The document provides steps for starting a small business, including writing a business plan, researching the market, establishing a legal structure and business name, obtaining necessary registrations and licenses, securing financing, acquiring business insurance, and selecting a business location. It also discusses key components of a business plan such as describing the product/service, target markets, competitors, and financial projections. Additionally, it outlines advantages and disadvantages of small businesses such as independence and limited resources.

1. SESSION 3
E.D.P.
1
Steps for Launching a
Small Enterprise

2. 1. Write a Business Plan
2. Research Your Market
3. Name and Legal Structure
4. PAN/current account
5. TAN/Sales tax registration/VAT no.
6. Business Financing
7. Select A Business Site
8. Business Insurance
Steps To Starting Your Own Business

3. I.Business Description and History
Name, nature of business, history, affiliates, stage
of development, unique features of products or
services, any proprietary position (patents,
experience)
II.Products and Services Description
Clearly explain all products and services. Describe
what you are selling and why.
1.Write a Business Plan

4. III. Management Plan
A. Personal history of principals (résumés)
B. Organization chart
C. Duties and responsibilities
D. Staff plan: include number of employees,
salaries, fringe benefits, training needs, etc.
1.Write a Business Plan

5. IV. Marketing Analysis and Marketing Strategy
A.An in-depth analysis of the market for the
product or service to be sold:
1. Who and how large is the market?
2. How will competitiveness be derived?
3. What s.b. the pricing and sales terms?
4. Market Plan?
5. How will the firm obtain market share and
achieve sales objectives:
a. Pricing / Promotion / Distribution
channels / Marketing review, monitoring
or evaluation
1.Write a Business Plan

6. V. Operating Requirements
A. Explain how the business will be run on a day-
to-day basis, hiring employees, and personnel
procedures.
B. How will your products and services be
produced and made available to the
customer?
1.Write a Business Plan

7. VI. Financial Management/Funding
A. Outline for obtaining FUNDS:
1. Projected start-up costs
2. Use of proceeds
3. Expected profit or ROI for the first year
4. Pricing and deal structure (including terms
and payback)
5. Projected income statements and balance
sheet for two years
6. Projected monthly cash flow statement for 12
months
1.Write a Business Plan

8. VII. Summary of Risks Involved
A. Discuss contingency plans that have been
developed for potential problems and delays.
1. Industry, company, and its personnel
2. Timing
3. Product and market acceptance
1.Write a Business Plan

9. VIII. Concluding Narrative
A. Summarize your business goals and objectives
and include a message that you are committed to
the success of your business
1.Write a Business Plan

10. Analysis of the product/service
Target markets - list and briefly describe
Competitor analysis
Market potential - potential sales, profit or other
advantages
Potential problems - brief description plus
proposed solution
2.Marketing Research

11. Proprietorship,
Partnership,
Joint Stock company
3. Name & Legal Structure

12. 12
Register the Company's Name
 Reserve the company's name with the Registrar
of Companies.
 ID proof, PAN Card, Address Proof is needed
along with the application form + registration
fee to get the certificate of incorporation that
legally approves the name of your business.

13. 13
4. Tax Account Number(TAN)
 Obtain a TAN from an authorized agent approved by
the National Securities Depository Limited.
 TAN is required of anyone responsible for collecting
tax.
 The application form is available at
www.incometaxindia.gov.in and www.tin-nsdl.com

14. 14
Permanent Account Number
 Application for PAN s.b. submitted to an
authorized franchise approved by the National
Securities Depository or the Unit Trust of India
Investors Services
 PAN is essential for tax purposes
 Mandatory while opening a business account or
while applying for a loan

15. 15
 Objective : to ensure all land related information so
that correct land records could be maintained.
 Also used for recording of transactions relating to
other immovable property
 provides for registration of supporting documents
which give these documents more authenticity
 Registering authorities are present in all the districts
Registration Act

16. 5. CENVAT
 A.k.a. Central Excise VAT which is charged on the
production of goods within India, and is levied by the
central govt., avoids cascading effect on duty
 Standard rate for CENVAT is 10.3% since Feb’10
 CENVAT filings are monthly, on the 10th day following
the period end
 SSI is exempted from payment of excise duty from
annual production up to Rs.1 crore
16

17. Sales Tax
 Central Sales Tax (CST) is 4% on manufactured
goods
 BIHAR VAT [erstwhile Local Sales Tax (LST)]  in
case of local sale, governed by relevant state tax
legislation - normally up to 15%, (Bihar-5%)
17

18. Sources of financing:
BIADA – land
MSME (micro finance institutions) –building
NSIC – machinery
BANKS – working capital
Personal savings/Friends/Family/Investors/
Promoters/Lenders – working capital, misc.
6: Business Financing

19. Things to remember while selecting a site:
A. Convenience for targeted customers
B. Building modification cost
C. Whether you want to own, rent, lease, or
purchase
D. Municipal regulations & compliances
E. Legal review of any leases or purchase
contracts
7. Select A Business Site

20. CoC provides the following:
New business contacts / Referrals
Publicity and exposure / Networking events
Demographic information
Professional development / Guidance and
counselling
Governmental advocacy
8. Join the chamber of commerce

21. Property Insurance
Inventory Insurance
Personnel Insurance
9. Business Insurance

22. independent management, usually owner
manages the biz.
one person or a few people provide capital
the area of operation is normally local
workers & owners work as one family
expansion is normally organic
a small business captures only a portion of the
total market in that time
Characteristics of small business

23. Scope of Small Business

24. Small businesses represent high % of all firms
Small business drives the economy by providing
jobs for over half of the private workforce
Small businesses create 60 to 80 percent of the
net new jobs
Scope of Small Business

25. In India, over 300,000,000 people are living
below the poverty line
GOI can’t provide means of livelihood to
everyone
Such situations mandates that YOU come up
with YOUR entrepreneurial initiative
Why Entrepreneurship?

26. “reports prepared by Planning Commission to
generate employment opportunities for
10,00,00,000 people over the next 10 years have
strongly recommended self-employment as a
way-out for teaming unemployed youth”
Why Entrepreneurship?

27. Increase in employment has not increased in
proportion to GDP growth
rising unemployment rate in India has resulted
in growing frustration among the youth
In India, there is a dearth of quality people in
the industry, therefore, the scope of enterprise in
India is tremendous!!
Why Entrepreneurship?

28. requisite technical and knowledge base to take
up the entrepreneurial challenge is available (35%
of the start-ups in Silicon Valley are by Indians!!)
GOI & various State Govts. have various
schemes & programmes aimed at nurturing
entrepreneurship
Why Entrepreneurship?

29. Advantages & Disadvantages
of Small Business

30. PERSONAL
relevant for experienced professionals who do
not have an adequate amount of resources
ideal for unemployed people
freedom to choose the hours of work
own business motivates the owner to work
harder!
ADVANTAGES

31. PERSONAL
Imparts ability to connect with many other
small-business owners
customers are attracted to small businesses as
they provide better customer service due to
more personal contact
ADVANTAGES

32. FINANCE
keeping track of inventory, cash flow and
transactions is easily manageable
relatively small amount of capital needed to
start the business. (*banks rarely fund new biz.)
unlimited income, 100% right over the profits
advantage of several tax deductions
ADVANTAGES

33. FINANCE
deployment of profits remains entirely at the
owner(s’) discretion
most of the transactions are conducted on a
first hand basis.
decent earning vs. low expenses, OYO w/o
taking a lot of risks
ADVANTAGES

34. MANAGEMENT
owner has full control of the biz.
independence
easier to manage compared to a large operation
decisions can be taken and implemented faster
most decisions are made with the best interests
of the business at heart
can be run from home or from their
neighbourhood localities
ADVANTAGES

35. most small businesses fail
within the first year. Almost
95% fail within first 5 years!!
DISADVANTAGES

36. PERSONAL
lot of discipline required
high commitment required
owners return to their previous jobs
frustrating long hours required during the
start-up phase
DISADVANTAGES

37. FINANCE
Owner is responsible for all the debts,
liabilities, shortcomings and losses encountered
claims on the debts and loans extend to
personal belongings
small-business owners usually earn 70 to 80%
of the salary that those in the workforce earn.
limited finance and resources
DISADVANTAGES

38. FINANCE
unexpected expenses can be detrimental
100% liability for all the debts
limited sales and stock volume
lack of economies of scale, high cost of
production
MARK.AD costs are usually high
very difficult to raise the required capital, if at
all…..capital is available at high interest rates
DISADVANTAGES

39. MANAGEMENT
slow process in the start-up phase
small work force
Filing/organising/recording all biz. transactions
compliance with local laws and regulations
Hard to find suitable premises for rent, high rents
planning and implementation of biz. strategies
any default can lead to the downfall very quickly
DISADVANTAGES

40. MARKET
Initially it’s hard to get customers or clients
Small businesses lack prominent exposure and
authority, clients prefer to work with big firms
small biz. can offer limited product range. What if
there’s a sudden fall in the demand of the only
products they offer. Motorola pager, floppy disks
requires tremendous marketing
lack of authenticity/goodwill is a major obstacle
DISADVANTAGES

41. provide large no. of employment
They act as competitors to larger firms 
consumers get better prices and services
Small firms come up with very innovative ideas
small businesses of today become market leaders
of tomorrow and contribute to the economy
Advantages to the Economy

42. government has to often interfere to protect
small biz. which is against the principles of free
market and trade liberalization
Disadvantages to the Economy

43. Do you want investors as shareholders in your
company?
Do you want to maintain control of the company
if you have investors involved?
Is there a great risk of liability associated with
your specific business?
Objectives of Small Business