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Business incubation is a dynamic process of business enterprise development. An incubation program's main goal is to produce successful "graduates", businesses which are financially viable and free standing when they leave the incubator. Business Incubation involves a unique mix of advice, services and support to help business develop and grow. It takes place in Incubators, which are infrastructural developments that help business to become established and profitable. Business Incubators are committed to 3 core principles. They: Focus on nurturing and growing successful businesses; Are themselves run as self-sustaining businesses; Offer services designed to meet the needs of their client businesses
Generally Business incubators provide: flexible space and leases, many times at very low rates fee-based business support services, such as telephone answering, bookkeeping, secretarial, fax and copy machine access, libraries and meeting rooms • group rates for health, life and other insurance plans • business and technical assistance either on site or through a community referral system • assistance in obtaining funding • networking with other entrepreneurs
The first identifiable business incubator was launched in Batavia, New York in 1959. More followed on a limited scale until 1984 when the U.S. Small Business Administration (SBA) began strongly promoting incubator development. At that time there were 20 incubators in operation.
Business Incubation in Nepal:
A private sector Business Incubation Centre came into operation in April, 2003 under management of Lotus Holdings. But now it was already closed. In the government level Business Incubation Programme was started from the fiscal year 2063/64 in Department of Cottage and Small Industries. Since then the programme is going on progressively with increasing budget every year.
Business Incubation Program, Kathmandu is a program operated under the lead role of the Department of Cottage and Small Industries, Government of Nepal, with active support of academia, professional organizations and research institutions. BIP is a nonprofit program under
the ownership of Government of Nepal but strictly operated using modern management tools as a business organization. With the vision to transform innovative ideas into dynamic enterprise for national and global competitiveness and Mission to be center for excellence generating high value addition products and services through proactive and innovative entrepreneurs.
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To graduate successful enterprises providing incubating facilities. To improve and upgrade system and process in the areas of small and micro industries through innovation and new technology. To create demand for further business incubation services in other parts of Nepal through the demonstrative success of new enterprises. To create and enhance network of experts & mentor in management, marketing, finance, Communication and other technical skills to be utilized by clients.
To create and enhance network of resource (laboratories, libraries, incubating space, finance, etc.) in the country for the possible use by clients. Since the first secretarial level meeting regarding the establishment of Business Incubation program was held on Jestha 15, 2062 and first board meeting was held on Jestha 24, 2062. The program started from the fiscal year 062/63, in its foremost existence Business Incubation Program, Nepal, took assistance from ITPF ( Information Technology Professional Forum, Kupandole ,Lalitpur) for Business Plan and working model. Business Incubation Program provides these facilities to incubatees. Advice:
Developing idea, strategic planning, business plan preparation, proactive support and advice on financial, legal, marketing, sales and management
Services to be offered include but not limited to office space, secretarial, office equipment, conference, bookkeeping, communication, resource center, library and laboratory etc.
Anchoring: Utilizing as graduate incubates and resources, experience sharing, feedback for
improvement and enhancement
Relationship: With wider audience and stakeholders (local government, other industrial houses, civil societies or
NGOs, professional societies, prospective incubates, INGOs, media etc
Financial: Providing financial advice, planning and solutions through specialized human resources,
linkages to financial institutions, angel investors and venture capital.
Along with these We
Scouting for innovation; Selection of innovators, evaluation of initial proposal and signing non disclosure
agreement (NAD) Service and shareholder agreement with clients Infrastructure and service to selected clients and initiating mentor program Providing access to technology and related network Commercialization activities - entrepreneurial venture, business plan, market research, consultancy, legal financial and other facilities Graduation of the clients; Documentation of learning and dissemination Follow up support BIP came into operation from fiscal year 2063/64 Since 2066/10 – Pace Nepal Pvt. Ltd has been providing the managerial support for Business Incubation Program. BIP is currently working with 11 incubatees. In 2065 Three Incubatees Graduated and two in 2066. Brief Profile of the affilitated Incubatees is given below:
Sajina Shrestha – Susam Food Products Graduated at the stage of Expansion stage (2065) Currently running the business of about 9800 kg of production since the initial years of 3500 kgs. Madhukar K. C. – Matribhumi Chulo Jadhan Udhyog Graduated at the Expansion Stage. (2065) Currently running the business with the sales of about 2000 pieces of air supply disc per year. Harigopal Shrestha – Himalayan Agarbatti Udhyog, Graduated at the expansion stage. (2065) Increasing the sales every year with annual growth of 40%. Recently has received Trade Mark on “Akhanda” and has various types of products in the market. Milan Dahal/Vishwo Khanal – Web Fusion Pvt. Ltd. Graduated at expansion stage (2066) this company has been working with the website developed about the 101 tourists sites of Nepal www.101nepal.com the company has created a new sensation in promotion of Nepal’s Tourism. Anjana Sharma Anima Visual & Research Service Center Graduated at expansion stage (2066) The Company has been making documentaries and other visuals related to the awareness in society and for the school children working with the program Real Picture. Present incubates affiliated with BIP Shiva hari Prasai- Kathmandu Macaroni Industries P. Ltd Manufacturing the food products like macaroni, sphagetti etc at Kathmandu.
Gopal Kafle -Evergreen Herbal & Cosmetics Products P.Ltd. Producing different types of herbal based cosmetics at Biratnagar.
Kashi Raj Marhattha- Pahadi Bikas Parishad He is working in the plantation of Jatropa, a possible alternative resource for petroleum products at Gorkha. Takka Bahadur Nepali- Karnali Innovative technology Development He is in-house incubate working with an alternaive energy production through a product called Portable Manpower Driven Generator. Saurav Dhakal- Nepal info park P.Ltd Working for the comphrensive package of making stories and keeping them online. Sangita Lama- One Piece Fashion House Working in the fashion designing sector and is in the process of registration Pasang Sherpa- Mountain Natural Food Product Production of different agricultural products and its by products as well from Dolakha. Khadananda Shiwakoti – Khadananda Bags P.Ltd Manufacturing varities of bags and other accessories Santi Ram Paneru- Pragati Hata Kala Udhyog Manufacturing different kinds of educational materials from Jhapa Man Bahadur Saud-Anamol Jadibuti Udhyog Working in the production and sales of different kinds of medical herbal products. Along with the above mentioned activities and services being provided by BI P. These are the remarkable achievements till date.
Networking with Nepal Youth Entrepreneur Forum Networking with Sun Rise Bank Graduated five incubates successfully. Membership of Asia Pacific Incubation Network(APIN) Member of infodev Networking with marketing agencies like Muncha House Working with a profound list of mentors Industrial Tour (Internal) Pre- Incubation Programs for the Incubatees Post-Graduation Services
Free Counselling to the interested enthusiastic wanting to be Entrepreneurs Attending different programs and exhibitions for public awareness about the program
Planning is a process; a set of tasks carried out to reach common goals and set up objectives and then arranging the best way of achieving them. This results in focused efforts and the most efficient use of resources. This gives rise to the importance of analyzing the environment in order to define a mission and select strategies. Effective planning serves as a basis for the business plan as well as a strategic analysis of the incubator. The main items covered by strategic planning are: 1. 2. 3. 4. Identity of the incubator (Vision, Mission and Values) SWOT analysis Strategic objectives Strategies, tactics and plan of action
Vision The government of Nepal and Management Board is committed to run BIP in DCSI as one of excellent incubator centers in Nepal providing technical and financial support as required and considering the enterprises development as base for overall economic development of the country. Mission To make the reality of the Vision, the mission of the BIP will be as follows: 1. BIP is established not only to commercialize the idea of the entrepreneurs but also to sustain their business for long run. 2. BIP works for incubates and only for their progress and development 3. BIP strengthens itself with infrastructures, equipment, finance and personnel so that it is able to provide more technical and managerial services to incubates 4. BIP will take strategy to provide its services in long term basis as Post- Graduation Services. 5. BIP will spread its network not only with national but also international organizations and institutions so that incubates even after graduation get supports and exposure to new markets and other business opportunities.
Values BIP will work on its own values and norms. BIP Board will be supreme and under guidance and supervision of this board, BIP will run by highly qualified and experienced technical and managerial personnel. DCSI will not interfere the day to day work of BIP.
SWOT analysis is very important tool for improvement work. This Business Incubation Programme is still under experiment. It was just operated and it is still not self sustainable. It has many problems and challenges. Some problems are internal and some are external which would be very difficult to overcome. But still the Business Incubation programme is functioning satisfactory and stepping toward the progressing. To sustain this development, result oriented programme and processes should be incorporated and implemented. On the basis of working experiences with BIP, the following SWOT analysis has been done.
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The BIP is now working under Government networking and budget. So it has huge network all over the country and it will be very easy to get support from international organizations and donor countries. DCSI being department working with industrialist and potential entrepreneurs, BIP is getting very easy access to various industrial establishments and experience sharing with success entrepreneurs. DCSI has very big space enough to run sizable business incubation centre. Now the BIP is running by very qualified technical and managerial personnel with long years of experience in entrepreneur development field. . Minimum physical facilities are in satisfactory stage with internet connection. This is just enough for starting the Business incubation programme. BIP being in Kathmandu, Experts (mentors) in all fields are also available at minimum cost at desired time Related materials on business incubation are available with BIP.
Weakness: The identification of weakness is the path for the development. BIP has now many weaknesses as follows:
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People are still not honest in work. Speaking and doing are different. There are still not such procedures developed to correctly identify the potential and right incubates. The selection procedures or approach did not prove in choosing of right candidate BIP does not have any workshop or small testing laboratory or sample making equipment, which are required to carry out project for product development and to turn the idea into business. . BIP does not have enough budgets to provide even small financial support to incubates in their development. Promotional program is not sufficient. Promotional works and materials are very low. And promotional activities are not conducted effectively. Short term contract period with the management consultancy is hampering the smooth running and growth and planning of long term activities. Sufficient knowledge and experience sharing could not performed effectively due to insufficient physical facilities for incubatees (computer, furniture, office space) and no budgets for study tour and field visit by BIP team and experts to various incubates located in different districts of the country.
BIP, DCSI is first of its kind in Nepal with two privately run virtual incubators makes it ahead of competitors. It has firsthand opportunity to proof itself as a very important programme for the development of the country. In spite of political instability growth rate of Nepal is rising which give opportunity to do business. Government is getting support from international organizations and donor countries. So BIP,DCSI has great opportunity to develop programme with the international supports Ever growing number of youth population in the country are more creative and innovate. Business incubation programme is especially for young entrepreneurs. Financial Institutions including Banks are now giving preferences in SMEs and creating a favorable financial environment for growing the entrepreneurs.
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Foreign employment and migration is high risk to domestic entrepreneurship. High drop out of incubates approximately 30 to 40 % is common. Lacking of government fund for running BIP efficiently and effectively. Investment in competent and progressive projects leads to saving of time and resources. Private sectors’ interest with foreign support in the establishment of incubation centers can shadow this low budgeted government program. Lack of long term work plan including the extension of incubation from program to center in its modality doubts it vision.
The main Strategy Objective of BIP is to run the Business Incubation Programme smoothly for potential entrepreneurs to commercialize their business ideas and make them successful entrepreneur with long term support. And its other objectives are as follows: a. To provide long term service to incubates smoothly and in organized way. b. To get sufficient budget for entrepreneurship development of potential entrepreneurs leading to overall economic development of Nepal. c. To make possibility of long term planning with budget d. To make easy to management consultant in scheduling work plan with incubates for their sustainable progress. e. To make less work to DCSI in budget Planning
Strategies to be followed
To enhance the strength, and to grape the opportunities without fail, to overcome the weakness and threat now facing by BIP, the following strategies will be established. 1. Business Incubation Programme (BIP) will be updated as Business Incubation Centre (BIC) with long term planning at least three years 2. Business Incubation Centre will be run by hired management consultant (outsourcing) under the guidance and supervision of a board formed under the chairmanship of Director General of DCSI.
3. Management Consultant will be contracted for three years. 4. Manager or Team Leader of management Consultant will be invited in all board meeting as an observer. 5. BIC will provide more exposure and power of free decision to management consultant to compete with private incubator. 6. Management of expenses such as expenses for stationery, meeting, training, seminar, tea, travelling etc will be handled by Management Consultant itself. 7. The expenses on study tour for incubates and promotional tour by BIC team and DCSI staffs within a country will be handled by management Consultant itself. 8. BIC will take strategy to provide necessary exposure to Management Consultant and its staffs together with DCSI staffs in the field of technical and managerial knowhow on Business Incubation. 9.Necessary physical infrastructure and technical strengthen will be established so that BIC become centre for excellence and autonomous body and able to provide regulatory framework and technical support to private incubators. 10.Selection procedures and criteria of incubates will reviewed and make necessary amendment and more effective promotional work will be done so that more potential entrepreneurs take interest joining the BIC and no drop out during the incubation period. 11.Effective and result oriented programme will be conducted for incubates until they became graduate. More effective and practical materials and concept and tools will be introduced so that incubates able to become successful entrepreneur. The graduation period will be 2 years. And follow up programme will be for one year. 12. More study tour to successful industries and organizations and institution will be arranged for incubates for their exposure. Sufficient budget will be allocated for this programme 13. Networking with various banks, IT institutions, industries and chambers, entrepreneurs associations will be established.
14. Attachment of incubates with related organization, industry, institution etc will be initiated so that the incubates get practical working experience during their stay (Tenant) in BIC 15.Initiation for sufficient government budget will be taken for the development of BIC and its work. 16.BIP will take initiation for business link for graduated incubates with business enterprises.
1. Every Year 10 incubates will graduated. (for first year of operation , graduation will be only after 2 years) 2. Graduated incubates will run their own business successfully and help to generate more employment 3. Establishment of Incubator Centre for Excellence and service provider for private incubator to be established in near future. 4. More private incubators will be established and Business Incubation will be culture to Nepalese entrepreneurs. 5. More successful entrepreneurs in Nepal leading to economic development.
Plan of Action for three years
Sr.No Activities 2068/69 Within 1 Meeting with incubates a) Meeting with new incubates in individual basis b) Conduction of half day introductory interaction program with incubates in Office. Inputs to incubates a) Handing over the business plan b) Implementation of the activities according to the plan c) Meeting with incubates in office and in their works d) Provide necessary technical and managerial input during field visit at their work and in office in general e) Advice to implement suggestions and inputs from BIP team a) Feedback on implementation of suggestions and inputs of BIP team Acceptance of New Incubates a. Review and amendment of application form b. Review and amendment of selection procedures and criteria c. Call for application from potential incubates 2069/70 Within Fiscal year 2070/71 Within
01.04.68 20.04.68 01.04.69 20.04.69 01.04.70 20.04.70
d. Selection of new 10 incubates Training on Productivity Enhancement and Efficient Resource 10.02.68 15.02.68 10.12.68 15.12.68 10.12.69 15.12.6910.10.70 15.10.70 Utilization a. Concept of Productivity and its application and importance b. Calculation of productivity c. waste and its importance d. waste management f. Resource and its efficient utilization g. Occupational health and Safety and its importance h. Quality and its importance i. Quality management j. Quality, Environment and Productivity Mentor List review and update: continuously a) Review of the mentor list available in office according to requirement of new incubates.. b) Finalization of requirement of mentors according to expectation of incubates c) Contact with mentors available in roster of the BIP d) Explore for the new mentors according to expectation of new incubates e) Meeting with mentors and respective incubate f) Finalization of contract with mentors Pre-incubation Training Programme 05.06.68 15.06.68 05.06.69 15.06.69 05.06.70 15.06.70 a) Preparation of agenda
b) Selection of topics according to c) expectation of incubates d) Preparation of programme schedule for 3days e) Finalization of venue and resource persons f) Finalization of chief guest and other invitees for inauguration programme g) Conduction of Pre-incubation training programme h) Feedbacks from incubates and resource person about the programme i) Review of the programme Business Plan a) Input to incubates on writing Business Plan b) Field visit to incubates's work c) Discussion over a business plan submitted by incubates. d) Comments of mentors on business plan submitted by incubates e) Writing of new business plan f) Discussion with incubates on new business plan g) Finalization of Business Plan Internal Study Tour a) Arrange a study tour for incubates to industrial districts and running industries (Biratnagar, Butwal) b) Discussion with management of industry
10.10.68 15.11.68 10.10.69 15.11.69 10.10.70
10.01.68 20.01.68 10.01.69 20.01.69 10.01.70 20.01.70 10.10.70 20.10.70 & & & & 10.03.68 20.03.68 10.03.69 20.03.69 10.03.70 20.03.70
c) Brainstorming among incubates and BIP team on study tour d) d. Home work to incubates on improvement External Study Tour for board members and Management Team(If resource available) a) Arranging study tour of BIP center to Suitable Suitable Suitable Suitable India/china for board members and date date date date BIP team leader b) participate in a short training " " " " programme organized by Indian BIP centre (For incubates) c) Make interaction programe among incubates, BIP team members and Indian BIP representatives. d) Briefing to incubates on Study tour BIP promotional activities a) Development promotional materials 10.03.68 20.03.68 10.03.69 20.03.69 10.03.70 20.03.70 10.10.71 20.10.70 (Pamphlets, Brusher, posters, documentary etc) b) Organize a Consultation Meeting with Possible Investors and make Roster of potential Investors c) Organize promotional activities to attract potential entrepreneurs d) Make promotional tour by BIP team to different district. Graduation 20.10.68 30.10.68 20.10.69 30.10.69 20.10.70 30.10.70 Attachment of Incubates a) Attachment of some interested incubates with research institutions, Continuously
industries, universities, campus and organizations, b) Making MOU with institutions and organizations. c) Interaction with representative of the institution/organization and incubate follow up of incubates on their performance Organizational networking a) Review of past networks and their performance b) Identification of new areas and organizations for networking c) Explore of possibilities of cooperation and exchange program with national and international organizations and institutions. d) Develop concept and explore for foreign aid projects. . e) Conduction of half day introductory interaction programme with stakeholders. External Support a. Development of concept note and proposal for external financial and technical support b. Explore the possibilities of external support c. Development project report if necessary
Expected Budget in NRs
The budget requirement for running of BIC will be met through government source. However for the infrastructure development and strengthening of human resources, the BIC will take initiation for financial and technical support from foreign donor countries and international organization. To meet the objectives and to fulfill the Plan of Action, the tentative budget requirement will be as follow: Sr.No 1 2 3 4 5 6 7 8 9 10. 11 Particulars Remuneration for technical staff, field visit and reporting etc Promotional activities and materials preparation Study tour for incubates Two times Graduation, Meeting and training, seminar expenses Stationeries and office support materials including some expendable IT materials Tea and guest relation expenses Mentor and other remuneration Repair and maintenance of equipment Purchase of Furniture, office equipment and fixture Research and development expenses for incubates Infrastructure, civil construction and repair and maintenance (additional rooms TOTAL 2068/69 15,00,000 6,00,000 3,00,000 3,00,000 3,00,000 70,000 3,00,000 1,00,000 5,00,000 5,00,000 10,00,000 54,70,000 Fiscal year 2069/70 16,00.000 7,00,000 3,50,000 4,00,000 3,50,000 80,000 4,00,000 1,50,000 6,00,000 6,00,000 12,00,000 64,30,000 2070/71 18,00,000 8,00,000 4,00,000 4,00,000 4,00,000 90,000 5,00,000 1,80,000 7,00,000 7,00,000 14,00,000 73,70,000
Breakdown of Budget (in NRs) a. Contracted amount for management consultant (sr.no 1-6) = 30, 70,000/b. Capital expense sr.no 9 and 11 = 15, 00,000/=9,00,000/-
34, 80,000/18, 00,000/11,50,000/-
c. Expenses directly by DCSI Sr no 7,8,10
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