sybms sem 3

2. VENTURE DEVELOPMENT
oSteps involved in starting of Venture
oInstitutional support to an Entrepreneur
oVenture funding, requirements of Capital (Fixed and working) Sources of finance, problem of
Venture set-up and prospects
o Marketing: Methods, Channel of Marketing, Marketing Institutions and Assistance.
o New trends in entrepreneurship

3. BUSINESS VENTURE
A business venture or a start-up is an entity which is set by an individual or a group in order to gain
profit.

4. STAGES IN SETTING UP NEW BUSINESS VENTURE
Identification
of market
opportunity
Evaluation of
Business
opportunity Selection of
the best
opportunity
Decision on
location
Develop a
business plan
Determine
resources
required
Arrangement
of resources
Allocation of
resources
Implementati
on
Periodic
review

5. INSTITUTIONAL SUPPORT TO ENTREPRENEURS
Small industries Development Bank of India (SIDBI) : BI was established1 in
1989 as a subsidiary of IDBI under a Special Act. The main functions of SIDBI
are the promotion and development of small scale industries by way of
financing.

6. THE FUNCTIONS OF SIDBI
o To promote small scale industries in semi-urban areas to create more employment opportunities.
o To undertake technological upgradation and modernisation of existing small scale industries.
o To expand the channels for marketing the products of SSI sector on both domestic and international markets.
o To extend seed capital or soft loan assistance under National Equity Fund Scheme / Mahila Udyam Nidhi
Scheme.
o To great direct assistance and refinance for exports of small scale sector.
o To provide financial assistance to SFCs, SIDCs, Commercial Banks, RRBs through existing credit delivery
system.
o To provide factoring and leasing service

7. NABARD
National Bank for Agriculture and Rural Development (NABARD) is an apex development
bank in India for all rural credit having headquarters based in Mumbai (Maharashtra) and other
branches are all over the country.
NABARD was established in terms of the Preamble to the Act, “for providing credit for the
promotion of agriculture, small scale industries, cottage and village industries, handicrafts.

8. OBJECTIVES OF NABARD
The National Bank will be an apex organisation in respect of all matters relating to policy, planning
operational aspects in the field of credit for promotion of Agriculture, Small Scale Industries, Cottage
and Village Industries, Handicrafts and other rural crafts and other allied economic activities in rural
areas.
The Bank will serve as a refinancing institution for institutional credit such as long-term, short-term
for the promotion of activities in the rural areas.
The Bank will also provide direct lending to any institution as may be approved by the Central
Government.
The Bank will have organic links with the Reserve Bank and maintain a close link with in.

9. EXPORT IMPORT BANK OF INDIA
• The government of India set up EXIM Bank in 1982.
• It provides medium and long term loans to exporters,Including small scale exporters.
• Some of the schemes of EXIM bank are:
oDirect Finance to Exporters: Joint ventures in foreign countries,units in SEZ,Deemed exporters
oFinance to Banks: Tt provides re-finance to commercial banks that provide finance to exporters
oFinance to Overseas Buyers: provides finance to overseas buyers at low interest rates to buy Indian capital goods
oFinance to Overseas Bank: Provides funds to overseas bank, so that they provide funds to overseas buyers to buy
Indian goods

10. LIFE INSURANCE CORPORATION OF INDIA(LIC)
oLIC provides loans for the development of socially oriented sectors and infrastructure facilities
like roads,housing,water supply,rural electrification.
oIt provides term loan to the corporate sector to undertake expansion and modernization activities
oIt subscribes to the share capital and debentures of corporate sector.
oIt also undertakes underwriting of shares and debentures issued by corporate sector

11. COMMERCIAL BANKS
oSBI and other commercial banks provide finance to entrepreneurs. Most of the commercial banks
like Bank of Baroda,Dena Bank,ICICI Bank etc. Provide financial products and services to the
entrepreneurs.
oThey provide advances towards working capital in form of Overdraft,cash credit,etc
oTerm loans towards fixed capital

12. SMALL INDUSTRIES DEVELOPMENT ORGANISATION
• SIDO was established in 1954.
• SIDO functions as Nodal Development Agency for small industries.
• Some of the important schemes are as follows:
• a) Credit Linked Capital Subsidy Scheme
• b) Marketing Development Assistance
• c) Integrated Infrastructure Development

13. STATE LEVEL FINANCIAL INSTITUTIONS
• State Investment Corporation of Maharashtra
• Maharashtra State Financial Corporation
• Maharashtra Small Scale Industries Development Corporation
• Maharashtra Industrial Technology Consultancy Organisation

14. FIXED CAPITAL
• Fixed capital includes the assets and capital investments that are needed to start up and conduct business,
even at a minimal stage.
• These assets are considered fixed in that they are not consumed or destroyed during the actual production of
a good or service but have a reusable value.
• Fixed-capital investments are typically depreciated on the company's accounting statements over a long
period of time, up to 20 years or more

16. FACTORS INFLUENCING FIXED CAPITAL REQUIREMENT
Nature of Business
Size of Business
Unit
Technology
Government
Subsidy
Economic
Condition

17. SOURCES OF FIXED CAPITAL
Equity Shares: Equity shareholders are the owners of the company and their contribution constitute the main source of
finance. The promoters are the first to contribute towards share capital of the company and the remaining mount of funds are
raised through sale of shares to general public.
Debentures:Debentures are normally secured and yield a fixed percentage of interest. Thus they are less risky and give
regular return to debenture holders. With the issue of debentures shareholders can retain control and earn more return on
their investment.
Term Loans:These are the loans obtained from banks and financial institutions and constitute the most important source of
finance. Term loans are normally repayable within a period of ten years or more and carry a fixed rate of interest.
Retained Earnings:Retained earnings reer to the surplus or reserve accumulated over years. This amount can be re-invested
in the enterprise for upgradation and expansion. The cost of employment of this capital is practically nil and at the same time
no liability worth the name is created.

18. WORKING CAPITAL
Working capital is a measure of both a company's efficiency and its short-term financial health.
Working capital is calculated as:
Working Capital = Current Assets - Current Liabilities

19. Examples of
working
capital
Salaries and
wages
Rent Electricity
Recurring
expenses
towards
materials

20. Factors Influencing
Working Capital
Competition
Size of Firm
Economic Condition
Technology
Expansion

21. SOURCES OF WORKING CAPITAL
Loans from Commercial Banks: Small-scale enterprises can raise loans from the commercial banks with or without security. This
method of financing does not require any legal formality except that of creating a mortgage on the assets. Loan can be paid in lump
sum or in parts. The short-term loans can also be obtained from banks on the personal security of the directors of a country.
Trade Credit: Just as the companies sell goods on credit, they also buy raw materials, components and other goods on credit from
their suppliers. Thus, outstanding amounts payable to the suppliers i.e., trade creditors for credit purchases are regarded as sources of
finance. Generally, suppliers grant credit to their clients for a period of 3 to 6 months.
Advances from Customers:One way of raising funds for short-term requirement is to demand for advance from one's own
customers. Examples of advances from the customers are advance paid at the time of booking a car, a telephone connection, a flat,
etc. This has become an increasingly popular source of short-term finance among the small business enterprises mainly due to two
reasons.
Public Deposits:It is a simple method of raising funds from public for which the company has only to advertise and inform the public
that it is authorised by the Companies Act 1956, to accept public deposits.

22. PROBLEMS OF VENTURE SET-UP

23. Problems of Venture Set-Up
Production
• Problem of Product
Planning
• Problem of Raw Material
• Use of outdated
Technology
• Problem of Infrastructure
• Under Utilization of
Plant Capacity
• Transportation Problem
• Warehousing Problem
Marketing Finance Human Resource Management
Research
• Problem of Acquiring Funds
• Poor Debt Management
• Poor Management of Fixed
Capital
• Poor Management of
Working Capital
• Problem of retained
Earnings
• Problem in Staff Selection
• Problem in Training
• Problem in Compensation
• Problem of working
Condition
• Lack of workers
Participation
• Lack of Delegation
• Problem of Short
Term Focus
• Lack of Competent
Research Personnel
• Problem of
Customer Feedback
• Lack of Government
Support

24. DIRECT MARKETING
• It's a method of contacting customers and potential
customers personally, rather than having an indirect
medium between the company and the consumer,
such as magazine ads or billboards that are seen by
the general public.
• Direct marketing can take many forms, including
mail, telephone calls, emails, brochures, and
coupons. the information is usually very broad and
meant for a general audience.
• Direct marketing works best for products that have a
wide appeal.

25. INDIRECT MARKETING
Under indirect marketing, the marketer
undertakes marketing with the help of
merchants, canalizing
agencies,consortium,state corporations

26. SOURCES OF INDIRECT MARKETING
Merchants: The merchant acts as an intermediary between the Manufacturer and the buyer. He obtains
orders from the buyers, assembles the goods from the manufacturer-suppliers,and then sells the goods to
buyers.
State Corporation: Several states have set up corporations to assist marketing of small entrepreneurs in
their marketing activities,because small marketers find it difficult to market and distribute the goods on
their own.
Canalizing Agencies: The canalizing agenvies perform marketing activities relating to export of
canalized items.Eg; Indian oil corporation.
Consortium: Small manufacturers form a cooperative association for the purpose of joint marketing

27. CHANNELS OF DISTRIBUTION
A distribution channel is a chain of businesses
or intermediaries through which a good or
service passes until it reaches the end consumer

28. TYPES OF MARKETING/DISTRIBUTION CHANNELS
Manufacturer
Consumer
Manufacturer Manufacturer Manufacturer
Retailer
Consumer
Wholesaler
Retailer
Consumer
Agent
Wholesaler
Retailer
Consumer

29. HORIZONTAL
MARKETING SYSTEM
A Horizontal Marketing system is a
distribution channel arrangement whereby
two or more organizations at the same
level join together for marketing purposes
to capitalize on a new opportunity.

30. VERTICAL
MARKETING SYSTEM
Manufacturers, sales executives.
distributors and retailers forms the vertical
marketing system and act in an unified
manner to eliminate the middleman and
agent system for the sales and marketing
of products and services in order to
enhance profitability.

31. TYPES OF VERTICAL MARKETING SYSTEM
1) Corporate Vertical Marketing System
In Corporate VMS, one member of the distribution channel be it a producer, a wholesaler or a
retailer Owns all the other Members of the Channel, thereby having all the elements of production and
distribution channel under a single ownership.
For example,: Amway is an American cosmetic company, which manufactures its own product range and
sell these products only through its authorized Amway stores. Here the ownership of production and
distribution is with the company itself.

32. 2) Contractual Vertical Marketing System
In Contractual VMS, every member in the distribution channel works independently and integrate their
activities on a Contractual Basis to earn more profits that are earned when working in isolation. The
most common form of Contractual VMS is Franchising. In franchising, the producer authorizes the
distributor to sell its product under the producer’s name against some annual license fee.
For example, Mc-Donalds, Dominos, Pizza Hut, etc. are all forms of the franchise which are working on
a contractual basis.

33. 3)Administered Vertical Marketing System
Under Administered VMS, there is no contract between the members of production & distribution
channel but their activities do get influenced by the Size and Power of any one of the member. In simple
words, any powerful and influential member of the channel dominate the activities of other channel
members.
For example, Big brands like HUL, ITC, Procter& Gamble, etc. command a high level of cooperation
from the retailers in terms of display, shelf space, pricing policies, and promotional schemes.

34. Financing
Strategies
Latest Technology Talented Employees Advertise
• Crowdfunding
• Venture capital
• Angel
Investors
• Peer-to-Peer
Lending
• Influencer Strategies
• Participatory Strategy
• Show-N-Tell Strategy
• Product Demonstration Strategy
• Social Media Network
New trends in Entrepreneurship in India