setting up a small business enterprise

7/27/2019 Setting Up a Small Business Enterprise

1/23

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


2/23

Filtration of BusinessOpportunities

Research your Industry

Market Assessment

Profit Assessment Financial Assessment

Legal Assessment


3/23

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


4/23


Food, Fruits and VegetablesProcessing, Refrigeration andTransportation

Mineral WaterEra of potablebottled water.

Insurance Sector

Herbal Sector

Tourism Sector


5/23


Telecommunication

Plastic & Chemical

Third Party Logistics (Courier Services)-provide vital link between suppliers&consumers. Cost effectivedistribution of time-critical-goods

Home based Business


6/23

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


7/23

b) Location Selection

Proximity to mkt.

Avail. of raw material,transport,incentives,

Convenience to the promoters Government policy.

Infrastructure facilities

Social infrastructure


8/23

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


9/23

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


10/23

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


11/23

Strategy of a core business plan:

Think competitively throughout

Be realistic

Involve people

Factual & Succinct


12/23

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


13/23

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


14/23

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


15/23

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.


16/23


17/23

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.


18/23

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


19/23

2.Registration

Obtain SSI Registration

Provisional registration certificate

Registration formalities Permanent Registration Certificate

Benefits of registration

Features of Reg.


20/23

4. Clearances from specific Deptt.(s)

5.Arrangement of Land/Shed

6.Arrange for Plant & Machinery7. Arrange for Infrastructure


21/23

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


22/23

4.Apply and obtain finance:

Share capital

Deposits own/ public

Debentures Long term loans

Short term loans

Working capital loan like cash credit


23/23

5.Implement the project & obtainfinal clearances:

Construction shed

Order for machinery

Recruit personnel Arrange for raw materials

Marketing

Final clearances (product specific)

setting up a small business enterprise

Documents