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EDE Assignment

This document discusses undertaking a SWOT analysis to identify strengths, weaknesses, opportunities, and threats related to developing a business idea for a product or service. A SWOT analysis is a strategic planning technique that examines these four parameters to help specify business objectives and identify internal and external factors that are favorable and unfavorable to achieving those objectives. The document provides details on how to conduct a SWOT analysis, including implementing it in a group setting and using it to decide if business objectives are attainable. It also discusses using brainstorming to generate business ideas, noting that brainstorming encourages creative ideas and a rich array of solutions by having an open environment without criticism of ideas.

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Pranay Zade
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0% found this document useful (0 votes)
221 views13 pages

EDE Assignment

This document discusses undertaking a SWOT analysis to identify strengths, weaknesses, opportunities, and threats related to developing a business idea for a product or service. A SWOT analysis is a strategic planning technique that examines these four parameters to help specify business objectives and identify internal and external factors that are favorable and unfavorable to achieving those objectives. The document provides details on how to conduct a SWOT analysis, including implementing it in a group setting and using it to decide if business objectives are attainable. It also discusses using brainstorming to generate business ideas, noting that brainstorming encourages creative ideas and a rich array of solutions by having an open environment without criticism of ideas.

Uploaded by

Pranay Zade
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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ASSIGNMENT 2

UNDERTAKE SWOT ANALYSIS TO ARRIVE AT YOUR BUSINESS


IDEA OF A PRODUCT/ SERVICE

SWOT analysis (or SWOT matrix) is a strategic planning technique used to help a person or
organization identify strengths, weaknesses, opportunities, and threats related to business
competition or project planning. It is intended to specify the objectives of the business venture
or project and identify the internal and external factors that are favourable and unfavourable to
achieving those objectives. Users of a SWOT analysis often ask and answer questions to
generate meaningful information for each category to make the tool useful and identify their
competitive advantage. SWOT has been described as the tried-and-true tool of strategic
analysis, but has also been criticized for its limitations (see § Limitations).

Strengths and weakness are frequently internally-related, while opportunities and threats
commonly focus on the external environment. The name is an acronym for the four parameters
the technique examines:

◾ Strengths: characteristics of the business or project that give it an advantage over others.
◾ Weaknesses: characteristics of the business that place the business or project at a
disadvantage relative to others.
◾ Opportunities: elements in the environment that the business or project could exploit to its
advantage.
◾ Threats: elements in the environment that could cause trouble for the business or project.

The degree to which the internal environment of the firm matches with the external
environment is expressed by the concept of strategic fit. Identification of SWOTs is important
because they can inform later steps in planning to achieve the objective. First, decision-makers
should consider whether the objective is attainable, given the SWOTs. If the objective is not
attainable, they must select a different objective and repeat the process.

Some authors credit SWOT to Albert Humphrey, who led a convention at the Stanford
Research Institute (now SRI International) in the 1960s and 1970s using data from Fortune 500
companies. However, Humphrey himself did not claim the creation of SWOT, and the origins
remain obscure.

Use

The usefulness of SWOT analysis is not limited to profit-seeking organizations. SWOT


analysis may be used in any decision-making situation when a desired end-state (objective) is
defined. Examples include non-profit organizations, governmental units, and individuals.
SWOT analysis may also be used in pre-crisis planning and preventive crisis management.
SWOT analysis may also be used in creating a recommendation during a viability study/survey.
Marketing
In many competitor analysis, marketers build detailed profiles of each competitor in the market,
focusing especially on their relative competitive strengths and weaknesses using SWOT
analysis. Marketing managers will examine each competitor's cost structure, sources of profits,
resources and competencies, competitive positioning and product differentiation, degree of
vertical integration, historical responses to industry developments, and other factors.
Marketing management often finds it necessary to invest in research to collect the data required
to perform accurate marketing analysis. Accordingly, management often conducts market
research (alternately marketing research) to obtain this information. Marketers employ a
variety of techniques to conduct market research, but some of the more common include:
◾ Qualitative marketing research such as focus groups
◾ Quantitative marketing research such as statistical surveys
◾ Experimental techniques such as test markets
◾ Observational techniques such as ethnographic (on-site) observation
◾ Marketing managers may also design and oversee various environmental scanning and
competitive intelligence processes to help identify trends and inform the company's marketing
analysis. Below is an example SWOT analysis of a market position of a small management
consultancy with specialism in HRM.
Strengths Weakness Opportunities Threats
Reputation in market Shortage of consultants Well established Large consultancies
place . at operation level position with a well operating at a minor
rather than partner defined market niche. level.
level .
Expertize at partner Unable to deal with Identified market for Other small
level in HRM multidisciplinary consultancy in areas consultancies looking
consultancy . assignments because other than HRM to invade the
of size or lack of ability marketplace

Steps for Implementation

A SWOT analysis is best developed in a group setting such as a work or community meeting.
A facilitator can conduct the meeting by first explaining what a SWOT analysis is as well as
identifying the meaning of each term.
One way of facilitating the development of a SWOT analysis includes developing an example
SWOT with the larger group then separating each group into smaller teams to present to the
larger group after set amount of time. This allows for individuals, who may be silenced in a
larger group setting, to contribute. Once the allotted time is up, the facilitator may record all
the factors of each group onto a large document such as a poster board, and then the large
group, as a collective, can go work through each of the threats and weaknesses to explore
options that may be used to combat negative forces with the strengths and opportunities present
within the organization and community. A SWOT meeting allows participants to creatively.

When to use SWOT analysis


The uses of a SWOT analysis by a community organization are as follows: to organize
information, provide insight into barriers[16] that may be present while engaging in social
change processes, and identify strengths available that can be activated to counteract these
barriers.
A SWOT analysis can be used to:
◾ Explore new solutions to problems
◾ Identify barriers that will limit goals/objectives
◾ Decide on direction that will be most effective
◾ Reveal possibilities and limitations for change
◾ To revise plans to best navigate systems, communities, and organizations
◾ As a brainstorming and recording device as a means of communication
◾ To enhance "credibility of interpretation" to be used in presentation to leaders or key
supporters.
Benefits and Advantages
The SWOT analysis in social work practice framework is beneficial because it helps
organizations decide whether or not an objective is obtainable and therefore enables
organizations to set achievable goals, objectives, and steps to further the social change or
community development effort. It enables organizers to take visions and produce practical and
efficient outcomes that effect long-lasting change, and it helps organizations gather meaningful
information to maximize their potential. Completing a SWOT analysis is a useful process
regarding the consideration of key organizational priorities, such as gender and cultural
diversity and fundraising objectives.

ASSIGNMENT 3
GENERATE BUSINESS IDEA(PRODUCT/SERVICE) FOR
INTRAPRENEURIAL AND ENTREPRENEURIAL OPPORTUNITIES
THROUGH BRAINSTORMING.
What Is Brainstorming?
Madison Avenue advertising executive Alex Osborn developed the original approach and
published it in his 1953 book, "Applied Imagination." Since then, researchers have made many
improvements to his original technique.

The approach described here takes this research into account, so it's subtly different from
Osborn's approach.

Brainstorming combines a relaxed, informal approach to problem solving with lateral thinking.
It encourages people to come up with thoughts and ideas that can, at first, seem a bit crazy.
Some of these ideas can be crafted into original, creative solutions to a problem, while others
can spark even more ideas. This helps to get people unstuck by "jolting" them out of their
normal ways of thinking.
Therefore, during brainstorming sessions, people should avoid criticizing or rewarding ideas.
You're trying to open up possibilities and break down incorrect assumptions about the
problem's limits. Judgment and analysis at this stage stunts idea generation and limit creativity.
Evaluate ideas at the end of the session – this is the time to explore solutions further, using
conventional approaches.

Why Use Brainstorming?


Conventional group problem solving can often be undermined by unhelpful group behaviour.
And while it's important to start with a structured, analytical process when solving problems,
this can lead a group to develop limited and unimaginative ideas.
By contrast, brainstorming provides a free and open environment that encourages everyone to
participate. Quirky ideas are welcomed and built upon, and all participants are encouraged to
contribute fully, helping them develop a rich array of creative solutions.
Group Brainstorming
Here, you can take advantage of the full experience and creativity of all team members. When
one member gets stuck with an idea, another member's creativity and experience can take the
idea to the next stage. You can develop ideas in greater depth with group brainstorming than
you can with individual brainstorming.
Another advantage of group brainstorming is that it helps everyone feel that they've contributed
to the solution, and it reminds people that others have creative ideas to offer. It's also fun, so it
can be great for team building!
Group brainstorming can be risky for individuals. Unusual suggestions may appear to lack
value at first sight – this is where you need to chair sessions tightly, so that the group doesn't
crush these ideas and stifle creativity.
How to Use the Tool
You often get the best results by combining individual and group brainstorming, and by
managing the process according to the "rules" below. By doing this, you can get people to focus
on the issue without interruption, you maximize the number of ideas that you can generate, and
you get that great feeling of team bonding that comes with a well-run brainstorming session!
To run a group brainstorming session effectively, follow these steps.
Step 1: Prepare the Group
First, set up a comfortable meeting environment for the session. Make sure that the room is
well-lit and that you have the tools, resources, and refreshments that you need.
How much information or preparation does your team need in order to brainstorm solutions to
your problem? Remember that prep is important, but too much can limit – or even destroy –
the freewheeling nature of a brainstorming session.
Consider who will attend the meeting. A room full of like-minded people won't generate as
many creative ideas as a diverse group, so try to include people from a wide range of
disciplines, and include people who have a variety of different thinking styles.
When everyone is gathered, appoint one person to record the ideas that come from the session.
This person shouldn't necessarily be the team manager – it's hard to record and contribute at
the same time. Post notes where everyone can see them, such as on flip charts or whiteboards;
or use a computer with a data projector.
If people aren't used to working together, consider using an appropriate warm-up exercise, or
an icebreaker.
Step 2: Present the Problem
Clearly define the problem that you want to solve, and lay out any criteria that you must meet.
Make it clear that that the meeting's objective is to generate as many ideas as possible.
Give people plenty of quiet time at the start of the session to write down as many of their own
ideas as they can. Then, ask them to share their ideas, while giving everyone a fair opportunity
to contribute.
Step 3: Guide the Discussion
Once everyone has shared their ideas, start a group discussion to develop other people's ideas,
and use them to create new ideas. Building on others' ideas is one of the most valuable aspects
of group brainstorming.
Encourage everyone to contribute and to develop ideas, including the quietest people, and
discourage anyone from criticizing ideas.
Steps to Starting a Home-Based Photography Business
If you're ready to start getting paid to take pictures, here are the steps to get started.
Decide what types of photography services you’ll offer.
Businesses and individuals need photographers for many reasons. Businesses need pictures of
their products for brochures. Realtors need images of the homes they’re selling. Magazines
need photos related to the articles they’re publishing. Or you can stick with non-business
photography and take portraits or photograph weddings.
2. Develop your business plan. The business plan outlines the details of your business,
including the services you offer, how you’ll differ from the competition, financial
projections, and marketing strategies. This is a good time to determine your pricing structure.
For example, if you want to make $50,000 per year and believe you can book 26 weddings a
year, you’d need to charge nearly $2,000 per wedding. Your pricing needs to take into account
the cost of equipment, supplies, and travel, as well as your time.
3. Decide your business structure. The easiest and lowest cost option is sole proprietor;
however, creating a limited liability company (LLC) will offer greater protection of your
personal assets should you run into legal problems.
4. Create a business name. What you name your business will become the brand image, so
choose a name that fits the type of photography you want to do. If you want to take kid portraits
you can have a whimsical name, but if you want to do business photography or weddings,
you’ll want something that sounds professional or elegant. If you don’t use your given name
in your business name, you’ll likely need to file a name statement with your county clerk’s
office. You also need to check with the U. S. Patent and Trademark office to ensure the name
isn’t protected by trademark.
5. Officially establish your business. Once you have a business name and set up your business
structure, you need obtain business license or permits as required by your city or county.
Although you may take photos using a digital camera, since you’ll be giving people prints, you
may need to collect sales tax if you live in a state that charges sales tax. Your state’s
comptroller or tax office will have the necessary forms and information on how to collect and
pay sales tax. Once you have your business license, you can open a business bank account.
6. Gather needed equipment and supplies. If photography is your hobby, you may already
have much of the equipment you need; however, you’ll have to assess if the quality is high
enough to charge for services. Along with a camera, you’ll also need lenses, flashes, batteries,
photo editing software, quality photo paper and packaging used to deliver the photos to clients.
You may also need lights and screens to control lighting.
7. Create marketing materials. Along with business cards and brochures, build a website.
Get permission from your subjects before posting their photos online. Also, set up social media
accounts on networks your target market can be found. For example, if you’re doing wedding
photos, you should have a Parget market.
8. Market, market, market. The key to success in a photography business is marketing. You
can’t take and get paid for photos if no one hires you. Along with business cards, brochures
and a website, use your personal and professional networks to spread the word about yourbusiness.
Attend trade shows and events geared toward your market. For example, if you want
to do wedding photography, attend wedding shows. If you want to take pet portraits, attend dog
shows.
Bonus Income Option: Sell Your Photos Online
Along with getting paid to take professional photos, you can also sell the photos you take
yourself (not those you're paid to take). Many stock photo sites will buy or allow you to sell
your photos.

ASSIGNMENT 5
IDENTIFY THE BUSINESS OPPORTUNITY SUITABLE FOR YOU
What Makes a Good Business Opportunity?
Finding good business opportunities isn't going to mean anything if you can't recognize it.
Recognizing good opportunities takes talent, whether you are looking for something to sink
your teeth into or you already had success once and want to find it again. You really have to
know what to look for, what to ask yourself, and be able to envision the future.
There are also many different types of business opportunities including distributor deals, supply
deals, franchise ownership, website acquisitions, and more, which you can learn about here.
Understanding which type of opportunity you're looking for and having a few goals in mind is
crucial and will help determine which factors make it good opportunity.
However, there are a few general things that should always be present with a good opportunity
(no matter what type):
1. The product or service will meet a need.
This can be a tough characteristic to find when looking for new opportunities, but it's probably
one of the most important. Whenever you evaluate an opportunity, ask yourself if there is really
a need for the product or service. Does the product or service solve a problem for consumers?
You may want to consider using Google Consumer Surveys or a similar survey service to talk
directly to the target audience. After all, the best way to see if people are going to be interested
in your business is to talk ask them.
If the need is already being met, you need to determine if the company you are looking at can
do a better job.
2. The opportunity will work in your location.
If the opportunity meets a need that's great, but it isn't going to mean much if that need isn't
specific to your location or the company won't work in your location. There has to be a demand,
and unfortunately that is very location-dependent.
You also have to think of the economic environment. There might be a need in your
geographical location, but are people in that location going to take the time and money needed
to get started with your company? More on this in points below.
3. You have the resources you need to help the business succeed.
While it's true that you can start to compile resources once you have acquired or started a
business, you should still be considering this at the start. This is more of a personal requirement
for an opportunity as opposed to finding one in general. Do you have what it takes to run that
type of business right now? Are you going to be able to afford the resources needed to help the
business succeed?
I talked with Scott Langdon, Managing Partner of SEOAgency.com, who has started three
successful businesses, and he said, "You have to be honest with yourself, and unfortunatelythis is where
many entrepreneurs make their mistakes the first time around. You will want to
do everything yourself, but in the end you need to trust others so that you can focus on the
bigger picture of setting the strategy."
4. You can provide the product or service at the right price according to the market.
We've been dancing around this point, but here it is: You have to consider the market and
consider price. Ask yourself whether or not you can provide the product or service at a price
the market can handle. Will your price attract customers while still earning you a profit? It's a
tough question to answer, but one of the most crucial.
5. The timing is right in terms of the market and your resources.
Timing is everything when evaluating business opportunities. This encompasses all of the
points on this list--your timing personally, timing in the market, and timing for your current
location. Everything has to line up in order for the opportunity to really work. You need to find
that window before making a commitment. If the timing isn't right, you are better off passing
or revisiting that opportunity later. Keep watching the market and doing your research so you're
ready to jump when the timing lines up.
It's also worth noting that even in a down economy there could be a window of opportunity.
It's all about considering the above points to decide if the timing is right for your idea.
Your next steps: If you find an opportunity that seems to posses all of these qualities, it's helpful
to talk with someone who has owned a similar company before if possible. If you're thinking
about buying an existing company, ask for access to their data regarding revenue and business
so you have all of the information you need to make the right decision.
Do you have any tips for finding good business opportunities? Let us know what has worked
for you in the comment section below.
Steps to Starting a Home-Based Photography Business
If you're ready to start getting paid to take pictures, here are the steps to get started.
Decide what types of photography services you’ll offer.
Businesses and individuals need photographers for many reasons. Businesses need pictures of
their products for brochures. Realtors need images of the homes they’re selling. Magazines
need photos related to the articles they’re publishing. Or you can stick with non-business
photography and take portraits or photograph weddings.
2. Develop your business plan. The business plan outlines the details of your business,
including the services you offer, how you’ll differ from the competition, financial
projections, and marketing strategies. This is a good time to determine your pricing structure.
For example, if you want to make $50,000 per year and believe you can book 26 weddings a
year, you’d need to charge nearly $2,000 per wedding. Your pricing needs to take into account
the cost of equipment, supplies, and travel, as well as your time.
3. Decide your business structure. The easiest and lowest cost option is sole proprietor;
however, creating a limited liability company (LLC) will offer greater protection of your
personal assets should you run into legal problems.
4. Create a business name. What you name your business will become the brand image, so
choose a name that fits the type of photography you want to do. If you want to take kid portraits
you can have a whimsical name, but if you want to do business photography or weddings,
you’ll want something that sounds professional or elegant. If you don’t use your given name
in your business name, you’ll likely need to file a name statement with your county clerk’s
office. You also need to check with the U. S. Patent and Trademark office to ensure the name
isn’t protected by trademark.
5. Officially establish your business. Once you have a business name and set up your business
structure, you need obtain business license or permits as required by your city or county.
Although you may take photos using a digital camera, since you’ll be giving people prints, you
may need to collect sales tax if you live in a state that charges sales tax. Your state’s
comptroller or tax office will have the necessary forms and information on how to collect and
pay sales tax. Once you have your business license, you can open a business bank account.
6. Gather needed equipment and supplies. If photography is your hobby, you may already
have much of the equipment you need; however, you’ll have to assess if the quality is high
enough to charge for services. Along with a camera, you’ll also need lenses, flashes, batteries,
photo editing software, quality photo paper and packaging used to deliver the photos to clients.
You may also need lights and screens to control lighting.
7. Create marketing materials. Along with business cards and brochures, build a website.
Get permission from your subjects before posting their photos online. Also, set up social media
accounts on networks your target market can be found. For example, if you’re doing wedding
photos, you should have a Parget market.
8. Market, market, market. The key to success in a photography business is marketing. You
can’t take and get paid for photos if no one hires you. Along with business cards, brochures
and a website, use your personal and professional networks to spread the word about yourbusiness.
Attend trade shows and events geared toward your market. For example, if you want
to do wedding photography, attend wedding shows. If you want to take pet portraits, attend dog
shows.
Bonus Income Option: Sell Your Photos Online
Along with getting paid to take professional photos, you can also sell the photos you take
yourself (not those you're paid to take). Many stock photo sites will buy or allow you to sell
your photos.

…….

ASSIGNMENT 6
COLLECT LOAN APPLICATION FORMS OF NATIONALIZE
BANK/OTHER FINANCIAL INSTITUTION
The SBI is one of the major banks which provide the housing loan to customer in order to fulfil
their dream of purchasing and living in their own house. The SBI bank has come up with variety
of options to offer the home loans for different categories of the customers, and hence it is rightly
said that it provides everything for everyone. The SBI has designed various schemes in such a
manner that is beneficial for the all segments of the customers be it in interest rates term or
repayment schedule terms. Also, the bank has started giving loan to employees or unemployed
women at reasonable interest rates.
Eligibility Criteria for Home Loan
Employment Stability: It’s a crucial aspect for home loan consideration. Unless the applicant is
salaried and employed for at least 2 years in the current profession or if the applicant is self-
employed with minimum 5 years of total earnings loan will not be processed.
Age Criteria: The younger the applicant is there is more probability of getting loan. Most
banks offer home loan for salaried employees only if they are between the age group of 20 to 60
years. However for self-employed this will change to 24 to 65 years.
Credit Rating: Apart from the applicant’s company’s performance, individual credit rating
has a lot of importance. Good credit rating will increases the chance of getting the loan with
more flexibility on loan amount, EMI, tenure and interest rates. Default payment records,
fraudulent tracks, and outstanding loan, will reflect negatively on the applicant, this could lead to
bank’s cancelling the loan request or will charge high rate of interest.
Employer: If the applicant is working with an employer who has high reputation and
impressive turnover, the credibility of the applicant will respectively increase. Being a part of
reputed and high turnover companies is an asset for the applicant especially when it comes to
applying for home loan.
Financial Situation: For this factor, not just present status is considered, the past records of
financial stability holds lot of value in deciding the eligibility for home loan. It is a key to
success in all fields if you have good financial records, this can decide the interest rate
percentage, loan amount and tenure when applying for loan.
Documents Required for home loan
Complete Home Loan Application Form with one passport size photograph.
Photo Identity Proof: Passport/ Driving License/ Voter ID/ PAN
Residence Address Proof: License/ Registered Rent Agreement/ Utility Bill
Residence Ownership Proof: Sale deed or rental agreement
Income Proof: salary slip, bank statement and Form 16
Job Continuity Proof: Appointment letter at employment and validation letter from HR
Bank Statement: Past 6 months’ document
Property Documents: Sale deed, Katha, transfer of ownership
Advance Processing Cheque: A cancelled cheque for validation of bank account
Investment Proof: LIC, mutual funds, property document etc.
Financial Documents:
a. For Salaried Individual: 3 month salary slip, Form 16 and bank statement
b. For Self-Employed Individual: IT returns for last 2 years along with computation of income
tax for past 2 years certified by a Chartered accountant
c. For Self-Employed Non- Professionals: IT returns for last 3 years along with computation of
income tax for past 2 years certified by a Chartered accountant.
ASSIGNMENT 8
PREPARE FINANCIAL FEASIBILITY REPORT OF A CHOSEN
PRODUCT
Financial Plan
Phoebe's Photo Studio will become profitable in its fifth month of operation, by May 2006. It
will grow vigorously each year after that to its optimum level during 2008. This optimum level
will produce sales sufficient for a generous net profit, even with the owner's and employee's
salaries.
The business will be funded with an investment by the owner and loan secured by real estate.
Start-up Funding
The start-up requirements for Phoebe's Photo Studio including start-up expenses, current assets,
cash on hand, and long-term assets were presented earlier in this plan. Start-up funding is
presented in the table below.
The owner, Phoebe Peters will provide a seed investment. A loan for the balance will be secured
by real estate.
Important Assumptions
We assume a stable economy with reasonable growth and a steady rise in interest rates. We also
assume that our competitors won't adopt our strategy within the first two years. After that, our
approach is likely to make a change in what our competitors charge for digital files, because
they'll see it's effective in bringing in repeat business as well as new business.
Break-even Analysis
The average monthly expenses are shown in the table below. With low average direct unit costs,
we will need to make the monthly sales displayed to break even. We expect to pass the break-
even point in May.
Key Financial Indicators
The benchmarks chart, below, shows a quick comparison of Sales, Gross Margin %, and
Operating Expenses over the next three years. Although Operating Expenses will rise slightly in
future years, they are not rising proportionally with sales growth. The higher operating cost ratio
in the first reflects the higher costs of advertising to establish visibility at the start of the
business.
Projected Profit and Loss
This business is projected to become profitable in May 2006, after the start-up advertising is
completed and customers begin to discover the service. For the year 2006, the business will be
profitable. It will grow at a vigorous rate over the next two years.
Our utility costs include monthly charges for high-speed Internet access via a corporate account,
which will essential to delivering our finished images to most of our customers.
The optimum level of profitability for this one-photographer shop is reached in 2008. Our profit
margins are much higher than the industry average because of our innovative product-delivery
options - digital images require no film, no paper, and no chemicals, just storage units (CDs and
DVDs) and delivery (computer and Internet access).
A financial feasibility study projects how much start-up capital is needed, sources of
capital, returns on investment, and other financial considerations. The study considers how much
cash is needed, where it will come from, and how it will be spent. It can focus on one particular
project or area, or on a group of projects (such as advertising campaigns).
The study is an assessment of the financial aspects of something. It could be anything,
but is most often used to consider a few key points that, if refined correctly, should answer most
of the basic questions of anyone who takes a seat at the table.
Start-Up Capital Requirements
Start-up capital is how much cash you need to start your business and keep it running
until it is self-sustaining. You should include enough capital funds (cash, or access to cash) to
run the business for one to two years. Although many business or sole proprietorships determine
their capital requirements individually, larger corporations may use the help of their respective
bank or capital firm to pinpoint capital requirements for either a round of funding or business
launch.
Finding Start-Up Capital Funding Sources
There are many ways to raise capital for your business, but no matter what route you take,
investors are more likely to invest, banks are more likely to approve loans, and large
corporations are more likely to give you contracts if you have personally invested in the business
yourself.
Depending on the size of your business, you may be able to utilize one of the many Small
Business Administration's (SBA) Microloan programs. Using these, you will not need much
capital, as the program allows for a much smaller down-payment on their lending partner's loans.
These can vary, but are around three-to-twelve percent.
When you make a list of funding resources, be sure to include anything that you can contribute to
the business, including free labor. If you are starting a nonprofit organization, your donated
professional time may even be tax deductible for you
Investors can be a friends, family members, professional associates, client, partners, share
holders, or investment institutions. Any business or individual willing to give you cash can be a
potential investor. Investors give you money with the understanding that they will receive
"returns" on their investment, that is, in addition to the amount that is invested they will get a
percentage of profits.
In order to entice investors you need to show how your business will make profits, when it will
begin to make profits, how much profit it will make, and what investors will gain from their
investment. The investment return section should offer both a description of how investors will
be involved and discuss different variables that will affect the profitability of your business,
offering more than one scenario. Paying Back Investors
How investors will be paid will vary according to individual investment offers. Read every offer
over very carefully —not all investors will be right for your business.
The investment section of your financial feasibility study should not make specific or binding
offers to investors. Do not state investors will be paid specific dollar amounts by certain dates.
Instead, list general practices for how investments return will be distributed, assuming different
business scenarios. For example, you might state that investors will be paid X amount of dollars
or X% on their investment at the end of any business quarter where profits exceed a certain
threshold.
Project total revenue, deduct business expenses, and then from the remaining amount, decide
what percentage will be distributed to investors. You should never promise 100% of the
remaining amount to investors. You need to keep cash on hand to continue operating your
business, to grow your business, and to build reserves.
Most investment returns are typically distributed on a quarterly, bi-annual, or annual basis.
Consider how the various distribution cycles could affect your business' cash flow during the
first two years of operation. In other words, do not just run one set of numbers, examine each
type of distribution and support why you think the option you choose is the best one.

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