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BizEdge

July 2012

INDEX

A monthly newsletter for business

owners & entrepreneurs

1. Changing Times pg 2-6

2. Special Feature:

BizEdge SME Conference pg 7-14

3. Out of Box pg 15

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1. Changing Times

News that impact your business

After e-commerce, now is the turn of social commerce!

The fast increasing social media population

hooked onto Facebook, Twitter, etc is set to

give a big boost to the already burgeoning

domestic e-commerce market that has

touched the Rs 50,000 crore-mark last year,

says an industry study. According to latest

Internet & Mobile Association of India

numbers, with 150 online population, the

country is the third largest in terms of internet

users after China and the US. Out of this, 50

million are on Facebook and 13 million on

Twitter, taking the size of social media

universe to 63 million. This also makes the

country the second largest Facebook

market after the US, while the sixth largest for

Twitter, says ICICI Merchant Services and First

Data general manager Amrish Rau, adding

most of these social media members are

also actively taking up e-commerce

transactions. "Going by the current growth

rates, social e-commerce is the next step in

evolution, combining the comfort and ease

of use of social media and e-tailing," says

Rau. Social commerce continues to gain

popularity around the globe, especially in

the US, with the rising popularity of e-gifting,

under which users send tangible gifts to their

loved ones from retailers through Facebook

and email, he adds.

Source: ibnlive.in

Access to finance a big concern of SME sector: CII

Data Industry body CII today said it is in the

process of working with banks and other

financial institutions to address concerns

over access to funds for micro, small and

medium enterprises (MSME)."Access to

finance is one of the prime areas of concern

for Indian SMEs. We are trying to address the

concern along with banks and other

financial institutions,"

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1. Business News

"Large companies can play a critical role in

helping MSMEs access finance and

technology.”

"In going with an OEM (Original Equipment

Manufacturers) approach, we have found

that it is easy to reach SMEs through OEMs.

Also large OEMs are able to visualise the

benefits and get it over to the SMEs”

Source: Economictimes

PlanCom paper for focus on SME growth

A paper, presented by the Planning

Commission at a meeting with state

planning boards, says small businesses are a

way to faster growth, as SMEs are more

attuned to the domestic economy. When

asked, the author of the presentation,

Pronab Sen, principal advisor, said the paper

looked at objective conditions. He said

corporate sentiment was down due to

problems related to the Euro zone and other

domestic issues. In this situation, the focus

should be on the small scale sector.

• Small businesses are a way to faster

growth, as SMEs are more attuned to

the domestic economy

• As external conditions are not in

India's hands, the country must focus

on things which are under its control

• For pushing up the SME sector,

governance needed to be improved.

• SMEs need to be given more fund

SMEs’ infrastructure, such as power,

issues must be addressed.

Source: Business-Standard

Centre for greater role of SMEs in defence electronics

The government is committed to

encouraging the involvement of the private

sector in defence, especially in the strategic

electronics space, said Union Minister of

State for Defence M M Pallam Raju here. He

also added, this should bolster the

indigenisation of defence technologies and

help increase the role of SMEs and also help

face any external threat. Speaking to

reporters “If the strategic electronics sector

develops niche technologies on (a) par with

the West, then this is possible. All modern

warfare systems depend on electronics

system and development of strategic

electronics is extremely important for the

country,” he said. Raju said, the government

is committed to helping the small and

medium (SME) industries in having a greater

participation in developing defence

technologies as well as projects under off-set

clause. “It is important we build our own

domestic industrial base in hardware and

also to ensure there is no breach of security

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in cyberspace,” he added. The Indian

electronics industry has shown an upward

trend during the 11th Plan, growing from Rs

5,400 crore in 2007-2008 to Rs 7,948 crore in

2011-12 and is projected to cross Rs 10,000

crore during the present year .

Source: Business-Standard

79 SME units fall sick a day

Blame it on the difficult business environment

or on administrative delays or even on the

lack of management skills. But, the truth is

that 79 small business units are turning

financially unviable every day in the country.

This translates to three units falling sick every

hour, according to data compiled by the

Micro Small and Medium Enterprises -

Development Institute (MSME-DI).

Of the total 1.33 crore SME units in the

country, more than two lakh are sick now.

Around 29,000 units are being added to the

sick list every year. It has also led to an

outstanding bank credit of over Rs 7,000

crore.

The Reserve Bank of India (RBI) declares a

small scale industry (SSI) unit sick if any of the

borrowal accounts of the unit remains

substandard for more than six months or

there is erosion in the net worth due to

accumulated losses to the extent of 50% of

its net worth in the previous accounting year.

Source: Times Of India

Urgent need to make ICT solutions affordable for MSMEs

To survive growing competition, Indian

micro, small and medium enterprises must

adopt information and communication

technologies, and there is an urgent need to

make these solutions affordable for them,

said a senior official from the Ministry of

MSMEs.

"If the sector has to survive and find a place

of its own, it must be competitive both

nationally and globally. And, if it wants really

to be competitive in the global world today,

one important tool is Information Technology

(IT)," MSME ministry.

Indian MSMEs can become competitive in

the global market by using affordable ICT

solutions, he added. The official pointed out

that problem of affordability is hindering

adoption of ICT among MSMEs.

Source: smetimes.in

Facebook, Ficci to campaign in six cities to woo SMEs

After striking an alliance with Federation of

Indian Chambers of Commerce and Industry

(Ficci) to guide small and medium

entrepreneurs on using the internet to

expand their business, social media giant

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Facebook plans to launch roadshows in six

major cities as part of its “SMB Boost”

programme. Facebook has kick started its

“Small and Medium Business Boost”

programme in India, after its successful roll-

out in the United States, United Kingdom and

Europe. Just as it teamed up with the British

Chambers of Commerce, the company has

tied up with Ficci recently to help smaller

firms understand the potential benefits of

advertising on the site. “In the next eight

months starting by the end of July, both Ficci

and Facebook will be organising roadshows

in six major cities across the country,” said ,

Ficci. The apex body and Facebook have

identified Faridabad and Hyderabad as the

first two locations to conduct such

programmes.

Source: Business-Standard

Indian SMEs slowly adapting cloud environment

A large number of Indian Small and Medium

Enterprises ( SME) are taking to cloud

computing gradually according to an online

survey. This is surely a positive trend and we

only hope it gets better. But one alarming

fact in this positive trend is that several Indian

SMEs are still struggling to utilize the

economic benefits that the cloud offers

them. Since the cloud offers strong network

connectivity, SMEs are finding this as a boon

since effective networking means more

profit and increased clientele.

Even the cost-effective techniques that and

initiatives that the cloud provides will serve

as cutting-edge tools to the SME sector.

Experts are of the opinion that SMEs need

proper awareness and guidance towards

effective cloud-service utilization. They also

opine that this guidance and initiation will

enable them to achieve greater success

and improve their current financial status as

well. So, SMEs in India need to take steps

towards cloud services implementation and

derive maximum benefits from the cloud.

Source: ciol.com

RBI Circular on ECB

RBI has issued a circular on June 25, 2012,

pursuant to which, Indian companies are

permitted to incur ECB for repayment of

Rupee loans availed from the domestic

banking system and/or for fresh Rupee

capital expenditure, under the approval

route, subject to the following conditions:

i. Only companies in the manufacturing and

infrastructure sector are eligible to avail of

such ECB, provided such companies

(i) have been consistent foreign exchange

earners during the past three financial years

and (ii) are not on the default list/caution list

of RBI;

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ii. Such ECBs may be utilised solely for

repayment of the Rupee loan(s) availed of

for “capital expenditure” that has been

incurred earlier and still outstanding in the

books of the domestic banking system

and/or for fresh Rupee capital expenditure.

In other words, an ECB cannot be used for

retiring domestic working capital debt. The

overall ceiling for such ECBs is US$10 billion.

Source: rbi.org.in

!!

Filing of Balance Sheet and Profit and Loss Account in Extensible Business Reporting Language (XBRL) Mode

The Ministry of Corporate Affairs vide

General Circular No. 16/2012 dated

06.07.2012 has mandated the following

select class of companies to file their

Balance Sheet and Profit & Loss Account in

XBRL mode for the financial year

commencing on or after 1.4.2011.

� all companies listed with any Stock

Exchange(s) in India and their Indian

subsidiaries; or

� all companies having paid up capital of

Rupees five crore and above; or

� all companies having turnover of Rupees

one hundred crore and above; or

� all companies who were required to file

their financial statements for FY 2010-11,

using XBRL mode.

Source: mca.gov.in

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Collabrant’s BizEdge series aims to provide access to cutting edge information, relevant industry insights and practical inputs to SMEs to resolve problems and facilitate growth.

On 10th of August 2012, Collabrant Incubators hosted a first

of its kind conference meet for business leaders

representing the SME industry, in association with ICICI

Bank and Axon Network. CRISIL and Tata Docomo were

our knowledge and telecom partners respectively. The

business conference followed by cocktail and dinner was

organized at Keys Business Hotel, Hosur Road on Friday

evening. It was attended by 70 delegates and featured

prominent speakers from the fields of business, finance,

banking and IT. The event was inaugurated by Shri K.R.

Ramamoorthy, former chairman and CEO of Corporation

Bank and non-executive chairman of Vysya Bank.

The key topics discussed during the evening were:

Cutting Edge: SME Ratings by Mr Yogesh Dixit

Director, CRISIL SME Ratings

Banking Solutions by Mr. Suresh M, Regional Head

ICICI Bank

Access to Market-Strategy Myth & Reality by Mr M

Sundarraj, founder director at Collabrant Incubators

Scaling New Heights by Mr. Satish Kumar, Head-

Strategy At Prateek Group

2. Special Feature

‘BizEdge-Cutting Edge To Your Biz ‘

Mr Ramamoorthy, former chairman Corporation bank inaugurating the event with Mr PK Sambamoorthy founder director at Collabrant Incubators on the podium.

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Growth Capital by Mr Ananta Sarma, CEO, SIDBI

Venture Capital

IT solutions On Cloud by Mr Ravindra Krishnappa

Director-Strategy, Axon Network Solution

Presentation Excerpts:

1) Cutting Edge Solution for MSMEs-

CRISIL SME Ratings

-CRISIL has completed ratings for 32,000 SMEs which has

provided SMEs increased access to funds at competitive

rates

-Credit facilities of CRISIL-rated MSMEs grew at 30%

compared to sector average of 20%

Benefits of getting rated for credit:

-Enhanced access to funds

-Credit facilities of CRISIL-rated SMEs grew at 30% compared to sector average of 20%

- A strong feedback and self-improvement tool

-Credit rated firms delivered sales and profit growth of 31%

and 25% as against sector average of 25% and 18%

respectively

-55% of rated SMEs see significant value in the rating

-Better borrowing rates and enhanced access to finance

-Aggregate interest savings of Rs.225 crore for rated entities

-Value proposition validated by repeat business without

subsidy

-Rating renewal rates are 40%

Mr Srivatsan, Founder Director at Collabrant Incubators welcoming the delegates and speakers to the first edition of BizEdge

Mr Yogesh Dixit, Director at CRISIL SME Rating addressing the delegates

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Four key features of CRISIL SME ratings:

-Affordability: MSMEs can avail of a rating for just Rs. 8,000 as

govt subsidies 75% of rating fees

-Unique two-dimensional scale to evaluate (business

performance capabilities and financial strength)

-Simple one-time rating process

-Wide acceptability by lenders

2) Banking Solutions-ICICI Bank

ICICI Bank presented the available banking products from ICICI for enterprises. They highlighted the salient features and benefits of products like FX Online,, Business loans, Advisory services etc

3) Access to Market-Strategy Myth & Reality-Collabrant Incubators

-Ideation is easy, execution is hard

-India co-exists with Bharat. Future growth is going to be in

tier 3,4 cities. But Tier 1 and 2 have ready business

infrastructure

- India is a land of many mini markets, not one of which is

large enough to make marketers happy

-The key is to be clear about which India do you want to

cater to? Each Tier has its own peculiar market economics.

The success of any business strategy depends on 3 critical

factors:

a) Access to funds, b) Access to talent and c) Access to

market intelligence

ICICI Bank’s regional Head, Mr Suresh M addressing the audience about banking solutions

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A 2-stage process for taking your products/services to the

market:

Stage1: Business Plan and Model

Stage2: Pilot Run

Why Pilot - It helps to minimize risk and save both money and

reputation. It gives you a reality check about the idea and

provides consumer insights and vital channel feedback

which is then used to tweak and refine the business model.

What does it take to build a robust organization?

-Developing Strategic Customer Insight & Sustainable

Business Building

-Building Appropriate Financial Structure & Management

Controls

-Balancing & Aligning Conflicting Stakeholder / Partner

interests

-Organizing People-Processes & Technology

All businesses need tight alignment at every level. Alignment

is the key word for market success.

3) Scaling New Heights-Prateek Group

-A success story of how a 3 crore-turnover company evolved

into a 500 crore company by living by its core principles of

Innovation, Quality & Delivery, Expertise and Values

-Prateek Apparels is into manufacturing, design and retail. In

retail it has successfully launched Coupon-a discount large

format retail store and F-Square-a fast fashion neighborhood

store and e-commerce

Mr M. Sundarraj, Founder Director at Collabrant Incubators presenting on Access to Markets-Strategy Myths and Realities

Mr Satish Kumar, Head Strategy at Prateek Group presenting a case study, Scaling New Heights

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Prateek's Pathway to success:

-Having a Clear Vision

-Identifying opportunities

-Building strengths around the opportunities

-Grabbing market share

-Building sustainable growth models

-Capitalizing on strengths

Key Building Blocks:

-Synergizing strengths

-Identifying opportunities

-Harnessing opportunities

-Building a strong core team of entre-leaders

(Entrepreneurship driven leaders)

-Fostering sense of community and well being among

employees

-Nimble and Lean organization

-Focus on efficiency and elimination of wastage

Our Telecom partners TATA DoCoMo showcased enterprise mobile solutions that can benefit SMEs

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4) Growth Capital-SIDBI Venture Capital

Equity share capital:

-The costliest yet the most effective form of growth capital

-Financial pressure in the short term minimal

-Enables the company to leverage further equity,

preference shares as well as debt

-If taken from venture capitalist, additional inputs relating to

corporate governance, strategy and management can be

obtained

SIDBI’s risk capital for growth

-Risk capital in form of Mezzanine Products as Growth Capital

He spoke about the 2 funds – Samridha and India

Opportunity fund (IOF) and about the investment criteria.

Samridha targets eight low-income states who supplies

products and services to SME and large corporates. It is an

impact investment fund.

IOF is a MSME dedicated Fund with USD 132 million funds

raised for investments. Sound business plan, strong

management team, Long term competitive advantage and

should provide good returns with exit possibilities. It invest in

manufacturing and service sector.

SIDBI Venture Capital CEO, Mr Ananta Sarma engaging the audiences with growth capital solutions

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5) IT Solutions On Cloud-Axon Network

-Real time market intelligence gives you the competitive

edge

Current set of IT problem faced by SMEs

-Disconnection problems

-Too many, too many logins, no single POV

-Islands of data, no trigger on exception

• Different departments need different tools for functioning

• Search & serve model will NOT work

What is needed?

-Efficient Email with SPAM filters

-Website hosting

-CRM tool to track leads and pipeline

-Branch office chat and voice tool

-Accounting tool

-HR Tool – Manage and track employees

-Customer support tool – Ticketing system

-PBX solution

-An ERP to manage

-Inside (IN ventory, f IN ance, IN dividuals, IN centives)

-Outside (Sales / Service, Image, Perception, Partner)

-Data store - Back up and restore of data

-On demand, connected & quick

Advantages of cloud

a)Try before you buy, b )No Capex, only Opex model

c) Highly Scalable, d) Support costs are significantly low

e) Integration with other cloud apps like Dropbox, Evernote

Mr Ravindra Krishnappa, Director Strategy at Axon Network addressing the audience about advantages of cloud computing

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There was an interactive Q & A session where businessmen

could resolve their doubts and seek clarification. After the

presentations, the session was open for networking and

socializing over cocktail dinner. So this was a gist of the first

edition of “BizEdge-Cutting Edge To Your Biz” series. We

would like to thank everyone involved for making this event

a grand success and are looking forward to the next edition

of BizEdge conference soon.

For more details on the presentation topics or to participate

in the next round of BizEdge conference please write to us at

info@collabrant.in

Mr K R Satyanarayana, Associate Director at Collabrant in conversation with delegates

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Stop, Smile, Ponder,

Amaze, Mull over !!

3. OUT OF BOX

READING ZONE

Top 5 Business Bestsellers for the month:

1) Uncommon Service-Francis Frei, Anne Morriss

2) From Values To Action- Harry M Jansen Kraemer

3) Mobile Wave-Michael Saylor

4) New Power Base Selling-Jim Holden, Ryan Kubacki

5) 4 Disciplines of Execution-Chris McChesney, Sean Covey, Jim Huling

Source: 800CEOread.com

Driverless Car is a reality now

The Google Driverless Car is a project by Google that involves developing technology for driverless cars. The project is currently being led by Google engineer Sebastian Thrun, director of the Stanford Artificial Intelligence Laboratory and co-inventor of Google Street View.

http://en.wikipedia.org/wiki/Google_driverless_car

Exploring the Red Planet

Read about Mars and Curiosity Rover’s epic voyage to the red planet.

http://www.nasa.gov/mission_pages/msl/index.html

World’s best art museums now in your home

Google’s art project is a virtual world museum showcasing some of the best art from around the world. Now you don’t need to be in London to visit the London Gallery of Art.

http://www.googleartproject.com

BizEdge is a monthly newsletter service brought to you by

Collabrant. Drop in your suggestions and

feedback at newsletter@collabrant.in

Collabrant Incubators Pvt Ltd.

Collabrant offers specialized business solutions to start up

ventures and SMEs looking for hands-on implementation

support in go-to-market strategy, financial planning/structuring

and manufacturing process improvement / product

development; in sum, helping entrepreneurs & companies

build & nurture robust organizations to meet business goals.

Read more about us at http://www.collabrant.in or write to us

at info@collabrant.in

Disclaimer:

The material in the newsletter is only for private circulation and is not intended to constitute any advice. The contents of the newsletter is for information and not a substitute for professional advice. Collabrant makes no representations or warranties express or implied with respect to information provided in this newsletter or for its completeness or accuracy. Collabrant disclaim all responsibility and accept no liability for consequences of any person acting or refraining from acting on such information. Any queries on the newsletter can be addressed to newsletter@collabrant.in

©Collabrant Incubators Pvt Ltd Bangalore, 2012

Collabrant Incubators Pvt Ltd

Office Address

Bangalore:

“Chintal Plaza”, #744/51, 3rd Floor, 33rd Cross, 10th Main Road, 4th Block Jayanagar, Bangalore-560011 Tel: +91 80 4114 4420/24/28 Fax: +91 80 4131 1148

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#215, Amir Industrial Estate, Sunmill Compound, Lower Parel, Mumbai - 400 013 Tel: +91 22 24975257

Email: info@collabrant.in