eMBA Nov12 Session 9

Entrepreneurship Course
EMBA Batch
April 2013 Session 9
The Program
Session Topic 1
Introduction
Entrepreneurship
The Entrepreneur
Business Planning
Curriculum Welcome the students Explain course and schedule The Contract Students expectation of the course Interaction I the Business Case Study #1 Interaction The Name Ball Interaction-I the Investor Part 1 Discussion Singapore Incorporated and Entrepreneurship Presentation Entrepreneurship Process Presentation Leadership and Entrepreneurship explained Interaction I the Business Case Study #2 Discussion Doing Business in India and China Interaction Jockey Quiz Presentation Myths about entrepreneurship Presentation The ten mistakes a new entrepreneur make Interaction I the Business Case Study #3 Self Assessment - Are you the entrepreneurial type? Discussion Challenges of an Entrepreneur Discussion Guan Xi and networking Discussion Business entertainment Presentation Generating ideas and opportunities Presentation Types of Business Plan Presentation Making assumptions and identifying constraints Interaction I the Business Case Study #4 Interaction Briefing on The Coffee Stall Business Discussion Business Entertainment Understanding of social entrepreneurship Learning the value of business (The Coffee Stall Business)
Date
9th April 7.00 pm to 8.15pm
9th April 9.00 pm to 10.15 pm
5 6
Site Visit at Dignity Kitchen
The Program
Session Topic Curriculum Presentation Understanding and evaluating business risks Presentation Taking Risk Presentation Funding Types and Process Presentation Closing the Deal Interaction - I the Investor Part 2 Interaction I the Business Case Study #5 Discussion - My Business Values Presentation Business structures & its incorporation Presentation Processes and System Presentation Maintaining a business Presentation Growth of a Business Interaction I the Business Case Study #6 Discussion Learning from the $100 Experience Presentation Death of a business Presentation Why business failed Presentation Element of Success in Business Discussion Bad Business Practice I the Business Individual Assessment The $100 Experience Business Plan Presentation Course Review Result of your Assessment Review of The Contract Date
Getting Started in Business
13th April
2.00 pm to 3.15pm
Doing Business
13th April
4.00 pm to 5.15 pm
Success in Business
13th April
6.00 pm to 7.15 pm
10 11
Assessment Assessment
14th April
10.00 am to 11.15 am
14th April
12.00 pm to 1.15 pm
12
Conclusion
14th April
2.00 pm to 3.15 pm
Session 9 Success in Business

Presentation Death of a Business Why business failed Element of Success in Discussion Bad Business
Business
Practice
Background Reading Questions and Answers

Christopher Benjamin Consultancy Services 4
Death of a Business
Presentation
The TS Story
Manufacture and distribute kueh Branded Husband and wife dispute Too much education and mans ego No proper financial control Living off other shareholders investment Business wind down
Christopher Benjamin Consultancy Services
Voluntary Winding Up
Proposal to wind up company
Declaration of solvency No declaration of solvency
general meeting held liquidator appointed
Creditors meeting called
General meeting held
Liquidator has favourable opinion
Liquidator has unfavourable opinions
nomination of liquidator creditors choice prevails
Members Voluntary Winding Up
Creditors Voluntary Winding Up
The Process of Winding Up

Compulsory winding up Petition filed Resolution to wind up passed Petition dismissed Petition granted Voluntary winding up
Ascertain realises assets
Liquidator appointed
Liquidation official appointed
Ascertain pays off debts Pays balance to shareholders
Company continues to exist
Dissolution of company
Winding Up
Hierarchy of Payments
Secured creditors
Preferred unsecured creditors
Other unsecured creditors
shareholders
Scheme of Arrangement: Procedure

Proposal for compromise
Application to court
Court orders creditors meeting Approval of 75% majority
Court rejects application
Court approves arrangement Arrangement implemented
Court rejects arrangement Company or creditor may begin winding up proceedings

Judicial Management Process

Application for judicial management Court rejects application Opposition to application Opposition fails Opposition succeed
Notice of application published
Petition dismissed
Court makes judicial management order ; judicial manager appointed
Order published and notice given to creditors
Statement of affairs of company given to judicial manager yes
No
Application to discharge order
Statement of proposals laid before creditors meeting
Proposal rejected
Judicial manager implements proposals Judicial management fails Christopher Benjamin Consultancy Services
Order discharge d Company or creditor petitions for winding up
Judicial management successful
12
Judicial Management and Winding up

DETAIL Aim Official I. Functions ii. Powers JUDICIAL MANAGEMENT Preservation of insolvent companies COMPULSORY LIQUIDATION
Dissolution of companies; collection and distribution of company assets. Judicial manager Liquidator i.To achieve purposes on which order i.To protect companys assets, realise granted. them and apply proceeds amongst ii. General powers to do such things creditors and contributories. are as necessary for the ii.Exercise of powers subject to court management of the affairs, business control; given powers to do such things as and property of the management. are necessary for the winding up of the company and the distribution of the companys property. Includes power to avoid certain antecedent transactions.
How commenced Who may petition
By petition The company; Its directors; A creditor or creditors
By petition The company; Any creditor; A contributory; The judicial manager

13

DETAIL Grounds for making order JUDICIAL MANAGEMENT The company is or will be unable to pay its debts; and The making of the order is likely to achieve specified purposes including the survival of the company or its undertaking as a going concern COMPULSORY LIQUIDATION The grounds include The companys business is suspended for a year; The company is unable to pay its debts; The court is of the opinion that it is just equitable for the company to be wound up Directors positions terminated, powers transferred to liquidator. Carried on by liquidator only if necessary for the beneficial winding up of the companys business and not for its continuance. Any disposition of company property void, unless court otherwise orders; no action or proceeding may be commenced or continued without court approval; and any execution against company property void.
14
Effect of order on i. Board of Directors ii. Business iii. Property
i.
Management powers vest in i. judicial manager. ii. Continues in accordance with ii. judicial managers proposals iii. No security may be enforced against no legal process may be commenced or continued against iii. companys property without consent of judicial manager or court.
15
Why Business failed?
Presentation
Ten Reasons Why Businesses Fail

1. inadequate capitalization or lack of funds 2. lack of financial planning and review 3. over dependence on specific individuals in the business 6. lack of management systems 7. lack of knowledge about the market and competition 8. lack of vision and purpose by principles 9. failure to establish or communicate company goals
4. poor market segmentation and strategy
5. absence of standardized quality program
10. owners concentrating on the technical rather than the strategic work at hand
17
Element of Success In Business
Presentation
Define Success
Success is different meaning to different people
Success is define as a satisfying state of the mind
19
Business is like a Car

Find the Driver?
Roadmap = Business Plan
Engine= Production
Co-driver
Driver
Passenger= worker
Fuel = money Store

Element of LOVE
{
Element of LOVE
Love
Founder AA Richard
CC Dan
Inheritor BB Ken
DD Chen
No Love
22
Element of LOVE Finding your passion

Time Happenings People Memories (Product / Service)
Birth
Childhood
School Outing Holiday Work Exposure Etc Etc Etc..
23
Element of TIME
{
Element of TIME
Living-10 Working-8 SpiritualPhysicalSocialFamily= 24 hrs 6

Element of TIME
Yes Yes Do It Now Important No
Do It Next
Urgent
No Do It Later Do you need to do it at all?
Important = Situation Urgency = Time

Element of KNOWLEDGE
{
Practice Knowledge Experience Core Knowledge Learned
28
Function Application
Educational Background
Geography
Industry
29
Element of MONEY
{ $
Element of MONEY
Money is needed
Set-up the business Maintain the business Grow the business
Money is needed
People Machine & equipment Material
31
Element of MONEY
Who do I know (directly)
What do I have (tangible)
$
Who do I know (indirectly) What do I have (intangible)
32
Element of HEALTH
{ $
}
33
Element of HEALTH
Physical & Mental state of health

Element of HEALTH
Physical health
You need your kidneys
35
Element of HEALTH
Mental Health
Risk Staying Power

PickMeup
OPPORTUNITY
{ $ }
Opportunity
37
OPPORTUNITY
Dreamers
Opportunity
DOER
38
Element of Success
Success =
{ $ }
In Business
About the Book
The Characters Tom The Case Subjects The Old Regular The Story Approach The Element of
Success
40
Failure is
Success is defined as a satisfying state of the mind and

Failure is when you stop trying
Bad Business Practice
Discussion
City Harvest: Background
City Harvest: Round-Tripping
City Harvest: Background
China Aviation Oil: Background
Jet fuel procurement, international oil trading and oil-related investment Handled virtually 100% of China's total jet fuel imports Began derivative speculation in 2003
In late 2003, bet oil price would fall Oil prices rose from US$35 to US$55 by Nov
2004
46
China Aviation Oil: Background
General failure in corporate governance CEO and Head of Finance jailed 4 years 3 months and 2 years respectively and fined Other directors fined for making false and misleading statement
China Aviation Oil: Singapores Legal System
Common Law System

Law based on decisions made in earlier cases Statutes introduced to codify some of these laws
Singapore Penal Code Other specific acts

Companies Act (CA) Securities and Futures Act (SFA) Prevention of Corruption Act (PCA)
48
China Aviation Oil: Regulatory Bodies
Singapore Exchange (SGX)
Manages day-to-day regulation of listed companies Investigates white collar crime Regulates and supervises financial market Investigates corruption in private and public sectors Deputy Public Prosecutors conduct prosecutions and guide investigations
Commercial Affairs Department (CAD)
Monetary Authority of Singapore (MAS)
Corrupt Practices Investigation Bureau (CPIB)
Attorney-Generals Chambers (AGC)
China Aviation Oil: Fraud Detection

Board of Directors
Delegated Daily Risk Management Managed Internal Controls and Business Risk
Chief Executive Officer

Received reports of risk exposure
Audit Committee
Failed to detect losses
Risk Management Committee
Internal Audit
Department Heads
Traders
China Aviation Oil: Duty of Director (CA S157)
Made mandatory duties of director

Act
honestly and use reasonable diligence in duties
Expected standard depends on position, company, business No breach if decision made losses
If
made honestly and with reasonable belief it was in the best interest of the company
51
China Aviation Oil: Possible Breach of Duty
Directors aware CAO was speculating in options No effective risk management guidelines in practice on options trading Board of Directors allegedly not aware of losses incurred Audit Committee and internal audit did not detect losses
Chai Pani ka Kayal

Discussion
Chai pani ka Kayal
What is your definition of
CORRUPTION ? Does every person has a price? By bribing, do you support corruption? Can corruption be eradicated?????
54
Chai pani ka Kayal
55
Changing Phases of Bribery

Indian China In the 80s Cigarette and panty hose In the 90s White goods & FEC Three joss sticks and liqueurs In the 00s Shares and options Indonesia Traffic fines = 100,000 Rupiah School application form = 500,000 Rupiah Delhi traffic fines = Rs 100 to Rs 500 Mumbai Rail Security
= Rs 200
Chennai Land Office Peon Administrator Manager Malaysia
= Rs 50 = Rs 500 = Rs 2000
Traffic fines = 50 Ringgit License application = 200 Ringgit

Bad Business Practice: Corruption

CORRUPTION DEFINED Corruption is operationally defined as the misuse of entrusted power for private gain "according to rule" corruption facilitation payments, where a bribe is paid to receive preferential treatment for something that the bribe receiver is required to do by law "against the rule" corruption. is a bribe paid to obtain services the bribe receiver is prohibited from providing. Transparency International
57

Corruption is the lack of integrity or honesty, often associated with bribery, through the use of a position of trust for dishonest gain. Bribery and corruption are globalised ethical issues which have a massive impact on both developing and developed countries. The globalisation of business has lead to many multinational and international organisations investing in some of the most corrupt countries in the world (according to Transparency Internationals index) therefore making it a worldwide issue that has serious implications for individuals, business and government relations. Additionally, corruption remains a serious problem for companies operating in parts of the world where corruption is a day-to-day factor; it is incorporated into business activities across regions, sectors and industries. The Governance Director from the World Bank Institute, David Kaufman, identified that bribery has become a $1 trillion industry Source: www.unglobalcompact.org
Bad Business Practice: Bribery

Bribe Payers Index Rank Country Score
1
1 3 3 5 5 5 8 9 9 9 12 13 14 14 19
Belgium
Canada The Netherlands Switzerland Germany Britain Japan Australia France Singapore The United State Spain Hong Kong South Korea Taiwan India
8.8
8.8 8.7 8.7 8.6 8.6 8.6 8.5 8.1 8.1 8.1 7.9 7.6 7.5 7.5 6.8
21
22
China
Russia
6.5
5.9 Source: Transparency International 2006
59
60
61

Prize
One Off ? Retainer ?
Project ? Tenure ?
Is it worth it ?
Relative ? Associate ?
Quantum
Money ? Kind ?
Approach
Gift ? Lost ?
62

CORRUPTION ERADICATED? is only possible if representatives from government, business and civil society work together and agree on a set of standards and procedures they all support COST OF CORRUPTION?
The cost of corruption is four-fold: political, economic, social, and environmental. Political - a major obstacle to democracy and the rule of law Economic - the depletion of national wealth Social - undermines people's trust in the political system, in its institutions and its leadership. Environmental - careless exploitation of limited natural resources
63
Project 2006
Benefits Development Project 2006 Implementation Village
Local Company X Non Governmental Organization Award
Tender
Fund Fund India Bank
Provincial Government and a group of Officers
Consultancy Fee
Introduction Commission
Mr. Fixer
Project 2006
Project 2006 was put on hold because of the financial crisis Singapore company sued Indian partner for non-performance Lesson Learnt Money is never enough Legal approach is complicated Allocation 3% to 15% of project (depending on project size) and always factor in Payment is in stages on getting paid Solution Mr. BIG mediates
Project 2006
Project Cost Less cost of design & development ($4.6 m) $12 m
implementation
expenses Introduction Commission Collaboration Expenses
($3.6 m)
($0.7 m) ($1.8 m) ($0.4 m)
Final profit recognized to Company X
$0.9m
DO YOUR SUM..
The creative approach to corruption . The scholarship story
happens in the 1980s multi million infrastructure project three eventual tenders chief negotiator an incorruptible government officer project award hinges on his evaluation award of a UK scholarship for a young lady.
20 years later.
Bad Business Practice: Scams

Scams Lottery Prize Scam Target Punters How it is Done? SMSes or overseas calls are made to victims mobile phone, telling them they have won cash prizes in lucky draws held by foreign companies. The tricksters then ask for money upfront to pay for administrative or processing fees via remittances companies account in China, before they can claim their money A kidnapper calls the victims on his mobile phone, claiming a relative has been kidnapped and demands a ransom. The caller says the relative will be harmed if the money is not handled over. Over the phone, a person posing as the relative implores the victim to save him. But no one has been kidnapped. The victim is also kept on the line, probably so he cannot call the relative to check until the money has been transferred. A woman approaches a victim, asking if he knows of an old man living nearby who can cure illness. Shortly after, accomplices join them, predicting the victims will fall sick soon. The victim is then asked to place cash and jewellery in a plastic bag for prayers to be perform by the healer. The women and her accomplices then instructed their victim to open the plastic bag a few days later. But when she does, the cash and jewellery have been swopped with apples and other items.
Kidnap Call Scam
Parents
Apple Scam
Middle-aged & Elderly women
68

Scams Nigerian Scam Target Netizens How it is Done? An e-mail from a supposed African official that offers a big cut if you help unfreeze millions in a late bureaucrats bank account. The catch is that the victims have to transfer money first to cover the transaction costs. More funds may be requested before snags occur and the official disappear, with the money A van will drive up to an unsuspecting victim and offers to sell him high end home theatre at very low price. Payment is cash. It can be the form of a mass e-mail or e-mail response to jobseekers ads, offering highly paid job such as investment consultants in Canada or operation managers position in Europe. But the victim has to wire money over first. Man wants to buy a consumer electrical item, he goes to see a fixer. The fixer will arrange for a victim who is desperate for cash. He asked the victim to purchase the item on hire purchase. The fixer takes the purchased item to the man and sells him at a discount. Take the cash from the sale and after deducting his fee give the rest to the victim and the victim has to service the hire purchase. Based on "rob-Peter-to-pay-Paul" principle, as money from new investors is used to pay off earlier investors until the whole scheme collapses.
Source: Commercial Affair Department, Singapore Police Force
It drop off the van Scam Job Offer Scam
General Public Job-seekers
Safe Supermart Scam
General Public
Ponzi Scheme
Investors
69
70
Questions & Answers
My email address: chrisben@singnet.com.sg

eMBA Nov12 Session 9

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Entrepreneurship Course

April 2013 Session 9

9th April 7.00 pm to 8.15pm

9th April 9.00 pm to 10.15 pm

10th April 7.00 pm to 8.15 pm

10th April 9.00 pm to 10.15 pm

Site Visit at Dignity Kitchen

11th April 6.00 pm to 8.30 pm

Getting Started in Business

Session 9 Success in Business

Background Reading Questions and Answers

Christopher Benjamin Consultancy Services

general meeting held liquidator appointed

Creditors meeting called

General meeting held

Liquidator has favourable opinion

Liquidator has unfavourable opinions

nomination of liquidator creditors choice prevails

Members Voluntary Winding Up

Creditors Voluntary Winding Up

Christopher Benjamin Consultancy Services

The Process of Winding Up

Ascertain realises assets

Liquidation official appointed

Ascertain pays off debts Pays balance to shareholders

Company continues to exist

Christopher Benjamin Consultancy Services

Preferred unsecured creditors

Other unsecured creditors

Scheme of Arrangement: Procedure

Court orders creditors meeting Approval of 75% majority

Court rejects application

Court approves arrangement Arrangement implemented

Court rejects arrangement Company or creditor may begin winding up proceedings

Judicial Management Process

Notice of application published

Court makes judicial management order ; judicial manager appointed

Order published and notice given to creditors

Statement of affairs of company given to judicial manager yes

Application to discharge order

Statement of proposals laid before creditors meeting

Order discharge d Company or creditor petitions for winding up

Judicial management successful

Judicial Management and Winding up

How commenced Who may petition

By petition The company; Its directors; A creditor or creditors

By petition The company; Any creditor; A contributory; The judicial manager

Christopher Benjamin Consultancy Services

Judicial Management and Winding up

Effect of order on i. Board of Directors ii. Business iii. Property

Christopher Benjamin Consultancy Services

Judicial Management and Winding up

Christopher Benjamin Consultancy Services

Why Business failed?

Ten Reasons Why Businesses Fail

4. poor market segmentation and strategy

5. absence of standardized quality program

Christopher Benjamin Consultancy Services

Element of Success In Business

Success is different meaning to different people

Success is define as a satisfying state of the mind

Christopher Benjamin Consultancy Services

Business is like a Car

Fuel = money Store