Promotion is the first stage for advancing towards the stability and formation of the enterprise/industry/business. This is the stage in which the idea of starting an industry emerges in the mind of an individual (entrepreneur) and he makes necessary inquiries and investigations.
Besides, a detailed programme is chalked about how the necessary resources (human, raw materials, machinery, management, and capital) will be arranged, from whom discussions and interactions are to be held and counseling is to be obtained, what legal formalities are to be fulfilled for its formation, etc. to fulfill the idea of setting up of new enterprise.
Promotion of Entrepreneurial Venture
In general sense, promotion means ‘start or formation’. But From the viewpoint of industry/enterprise, it means all those activities and modalities which are performed right from the emergence of the idea of setting up the industry to bring it to the stage of its establishment.
In other words, the promotion starts from the emergence of the idea to the stage at which an enterprise/business/industry completely establishes well, to start its activities as an organization or institution.
Following definitions are useful to understand the meaning of Promotion.
- Promotion involves four elements, discovery, investigation, assembling, and financing.
- Promotion is the process of creating a specific business enterprise. The aggregate of activities contributed by all those who participate in building up of the business constitutes promotion.
- Promotion may be defined as the discovery of business opportunities and the subsequent organization of funds, properly and managerial ability into a business concern for the purpose of making profits therefrom.
Thus, promotion means all those activities (legal, financial and initial contracts) which are carried out right from the emergence of the industrial or business ideas in the brain of any individual or group of individuals to bring it to the stage of starting it.
Essential Elements for Promotion of Entrepreneurial Venture
On the basis of aforesaid definitions of promotion, the following essential elements are necessary for it.
1. This is the first basic and important step for building up or establishment of an industry.
2. Promotion is the process of building up of any specific business enterprise.
3. This is the aggregate of all activities of building up of the industry, like capital, property, finances, discoveries, investigations, planning for utilization of resources, assessing profitability, fulfilling legal formalities and initial contracts, etc.
4. Promotion starts from the emergence of the idea of the establishment of any business and ends at bringing it the stage of starting.
5. Such an idea may emerge in the mind of an individual or group of individuals.
We have studied that promotion involves all activities starting from the emergence of the idea of building up/establishment of the industry to its actual establishment and the person who performs these activities is called the promoter.
In other words, promoter means a person in whose mind the idea of sitting an industry emerges first of all and who takes necessary steps to materialize this idea.
The promoter is the person who commits to build and operate the industries, in the context of a given scheme and takes necessary steps to fulfill this objective.
Thus, the promoter is an industry expert, who carries all functions related to perceiving for building up of the industry to bring it to the stage of starting it.
Truly speaking, the promoter takes over him the responsibility to build an entrepreneurial venture for the establishment of the industry and takes all necessary action to fulfill it.
Of course, the entrepreneur takes heavy risks, because if the building up the industry is not successful, he alone will have to bear all losses.
Functions of the Promoter or Entrepreneur
The functions of the promoter or entrepreneur depend upon nature, legal restrictions, the timings and the situations of the entrepreneurial venture, at its commencement.
In general, the following functions are to be performed by a promoter/entrepreneur.
- To conceive about building up of industry.
- To explore the possibilities related to the business and its various activities.
- To consider, how the industry will be established, whether it will be started altogether afresh or by purchasing any established industrial unit or by assembling the existing industries.
- To determine the business, objectives, nature, scope, and limitations of the proposed industries.
- To contact the specialists, technical experts, and knowledgeable scholars to seek their advice and guidance.
- To obtain reports from the advisors and counsellers.
- To make efforts to materialize the ideas of building up of the industry.
- The preliminary study of reports received from the advisors and experts.
- Collection of facts and data related to the business.
- To assess the profitability of the entrepreneur.
- Estimation of the resources required for setting up of the industry. Detailed investigation about the probable setting up of the industry, demand, and supply of the product, the competitive organizations, and institutions, etc. Related: 21 Importance and Role of Entrepreneur.
- To make initial contracts for land, buildings and other sources with the concerned parties, if the industry is to be built, by starting the new business and industry. However, if the industry is to be established by purchasing the existing unit, the need is of making a contract with the seller, after taking advice from the experts.
- To appoint legal advisors, managers, managing agents, secretaries, and employees.
- To make arrangements for contacts with sellers, advisors, specialists and managing directors, etc.
- To manage machinery, equipment, and furnishing of the office of the industry.
- To complete legal formalities, like deciding the name of the industry, getting its registration, if required, to decide the place for the registered office, preparation of required documents and their printing, etc.
- To manage initial capital.
- To appoint banks, auditors, agents and underwriters and their remuneration.
- To start the entrepreneurial venture and send its information to the registrar.
Thus, now know the promotion of entrepreneurial venture.