Running head: JAWAD INTERNATIONAL (PVT) LTD

ENTREPRENEURIAL ANALYSIS
OF
JAWAD INTERNATIONAL (PVT) LTD

By

W.D.L.S Weerasekera (2009/MBA/WE/53)

S.P.T. Thejani (2009/MBA/WE/54)
J.B.A.R. Niroshana (2009/MBA/WE/71)
Lucksiri Perera (2009/MBA/WE/FIN/21)
Varuna Dharmarathna (2009/MBA/WE/FIN/30)
A.C. Wickramasinghe (2009/MBA/WE/FIN/37)

Semester III – Second half

May 2011

Course: MBAGM 614 – Entrepreneurship and Small Business Management

Lecturer(s): Prof. Gamini De Alwis
Dr. Sarath Buddhadasa

Postgraduate and Mid-Carrier Development Unit

Faculty of Management and Finance
University of Colombo
ENTREPRENEURIAL ANALYSIS

Contents

Research Objective................................................................................................1
Introduction...........................................................................................................2
1.1 Personal History of the Owner......................................................................2
1.2 Company...................................................................................................... 2
1.3 Products and Export market.........................................................................3
1.4 The Facility................................................................................................... 3
1.5 Financing...................................................................................................... 3
Business Analysis...................................................................................................4
1.6 How the business grows...............................................................................4
1.7 Profitability and stability of the business......................................................4
1.8 Ratio analysis............................................................................................... 5
1.9 Industry analysis...........................................................................................6
1.10 SWOT Analysis............................................................................................7
Entrepreneurial Analysis........................................................................................9
1.11 Need for achievement (N-Ach)...................................................................9
1.12 Risk Taker...................................................................................................9
1.13 Opportunity Seeking Behavior .................................................................10
1.14 Innovator.................................................................................................. 10
1.15 High Locus of Control................................................................................11
1.16 Visionary Person.......................................................................................11
1.17 Entrepreneurial questionnaire..................................................................11
Recommendation.................................................................................................13
1.18 Age of the organization............................................................................14
1.19 Size of the organization............................................................................15
1.20 The speed of growth.................................................................................15
Reference............................................................................................................17
Annex 1 - Assumptions made in preparing the Balance sheet and Income
Statement............................................................................................................18
Annex 2 - Income Statement for 2008, 2009, 2010, 2011 (forecast) and
2012(forecast) ....................................................................................................19
Annex 3 – Balance sheet of Jawad International (pvt) Ltd (Comparative)............21
Annex 4 - Key financial ratios .............................................................................23
Annex 5 – Self rating questionnaire ....................................................................24
ENTREPRENEURIAL ANALYSIS

List of Figures

Figure 3-1 : Business forecast................................................................................4

Figure 3-2 : Value chain and Supply chain management.......................................6
Figure 5-3 : Age of the Organization....................................................................15
Figure 5-4 : Growth speed of the Organization....................................................16
Figure 5-5 : five phases of growth.......................................................................16

List of Tables

Table 4-1 : Entrepreneurial Analysis ..................................................................12

ENTREPRENEURIAL ANALYSIS 1

Research Objective

Main objective of this research is to analyze the success and the sustainability of the
entrepreneurship, Jawad International (pvt) Ltd and relate the entrepreneur’s qualities
towards the business using relevant theories. In this context we have adopted the
methodology which is inclusive of accepted questionnaire for capturing entrepreneur’s
qualities. Financial statements constructed based on the information provided by the
entrepreneur were used for measuring the success of the business.
ENTREPRENEURIAL ANALYSIS 2

Introduction

1.1 Personal History of the Owner

Mr.Mohomed Jawad is the founder of this company. He got education up to Ordinary

Levels (O/Ls) at Viruthodi Muslim Vidyalaya. After doing O/Ls, he has migrated to Saudi
Arabia and he worked there for almost ten years. His occupation at Saudi Arabia was not
mentioned during the interview. After returning to the country, he has worked as an
intermediary for a short period. As a broker, he purchased coir from local suppliers and sold
them to some other manufactures. However, his inner intention was to start a business owned
by him in the future and ultimately he became the owner of the Jawad International (Pvt.)
Ltd.

He is from a Muslim family

and his father is a community
leader and his grandfather has done
Copra business. (Coconut related
business). Therefore, from his
childhood he has been grown in a
business environment. So that from
the childhood, he was dreaming to
start his own business and that
imagination and hard working
nature caused him to start his own business.

1.2 Company

Jawad International (Pvt.) Ltd. is one of the organizations engaged in exporting of

coir products from Sri Lanka. It falls under the small enterprise category and the main
product area of the company is baled coconut fiber. The company has been in the coir
industry since 2008 and is striving its way towards a better hold of the company’s growth.
Coming from the coconut triangle of Sri Lanka, the company has always been a part of eco-
friendly product manufacturing in the country. China is the main target market at present and
the organization is also geared to develop products to individual customer specifications.
ENTREPRENEURIAL ANALYSIS 3

1.3 Products and Export market

The main product area that the company is

engaged in is the baled coconut fiber category.
Fiber is compressed into bales and this baled
fiber is used in agriculture industry as hydro
seeding mixture provides better medium for
seed germination. This fiber is also used in
nursery pots and flower pots and also it helps
the environment by acting as an erosion
control product. He exports his products to
twenty one companies in Fujian, China. On
average, three number of 40 feet containers
are being exported per week. This is roughly (17.5 X3) Tons and as per him the monthly cash
inflow is US$ 200,000.00.

1.4 The Facility

He has an in-house production facility and he collected some assets to his business
gradually including two Chinese made bail machines, three vehicles, a forklift, a large factory
building with loading bay, an office and other auxiliary buildings. Since his factory is located
very close to the suppliers, it is a definite advantage for him to collect row materials easily at
lower cost. On the other hand he has built a good rapport with suppliers in order to build a
strong supply chain. Although he has done this business more than two years, no any
advertising has been done so far.

As instructed by Export Development Board he has recently built a boundary wall

around the factory and finished his building as per EDB stipulated standards. Since his low
education level he has not applied any SME awards and therefore he has not achieved such
awards so far although he is success in his venture.

1.5 Financing

Financing for the business has been basically done as equity finance. He saved the
earned money during his transition period and invested them to start his own business.
ENTREPRENEURIAL ANALYSIS 4

Business Analysis

1.6 How the business grows

Based on the information gathered from Jawad, we have constructed the Income
Statement of the business for 5 years commencing from 2008 (Y0) where the figures for
2011(Y3) and 2012(Y4) were estimated subject to certain assumptions (Annex 1). As agreed
with Jawad, we also built up 3 scenarios under the probabilities assigned, with annual
performance increment of 25%, 10% and a reduction of 10% for the Cases, “Best”, “Normal”
and “Worst”, respectively (Annex 2). Graphical representation of the scenarios is as follows.

Best Case Normal Case Worst Case

Figure 3-1 : Business forecast

Results indicate that Jawad should make efforts to keep his business around or above
the normal case, to ensure future business growth. Requisite suggestions in this context are
further discussed under recommendations.

1.7 Profitability and stability of the business

The aforesaid Income Statement also follows a Balance Sheet as at 31st December,
2010 (Annex 3) and Cash Flow Statement for 2010 (Annex 4). For analytical purposes we
will consider the income statement under the normal case.

Gross and net profits figures are positive, indicating that the entrepreneur is in a
profitable business.
ENTREPRENEURIAL ANALYSIS 5

Balance sheet shows that the receivable and the cash amounts are much higher than the
rest of the assets suggesting the entrepreneur to search for optional mechanisms to them
within the company’s working capital life cycle and to consider the excess cash to be
invested in other positive NPV projects, capital market (by constructing a portfolio) or money
market etc. Higher amounts under the capital and tax payable also support the above
argument.

Screening through the Cash Flow Statement is evidenced that the magnitude of the
amounts received from the customers and the amounts paid to suppliers are almost similar.
This suggests the need of searching for some credit mechanisms such as negotiating credit
terms with the suppliers, exporting on DA terms etc.

1.8 Ratio analysis

Based on the key financial ratios of the business (Annex 4), our comments are given
below.GP Margin indicates that the entrepreneurship is in a profitable business. However
26% may not be a very healthy indicator as the GP Margin.

NP Margin has increased by 2% during 2010 and the present rate of 11% which is
slightly above the prevailing interest rates within the economy.

Return on capital employed (ROCE) is 44% in 2010 and an increase of 100% as against
the previous year. The returns of the business are at a very high position in relation to the
capital employed.

Gearing of the company is zero as the entrepreneur is running the business almost on
his own capital. Although the machines are obtained on loan, this has been fully settled
during 2010. Also the current interest coverage is 55 times. The position indicates that he can
look for further business expansions by raising some debt capital.

Current asset and quick asset ratio of the business are 6: 1 and 23: 1 respectively.
Although the ideal position of these rates are depending on the industry, as we see they are
very high suggesting the entrepreneur to look for his supply chain management process as
against the value chain of the organization. A supply chain is the stream of processes of
moving goods from the customer order through the supply, raw materials stage, production,
and distribution of products to the customer inclusive of the customer services. Managing the
chain of events in this process is known as supply chain management. Effective management
ensures coordinating all these different pieces quickly and efficiently, without losing the
ENTREPRENEURIAL ANALYSIS 6

customer satisfaction (RGG University, Supply Chain Management). We need value chain to
understand the activities through which a firm develops a competitive advantage in creating
the organizational value. It separates the business system into a series of value-generating
activities. M. E. Porter identified primary and support activities that comprise a sequence of

activities found to be common to a wide range of firms (Jonson G., Scholes K, Whittington
R). Based on the above theories, the relationship of supply chain and value chain of our
entrepreneur can be shown through the following diagram.

Figure 3-2 : Value chain and Supply chain management

1.9 Industry analysis

Assessing the existing competition is another vital area when performing a business
analysis for a business organization. This will assure long term survival and growth of the
entity. If it is a small scale business the owner/entrepreneur should have an idea of the
magnitude of the competition so that he/she could take necessary steps to withstand
successfully in the competition or avoid any adverse effects of competition.
In this context, we intend to assess the magnitude of the competition that Mr. Jawad
(“Jawad International”) is currently experiencing as an entrepreneur. This assessment will
focus mainly five key areas based on Michael Porter’s five forces model. They are namely,
suppliers, customers, new entrants, substitute products and no of existing competitors.
ENTREPRENEURIAL ANALYSIS 7

As far as this coir related business is concerned, the suppliers are individuals who
supply raw coir materials. The quantity of each supplied is not large with compared to the
total volume purchased by Jawad. Other coir raw material collectors in the area also offer
similar prices to that of Jawad. Further, these suppliers are vested with no other option if they
do not supply these materials one of collectors/coir product manufacturers like Jawad.
Therefore, it is clear that suppliers do not have a bargaining power if his/her quantity supplied
is significant.
Jawad focuses only on foreign customers; Chinese buyers who initially helped him
start the business. He heavily depends on this single buyer and he does not have any control
over the buyer. This seems to be very risky area of this business unless Jawad finds new
buyers locally or internationally by using his existing network.
Coir business does not require specific technical know-how. Therefore, anyone who is
interested in coir related business could enter the business as long as s/he has easy access to
raw materials required. Further, even at present there are few coir collectors available in the
area. However, in the case of Jawad he is operating at quite large scale not being merely a
coir collector but adding value to it through further processing. On the other hand he is more
comfortable with high demand from his sole buyer. As a result, he is ahead in the competition
and though new competitors get into the same business Jawad would not be much affected.
It is very difficult to find substitutes for coir products in the sense that it is fully
dependent on natural materials (wastes of coconut tree). However, there is a risk of being
introduced low cost artificial material which is substitutable by Chinese inventors. Therefore,
if that happen this entrepreneur has to find other buyers locally or internationally.
It can be concluded, in summary, all other factors considered in competitor analysis are
favorable to Jawad’s coir product business except bargaining power vested with buyer.
However, the impact of only unfavorable factor could be critical in the sense that he has only
one buyer.

1.10 SWOT Analysis

Another very important area of business analysis is assessing internal and external
environment of the organization. Strengths and weaknesses are internal factors to be
concerned whereas opportunities and threats are external to the organization. Accordingly,
this section consists of brief SWOT analysis with respect to Jawad’s business.
The key strength of this business is assistance from Chinese partner. Because of
Chinese assistance Jawad has been able to own two “Bail Machines” and assurance about his
sales, which are competitive advantages for him. Also, since Jawad is operating large scale
ENTREPRENEURIAL ANALYSIS 8

with compared to others suppliers have more confidence on him. This enables him buy more
materials on 7 day credit basis. Further, experience gained and network built among
suppliers, buyers and labors can also be considered as internal strengths.
On the other hand, Jawad heavily depends on Chinese assistance and he has only one
buyer. He does not think of other options available to him either. As a result, any unfavorable
decision from Chinese buyer would totally change his journey.
There are opportunities available to this business. Jawad could think of producing the
end product what Chinese partner produce with his materials or some coir related new
products for local market.
However, there might be potentially threats from availability of materials due to some
diseases caught by coconut trees like we currently experiencing in Galle, Matara, Weligama
areas. Further, there is always risk of emerging new entrepreneurs in this sector with more
innovative products where s/he could offer higher prices to suppliers than that of Jawad.
ENTREPRENEURIAL ANALYSIS 9

Entrepreneurial Analysis
When analyzing the background information of Jawad, we could observe that several
entrepreneurial characteristics have been inherited by himself from his small stage.

• Need for achievement

• Risk taker
• Opportunity seeking behavior
• Innovator
• High locus of control
• Visionary person

1.11 Need for achievement (N-Ach)

Need for Achievement (N-Ach) refers to an individual's desire for significant
accomplishment, mastering of skills, control, or high standards. Jawad has a burning driven
to be an achiever. He seems to be more concerned with personal achievement than with the
rewards of success. As his background information depicts, after a short time period once
returning from overseas he has initiated his business as a broker in coir business while the
intention of starting his own business was struggling in his mind. During this period, he
might have definitely gathered the information related to the coir business and made good
social network which might help him in the future. Once he has started the business he had to
undergo several obscurities, but he never thought of giving up the business. He has a strong
determination of making his dream a true. He is a "can do" person who demonstrates
common sense in his decision and actions and is able to cut through and resolve problems
effectively. Before commencing the new business he saved every cent for his future business.
He pursued issues until results are achieved and paid the high degree of energy till his
business grew up to his satisfaction level. All these traits show that how achievement oriented
he is.

1.12 Risk Taker

Jawad can be considered as a risk taker since he had to operate the business
effectively in an environment filled with risk and uncertainty from the very beginning of his
new business. He has invested all his saved money in his business knowing that if something
bad has happened he will lose everything he had. For example, if the exported products are
ENTREPRENEURIAL ANALYSIS 10

not in good condition, buyers might reject the goods creating losses for the business and it
was one of the biggest challenges in front of him. But his commitment and strength of mind
helped him to withstand as a calculated risk taker. He was able to make progress towards
goals and was able to make decisions when lacking one or several critical resources or data.
Knowing his own strengths and shortcomings, he has established and managed his business
in a manner which helped to mitigate huge risks.

1.13 Opportunity Seeking Behavior

Jawad can also be considered as an opportunity seeker. As mentioned in his
background data, he has identified the advantage of the location he was living. His home
town is located within the coconut triangle in the country and the nearest port is Colombo,
which is 65km away and the Katunayake International Airport is just 40km away. He has an
in-born advantage of producing high quality products since his home area has the ideal
climate for coconut cultivation. Therefore, he was able to collect the necessary row materials
from the surrounding area and he knew that quality is one of the prime factors that he should
take into the consideration when outperforming competitors. Therefore, Jawad maintained a
better relationship with suppliers to buy quality materials since the whole business operation
is depending on the row materials provided by the suppliers and it is a major factor for
business sustainability. He could reduce the transportation costs since the row materials
sources were located in the close by areas. Likewise, he was intelligent enough to grasp the
opportunities existed around his environment in order to attain his ideation on coir business.

1.14 Innovator
The major step of Jawad’s successful venture is developing a creative idea by looking
at opportunities of his environment as above discussed and proper understanding of his
strengths and core capabilities. Since he has been grown in a business environment during his
childhood, the idea of generating a business might have flashed in his mind from those days.
The innovative ideas of Jawad helped to shape up his business in order to achieve his ultimate
goals. Coming up with innovative ideas has become a continuous activity in his business and
he always sees new ways of doing things with little concern for how difficult they might be.
He never satisfied by merely achieving what he really expected and he made into practice
what he really dreamt. He knew exactly where he was, what he wanted, or what he didn’t
want, and based on that he stepped into the next step of the creation of ideas or innovate
something. He was encouraged by this splendid thinking combined with the willpower to
ENTREPRENEURIAL ANALYSIS 11

start the business of exporting of coir products by using the existing resources in his
surroundings.

1.15 High Locus of Control

As an entrepreneur in coir business, Jawad was able to control the circumstances that
affected his business in numerous ways in both internally and externally. He takes the full
responsibility for all the things happen in his business and his behavior is also figuring out it
clearly. He makes sure to maintain extensive and noteworthy relationships with both
suppliers and buyers since the whole business is controlled by those parties. Further, he was
able to properly maintain the financial aspects of the business although he has never used
advanced financial techniques like balance confirmations, income statements, profit and loss
accounts and etc. By doing so, he was able to invest what he earned prior to business and
during the business for expansion of the business and assets. He had only few permanent
workers, but he is clever enough to retain them with himself due to his respectful and
empowering relationship with them. He knew that they are the key assets for his business.
Likewise, his internal locus of control with related to the factors of production helped him to
achieve his determination.

1.16 Visionary Person

Jawad can be considered as a visionary leader who dreams wonderful visions of the
future and articulate them with great inspiration. Higher commitment to the values is an
outstanding characteristic of him and he is elevated by power and exercised moral leadership.
From his childhood, he had a positive picture of the future, as well as a clear sense of
direction as to how to get there. That’s why he dedicated his whole life and sacrificed many
things to reach his ultimate target. Once he visualizes something, he sees exactly how to
make it happen.

1.17 Entrepreneurial questionnaire

To identifying the entrepreneur characteristics in quantitative manner it should assess
through a comprehensive questionnaire. Therefore comprehensive questionnaire should
address the each entrepreneurial characteristic and also need to capture the accuracy of the
data gathered.

A questionnaire (Annex 6) which is capturing 13 entrepreneurial characteristics of

Initiative, Sees and Acts on Opportunities, Persistence, Information Seeking,
Concern for High Quality of Work, Commitment to Work Contract, Efficiency
ENTREPRENEURIAL ANALYSIS 12

Orientation, Systematic Planning, Problem Solving, Self-confidence,

Assertiveness, Persuasion and Use of Influence Strategies. Mr. Jawad’s skills and
characteristics were analyzed using this questionnaire.

Characteristic Score
Initiative 22
Sees and Acts on Opportunities 18
Persistence 21
Information Seeking 23
Concern for High Quality of Work 19
Commitment to Work Contract 21
Efficiency Orientation 23
Systematic Planning 22
Problem Solving 20
Self-confidence 24
Assertiveness 22
Persuasion 22
Use of Influence Strategies 20
Correction factor 16
Corrected Total Score 277
Table 4-1 : Entrepreneurial Analysis
With this analysis it can be clearly seen that Mr. Jawad is a genuine person because
that corrective point 16 are below 19. And his characteristics are majority scoring more than
20 points by summing up to 277. But in few occasions like Sees and Acts on Opportunities
and Concern for High Quality of Work are lagging behind which indicates by getting value of
18. As an example adoption to new technology or applying for the SME category award and
recognition programs were not seen from Mr. Jawad. Also he is not much concern on to
adoption to latest quality checking process which is symptoms of lagged characteristics.

But at the field it can be seen that he is very powerful in persuading others to achieve
his objectives. Mr. Jawad is only player in coir export in this region which illustrates his
initiative characteristics. Also he is very confident in business because he is ensuring his
factory maintain the required standard as well as he insured his property with government
insurance company. It also gave himself confident on his business.
ENTREPRENEURIAL ANALYSIS 13

Recommendation

From our study we conclude that Jawad is an entrepreneur with N-arch traits. From
his humble beginnings coupled with laborious work at the incipient stages, he has achieved
greater strides in his business domain and today is an established businessman in the area
with a monthly turnover around USD 200,000.00 (approximately LKR 22.20 million). Apart
from his personal success, Jawad portraits himself as a foreign exchange earner to the nation,
to which he places more value than his personal achievements. In essence, Jawad also
demonstrates the traits of need for common affiliation that transcends personal goals.

The core competence of his business is the business link that he has established with
China via his Chinese partner. This is a highly vulnerable core competence. The entire
success of Jawad’s business depends on this particular individual. Further, owing to the
proliferation of Information Technology (IT) the entire world has become one village.
Establishing business relationships has become a common aspect via IT with very lower
transaction costs. Hence, for how long Jawad could exploit the core competence for his
competitive advantage is a matter that need scrupulous thought.

Therefore, to surmount the challenges, Jawad must understand the changes in the near
(micro) and the far (macro) environment and respond accordingly.

The main ingredient of the product he exports is “coir”. Therefore, there is a high
degree of bargaining power of the suppliers. Though at present he maintains a very
harmonious rapport with them, it may be possible that such relationships may strain as time
progresses and the suppliers may switch allegiances. Therefore, in order to defuse a potential
threat, Jawad may consider backward integration by acquiring the business of some of the
main suppliers and / or acquiring coconut lands so that he could directly source the raw
material. This could also herald the end for other players of the industry in the area in which
Jawad operates thereby negating the inter-firm rivalry.

The above measure could deter the any new entrants to the industry in that area. This
is because the main raw material sources are under the realm of Jawad and hence the
remaining suppliers would be compelled to continue supply to his business instead to some
other business.
ENTREPRENEURIAL ANALYSIS 14

As mentioned, the success of the business is dependent on one single customer.

Hence, we may conclude that there is a very high degree of bargaining power of that
customer. In the event that the solo customer decides to sever the business relationship with
Jawad then the entire business would be in a quandary. To overcome such a possible scenario
following measures are recommended:

The value addition for the raw material is at a very rudimentary level. Jawad must ascertain
the purpose of his product being used in China and explore the possibility of manufacturing
the end product.
Another option would be to tap other international markets to supply the basic product and /
or a value added product.
For above purposes, assistance from the Export Development Board (EDB) may be
solicited.

If the users of Jawad’s product in China find an alternative that is superior in cost,
quality, ease of handling, etc, the sustenance of the business is at stake. Hence, avenues to
continuously improve the quality of the product and extensive liaison with the customer to
fulfill the changing aspirations are necessary.

Jawad’s business is also exposed to the vicissitudes of the macro environment such as
political, economic, social, technological and legal aspects.

In order to effectively deal with challenges discussed above (micro and macro), Jawad
needs to fathom the stages of his business and respond accordingly. An appropriate
framework would be Greiner’s Evolution and revolution as organizations grow.

The two most important dimensions are the “age of the organization” and the “size of
the organization”:

1.18 Age of the organization

Same organization practices are not maintained throughout a long life span. Jawad’s
business commenced in 2008 and it is still a young business. However, as the business grows
more employees will be recruited, equipment employed, perhaps the business itself moving
into a new premises, the present direct controls can’t be sustained.
ENTREPRENEURIAL ANALYSIS 15

Figure 5-3 : Age of the Organization

1.19 Size of the organization
A company's problems and solutions tend to change markedly as the number of
employees and sales volume increase. Thus time is not the only determinant of structure; in
fact, organizations that do not grow in size can retain many of the same management issues
and practices over lengthy periods. In addition to increased size, however, problems of
coordination and communication magnify, new functions emerge, levels in the management
hierarchy multiply, and jobs become more interrelated. Jawad can’t escape this veracity.

1.20 The speed of growth

The speed at which an organization experiences phases of evolution and revolution is
closely related to the market environment of its industry. For example, a company in a
rapidly expanding market will have to add employees rapidly; hence, the need for new
organization structures to accommodate large staff increases is accelerated. While
evolutionary periods tend to be relatively short in fast-growing industries, much longer
evolutionary periods occur in mature or slowly growing industries. Evolution can also be
prolonged, and revolutions delayed when profits come easily. For instance, companies that
make grievous errors in a rewarding industry can still look good on their profit and loss
statements; thus they can avoid a change in management practices for a longer period.
ENTREPRENEURIAL ANALYSIS 16

Based on the best available information we may conclude that the company is in a
low growth industry. Hence, the evolutionary periods can be longer for Jawad but still it
should happen.

Now let us analyze what obstacles (revolutions) that Jawad would have to face
(including the influences of the macro environment as described above), how to address them
and how evolution can take place.

Figure 5-4 : Growth speed of the Organization

The following table provides a summary of the organization practices that Jawad’s
business could adopt during the evolution in the five phases of growth:

Figure 5-5 : five phases of growth

ENTREPRENEURIAL ANALYSIS 17

Reference

ANSHU GUPTA. (n.d.). ENTREPRENEUR AND ENTREPRENEURSHIP. Retrieved 2011,

from www.egyankosh.ac.in:
http://www.egyankosh.ac.in/bitstream/123456789/36012/1/MTM8-02.pdf

Greiner, L. E. (n.d.). Evolution and Revolution as Organizations Grow. Harward Review , p.

Vol. 50(4).

Jonson G., Scholes K, Whittington R. In Exploring Corporate Strategy (7th Ed.) (p. 137).

RGG University, Supply Chain Management. (n.d.). Supply Chain Management. Retrieved
May 2011, from rockford consulting.com: http://rockford consulting.com/supply-chain-
management.htm.
ENTREPRENEURIAL ANALYSIS 18

Annex 1 - Assumptions made in preparing the Balance sheet and Income Statement

1. Transactions were taken place towards the beginning of the year

2. Transactions were taken place towards the beginning of the year.

3. Transactions were taken place towards the beginning of the year

4. Taxes were computed based on the country's tax law, as tax information of was not
available.

5. No additions of property plant and equipment were made after the year 2010.

6. No volatility of exchange rates. US$= 110 LKR

7. So far no payments made to Jawad for his services rendered to the business.

8. Loan on machines supplied by Fujian was fully settled in 2010.

9. Purchases are made on cash basis, while the sales proceeds are expected to settle in one
month (No receivables towards the end of 2009).
ENTREPRENEURIAL ANALYSIS 19

Annex 2 - Income Statement for 2008, 2009, 2010, 2011 (forecast) and 2012(forecast)
ENTREPRENEURIAL ANALYSIS 20
ENTREPRENEURIAL ANALYSIS 21

Annex 3 – Balance sheet of Jawad International (pvt) Ltd (Comparative)

ENTREPRENEURIAL ANALYSIS 22
ENTREPRENEURIAL ANALYSIS 23

Annex 4 - Key financial ratios

2010 2009
Profitability and Efficiency
Ratios
GP Margin 26% 26%
NP Margin 11% 9%
Return on capital employed 44% 20%
Solvency Ratio
Gearing Ratio (Debt Equity
Ratio) 0% 0%
Interest Coverage (No of 1
times) 55 8
Liquidity Ratios
Current Ratio 6 8
Quick Asset Ratio 23 1
ENTREPRENEURIAL ANALYSIS 24

Annex 5 – Self rating questionnaire

Name Mr. Mohomed Jawad

Company Jawad International (pvt) LTD..

Address Madurankuliya, Puttlam

Date 23rd of April 2011

Instructions

1) This questionnaire consists of 70 brief statements. Read each statement and

decide how well it describes you. Be honest about yourself.

2) Select one of the numbers below to indicate how well the statement describes
you:

5 = Very well 4 = Well

3 = Somewhat 2 = Very little

1 = Not at all

3) Write the number you select on the line to the right of each statement. Here is
an example:

1. remain calm in stressful situations. - 2

The person who responded to the item above wrote a “2” indicating that the
statement described him or her very little.

4) Some statement may be similar, but no two are exactly alike.

5) Please answer all the questions.

 ENTREPRENEURIAL ANALYSIS 25

Write the number on the line to the right of each statement.

1) I look for things that need to be done. : 5

2) I like challenges and new opportunities. : 4

3) When faced with a difficult problem, I spend a lot of time trying to find a solution.
:4

4) When starting a new task or project, I gather a great deal of information. : 5

5) It bothers me when things are not done very well. : 5

6) I give much effort to my work. : 5

7) I find ways to do things faster. : 5

8) I plan a large project by breaking it down into smaller tasks. : 5

9) I think of unusual solutions to problems. : 4

10) I feel confident that I will succeed at whatever I try to do. : 5

11) I tell others when they have not performed as expected. : 3

12) I get others to support my recommendations. : 5

13) I develop strategies to influence others. : 4

14) No matter who I’m talking to, I’m good listener. : 5

15) I do things that need to be done before being asked to by others. : 4

16) I prefer activities that I know well and with which I am comfortable. : 5

17) I try several times to get people to do what I would like them to do. : 5

18) I seek the advice of people who know a lot about the problems or tasks I am
working on. : 5

19) It is important to me to do a high quality job. : 4

20) I work long hours and make personal sacrifices to complete jobs on time. : 5

21) I am not good at using my time well. : 3

22) I think about the advantages and disadvantages of different ways of

accomplishing things. : 5

23) I think of many new ideas. : 5

24) I change my mind if others disagree strongly with me. : 2

 ENTREPRENEURIAL ANALYSIS 26

25) If I am angry or upset with someone, I tell that person. : 5

26) I convince others of my ideas. : 5

27) I do not spend much time thinking about how to influence others. : 5

28) I feel resentful when I don’t get my way. : 3

29) I do things before it is clear that they must be done. : 4

30) I notice opportunities to do new things. : 5

31) When something gets in the way of what I am trying to do, I keep on trying to
accomplish what I want. : 5

32) I take action without seeking information. : 1

33) My own work is better than that of other people I work with. : 5

34) I do whatever it takes to complete a job. : 5

35) It bothers me when my time is wasted. : 5

36) I try to think of above problems I may encounter and plan what to do if each
problem occurs. : 5

37) Once I have selected an approach to solving a problem, I do not change that
approach. : 5

38) When trying something difficult or challenging, I feel confident that I will
succeed. : 5

39) It is difficult for me to order people to do things. : 2

40) I get others to see how I will be able to accomplish what I set out to do. : 4

41) I get important people to help me accomplish my goals. : 5

42) In the past, I have had failures. : 5

43) I take action before it is clear that I must. : 4

44) I try things that are very new and different from what I have done before. : 3

45) When faced with a major difficulty, I quickly go on to other things. : 4

46) When working on a project for someone, I ask many questions to be sure I
understand what that person wants. : 5

47) When something I have been working on is satisfactory I do not spend extra time
trying to make it better. : 5
 ENTREPRENEURIAL ANALYSIS 27

48) When I am doing a job for someone, I make a special effort to make sure that
person is satisfied with my work. : 4

49) I find ways to do things for less cost. : 5

50) I deal with problems as they arise, rather than spend time trying to anticipate
them. : 3

51) I think of many ways to solve problems. : 5

52) I do things that are risky. : 5

53) When I disagree with others, I let them know. : 5

54) I am very persuasive with others. : 5

55) In order to reach my goals, I think of solutions that benefit everyone involved in a
problem. : 5

56) There have been occasions when I took advantage of someone. : 4

57) I wait for directions from others before taking action. : 1

58) I take advantage of opportunities that arise. : 5

59) I try several ways to overcome things that get in the ways of reaching my goals.
:5

60) I go to several different sources to get information to help with tasks or projects.
:3

61) I want the company I own to be the best of its type. : 4

62) I do not let my work interfere with my family or personal life. : 4

63) I get the most I can out of the money I have to accomplish a project or task. : 5

64) I take a logical and systematic approach to activities. : 4

65) If one approach to a problem does not work, I think of another approach. : 5

66) I stick with my decisions even if other disagree strongly with me. : 5

67) I tell people what they have to do, even if they do not want to do it. : 5

68) I cannot get people who have strong opinions or ideas to change their minds. : 3

69) I get to know people who may be able to help me reach my goals. : 5

70) When I don’t know something, I don’t mind admitting it. : 5

ENTREPRENEURIAL ANALYSIS 28

1) Enter the ratings from the completed questionnaire on the lines above the
item numbers in parentheses. Notice that the item numbers in each column are
consecutive: item number 2 is below item number 1, and so forth.

2) Do the addition and subtraction indicated in each row to compute each

competency score.

3) Add all competency scores to compute the total score.

Rating of Statements Score Competency

5 + 4 + 4 + 4 – 1 + 6 = 22 Initiative
(1) (15) (29) (43) (57)
4 – 5 + 5 + 3 + 5 + 6 = 18 Sees and Acts on Opportunities
(2) (16) (30) (44) (58)
4 + 5 + 5 – 4 + 5 + 6 = 21 Persistence
(3) (17) (31) (45) (59)
5 + 5 – 1 + 5 + 3 + 6 = 23 Information Seeking
(4) (18) (32) (46) (60)
5 + 4 + 5– 5 + 4 + 6 = 19 Concern for High Quality of Work
(5) (19) (33) (47) (61)
5 + 5 + 5+4 – 4 + 6 = 21 Commitment to Work Contract
(6) (20) (34) (48) (62)
5 – 3 + 5 + 5 + 5 + 6 = 23 Efficiency Orientation
(7) (21) (35) (49) (63)
5 + 5 + 5 – 3 + 4 + 6 = 22 Systematic Planning
(8) (22) (36) (50) (64)
4 + 5 – 5 + 5 + 5 + 6 = 20 Problem Solving
(9) (23) (37) (51) (65)
5 – 2 + 5 + 5 + 5 + 6 = 24 Self-confidence
(10) (24) (38) (52) (66)
3 + 5 – 2 + 5 + 5 + 6 = 22 Assertiveness
(11) (25) (39) (53) (67)
5 + 5 + 4+ 5 – 3 + 6 = 22 Persuasion
(12) (26) (40) (54) (68)
4 – 5 + 5 +5 + 5 + 6 = 20 Use of Influence Strategies
(13) (27) (41) (55) (69)

TOTAL SCORE = 277

ENTREPRENEURIAL ANALYSIS 29

5 – 3 – 5 – 4 + 5 + 18 = 16 Correction Factor
(14) (28) (42) (56) (70)

CORRECTED SCORING SHEET

Instructions
1) The Correction Factor (the total of items 14, 28, 42, 56, and 70) is used to
determine whether or not a person tries to present a very favorable image of
him or herself. If the total score on this factor is 20 or greater, then the total
scores on the 13 competencies must be corrected to provide a more accurate
assessment of the strength of the competencies for that individual.
2) Use the following numbers when figuring the corrected score:

If the Correction subtract the following

Factor score is: correction number from the
Total score for each competency:

24 or 25 7

22 or 23 5

20 or 21 3

19 or less 0
3) Use the page below to correct each competency before using the Profile
Sheet.

COMPETENCY PROFILE SHEET FOR SELF-RATING QUESTIONNAIRE

Instructions

1) Transfer the corrected competency score to the profile sheet by marking an

“x” at the appropriate point on the dotted horizontal line for each
competency.

2) Draw a heavy line over the dotted horizontal line for each competency, from
the left vertical line to the point you have marked with an “x”. The heavy line
you have drawn graphically represent the strength of each competency.

3) The following is an example of how to create the profile sheet.

If the score for Initiative is 19, it will appear as follows:
Initiative —————————————————–
0 5 10 15 20 25
ENTREPRENEURIAL ANALYSIS 30

CORRECTED SCORE SHEET

Competency Original Correction Corrected

Score – Number* =Total

Initiative 22 – 0 = 22

Sees and Acts on Opportunities 18 – 0 = 18

Persistence 21 – 0 = 21

Information Seeking 23 – 0 = 23

Concern for High Quality of Work 19 – 0 = 19

Commitment to Work Contract 21 – 0 = 21

Efficiency Orientation 23 – 0 = 23

Systematic Planning 22 – 0 = 22

Problem Solving 20 – 0 = 20

Self-confidence 24 – 0 = 24

Assertiveness 22 – 0 = 22

Persuasion 22 – 0 = 22

Use of Influence Strategies 20 – 0 = 20

Corrected Total Score = 277

(ANSHU GUPTA)