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    18es51 Time m5

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    TECHNOLOGICAL INNOVATION MANAGEMENT AND ENTREPRENEURSHIP Module 5 Business model — Meaning, designing, analyzing and improvising; Business Plan ~ Meaning, Scope and Need; Financial, Marketing, Human Resource and Production/Service Plan; Business plan Formats; Project report preparation and presentation; Why some Business Plan fails? (Chapter 8 (Page No 159-164, Text 2) What Is a Business Model? + The term business model refers to a company’s plan for making a profit. + Business model identifies the products or services the business plans to sell, its identified target market, and any anticipated expenses, + Business models are important for both new and established businesses, Business Model + A business model is a company’s core strategy for profitably doing business. + Models generally include information like products or services the business plans to sell, target markets, and any anticipated expenses. + When evaluating a business model as an investor, ask whether the idea makes sense and whether the numbers add up. Business Model Analysis Analyzing the business model can help to determine whether a venture is, or will be, viable and valuable, After completing a Business Model Canvas for a current or future business model, designers often ask the following questions: + Where are our revenues coming fiom? + What value is delivered to which markets? + What costs are involved in delivering that value? + Are our perceived key activities and key resources as important for gaining revenue as we think they are? + If we change our model in a specific way, what are the effects? This requires insight into several elements of the business model, atributes of these elements and the relations between different elements, Analyzing these elements will provide the foundation for business model change and innovation in an organization. Improvisation Improvisation is something that every manager must do when the company plan offers little guidance for the decision at hand, This technique requires thinking on your feet. You might like this approach for brainstorming in strategy meetings and for helping employees troubleshoot problems. Improvisation works well if you like to test your ideas with a flexible approach, especially when trying to carve a niche for a new business in the market, If you learn from what works and what doesn't work, you have a good idea of what to try next. Business Plan: Introduction A business plan is a roadmap and blueprint of the project. ‘A business plan is a written document that describes in detail how a business is going to achieve its goals Business plan is a document that explains .a business opportunity, identifies the market to be served, and provides details about how the entrepreneurial organization plans to pursue it Ideally, the business plan describes the unique qualifications that the management team brings to the effort, explains the resources required for success, and provides a forecast of results over a reasonable time horizon. ‘A business plan is based on estimates, Business Plan: Purpose of A Business Plan ‘A business plan is the written representation of an entrepreneur's vision for his/her business, ‘A business plan is a written document between 20-40 pages in length that describes where a business is heading and how it hopes to achieve its goals and objectives. A workable business plan should determine the direction of the company; highlight the challenges in the path of the business; and formulate strategies and contingencies to keep the business on track in order to reach predetermined goals and objectives. - The reasons for preparing n business plan are given below: Entrepreneurs reap benefits from the planning activity itself, ‘A business plan is used to get finance from banks or to get equity funding from angel investors or venture capitalists, Business plan can also be used to attract business partners and key employees or to make business alliances, If the business plan is prepared within a large organization, then it enables the board of directors to make capital investment decisions. The act of writing the plan will force the entrepreneur and his team to think through all the key elements of the business. ‘The plan provides a basis for measuring actual performance against expected performance. ‘The plan's financial projections can be used as a budget. Actual results that fall short of planned results will prompt the entrepreneur to investigate and take corrective action, ‘The plan acts as a vehicle for communicating to others what the business is trying to accomplish. Scope and Value of the Business Plan The business plan may be read by employees, investors, venture capitalists bankers, suppliers customers, advisors, and consultants & by the entrepreneur himself 3 perspectives should be considered in preparing the plan Perspective of the entrepreneur Marketing perspective Investor’s perspective Scope and Value of the Business Plan The business plan is valuable to the entrepreneur, potential investors, or even new personnel, who are trying to familiarize themselves with the venture, it goals, and objectives. + Business plan helps determine the viability of the venture in a designated market. + Business plan provides guidance to the entrepreneur in organizing his or her planning activities + Business plan serves as an important tool in helping to obtain financing The business plan is valuable to the entrepreneur, potential investors, or even new personnel, who are trying to familiarize themselves with the venture, it goals, and objectives. + Business plan helps determine the viability of the venture in a designated market. + Business plan provides guidance to the entrepreneur in organizing his or her planning, activities + Business plan serves as an important tool in helping to obtain financing Human resources plan + Human resources section addresses how to plan to manage the employees and human resources processes. + Human resources should also discuss the short-term and long-term plans for employee recruitment, training, and retention + If appropriate, discuss any advisors, mentors, consultants that offer the needed support. Human resources plan include: + A brief organizational layout or chart of the business. + Who does what, with a brief job description of each position. + The essential skills required for each position. + Information on the employee training program. + Any other relevant information related to personnel (e.g. Gaps in your team, training budget) Production/Service Plan + The products and services section of the business plan is more than just a list of what business is going to provide. To use the business plan to get funding or find partners, the products and services section needs to showcase the quality, value, and benefits of the business offers. ‘The products and services section of the business plan outlines the product or service, why it's needed by the market, and how it will compete with other businesses selling the same or similar products and services. The products and services section should include: A description of the products or services you are offering or plan to offer How your products and services will be priced A comparison of the products or services your competitors offer in relation to yours Sales literature you plan to use, including information about your marketing materials and the role your website will play in your sales efforts ‘A paragraph or so on how orders from your customers will be processed or fulfilled Any needs you have in order to create or deliver your products, such as up-to-date computer equipment Any intellectual property, such as trademarks, or legal issues you need to address Future products or services you plan to offer Contents of A Business Plan Business plans follow a broadly similar structure. The key sections in a business plan along with the average number of pages to be included in each section are given in table. Most business plans contain the following components. Cover Page and Table of Contents Executive Summary Business Concept, Business Strategy Management Summary Marketing Plan Operations Plan Financial Plan Appendix Cover Page and Table of Contents + Every business plan should have a cover page. + The cover page presents the first impression of the business plan 'to readers, + This is just like a newspaper headline that gives quick information to readers, which helps the reader to decide whether to read the complete article + The cover page should have a clean and professional appearance and should contain the following information: + Name of the business or project. + The company’s name, logo, address, telephone and fax numbers, Web site address, e-mail address. + The name and designation of the contact person The table of contents is usually on the second page of the business plan and gives at a glance the topics covered in the business plan. The table of contents should be written for easy navigation to the rest of the plan by numbering each topic. Executive Summary Executive summary is a concise presentation of the main points of the business plan and gives a brief overview of the business venture. ‘The purpose of the executive summary is to give the reader a quick understanding of the business proposal and provide the whole picture. Bankers and venture capitalists generally do not read through the entire business plan when it is, presented to them. They go through the executive summary. The executive summary is a formal statement and should include the following information. + A brief description of the industry and market environment in which the business opportunity will develop and flourish + The uniqueness of the business opportunity and the key strategies for success. + Profiles of the company's management team. + Financial requirements and budget allocation. + The anticipated risk and reward of the business, Business Concept Business Concept is another summary and gives the history of the business, the basic nature, and the purpose of the business, Business Concept clearly states the business objectives, There is no point in starting or expanding a business unless the entrepreneur has identified a lucrative opportunity. Business Concept section describes the business opportunity. Business Concept analyses the economics underlying the opportunity and the key factors that will drive its success, such as market penetration and product innovation. This section is used to describe the company and to explain how itis organized Business Concept gives the usage, description, and specifications of the products and services to be offered. If the product/service prototype is ready, zh-quality photographs are included. Business strategy Business strategy section provides the SWOT analysis of the firm and analysis of the business environment. Business strategy provides information on the nature of the industry, competition within the industry, anticipating barriers to entry, the market, and the customers within the market. ‘The industry background provides information to understand the shape, size, trends, and key features of the industry and to understand how the company's product or service will fit into that industry. Business strategy The goals of the company and the business strategy are explained in this section. Strategy is the game plan of the business. Business strateg is about differentiation and competitive advantage. Business strategy section should give the mission, vision, future plan, and exit strategy of the business. Management Summary ‘The management team is very important in any business. The success of the business ‘mainly depends on the quality of the management team, Investors are also keen to know about the people behind the business who they see as key assets, It isa well-known fact that without right team, none of the other parts really matter. ‘This section should be able to answer the following questions such as Management Summary What is the profile of the founders, the team’s management philosophy, and their reputation in the business community? Who are the current owners, and what percentages do they control? Hoy ownership evidenced? Have any options, warrants or convertible bonds that could expand ownership been issued? Which owners are involved in the day to day working of the business? Marketing Plan ‘The term market is often used to describe the various elements of the total business environment. The market is where the company’s product or service will be sold, ‘The marketing plan is written after conducting a market analysis. This section pro information on assessing the markets size and growth, defining the target market, and articulating the value proposition, ‘The value proposition gives the unique set of benefits that the customers will get if they choose to purchase the company’s offerings over its competitor's offerings. Stakeholders know that marketing is the activity most associated with success or failure. A company that is not able to connect with its customers will fail even if it offers attractive products or services. ‘A sound and realistic marketing plan is the best guarantee that a solid customer connection will be made. ‘The marketing plan should be supported with a solid market intelligence report for the plan to be credible. ‘The plan should be clear about all aspects of marketing, including price, position, promotion, place and customer value proposition. ‘The marketing plan provides strategies to sell the company’s product or service. ‘The marketing plan should be a dynamic plan used to monitor the progress of the business Operations Plan Operations deals with the transformation of ideas or raw materials into Products or services to be sold to the customer. Operations Plan gives an overview of the flow of the dally activeness of the business operation and the strategies to support them ‘The operations plan should focus on the critical operating factors that will make the proposed business a success, ‘The operations plan section of a business plan describes the physical necessities of the business's operation, such as the business's physical location, raw materials, technology, human resource, facil ies, and equipment. Information about inventory requirements, suppliers, and employees may be included depending on the kind of business. ‘An operations plan provides a description of the break-even analysis; quality control ‘measures, and the manufacturing process. Financial Plan ‘The financial plan is a critical section of the business plan as it translates all the other parts of the business into anticipated financial results The financial plan section is the section that determines whether or not the business idea is viable, and is key component in determining whether or not the business plan is going, to be able to attract any investment in the business idea. + The financial plan section of the business plan consists of an analysis of financial statements such as the income statement, the cash flow projection, projected balance sheet, break-even charts, cost of the project, sources, and uses of funds, Appendix + Appendix contains document attachments and the milestones of the project. + Appendix comes at the end of the business plan. + Appendix contains the market survey report, financial projections, product and technological specifications, process flow charts, photographs of the existing or proposed firm, lists of plants and machinery, organizational charts, and resumes of each member of the management team, + The milestones plan lists the major events in the business's development such as prototype development, installation of plant and equipment, market test and penetration, requirement of key personnel, funding from investors, and the breakeven point. + Appendix includes only major events and the schedule of the project that he entrepreneur can meet + Appendix may impress investors and improve the reputation of the company. Project report preparation and presentation + The project report is an important document and should be prepared carefully + Banks and other financial institutions decide whether a loan should be granted, and if granted, the amount that should be sanctioned on the basis of this report. The project report is generally prepared to cover the following broad segments. + General information, + Details of the project + Market survey + Cost of project + Profitability + Annexure + General information: © Name of the unit and address. © Name of product/service. © Constitution of the unit. © Name of the promoter. © Educational qualification. © Experience. of the project: © Productservice details © Details of machinery © Details of raw material ©. Utility, © Manpower requirement. © SWOT analysis. + Market survey ‘The market survey report should be enclosed. + Cost of project: ©. Fixed cost: Land/building, machinery, office equipment, miscellaneous items. © Working capital: Stock in raw material, semi-finished goods, finished goods, bills receivable, working expenses, © Total investment: Fixed capital, working capital, preliminary and_ preoperative expenses interest during implementation, contingency. © Means of finance: Term loan, working capital loan, own investment (with incentives), © Profitability: Revenue, production cost, depreciation, administrative expenses, interest, maintenance, sales and advertisement, profit, annual income before tax, taxes, net profit, + Annexure: Promoter's bio-data, organizational chart, details of group units if any, statutory sanctions, approvals, project feasibility study report, project schedule, arrangement of land and building; statement of cost of plant, machinery and other equipment, details of orders and enquiries, process chart, financials for project and its analysts, financials of the company and its analysis, manpower planning and financial statements, Presenting A Business Plan A business plan should be well-written in crisp and to the point language and should not contain irrelevant information.lt should be written in a professional manner. The contents of the plan are critical; the document should be attractive, impressive, and easy to read, The writing style should be clear and concise The business plan should be printed on plain white bond paper of A4 size using a good quality printer, Each page should follow a standard layout with clear headings. Each new section should begin on a fresh page. Information such as document title, date, page number, and file name should be included either in the header or in the footer. Dividers can be used to make the contents of the document more accessible, A good business plan can be the most important factor in the success of the business. Business plan should be brief, clear, and properly organized. A business plan is not only a tool for raising money; it also helps the entrepreneur to identify and define business goals and to determine the best methods for achieving those goals. A business plan should highlight the points that can attract investors. The assumptions made in preparing the business plan should be realistic, Apply for and Obtain Finance A formal application needs to be made for loans from financial institutions and commercial banks, The details of documentation that need to be provided with the loan application are given below: + Balance sheet and profit and loss statement for the previous 3 consecutive years of firms held by promoters. + Income tax assessment certificates of partners/directors, proof of possession of land/building Architect's estimate for construction cost. + Partnership deed/memorandum and articles of association of the company. + Project report. ‘+ Budgetary quotations of plant and machinery. A bank issues a sanction or rejection letter after it completes an assessment of the application for funding. If the loan is approved, the bank sends a sanction letter to the applicant. Applicants need to indicate in writing their acceptance of the terms and conditions laid down by the financial institutions’ banks after receiving the sanction letter. The loan is disbursed according to the phased implementation of the project. Apart from commercial banks and government-owned financial institutions, entrepreneurs can also approach venture capital funds and non-governmental finance companies for funding Applicants need to indicate in writing their acceptance of the terms and conditions laid down by the financial institutions’ banks after receiving the sanction letter. The loan is disbursed according to the phased implementation of the project. Apart from commercial banks and government-owned financial institutions, entrepreneurs can also approach venture capital funds and non-governmental finance companies for funding, Why some Business Plan fails? Like any other project, writing a business plan needs careful planning and systematic execution, Some business plans fail because of the following reasons. + Failure to address the customer's problems and needs, + Unreatistic goals set by the promoters + Lack of commitment to the business by the promoters + Lack of experience of the promoters + Lack of professionalism ure to address the customer's problems and needs: * The business plan should address the customer's problems/needs/wants. + Business plan should clearly state how big the business opportunity is. The ‘entrepreneur should document customer pain points before preparing the plan. + Customer needs can be identified from direct experience, letters from customers, or from market research. + Failure to address the customer's problems and needs: + The business plan should address the customer's problems/needs/wants. + Business plan should clearly state how big the business opportunity is. The entrepreneur should document customer pain points before preparing the plan. + Customer needs can be identified from direct experience, letters from customers, or from market research, + Failure to address the customer's problems and needs: + The business plan should address the customer's problems/needs/wants. + Business plan should clearly state how big the business opportunity is. The entrepreneur should document customer pain points before preparing the plan. + Customer needs can be identified from direct experience, letters from customers, or from market research, + Unre stic goals set by the promoters: + Setting goals requires the entrepreneur to be well informed about the type of business and the business environment. + The goals set by the entrepreneur are based on data and the business plan is no good if it does not include a lot of data. + The goals set by the entrepreneur should be Specific, Measurable, Achievable, Realistic, and Time-bound (SMART) + The financial and market projections should be realistic, logical, and reasonable. + Lack of commitment to the business by the promoters: + The promoters must make a total commitment to the business in order to be able to meet the demands of a new venture + Investors will not be interested in a venture that does not have committed promoters, + Investors Iso expect the promoter to make a significant commitment to the business. + Business plan is required to have complete focus on the business if it is a new venture and promoters should not be over enthusiastic in trying to do all things at once + Lack of experience of the promoters: A lack of experience will result in failure unless entrepreneur can either attain the necessary knowledge or team up with others who already have experience in this area + Lack of professionalism: + The business plan should be brief, clear, and nicely organized. + It should highlight those points that can attract investors. + The assumptions made in preparing the business plan should be realistic. Module 5 Financing and How to start a Business? Financial opportunity identification; Banking sources; Nonbanking Institutions and Agencies; Venture Capital ~ Meaning and Role in Entrepreneurship; Government Schemes for funding business; Pre launch, Launch and Post launch requirements; Procedure for getting License and Registration; Challenges and Difficulties in Starting an Enterprise (Chapter 7 (Page No 147-149), Chapter 5 (Page No 93-99) & Chapter 8 (Page No. 166-172) Text 2) Financing and How to start a Business? + Project Financing + Funds can be raised from a variety of sources for financing project. + The two broad sources of finance available to a firm are Equity Financing and Debt Financing + The key factors in determining the debt-equity ratio for a project are the cost, nature of assets, business risk, norms of lenders, control considerations, and market conditions. ‘+ Equity and debt come in a variety of forms and are raised in different ways. Project Financing: Equity Financing + This is a shareholder’s fund and it may be in the form of equity capital, preference, internal accrual venture capital, and angel investing. + Equity financing means exchanging partial ownership in a firm for funding, + Equity shareholders enjoy the rewards as well as bear the risk of ownership. However, their liability, unlike the liability of the owner in a proprietary firm and the partners in a partnership concern, is limited to their capital contributions. + The rights of equity shareholders consist of the right to residual income; the right to control; the pre-emptive right to purchase additional equity shares issued by the firm; and the res Equity Capital + Equity Capital represents ownership capital as equity shareholders collectively own the lual claim over assets in the event of liquidation, firm, When a company is formed, it first issues equity shares to promoters and also, in ‘most cases, raises loans from banks, financial institutions; and other sources. + As the need for financing increases, the company may issue shares and debentures privately to promoters’ relatives, friends, business partners, employees, financial institutions, banks, mutual funds, venture capital funds, and others. + Venture capital funds are likely to be an important source of finance for a nascent venture. Such investors are specific and small in number. + As the company grows, it may raise capital from the public. + The first -issue of equity shares to the public by an unlisted company is called the initial public offering (IPO), + Subsequent offerings are called seasoned offerings. + Apart from equity shares, a firm may issue preference shares and debentures to the general investing public through a public issue. Preference Capital + Preference Capital represents a hybrid form of financing, + Preference Capital has some characteristics of equity and some attributes of debentures, + Preference Capital is a special class of a company’s shares, on which dividends are paid before the dividends on ordinary shares, and whose holders are repaid before others if the company goes bankrupt. Internal Accruals + The internal accruals of a firm consist of depreciation charges and retained earnings, + Depreciation represents the allocation of capital expenditure to various periods over which the capital expenditure is expected to benefit the firm, ‘+ Even though the amount that may be available by way of internal accruals may be limited and the opportunity cost of retained earnings quite high, intemal accruals are viewed favorably by most corporate management + Because internal accruals are readily available; the use of internal accruals in contrast to extemal equity eliminates issue costs and losses on account of under pricing; there is no dilution of control when a firm relies on internal accruals; and the stock market views internal accruals with a pessimistic approach. Venture Capital (VC) + Venture Capital is finance invested by professionals, called venture capitalists, in start ups with growth potential + A venture capitalist provides guidance to the company ad is a business partner sharing both risk and rewards. + Venture capital is an important source of equity for start-up companies. Venture capital injects equity finance with a solid capital base for future growth + Venture capital firms provide equity for business and expect 20 to 40 per cent equity stake in a company and high returns on their investments within three to five years, Stages of Venture Capital Financing + The requirements of funds vary with the life cycle stage of the enterprise. + Depending upon the stage they finance, venture capitalists are called angel investors, venture capitalists, or private equity suppliers/investors. + The venture capital investment process is different from normal project financing, In 1984, A. V. Bruno and T. T. Tyebjee the School of Business, University of Santa Clara, California, formulated a model of Venture capital investment activity which with some variations is commonly used today. ‘As per this model, this activity is a five-step process as follows:- Deal organization. 2. Screening, Eval ion or due diligence. Deal structuring Post-investment activity and exit. ‘Tyebjee and Bruno identified 6 stages of venture capital financing, which are given below: 1. The seed money stage: A small sum of money required to prove a concept or develop a product, 2. Start-up: Financing of firms that are less than one year old. The funds are primarily ‘meant for marketing and product development. 3. First-round financing: Additional money needed to begin sales and manufacturing after the start-up funds are exhausted. 4. Second-round financing: Funds required for working capital for a firm that is selling its product but still losing money. 5. Third-round financing: Financing of a firm that has broken even and is planning an expansion, This is also called Mezzanine financing, 6, Fourth-round financing: Financing of a firm that is expected to go public within six ‘months, This is also called bridge financing. Angel Investing Angel investors ate wealthy individuals who invest in entrepreneurial firms, usually during start-up Angel investors provide cash to young investors and take equity in return Angels are usually entrepreneurs who have successfully built companies, or have spent a part of their professional career in mentoring start-ups. Angels invest their own money and actively mentor the company. Angels usually expect a lower return on investment than venture capital firms. Business angels are high-net-worth individuals, usually successful people or professionals, who provide early stage capital to startup businesses in the form of either debt, equity capital, or both. ‘They are often self-made millionaires and are accustomed to taking calculated risks with their own money. They provide financing for start-up and early stage firms that are too small to get the attention of VC firms, often too limited in their revenue potential at maturity to interest VC firms, and too risky for bank loans and for most appetites. ‘An angel network is a unique concept, which brings together highly successful CEOs and entrepreneurs from India and around the world interested in investing in start-ups and have a potential of creating high-growth companies, ‘The network provides equity finance along with high-quality mentoring. Some of the well-known angel investing networks in India are Chennai Funds, the Indian Angel Network, the Mumbai Angels; and the TiE Entrepreneurship Acceleration Program, Project Financing: Debt Financing Debt Financing is basically money that is borrowed to run the business, Debt Financing refers to borrowing money from a source outside the company under certain terms and conditions relating to interest rates and the period of return of the principal amount. ‘Most entrepreneurs prefer to start their operations with money borrowed from banks. and financial institutions, When a firm raises money for working capital or capital expenditures by selling bonds, bills, or notes to individual and/or institutional investors, this money is called a debt fund. In return for lending the money the individuals or institutions become creditors and receive a promise that the principal and interest on the debt will be repaid. ‘Term loans and debentures are two important ways of rising long-term debt. Term Loans Financial institutions and banks have traditionally been the primary source of long term debt for public and private firms. ‘Term loans represent a source of debt finance, which is generally repayable in less than ten years. They are typically employed to finance the acquisition of fixed assets. Financial institutions give Indian rupee term loans as well as foreign currency term loans, ‘Term Loans represent secured borrowing, Usually assets, which are financed with the term loan, provide the prime security. In order to protect their interests, financial institutions impose restrictive covenants on the borrowers, Financial institutions such as SIDBI, IDBI, and ICICI fund entrepreneurial ventures. Debentures For large firms, debentures are a viable alternative to term loans. Debentures are instruments for raising debt finance. Debentures often provide more flexibility than term loans as they offer greater choice with respect to maturity, interest rate, security, repayment, and special features, Banking sources Period Basis Sources On the basis of the period, the different sources of funds can be classified into three parts Long-term sources falfill the financial requirements of a business for a period more than 5 years. Itincludes various other sources such as shares and debentures, long-term borrowings and loans from financial institutions. Such financing is generally required for the procurement of fixed assets such as plant, equipment, machinery etc. Medium-term sources are the sources where the funds are required for a period of more than one year but less than five years. The sources of the medium term include borrowings from commercial banks, public deposits, lease financing and loans from financial institutions Short-term sources: Funds which are required for a period not exceeding one year are called short-term sources. Trade credit, loans from commercial banks and commercial papers are the examples of the sources that provide funds for short duration, Nonbanking financial institution NBFls do facilitate alternative financial services, such as investment (both collective and individual), risk pooling, financial consulting, brokering, money transmission, and check cashing, NBFls are a source of consumer credit. Examples of nonbank financial institutions include insurance firms, venture capitalists, curreney exchanges, some microloan organizations, and pawn shops. ‘These non-banks financial institutions provide services that are not necessarily suited to banks, serve as competition to banks, and specialize in sectors or groups. Government Schemes for funding business 1 ME government business loan scheme ‘The Indian Government launched the MSME business loan scheme as a working capital loan. ‘Asan MSME, you can get a loan sanction of up to Rs. crore within just 59 minutes. The best part is you get this loan at 8% rate of interest, keeping the repayment easy on your pocket. A reservation of 3% is available for women entrepreneurs, so as to offer a quick sanction to the increasing number of women helming their own business today. When applying for the loan, follow these basic steps: + Enter your business's GST Identification Number + Upload the income tax returns for your business in XML format + Upload the bank statements of your business account for the last six months in PDF format. + Enter the director/owner’s details for your business. This will include all details related to personal, educational, and ownership criteria, + Submit the application to enjoy an on-principle sanction within 59 minutes! 2. MUDRA business loan + Established by the current government, Micro Units Development and Refinance Agency (MUDRA) has envisioned the idea of “funding the unfunded’ and put it into action with a funding scheme, + Small business entities and start-ups are given financial support in the form of low-cost credit. + MUDRA Loans are financed through public and private sector banks, co-operative societies, small banks, scheduled commercial banks, and rural banks. + Broadly, any MSME operating in the manufacturing, trading and services sector is eligible for the MUDRA loans. + Your firm can avail funds via the government business loan scheme under three subheads. + - Sishu Loans up to Rs.50,000 - Kishor Loans up to Rs.5,00,000 - Tarun Loans up to Rs.10,00,000 3. Credit guarantee fund government business loan scheme + CGTMSE has been in action for 18 years now. Since its inception, the Credit Guarantee Fund Trust for Micro and Small Enterprises has been facilitating collateral-free loans for MSMEs, + Any scheduled commercial bank and regional rural bank can become a part of the scheme bby empanelling itself as a lending authority. The agency sanctions loans to eligible Micro and Small Enterprises basis their credit standing via the lending agencies in question. 4. National Small Industries Corporation Subsidy + Established in 1955, NSIC offers MSMEs two kinds of funding benefits: raw material assistance and marketing assistance. Any business qualifying as a micro and small enterprise having EM Part-II (Optional) Udyog Aadhaar Memorandum (UAM) is eligible to register for this government business loan scheme under its Single Point Registration Scheme (SPRS) Once you qualify, you can opt for the raw material assistance scheme, where funding for both indigenous and imported raw material is covered. Under the marketing support, you can avail funds and use it to enhance your competitiveness and the market value of your offerings. ‘The NSIC also overlooks the functioning of an MSME and supports it in its endeavor to enrich production and quality. Once you qualify, you can opt for the raw material assistance scheme, where funding for both indigenous and imported raw material is covered. Under the marketing support, you can avail funds and use it to enhance your competitiveness and the market value of your offerings. ‘The NSIC also overlooks the functioning of an MSME and supports it in its endeavor to production and quality 5. Credit Link Capital Subsidy Scheme This government business loan scheme funds technological up gradations. Under the varied facets of the scheme, you can access finance to enhance your technology and equipment. You can use the funds from your sanction to undertake a revamp related to ‘numerous processes for your business, like manufacturing, marketing, and supply chain, Through this scheme, the government plans to reduce the production cost borne for creating and providing goods and services by small and medium enterprises This will pave the way for a more competitive local and international market ecosystem, Under this scheme, you can get an upfront 15% capital subsidy for your business. However, the maximum amount you can avail as subsidy is capped at Rs.15 Lakhs. In order to be eligible for a loan under this scheme, you need to apply as a sole proprietorship business, partnership firm, and co-operative or private and public limited company. Pre launch, Launch and Post launch requirements The three main product launch plan steps are: The pre-launch step: Preparing for success, including “warming up” your customers and creating the launch marketing materials The launch step: Keeping the energy high as you promote, answer questions, and provide customer service ‘The post-launch step: Reviewing results, making changes, and planning for the future Phase 1: Launch Prep During the launch prep phase you'll: Confirm Important Launch and Pre-Launch Dates, Acquire and Set-up New/Existing Tech Platforms Organize Launch Docs and Set Up Admin Backend Confirm Client Policies and Procedures Recruit and Train Launch Team Setup Digital Properties and Domains Phase 2: Pre-Launch During the pre-launch phase you'll Write/Publish Pre-Launch Content Design Pre-Launch Content Setup, Test and Schedule Pre-Launch Content Schedule Social Media Content Setup Facebook Ads Engage Phase 3: Live Launch During the live launch phase you'll: Setup and Test All Sales and Checkout Pages Write Live-Launch Content Design Live-Launch Graphics Setup, Test and Schedule Sales Conversion Email Sequence + Schedule Social Media Content + Setup Facebook Ads + Engage + Monitor, Check-in and Adjust Phase 4: Post Launch During the post launch phase you'll: + Setup Redirects + Send A Survey + Evaluate + Celebrate Launching is fun and exciting. It’s likely part of your business model so it’s best that you learn the phases and what's included in each of them. Procedure for Application and Document Requirement ‘The documents required for the same are: 1. Application in Form 353 or 354, as the case may be. IF the applicant is an individual, his/her Aadhaar Card is mandatory. If the applicant is any Company, LLP, Firm, etc, their PAN Card, along with incorporation certificate or document. 4. Latest Tax Payment Receipt 5. Consent letter or Lease documents from the property Owner. Challenges and Difficulties in Starting an Enterprise 1. Fierce Competition The corporate world is quite fierce. There is always a competition going on between the giants. Competition poses one of the biggest challenges for the survival of startup businesses. And if you have an online business startup, the competition gets tougher. ‘The competitive environment keeps the startups on their toes, as there is no margin of error available, Both B2B and B2C organizations always tend to feel the heat of the fierce competition. In order to survive in this competitive business environment that covers both traditional and ontine businesses, the startups need to play aggressively, and punch above their weight to gain the much needed recognition amongst the clusters of ever challenging and expanding businesses 2. Unrealistie Expectations Success does not come alone. It brings expectations with it. Most of the times, these expectations seem realistic, But in the real sense of the word, are merely unrealistic. This same concept holds true for young startups. Startups tend to face challenges when they set ‘unrealistic expectations’ following a booming, success. Remember, success is short-lived and expectations never end. This is where startups need to translate what the real expectations are? Sustainability is the name of the game. And sustainabi requires consistent efforts In order to succeed in a competitive business world, startups need to have high but controlled expectations, keeping view of the resources available, the extent of growth potential, and other market factors as well. a ing Suitable Candidates One of the most important factors that define organizational culture within a startup company is the synergy of the team. A team comprises of individuals with similar capabilities and identical focus, In order to develop a highly successful team culture, organizations in general — and startups in particular ~ need to hire suitable candidates, There is a huge poo! of aspiring individuals available. Selecting a suitable candidate that fits the job well enough is a peculiarly tricky task It is one of the biggest challenges facing the startup businesses in this digital age When hiring a suitable candidate, organizations must remember one golden rule: Birds of a feather flock together. 4, Partnership Decision Making Partnership is the essence of success. And this logic holds true for startups as well. In this ever- expanding and ever-changing digital era, where organizations need to battle hard for their survival, startups also find it difficult to find trustworthy partners. It’s really a big challenge for startups today. And as far as tech startups are concerned, stakes in partnership are much higher for them. Going into a partnership pays great dividends for the startups, but they need to consider a variety of factors before making any decision to collaborate with another company working in the same ecosystem. To reap out maximum benefits out of a partnership, startup businesses should look for organizations that enjoy a sound presence within the market and a good reputation amongst the industry giant. 5, Financial Management Money begets money. Remember the fact that when income increases, the expenditures also increase. There is no doubt about it. One of the biggest challenges that startups face today relates to financial management It is a fact that small startups rely heavily on financial backups from the so called investors, At times, when there is a cash influx, small firms, most importantly startups tend to find it really hard to properly manage their finances, and they bog down against the pressure. In order to address this kind of situation, startups need to play a safe and cautious hand, by keeping all the cards close to their chests. Taking help from a reputed financial consultancy firm may really help out in managing financial crises facing today’s tartup businesses. 6. Cyber Security This is the digital age. And surviving the challenges in this age requires small startups especially the ones operating online ~ to be super agile to counter the so called online security threats, Hackers are everywhere, and they are going to take advantage of any loophole within the systems installed within a startup firm The rate of cyber crimes has increased dramatically during the past couple of years. The percentage is going to increase in the coming years as well. Startups that are active online do face online security threats, Be it unauthorized access to startup’s sensitive information, employee records, bank accounts? information, or any other related information that is deemed important for the survival of a tech startup, they are at risk. 7. Winning Trust of Customers Customer is the king. And that’s absolutely right. Winning a customer’s trust is one of the most important challenges that businesses in general — and startups in particular — face today. With a highly satisfied and loyal customer base, startups can scale and make progress towards excellence. Customers are the real force behind a startup’s success. Their word-of-mouth power and their presence on social media can give tech startups an edge against all the traditional businesses. To win customers’ trust and loyalty, startups need to work aggressively to implement a customer-centric working philosophy, so as to enable them to succeed in their pursuit of attaining the height sustainable growth and progress they desire to achieve in this tech-savvy and challenging business world Module 5 Project Design and Network Analysis: Introduction, Importance of Network Analysis, Origin of PERT and CPM, Network, Network Techniques, Need for Network Techniques, Steps in PERT, CPM, Advantages, Limitations and Differences. (Chapters 20, xt 3). Project Design and Network Analysis: Introduction Importance of Network Anal Project design is the framework of a project formatted with detailed sequence and develops an acceptable work plan for the project Project design helps the entrepreneur to improve the project as +heduled without any, The strategy is examined in details and the details are utilized to compile the sequential nation of the constitution activities of the project. Briefly, project design is the framework of a project formulated with detailed sequences and develops an acceptable work plan for the project. Project design and Network Analysis helps the entrepreneur to implement the project as scheduled without any hindrances. ‘The network analysis has the potential to unfolding unknown snags involved in project estimates which, when detected, may provide management not only to improve on the ongoing project estimates but also to take serious lesson for future applications. ‘The whole project should be considered with reference to the sequence of activities and events. This would also require that the events should be thought of in different streams of operations and their relationship understood clearly. ‘The whole project may be put on one network while different segments of the project ‘may be detailed out in separate networks for final integration in the overall network. The time estimates may be made taking into view two discrete aspects: one projects in which previous experience does not exist two time estimates may be based on previous experience of similar types of operation in different other projects. Cost estimates would depend on the project time estimates and the changes in the prices of different factors of production. ‘The physical progress of the projects, individuality and simultaneity of events, jobs farmed out snags in different areas of project work would all require adequate notice and application of correctives in proper time. The concept of crashing would be helpful to reduce penalties. Origin of PERT and CPM Programme Evaluation and Review Techniques (PERT) was developed about 1958 as a result of collaboration between the Operational Research Division of the United States Navy and a firm of business consultants The emphasis was on completing the program in the shortest possible time. In addition PERT had the ability to cope with uncertain activity completion times, CPM came into focus about 1957 as an offshoot of collaboration between Du Pont and Remington Rand. The emphasis was on the trade-off between the cost of the project and its overall completion time, CPM is essentially on the activities themselves and the cost associated with the completion of each activity. CPM came into focus about 1957 as an offshoot of collaboration between Du Pont and Remington Rand. Network + A network comprises a set of exponents connected with each other in a sequential relationship with each step till the completion of a project. + Network analysis is a system which plans both large and small projects by analysing the project act + Projects are broken down into simple activities, which are then arranged in a logical sequence. + It is also decided as to which task will be performed simultaneously and which other sequentially. Network Design Project Analysis Scheduling Time costs | | Coordinating Design of project Project worked the activities >| activities [>| activities |) out | Network Design Network Techniques A business plan or any project contains various activities ~ which can be taken up concurrently and which can be taken up only after completing some other activities. Any delay in any activity will affect the other activities, project is delayed, costs will go up leading to reduced profit. A number of networking techniques have been developed for project scheduling and control Networking techniques developed for project scheduling and control are | Programme Evaluation and Review Techniques (PERT) 2. Critical Path Method (CPM) 3. Line of Balance (LOB) 4, Graphical Evaluation and Review Techniques (GERT) 5, Workshop Analysis and Scheduling Programme (WASP) CPM widely used in project management as they are very useful in the basic management functions of planning, scheduling and control. These techniques can be applied in diverse kinds of projects like Construction of projects, Scheduling ship construction and repairs, End of the month closing of accounts, Large, research projects ete, Need for Network Techniques ‘Network analysis helps in designing, planning, coordinating, controlling and decision-makin; order to accomplish the project economically in the minimum available time with the limited available resources The conventional planning method like bar chart had limitations the following disadvantages are’ © A bar chart becomes too cumbersome while dealing with big and complex projects. © A bar chart does not point out which tasks should be given priority as regards resources. Bar chart Disadvantages are:

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