Sen

se o

f In

itia

tive a

nd E

ntr

ep

reneu

rsh

ip

This project has been funded with support from the European Commission. This [publication] communication reflects the views only of the author, and the Commission cannot be held responsible for any use which may be made of the information contained therein.

Sense of Initiative and Entrepreneurship

Lesson 1

• Basic steps on how to set up a business

Sen

se o

f In

itia

tive a

nd E

ntr

ep

reneu

rsh

ip

This project has been funded with support from the European Commission. This [publication] communication reflects the views only of the author, and the Commission cannot be held responsible for any use which may be made of the information contained therein.

• First Step– Business objective

• At first, you should make a decision in which sphere you will run your business, which means to choose your business objective or objectives. You can find some useful information on the web pages of Register of companies or Trade register. It is necessary to notice business objectives of individual entrepreneurial subjects.

Basic steps to set up a business

Sen

se o

f In

itia

tive a

nd E

ntr

ep

reneu

rsh

ip

This project has been funded with support from the European Commission. This [publication] communication reflects the views only of the author, and the Commission cannot be held responsible for any use which may be made of the information contained therein.

• Second Step– Types of trades

• If you have a conception of your business objective, it is necessary to find out whether you are required to fulfil certain conditions (education, experience, etc.) to carry on the chosen business. A district authority (department of trades) provides information regarding the required conditions.

Basic steps to set up a business

Sen

se o

f In

itia

tive a

nd E

ntr

ep

reneu

rsh

ip

This project has been funded with support from the European Commission. This [publication] communication reflects the views only of the author, and the Commission cannot be held responsible for any use which may be made of the information contained therein.

• We distinguish between two basic types of trades– Registry Trade– Licensed Trade

• A registry trade can be:– Craft trade

• You are supposed to prove your vocational qualification with an official certificate and to have a document about at least three- year practice in the craft. If you meet this mentioned condition, you can run a craft business by registering.

Basic steps to set up a business

Sen

se o

f In

itia

tive a

nd E

ntr

ep

reneu

rsh

ip

This project has been funded with support from the European Commission. This [publication] communication reflects the views only of the author, and the Commission cannot be held responsible for any use which may be made of the information contained therein.

– Bound trade• There are specific regulations for

running this trade type. The condition you are required to meet is professional knowledge.

– Free trade• To run a free business you are not asked

to prove your professional knowledge. There is no condition to have any documents regarding your qualification and knowledge.

Basic steps to set up a business

Sen

se o

f In

itia

tive a

nd E

ntr

ep

reneu

rsh

ip

This project has been funded with support from the European Commission. This [publication] communication reflects the views only of the author, and the Commission cannot be held responsible for any use which may be made of the information contained therein.

• Licensed Trades

– You can run a licensed trade based on a license. Licensed trades are for example: Road transport, repairs, modifications, exchange offices, etc. Specific directives regulate professional eligibility for licensed trades.

– Special condition for running a licensed trade is reliability that assesses in connection with business objective with respect to life protection, health protection, protection of ownership and other rights of people and public interest. Trade authority can impose some conditions regarding running the trade.

– Particularly it is allowed to limit the territory of running the trade because of public interest reason or it can authorize the trade for limited period.

Basic Steps to set up a business

Sen

se o

f In

itia

tive a

nd E

ntr

ep

reneu

rsh

ip

This project has been funded with support from the European Commission. This [publication] communication reflects the views only of the author, and the Commission cannot be held responsible for any use which may be made of the information contained therein.

• Third Step– Required Documents:

• To issue a trade, you will need a statement of crime register. You are supposed to demonstrate your either ownership or rental of either a real estate, which is the place of your business or your operation with ownership certificate (if you are the owner) or having a rent contract (if you rent the building or premises). In the case of renting a letter of approval of the owner of the real estate form instead of the contract it is acceptable. If special certificates are required to run a business, you are supposed to demonstrate them as well (such as a diploma).

Basic steps to set up a business

Sen

se o

f In

itia

tive a

nd E

ntr

ep

reneu

rsh

ip

This project has been funded with support from the European Commission. This [publication] communication reflects the views only of the author, and the Commission cannot be held responsible for any use which may be made of the information contained therein.

• Fourth Step– Trade authority

• The next step is arranging a trade license.

–   Sole trader• Those who want to start a business are obliged to report to

respective local trade authority according to permanent address of the trader.

–  Corporate body• Those who want to carry on a licensed trade are obliged to

ask Trade Office to issue a concession. Those who want to run a registry trade are obliged to announce that to a respective local trade office according to the address of place of business of the corporate body.

Basic steps to set up a business

Sen

se o

f In

itia

tive a

nd E

ntr

ep

reneu

rsh

ip

This project has been funded with support from the European Commission. This [publication] communication reflects the views only of the author, and the Commission cannot be held responsible for any use which may be made of the information contained therein.

• Fifth step– Health Insurance and social security insurance company

• As a self-employed person you are supposed to pay health insurance contributions so after establishing your business you should register as a self-employed person in your health insurance company.

• Regarding social security (pension contributions, unemployment contributions) you are supposed to report to Social security insurance company the commencement date of your business. You must be informed on the legislation of your country regarding the social insurance.

Basic steps to set up a business

Sen

se o

f In

itia

tive a

nd E

ntr

ep

reneu

rsh

ip

This project has been funded with support from the European Commission. This [publication] communication reflects the views only of the author, and the Commission cannot be held responsible for any use which may be made of the information contained therein.

• How to set up a business plan– There is no generally accepted rule of how

to structure a business plan, but frequently business plans consist of the following items:

• Executive summary (short summary of the project)

• Starting position / Actual analysis (of enterprise, business environment, business team)

• Marketing plan• Project plan• Investment analysis and assessment of

economic efficiency • Financial plan• Appendix / Notes to the business plan

Structure of a business plan

A business plan is an essential step for any prudent entrepreneur to take, regardless of the size of the business.

A business plan is an essential step for any prudent entrepreneur to take, regardless of the size of the business.

Sen

se o

f In

itia

tive a

nd E

ntr

ep

reneu

rsh

ip

This project has been funded with support from the European Commission. This [publication] communication reflects the views only of the author, and the Commission cannot be held responsible for any use which may be made of the information contained therein.

– Executive Summary• Decision makers often have little time and

secondly, too little interest to be bothered with details. They want to receive a quick overview, which is their first criterion in deciding whether to deal with the project personally or delegate it to others.

– Starting position / Actual analysis (of enterprise, business environment, business team)

• Only a person who knows about his present position can set realistic goals and take appropriate steps to realize them. This is why any business plan needs to start from a solid actual analysis.

Structure of a business plan

Sen

se o

f In

itia

tive a

nd E

ntr

ep

reneu

rsh

ip

This project has been funded with support from the European Commission. This [publication] communication reflects the views only of the author, and the Commission cannot be held responsible for any use which may be made of the information contained therein.

• Marketing plan– Eventually projects must also be

marketed, so that they reach the customer and contribute their share to the success of the business organisation. A thorough marketing plan ought to take care of the following items in detail:

• consider the needs of the customers• design a product suitable to meet those

needs• work out a pricing strategy / figure out

the associated costs• communicate the project, i.e. develop a

strategy that makes the customers accept the project

Structure of a business plan

Sen

se o

f In

itia

tive a

nd E

ntr

ep

reneu

rsh

ip

This project has been funded with support from the European Commission. This [publication] communication reflects the views only of the author, and the Commission cannot be held responsible for any use which may be made of the information contained therein.

• Project Plan– Realizing a project needs detailed

planning of time and the necessary resources. A project plan must present and explain the major project stages as milestones and must not ignore possible restraining factors.

Structure of a business plan

Sen

se o

f In

itia

tive a

nd E

ntr

ep

reneu

rsh

ip

This project has been funded with support from the European Commission. This [publication] communication reflects the views only of the author, and the Commission cannot be held responsible for any use which may be made of the information contained therein.

• Investment analysis and assessment of exonomic efficiency– A project should always yield more than it costs. It should be

profitable. It is the task of an investment analysis and/or an assessment of economic efficiency to demonstrate just that. Methods include a number of different procedures, which range from the simple static calculation of the break-even point to the construction of sophisticated dynamic models by means of the calculus of probability.

• Financial Plan– The best ideas and the most profitable investments cannot be realized

if the enterprise cannot afford them. It happens quite often that a firm runs out of financial means and has to step on the brake when it is only half way through a project. It is therefore crucial to determine whether or not there will be sufficient funding for the project.

Structure of the business plan

Sen

se o

f In

itia

tive a

nd E

ntr

ep

reneu

rsh

ip

This project has been funded with support from the European Commission. This [publication] communication reflects the views only of the author, and the Commission cannot be held responsible for any use which may be made of the information contained therein.

• Appendix- Notes to the business plan– In order to keep the core of a business

plan concise, additional information should be added in an appendix.

Structure of the business plan

Sen

se o

f In

itia

tive a

nd E

ntr

ep

reneu

rsh

ip

This project has been funded with support from the European Commission. This [publication] communication reflects the views only of the author, and the Commission cannot be held responsible for any use which may be made of the information contained therein.

• Step 1: Analyse strengths and weaknesses– In addition, you may try to determine and

categorize the significance or weight of individual strengths and weaknesses.

– Example: 1 = highly significant, 4 = insignificant

• Step 2: Plan measures to reinforce your strengths and eliminate or mitigate your weaknesses

Analytical & planning instruments

  

Strengths/ Weaknesses Analysis  Performing such an analysis, which focuses on an enterprise’s internal strengths and weaknesses is easy and comprises the following steps:

Sen

se o

f In

itia

tive a

nd E

ntr

ep

reneu

rsh

ip

This project has been funded with support from the European Commission. This [publication] communication reflects the views only of the author, and the Commission cannot be held responsible for any use which may be made of the information contained therein.

• Step 1: Analyse opportunities and threats– At this point you may categorize according to two criteria:

• a) Significance: How important is the opportunity / how serious is the risk for the future of the enterprise?

• b) Probability: How likely is the opportunity / the risk to occur?

– 1 = highly significant / highly probable– 4 = insignificant / highly unlikely

• Step 2: Plan measures to seize the opportunities and avoid risks

Analytical & planning instruments

Opportunities / ThreatsThe opportunities/threats analysis which focuses on external aspects is developed in a similar manner as the strengths/weaknesses analysis and comprises the following steps:

Sen

se o

f In

itia

tive a

nd E

ntr

ep

reneu

rsh

ip

This project has been funded with support from the European Commission. This [publication] communication reflects the views only of the author, and the Commission cannot be held responsible for any use which may be made of the information contained therein.

Analytical & planning instruments

 

SWOT Analysis

It is a combination of the strengths / weaknesses analysis and the opportunities / threats analysis.

Both analyses are presented in a so-called SWOT matrix that is designed as follows:

Sen

se o

f In

itia

tive a

nd E

ntr

ep

reneu

rsh

ip

This project has been funded with support from the European Commission. This [publication] communication reflects the views only of the author, and the Commission cannot be held responsible for any use which may be made of the information contained therein.

Analytical &Planning Instruments

Sen

se o

f In

itia

tive a

nd E

ntr

ep

reneu

rsh

ip

This project has been funded with support from the European Commission. This [publication] communication reflects the views only of the author, and the Commission cannot be held responsible for any use which may be made of the information contained therein.

• An importance-urgency matrix may help in such cases. It requires the following steps to be taken:

– Step 1: Prepare a to-do list.– Step 2: Evaluate the importance of the to-do items.– Step 3: Evaluate the urgency of the to-do items

Analytical &Planning InstrumentsPortfolio analysisThis important planning instrument of business management can, for instance, help anyone towards better time management. We want to approach it by first explaining what an ”importance / urgency portfolio or matrix” is.

Sen

se o

f In

itia

tive a

nd E

ntr

ep

reneu

rsh

ip

This project has been funded with support from the European Commission. This [publication] communication reflects the views only of the author, and the Commission cannot be held responsible for any use which may be made of the information contained therein.

• The marketing mix consists of four basic elements called the four Ps– Product: representing the actual product. – Price: represents the process of

determining the value of a product. – Place: represents the variables of getting

the product to the consumer like distribution channels, market coverage and movement organization.

– Promotion: is the last P for which is the process of reaching the target market and convincing them to go out and buy the product.

Marketing Mix

Sen

se o

f In

itia

tive a

nd E

ntr

ep

reneu

rsh

ip

This project has been funded with support from the European Commission. This [publication] communication reflects the views only of the author, and the Commission cannot be held responsible for any use which may be made of the information contained therein.

• Virtually any medium can be used for advertising. – Commercial advertising media can

include • wall paintings, • billboards, • street furniture, • components, • printed flyers and rack cards, radio, • cinema and • television adverts, • web banners, • mobile telephone screens,

Types of advertising

•shopping carts, •web popups, •skywriting, •bus stop benches, •human billboards, •magazines, •newspapers, town criers, sides of buses, banners attached to or sides of airplanes

Sen

se o

f In

itia

tive a

nd E

ntr

ep

reneu

rsh

ip

This project has been funded with support from the European Commission. This [publication] communication reflects the views only of the author, and the Commission cannot be held responsible for any use which may be made of the information contained therein.

• Other advertisements• Ιn-flight advertisements on seatback tray tables or overhead

storage bins, taxicab doors, roof mounts and passenger screens, musical stage shows, subway platforms and trains, elastic bands on disposable diapers, doors of bathroom stalls stickers on apples in supermarkets, shopping cart handles (grabertising), the opening section of streaming audio and video, posters, and the backs of event tickets and supermarket receipts.

– Any place an "identified" sponsor pays to deliver their message through a medium is advertising. 

Types of advertising

Sen

se o

f In

itia

tive a

nd E

ntr

ep

reneu

rsh

ip

This project has been funded with support from the European Commission. This [publication] communication reflects the views only of the author, and the Commission cannot be held responsible for any use which may be made of the information contained therein.

You have successfully completed this section.

Thank you for participating in this learning session and

remember never stop engaging in learning

situations

Thank YOU