ASSIGNMENT

Entrepreneurship development

#Project Appraisal
Definition

Project appraisal may be defined as a process of detail analysis of a particular/ specific

project with a view to assess weather the project is realistic and achievable within
sipulated period by the entrepreneur with their current level of competemcy. It is a writen
statement of every ins & out of the business. As results are rewarded not the effort, it
provides answer of all the necessary question in detail on different aspects of the project
with a view to study the viability feasibility of the projects future. Project Appraisal may
also be defined as a blue print of all the activities of the project that includes but not
limited to the followings:
1. Project identification & selection (PIS)
2. Project formulation (Business plan implementation)
3. Project appraisal

Business plan is net work analysis, that is detail written statement of the various
activities to start up and running the business within the stipulated period. Project
appraisal of a project contains detail break down analysis of the following
important aspects for its viability:
a) Economic analysis
b) Financial analysis
c) Market analysis
d) Technical analysis
e) Management competency

In simple word we can say project appraisal is like a road map of a travelor .

Need and significance of project appraisal/ Importance of

project appraisal
i) World rewarded the results not the effort. Project appraisal provide necessary
information needed to investor also to bank for giving loan for proper judgment of
the future of the project as it provides projected scenario of the future also rather
than focusing of narrowly on the present
ii) It helps to understand the four stages of growth of specific business. i.e.
f) Pre start up stage
g) Start of stage
h) Early growth up stage
i) Later growth stage

The detail analysis of above four stages gives an evaluation before going for
the business.
 It gives details idea to loan giving authority weather the project is
realistic and i) achievable by overcoming critical/crucial part of the
business activity is likely to be overcome & risk are very little.
 Financial report of the project includes everything like cash flow,
profit & loss, break event point gestation period, balance sheet etc.
for a minimum period of 3 years. That gives the main objective of
the business i.e. viability of the project with adequate profit.
  If gives a proper schedule of doing works i.e. activity schedule -what,
when & how etc.
 Last but not the least, project appraisal provides a clear cut pre
scenario of the project so that entrepreneur can assess about
success or failure.

#Franchising
Definition
Franchising is basically a right which manufacturers or businesses give to others.
This right allows the beneficiaries to sell the products or services of these
manufacturers or parent businesses. These rights could even be in terms of access
to intellectual property rights.
Franchising is a business relationship between two entities wherein one party
allows another to sell its products and intellectual property. For example, several
fast food chains like Dominos and McDonalds operate in India through franchising.

Examples of Franchising in India

 McDonald’s

 Dominos

 KFC

 Pizza Hut
 Subway

 Dunkin’ Donuts

 Taco Bell

 Baskin Robbins

 Burger King

Advantages and Disadvantages of Franchising

Advantages to Franchisors

 Firstly, franchising is a great way to expand a business without incurring additional

costs on expansion. This is because all expenses of selling are borne by the franchise.

 This further also helps in building a brand name, increasing goodwill and reaching
more customers.

Advantages to Franchisees

 A franchise can use franchising to start a business on a pre-established brand name

of the franchisor. As a result, the franchise can predict his success and reduce risks of
failure.

 Furthermore, the franchise also does not need to spend money on training and
assistance because the franchisor provides this.

 Another advantage is that sometimes a franchisee may get exclusive rights to sell
the franchisor’s products within an area.

 Franchisees will get to know business techniques and trade secrets of brands.

Disadvantages for Franchisors

 The most basic disadvantage is that the franchise does not possess direct control
over the sale of its products. As a result, its own goodwill can suffer if the franchisor
does not maintain quality standards.

 Furthermore, the franchisee may even leak the franchisor’s secrets to rivals.
Franchising also involves ongoing costs of providing maintenance, assistance, and
training on the franchisor.
Disadvantages for Franchisees

 First of all, no franchise has complete control over his business. He always has to
adhere to policies and conditions of the franchisor.

 Another disadvantage is that he always has to pay some royalty to the franchisor on

a routine basis. In some cases, he may even have to share his profits with the
franchisor.