Simulation Exercise On Goal Setting in Entrepreneurship: by Divyesh Gandhi

Simulation Exercise on Goal
setting in entrepreneurship
By
Divyesh Gandhi
1
INTRODUCTION TO SIMULATION
Webster’s Dictionary:
“ to assume the mere appearance of ,

without the reality”
Definition:
“Simulation is the process of designing a model of
a real system and conducting experiments with this
model for the purpose of either understanding the
behavior of the system and/or evaluating various
strategies for the operation of the system.”
Simulation is one of the most widely
used techniques in operations research
and management science…
Applications:
MANUFACTURING: material handling systems, assembly lines,
automated production facilities, inventory control systems, plant
layout, etc..
BUSINESS: stock and commodity analysis, pricing policies,

marketing strategies, cash flow analysis, forecasting, etc..
GOVERNMENT: military weapons and their use, military tactics,

population forecasting, land use, health care delivery, fire protection,
criminal justice, traffic control, etc..
And the list goes on and on...

Advantages to Simulation:
Simulation’s greatest strength is

its ability to answer
“what if” questions...
Advantages to Simulation:
• Can be used to study existing systems without disturbing the
ongoing operations.
• Proposed systems can be “tested” before committing resources.
• Allows us to control time.
• Allows us to identify bottlenecks.
• Allows us to gain insight into which variables are most

important to system performance.
Simulation is not
without its drawbacks...
Disadvantages to Simulation
• Model building is an art as well as a science. The quality of the
analysis depends on the quality of the model and the skill of the
modeler.
• Simulation results are sometimes hard to interpret.
• Simulation analysis can be time consuming and expensive. Should

not be used when an analytical method would provide for quicker
results.
Goal Setting
in
Entrepreneurship
11
Goal Setting
• Define your business goals, especially before you get started.
• Goal Should be match with your business.
• Goals are powerful contributors to successful business growth in
several ways.
12
Quality in Goal:
• Specificity
• Optimism
• Realism
• Short and long term
13
• Specificity. You have a better chance of achieving a goal if it's
specific. Raising capital isn't a specific goal; raising $10,000 by
July 1 is.
• Optimism. Be positive when you set your goals. Being able to

pay the bills isn't exactly an inspirational goal. Achieving
financial security phrases your goal in a more positive manner,
thus firing up your energy to attain it.
14
• Realism. If you set a goal to earn $100,000 a month when you've
never earned that much in a year, that goal is unrealistic. Begin
with small steps, such as increasing your monthly income by 25
percent. Once your first goal is met, you can reach for larger ones.
• Short and long term. Short-term goals are attainable in a period

of weeks to a year. Long-term goals can be for five, 10 or even 20
years; they should be substantially greater than short-term goals
but should still be realistic.
15
Factors to consider when setting goals
• Income
• Lifestyle
• Type of work
• Ego gratification
16
• Income. Many entrepreneurs go into business to achieve financial
security. Consider how much money you want to make during
your first year of operation and each year thereafter, up to five
years.
• Lifestyle. This includes areas such as travel, hours of work,

investment of personal assets and geographic location. Are you
willing to travel extensively or to move? How many hours are you
willing to work? Which assets are you willing to risk?
17
• Type of work. When setting goals for type of work, you need to
determine whether you like working outdoors, in an office, with
computers, on the phone, with lots of people, with children and so
on.
• Ego gratification Face it: Many people go into business to satisfy

their egos. Owning a business can be very ego-gratifying,
especially if you're in a business that's considered glamorous or
exciting. You need to decide how important ego gratification is to
you and what business best fills that need.
18
Ways to help make sure you hit your
goals continuously.
1. Know your target
2. Set up action steps
3. Keep score
4. Keep your eye on the prize
19
1. Know your target
The last thing you want to do is set your goals like most people make their
New Year’s resolutions.
• “I am going to try to lose weight.”
• “I am going to go to the gym more.”
• “I’m going to quit smoking…for good this time!”
The reason why resolutions like this fail is not because people are lazy, as
much as they are not setting crystallized goals. For your business, you
want to avoid vague objectives like “I will raise our revenues,” or “I will
cut inventory losses.”
Instead, make a goal like “I will raise our revenue by $5,000 per month,” or
“I will cut monthly shoplifting losses by 20 percent by next year.”
Now the goal is crystallized, so you’ll at least know if you hit it or you
don’t. It also makes it more “real,” so you can envision it happening.
20
2. Set up action steps
• “That was it?” you might ask yourself. Some goals will come way
easier than you expected, simply by taking action.
• For other things, you may need a longer set of action steps. For
raising revenues, you might decide to invest in greater sales
training for your associates or set up perks for meeting quotas.
Maybe the first three things you try won’t work, and that’s fine.
You don’t need to have everything from Point A to Point Z lined
up—it’s actually better that you don’t. If you were psychic enough
to foresee every result, you probably wouldn’t have this problem
in the first place. It’s fine to just have a basic outline and initial
steps planned out. As you go along the path, new opportunities
will arise that may be far better than your original plan.
21
3. Keep score
• Documenting everything is a huge part of reaching your goals. In

fact, a lot of things get improved by keeping track of them, even
if you don’t have a goal set up and take no other action.
• It’s the same with watching your revenues and expenses. The act
of mere observation can have a stunning effect. When you have a
goal set, plus regular observation, you have everything you need
to progressively move up the ladder into excellence. Sometimes
staring at the balance sheet is difficult if things aren’t improving.
This is why it’s important not to beat yourself up, but instead be
patient and continue to take the proper actions towards your
goal’s achievement.
22
4. Keep your eye on the prize
There are a number of motivational tactics to keep you focused on

your goals and attainment of them. One way to do this is to keep
up a poster in your office with the goal in big letters. This is a
constant reminder to everyone for what they’re shooting for.
This also helps with accountability. Some small business owners
I know actually post their goals on their Facebook or LinkedIn
accounts so they’ll feel compelled to not embarrass themselves.
Of course, this is by no means appropriate for every business.
Confidentiality and professionalism still heavily apply to most
firms, but for solo entrepreneurs, affiliates and Internet
marketers, there is clearly a lessening of both in the social media
age.
23
EVERYONE WANTS TO BE
SUCCESSFUL. UNTIL THEY
SEE WHAT IT ACTUALLY
TAKES.
24

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Simulation Exercise on Goal

“ to assume the mere appearance of ,

BUSINESS: stock and commodity analysis, pricing policies,

GOVERNMENT: military weapons and their use, military tactics,

And the list goes on and on...

Simulation’s greatest strength is

• Proposed systems can be “tested” before committing resources.

• Allows us to control time.

• Allows us to identify bottlenecks.

• Allows us to gain insight into which variables are most

• Simulation results are sometimes hard to interpret.

• Simulation analysis can be time consuming and expensive. Should

• Optimism. Be positive when you set your goals. Being able to

• Short and long term. Short-term goals are attainable in a period

• Lifestyle. This includes areas such as travel, hours of work,

• Ego gratification Face it: Many people go into business to satisfy

• Documenting everything is a huge part of reaching your goals. In

There are a number of motivational tactics to keep you focused on

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