Ques: How to Start Small and Medium Business?

Starting a small or medium-sized business can be an exciting yet challenging

endeavor. Here are some general steps to help you get started:

1.Identify Your Business Idea: Think about your interests, skills, and market
opportunities. What products or services could you offer that fulfill a need or solve
a problem? Conduct market research to validate your idea and assess the demand.

2.Create a Business Plan: Outline your business goals, target market, competition
analysis, marketing and sales strategy, operational plan, and financial projections.
A well-thought-out business plan serves as a roadmap for your business and can
help secure funding if needed.

3.Choose a Business Structure: Decide on the legal structure of your business,

such as sole proprietorship, partnership, limited liability company (LLC), or
corporation. Each structure has its own implications for taxes, liability, and
regulations.
Register Your Business: Choose a business name and register it with the
appropriate government authorities. Obtain any necessary licenses or permits for
your industry and location.

4.Set Up Your Finances: Open a business bank account to keep your personal and
business finances separate. Determine your startup costs, create a budget, and
explore funding options such as personal savings, loans, investors, or crowd
funding.

5.Develop Your Brand: Create a strong brand identity including a logo, website,
and marketing materials. Your brand should communicate your values and
differentiate you from competitors.

6.Build Your Team: If needed, recruit employees or contractors with the skills and
experience necessary to help grow your business. Invest in training and
development to ensure your team is equipped to succeed.

7.Set Up Operations: Establish processes and systems for day-to-day operations,

including production, inventory management, customer service, and logistics.
Consider leveraging technology to streamline workflows and improve efficiency.

8.Market Your Business: Develop a marketing strategy to attract customers and

generate sales. This may include digital marketing, social media, advertising,
networking, and partnerships. Build relationships with your target audience and
focus on providing value.

9.Launch Your Business: Once everything is in place, launch your business with a
strong marketing campaign and promotional efforts. Be prepared to adapt and
iterate based on feedback and market dynamics.

10.Monitor and Adapt: Regularly review your business performance against your
goals and make adjustments as needed. Stay informed about industry trends,
customer preferences, and regulatory changes to stay competitive.

Question 2

1.Risk of entrepreneurship

Financial risk- In most new ventures, individual invests his or her savings or other
resources, which creates a serious financial risk. If the venture fails, this money or
resources will be lost. If the individual takes loan from a bank and invest it on the
venture, it also create a risk. The individual might face personal bankruptcy. For
these reasons, many people are unwilling to risk their savings, house, property and
salary to new business.

Career risk- It is a major concern to manager or employees who have a secure

organizational job with a high salary and a good benefit package. If a person
becomes an entrepreneur will he be able to find a job or go back to their old job if
their venture fail.

Family and social risk- Starting a new venture require much of the entrepreneurs’
time and energy, which can create a risk in his or her social life with family and
friends.

Psychic risk- Drastic damage in the relationship with family and friends and
financial catastrophes will have a psychological impact for them.
 QUESTION 3
TYPES OF INNOVATIONS
Four basic types of innovation exist:

Invention: the creation of a new product, service or process, often one that is
untried. Such concept tends to be revolutionary.

Example: AMBASSADOR HEADPHONES TRANSLATORS,

XIAOMI HANDWARMER POWERBANK, The Wearable Reading Light.

Extension- the expansion of a product or service. Adding some features on an

already existing product, service or process.

Example:colgate

Duplication- creative replication of an exiting concept.

DUPLICATION-
1. Hamilton Jet Boat, 2. Dean Kamen (US) – Segway Human Transporter,

Synthesis- the combination of existing concepts and factors into a new

formulation.
Example: Alan Gibb (NZ) – Aquada (car on water)

Question 4
Importance of entrepreneurship development in Bangladesh:

Entrepreneurship plays an important role in the economic development of a

country. Entrepreneurship creates the forces of change and ultimately accelerates
the pace of economic development. Some of the importance of entrepreneurship in
economic development is highlighted below.

Proper utilization of resources- Economic development of a country depends on

the proper utilization of human and non-human resources. Entrepreneurship is all
about putting to better use the resources which are of low value with an aim of
earning income.
Growth of Infrastructural Facilities: Entrepreneurs help in the growth of
infrastructural facilities such as roads, bridges, buildings, factories, etc. which are
the cornerstones of economic growth.

Industrialization- Another important aspect of economic development is

industrialization. A country may have a plenty of raw materials, labour facilities,
capital, etc., but it may still not be an industrially developed country. Entrepreneurs
take initiative by establishing new ventures. Bangladesh has a massive potentiality
in terms of resource capacity, both material and human for the development of
industries.

Creation of employment opportunities- Entrepreneurs play a significant role in

generation of employment opportunities by establishing new units in
manufacturing, trading and service sectors, laying emphasis on small scale
industries, upholding self-employment as a core objective. They establish new
organizations that employ labour force.

Changes in traditional outlook and values- Economic development is to some

extent slow down by the traditional outlooks, attitudes, values and thinking of the
people. People of a country should welcome and accept changes and cope with the
changing environment. Entrepreneurs help in this regard by generating and
introducing new methods and technologies in the society.

Wealth Creation and Sharing- By establishing the business entity, entrepreneurs

invest their own resources and attract capital from investors, lenders and the
public. This drives public wealth and allows people to benefit from the success of
entrepreneurs and growing businesses.

Standard of Living/ Improvement in physical quality of life- Entrepreneurs

again play a key role in increasing the standard of living in a community. They do
this not just by creating jobs, but also by developing and adopting innovations that
lead to improvements in the quality of life of their employees, customers, and other
stakeholders in the community.

Brining Social Stability and Balanced Regional Development- Entrepreneurs

play a crucial and unique role in bringing about social stability and balanced
regional development through absorption of workforce in industries, removal of
poverty, improving health and education facilities, creating fair competition,
equitable distribution of income, creation of social infrastructures, empowering
women and weaker sections of the society and supply of qualitative goods and
services.

Question 5
Problems faced by Entrepreneurs in Bangladesh:

The country’s SMEs confront various types of structural, managerial, financial,

infrastructural, marketing, and social problems. The extent of the problems faced
by SMEs differs according to their size, location, and market linkage.

Lack of Sufficient Financial Support: Small entrepreneurs require various types

of financial support to cover their expenses, such as “initial capital” to cover initial
expenses, and “working capital” to cover running expenses. In most cases, these
enterprises receive ‘working capital’ from the financial institutions, but ‘start up
capital’, which is crucial to cover preliminary expenses, is often not supported by
financial institutions. Various policies such as the SME policy or Industrial Policy
do not give any guidelines regarding the financial coverage required to meet the
initial expenses and unexpected requirements. Although the government has tried
to enhance support for SMEs by providing credit through different banks and other
institutions including the ‘SME Foundation’, the coverage of these support
programs is found to be inadequate.
In the budget of FY2008, the government has allocated an endowment fund of
Tk.100 crore for the SME Foundation to provide credit to SMEs through private
commercial banks under the Foundation’s credit wholesaling program. The
government has continued allocating resources in the fiscal year FY2009 (Tk.100
crore) to support SMEs. The allocation of EEF (Equity and Entrepreneurship Fund)
in the FY2009 has been targeted at IT related industries; in FY2008 the EEF
allocation was targeted at agro-based industries. A total of Tk.469.6 crore has been
given as of 2008 in 215 agro-based projects and IT related projects. Major projects
included fish hatchery, shrimp hatchery, software development and poultry and fish
feed projects. However, the EEF covered only about 38.1 per cent of the total cost
of the projects. This needs to be increased to provide adequate support to the
eligible business activities.
Poor legal and regulatory framework: Although various policies in support of
SMEs are currently in operation, there is a problem of ambiguity/uncertainty, non-
transparency, and inconsistency in these policies, which ultimately reduces
entrepreneurs’ confidence in the legal and regulatory framework of the country.
Besides, inconsistencies in enforcing laws, bureaucratic interpretation of rules, lack
of firm political commitment, lack of accountability, lack of rule of law, and lack
of control over corruption, offers an meaningful list revealing how poor the legal
and regulatory framework is, and how badly the development of SMEs is hindered
in the country.
Poor infrastructure: Poor physical infrastructure increases the cost of production
and reduces the competitiveness of SME products. Major problems related to
infrastructure include frequent power failures and poor transport facilities. Poor
transportation facilities hamper the smooth production and delivery of products.
Small enterprises suffer more from frequent power failures because of lesser
captive power generation facilities in their production units.

Lack of skilled workers: In order to enhance productivity and manufacture high

end products, entrepreneurs often demand an adequate supply of skilled workers.
An upgrade of technologies, important for manufacturing better products, always
requires skilled workers. Huge public investment is necessary to develop human
resources. A number of public and private initiatives were undertaken in order to
upgrade workers’ skill. The government allocated Tk.50 crore in the 2007 national
budget for skilled development training of garment workers. The Bangladesh
Garment Manufacturers and Exporters Association (BGMEA) also took the
initiative of training workers and supplying them to various factories.

Political unrest: Political structures remain confrontational in the country.

Personal and political conflict between rivals, frequent strikes, and the lack of
respect for basic principles of democratic governance has become the principal
characteristics of the country’s political system. A series of prolonged strikes affect
the socio-economic and political conditions of the country. The average cost of
strikes during the 1990s to the Bangladesh economy was 3-4 percent of GDP
(UNDP, 2005). These syndromes have given birth to a culture of corruption,
bribery and discourage the development of entrepreneurial talent and initiative in
the country through the non-adherence of any rule of law.

Absence of a favorable social/cultural environment: The concept of

entrepreneurship is not native (known) to every culture or society. Starting a
business requires courage: the courage to assume the risks of putting money into
ideas and the courage to take a leap into an unknown future. Throughout the world
millions of entrepreneurs display such courage. But the fear of failure produced by
the highly volatile (tensed) socio-politico-economic conditions of Bangladesh has
increased into the minds of potential entrepreneurs. Consequently, new and
energetic entrepreneurs are not emerging in the market. The traditional and cultural
values of the country tend to keep women inside family homes while women
shoulder the burden of the poverty. The SME policy of the country needs to work
on building awareness at the socio-cultural level to develop a favourable
environment for creating new entrepreneurs.

Poor quality and standards: Bangladesh has limited capacity to ensure the
quality of products and services to consumers not only in the domestic market but
also in international markets. Currently, the Bangladesh Standards and Testing
Institution (BSTI) formulate national standards for industrial, food, and chemical
products. However, BSTI lacks credibility and importers from North America and
Europe do not accept the certificates it issues.

Inefficient marketing practices: SMEs in Bangladesh, especially the small

enterprises, do not have enough marketing capabilities or networks. Majority of
small firms do not have resources to invest in marketing. Export-oriented SMEs
have very little marketing activities and most of them try to survive by linking up
with multinational buyers or setting up subcontracting relationships with them. In
the domestic market, lack of resources and skills make it difficult for SMEs to take
advantage of market promotional activities.

Lack of entrepreneurship and management skills: Many owner-managers and

entrepreneurs often lack wider managerial skills, which hinder their long-term
success. Strategic planning, marketing, commitment to quality, knowledge of
quality systems, cash-flow management, and information technology are a few
critical elements of management required to meet the challenges of the market
economy.

Challenges faced by women entrepreneurs: Women are handicapped in the

current centralized wholesale market set-up controlled by men. Home-based
women entrepreneurs suffer from a lack of access to inputs and services like credit,
input supplies, markets and new technology that could increase their productivity.
Women often lack the legal knowledge to protect their industries. Due to the lack
of market facilities, women do not get the proper prices for their products, which
are under-priced by the customers or wholesalers who order their products. Bank
loan procedures are not that easy because of bureaucratic obstacles.

Question 6
Problems Faced by Women Entrepreneurs:

1. Access to Finance & Financial Institutions- Insufficient initial capital is one

of the main problems for the women entrepreneurs in Bangladesh. Particularly,
when a new venture is established, huge difficulties is faced by them in
 accessing credit. High transaction costs, the rigidity of security requirements
and heavy paper work are further problems to women entrepreneurs. In other
words, lack of capital, higher interest rates, lack of experience and information,
lower investment, excessive of formality in loan arrangement and unavailability
of facilities like business premises or other equipment, often hamper the
progress and existence of enterprises handled by women entrepreneurs.

2. Lack of Knowledge- Lack of knowledge among the women entrepreneurs is

another barrier. Many of them have no education over class eight or SSC level.
Knowledge about business enterprise, business management, environment,
entrepreneurship, economy and policy are important in today’s business. Lack
of knowledge in these topics acts as a major obstacle to women
entrepreneurship. In another survey revealed that 76.3 percent of the rural
entrepreneurs had no education at all, of which nearly 17 percent could neither
read nor write and the other 59.3 percent were only able to put on their
signature.

3. Lack of skilled manpower and Entrepreneurial Training- Lack of skilled

and trained manpower is a further barrier to women entrepreneurship growth.
Profitable business requires skilled and trained manpower that have greater
output. For successful entrepreneurship generation, entrepreneurship education
is necessary.

4. Family Responsibilities- Family responsibilities such as household work,

caring for elders and nurturing children prevent them from gaining skills,
knowledge properly since they cannot usually find the suitable time to be more
proficient.

5. Government’s Taxing Policy - Bangladesh tax policy and measures are too
complex for an average income earner to understand. Requirement of TIN
Certificate, Tax credit for tax deducted at sources, Trade license fees creates
difficulties. If tax rate is increased; new tax or VAT is imposed; tax holiday
facility or tax exemption are not given they negatively affect the growth of
women entrepreneurship.
6. Access to Marketing Information and Network - They do not know how to
get access to domestic as well as export market. Even they do not have
knowledge of using market promotion activities. The unavailability of
information relating to market is a major problem. There are rarely any women-
majority or women-only networks where a woman can achieve self-reliance,
participate and attempt to make improvement.

7. Lack of Access to Infrastructure - Existing women enterprise both micro,

small and medium enterprise (SMEs) are suffering badly due to load shedding
of electricity and insufficient supply of gas. Poor infrastructure has an effect on
village women’s capacity to develop their enterprises. Further unplanned road
and other physical transportation and communication systems, unorganized
supportive government policy, trade and commerce regulation etc.
8. Lack of Access to Technology- Women entrepreneurs in SMEs usually uses
local technologies to manufacture goods and provide services. But local
technologies are not productive enough to fulfil market demand and produce
quality products. As a consequence, Women SME entrepreneurs are losing their
income due to poor technical knowledge or skills.

9. Absence of R&D to Improve Product Quality- Research and development is

done to improve quality of existing products, innovating new products. In
Bangladesh women entrepreneurs in small and medium (SMEs) cannot afford
to introduce research and development because it requires huge investment.

Question 7
WOMEN ENTREPRENUERship

Women Entrepreneurs means the women or a group of women who initiate,

organize and operate a business enterprise.

Some Successful Bangladeshi Women Entrepreneurs

BIBI RUSSEL
IVY HAQUE RUSSELL
RUBABA DOWLA
SABRINA ISLAM
TASLIMA MIJI

BIBI RUSSEL
She earned a graduate degree in fashion from London College of Fashion in 1975.
In the next five years, she worked as a model for different magazines
including Vogue, Cosmopolitan and Harper's Bazaar.
Returning to Bangladesh in 1994, Russell opened a fashion house named Bibi
Productions, which fused indigenous Bengali cultural elements into her design. As
of 2004, her company employed 35,000 weavers in rural Bangladesh.

IVY HAQUE RUSSELL

She also founded Pulse Healthcare service, a Digital healthcare platform providing
access to Doctors through video consultation with online diagnosis and e-
prescription capability . She is Currently leading Oracle Bangladesh as Country
Managing Director. More than 23 years of work experience in the corporate sector.

RUBABA DOWLA
Rubaba Dowla is Pulse Healthcare Service’s founder, which was established in
2017. It is a telemedicine platform that connects patients and doctors through
video conferences.
This platform aims to ensure patients receive good healthcare from their homes,
avoiding waiting in long queues at the hospitals. Such online consultations are
secure and convenient, and the platform showed its significance during the
COVID-19 pandemic.

SABRINA ISLAM
Sabrina Islam is modernizing the country’s architecture field. In the late 90s,
when she used to work with Bangladesh Handicrafts Cooperative Federation
(Karika), Sabrina realized that stained glasses were not available in the country
and they needed to be imported. However, the demand for decorative glasses
was growing, and architectural trends were changing. Identifying this market gap,
Sabrina Islam gained skills in making decorative glass arts and founded
Reflections in Bangladesh in 1998.

TASLIMA MIJI

Taslima Miji started exploring the field of computer hardware businesses. Finally,
in June 2008, she established Techmania, a company that offers computer-
related hardware and networking solutions. Techamania’s services are available
inside Dhaka, which includes assembling, troubleshooting, and repairing
computer systems.

Question 8
Dealing with stress

Networking- One way to relieve the loneliness of running a business is to share

experiences by networking with other business owners. Hearing about the success
and faults of other business owners, can help an entrepreneur solve many problems
in threir business.

Getting away from it all- the best antidote to immersion in business is a holiday.
Short holidays or breaks allow a measure of self-renewal.

Communicating with employees- If entrepreneurs are in close contact to their

employees, they can readily assess the concerns of their staffs such as company-
wide outings, flexible hours, and small loans to tide workers until payday -are
possible to provide to the employees. In such settings, employees often are more
productive and entrepreneurs may experience less stress due to personal touch.

Finding satisfaction outside the company- they need to get away from business
occasionally and do some other thing through which they can gain some new
perspectives in life or which makes them happy. It can be painting, fishing, yoga
etc.

Delegating- entrepreneurs think that they have to be involved in every aspect of

the operation of their business. To deal with stress delegation of work is needed.
Exercising- physical exercise will also help to reduce stress level.

Question 9
Sources of innovative ideas
The following are some of the most effective sources of entrepreneurial
opportunities.

Trends- it is what majority of the population currently think and want. Observing
trends closely will grant an entrepreneur the ability to recognize a potential
opportunity. Trends need to be observed in society, technological, economy and
government.

1. Societal trends- health and fitness, amusement park, aging demographics.

2. Technological trends- mobile, internet advances.
3. Economic trends- high disposable income, dual wage-earner
 4. Governmental trends-increased regulations, petroleum price

Unexpected occurrences- If something happen unplanned which might be

positive or negative. It produced an influx of innovative solution to that problem.
Example- the 9/11 US terrorist attack.

Incongruities- Incongruities occur when a gap or difference exists between

expectations and reality. Difference between what is and what should be, such as
what customer complains about and unmet needs of customers. These incongruities
can be a source of innovative idea for a company. Example- FedEx.

Process needs- these occur when an answer to a particular need is required. The
entrepreneur must recognize an innovative solution. Example- creation of medical
devices or medicines.

Industry and market changes- Continual shifts in the marketplace are caused by
development such as consumer attitudes, advancement in technology and industry
growth. Industries and markets always undergo changes in structure, design or
definition. Example- service like Uber or home deliveries

Demographics changes- These arise from trend changes in population, age,

education, occupation, etc. Demographic shifts are important and often provide
new entrepreneurial opportunities. Example- land development or health care for
senior citizens.

Perceptual changes- these are changes that occur in people’s interpretation of

facts and concepts. It can cause major shifts in ideas to take place. Example-
healthy foods or gym for people are getting concern about fitness.

Knowledge-based concepts- these are the basis for the creation or development of
something brand new. Inventions are knowledge based they are the product of new
thinking, new methods and new knowledge. Such innovations often require the
longest time period between initiation and market implementation because of the
need for testing and modification. Example- today’s cellphone that provide lot of
facilities e.g. camera, internet, music etc. Another example is robotics
 Question 10
Factors Responsible for Failure

 Inappropriate course of action for future.

 Unskilled workers
 Wrong business location
 Starting business with too many competitors.
 Inappropriate record keeping
 Starting business with scarcity/lack of capital
 Reluctant to change
 Obsolete machinery
 Lack of knowledge about the line of business, market and demand
 Conflicts among the partners
 Low quality product
 Not good service.
 Little or No market survey
 Poor channel of distribution
 Natural calamity accident
 Death of key personnel.