Launching a Business1

8/2/2019 Launching a Business1

1/68

Click to edit Master subtitle style

4/24/12

LAUNCHING A BUSINESS


2/68

4/24/12

SADIYA S SAYEED(1043)

ZUBER YOUSUF(1011)

SNEHA CHAVAN(1006)

ANNOOPI SETH(1050)

SAMSON MASCARENHES(1022)

PRIYANKA MUNDALE(1023)

SUMAN RAINA(1035)

SHAHID SHAH(1044)

RAJESH BHANUSHALI(1002) KEYA PARIKH

RAJSHREE JOSHI(1015)

RISHIKANT TIWARI(1057)

GROUP MEMBERS


3/68


4/24/12

DEVELOPING A BUSINESS

IDEA


4/68


4/24/12

BUSINESS PRODUCT

DEVELOPMENT


5/68

4/24/12

INTRODUCTION

Opportunity is a business concept.

Opportunity if turned in tangible product or service then itcan result into profit.

Some important parameters for opportunity assessment are:

Market potential

Market share

Routes to market

Protection

Business viability


6/68

4/24/12

INTRODUCTION

Importance of identifying the right business opportunity to theentrepreneur

Importance of identifying the right business opportunity to thecommunity or nation

Checklists for an entrepreneur related to his personality


7/68

4/24/12

PRODUCT SELECTIONPROCESS

A product is capable of satisfying needs and wants of people atlarge

A product can therefore be anything an object, a service, aperson, an activity or a place

The careful research, evaluation and sound judgment is anactivity which is called as the Product Selection Analysistechnique


8/68

4/24/12

PRODUCT SELECTION ANALYSISTECHNIQUE

IDEA GENERATION

The search for good idea can be through:

Generating your own idea

By developing someone elses idea.

The following approach will help to generate the ideas:

Understanding changing needs and expectations of the customer

Visualizing emerging trends in the society

Good understanding of the economy


9/68

4/24/12

PRODUCT SELECTIONANALYSIS TECHNIQUE

Simpler approach can be:

Observation

Reading

Visits

Interaction


10/68

4/24/12

PRODUCT SELECTIONANALYSIS TECHNIQUE

Product search and screening

After getting idea of product

screening andvaries kinds of products close to it

are searched.

Product Life Cycle


11/68

4/24/12

PRODUCT EVALUATIONTECHNIQUE

THE EVALUATION IS CARRIED ON FOLLOWING

FACTOR:-

1. Stability

2. Growth

3. Marketability

4. Company position

5. Production


12/68

4/24/12

1.STABILITY FACTOR

Performance of market

Breadth of market

Possibility of captive market

Difficult of copying

Stability in recession


13/68

4/24/12

2.GROWTH FACTOR

Demand supply relationship

Rate of technology change

Export possibilities


14/68

4/24/12

3.MARKETABILITY FACTOR

Ease of distribution

After sales service

Average order size/per customer

Freedom from numerous variations

Freedom from seasonal fluctuations


15/68

4/24/12

4.COMPANY POSITIONFACTOR

Time required to get established

Degree of value addition

Availability of raw material

General labour atmosphere


16/68

4/24/12

5.PRODUCTION FACTOR

Procurement of equipment

Utilities/facilities required

Training and personnel

Freedom from difficult maintenance problem

Freedom from costly waste disposal problem


17/68

4/24/12

DEVELOPING THE SERVICEPRODUCT

Analyze the service Product at four levels:

1. Customer Benefit Concept

2. Service Concept3. Service Offer

4. Service Delivery System


18/68

4/24/12

TOTAL PRODUCT CONCEPT:

1. Core Or Genetic

1. Expected

1. Augmented

1. Potential


19/68

4/24/12

Time

A

PRODUCT LIFE CYCLE DIAGRAM

B C DE


20/68

4/24/12

THE PRODUCT LIFE CYCLE

A Introduction Phase New technology appears.Early adopters

B Growth Phase Greater awareness of benefits.

Rapid growth in demand.

C Maturity Phase Increasing level of Competition.

D Saturation Phase Intense competition.

Market has ceased to grow.

E Decline Phase New technology appears, which reduceddemand.


21/68

4/24/12

NEW SERVICE DEVELOPMENT

1) Idea Generation

Ideas may be generated in many ways

NEW PRODUCT

Long rangestudies

Market Gap

Consumeractivityanalysis

Learning fromoverseas

experience

Marketresearch

Competitors


22/68

4/24/12

2)Idea screeningThis stage is concerned with checking out different ideas which

are generated.

3)Concept developmentThis stage is concerned with translating the service product idea

in functional and objective terms.

4)Concept TestingThis stage consists of taking the concept developed after the

stages of idea generation and idea screening and getting reactionfrom target customers.

5)Business AnalysisThis stage is concerned with translating the proposed idea into afirm business proposal. It also involves undertaking a detailedanalysis of the idea in business terms and its likely chances ofsuccess or failure.


23/68

4/24/12

6)DevelopmentThis stage requires the translation of the idea into an actual

service product for the market.

7)TestingThe testing may be done on selected sectors or routes or on

regional basis.

8)CommercializationThis stage represents organizations commitment to full-scale

launch of the new service product.


24/68


4/24/12

DEVELOPING A BUSINESS

PLAN


25/68

4/24/12

Business Plan

It is an outline of the business giving details of the finance,

assets, staff, products or services and markets.

It guides the entrepreneur, it identifies possible problems and it

is also used in funding applications.

The business plan sets out how the owner of a business intends

to realize its objectives.


26/68

4/24/12

If you are starting a new business you will require a plan toclearly assess every aspect of the business and show how it willsucceed

If you are buying an already established business you will needto identify the strengths and weaknesses of the business to

decide if you will be able to make it a success

If you already up and running and in need of extra finance youwill need a plan to convince those putting capital into your

business that you can and will succeed

If you are applying for one of the many grants available

Reasons for a Business Plan


27/68

4/24/12

Users of a Business Plan


28/68

4/24/12

The main section headings to compile a business plan are as

follows:

1. The Executive Summary

2. General Information regarding the Business

3. Project Description

4. The Market and the Competitors

5. The Marketing Plan

6. Capital cost and Sources of finance7. The Operational Plan

8. Benefits of the Business to the Society

Components of a Business Plan


29/68

4/24/12

The Executive Summary

The summary should describe the following:

The current position of your business.

Details about who will be buying your products or services,

in what quantities and why.

Short, medium and long term objectives and how will theybe achieved.

A summary of your financial forecasts.

Details of how much money you will need.


30/68

4/24/12

General Information regarding theBusiness

The following points must be covered:

Business name, address and contact telephone number

The legal status you will trade under

Details of key members of staff including oneself.

Location

Business objectives and how these will be achieved.

Mission statement

Reference to the industry the following details must bepresented

Trends in the industry

P j t D i ti


31/68

4/24/12

This section must contain the following

information: Mention the site, indicate the town, street or

industrial estate

Whether the land is owned or leased Location of the industry

Details about physical infrastructurefacilities and the manufacturing process

The Market and Competitors

Project Description


32/68

4/24/12

It will describe how you will promote and sell your products orservices. It will include details of:

market research

target market

the competition

marketing methods

marketing strategy

Capital costs and Sources of Finance

The financial section of your business should outline how

much capital you need to raise, how will you raise theproceeds and how you will intend to finance your business.

The Marketing Plan


33/68

4/24/12

The following are the other important financial aspect of a

business plan that should be included:

i. The projected balance sheet

i. The projected profit and loss account

ii. The projected cash flow statement

The break-even point of sales also needs to be calculated. Thefollowing important ratios also needs to be calculated:

Profitability ratio : Net Profit / Sales * 100

Return on Investment: Net Profit / Capital * 100

Debt-Equity ratio: Debt / Equity

Debt Service Coverage ratio: (NPAT + Dep + Int) /( Installment + Interest)


34/68

4/24/12

The operation plan is the nuts and bolts of yourbusiness. It will illustrate to your reader the stepsyou will take to make sure your business will operateboth successfully and profitably. These are the actionplans along the time period when the particularoperations are to be carried out.

Benefits of the Business to the Community

This section can be classified as the impact of the business on

the economy and the contribution of the business to the society.

The following are the social and economic benefits that shouldbe mentioned:

i. Promoting employment

ii. Im ort substitution

The Operational Plan


35/68

4/24/12

The Marketing aspect

Marketing keeps your product selling and money selling intoyour business , which makes your business run. Some of majormistakes made while marketing are as follows:

i. Ignoring Competition

ii. Ineffective Customer Service

iii. Failing to validate your customers

iv. Lack of internal marketing

. The Financial aspect

Finance is the life-blood of a business and its management

effectively is one of the important factors for the success ofthe business. Some of the important factors to be considered

Reasons for failure of a Business Plan


36/68


37/68

4/24/12

The business can also fail due to improper handling ofpersonal issues. The following are the important issues ofconcern:

i. Mixing personal and professional issues

ii. Close-mindedness

iii. Procrastication

The Personal Issues


38/68


39/68

4/24/12

Need For Finance

For Creating the Asset

For Raw Material


40/68

4/24/12

Financial Resources

Short Term Finance

Creditors Bank Borrowing For Working Capital

Credit Available From Supplier

Advances Received From Customer


41/68

4/24/12

Cont

Long Term Finance

Equity/ Owners Capital

Loans From Financial Institution & Banks


42/68

4/24/12

RAISING WORKING CAPITAL


43/68

4/24/12

WORKING CAPITAL

Working capital requirements of a unit are metby internal as well as external sources.

The major external source is the banking

system.

Their approach is normally flexibleparticularly small scale sectors.

Credit facilities are granted by banks againstthe investory holdings, book debits and billsreceivables for export oriented units by way of

export finance.


44/68

4/24/12

TANDON COMMITTEE NORMS

The important features are:-

1. Classification of industry and fixation ofindustry/ receivables norms:

. The committee classified certain industriesinto distinct groups and fixed inventorynorms for 15 industry groups.

2. Application of margin and eligibility forborrowings:

. in order to avoid double financing, thecommittee recommended that onl a art of


45/68

4/24/12

CHORE COMMITTEE NORMS

The recommendations are:-

the borrowers enjoying aggregate workingcapital limits of Rs. 50 lakh and over would

require to conform to second method oflending prescribed by Tandon Committeewhich would give a minimum current ratio of

1.33 the borrower would be required to submit to

the bank his quarterly requirement of funs on

the basis of his budget and provide periodical


46/68

4/24/12

LIBERALISED NORMS

A new norm to compute the working capitalwas introduced in 1992 and the ceiling wasenhanced from time to time.

As per the current provisions, for SSI unitshaving aggregate working capital requirements

upto Rs. 1 crore, the limit is determined by thebanks on the basis of a simple calculation of20% of their annual turnover.


47/68

4/24/12

working capital management

DEFINITION:

working capital is defined as that part of thecapital, which is invested in the working/

current assets like stock of raw materials, semifinished goods, sundry debtors, billsreceivables etc.


48/68

4/24/12

CLASSIFICATION

REGULAR WORKING CAPITAL: meetingday to day business needs of the firm, changesits form, it is invested and reinvested in

business.

VARIABLE WORKING CAPITAL: meeting

the requirements of a rise in the total quantityof goods produced during certain season in theyear.


49/68

4/24/12

OPERATING CYCLE

FACTORS AFFECTING


50/68

4/24/12

FACTORS AFFECTINGWORKING CAPITAL NEEDS

Nature of business.

Production policies.

Manufacturing process.

Growth and expansion of business.


51/68

4/24/12

Venture Capital


52/68

4/24/12

FEATURES

Long term source of Investment

Conventional source

Not averse to the Risk

Not permanent equity holder


53/68

4/24/12

PROCESS

The Preliminary Screening

Due Diligence

Negotiations

MoU Flow of Funds

Exit


54/68


4/24/12

MANAGING EARLYGROWTH OF A

BUSINESS....

....BUSINESS INCUBATION PROGRAMME


55/68


56/68

GROWTH STAGES OF SMALL SCALE


57/68

4/24/12

GROWTH STAGES OF SMALL SCALEBUSINESS

Creativity

Direction

Delegation Coordination

Collaboration

GROWTH STAGES


58/68

4/24/12

GROWTH STAGES

OF SMALL-SCALEBUSINESS

1. Creativity:-

This is the birth place of smallscale industry.


59/68

4/24/12

Direction is usually authoritarian

The hierarchy-ridden organization kill initiative and

enthusiasm of the employees, solution to this is to givedelegation

3. Delegation

Decentralized organization structures

Autonomy is given to employees

Problem of effective coordination of financial technological and

manpower resources of the organization occurs because of theautonomy

At this phase the entrepreneur has to move to next phase ofcoordination


60/68

4/24/12

4. Coordination

Formal planning procedures are established.

The organizations becomes increasingly practical in character withits formal programmes and rigid systems.

Then comes the final phase Collaboration.

5. Collaboration

This evolution is characterized by more flexible and behavioralapproach to management.

Problems are solved quickly through team action.


61/68

4/24/12

EARLY GROWTH STAGE:

This is the testing time when the future of an

enterprise could be made or destroyed.

The advantages of this phase

1. Scale of Business

2. Focused Attention

ENTREPRENEURIAL SKILLS


62/68

4/24/12

ENTREPRENEURIAL SKILLSAND STRATEGIES

1. Record Keeping and Financial Control

1. Inventory Control

1. Human Resource

1.

Marketing Skills

BUSINESS INCUBATION


63/68

4/24/12

BUSINESS INCUBATION

PROGRAMME The Incubation Programme provides Consultancy support in

the following forms:

1. Basic benefit of the office Space

2.

Coaching3. Funding

4. Consultancy that could be Technical, Financial or GeneralManagerial

5. Marketing research study and forecasting

6. Modernization Schemes and Financial and Technical help forthe same

7. Growth Strategy Consultancy

VICIOUS CYCLE OF


64/68

4/24/12

VICIOUS CYCLE OFINCUBATION

Business incubation


65/68

4/24/12

Business incubationprogramme

Business incubators are programs designed to accelerate the successful

development of entrepreneurial companies through:

1. Business support resources and services,

2. Developed and orchestrated by incubator management.

. .Successful completion of a business incubation program increases thelikelihood that a start-up company will stay in business for the long term.

.

Unlike many business assistance programs, business incubators do notserve any and all companies. Entrepreneurs who wish to enter a businessincubation program must apply for admission. Acceptance criteria varyfrom program to program, but in general only those with feasible businessideas and a workable business plan are admitted.


66/68

Library and Documentation : The incubatees through ourcentre can have access to the central library of IIT Kanpur at


67/68

4/24/12

centre can have access to the central library of IIT Kanpur atvery nominal charges.

Assistance In Obtaining Finance : SIIC facilitates to

obtain funds for the incubatee companies at a post incubationphase through a network of venture capitalists from all overIndia

Advertisement Agencies : We have several links to the

advertisement agencies all over India , which help thecompanies at our centre to advertise themselves

Legal experts : We have a panel of highly qualified legalexperts which advise the companies at our centre in their legal

matters Advantages of Electronic and Animation Cell at

SIIC : TheB.tech and M.tech students of IIT Kanpur areprovided space and necessary facilities to develop novelElectronic and Animated products/software's. This cell is very

beneficial to SME'S related to electronic field


68/68


NEW VENTURE EXPANSION

Documents

Launching a Business1