Industrial Project & Development Assignment No :02

1.Define small scale enterprise industry?

Defining small-scale industry is a difficult task because the definition of smallscale industry varies from country to country and from one time to the another in the same country depending upon the pattern and stage of development, government policy and administrative set up of the particular country. Every country has set its own parameters in defining small-scale sector. Generally, small-scale sector is defined in terms of investment ceilings on the original value of the installed plant and machinery. But in the earlier times the definition was based on employment. In the Indian context, the parameter are as follows. The Fiscal Commission, Government of India, New Delhi, 1950, for the first time defined a small-scale industry as, one which is operated mainly with hired labour usually 10 to 50 hands. Fixed capital investment in a unit has also been adopted as the other criteria to make a distinction between small-scale and large-scale industries. This limit is being continuously raised up wards by government. The Small Scale Industries Board in 1955 defined, "Small-scale industry as a unit employing less than 50 employees if using power and less than 100 employees if not using power and with a capital asset not exceeding Rs. 5 lakhs". 'The initial capital investment of Rs. 5 lakhs has been changed to Rs. 10 lakhs for sma industries and Rs. 15 lakhs for ancillaries in 1975. Again this fixed capital investment limit was raised to Rs. 15 lakhs for small units and Rs. 20 lakhs for ancillary units in 1980. The Government of India in 1985, has further increased the investment limit to Rs. 35 lakhs for small-scale units and 45 lakhs for ancillary units. Again the new Industrial Policy in 1991, raised the investment ceilings in plant an machinery to Rs. 60 lakhs for small-scale units and Rs. 75 lakhs for ancillary units. As per the Abid Hussain Committee's recommendations on small-scale industry, the Government of India has, in March 1997 further raised investment ceilings to

Rs. 3 crores for small-scale and ancillary industries and to Rs. 50 lakhs for tiny industry. The new Policy Initiatives in 1999-2000 defined small-scale industry as a unit engage in manufacturing, repairing, processing and preservation of goods having investment in plant and machinery at an original cost not exceeding Rs. 100 lakhs. In case of tiny units, the cost limitation is up to Rs. 5 lakhs. Again, the Government of India in its budget for 2007-08 has raised the investment limit in plant and machinery of small-scale industries to 1.5 corers An ancillary unit is one which is engaged or proposed to be engaged in the manufacture c production of parts, components, sub-assemblies, tooling or intermediaries or rendering services and the undertaking supplies or renders or proposes to supply or render not less than 50% of its production or services, as the case may be, to one or more other Industries undertakings and whose investment in fixed assets in plant and machinery whether held on ownership terms or lease or on hire-purchase does not exceed Rs. 75 lakhs. For small-scale industries, the Planning Commission of India uses terms 'village an small-scale industries'. These include modern small-scale industry and the traditional cottage and household industry.

2. The pros & cons of small business/enterprise ownership?

Pros of incorporating your business:

Owner Protection from Legal Liability. Owners of a corporation have a limited amount of legal liability for the corporation's business activities and debts, because in the eyes of the law the corporation is a separate entity from the person. Ability to Attract Investors. The corporation's ability to issue stock is a strong selling point to those willing to invest capital in a business venture. In addition, you'll probably look more serious to potential investors if you are a corporation. Stock and Stock Options for Employees. The corporate business structure offers an appealing opportunity to potential employees as corporations can issue stock and stock options. Stock benefits are also helpful for starting companies that may not have that much capital to pay competitive salaries.

Cons of incorporating your business:

Time and Cost of Incorporation. As mentioned before, the incorporation process can be very expensive and time-consuming. A number of documents must be prepared (including the new corporation's articles of incorporation and bylaws), and filing fees must be paid to your state's Secretary of State Office (or similar business filing agency). Following Corporate "Formalities." All corporations are required to observe a number of corporate formalities. These requirements can include holding regular meetings of directors, keeping records of corporate activity, and maintaining the corporation's ongoing financial independence. Potential Tax Liability. The profits from corporations may be "double taxed." This means that the corporation is taxed for profits earned, and any individual stockholders (you) are also taxed.

3. Explain the importance of creativity in entrepreneurship?

Creativity is a process that can be developed and improved. Everyone is creative to some degree. However, as is the case with many abilities and talents (e.g., athletic, artistic), some individuals have a greater aptitude in an environment that encouraged them to develop their creativity. They have been taught to think and act creatively. For others the process is more difficult because they have not been positively reinforced, and, if they are to be creative, they must learn how to implement the creative process. There are four phases or steps in the creative process. Most experts agree on the general nature and relationship between these phases, although they refer to them by a variety of names.(5) Experts also agree that these phases do not always occur in the same order for every creative activity. We shall examine this four-step process using the most typical order of development. Phase 1: Background or Knowledge Accumulation Successful creations are generally preceded by investigation and information gathering. This usually involves extensive reading, conversations with others working in the field, attendance at professional meetings and workshops, and a general absorption of information relative to the problem or issue under study. Additional investigation in both related and unrelated fields is sometimes involved. This exploration provides the individual with a variety of per species on the problem, and it is of particular importance to the entrepreneur, who needs a basic understanding of all aspects of the development of a new product, service, or business venture.

There are a number of ways to develop a creative mind. Some of the most helopful include: 1. Read in a variety of fields. 2. Join professional groups and associations. 3. Attend professional meetings and seminars. 4. Travel to new places. 5. Talk to anyone and everyone about your subject. 6. Scan magazines, newspapers and journals for articles related to your subject. 7. Develop a subject library for future reference. 8. Carry a small notebook and record useful information. 9. Become curious about everything.(6) Phase 2: The Incubation Process Creative individuals allow their subconscious to mull over the tremendous amounts of information they gather during the preparation phase. This incubation process often occurs while they are engaged in activities totally unrelated to the subject or problem. It happens even when they are sleeping. This account for the advice frequently given to a person who is frustrated by what appears to be an unsolvable problem: "Why don't you sleep on it?" Getting away from a problem and letting the subconscious mind work on it allows creativity to spring forth. Some of the most help flu steps include: 1. Engage in routine, "mindless" activities (cutting the grass, painting the house). 2. Exercise regularly. 3. Play (sports, board games, puzzles). 4. Think about the subject or problem before falling asleep. 5. Meditate and/or practice self-hypnosis. 6. Sit back and relax on a regular basis. Phase 3: The Idea Experience This phase of the creative process is often the most exciting. It is at this time that the idea or solution the individuals is seeking is discovered. This phase is also the one that the average person incorrectly perceives to be the only component of creativity. As with the incubation process, new and innovative ideas often emerge while the person is busy doing something unrelated to the enterprise, venture, or investigation (e.g., taking a shower, driving on an interstate highway, leafing

through a newspaper). Sometimes the idea appears as a bolt out of the blue. In most cases, however, the answer comes to the individu al incrementally. Slowly but surely, the person begins to formulate the solution. Because it is often difficult to determine where the incubation process ends and the idea experience phase begins, many people are unaware of when they move from phase 2 to Phase 3. In any event, there are ways of speeding up the idea experience: 1. Daydream regularly. 2. Practice your hobbies. 3. Work in a leisurely environment (e.g., bring your work to the park). (#ATH) 4. Put the problem on the back burner 5. Carry a notebook and record your ideas. 6. Take breaks while working.(8) Phase 4: Evaluation and Implementation This is the most difficult step of a creative endeavor and requires a great deal of courage, selfdiscipline, and perseverance. Successful entrepreneurs are able to identify those ideas that are workable and that they have the skills to implement. More importantly, they do not give up when they run into temporary obstacles. Often they will fail several times before they successfully develop their best ideas. In some cases entrepreneurs will take the idea in an entirely different direction or discover a new and more workable idea while struggling to implement the original idea. Another important part of this phase is the reworking of ideas to get them into final form. Because frequently an idea emerges from Phase 3 in rough form, it needs to be modified or tested in order to put it in final shape. Some of the most useful suggestions for carrying out this phase are: 1. Increase your energy level with proper exercise, diet, and rest. 2. Educate yourself in the business planning process and all facets of business. 3. Share your ideas with knowledgeable people. 4. Take notice of your intuitive hunches and feelings. 5. Educate yourself in the selling process. 6. Learn about organizational policies and practices. 7. Seek advice from others (e.g., friends, experts). 8. View the problems that you encounter while implementing your ideas as challenges.

4. Evaluate at a general level a business idea for profitability?

Some entrepreneurs, getting the idea-and imagining the possibilities-is the easy part. It's the market research that doesn't come so naturally. "It's a big red flag when someone outlines the size of the market-multibillion dollars-but doesn't clearly articulate a plan for how the idea will meet an unmet need in the marketplace," The type of information you'll be gathering depends on the type of product or service you want to sell as well as your overall research goals. You can use your research to determine a potential market, to size up the competition, or to test the usefulness and positioning of your product or service. "If, for example, the product is a tangible item, letting the target audience see and touch a prototype could be extremely valuable," notes Shenker. "For intangible products, exposing prospective customers to descriptive copy or a draft Web site could aid in developing clear communications." Analysis When working with firms on brand development, Keller first looks at a business idea from four perspectives: company, customer, competitor and collaborator. This approach allows Keller to scrutinize a business idea before even approaching the topic of brand development. Here's what he looks at for each of the four issues: 1. Company. Think of your idea in terms of its product/service features, the benefits to customers, the personality of your company, what key messages you'll be relaying and the core promises you'll be making to customers. 2. Customer. There are three different customers you'll need to think about in relation to your idea: purchasers (those who make the decision or write the check), influencers (the individual, organization or group of people who influence the purchasing decision), and the end users (the person or group of people who will directly interact with your product or service). 3. Competitor. Again, there are three different groups you'll need to keep in mind: primary, secondary and tertiary. Their placement within each level is based on how often your business would compete with them and how you would tailor your messages when competing with each of these groups.

4. Collaborators. Think of organizations and people who may have an interest in your success but aren't directly paid or rewarded for any success your business might realize, such as associations, the media and other organizations that sell to your customers. Another approach is to research is SWOT analysis, meaning analysis of the strengths of your industry, your product or service; the weaknesses of your product (such as design flaws) or service (such as high prices); and potential threats (such as the economy). "[SWOT] enables you to understand the strengths and flaws, [everything] from internal information such as bureaucracy, product development and cost to external factors such as foreign exchange rates, politics, culture, etc.," says Drew Stevens, a St. Louis professional speaker and consultant who works with entrepreneurs in researching and marketing their ideas. "SWOT enables an entrepreneur to quickly understand whether their product or service will make it in the current environment." Whatever your approach to evaluating your idea, just be sure you're meeting the research objectives you've outlined for your product or service. With those goals always top-of-mind, your analysis will help you discover whether your idea has any holes that need patching.

5. List precautionary steps to protect your business ideas?

If you are looking for a new small business opportunity, you are in the right place. This list of small business ideas includes everything from personal services, to retail opportunities, to environmental services, to pet-related ideas, to technology businesses. Use this list to identify the business idea that is perfect for your situation. Furniture Sales Developer Repair Technician Aquarium Maintenance Remodeler Blog Consultant Bookkeeper Business Consultant e Maker Maker

Service Expert Cloth Diaper Service Composting Computer Repair and Maintenance Computer Trainer Construction Cleanup Service Professional

6. Explain why a good business plan is important?

1. Provide or enhance good industrial relationship. 2. Assist in effective decision making 3.Help to solve conflicts 4.increase production 5.lead to the achievement of the goals Additionally, in today's volatile political, economic and financial environment, the business plan may serve as a 'door opener' to the capital markets; however, to raise capital, additional 'full disclosure' information, not in the business plan, must be provided to prospective investors. The business plan may help form the foundation for these additional documents. When we review a business plan, with an eye toward possible investment, we focus upon the management team and the cash flow summary. A properly created cash flow summary, oftentimes not available from the on-line services, will identify the cash required to achieve the company's e.g., 3 or 5 year goals.

7. Prepare a format for a simple business plan and an extensive one?

The most important assessment of a business plan format is to produce a written summary that assesses all the features of the fiscal capability of the enterprise, comprising an explanation and assessment of the business viewpoints. Mentioned below is a comprehensive business plan format that can be included while preparing the presentation. 1. Executive synopsis

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Aims Objectives o undertaking o Success Factors Company Profile o Type of Ownership o History o Its branches and Facilities Products and Services o Description of the range of product and services o Competitive assessment o Trade Background o Foundation and accomplishment o Technology Deployed o Products and Services in the pipeline Market Assessment Synopsis o Market Division o Market Division Approach o Market Requirement o Market Conditions o Market Expansion Sectored Assessment o Major Participants o Allocation outlines o Rivalry and Purchasing Samples o Major players Approach and Execution synopsis o Price Proposition o Promotional stratagem o Positioning Accounts o Costing stratagem o Advertising stratagem o Allocation Patterns o Promotional Programs Sales Approach o Predictions o Programs o Calculated Tie-ups o Objectives Internet Plan Synopsis o Internet promotional strategy
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Expansion Needs 9. Administrative Summary o Managerial composition o Organization Team o Executive Programs 10.Fiscal Strategy o Significant hypothesis o Major Fiscal Indicators o Break-even Assessment o Estimated Profit and Loss o Estimated Fund Flow o Estimated Balance Sheet o Business percentages o Long-term Strategies
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8. Develope a rough sample plan for a personal business opportunity?

We are currently in a highly lucrative market in a rapidly growing economy. The current trend towards an increase in the number of entrepreneurs and competition amongst existing companies presents an opportunity for an increased demand for market information and services that will enable companies to stay ahead of the pack. Our services will be positioned very carefully: they will be of extremely high quality, relevant, timely and accurate, tailored to the clients' needs so as to enable them to make the right decisions, in turn leading towards growth of their companies, benefiting the overall economy. Palms and Bonds offers the expertise that a proactive-oriented and marketopportunity seeking company needs to develop and enter new product distribution and new market segments in new markets. We intend to provide a number of necessary services to the business community and to the public. These can be summed up in two main divisions -- Business and Training Services. Our business services can be taken as marketing research, market research reports, project-based consulting, business and marketing plans, plan consulting and writing, high-level retainer consulting and company registration. Our training services include workshops and seminars on such topics as sales and marketing, as well as in-house training of receptionists, secretaries, and sales and marketing personnel.

Our marketing strategy will be based mainly on ensuring that customers know what needs the services are able to fulfill, and making the right information available to the right target customer. We intend to implement a market penetration strategy that will ensure that we are well known and respected in our respective industry. We will ensure that our services' prices take into consideration people's budgets, and that these people appreciate the services, know that it exists, and where to find it. The marketing will convey the sense of quality in every picture, every promotion, and every publication. Our promotional strategy will involve integrating advertising, events, personal selling, public relations, direct marketing and Internet marketing, details of which are provided in the marketing section of this plan. Our target markets will range from persons in the corporate towers, small or medium businesses, to home institutions needing information on their particular area of concern. The common bond will be the appreciation of the importance of quality information that will enable correct decisions to be made, holding all things equal. Palms and Bonds prides itself on its analytical ability, its value-added service, competitive fees, its high standards of quality and its adaptability to changes in the market and in the method of its practice. Palms and Bonds intends to provide the client with more than just information and planning tools. We intend to provide quality information that is customized to the client's needs, in the process assisting them on how best to use the available information. By employing our services, our clients are assured of consultants dedicated to finding the right answers for their business and enabling them to benefit long after we have finished our work. We are in this line of work because we like efficiency and because we understand and believe in problem solving and market/marketing research. As we grow we want to grow right. For example we recognize that we have to be in constant touch with our stakeholders to ensure market knowledge at all times. This is the nature of the channels we deal with. Also, we intend to build our management team correctly. We need the right people in the right place at the right time if we are to ensure optimum growth. We intend to develop our team so that our people can grow as the company grows -- a mutually beneficial relationship. In a nutshell, we don't just intend to market and sell our service, but to market and sell customized information, solutions and a total-quality environment. This will ensure we establish a reputable corporate image.

9. Understand the various considerations that are required to be made for identify a good location and then select a location for the propose business nature?
Many new businesses work in a short-term, reactive way. This offers flexibility but can cost time and money as you move from getting the business going to concentrating on growing and developing it. The best option is to balance your ability to respond rapidly with a clear overall strategy. This will help you decide whether the actions you take are appropriate or not. At this stage you should ask yourself if there are any internal factors holding the business back, and if so, what can you do about them? Consider the various aspects of your business in turn. Premises

What are your long-term commitments to the property? What are the advantages and disadvantages of your current location? Do you have room to grow, or the flexibility to cut back if necessary? If you move premises, what will be the cost? Will there be long-term cost savings and improvements in efficiency?

Facilities

If you manufacture products, how modern is your equipment? What is the capacity of your current facility compared to existing and forecast demand? How will you fund any improvements? How do you compare with your competition?

Information technology

What management information and other IT systems do you have in place? Will these systems cater for any proposed expansion? Will they really make a difference to the quality of product or service your business provides? If they don't, can you change them to make sure they do?

Do you make best use of technology such as wireless networking and mobile telephony to allow for more flexible working?

People and skills

Do you have the right people to achieve your objectives? Do they know what is expected of them? Do you operate a training and development plan? Do you pay as well as the competition? Do you suffer from high staff turnover? Are staff motivated and satisfied?

Professional skills

Do you have the right management team in place for growth? Do you have the skills available that you need in areas such as human resources, sales and IT? Do your staff need new or improved skills or to be retrained?

Review your financial position Businesses often fail because of poor financial management or a lack of planning. Often the business plan that was used to help raise finance is put on a shelf to gather dust. When it comes to your business' success, therefore, developing and implementing sound financial and management systems (or paying someone to do it for you) is vital. Updating your original business plan is a good place to start. When reviewing your finances, you might want to consider the following:

Cash flow - this is the balance of all of the money flowing in and out of your business. Make sure that your forecast is regularly reviewed and updated. Working capital - have your requirements changed? If so, explain the reasons for any movement. Compare this to the industry norm. If necessary, take steps to source additional capital. Cost base - keep your costs under constant review. Make sure that your costs are covered in your sale price - but don't expect your customers to pay for any business inefficiencies.

Borrowing - what is the position of any lines of credit or loans? Are there more appropriate or cheaper forms of finance you could use? Growth - do you have plans in place to adapt your financing to accommodate your business' changing needs and growth?

Conduct a competitor analysis Now that you have been running your business for a while, you will probably have a clearer idea of your competitors. Gathering more information may cost time, money and effort, but there are many benefits to knowing more about what your competition is doing. What you need to know The type of competitor information that will be really useful to you depends on the type of business you are and the market you're operating in. Questions to ask about your competitors include:

who they are what they offer how they price their products what the profile and numbers of their customers are compared to yours what their competitive advantages and disadvantages are compared to yours what their reaction to your entry into the market or any product or price changes might be

You will probably find it useful to do a SWOT (strengths, weaknesses, opportunities, threats) analysis. This will show you how you are doing in relation to the market in general and specifically your closest competitors. See the page in this guide on models for your strategic analysis.

Conduct a customer and market analysis When you started your business, you probably devised a marketing plan as part of your overall business plan. This would have defined the market in which you intended to sell and targeted the nature and geographical distribution of your customers.

10. Understand the importance of customer care and develop policies and procedures for the business?
A strong customer service policy can make a huge difference in the success of a business. By implementing and maintaining policies and procedures that encourage strong ties with clients while still protecting the interests of the company, the process of keeping customer defection to a minimum while continuing to expand the client base is simplified. While the exact nature of a customer service policy will vary from one business to another, there are a few basic factors that should be considered in any setting. Determine the goals for the customer service policy. Along with customer retention, the policy may also involve aims such as providing education to the customer on new products, obtaining feedback on product lines, and introducing incentives based on the sales volume generated by each customer. Identifying these goals serves as the foundation for the policy and makes it easier to develop strategies and procedures that aid in achieving each one. Compare the customer service goals with the policies followed by major competitors. This will provide some background in terms of what is likely to be considered industry standards, making the process of creating a policy that not only meets those standards but ultimately offers something more that exceeds what the competition is offering. Relate customer service goals to the mission of the company. Creating a direct correlation between the goals and the company mission helps to qualify each goal as being relevant to the success of the business. Identify specific procedures that will aid in the accomplishment of each goal. For example, the goal of easy communication may lead to creating a step by step structure that includes the options of telephone contacts, email communications, and even online text messaging as ways for customers to interact with customer service and support personnel. Draft specific standards and guidelines that apply to each procedure. Creating an escalation list that provides a logical chain or sequence of action to manage each aspect of the customer service policy is important in order to maximize use of available resources and avoid a duplication of effort.

Test-drive the policy with a select group of support personnel and customers. Doing so makes it possible to identify any flaws in the overall policy design before it is rolled out on a major scale. Make sure that all customers involved understand this is a beta test and their feedback on the policy will make an impact on the final set of procedures that will be inherent in the finished policy. Train the customer service staff in the specifics of the new customer service policy. Equipping customer service personnel in this manner makes it easier to maintain a degree of unity in how customers are treated and increase the chances of making the best possible use of the procedures inherent in the policy.

11. Estimate finance required for the proposed business/services venture?

There are five common stages of venture capital financing: 1. 2. 3. 4. 5. The Seed stage The Start-up stage The Second stage The Third stage The Bridge/Pre-public stage

The number and type of stages may be extended by the VC firm if it deems necessary; this is common. This may happen if the venture does not perform as expected due to bad management or market conditions.

The Seed Stage This is where the seed funding takes place. It is considered as the setup stage where a person or a venture approaches an angel investor or an investor in a VC firm for funding for their idea/product. During this stage, the person or venture has to convince the investor why the idea/product is worthwhile. The investor will investigate into the technical and the economical feasibility (Feasibility Study) of the idea. In some cases, there is some sort of prototype of the idea/product that is not fully developed or tested. If the idea is not feasible at this stage, and the investor does not see any potential in the idea/product, the investor will not consider financing the idea. However if the idea/product is not directly feasible, but part of the idea is worth for more

investigation, the investor may invest some time and money in it for further investigation. The Start-up Stage If the idea/product/process is qualified for further investigation and/or investment, the process will go to the second stage; this is also called the start-up stage. A business plan is presented by the attendant of the venture to the VC firm. A management team is being formed to run the venture. If the company has a board of directors, a person from the VC firms will take seats at the board of directors. While the organization is being set up, the idea/product gets its form. The prototype is being developed and fully tested. In some cases, clients are being attracted for initial sales. The management-team establishes a feasible production line to produce the product. The VC firm monitors the feasibility of the product and the capability of the management-team from the board of directors. To prove that the assumptions of the investors are correct about the investment, the VC firm wants to see result of market research to see whether the market size is big enough, if there are enough consumers to buy their product. They also want to create a realistic forecast of the investment needed to push the venture into the next stage. If at this stage, the VC firm is not satisfied about the progress or result from market research, the VC firm may stop their funding and the venture will have to search for another investor(s). When the cause relies on handling of the management in charge, they will recommend replacing (parts of) the management team. The Second Stage At this stage, we presume that the idea has been transformed into a product and is being produced and sold. This is the first encounter with the rest of the market, the competitors. The venture is trying to squeeze between the rest and it tries to get some market share from the competitors. This is one of the main goals at this stage. Another important point is the cost. The venture is trying to minimize their losses in order to reach the break-even. The management team has to handle very decisively. The VC firm monitors the management capability of the team. This consists of how the management team manages the development process of the product and how they react to competition.

If at this stage the management team is proven their capability of standing hold against the competition, the VC firm will probably give a go for the next stage. However, if the management team lacks in managing the company or does not succeed in competing with the competitors, the VC firm may suggest for restructuring of the management team and extend the stage by redoing the stage again. In case the venture is doing tremendously bad whether it is caused by the management team or from competition, the venture will cut the funding. The Third Stage This stage is seen as the expansion/maturity phase of the previous stage. The venture tries to expand the market share they gained in the previous stage. This can be done by selling more amount of the product and having a good marketing campaign. Also, the venture will have to see whether it is possible to cut down their production cost or restructure the internal process. This can become more visible by doing a SWOT analysis. It is used to figure out the strength, weakness, opportunity and the threat the venture is facing and how to deal with it. Except that the venture is expanding, the venture also starts to investigate followup products and services. In some cases, the venture also investigates how to expand the life-cycle of the existing product/service. At this stage the VC firm monitors the objectives already mentioned in the second stage and also the new objective mentioned at this stage. The VC firm will evaluate if the management team has made the expected reduction cost. They also want to know how the venture competes against the competitors. The new developed follow-up product will be evaluated to see if there is any potential. The Bridge/Pre-public Stage In general, this is the last stage of the venture capital financing process. The main goal of this stage is for the venture to go public so that investors can exit the venture with a profit commensurate with the risk they have taken. At this stage, the venture achieves a certain amount of market share. This gives the venture some opportunities, for example:

Merger with other companies Keeping new competitors away from the market Eliminate competitors

Internally, the venture has to examine where the product's market position and, if possible, reposition it to attract new Market segmentation. This is also the phase to introduce the follow-up product/services to attract new clients and markets. Ventures have occasionally made a very successful initial market impact and been able to move from the third stage directly to the exit stage. In these cases, however, it is unlikely that they will achieve the benchmarks set by the VC firm.

12. Identify the sources of finances?

Sources of finance Sources and uses of finance there are a number of ways of raising finance for a business. The type of finance chosen depends on the nature of the business. Large organizations are able to use a wider variety of finance sources than are smaller ones. Savings are an obvious way of putting money into a business. A small business can also borrow from families and friends. In contrast, companies raise finance by issuing shares. Large companies often have thousands of different shareholders. Sources of finance Uses of finance Shareholders Finance to set up and expand a business Bank Loans to finance capital projects. Overdrafts to manage cash flow Creditors Short term credit until goods have been sold to gain extra finance, a business can take out a loan from a bank or other or other financial institution. A loan is a sum of money lent for a given period of time. Repayment is made with interest. The lender of money needs to know all the business opportunities and risks involved and will therefore want to see a detailed business plan. The lender may also want some form of security should the business run into financial difficulty, and may therefore prefer to provide a secured loan. Another way of raising short-term finance is through an overdraft facility with a bank. The borrower is given permission to take out more from their account than they have put in. The bank fixes a maximum limit for the overdraft. Interest is charged on the overdraft daily. A further way of raising funds that has become popular is through venture capital. Merchant banks and investment specialists may be willing to provide finance for a

promising and fast-growing smaller business. This usually involves a package that is a mix of share and loan capital. Businesses may also qualify for grants. Government (or EU) assistance and funding is sometimes made available to businesses that meet certain conditions. For example, grants and loans may be available to firms setting up in rural areas or where there is high unemployment. Once a business is up and running there are various ways of financing its expenditures. Expensive items of equipment can be leased. Rather than buying the equipment the business hires it from a leasing company. This saves having to lay out sums of money and the business does not have to worry about having to carry out major repairs itself. Motor vehicles, machines and office equipment are often leased. Hire Purchase is an alternative way of purchasing items of equipment. With a leased item you use and pay for the item but never own it. With hire-purchase you put down a deposit on an item and then pay off the rest in instilments. When the last instilment has been paid you become the owner of the item. Another common way in which firms can finance their business in the short term is through trade credit. In business it is common practice to purchase items and pay for them later. The supplier will normally send the purchaser a statement at the end of each month saying how much is owed. The buyer is then given a period of time in which to pay.

13. Identify your competitors, their products and services, their strength and weakness?
Knowing who your competitors are, and what they are offering, can help you to make your products, services and marketing stand out. It will enable you to set your prices competitively and help you to respond to rival marketing campaigns with your own initiatives. You can use this knowledge to create marketing strategies that take advantage of your competitors' weaknesses, and improve your own business performance. You can also assess any threats posed by both new entrants to your market and current competitors. This knowledge will help you to be realistic about how successful you can be.

This guide explains how to analyses that your competitors are, how to research what they're doing and how to act on the information you gain.

Who are your competitors? What you need to know about your competitors Learning about your competitors Hearing about your competitors How to act on the competitor information you get

Who are your competitors? All businesses face competition. Even if you're the only restaurant in town you must compete with cinemas, bars and other businesses where your customers will spend their money instead of with you. With increased use of the Internet to buy goods and services and to find places to go, you are no longer just competing with your immediate neighbors. Indeed, you could find yourself competing with businesses from other countries. Your competitor could be a new business offering a substitute or similar product that makes your own redundant. You can get clues to the existence of competitors from:

local business directories your local Chamber of Commerce advertising press reports exhibitions and trade fairs questionnaires searching on the Internet for similar products or services information provided by customers flyers and marketing literature that have been sent to you - quite common if you're on a bought-in marketing list searching for existing patented products that are similar to yours planning applications and building work in progress

What you need to know about your competitors Monitor the way your competitors do business. Look at:

the products or services they provide and how they market them to customers the prices they charge how they distribute and deliver the devices they employ to enhance customer loyalty and what back-up service they offer their brand and design values whether they innovate - business methods as well as products their staff numbers and the calibre of staff that they attract how they use IT - for example, if they're technology-aware and offer a website and email who owns the business and what sort of person they are their annual report - if they're a public company their media activities - check their website as well as local newspapers, radio, television and any outdoor advertising

Consult Corporations Canadas Choosing a name and the Registrars des enterprises' database in Qubec to check the availability of a company name, and the Canadian Trade-marks Database for the availability of a trade mark. How they treat their customers Find out as much as possible about your competitors' customers, such as:

who they are what products or services different customers buy from them what customers see as your competitors' strengths and weaknesses whether there are any long-standing customers if they've had an influx of customers recently

What they're planning to do Try to go beyond what's happening now by investigating your competitors' business strategy, for example:

what types of customer they're targeting what new products they're developing what financial resources they have

Learning about your competitors Read about your competitors. Look for articles or ads in the trade press or mainstream publications. Read their marketing literature. Check their entries in directories and phone books. If they are an online business, ask for a trial of their service. Are they getting more publicity than you, perhaps through networking or sponsoring events? If your competitor is a public company, read a copy of their annual report. Consult Corporations Canadas Choosing a name and the Registries des enterprises' database in Qubec to check the availability of a company name, and the Canadian Trade-marks Database for the availability of a trade mark. Go to exhibitions At exhibitions and trade fairs check which of your competitors are also exhibiting. Look at their stands and promotional activities. Note how busy they are and who visits them. Go online Look at competitors' websites. Find out how they compare to yours. Check any interactive parts of the site to see if you could improve on it for your own website. Is the information free of charge? Is it easy to find? Business websites often give much information that businesses haven't traditionally revealed - from the history of the company to biographies of the staff. Use a search engine to track down similar products. Find out who else offers them and how they go about it. Websites can give you good tips on what businesses around the globe are doing in your industry sector. Organizations and reference sources

Your trade or professional association, if applicable. The local Chamber of Commerce.

Directories and survey reports in any business reference library. Our Strategic Information Centre

Hearing about your competitors Speak to your competitors. Phone them to ask for a copy of their brochure or get one of your staff or a friend to drop by and pick up their marketing literature. You could ask for a price list or enquire what an off-the-shelf item might cost and if there's a discount for volume. This will give you an idea at which point a competitor will discount and at what volume. Phone and face-to-face contacts will also give you an idea of the style of the company, the quality of their literature and the initial impressions they make on customers. It's also likely you'll meet competitors at social and business events. Talk to them. Be friendly - they're competitors not enemies. You'll get a better idea of them - and you might need each other one day, for example in collaborating to grow a new market for a new product. Listen to your customers and suppliers Make the most of contacts with your customers. Don't just ask how well you're performing - ask which of your competitors they buy from and how you compare. Use meetings with your suppliers to ask what their other customers are doing. They may not tell you everything you want to know, but it's a useful start. Use your judgments with any information they volunteer. For instance, when customers say your prices are higher than the competition they may just be trying to negotiate a better deal. How to act on the competitor information you get Evaluate the information you find about your competitors. This should tell you whether there are gaps in the market you can exploit. It should also indicate whether there is a saturation of suppliers in certain areas of your market, which might lead you to focus on less competitive areas.

Draw up a list of everything that you've found out about your competitors, however small. Put the information into three categories:

what you can learn from and do better what they're doing worse than you what they're doing the same as you

What you can learn from and do better If you're sure your competitors are doing something better than you, you need to respond and make some changes. It could be anything from improving customer service, assessing your prices and updating your products, to changing the way you market yourself, redesigning your literature and website and changing your suppliers.

14. Explan the advertising and business promotion policies of the nature?
Segmentation Dividing potential customers into discrete groups is vital if you want to increase the success rate of any communications message. If you don't know who you are talking to, it's unlikely you will get much of a response. Who are the potential customers? How many sub-groups should you divide them into? How do these groups differ? Hopefully, most of this information will be readily available from your market research. Once you have an idea of the customer, you should further drill down to explore them in more detail. What are their media consumption habits? What are their expectations and aspirations? What are their priorities? How much disposable income do they have? What are their buying habits? Are they likely to have children? How many holidays do they take a year? How much money do they give to charity? How can you help them? This information can be obtained in a variety of ways, from commissioning a specialist market research agency, to examining sales patterns or social media interactions.

Commonly used market research methods include:

Sales analysis and buying patterns Questionnaires Desk research Website statistics, especially social media Focus groups Face-to-face interviews Specialist market research companies

Once you have built up an accurate picture of your customer, it's time to get their attention

Promotion is one of the key elements of the marketing mix, and deals with any one or two-way communication that takes place with the consumer. This article concentrates is a high level introduction to developing a promotional strategy for your business focusing on advertising and other 'pull' tactics. Advertising is just one element of the marketing communication arsenal, which can be divided into the following areas: Advertising a mass media approach to promotion

Outdoor Business directories Magazines / newspapers TV / cinema Radio Newsagent windows

Sales promotion - price / money related communications

Coupons Discounts Competitions Loyalty incentives

Public relations - using the press to your advantage

Press launches PR events Press releases

Personal selling one to one communication with a potential buyer

Salesmen Experiential marketing Dealer or showroom sales activities Exhibitions Trade shows

Direct marketing - taking the message directly to the consumer

Mail order catalogues Bulk mail Personalized letters Email Telemarketing Point of sale displays Packaging design

Digital marketing new channels are emerging constantly

Company websites Social media applications such as Face book or Twitter Blogging Mobile phone promotions using technology such as Bluetooth YouTube E-commerce

15. Formulate an employee policy?

. Employee policies are a legal necessity for all employers. They cover legal aspects of employment such as anti-discrimination and harassment, workplace communications and attendance. Employee policies are also a way for employers to implement disciplinary action for employees who display inappropriate

workplace behavior. As a condition of employment, employees must sign and attest that they have received and understand workplace policies. Attendance Employee attendance policies allow employers to effectively communicate expectations regarding adherence to work schedules. The policy emphasizes the importance of regular attendance and establishes the consequences for failing to adhere to a schedule. Attendance policies also describe the procedures for reporting tardies and absences. For example, the policy explains the number to call if an employee cannot report to work or will be late for work. This policy clearly communicates how many absences or tardies an employee can have before the employer takes disciplinary action to correct the behavior. Harassment Employee harassment policies encourage a cooperative and respectful workplace. These policies prohibit harassing behavior between co-workers, supervisors, managers and contractors. The type of harassment and inappropriate behavior that violates employee harassment policies typically include offensive jokes and negative stereotyping; inappropriate nonverbal conduct; inappropriate physical conduct; and the sharing of offensive visual images. Anti-harassment policies support equal opportunity laws that prohibit discrimination and harassment on the basis of race, gender, disability, pregnancy, religion or other classes and characteristics protected by state and federal law. Electronic Communications Most businesses use electronic communication such as phone and e-mail so coworkers and business partners can efficiently interact with each other. Companies implement an electronic communications policy to govern the use of Internet, email, mobile phones, telephones, fax machines and personal media devices. The purpose of the policy is to ensure that the employees who have access to electronic devices use the technology for business purposes. The policy describes the various websites an employee can access as well as which websites are prohibited from use. The policy also describes how the employer monitors electronic communications such as recording phone conversations and storing deleted emails. Drug and Alcohol Use Employers implement "Drug-Free Workplace" policies to prohibit drug and alcohol use while on company property or on company time. An employer can tailor the drug-free policy to meet the specific needs of the organization. The written policy typically includes why the employer has chosen to implement the program. For instance, an employer may implement a drug-free workplace policy

for the safety and well-being of its employees. The policy may also include a description of prohibited behavior, such as the use, possession or sale of illegal drugs. Further, the drug-free workplace policy explains the consequences for noncompliance such as termination if an employee is caught with drugs or alcohol while at work.

16.List the type of risks faced by your business the type of risks and list ways you can reduce your risks?

The type of risks in business

Business risks are of a diverse nature and arise due to innumerable factors. These risks may be broadly classified into two types, depending upon their place of origin.

Internal Risks are those risks which arise from the events taking place within the business enterprise. Such risks arise during the ordinary course of a business. These risks can be forecasted and the probability of their occurrence can be determined. Hence, they can be controlled by the entrepreneur to an appreciable extent. The various internal factors giving rise to such risks are:

Human factors are an important cause of internal risks. They may result from strikes and lock-outs by trade unions; negligence and dishonesty of an employee; accidents or deaths in the industry; incompetence of the manager or other important people in the organisation, etc. Also, failure of suppliers to supply the materials or goods on time or default in payment by debtors may adversely affect the business enterprise. Technological factors are the unforeseen changes in the techniques of production or distribution. They may result in technological obsolescence and other business risks. For example, if there is some technological advancement which results in products of higher quality, then a firm which is using the traditional technique of

production might face the risk of losing the market for its inferior quality product. Physical factors are the factors which result in loss or damage to the property of the firm. They include the failure of machinery and equipment used in business; fire or theft in the industry; damages in transit of goods, etc. It also includes losses to the firm arising from the compensation paid by the firm to the third parties on account of intentional or unintentional damages caused to them.

External risks are those risks which arise due to the events occurring outside the business organisation. Such events are generally beyond the control of an entrepreneur. Hence, the resulting risks cannot be forecasted and the probability of their occurrence cannot be determined with accuracy.

The various external factors which may give rise to such risks are :

Economic factors are the most important causes of external risks. They result from the changes in the prevailing market conditions. They may be in the form of changes in demand for the product, price fluctuations, changes in tastes and preferences of the consumers and changes in income, output or trade cycles. The conditions like increased competition for the product, inflationary tendency in the economy, rising unemployment as well as the fluctuations in world economy may also adversely affect the business enterprise. Such risks which are caused by changes in the economy are known as 'dynamic risks'. These risks are generally less predictable because they do not appear at regular intervals. Also, such risks may not necessarily result in losses to the firm because they may also contain an element of gain for the firm. For instance, due to market fluctuations,a well known product of a firm may either lose its demand or may occupy a larger market share. Natural factors are the unforeseen natural calamities over which an entrepreneur has very little or no control. They result from events like earthquake, flood, famine, cyclone, lightening, tornado, etc. Such events may cause loss of life and property to the firm or they

may spoil its goods. For example, Gujarat earthquake caused irreparable damage not only to the business enterprises but also adversely affected the whole economy of the State. Political factors have an important influence on the functioning of a business, both in the long and short term. They result from political changes in a country like fall or change in the Government, communal violence or riots in the country, civil war as well as hostilities with the neighbouring countries. Besides, changes in Government policies and regulations may also affect the profitability and position of a enterprise. For instance, changes in industrial policyand Trade policy annual announcement of thebudget amendments to various legislations, etc. may enhance or reduce the profits of a business enterprise.

Thus, business risk takes a variety of forms. In order to face such risks successfully, every businessman should understand the nature and causes of these risks as well as the various measures which must be taken in order to minimise them.

17.List atleast ten tips for minimising inventory?

.

Ten Ways to Reduce Inventory, While Maintaining or Improving Service Our competitor turns its inventory six times per year, but were only at four. We should be able to turn our inventory six times as well! says the boss. And get it done quickly! From that, the inventory reduction crusade is set into motion. Whats the easiest way to lower inventory? Yep, slim down the stock on the medium and high movers. The inventory gets reduced, but expedites go up, and service goes down. You achieved six turns, but at what price? Why does this happen? Because inventory reduction gets managed in a vacuum. Trying to control inventory independently of the variables that cause it is a no-win strategy. Inventory is a dependent variable based on the inputs of many factors including: demand and demand variability, supply lead time and lead time variability, supply chain design, manufacturing capabilities versus customer purchase characteristics, transportation modes, and desired service levels. In order to achieve sustainable inventory reduction while maintaining or improving customer service, the variables that drive inventory must be improved. Too often,

inventory is adjusted to meet financial goals, without corresponding improvements in the variables that drive inventory levels. Why is inventory the target? Because it shows up directly on monthly and quarterly financials. Theres no line item for supplier lead time, forecasting accuracy, or setup cost reductions. Inventory is usually a big number and in plain view to executive management and the shareholders. It is also expensive. Generally it costs 20% to 40% of the materials cost or COGS per year to store. Some of this cost is based on the value of the product (cost of money, taxes, insurance, scrap); the rest is based on storage (warehouse space, maintenance, utilities, equipment). Here are 10 approaches to lowering your inventory. The key to sustainable reductions is to focus on the input variables. But remember, the overarching goal of the organization is to maximize long-term profits. Any attempt to reduce inventory should be in harmony with this goal. Number 1: Pareto your inventory Gather sales and inventory in dollars by item. Construct two Pareto charts. For the first chart, classify your items into A, B, C, and D (80%, 15%, 5%, 0%) based on sales. Then calculate your inventory for each group. Do your A items represent 50% of your inventory? If not, you may not have enough inventory for these items. A significant amount of inventory on low demand items may indicate problems with product run-outs, transitions, engineering change management, and managing obsolete inventory Number 2: Reduce replenishment lead times This can be important for raw material lead time or lead times between your internal tiers of distribution. Break this lead time into three components: the review period, manufacturing time and transportation time. The review period is the time from when the need is identified to when the order is sent upstream. The manufacturing time is the time from when the order is sent until product is available to ship. The transportation time is the time it takes from availability to ship until the material is received and available for use at the next location. Number 3: Revise order cycles/quantities

Smaller and more frequent order quantities translate into less inventory. Is there sufficient capacity to increase changeovers required by more frequent cycles? Can capacity loss be offset by running low demand parts less frequently? Will there be any loss of transportation efficiencies by moving to smaller batches? What does this mean to the labor workload at the distribution centers? Determining order frequencies is one of the key variables of your supply chain. It can affect nearly every aspect of your supply chain. You must have a thorough understanding of your supply chain costs and capabilities before embarking on this strategy Options include: reducing setup time and costs, re-evaluating the cost of holding inventory, understanding warehouse storage procedures, and understanding labor, transportation, and inventory cost trade-offs. While the goal is reducing inventory, you may discover that the opposite is true; increasing order quantities on some items may yield substantial overall savings. Number 4: Improve your forecasting Many people dont like the F word. But lets face facts every make-to-stock or purchase-to-stock company forecasts, admittedly with differing degrees of formality. Even if your production rules are make what we sold yesterday or replenish up to x, a forward-looking view of demand is implicit in determining how much to buy and keep on hand. While everyone knows the forecast will always be wrong, it is possible to become less wrong. Often, improvement efforts start with the mathematical forecasting method, e.g., exponential smoothing vs. regression vs. Winters. That should actually be the last step. As the saying goes, Id rather be approximately correct than precisely incorrect. Think of forecast improvement in three segments: 1. Are the input data the relevant drivers of demand? If marketing or sales are influencing demand through pricing and promotion activity and you dont take this into account, the forecasting formula doesnt matter. You must understand and collect the inputs that drive demand. 2. The data must be accurate. If you forecast from shipments, but shipments dont reflect true customer order quantity and dates (based on unavailability and backorders), the shipment data are tainted garbage in, garbage out. Get as close as possible to true demand.

3. Review the forecasting method. If you have the right inputs and the data is clean, basic forecasting methods will produce good results. If you have limited resources, spend the effort on the first two steps to achieve the best results. Number 5: Eliminate obsolete stock How much obsolete stock is kept on hand in your facilities? Is it being kept because no one wants to own up to it? Or is it because the company cant afford an expense hit this quarter to write-off the obsolete stock? Ridding your warehouses of obsolete inventory is a good policy, and good operating policies will result in good long-term financial results. Here, accounting rules can drive poor operating rules. If you dont address obsolete stock now, it will just continue to grow. So, own up to obsolete stock, get it off the books, and use that warehouse space for productive inventory. Number 6: Centralize your inventory In total, distributed warehouses require more inventory than centralized facilities. The key driver of the increased inventory is safety stock. The rule of thumb is: As the number of facilities increase, the amount of safety stock increases by the square root of the facility increase. Increasing facilities by a factor of four will increase safety stock by a factor of two. If centralization is possible, a reduction in order quantities may be possible. By ordering to only one location, you may be able to increase your order frequency, thus lowering your overall order quantity. While you may have the ability to centralize some items, large-scale centralization may just not be possible. The centralized vs. distributed analysis is a major supply chain decision and requires extensive analysis from customers requirements to suppliers capabilities. However, you may be able to take advantage of centralization on a piecemeal basis. Can you hold most safety stock centrally and allow daily replenishments to distributed facilities? Can spare parts be held centrally and expedited in emergency situations? Will customers accept different lead times on some items, thus allowing centralization? Number 7: Lower your service level Heresy, you say. Probably, so let me re-phrase this one: Understand your customers. What kind of service, in terms of lead time and availability, do your customers require? For example, do your customers need their entire order at once? Could you lower inventory by being able to ship half the order immediately, half

later this week? Do customers request short lead times just because they can, not because they require it? The best way to meet your customers needs is to understand their needs. How do they use your product? When do they know that they need your product? Understanding their needs will help you meet them. However, in todays competitive environment, you just might find that you have to shorten lead times and increase availability just to keep up with competitors. Whatever the case, understanding your customers needs is critical to your success. Number 8: Reduce SKU counts Do you have customer-specific SKUs? Are identical products packaged and stored differently? Postponement is the act of pushing customization until the latest possible moment. If you can store the base item and only customize it when you have the order, you can significantly reduce inventory. This may require packaging or assembly operations at the distribution center, but the savings may well be worth it. You may even be able to respond more quickly to customer orders. Is there substantial part/SKU proliferation? Do you stock the 2-count, 4-count, 6count and 8-count packs? Working with sales and marketing, you may be able gain agreement that eliminating one of the packs will not affect sales at all. Any part reduction will help to free up space in warehouse, ease production planning, and reduce inventory. Number 9: Reduce variability of demand and supply A tough task, you say. Lets look at some ways to reduce demand variability. Is it possible to reduce or eliminate large end-of-period buys (that were only to meet quotas)? Breaking this end-of-period addiction is very painful. It will require a quarter of two of decreased sales and profits as customers use up their excess inventories. Also, managing the resultant slack in the supply chain is costly. This is an extremely difficult habit to break and requires support all the way to the top of your organization. Are there any other ways to smooth customer orders? Study the largest spikes in your historical demand. What caused them? If you can alter these patterns in the future, your volatility will be much less. Or, can you plan them separately if they are driven by discrete events? On the supply side, do you have suppliers that can commit to tight timelines? A longer average lead time with less variability may be better than a short average

lead time with a lot of variability. Generally, you will have to plan for the long end of the spectrum, anyway. Variability is highly correlated with lead time; shorter lead times generally have less variability. Identifying the volatility and discovering the cause will reduce the variability in the supply chain and lower inventories. Number 10: Align your metrics This is a critical (and difficult) step. Does your organization have departmental metrics that are at odds with each other? You might not think so. Even good metrics can produce sub-optimization by department. For example, the plant manager gets his bonus based on efficiency. The lower the unit cost, the better, right? The plant manager likes long stable runs so he can get his equipment humming. The inventory planning manager gets his bonus based on finished goods inventory. He likes low inventory in the warehouses. Good for the organization right? And the sales manager wants everything in the warehouse so when he sells that huge new order, everything is available, because his bonus is his commission. Increased sales, good for the organization right? What happens at our hypothetical organization? The plant manager disregards short production cycles and produces excess stock to get his utilization up. The inventory manager wont accept the goods at the warehouse because he doesnt want finished goods inventory going up, so it gets stored at the plant or in trailers. The sales manager inks a deal but the stock is not available at the warehouse, so it gets expedited from the plant. The bottom line: everyone gets his or her bonus but the supply chain is anything but efficient. Beware the metrics what people get paid to do, they will do. In conclusion, inventory is the measuring stick of your entire supply chain. It reflects the agility of your supply chain. The only sustainable way to reduce inventory is to improve your supply chain processes. To do this, your organization needs an end-to-end view of the entire chain. You will need to begin breaking down the silos across your extended supply chain with communication and understanding. Start internally and then progress upstream and downstream. Finally, remember that supply chain management is a process; there is no finish line.