ENTREPRENEURSHIP w. POWER Hub - Wangari Maathai Institute
Entrepreneurship • Entrepreneurship is the development of a business from the ground up — coming up with an idea and turning it into a profitable business
Business life cycle
Clean energy value chain
Entrepreneurial marketing • EM is a spirit—an orientation as well as a process of pursuing opportunities and launching and growing ventures that create perceived customer value through relationships, especially by employing innovativeness, creativity, selling, market immersion, networking and flexibility • 80% of entrepreneurship is sales and marketing
Cont. . • Marketing provides an effective vehicle for achieving entrepreneurship. As some have argued, marketing is the home for the entrepreneurial process.
Marketing practices • To have a successful energy business you need to satisfy the wants and needs of the customers. • Planning steps 1. 2. 3. 4. 5. Analyzing marketing opportunities Selecting target markets Designing marketing strategies Developing market programs Managing the marketing effort - Execution
Marketing mix Product Price Promotion Person Place The 5 ‘’Ps’’ help energy entrepreneurs to understand key components of the marketing process & learn how to solve common marketing problems. 8
Product • What is the product/ service? • Physical Presentation • Value Added Qualities • Bundled Package (Product with Service) • One Stop Services
Price Setting the right price 1. 2. 3. 4. 5. Selecting the Price Determining Demand Estimating Costs Analyzing competitors’ costs, prices &offers Selecting a price method: for e. g. markup pricing, target return pricing, value pricing.
Promotion Common promotion platforms • Advertising • Sales Promotion • Events/Experiences • Public Relations & Publicity • Personal Selling • Direct Marketing
Place • Where are the energy products accessed from A - Direct (door to door, market stall, shop) B – Distribution channels (Manufacturer, wholesalers, distributors, retailers, own house/mail order etc. )
Person Ø The relationship between the entrepreneur (producer, salesperson, marketing person) and his/her clients, suppliers and other persons important to the business. Ø The attitude of the entrepreneur (friendly, hospitable, capable and efficient). Ø The personal reputation of the entrepreneur in the location (area, village). Ø The skills and personal competencies of the entrepreneur.
• • v Customer care Treating customers well can help you promote your energy products by word of mouth to neighbours and friends. Customer relationship means making a decision about how you operate, service, help and supply the customers. v After Sale service An energy business + a customer care team, sort out any technical problems and make sure customers are happy. Offer warranty/guarantee
To sell your energy product. . . . You MUST know • the cost of your product or service is the amount you spend to produce it • the price is your financial reward for providing the product or service • the value is what your customer believes the product or service is worth to them
Costing Before setting a price for your product, you have to know the costs of running your business. • Variable costs: These are your expenses specifically to produce/sell your items (changes based on how much you produce/sell). • Fixed costs: These are all the expenses that will not change with the number of products you sell. Total costs = Variable costs + Fixed costs
Pricing & Profit One of the secrets to business success is pricing your products appropriately and that can enhance how much you sell. It's important to find out what your competitors offer and what they charge
Total Revenue = Price x Number of products Profit = Total revenue - Total cost
Record keeping
• Good records will help you monitor the progress of your business, prepare your financial statements, identify sources of income, keep track of deductible expenses, prepare your tax returns, and support items reported on your tax returns
Cash book • Cash book: All the day-to-day transactions involving cash repayments and receipts are recorded in this book. Information in the cash book includes: Cash in hand; Cash purchases; Daily expenses; Cash receipts For balancing: • When you take money out = ( - ) SUBTRACT • When money comes in = ( + ) ADD
Sales book In this book you record all the information about what you sell on cash and on credit. The sales book will show your sales are moving, that is, whether they are going up or down. Always know how much you have been paid in cash and how much is remaining (credit) for every product you sell, and record the information in the sales book! You can make a separate book for people who owe you money if you would like. This can be called a “debtors book, ” as it is to keep track of people who are in debt to you. Make sure you keep a copy of every receipt and fill in your sales book at the end of each day or week.
Credit book In this book, you should record all the debts you have with your suppliers. When you get a loan or credit from someone, you then have a debt with those people. • Creditors are the suppliers to whom your business owes some money.
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