Professional Documents
Culture Documents
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• Influences
– Culture
– Sub-Culture
– Family / Peers / Education
• Support
– Govt.
– Financial institutions
• Venture Capital/Banks etc.
Step 2 : Identify and Evaluate Opportunity
Opportunity Analysis: It should include A description
of the product or service; an assessment of the
entrepreneur and the team; specification of all the
activities and resources; sources of capital; as well as
its growth.
The assessment of the opportunity requires answering the
following questions:
- What market need does it fill?
- What personal observations have you experienced or
recorded with regard to that market need?
- What social condition underlies this market need?
- What market research data can be marshalled to describe.
Is it a good idea? 5 questions to ask
• Is the number of potential customers, in other words the
market, large and growing?
• Who is your customer and what is his or her problem,
specifically, that you plan to solve?
• How are these people currently solving their problem, that is,
what is your competition?
• How much better or cheaper are you than your potential
customers' current solution, and can you maintain that
advantage?
• And, most importantly: are you and your team suited to this
task - do you have the right knowledge and network in this
industry? Are you passionate about the problem or industry?
Created need Garment
Solving the problem Mixie
Creating the problem Mixie with larger cap
New application Roofing sheets
Modification Mixie with top handle
Special Feature Remote Control
Manipulation of Technology (miniature Roof top Green Houses
version)
• Men
• Plant & Machines
• Land & Building
• Materials
• Money / Funding
– Debt: Friends, relatives, indigenous banks, banks,
financial institutions, public deposits, debentures, private
equity, venture capital.
– Equity: Equity and own funds
Step 5 : Manage the Enterprise
• Planning
– Decision Making/ Operational & Strategic
– Budgets, P&L, B/S, Cash flow
• Organising
– Division of Work/ Org. Structure
– Allocating resources
• Leading
– Delegation / Motivation
• Control
– Performance Evaluation / Review
Promoters contribution
- Promoters contribution fixed at 22.5 per cent of the project cost.
- Concessional Norms: Available in terms of the location of the
project.
‘A’ areas: No industry Districts
‘B’ areas: Districts where industrial activity has started
‘C’ areas: Districts with industries are sufficiently well-developed
- Concession in promoters contribution:
‘A’ areas: 17.5 per cent
‘B’ areas: Projects above Rs. 25 crore in ‘B areas – 17.5 per cent
‘C’ areas: 20 per cent
- Concessional Norms are allowed purely at the discretion of the
financial institutions
- Contribution may vary depending up on the risk of the project.
- Deserved entrepreneurs who are unable to contribute can avail
seed capital assistance from State Financial Corporations (up to
specified limit), Industrial Development Bank of India, Risk
Capital and Technology Corporation of India Ltd., or Small
Industries Development Bank of India (depending up on the size
of the project Rs. 10 to Rs.30lakhs).
- For the purpose of promoter’s contribution, investments made by
mutual funds are considered if they are covered by non-disposal /
buy-back clause.
Capital Incentives
- Capital incentives are part of equity.
- Viability of the project should be judged independent of the
quantum and availability of incentives.
Eg: Project Cost: Rs. 10 crores; Promoters’ contribution is 22.5 per
cent; Debt-equity ratio 2:1.
Trends
- DFIs can choose become a bank or NBFC
- Uniform supervisory regime for banks and NBFCs (on-
site and off-site monitoring; and periodic external
auditing.
- Consolidation