whose investment in plant and machinery does not exceed Rs. 5 crores.
❖ Tiny sector: Whose investment in plant and machinery is up to Rs. 25 lakhs.
❖ Auxiliary: A small-scale industry unit when it supplies not less than 50% of its production to another unit.
❖ Sources of information: An information source is where you got your information from which can be useful for the
operational process of an organisation.
❖ Primary collection: The data is collected by the investigator himself/herself, for the first time.
❖ Secondary collection: Already collected information through or original information, which can be modified,
according to requirement or purpose.
❖ Census method: When all the units associated with a particular problem are studied.
❖ Sample method: Technique of data collected from the sample or group of items taken from the population.
❖ Business is an economic activity which involves production or processing and sale or exchange of goods and services
at regular basis with an aim of earning profit.
❖ Industry: Refers to all economic activities involved in converting raw materials into finished products which are
ultimately consumed by consumers.
❖ Types of Industry: Primary industry, Secondary industry and Tertiary industry.
❖ Producer’s Goods: The goods produced by one enterprise and used by other enterprises as raw material
for further production.
❖ Consumer Goods: The goods used by final consumers for deriving personal satisfaction.
❖ Secondary industries are the industries which are concerned with the changing forms or transformation of the
materials provided by primary industries.
❖ Commerce refers to all those activities which facilitates exchange of goods/services or relates to the transfer
of goods from place of production to ultimate consumers.
❖ Components of Commerce are: Trade and Auxiliaries.
❖ Trade can be Home or Foreign trade.
❖ Auxiliaries to trade are transportation, banking, insurance, warehousing, advertisement and salesmanship.