Entrepreneurship

Unit Objectives

At the end of this unit, you will be able to:

1 Understand importance of being an entrepreneur.

2  Understand concepts of tailor shop economies like took keeping, inventory management

An Entrepreneur

An entrepreneur is a person who runs his/her own business Entrepreneurs are the ones who explore opportunities. scan the environment, mobilize resources, and transform notions and ideas into practicable business propoution providing new products and services to the society by bringing together and merging various factors of production An entrepreneurial individual has a distinct concept, vision and a dream, which he/she is able to convert into products. Such individuals are driven by task, challenge and opportunity with very high achievement orientation.

Accounting

Book keeping is an activity that is unkempt by small scale farmers, even in literate populations. The agriculturalists may not see the advantage from this extra activity, which appears to be quite unrelated to the practical aspects of dairy farming. However, financial record keeping is a very vital activity to safeguard that the dairy business runs economically. Maintaining separate accounts for the dairy farm will be helpful in:

. Understanding how money is spent and income is earned.

. Finding ways of reducing expenses and increasing incomes i.e increasing profits.

. Making decisions about increasing or decreasing concentrate feeds, growing pastures and fodder crops, buying and selling of animals etc.

. To get a correct picture of the income, expenditure and profits (or losses), everything of value in the dairy farm and all transactions involving payments and receipts of money must be recorded.

Single-entry book keeping

Single-entry book keeping is a simple method of accounting. A single book is maintained to enter all transactions, whether they are payments made out or income received by the farmer. Some key points to remember while keeping a single-entry book are:

. Fill in the book every day or at least every week. Enter all transactions including payments and income.

. Keep receipts, invoices, statements and other business documents together with a clip or in a file.

For example, if someone (a buyer) gives you a bill or an invoice the following data should be recorded in the single-entry book:

. Amount of money received

. Quantity of milk

. Invoice numbers

. An example of a single-entry book is shown below:

Some important aspects of financial management are:

Profit and Loss

Even though income and expenditure are recorded everyday in this manner as and when actual transactions take place the profits (and losses) are usually calculated for longer periods eg. for a year. For calculating profits (and Josses), the items of expenditure and income during the period under consideration are summarised under three main sections:

. Capital Items: Capital items are those having a longer life and a higher value e.g. land, buildings, equipment such as milk cans and animals.

.Recurrent items: The recurrent (or consumption) items are those that get used up in the production process eg cattle feeds (both roughages and concentrates), mineral mixtures, chemicals, disinfectants, medicines, soap, and various miscellaneous items.

. Loans (and payment of loan instalments including interest).

Cash flows

It is also imperative to know about the timing of receipts and expenditure of money if money is not available from the enterprise to meet the expenditure at the correct time, e.g. planting grass or buying concentrates, the farmer may be forced to lend from expensive sources (because the borrowing has to be done at short notice).

Client Management

For a tailor it is very important to manage relations with clients. By maintaining cordial relations with clients, the tailor can benefit financially as well as benefit from finding new linkages. There are generally two kinds of clients:

Buyers/Customers: These are the people who buy finished garments from you to sell them to others in other words, they are not the direct users of the products. They might be wholesalers, who supply products to the retailers.

Consumers: These are the people who directly consume the products (for example a consumer who get a shirt

Made for finish)

One has to understand that there are a number of tailoring shops in the market and if good relations are not maintained with the clients, they can easily move on to some other tailors. A business remains in the market successfully only by sustaining good relations with each of the client Clients can be satisfied with the goods and services provided by you:

. When they are happy with the features and quality of the product.

. When the price of your product is reasonable (reasonable means within the budget)

.  When one delivers on time and maintains agreed terms

. When extra efforts are put in to make them happy, like by working overnight to deliver on time

Another important benefit of managing good relations with the clients is that they can provide more detailed and accurate information on the market trends. E.g. a wholesale buyer can update with the expected change in demand of a new design of blouse or shirt or even tell you about the arrival of a new tailor. This information can help you to manage you production accordingly and also to decide prices in a better way.

It is also advisable to keep a detailed record of the different clients that are associated with you. The record may include:

. Client’s name

. Contact number

. Quantity of goods sold (daily, weekly or monthly)

.  Financial details (money received/money given)

Once you have good relations with the client, you can understand their needs and requirements in a better way and hence serve them well.