9. mms - imcost (ranjan) managing early growth of business and new venture expansion

8/12/2019 9. MMS - IMCOST (RANJAN) Managing Early Growth of Business and New Venture Expansion

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Managing Early Growth Of Business

New Venture Expansion

Strategies and Issues


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Managing Early Growth of Business

Project Execution : Various steps involved

Feasibility of the project to be determined Involvement of the promoters.

The detailed project report needs to be prepared.

Search of the financial institutions to support the project

including alternative search and evaluation.

Submission of the DPR to the financial institution

Checking of feasibility by the financial institution

A loan is sanctioned for disbursing of the loan amount. To check the agreed upon terms and conditions of the

loan.

The project is ready for the execution.

To control the development for the conception period.


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Company Formation

Proper consideration towards venture ownership before its

establishment.

It must be based on sole or in multiple combination of

-- Investment capacity

-- Technical competency

-- Managerial ability

-- Salesmanship

-- Limitations if any

In general the ownership may be of following types

-- Individual Proprietorship

-- Family Partnership

-- Partnership with individuals who are not family members

-- Private limited company

-- Limited company

-- Co-operative society and

-- Private Trust


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Acquisition of Assets

Fixed Assets

Land

Building

Plant and Machinery

Movable Assets

Factory cars and vehiclesWork managers

Technical know how

Promoters and experts

Infrastructure

Sundry Assets

Power stations, Bore wells, Water tank, Fire fighting etc.

Equipments and Balance Sheet Items (Loan interest etc.)

Working manpower and workers


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Infrastructure

Road and Transport facilities

Telecommunications

Electricity and water supply

Post office, banking, medicine, catering etc.

Marketing Activities

Product Testing

Testing of the marketing mix

Advertising, publicity and sales promotion & Market intermediaries

Organization Structure

Decision of hierarchy

Role as per hierarchy

Accountability of the hierarchy

Formulation of operational manual

Monitoring and Control

Sales analysis and profitability analysis

Expenditure and liquidity analysis


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Management of Human Capital The new enterprise normally obsessed with the problem of

high staff turnover.

Initially, the minimum manpower is selected for trial run of theproject.

This is the most crucial segment of an enterprise apart from

material, money, method, machines, market and mechanism.

The management of human resource can be divided into 2parts as, staffing and the performance management.

Staffing

Identification of need in terms of necessary knowledge,skills and abilities to perform the desired job at all stages of

enterprise development.

Principle of effective staffing is to be observed.

The feasibility of outsourcing


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Principle of Effective Staffing

Staff ing ob ject ive

Determination of short and long run needs

Formulation of job description and specificationTo organize a recruiting campaign

Knowledge of govt. regulations regarding employment

Staff ing

Expectation from the job by the employer

Any specific skill is required for the job

Training of the worker to make them more competent

Job Def ini t ion

Person must aware that what is expected from them

To observe open compet i t ion to select the best

Emp loyee Appraisals to cater the motivational level

Emp loyee Training

Owner or the Work Manager tra in ing


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Performance Management

This is essential for survival and competency of the

enterprise

This is must for manpower retention

To organize training program

To establish training needs and goals

To choose most practical training methodsTo evaluate the result and the outcome

On the Job Training

Preparation, Demonstration, Application and Inspection

Performance Appraisal Personal Development, Personal

planning, Motivation, Reward and Communication

Management by Objectives

Adequate CompensationKRA and Accountabilit and Job Satisfaction


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Challenges before the Growing Ventures

The distinction of smaller size

The one person brand syndrome

Time management

Community obligation

To abide various govt. laws

To continue management education To manage venture capital at each stage of growth

Effective delegation and control

Tolerance of failure

To cope up with the environmental change

Networking capabilities and flexibility

To balance the focus of objective

To establish outside managerial assistance

To maintain focus on the customer needs


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New Venture Expansion The venture needs to transform from single line to a

multi line enterprise To broaden the venture product and service offerings

All together to enter into a new market segment

Decentralization across different departments

To Identify the alternate source of resources

To further define the need of human resource

Inventory control and credit management

Marketing and cash flow management

To deal with the competitions

Adequate logistics and distribution management

Further c onsolidation to maintain profit


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Prime Difficulties to ManageFinancial Problems

Long time of dispersal of loanIn general preference given to experience persons

SFCs ask for details of working capital sanctioned by the

commercial bank

Seed capital is very difficult to get

For sundry assets SFCs declines to provide loan

The attitude of banks in financing new venture is not

encouraging and sympathetic.

Energy Problem

Power connection not provided on time.

Power company asks for deposits which are not funded

To decide the load factor and thus installation is very tedious


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Prime Difficulties to ManageAsset Procurement Problems

To get the NOC for procurement of fixed asset is troublesomeSmall sheds and plots are not available in SEZ, SIZs.

In SEZ and SIZs the infrastructures are not adequate

To procure private land and sealing lands for industry purpose

is an up hill task.

Legal formalities from the local authorities is not easy.

The land allotted by the govt. is not on permanent basis.

Raw Material ProblemSmall quota of raw materials is very difficult to get.

To get quota regularly is not certain.

Delay in recommendation of quota from authorities

To get approval from state development authorities takes time

P i Diffi lti t M


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Prime Difficulties to ManageProblem from the DICs

More delay in registration process

Lack of coordination between bank and the DICs

Delay in recommendation of quota for raw materials

Loan recommendation from DIC is time taking always.

Promoters ProblemDelay in preparation of project reports specifically for small

units

EDP participants gets low priority from promoters.

Marketing Problems

Lack of marketing efforts by entrepreneurs and lack of govt

support

Competition and price wars In ade uate bud et rovisions for sales romotions

9. mms - imcost (ranjan) managing early growth of business and new venture expansion

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