How to set-up new ventures
J R D. Tata had remarked “If mere words could create wealth, the streets of India would be paved with gold. It takes more than words and wishes to generate wealth for nation. A nation’s wealth comes out of the vision and hard work of its entrepreneur.”
As far as the new-economy Indian entrepreneurial ventures are concerned, a combination of factors seems to have inspired the remarkable growth of demand for Indian services in the world market. Some of the important triggers for entrepreneurial activity in the new economy have come from environmental conditions, financial considerations, education and experience of the entrepreneurs. The background that provided a positive climate for entrepreneurship to take off and created motivation for setting up new ventures.
Another factor that has been responsible for venture creation has been the high-quality technical education infrastructure created by universities in India. In addition to this, the access to state-of-the-art education in the US through thousands of young engineers each year and the experience of working with leading technology firms in India and US have possibly provided an opportunity to study the market requirements, understand customer behavior and observe technology trends from close quarters, all of which have been triggers for new venture creation.
Surveying 46 technology firms in India funded by venture capitalists, Ramachandran (2001) states that most of them chose their product and technology in the same area in which they already had received exposure by way of training or earlier work experience. Some others were more radical and used their background to explore new avenues in emerging areas, especially in the context of the Indian market.
BUSINESS PLAN
A business plan is a comprehensive set of guidelines for a new venture. Planning is essential and it must be done in a reasonable manner. Therefore, feasibility planning is used as a way of moderating the concept of a comprehensive business plan.
A feasibility plan is an outline of potential issues to address and a set of guidelines to help an entrepreneur make better decisions. A well written plan should clearly identify the product, service, market and the founders. A feasibility plan should be prepared in a quality manner.
Effective plans avoid emotion packed phrases and abstract language. Entrepreneurs who know how to write a good plan will avoid saying “think” there is a market or they “believe” a product will work. Instead, they will use to support their assertions.
PROJECT
A project is a work-plan to achieve certain objective within a specific period. A project may be prepared for starting a new factory or a plant or it may be prepared for expansion or modernization of the existing enterprise.
PROJECT PLANNING:
Project planning starts with the discovery of a business opportunity and ends with the completion of all details required for the actual execution. Project planning is the result of the detailed investigation of various aspects such as technical, managerial marketing and financial of the proposed business activity.
It is essential in case of new projects as it gives the basic data required for the execution of the project. The entire plan of the project is noted in a written document called project report.
PROJECT REPORT
The project report is the summary of the project planning. It is prepared by experts after completing the project planning. It serves as a base for feasibility studies and actual execution of project. The report deals with the different aspects of the proposed project. It is generally prepared by a team of experts including engineers, technicians and financial experts.
CONTENTS OF PROJECT REPORT:
Name, address and other details of the sponsoring agency.
Brief history and summary of the propose project.
Technical details of the project which includes details of plant layout, location, manufacturing process, product, etc.
Cost of profitability.
Manpower requirement of the project.
Financial aspects of the project, which includes cost of project, fixed assets, working capital requirement and sources of finance.
Total income, operative profits and net profits.
Importance regarding marketing
Importance of the project which will have bearing on the successful implementation with reference to land, building, plant and machinery, raw material, availability of labour, etc.
FEASIBLITY STUDY:
Feasibility study of a project means to find out the practical utility or the future prospects of a project. It is necessary to study the practical utility in an impartial manner.
Feasibility study gives more safety and security to the sponsor of the project. It avoids possible failure after execution. It’s a lengthy process and hence, step by step approach is adopted. The broad areas of feasibility study are technical feasibility, economical feasibility, commercial feasibility and managerial feasibility. The banks and the financial institutions undertake such study in an impartial manner for their safety. Such appraisal is necessary and useful in the case of large projects, which need huge financial investment.
Hence, the basic purpose of feasibility study is to find out whether the project is technically, economically, financially and managerially sound.
AREAS OF FEASIBILITY STUDY:
Technical feasibility study
Economical feasibility study
Commercial feasibility study
Managerial feasibility study
FEASIBILITY REPORT
It is a document prepared after completing different types of feasibility studies. It is prepared by the sponsor or even by banks or lending agency for the safety of their funds. It is prepared after the project report.
It gives full analysis of the projected inputs and outputs covering all information upon which promoters can take final decision about the proposed project. Feasibility report may suggest certain modification in the proposed project. It is desirable to modify the project in the light of such modifications.
Feasibility report is also useful for improving the proposed project and making it more safe and promising.
ROLE OF INDUSTRIAL FAIRS:
Industrial fairs are the fairs at which industrialists exhibits their products. These fairs are organized at regional, national and international levels. A large number of people from industry and trade visit these fairs. Such type of interaction is very helpful in promoting and sustaining entrepreneurship.
The following are the main advantages of industrial fairs:
Dissemination of information concerning new/improved products.
Booking of orders for supply of product.
Ideas for developing new/better related products.
Foreign collaborations for technical know-how.
Assessing the trends in competition.
Contracts for dealership import or export.