CBSE Class 12 Entrepreneurship
Chapters: 6
1. Entrepreneurial Opportunity
Entrepreneurial opportunity
- Idea Generation: From Problems to Opportunities – Every business starts with an idea, but not every idea is an opportunity. An entrepreneur senses opportunities by scanning the environment (customers, technology, rules, economy, society), noticing problems people face, and looking in idea fields such as skills, local resources, people's needs and waste. Spotting long-lasting trends shows which ideas have a future. Creativity produces new ideas; innovation turns them into useful products. Finally, ideas are screened on demand, skills, money, competition and risk, and the best one is chosen as the business opportunity.
2. Entrepreneurial Planning
Entrepreneurial planning
- Business Plan: How to Plan a New Business – A business plan is a written document that says what a business will do, who its customers are, how it will reach them, who will run it and how the money will work. Owners use it to think clearly, to spot risks early and to persuade banks or investors to lend or invest. A typical plan has these parts: executive summary, business idea and aims, market research (customers), competitors, marketing (the 4 Ps), operations and team, and a finance section. The finance section uses a few simple sums. Fixed costs stay the same whatever you sell (rent). Variable costs rise with each unit (ingredients). Total cost = fixed + variable. Revenue = price × units sold. Profit = revenue − total cost (a negative answer is a loss). The break-even point is the number of units where revenue equals total cost: fixed costs ÷ (price − variable cost per unit). A plan is a guess about the future, so it should be checked and updated often.
3. Enterprise Marketing
Enterprise marketing
- Marketing Management – Marketing means finding out what buyers need and meeting that need in exchange for value, at a profit. It has many functions (research, planning, branding, labelling, packaging, pricing, promotion, distribution, service) and five philosophies (production, product, selling, marketing, societal). The marketing mix is the 4Ps: product (with branding, labelling, packaging), price (shaped by cost, demand, competition, government rules, objectives and marketing methods), place (channels and physical distribution) and promotion (advertising, personal selling, sales promotion, public relations).
4. Enterprise Growth Strategies
Enterprise growth strategies
- Business Growth Strategies – After checking how a business is doing, its owner can continue, grow, diversify or close. Growth can be organic (internal: using own profits to add products, staff or branches) or inorganic (external: joining with other firms). Franchising lets other people open copies of the business for a fee and royalty. A merger joins two firms into one by agreement; an acquisition (takeover) is when one firm buys control of another. Mergers can be horizontal, vertical or conglomerate. Each route trades speed against cost, control and risk.
5. Business Arithmetic
Business arithmetic for many products
- Break-Even Analysis – A business breaks even when total revenue equals total cost, so profit is zero. Each unit sold brings a contribution = price − variable cost per unit, which first pays off the fixed costs. Break-even output = fixed costs ÷ contribution per unit. Sales above this make a profit; below it make a loss. Margin of safety = actual sales − break-even sales. To earn a target profit, sell (fixed costs + target profit) ÷ contribution per unit.
6. Resource Mobilisation
Raising capital
- Raising Capital: Capital Market, Angels and Venture Capital – A business needs long-term money (capital) to grow. The capital market is where long-term funds move from savers to businesses through shares and bonds. In its primary market, a company sells new securities directly to investors by a public issue (IPO), offer for sale, private placement, rights issue or other methods. Young startups are too small for this, so they turn to angel investors (rich individuals who invest early and give advice) and venture capital (funds that invest pooled money in risky, fast-growing startups for a share of ownership, and exit later by an IPO or sale). Every new investor gets new shares, so the founder's share shrinks (dilution) while the company's value can grow.