The document discusses monitoring and evaluation of small businesses. It provides details on monitoring, which involves regularly collecting data on activities, outputs and processes to track progress and make adjustments. Evaluation determines the effectiveness, efficiency and impact of activities in achieving objectives. The document also discusses causes of business sickness like inappropriate resource use, financial constraints, and external factors. Remedies include effective planning, training, credit arrangements, and modernization. Prevention involves cooperation between institutions and government agencies.

1. Unit 5
MANAGEMENTOF SMALL BUSINESS

2. Monitoring and Evaluation - Introduction
• Monitoring is a continuous process by which stakeholders
obtain regular feedback on progress towards achieving the
set milestones and results (often focusing more on process,
activities, inputs and outputs). It is a process that is not only
concerned with the transformation of inputs into outputs,
but can also take the form of physical and financial
monitoring, process monitoring and impact monitoring.
• Evaluation is a process which determines, as systematically
and as objectively as possible, the relevance, effectiveness,
efficiency, sustainability and impact of activities in the light
of a project/programme performance. It focuses on analysing
the progress made towards the achievement of the
objectives that an organisation or social enterprise set for
themselves

3. Monitoring and Evaluation of Business
• Monitoring is the systematic collection and analysis of information
as a project progresses.
• Monitoring is a continuous process of regular data collection used
to plan, track, identify gaps and make adjustments during a project
implementation phase. It tends to focus on who did what, where
and when certain activities happened, how many people joined or
were impacted by the project. It usually starts at the beginning of
the project and lasts throughout the project life cycle.
• It is aimed at improving the efficiency and effectiveness of a project
or organization. It is based on targets set and activities planned
during the planning phases of work. It helps to keep the work on
track, and can let management know when things are going wrong.
• Effectiveness is a measure of the extent to which a development
programmes or project achieves the specific objectives it set.

4. Monitoring and evaluation can:
1. Help you identify problems and their causes;
2. Suggest possible solutions to problems;
3. Raise questions about assumptions and strategy;
4. Push you to reflect on where you are going and how
you are getting there;
5. Provide you with information and insight;
6. Encourage you to act on the information and insight;
7. Increase the likelihood that you will make a positive
development difference.

5. Monitoring involves:
• Establishing indicators of efficiency, effectiveness
and impact;
• Setting up systems to collect information relating
to these indicators;
• Collecting and recording the information;
• Analysing the information;
• Using the information to inform day-to-day
management.
• Monitoring is an internal function in any project
or organisation.

6. Importance of Monitoring and Evaluation
• Track Project and Organizational Performance:
• Helps organizations catch problems early
• Improves Organizational Performance:
• Transparency and Accountability:
• Helps organizations learn from their mistakes
• Brings Bigger Opportunities:
• Aids Efficient Resource Allocation:
• Promotes Better Decision-Making Processes:
• Enhances Future Projects:
• Supports Organization Development and Learning:
• Understand success.
• Demonstrate the return on investment (ROI).
• Build trust.
• Determine sustainability.
• Encourage future investment.

7. Business Sickness
• A sick unit is one which is unable to support itself through the
operation of internal resources.
• “A sick unit is one which has reported cash loss for the year of
its operation and in the judgment of the financing bank is
likely to incur cash loss for the current year as also in the
following year.”
• Industrial sickness refers to the uneconomical performance of
industrial entities. It reflects poor functioning of business
operations and suggests that something has seriously gone
wrong with the usual business running.
• "A sick unit is that unit which fails to generate an internal
surplus on a continuous basis and depends for its survival
upon frequent infusion of external funds".

8. Symptoms of Industrial Sickness
• Inappropriate utilization of resources.
• Rejection rate of goods manufactured is very high.
• Overuse of cash credit facilities on a regular basis and failing to pay
instalment on credits and interest on loans taken from banks and
other financial institutions
• Constant inconsistency prevailing in cash, credit accounts.
• Failure to pay statutory liabilities.
• Employing working capital funds for financing capital expenditure
• Continuous loss of profits, fluctuations or downward trends in sales
and stagnation followed by downfall in the market share.
• Longer and larger outstanding bills.
• Diverging industrial funds and employing it to other purposes which
may not relate to industry.
• Conducting quick expansion activities and too much diversification
with a short interval of time.
• Frequent changes made in the management of the industry
including professional or an individual authority.

9. Causes of Industrial Sickness
• The reasons for industrial sickness in India can be
divided into two categories:
• Internal causes – which includes
– Faults at the initial levels of planning and
construction.
– Financial constraints.
– Labour and management problems.
– Defective, inefficient, and age-old machinery.
– Incompetence on the parts of entrepreneurs.
– Unskilled laborers to work with modern
technology.

10. • External causes are those which are beyond the
control of its management and include –
– Sudden changes in government policies.
– Erratic supply of inputs.
– Non-availability of energy resources and raw
materials.
– Increased competition.
– Power cuts.
– Demand and credit restraints.
– Delay on the part of the Government in
sanctioning licenses, permits, etc.

11. Consequences of Industrial Sickness
• Large-Scale Unemployment
• Wastage of Resources
• Adverse Effects on Related Units
• Adverse Effects Investors and Entrepreneurs
• Losses to Banks and Financial Institutions
• Decline in the Revenue of Government :
• Market fluctuation.

12. Remedial Measures for Industrial Sickness
• The measures to overcome industrial sickness or
remedies of industrial sickness are enlisted below
1) Effective Planning :
2) Improvement in Techniques of Production and
Proper Technology :
3) Training and Development :
4) Provision of Infrastructural Facilities :
5) Regular Supply of Raw Materials :
6) Adequate Credit Arrangement :
7) Effective Marketing Arrangements :

13. Prevention and Rehabilitation of
Business Units
– Cooperation between Term-Lending Institutions and
Commercial Banks:
– Coordination between Various Government Agencies:
– Willing Cooperation and Clear Understanding with the
Project Promoters:
– Marketing support
– Recovery of Outstanding
– Modernisation of Machinery:
– Improving Labour Relations
– Efficient Management
– Performance Incentives

14. Revival and rehabilitation measures
• Change management
• Development of a suitable management information
system
• A settlement with the creditors for payment of their
dues in a phased manner, taking into account the
expected cash generation as per viability study
• Determination of the sources of additional funds
needed to refinance.
• Modernization of plant and equipment or expansion
of an existing programme or even diversification of
the products being manufactured.
• Concession or reliefs or assistance to be allowed by
the state level corporation ,financial institutions and
central government.

15. Effective Management of Small Business
• Be Prepared To Grow
• Stay On Top Of The Bottom Line
• Effective Growth Planning:
• Make Adjustments For Growth
• Form A Great Support Team
• The Power of Technology:
• Customer-driven Process:
• Seeing the Future:
• Be Consistent
• Be the Example
• Adapt to Change
• Listen and Ask Questions
• Create Online Apps
• Cut Costs