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LAUNCHING A BUSINESS
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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
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DEVELOPING A BUSINESS
IDEA
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BUSINESS PRODUCT
DEVELOPMENT
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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
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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
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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
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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
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PRODUCT SELECTIONANALYSIS TECHNIQUE
Simpler approach can be:
Observation
Reading
Visits
Interaction
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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
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PRODUCT EVALUATIONTECHNIQUE
THE EVALUATION IS CARRIED ON FOLLOWING
FACTOR:-
1. Stability
2. Growth
3. Marketability
4. Company position
5. Production
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1.STABILITY FACTOR
Performance of market
Breadth of market
Possibility of captive market
Difficult of copying
Stability in recession
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2.GROWTH FACTOR
Demand supply relationship
Rate of technology change
Export possibilities
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3.MARKETABILITY FACTOR
Ease of distribution
After sales service
Average order size/per customer
Freedom from numerous variations
Freedom from seasonal fluctuations
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4.COMPANY POSITIONFACTOR
Time required to get established
Degree of value addition
Availability of raw material
General labour atmosphere
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5.PRODUCTION FACTOR
Procurement of equipment
Utilities/facilities required
Training and personnel
Freedom from difficult maintenance problem
Freedom from costly waste disposal problem
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DEVELOPING THE SERVICEPRODUCT
Analyze the service Product at four levels:
1. Customer Benefit Concept
2. Service Concept3. Service Offer
4. Service Delivery System
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TOTAL PRODUCT CONCEPT:
1. Core Or Genetic
1. Expected
1. Augmented
1. Potential
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Time
A
PRODUCT LIFE CYCLE DIAGRAM
B C DE
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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.
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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
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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.
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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.
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DEVELOPING A BUSINESS
PLAN
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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.
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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
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Users of a Business Plan
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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
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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.
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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
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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
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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
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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)
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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
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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
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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
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Need For Finance
For Creating the Asset
For Raw Material
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Financial Resources
Short Term Finance
Creditors Bank Borrowing For Working Capital
Credit Available From Supplier
Advances Received From Customer
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Cont
Long Term Finance
Equity/ Owners Capital
Loans From Financial Institution & Banks
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RAISING WORKING CAPITAL
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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.
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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
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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
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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.
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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.
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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.
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OPERATING CYCLE
FACTORS AFFECTING
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FACTORS AFFECTINGWORKING CAPITAL NEEDS
Nature of business.
Production policies.
Manufacturing process.
Growth and expansion of business.
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Venture Capital
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FEATURES
Long term source of Investment
Conventional source
Not averse to the Risk
Not permanent equity holder
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PROCESS
The Preliminary Screening
Due Diligence
Negotiations
MoU Flow of Funds
Exit
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MANAGING EARLYGROWTH OF A
BUSINESS....
....BUSINESS INCUBATION PROGRAMME
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GROWTH STAGES OF SMALL SCALE
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GROWTH STAGES OF SMALL SCALEBUSINESS
Creativity
Direction
Delegation Coordination
Collaboration
GROWTH STAGES
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GROWTH STAGES
OF SMALL-SCALEBUSINESS
1. Creativity:-
This is the birth place of smallscale industry.
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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
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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.
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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
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ENTREPRENEURIAL SKILLSAND STRATEGIES
1. Record Keeping and Financial Control
1. Inventory Control
1. Human Resource
1.
Marketing Skills
BUSINESS INCUBATION
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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
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VICIOUS CYCLE OFINCUBATION
Business incubation
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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.
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Library and Documentation : The incubatees through ourcentre can have access to the central library of IIT Kanpur at
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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
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NEW VENTURE EXPANSION