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Entrepreneurship and SME

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									Entrepreneurship and SME Main Content Understand Entrepreneurship and entrepreneur The importance of the entrepreneur’s role on Business development and Economic growth in society.

Entrepreneurship Definition: -Entrepreneurship is the practice of starting new organizations, particularly new businesses generally in response to identified opportunities and assuming the risks and rewards. Entrepreneur Definitions: An entrepreneur is someone who indicates either that (s)he has started a business venture alone or with a group or that (s)he has acquired a (family) business, alone or with a group. An entrepreneur is someone who acknowledges that s(he) is being the sole owner of a corporation or is-self employed. Self-employed people do not derive their main income from a wage or a salary, but by exercising their profession or business on their own account and at their own risk.

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Skills required by entrepreneurs can be classified into three main areas: technical skills, business management skills, and personal entrepreneurial skills.(See Table 1.1) Types of Skills Required in Entrepreneurship Technical Skills Writing Oral communication Monitoring environment Interpersonal Business Management Skills Planning and goal setting Decision making Human relations Marketing Personal Entrepreneurial Skills Disciplined Risk taker Innovative Change oriented

Ability to organize Management style Network building Listening Technical business management Table 1.1 Advantages of Entrepreneurship

Finance Accounting Management Control Managing growth

Persistent Visionary leader Ability to manage change

Every successful entrepreneur brings about benefits not only for herslf/himself but for the country as a whole. The benefits that can be derived from entrepreneurial activities are as follows: 1. Self-employment 2. Employment for others 3. Development of more industries especially in the rural areas 4. Encouragement of the processing of local materials into finished goods for domestic consumption as well as for export 5. Income generation 6. Healthy competition thus encourages higer quality products. 7. More goods and services available 8. Development of market 9. Promotion of the use of modern technology in small-scle manufacturing to enhance higher productivity 10. Encouragement of more researches/studies and development of modern machines and equipement for domestic consumption 11. Development of entrepreneurial qualities and attitudes among potential entrepreneurs to bring about significant changes in rural areas

Case Study
Li Ka-shing, is one of the most famous businessmen and entrepreneur in the world.Presently, he is the Chairman of Hutchison Whampoa Limited (HWL) and Cheung Kong Holdings in Hong Kong. Li's beginnings Li Ka-shing was born in Chaozhou in the Guangdong Province, China in 1928. In 1940 the Li family fled to Hong Kong to avoid the turmoils in China.[5] Li's father suffered from tuberculosis and died in Hong Kong. Shouldering the responsibility of looking after the livelihood of the family, Li was forced to leave school before the age of 15 and found a job in a plastics trading company where he labored 16 hours a day. By 1950, his hard work, prudence and his pursuit of excellence had enabled him to start his own company, Cheung Kong Industries. From manufacturing plastics, Li led and developed his company into a leading real estate investment company in Hong Kong that was listed on the Hong Kong Stock Exchange in 1972. Cheung Kong continued to expand by acquiring Hutchison Whampoa and Hongkong Electric Holdings Limited in 1979 and 1985 respectively.
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Li's businesses A Harvard Business School article summarizes Li's career in the following way:

From his humble beginnings in China as a teacher’s son, a refugee, and later as a salesman, Li provides a lesson in integrity and adaptability. Through hard work, and a reputation for remaining true to his internal moral compass, he was able to build a business empire that includes: banking, construction, real estate, plastics, cellular phones, satellite television, cement production, retail outlets (pharmacies and supermarkets), hotels, domestic transportation (sky train), airports, electric power, steel production, ports, and shipping.[7]
Li's businesses are dominant in every facet of life in Hong Kong, from electricity to telecommunications, from real estate to retail, from shipping to the Internet. The group operates in 54 countries and employs over 220,000 staff worldwide. Plastics In 1949, after learning how to operate a plant, Li founded a plastics manufacturing company in Hong Kong with funds borrowed from family and friends and contacts he cultivated as top-tier salesmen. Always anxious to strengthen his company's position, Li read trade publications and business news religiously. Li noticed the growing wealth of the west and decided to supply the world with high quality plastic flowers at bargain prices. Li visited Europe to learn the

sophisticated technique of mixing colour with plastics that resemble real flowers. After retooling his shop and hiring the best technicians he could find, he prepared for weeks for the plant visit of a large foreign buyer. Impressed with the quality of Li's plant, the buyer placed a large order. A few years later, Li grew to be the largest supplier of plastic flowers in Asia and made a fortune selling them. Later on, when people ask him if he considered himself lucky, Li's response was "No, I wasn't lucky. I worked hard to achieve the goals I set for myself." Real estate In 1958, unable to renew the lease for his company, Li was forced to purchase and develop a site by himself. Li was diligent in bidding for land, always making calculations to ensure his profit would be satisfactory and not get carried away by the heat of the moment. Li has a saying that "buying land is not like buying antique, it is not the only deal available." His big break came during the 1960s. When the 1967 riots inspired by the Cultural Revolution on the Mainland were in full swing, many fled Hong Kong. As a result, property prices plummeted. Li, believing that the political crisis would be temporary, and that property prices would eventually rise after that, started buying good parcels of land at rock-bottom prices. By 1971, Li officially named his real estate development company Cheung Kong (長江實業有限公司). Ports and electricity In 1979, Li closed a unique transaction and acquired his current flagship company Hutchison Whampoa Limited from one of today's largest banks HSBC. The purchase created a massive conglomerate with business interests in multiple industries. The most notable branch of his business is the investment in container port facilities around the world, including in Hong Kong and many developing countries. Retail A subsidiary of Hutchison Whampoa, the A.S. Watson Group is a leading retail operator with over 6,800 stores. Its portfolio encompasses health & beauty specialist Watson's Your Personal Store, PARKnSHOP supermarkets, Great Food Hall, TASTE food galleria, Gourmet boutique style fine food hall, Fortress electrical appliance stores, Watson’s Wine Cellars and Nuance-Watson airport duty free shops. ASW is also a major producer and distributor of water products and beverages in the region with Watsons Water the top selling brand in Hong Kong.

Discuss about what factors that make Li Ka Shing to become a successful entrepreneur.

SME
Main content What is SME in Hong Kong? The importane of SME to Hong Kong Economics Comparison between SME and the large enterprise How government support SME? And the business proposal

SME Definition: The Governemnt of Hong Kong specifies that manufacturing enterprises with fewer than 100 employees and non- manufacturing enterprises with fewer than 50 employees in Hong Kong come under the category of SMEs. Importance of SMEs to HK economics According to the statistics, as of June 2004, Hong Kong wa home to over290,000 SMEs, which accounted for about 98% of the total establishments in the city.It is crucial for HK economics. 1. Provide job opporturnities - According to the statistics released by the Support and Consultation Centre for SMEs (SUCCESS), SMEs provided job opporturnities to about 1,33 million people, about 60% of the total employment( excluding civil service). 2. Develope new products and services - In order to keep existing in the market, SMEs keep risking, innovating and looking for change. That brings new products and services to the consumers. 3. Support large enterprise - Large enterprises cannot all the time self-sufficient, sometimes it have to rely on SMES to assist and to complement. For example, the supply of the domestic materials,etc. 4. Fulfil special needs - The high flexibilty of SME can satisfy the special needs of the customers and make the corresponding adjustment.

5. Construct a good development environment - By the coorperation between SMEs, it build up a harmonious business operating environment. Comaprison between SME and the large enterprise

Business Decision affairs Internal structure No.of employees Labour relation Internal communication and coordination Customer relation Resources/Resources management Capital/ Capital source Management

SMEs Complex More Complex More Farther More difficult

Large Enterprises Simple,localized Less Simple Less Closer Simpler

Farther More More,widespread Decentralization

Closer Less Less,Simple Centralization

How government support SME? Small and medium enterprises (SMEs) are the backbone of Hong Kong's economy, and the driving force of our economic development. They play an important role in the process of economic restructuring. SMEs comprise over 98% of business establishments in Hong Kong and employ about 60% of the working population in the private sector. The Government of the Hong Kong Special Administrative Region (HKSAR) attaches great importance to supporting Hong Kong's SMEs. To support the SMEs to cope with economic developments, the Chief Executive, in his Policy Address in October 2001, accepted the Report on Support Measures for SMEs submitted to him by the SME Committee in June of the same year, and set aside $1.9 billion to establish four funding schemes with a total commitment of $7.5 billion to help SMEs rise to new challenges and opportunities. The four funding schemes, which were set up in December 2001/January 2002, are:

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SME Loan Guarantee Scheme [formerly known as SME Business Installations and Equipment Loan Guarantee Scheme]

- SME Export Marketing Fund - SME Training Fund - SME Development Fund Business proposal A business proposal is an offering from a seller to a prospective buyer. Proposal can range in size from a one page letter, or price list,to several hundred pages of detailed specifications.In the business sales process, the written propsal is the vehicle that carries the term of an agreement between buyer and seller, and forms the basis for a subsequent business contract. When a proposed offer is accepted by the buyer , it creates a legally binding document for both parties, buyer and seller. In compex sales situations,the process if selling can take several weeks, or even months,to complete.In some cases,offer and counter offers will go back and forth.The proposal provides a formal way for both sides to communicate in writing during these negotiations. Prospective buyers sometimes issue a Request for Proposals(RFP), or an invitation for Bids(IFB), to guide the sellers and provide specific information about what products and services they want. These specifications become the customer’s requirements, and meeting requirement is a major objective in writing s successful proposal. A properly accomplished proposal will put the buyer’s requirements into a context that favours the sellers products and services,educating the prospective clients about the full nature or his or her needs and the capabilities of the seller in satisfying those needs.A successful proposal is one that results in sale,where both parties get what they want. This is called a win-win situation. Basic components of the business proposal 1. An orientation to the sellers capabilities or products 2. A discussion of key issues 3. A description of the sellers offering and related benefits 4. The cost of the offering

5. A schedule for delivery of the products or services 6. Testimonies from owners of products

Refrences: Ali Farhoomand(2005),Small Business management and entrepreneurship in Hong Kong,A Casebook.Retrived 17th,September,2007. Li-Ka Shing,Retrived 19th,September from http://en.wikipedia.org/wiki/Li_Ka_Shing. SME funding Schemes,Retrived 19th,Spetember,2007 from http://www.smefund.tid.gov.hk/ Business proposal,Retrived 20th,September 2007 from http://en.wikipedia.org/wiki/Proposal_(business) C.Mirjam van Praag(2005).Successful Entrepreneurship.Retrived 21st,September,2007 Robert D.Hisrich,Michael P.Peters and Dean A.Shepherd (2005).Entrepreneurship.Retrived 22 nd,Sept,2007


								
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