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Setting up a small Business Enterprise

Identifying the business opportunity: ---lot of courage ---to stay in business ---combination of hard work, skill and perseverance Two categories ---with idea waiting for opportunities ---do not have ideas

Business opportunities in various sectors Green business Biotechnology Events management IT enabled services Food, fruits and vegetables processing, refrigeration and transportation Mineral water Courier services

Insurance sector Telecommunication Herbal sector Tourism sector Plastic Formalities for setting up of a small business

1. Selection of a project a) product or service selection b) location selection c) Project feasibility study d) Business plan preparation e) Preparation of a project profile

a) product or project selectionfactors --background of experience of the entrepreneur --availability of technology and know-how for the project --marketability of the product /service --investment capacity --availability of p/m --availability of raw materials --availability of proper infrastructure facilities

Organizations possess information on business opportunities---DIC, Technical consultancy organization, Centers for entrepreneurship development, Small industry service Institutes, Leading banks, Industrial extension bureaus', National Industrial development corporation,N.Delhi, Khadi and village industries commission, N.Delhi Commissioner of cottage industries, National Institute of entrepreneurship and small business development New Delhi-----

This information could be in the form of--project profiles feasibility studies industry studies area development studies The following factors related to the product need to be considered Easy availability of raw material Process technology Easy accessibility in the market Product line Market information Packaging Branding Warranties After sales service

B) Location selection: Factors--Proximity to market Availability of raw materials Availability of transportation and communication facilities Availability of incentives and concessions Government policy Availability of suitable infrastructure facilities Convenience for the promoter

C) Project feasibility study ---Market analysis consumption trend, past and present supply position, production possibilities and constraints, imports and exports, structure of competition, cost structure, elasticity of demand, consumer behaviour,distribution channels and marketing policies in use,administrative,technical and legal constraints.

Business Plan Preparation ----Determine where the co. needs to go ---formulate responses to contingencies --Keep the business on track to reach its planned goals ( think competitively, be realistic, involve people)

Business plan focuses on the following ---product features, capacity uses --Market prospects, selling prices and cost of selling ---production process and technical arrangements --P/M supplies and cost --location --raw materials --working capital --manpower etc

E) Project profile ---gives birds eye view of proposed project F) Decide on the constitution ( kind of org.)

Franchising
Franchising is something of halfway house, lying between entrepreneurship and employment A franchise is a system of distribution that enables the supplier ( called the franchiser) to arrange for a dealer (called the franchisee) to handle a specific product or service under certain mutually agreed upon conditions

FranchisingFrench word free from slavery The local operator ( franchisee) pays the parent organization( franchiser) an initial fee and usually, continues royalties for the privilege The franchiser also provides the franchisee with training and other backup support ( a/c, advt. personnel)

For the franchiser-- Advantages: No direct investment Expansion by opening branches Franchisee highly motivated , responsive to local needs and conditions--------- Disadvantages Failure of franchisee--- Termination of agreement Breaking the conditions, rules---

The franchisee advantages-- Start up is easy Recognized name, credibility of supplier Promotion from franchiser Responsibility with franchiser Direct and close assistant Training Standard management Feedback

All round direction from franchiser Professional guidance Privilege Easy finance Disadvantages ---no individual initiative for product development --low margin

No liberty Territory agreements may be difficult to enforce Heavy royalty Control and obligation Failure of the franchiser.

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