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New Venture Creation
                                                                       An Overview




http://emagine...
The journey to becoming an
           entrepreneur is easy.




http://emagine-group.com   Brand Focused, Socially Active,...
The path to becoming a successful
  one is filled with heartache,
  barriers, failure, ridicule, sacrifice
  and eventuall...
The problem that we have in
   Pakistan is that entrepreneurship
   is misunderstood and therefore
   ridiculed by everyon...
Our parents tell us that we are
   wasting our time and education
   with something that MIGHT earn
   some money



http:...
Our friends tell us that we are
   wasting our time and starving
   ourselves when it would be easier
   to just get a job...
Potential clients don’t take us
   seriously because we don’t have a
   huge financial base to work from,
   so we will pr...
Sadly, all of these things are
   partly true, but they make our
   lives harder and more stressful
   because the approva...
People don’t understand
       entrepreneurship, so they don’t
          know what to make of it.



http://emagine-group....
But the answer to all these
   problems are easy, if you know
   how to handle them.



http://emagine-group.com   Brand F...
First objective of the course:

   To teach you how to explain what you
   are doing to those around you in small
   manag...
Second objective of this course:

   To take your idea and show you
   how to determine if it is viable,
   feasible and h...
Third objective of the course:

   To teach you how to build a
   successful business



http://emagine-group.com   Brand ...
Entrepreneurship in Pakistan
                                  The Great Wasteland of Business




http://emagine-group.co...
Entrepreneurship in Pakistan is a
   failure from the word go because
   of how our culture operates.



http://emagine-gr...
In Pakistan, we don’t accept new
        things with very much ease.




http://emagine-group.com   Brand Focused, Sociall...
In Pakistan, we like to follow the
   crowd more than go our own way.




http://emagine-group.com   Brand Focused, Social...
In Pakistan, we would rather be
   unhappy with our careers than
   dare to do something that takes
   hard work but makes...
All of these things make Pakistan
  a hard place to be an entrepreneur,
  but there are other things that
  keep us from s...
Economic	
  Breakup	
  -­‐	
  Pakistan	
  

                                     10%	
  

                                ...
Business	
  Environment	
  -­‐	
  Pakistan	
  


                                     12%	
  



                         ...
Pakistan follow patterns….




http://emagine-group.com   Brand Focused, Socially Active, Digitally Enabled
For decades there were only 2
   choices when it came to career
   paths:

   Doctor
   Engineer

http://emagine-group.com...
Then the software industry in
   India started to grow and people
   in Pakistan started opening
   software houses.



ht...
So Pakistanis had a new career
   choice – computer science




http://emagine-group.com   Brand Focused, Socially Active,...
Then the banks started to grow
   and hire more and more people….




http://emagine-group.com   Brand Focused, Socially A...
Pakistan had another new career
   choice – MBA




http://emagine-group.com   Brand Focused, Socially Active, Digitally E...
But when the economy turned
   south, unemployment went up
   and people decided to sit at home
   and do nothing rather t...
Why?



http://emagine-group.com    Brand Focused, Socially Active, Digitally Enabled
There are 3 reasons that stop
   people from starting their own
   business in Pakistan:



http://emagine-group.com   Bra...
Reason 1:

   No support network



http://emagine-group.com   Brand Focused, Socially Active, Digitally Enabled
Around the world, universities
   encourage their students to be
   independent and give them the
   skills to be free thi...
With free thinking comes
                       confidence




http://emagine-group.com   Brand Focused, Socially Active, ...
So you are more comfortable
   taking chances and risk to achieve
                 more



http://emagine-group.com   Bran...
But for an entrepreneur to
   succeed, they must have a
   support network



http://emagine-group.com   Brand Focused, So...
We need people who understand
   what we are struggling with to
   help guide us through the difficult
   times



http://...
We don’t have that in Pakistan.




http://emagine-group.com   Brand Focused, Socially Active, Digitally Enabled
Reason 2:

   No financial support



http://emagine-group.com   Brand Focused, Socially Active, Digitally Enabled
For any venture to succeed, there
   needs to be somewhere that
   capital can be sourced



http://emagine-group.com   Br...
In Pakistan, we only have 3 options:

Parents (if they are wealthy)
Banks (if we have collateral)
Sethis (if we are desper...
Financing Option 1 – Parents

   Many of the businesses that are
   started in Pakistan are funded by
   the family of the...
While that is a great option,
   family businesses require lots of
   money and many members of the
   family involved to ...
When it’s only one person, the
   parents give them money so that
   they have something to do – there
   are no checks an...
But when your parents aren’t loaded,
what options do you have?




http://emagine-group.com   Brand Focused, Socially Acti...
Financing Option 2 – Banks

   Some entrepreneurs in Pakistan
   get bank loans to start their
   ventures.


http://emagi...
Bank loans require a number of
   things:

   Collateral to secure the loan
   Proof of Concept
   Past Experience

http:/...
Most entrepreneurs don’t have
   the collateral to secure a bank
   loan.



http://emagine-group.com   Brand Focused, Soc...
Most entrepreneurs need capital
   to be able to provide proof of
   concept.



http://emagine-group.com   Brand Focused,...
Most of your past experience is
   either in working for others or
   none at all. Entrepreneurs that
   have past experie...
But do you really want a bank
   loan?



http://emagine-group.com   Brand Focused, Socially Active, Digitally Enabled
Bank loans mean that you must
   make payments whether you
   have the revenue or not – and
   when you miss a couple of
 ...
Also, in our banking culture, loans
   come with a 22% interest rate




http://emagine-group.com   Brand Focused, Sociall...
In the rest of the world, banks
   have small business loans with
   an interest rate between 2 – 10%.



http://emagine-g...
So if you take a bank loan of Rs.
   10,000,000 at 22% interest




http://emagine-group.com   Brand Focused, Socially Act...
You must be able to pay back Rs.
   100,000 each month otherwise
   your business is at risk



http://emagine-group.com  ...
And Rs. 100,000 in monthly
   revenue is very difficult – if not
   impossible for a new business.



http://emagine-group...
Financing Option 3: Sethi

   The Sethi is one of the worst
   options for startup financing.


http://emagine-group.com  ...
The Sethi sees your business as
   another investment – like gold and
   property – and expects returns
   immediately.


...
As a result, the investment they
   make is capitalized an any cost.




http://emagine-group.com   Brand Focused, Sociall...
That means that you will be
   selling products or providing
   services cheaper than market
   rate so that the Sethi can...
Reason 3:

   No credibility



http://emagine-group.com   Brand Focused, Socially Active, Digitally Enabled
New businesses have no
   credibility in the market because
   they don’t have the capital to
   survive.


http://emagine...
Because of this most clients will
   not work with your venture or
   offer the high value contracts
   because they don’t...
Additionally, since you don’t have
   an existing body of work, you
   don’t have anything to convince
   the client that ...
So you are stuck working with
   small ventures like yours that
   have the same capital problems
   as you do – which cre...
Third Objective of the Course:

   To show you how to get through
   these hard times and give you a
   support network to...
So Where Do We Go?
                                           Getting Around the Problems




http://emagine-group.com    ...
In this course, we will teach you
   how to build successful
   businesses by testing and
   working out the best methods ...
This includes idea generation,
   model development, operations
   planning, human resources and a
   variety of things th...
Our Method of Teaching




http://emagine-group.com   Brand Focused, Socially Active, Digitally Enabled
Financial
                                                                                                      Plan
     ...
Next Week’s Lecture:

   Idea Identification




http://emagine-group.com   Brand Focused, Socially Active, Digitally Enab...
Readings for Next Week:

From Paycheck to Paydirt
Can Entrepreneurs Save The World?
How I Did It?
100 Brilliant and Insigh...
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Lecture 1 - New Venture Creation

  1. 1. New Venture Creation An Overview http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled
  2. 2. The journey to becoming an entrepreneur is easy. http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled
  3. 3. The path to becoming a successful one is filled with heartache, barriers, failure, ridicule, sacrifice and eventually success – if you can stick with it. http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled
  4. 4. The problem that we have in Pakistan is that entrepreneurship is misunderstood and therefore ridiculed by everyone around us. http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled
  5. 5. Our parents tell us that we are wasting our time and education with something that MIGHT earn some money http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled
  6. 6. Our friends tell us that we are wasting our time and starving ourselves when it would be easier to just get a job. http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled
  7. 7. Potential clients don’t take us seriously because we don’t have a huge financial base to work from, so we will probably shut our doors in a few months. http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled
  8. 8. Sadly, all of these things are partly true, but they make our lives harder and more stressful because the approval from our inner circle isn’t there. http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled
  9. 9. People don’t understand entrepreneurship, so they don’t know what to make of it. http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled
  10. 10. But the answer to all these problems are easy, if you know how to handle them. http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled
  11. 11. First objective of the course: To teach you how to explain what you are doing to those around you in small manageable pieces so that you can get their support. http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled
  12. 12. Second objective of this course: To take your idea and show you how to determine if it is viable, feasible and how to make it successful. http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled
  13. 13. Third objective of the course: To teach you how to build a successful business http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled
  14. 14. Entrepreneurship in Pakistan The Great Wasteland of Business http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled
  15. 15. Entrepreneurship in Pakistan is a failure from the word go because of how our culture operates. http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled
  16. 16. In Pakistan, we don’t accept new things with very much ease. http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled
  17. 17. In Pakistan, we like to follow the crowd more than go our own way. http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled
  18. 18. In Pakistan, we would rather be unhappy with our careers than dare to do something that takes hard work but makes us happy – for much less money (in the beginning) http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled
  19. 19. All of these things make Pakistan a hard place to be an entrepreneur, but there are other things that keep us from succeeding. http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled
  20. 20. Economic  Breakup  -­‐  Pakistan   10%   15%   Wealthy   Middle  Class   Poor   75%   http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled
  21. 21. Business  Environment  -­‐  Pakistan   12%   Business  Owners   Working  Class   88%   http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled
  22. 22. Pakistan follow patterns…. http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled
  23. 23. For decades there were only 2 choices when it came to career paths: Doctor Engineer http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled
  24. 24. Then the software industry in India started to grow and people in Pakistan started opening software houses. http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled
  25. 25. So Pakistanis had a new career choice – computer science http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled
  26. 26. Then the banks started to grow and hire more and more people…. http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled
  27. 27. Pakistan had another new career choice – MBA http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled
  28. 28. But when the economy turned south, unemployment went up and people decided to sit at home and do nothing rather than start their own businesses. http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled
  29. 29. Why? http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled
  30. 30. There are 3 reasons that stop people from starting their own business in Pakistan: http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled
  31. 31. Reason 1: No support network http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled
  32. 32. Around the world, universities encourage their students to be independent and give them the skills to be free thinkers http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled
  33. 33. With free thinking comes confidence http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled
  34. 34. So you are more comfortable taking chances and risk to achieve more http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled
  35. 35. But for an entrepreneur to succeed, they must have a support network http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled
  36. 36. We need people who understand what we are struggling with to help guide us through the difficult times http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled
  37. 37. We don’t have that in Pakistan. http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled
  38. 38. Reason 2: No financial support http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled
  39. 39. For any venture to succeed, there needs to be somewhere that capital can be sourced http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled
  40. 40. In Pakistan, we only have 3 options: Parents (if they are wealthy) Banks (if we have collateral) Sethis (if we are desperate) http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled
  41. 41. Financing Option 1 – Parents Many of the businesses that are started in Pakistan are funded by the family of the entrepreneur. http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled
  42. 42. While that is a great option, family businesses require lots of money and many members of the family involved to make them successful. http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled
  43. 43. When it’s only one person, the parents give them money so that they have something to do – there are no checks and balances – therefore, no drive to succeed. http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled
  44. 44. But when your parents aren’t loaded, what options do you have? http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled
  45. 45. Financing Option 2 – Banks Some entrepreneurs in Pakistan get bank loans to start their ventures. http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled
  46. 46. Bank loans require a number of things: Collateral to secure the loan Proof of Concept Past Experience http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled
  47. 47. Most entrepreneurs don’t have the collateral to secure a bank loan. http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled
  48. 48. Most entrepreneurs need capital to be able to provide proof of concept. http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled
  49. 49. Most of your past experience is either in working for others or none at all. Entrepreneurs that have past experience have the capital they need already. http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled
  50. 50. But do you really want a bank loan? http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled
  51. 51. Bank loans mean that you must make payments whether you have the revenue or not – and when you miss a couple of payments, you lose your business http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled
  52. 52. Also, in our banking culture, loans come with a 22% interest rate http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled
  53. 53. In the rest of the world, banks have small business loans with an interest rate between 2 – 10%. http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled
  54. 54. So if you take a bank loan of Rs. 10,000,000 at 22% interest http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled
  55. 55. You must be able to pay back Rs. 100,000 each month otherwise your business is at risk http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled
  56. 56. And Rs. 100,000 in monthly revenue is very difficult – if not impossible for a new business. http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled
  57. 57. Financing Option 3: Sethi The Sethi is one of the worst options for startup financing. http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled
  58. 58. The Sethi sees your business as another investment – like gold and property – and expects returns immediately. http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled
  59. 59. As a result, the investment they make is capitalized an any cost. http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled
  60. 60. That means that you will be selling products or providing services cheaper than market rate so that the Sethi can get their money back and believe that you will succeed. http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled
  61. 61. Reason 3: No credibility http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled
  62. 62. New businesses have no credibility in the market because they don’t have the capital to survive. http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled
  63. 63. Because of this most clients will not work with your venture or offer the high value contracts because they don’t believe you will be around in a couple of months. http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled
  64. 64. Additionally, since you don’t have an existing body of work, you don’t have anything to convince the client that you can deliver the work they are expecting. http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled
  65. 65. So you are stuck working with small ventures like yours that have the same capital problems as you do – which creates a vicious cycle that is difficult to get out of. http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled
  66. 66. Third Objective of the Course: To show you how to get through these hard times and give you a support network to share with. http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled
  67. 67. So Where Do We Go? Getting Around the Problems http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled
  68. 68. In this course, we will teach you how to build successful businesses by testing and working out the best methods to go to market. http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled
  69. 69. This includes idea generation, model development, operations planning, human resources and a variety of things that will make your new venture successful. http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled
  70. 70. Our Method of Teaching http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled
  71. 71. Financial Plan Growth Strategy Pricing Model Product/ Service Human Development Resources Operations Planning Business Model Idea Generation Identification http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled
  72. 72. Next Week’s Lecture: Idea Identification http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled
  73. 73. Readings for Next Week: From Paycheck to Paydirt Can Entrepreneurs Save The World? How I Did It? 100 Brilliant and Insightful Companies http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled
  • haseebteddy

    Oct. 18, 2014
  • jonren

    Aug. 30, 2014
  • romeo190921

    Apr. 22, 2013

Lecture 1 of the New Ventre Creation se

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