Meaning of Entrepreneurship.
Entrepreneurship is the the process of creating new ventures. It begins with an innovative idea. It identifies opportunities. It mobilizes and invests resources to exploit those opportunities. It involves innovation. It assumes risks to reap rewards. It creates employment for self and others. It is key to the success of small business.
According to Joseph Schumer, “Entrepreneurship is based on purposeful and systematic innovation….. it essentially consists in doing things that case not generally done in the ordinary course of business routine.
According to Hisrich and Peter, “Entrepreneurship is the process of creating something different with value by devoting the necessary time and effort, assuming the accompanying risks, and receiving the resulting rewards.”
This above various writer definitions of entrepreneur ship point view is:
Thus, Entrepreneurship is the process of exploiting opportunities by creating new venture through resource pulling risk talking innovation and managing for rewards. Entrepreneur ship results in the creation and management of new business for growth and profit. It focuses on start-up process. It is the capacity to create new opportunities for innovation, investment and expansion in new markets, products and technology.
The entreprenetial process consists of the following elements:
Assumption of Risks.
Figure-1: Elements of Entrepreneurial Process
1.2. Meaning of Entrepreneur
The words “Entrepreneur” is derived from the French work which means between takers or go between. Entrepreneur refers to an individual. Entrepreneur performs the functions of entrepreneurship. They are creative individuals. They have vision & inspiration to create new ventures. They identify new business opportunity & takes advantage of it. They take risks; they are better informed & possess greater experience. About all, they are achievement- oriented individuals driven to seek new challenges & accomplishment.
Thus, we can know that the entrepreneur is a creative person and innovator, a risk-bearer, a leader, an organizer, a self-motivator, a visionary & a good imitator.
According to Richard cantilena, “An entrepreneur is …… a risk-bearing agent of production.
Thus, an entrepreneur defines simply as a risk bears.
According to ILO (International labor Organization), “Entrepreneurs are people who have the ability to see and evaluate business opportunities, together with the necessary resources to take advantage of them & them ensure appropriate action to ensure success.”
According to David Holt, “An entrepreneur is a person who starts a new venture taking the initiative an risk associated with it and does so by creating something new to provide value to consumers.”
Thus, An Entrepreneur is a visionary individual who take risks by starting something new though assembling and coordinating various resources for the sake of uncertain rewards.
1.3 Description of Organization for study
Naso Gift collection is a small gift shop which is small business-related. It is a sole-proprietorship business organization established with the authorized capital of Rs 80000 in 2055/11/12 Mr. Sanjay Maharjan is a proprietor of the business. The shop is registered after seven years of starting as private firm act with Registration No. 2062/11/15. The shop is situated at the way of Nardevi to pyaphat. The shop is placed at Yetkha, the house of Guthi. The shop is operating by him and his wife. So nobody can be employing beside them. The shop is dealing with gift items & greetings especially.
1.4. Description of subject for Study
1.4. A. Accounting Records for small Business.
Accounting is recording, classifying & summarizing financial transations in a systematic way. It provides financial information to find out profit & loss of small business. It provides records of changes in financial position. Small business should have a simple accounting system. It helps them to make business decisions well.
1.4.B. Importance of Accounting records to small business
- It provides information about profit & loss, sales & changes in financial position.
- It help day-to-day decision making.
- It helps correct financial problems.
- It provide comparative performance of the business.
- It Provide financial statements for banks creditors & other purposes.
- It‘s (having) Taxation problems can be effectively dealt with.
- It‘s (having) fraud & theft by employee are revealed .
1.5. Objectives of Study
The main objective of the study has been pointed below:
- To find out the accounting system of the small business as single entry system.
- To evaluate the accounting records of the small business.
- To find out the composition of the income & expenditure of the small business the like gift shop.
1.6 Significance of study:
The report has great significance for each & every persons. Some of significance of study as follows:
- It will be helpful the new entrepreneur who is thinking of starting new small business.
- It will be useful for the new entrepreneur who is trying to find out the accounting procedures of the small business, like gift shop.
- By studying this report, the students of the entrepreneurship & small business management can get the practical knowledge of the small business.
- Similarly this report will be helpful for the coming bachelor students of the management.
1.7. Limitation of study.
Though lots of efforts have been done to prepare this report, these are certain limitations which are:
Ø The study is concentrated on the accounting records & system as single entry data of the NASO gift collection of gift items business only.
Ø These are different subject matters to be study in the entrepreneurship & small business management but only the accounting system has been concentrated in this study.
Ø Under the small business accounting, there are lots of subjects, titles & issues to be discussed but only the stocks, income & expenditure of the business has been made the subject for study. The data are completely historical & rigid.
1.8.A. Research design:
The study is designed in order to evaluate the product line of the N.G.C. The study especially deals with the dept analysis will be descriptive and analysis in order to answer the problem identified. Similarly, it will be guideline for future researcher.
1.8.B. Source of data.
The data of primary in nature are gathered by personal interview. The secondary data is collected from the N.G.C.,
Kathmandu. Annual reports of Handicraft Association & Nepal
1.8.C. Data collection Methods
v First of all various relevant data and information collected from N.G.C. and reviewed.
v Interview with Mr. Sanjay Maharajan about related subject matter . (For some primary data) . It is completely F.G.D. (Focus Group Discussion).
1.8.D. Data processing Techniques
The collected data have been processed and tabulated in the forms of table. Similarly graphs and diagrams are presented after the data are processed (managed).
1.8.E. Tools used.
Mainly the statistical & mathematical tools have been used to analyze & present the data collected.
2. Presentation & Analysis of data.
2.1 Purchase of different types of goods (Amount In Rs)
Creamier Gift Items
Handicraft gift items (Rs)
Table No.1: Presentation of data
Figure No.1: Position of Purchase of different types of goods
Finding:- The N.G.C has been keeping the proper records of every types of goods since past five years, By maintaining the stock book by the business it has been easier to know which types of goods were purchased at what the amounted-quantity for the particular period.
2.2: Sales of different types of goods (Amount In Rs)
Table.No:-2 Presentation of Data of Sales
Fighter .3:- Positions of sales of different types of goods
Finding:- The N.G.C. has been keeping the records of every type of goods since past five years. By Maintains the stock book by the business it has been easier to know which types of goods were sold at what the amounted quantity for a particular period. This made easier to find out the remaining stock in shop and easy to find damage or loss that took place while presenting the gift to decorate. The difference on stock of the goods purchase & sold recorded in the stock book made easier in sales planning & stock planning.
2.3. Net Income by sale of different types of goods.
Ceramic & Handicraft items
Table. No: 3:- Presentation of Net income
Figer.5:- Total income by the sales of different types of goods
Finding:- As the N.G.C has been keeping the proper records of each & every transaction it has been easier to find out the net income generated by the shop during past five years. The income is slightly increasing in next three years F/Y 2058/59, F/Y 2059/60 and F/Y 2061/62 and the income was decrease in F/Y 2059/60 and F/y 2061/62 and the income was decrease in F/Y 2060/62. The income from the record, there comes ups and down in sale of goods (as gift items, Greeting & Others items).
2.4. Proportion of net income from sales.
Detail of income
Sales of Gift items
Sales of Greetings
Sales of other gift items
Table.no:-4 Presentation of net income in percentage
Figer.6:- presentation of net income in percentage by bar diagram.
Finding:- Interpretation of data of the total income of the total income of N.G.C. income from the sales of gift items as ceramics & handicraft the majority composition around 50% to 90% of the total net income of the shop. Then the net income from sales of greeting and others composes each less than 40% of the net income. From the above calculation & presentation, we can see that these are a consistency in net income composition of the shop which is relatively good for such small business as for entrepreneurs. We should keep proper record keeping by the business. It will be also helpful for the future for the shop by looking the trend of past.
2.5 Expenditure in different Subjects
Office & Stationery
Interest on Lean
Prevision for less
Table.5:- Presentation of data of Expenditure
It is really good to see that the small business has kept each & every detail records of the expenditure occurred in the operation of the business activities. By keeping props accounting by these types of the small business it will be easier for the department of the tax for estimating & learning taxes to them. These will be the fairness in the operation of the day to day activities also. These will also be less changes of being fraud & embezzlement by the workers in the business.
2.6. Ratio of Expenditure in different heads to the Total Expenditure
Office & Stationery
Interest on Lean
Prevision for less
Table.no.6:- presentation of Ratio of Expenditure
It has been easier to find out how much amount of the different F/Y of the total place expenditure that took place, owner’s expenses has taken place most. Then the expenditure for others expenses occurred more. Similarly the rent has also covered important proportion in the competition of total expenditure. The interest of loan is paid starting from F/Y 2059/60 because the loan is taken before one year. From these historical each expenditures data, the proprietor of N.G.C. can predict the feasible expenditure that might take place in the gift items. This has been easier by the place in the accounting records that were kept by the shop.
2.7. Major Findings.
Ø The N.G.C. has been keeping props records of the stocks they are dealing with
Ø The N.G.C has kept the props records of the sale of gift and greeting items.
Ø It has also maintained the records of income from the sale of gift items, Greeting and Other for the last five years. From this we can say the business has kept proper
Ø Accounting without which income of the business couldn’t be calculated.
Ø As from the above presentation, we see that N.G.C has been not paying tax to government because the firm is resisted in 2062. This can’t justify that business has been keeping clean & proper of accounting records but as per the norms & principles of a Accounting is used for planning future.
Ø The N.G.C has also kept the proper accounts & records of the each & every expenditure for easiness of owner’s dedication for shop that took place during operation of the business.
Ø The N.G.C. has been following the Nepalese government fiscal year for keeping the records of their each & every financial transaction, now.
2.8. SWOT Analysis:-
- Management independence is an important strength.
- There is a quick decision mechanism.
- The process of record keeping is easier & cost-effective than that of large business
- These small businesses have flexibility in operation
- They are responsive to the customers i.e. customer oriented marketing
- They are employment opportunity creator
- Put on keeping good financial performance
- Large businesses are also interdependence.
- The location of the organization is also one of its strengths.
- There is a high risk of failure.
- There is a lack of inadequate management skills.
- Small businesses face different kinds of accounting & taxation problems.
- There is a lack of sufficient fund.
- There is a lack of up-date technology.
- They are facing from good credit facilities.
- They face a lack of sufficient man-power.
- Segregation of the different account heads is not possible in the small business accounting system.
- There is a chance of technology entrancement.
- They can use professional & technical workers.
- There is an opportunities for the women & ethnic group.
- They can easily shift to occupational & industrial activates.
- There is an option of practicing different product line decision.
- There is a chance of adding further outlets in the process of growth.
- There will be a lack of sufficient capital.
- There is a lack of props government regulations which protect the copy right of the goods produced by the small business.
- Leaving of unnecessary taxes would increase the burden to the small business.
- Staying informed is another great challenge for the small business.
- Lack of proper time management is seen as the owners they have to perform the managerial activities.
- There is a lack of managerial know how among the small business men.
- Similarly, the domestic products have to compete with the foreign products at present as
has becomes the member of the WTO. Nepal
Threat SWOT Analysis Weakness
Finger:-10. SWOT Analysis
Under the gift & greetings business, they can verify into many kinds of products. These products are come from production which is the way to laborite the different classes of labor from skilled to semi skilled labor. So the small business like gift shop as gift & greetings business also gives the job opportunity to different types of labors. Thought the small businesses have the less economic activities, they are also bounded for keeping proper accounting system. It will be plus point for them by keeping proper accounting records because it will be easier for the owners to know the actual financial position of the business in the required time. It will be easier for the follow up for the collection of goods in credits as well as own liabilities.
In the present context, the business houses of the
whether in the large or small are going through the worst situation? The economy of the country has been badly affected by uncertain political & economic situation. They problems are either internal or external. Even the big business with the large investment & expensive technology are facing problem in operating smoothly, we can predict how tough will be for the small business. There are lots of threats & challenges in front of the small business entrepreneurs. Nepal
Its lot of hard work & struggle has to be done by the small business entrepreneurs to just sustain in the market. The position of getting profitability is the distant option, so, the small business entrepreneurs should highly creative & skillful. They have to think very carefully & analyze the market before starting their business. As, by name also, small business the entrepreneur starts the business with small fund in their hands. So he/she should be careful in choosing & starting which types of small business & what types of products & services they are going to introduce in the market.
In the context of the the accounting system of small business, they should also keep proper records of each and every transactions. It will be easier to know the actual financial position of the business simply. These accounting records would be the supportive tools & feedback for over all financial management of small business. It would help very well on comparative performance study & financial problems facing by the business. Accounting records in the small kind of business will be helpful for the future planning. So it helps in prediction of the cost of fund, capital level of profitability in the business. As each every transaction is recorded properly, important financial ratios for the management control will be easier.
3.3 Workable Suggestion.
- As the government has made the compulsion of taking the PAN by the every scale of the business. It would be really a troublesome job for the tax clearance & other paper works if the business has not kept proper accounting records.
- The gift shop should be capable in changing decoration as presentation according to the market.
- Cost effective accounting should be adopted by the small business with good result.
- The accounting should be kept at the time they occurred. As the record keeping jobs goes on pending. It will be difficult for accessing the tax to be paid to the local government.
- Modern affordable technology should be adopted by the small business to reduce the cost of employees just for keeping records of the transactions. This will be feasible by installing suitable accounting software to record the transactions.
- Lots of afford should be done by the small business like gift shop to exist strongly in the market.
- The gift business should keep every types of labors skilled, semi-skilled, etc for the production of good quality, quantity and verify of products as Ceramics gift items, Handicraft gift items, Glasses gift items, etc up to its feasibility of fund they can afford.
Govinda Ram Dr.(2005) “Entrepreneurship and small business management in ,” M.K. Publisher & Distributors. Bhotahity, Nepal . Kathmandu, Nepal
Govinda Ram Dr(2005) “Entrepreneurship Development in ,” M.K. Publishers & Distributors. Nepal . Bhotahity Kathmandu, Nepal
Bhanu Chandra Dr(2054) “Business Statistics & Mathematics,” M.k. Publishers & Distributors. Bhotahiy, . Kathmandu, Nepal
- Federation of
Cottage & Small Industries (FNCSI) Several volumes, “cottage & Small Industries News.” Central office, Bijuli Bazaar, Nepal Kathmandu.
- Pant, G.d. Prof. & Chaudhary, A.K. (2055) 3rd Edition “Business Statistics & Mathematics for BBS” Bhudipuran Prakashan, kathmandu,
- Sharma Narendra (1998) 2nd Edition (Revised) ‘A test book of Accountancy And Audifing,” Ekata Books Distributors Pvt.Ltd. Thapathali,
. Kathmandu, Nepal
- Sharma, Narendra & Pradhan, Gopal Man (2002) Reprindted, “A testbook of book-keeping And Government Accountiong,” Ekta Books,
. Kathmandu, Nepal
- Sharma, Pushkar & Silwal, Dhurba, (2004) First Edition “Business Mathematics & Statistics,” Taleju Prakashan
Shresetha, Sunity & Amatya Sunil, (2004) First Edition “Business Statistics” Boudh