Setting Up a Small Business Enterprise
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Transcript of Setting Up a Small Business Enterprise
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Setting up a Small BusinessEnterprise
Identifying the Small Business
Precaution before starting your own unit:
i)Is it viable business proposition on your area.ii) Does it match local cliental
iii) Make market research
iv) Consult with experts
v) Look out for competitionvi) Is it sunrise industry
vii) Evaluate your business opportunities
viii) Project conceptualization
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Filtration of BusinessOpportunities
Research your Industry
Market Assessment
Profit Assessment Financial Assessment
Legal Assessment
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The potential Sector forBusiness Opportunities
Biotechnologyuse of livingorganism to manufacturing food,drugs and other products.
EventManagementClientspending more to make events moreelaborate and memorable
IT Enabled Services
representingthe country globally
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The potential Sector forBusiness Opportunities
Food, Fruits and VegetablesProcessing, Refrigeration andTransportation
Mineral WaterEra of potablebottled water.
Insurance Sector
Herbal Sector
Tourism Sector
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The potential Sector forBusiness Opportunities
Telecommunication
Plastic & Chemical
Third Party Logistics (Courier Services)-provide vital link between suppliers&consumers. Cost effectivedistribution of time-critical-goods
Home based Business
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Formalities for Setting Up of aSmall Business Enterprise
1.Selection of a Project
a)Product or Service selection:
Background and experience ofentrepreneurs
Avail. Technology & know-how of project
Marketability
Investment Capacity Avail. Of plant & mach. And raw material
Sufficient infrastructure
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b) Location Selection
Proximity to mkt.
Avail. of raw material,transport,incentives,
Convenience to the promoters Government policy.
Infrastructure facilities
Social infrastructure
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c) Project Feasibility Study:
Market analysis:
i) what would be agg. Demand
ii) what would be the market share
Technical analysis:
i) To determine whether the
prerequisite for the success of projecthave been considered & reasonablygood choice have been made
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c) Project Feasibility Study:
Financial analysis: whether viable in thesense of being able to meet the burden ofdebt service & will satisfy return
expectation Economic analysis:
i) Referred to social cost-benefit analysis interms of shadow prices
ii) Impact on I,S and distribution of income Ecological analysis: damage to
environment and restoration cost of it
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d) Business Plan Preparation:
Determines where the companyneeds to go.
Possible roadblocks along the way Formulate responses to contingencies
Keeps the business on tracks to reachits planned goal
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Strategy of a core business plan:
Think competitively throughout
Be realistic
Involve people
Factual & Succinct
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e) Project Profile:
Information heads in a project profile:
Introduction
Promoters Background
Product description Market &marketing
Plant &machinery
Manpower required
Cost of production & profitability
Means of finance
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Decisions on Constitution
A) Sole Proprietorship:
Vast majority in India
Relatively free from formality No legal distinction between you and
your business
Easy to set up
Your own boss
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b) Partnership(1932 Act.):
Association of two more presons butless than 20.
Effective collection of sole-prop. But face losses due to others.
All partner contribute capital equallyand share profits and losses equally
Raise the level of capital
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c) Corporation/Limited Company(Companies 1956 Act.):
Pvt. Ltd-minimum 2 persons & max.50 persons
Public Ltd-minimum 7 persons and
max. no limits Management structure well defined
Financial liability limited
Bankruptcy does not effect all. But may be expensive & need
professional help.
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d) Cooperatives:
Enterprises owned & controlled by thepeople working init.
One person one vote Stipulated qualification
members must benefit primarily
Once in danger of extinct helped by2002 act.
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e) Franchising:
Half way house laying betweenentrepreneurship & employment
Attraction of running business whilstat the same time eliminating somemore unappealing risks.
Franchising of a product or service
Franchising of an entire businessenterprise product or service
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2.Registration
Obtain SSI Registration
Provisional registration certificate
Registration formalities Permanent Registration Certificate
Benefits of registration
Features of Reg.
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4. Clearances from specific Deptt.(s)
5.Arrangement of Land/Shed
6.Arrange for Plant & Machinery7. Arrange for Infrastructure
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3.Prepare Project Report
Executive summary
Existing company details if any
Operational details of the existing company
Project details
The company vis--vis related industry
Conclusion
Annexure
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4.Apply and obtain finance:
Share capital
Deposits own/ public
Debentures Long term loans
Short term loans
Working capital loan like cash credit
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5.Implement the project & obtainfinal clearances:
Construction shed
Order for machinery
Recruit personnel Arrange for raw materials
Marketing
Final clearances (product specific)