assignment part 1.docx

8/21/2019 Assignment part 1.docx

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University Of Chester

Managing Human Capital and

Entrepreneurship

BU7203


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Student Id: 142544

Part IEntrepreneurial Drawbacks and Benefits

C!ntents

Introduction to entrepreneurship..................................................................................................................1

iterature review.................................................................................................................................. .......!

"dvanta#es and drawbacks of entrepreneurship..........................................................................................$

Econo%ical or financial drawbacks.........................................................................................................$

Political and le#al drawbacks.................................................................................................................. &

'ocio cultural drawbacks.........................................................................................................................&

(echnolo#ical drawbacks.........................................................................................................................)

Develop%ent in the area of entrepreneurship awareness.............................................................................)

Conclusion...................................................................................................................................................*

+eferences...................................................................................................................................................,


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Intr!du"ti!n t! entrepreneurship

(he recent decade has witnessed so%e dra%atic chan#es in %ana#e%ent style and bi#

co%panies are tryin# to downsi-e their %anpower with different ca%pai#ns. (hese variations has

caused for ob insecurity/ stressful workin# environ%ent/ increased co%petitiveness and

innovation for new opportunities in the %odern business world. 0ew ideas are the root %ap for

the entrepreneurial proects/ skilled and talented e%ployees are started %ovin# towards

entrepreneurship rather than workin# for paycheues. Entrepreneur is a person who initiates

business or co%%ercial activities with chances of loss or profit 2'ule/ !31$4. It is not necessary

activity should focus only on profit/ it can be social develop%ent. "ccordin# to 5i%%erer/

'carborou#h and 6ilson 2!3374/ Entrepreneurship is havin# potential i%pact on #lobal econo%y/

the %odern business world believes that econo%ic develop%ent and success is possible with

entrepreneurship develop%ent. Entrepreneurship is a #lobal econo%ic en#ine/ which brin#s

positive chan#e in people8s life.

9any entrepreneurs are co%%itted to achieve success by creatin# innovative custo%er

centric product and services/ innovative %arketin# strate#ies/ and diversified knowled#e.

Entrepreneurs are not only concentratin# on econo%ic prosperity/ but %any of the% are tryin# to

provide i%proved lifestyle to the people. (hose who possess the ri#ht entrepreneurial leadership

ualities will re%ain in the race of econo%ic revolution. :Entrepreneurs are pursuin# a novel

opportunity while lackin# access to reuired resources; 2Eisen%ann/ !31$4/ and they carries


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econo%ical/ technical/ operational and financial risk in their enterprise activities. "s an

entrepreneur is not easy to sustain in this co%petitive business world/ they will face %any

challen#es. It is not necessary to have #reat knowled#e/ skills/ %oney to beco%e an entrepreneur

and there is no set of characteristics/ but desire/ self


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2Barrow/ Burke/ 9olian and Brown/ !3114. :One


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due to insufficient resources/ bounded opportunities/ philanthropic issues and sustainability

issues 2all/ Daneke/ eno>/ !3134.

E"!n!mi"al !r )inan"ial dra%'a"(s

=inancial proble%s includes source of invest%ent/ invest%ent strate#ies/ uncertainty of

inco%e/ risk involve%ent/ allocation of finance and sustainability. "ll the financial proble%s are

interrelated to each other arran#in# finance for entrepreneurial venture is a difficult task/

financial institutions and investor looks for security to their invest%ent. Due to this %any startup

business will face financial difficulties in the initial days. i%ited source of capital will i%pact

on invest%ent strate#ies to achieve success entrepreneur should focus on lon# as well as short

ter% invest%ent strate#ies/ but it depends on availability of fund/ type of source and cut off ti%e.

6ithout appropriate invest%ent strate#ies business cannot achieve #ood profit and it does not

provide #uaranteed salary/ it %ay effect for business as well as entrepreneur personal life.

Ownin# business always carries hi#h level of risk because owner will be held responsible for the

business losses. I%proper allocation of financial resources leads to sustainability issues.

owever entrepreneurial education and awareness pro#ra%s will help to address the issues with

ri#ht strate#ies and re%ains dependin# on %acroecono%ic #rowth. Due to lack of financial

sources entrepreneur %ay face %any challen#es and %ay lose the co%petition without any

reason 2'torey/ @reene/ !3134

*!liti"al and legal dra%'a"(s

Political and le#al drawbacks deals with ta> policies/ #overn%ent rules and re#ulations/

political power shift and so on. Entrepreneurs have to fulfill le#al reuire%ent start business it

always differs fro% one country to another. Due to le#al issues the proect approval %ay take

%ore ti%e/ delay in business process leads to e>cess e>penses and loss of opportunity. I%posin#

%ore ta> on business products will reduce the cash flow and profitability/ due to this cost of

product will beco%e e>pensive and entrepreneur loses the co%petitive advanta#e. Every business

concentrates on power/ due to political power chan#es new businesses will face %any challen#es.

E%ploy%ent re#ulations/ corruption issues/ and re#istration #uidelines will have re#ular effect

on business. owever these challen#es will re%ain sa%e until political transfor%ation/ and

entrepreneurs are workin# hard to reduce throu#h effective policies and co%%unication


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pro#ra%s. (ransparency in le#al ter%s reduces the differences and %isunderstandin# between

#overn%ent and business owners 26a#ner/ !31!4.

S!"i! "ultural dra%'a"(s

(his challen#es arises due cultural differences and social barriers/ it includes tradition/

reli#ion/ co%%unity issues/ lifestyle/ workin# environ%ent and e>perience/ education and habits.

(radition/ belief and lan#ua#es are indirectly related to the entrepreneurship success/ lan#ua#e is

an inte#ral part of business/ without that it is very difficult to %ana#e in forei#n countries. (o

attract %ore custo%er entrepreneur should aware of tradition and beliefs/ it will help to reach

tar#eted custo%ers. 'o%e cases reli#ion and co%%unity do not accept the product due to their

beliefs. owever socio cultural issues are declinin# in the era of #lobali-ation and people are

e>pectin# i%prove%ent in lifestyle. Entrepreneurial education is an effective tool for skills

develop%ent/ personal attitude and ualities and also reduces the socio cultural barriers

2Folk%ann/ 6ilson/ 9ariotti/ +abu--i/ Fyakarn% and 'epulveda/ !33G4

+e"hn!l!gi"al dra%'a"(s

(echnical knowled#e plays an i%portant role in entrepreneurial success/ today8s business

hi#hly related with technolo#y. If entrepreneur is not aware of technolo#ical advance%ent/ he

%ay beco%e less co%petitive co%pare to others. 9oreover the traditional business %ethods are

ti%e consu%in#/ e>pensive and less attractive/ when co%pare to %odern business techniues.Due to financial difficulties %any startups cannot afford new technolo#y. :'o%e entrepreneurs

cannot %ana#e this transition effectively and their business loses direction and %o%entu%;

2(ho%pson/ 1GGG4.

(here are %any other factors influences to the entrepreneurship activities such as poor

infrastructure/ interpersonal skills/ co%petitive nature/ personal life/ %ana#e%ent skills/ e>ternal

environ%ent/ psycholo#ical attributes/ friends and fa%ily/ corruption/ central bank policies/

e%ployees8 interest/ philanthropic issues and so on.

,e$el!pment in the area !) entrepreneurship a%areness

"ccordin# to 'carborou#h 2!31!4 entrepreneurs innovates the ideas to i%prove people8s

life and solve their day to day proble%s. Innovation is the key tool to create value for product or


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services/ it leads co%pany to #ain brand i%a#e in the %arketplace. (here are %any researchers

su##ested that/ there is a necessary to develop dyna%ic %ethods to i%prove entrepreneurial skills

and ualities. Entrepreneurial education will be beneficial and effective in business startup to

liuidation and also very useful to i%prove startcessive people are enterin# into the entrepreneurial world. "wareness of

entrepreneurship drawbacks will help to desi#n your ideas or products accordin# to the %arket

interest/ and able to understand the #ap between %arket e>pectation and e>istin# offers. (hese

ualities will support to #enerate sufficient ener#y and belief to enter the entrepreneurial world.

"ccordin# to 'teinhouse and 6est 2!3374 :if you have sufficient ener#y and belief in both

yourself and offer/ you will find buyer;/ also believes that enthusias% and stron# deter%ination

are the best tools to i%prove e>perience to serve better.

C!n"lusi!n

Entrepreneurship is not new to the business world and believed that one of the key driver

for econo%ic kick start. It also considered an effective tool to increase profitability/

e%ployability and revenue #enerator for the country. In recent years there are %any universities

and institutions are conductin# pro#ra%s to develop entrepreneurial skills to address potential

drawbacks. (his study shine li#hts potential drawbacks of entrepreneurship and awareness

effectiveness. "ll the drawbacks are closely related to each other/ financial and econo%ical

barrier are havin# %aor i%pact on business success. owever #overn%ent and central financial

institutions are providin# financial assistance to face these proble%s. (echnolo#y plays an

i%portant role in buildin# self benefits to pro%ote


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entrepreneurial and s%all scale startups. Hnowled#e of barriers will increase the confidence of

handlin# those with innovative strate#ies. owever these proble%s will introduce the alternative

and innovative strate#ies to the world of entrepreneurship. It also believed that entrepreneurial

education can be effective tool to build entrepreneurial interest.

-e)eren"es

Barrow/ C./ Burke/ @./ 9olian/ D./ Brown/ +. 2!3114. ENTERPRISE DEVELOPMENT: The

Challenges of Starting, Growing and Selling !sinesses. a%pshire/ United Hin#do%?

Cen#a#e earnin#.

Buruns/ P. 2!3114. Entre"rene!rshi" and S#all !siness 2$rd ed.4. 0ew Jork/ 0? P"@+"FE.

Coobey/ (. 9. 2!31!4. Entrepreneurship 'kills for @rowth

fro% https?hbr.or#!31$31what


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Hoellin#er/ P./ 9inniti/ 9./ 'chade/ C. 2!33,4. :I think I can/ I think I can;? Overconfidence

and entrepreneurial behavior. -o!rnal of E/ono#i/ Ps0/holog0/ %12&4/ )3!perts!31)31!7how


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(ho%pson/ . . 21GGG4. " strate#ic perspective of entrepreneurship. International -o!rnal of

Entre"rene!rial eha2io!r 8 Resear/h/ .2*4/ !,G

Folk%ann/ C./ 6ilson/ H. E./ 9ariotti/ './ +abu--i/ D./ Fyakarana%/ './ 'epulveda/ '. 2!33G4.

Ed!/ating the Ne9t 4a2e of Entre"rene!rs. +etrieved fro% 6orld Econo%ic =oru%

website? http?ncee.or#.ukwp<

contentuploads!31&3*educatin#QtheQne>tQwaveQofQentrepreneurs.1.pdf

6a#ner/ 9. 2!31!4. Entre"rene!rshi", Inno2ation and S!staina7ilit0. 'heffield? @reenleaf.

5i%%erer/ (./ 'carborou#h/ 0. 9./ 6ilson/ D. 2!3374. Essentials of entre"rene!rshi" and

s#all 7!siness #anage#ent 2)th ed.4. Upper 'addle +iver/ 0? PearsonPrentice all.


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9ana#in# u%an Capital

and EntrepreneurshipBU,!3$

S!n.

(ype the abstract of the docu%ent here. (he abstract is typically a short su%%ary of the contents of the

docu%ent. (ype the abstract of the docu%ent here. (he abstract is typically a short su%%ary of the

contents of the docu%ent.


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C!ntents

Introduction to one stop financial services............................................................................................ ......$

9ission and Fision state%ent.................................................................................................................. $

Our products and services........................................................................................................................$

Invest%ent service...............................................................................................................................$

=inancin# services......................................................................................................................... ......)

Consultancy services........................................................................................................................... )

'i-e of the business................................................................................................................................. *

Office euip%ent and personnel.............................................................................................................. *

Or#ani-ational structure............................................................................................................................ ..*

9arketin# Plan........................................................................................................................................ ....7

Operational Plan........................................................................................................................................ 13

=inancial Plan..............................................................................................................................................1

=i#ure 1? 'tock %arket tradin# platfor%.........................................................................................&

=i#ure !? =ore> tradin# platfor%.....................................................................................................&

=i#ure $? Co%%odity tradin# platfor%............................................................................................)

=i#ure &? Industry contribution towards e%ploy%ent.....................................................................*

=i#ure )? Or#ani-ational chart 2One source financial solutions4.....................................................,

=i#ure *? Or#anisational plan.........................................................................................................11

=i#ure ,? "llocation of e>penses...................................................................................................1!

=i#ure 7? Break


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(able &? E>pected annual cash flow state%ent..............................................................................1&

(able )? E>pected Inco%e state%ent of One source financial solutions.......................................1)


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Intr!du"ti!n

/ne s!ur"e )inan"ial ser$i"es

One source financial solutions an a%bitious innovative service provider for financial

proble%s. (he co%pany is plannin# to start in Chester and plannin# to e>tend its operation

throu#hout United Hin#do%. (he %ain ai% is to provide all types of financial services under one

roof and reduce the cost and ti%e. =inancial %ana#e%ent is one of the critical part and %ost

i%portant for every individual due to this fir% is plannin# to %ake it easy for everyone. It caters

Euity/ Co%%odity and =ore> brokin# services/ Portfolio %ana#e%ent services/ Invest%ent and

financin# advisory services/ o%e loan/ personal loan/ business loan and %ort#a#e services and

international re%ittance services. Co%pany is havin# partnership with leadin# stock brokers and

financial institutions to achieve its obectives.

Missi!n and isi!n statement

(o beco%e %ost reputed financial services in UH

(o %ake sure financial solutions ready available to everyone

(o brin# %a>i%u% services under one roof

(o %a>i%i-e investor trust and interest

/ur pr!du"ts and ser$i"es

Co%pany is workin# as a subsidiary for all leadin# stock brokin# fir%s and financial

institution. (he %ain strea% financial services on invest%ent solutions/ beyond that co%pany

offerin# wide ran#e of products and services.

In$estment ser$i"e

Co%pany is offerin# wide ran#e of invest%ent solutions to the #eneral public/ they

%entioned below?

'tock brokin#? Co%pany provides opportunity to trade in 'E listed share throu#h real ti%e

online and offline e>ecution. It includes cash %arket intraday and delivery services/ derivative%arket future/ option and contract for differences 2=O/ C=D4/ initial public offerin# 2IPO4 and

research advises on invest%ent.

Bond %arket? In this se#%ent provides analytical services to invest in best rated #overn%ent and

corporate bonds.


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9utual funds? Offers offline and online tradin# services/ perfor%ance tracker and research

advice.

igure 1: St!"( mar(et trading plat)!rm

2'ource? http?www.%oneya%.co%4

igure 2: !re trading plat)!rm

2'ource? http?www.esi#nal.co%tradin#ecution/ lon# ter%

and short ter% invest%ent su##estions.


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igure 3: C!mm!dit. trading plat)!rm

2'ource? http?adithyaco%%odity!31$.blo#spot.co.ukppictures.ht%l4

=ore> %arket? Provides online and offline tradin# services/ intraday and delivery tradin# tips and

international re%ittance services.

Portfolio %ana#e%ent services? Offers well diversified hi#h #rowth portfolio develop%ent.

Insurance brokin#? Offers insurance services to individual/ co%%ercial and personal vehicles and

businesses.

inan"ing ser$i"es

Co%pany provides wide ran#e of loan facilities to the custo%ers/ such as o%e loan/

personal loan/ business loan for s%all industries/ and loan takeover.

C!nsultan". ser$i"es

Co%pany offers %ana#e%ent consultancy services/ such as %er#er and acuisition

assistances/ capital structure preparation/ business develop%ent plans/ and corporate trainin# and

develop%ent services.


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Sie !) the 'usiness

Initially it is plannin# to open with one branch in Chester/ so it will be s%all scale/ sole

proprietorship co%pany. =inancial services is a %aor contributor to the UH @DP and econo%y/

as on !31& statistics report industry trade surplus was R$&.7 billion and assets under %ana#e%ent

is al%ost R&.7 trillion. UH is one of the leadin# financial service centers and industry considered

to be leadin# e%ploy%ent provider 2UH statics/ !31&4.

(he below fi#ure shows the si-e of the UH financial services and contribution for% the

specific industry.

igure 4: Industr. "!ntri'uti!n t!%ards empl!.ment

/))i"e euipment and pers!nnel

It is a s%all scale business unit and plannin# for conservative invest%ent in office

euip%ent. Plannin# to own 7 to 13 desktop co%puters/ $ CD (F8s/ & telephones/ 1 recordin#

euip%ent/ !) chairs/ * lon# tables/ ! office tables/ 1 %icrowave and * application shelf.

Co%pany is lookin# for less no of e%ployees due to lack of financial availability it includes 1

%ana#in# director/ ! operational %ana#ers and & support staffs.

/rganiati!nal stru"ture

(o achieve or#ani-ational obective/ co%pany should have effective or#ani-ational

structure to process activities fro% one layer to another. One source financial solution is a sole

proprietorship co%pany and owner carries ulti%ate authority of the business. Entrepreneur


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ManagingDirector

OperationalManager(Finance)

Relationship Manager

1


2

OperationalManager

(Marketing)


3


4

believes in his own capabilities than other people supports. Co%pany is plannin# to have

invest%ent 2sleepin#4 partners to raise operatin# capital. (he authority of invest%ent partner will

be li%ited and there is no operational and %ana#erial control. =or the financin# and invest%ent

decision their consent and advices will be considered. Co%pany is plannin# to have fle>ibility in

or#ani-ational plan/ accordin# to the #rowth or#ani-ational structure will be altered. (he current

or#ani-ation plan is %entioned below.

igure 5: /rganiati!nal "hart /ne s!ur"e )inan"ial s!luti!ns6

2'ource

? "uthor4

(he above fi#ure & e>hibits the or#ani-ational hierarchy of the co%pany %ana#in#

director is the ulti%ate power in the co%pany/ e involves in all the activities of the co%pany/

pri%arily e>ecutin# offline orders/ %ana#es custo%ers8 portfolios/ custo%er relationship

%ana#e%ent and loan processin#/ besides this #ives directions to finance and %arketin#

%ana#ers on daily operations. Operational %ana#er 2finance4 deals financial %arket operations

such as handlin# custo%er ueries/ offline tradin#/ loan docu%entation/ international re%ittance

and financial plannin# for the co%pany. 9arketin# %ana#er %ainly focus on %arketin# and sales

activities/ acuisition of custo%ers/ insurance and %utual fund sales/ arran#es corporate trainin#/

%ana#es co%pany advertise%ent and helps in co%pany operations. +elationship %an#er 1 and !


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hi#hly involved with custo%ers such as offline tradin#/ online support/ network buildin#/

sharin#/ %arketin# and sales/ loan docu%entation/ back office support/ %arket research/ low and

%ediu% net worth portfolio %ana#e%ent and so on. +elationship %ana#er $ and & also carries

sa%e level of responsibilities unlike 1 and !/ but %aor focus on %arketin# and sales and

business develop%ent.

"ll the e%ployees are interrelated to each other/ apart fro% their core responsibilities/ they are

co%%itted to provide custo%er oriented services and considered to be part of the One source

fa%ily.

Mar(eting *lan

Based on financial services %arket research/ co%pany is plannin# to introduce its productand services.

Pricin# strate#y? Pricin# is very sensitive area in %arketin#/ it closely i%pact on entire co%pany

operations. *ri"ing is a"tuall. prett. simple888Cust!mers %ill n!t pa. literall. a penn.

m!re than the true $alue !) the pr!du"t8 9 -!n !hns!n . Based on this understandin#/

secondary %arket research on brokera#e char#es/ and co%parison of leadin# broker services and

char#es/ co%pany prepared co%petitive pricin# on its products. Co%pany is plannin# to enter

with co%bination of custo%er based and co%petitor based pricin#. Introducin# specialintroductory offer to attract %ore custo%ers with co%bo packa#e/ such as 3.3$S for intraday/

3.$S for delivery on transaction value and %in of R13.GG per trade or whichever is hi#her will be

char#ed in stock brokin# and co%%odities. In fore> tradin# 3.3!)S will be char#ed on

transaction value. Portfolio char#es will be based on the si-e of the portfolio/ %in invest%ent si-e

is R$333 and )S upfront co%%ission will be collected after successful 2profit4 trade/ $333


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(he below %entioned table 1 shows the co%petitive co%%ission char#es fro% the

leadin# stock brokers on stock brokin# and co%%odity tradin#.

+a'le 1: C!mpetit!r st!"( 'r!(ing "harges

Share9dealing ser$i"es

*r!du"t /""asi!nal in$est!r Semi9)reuent in$est!r reuent in$est!r

-I;8/8C/8U? R11.G3 R,1.&3 R,1&

I@EB R$) R7) R*!)

BE&U/-+ SH&-E,EI;< R1* RG* RG*3

C#UBI;&;CE R131 R13* R&13

SH&-E,E &C+IE R1G R11& R1/1&3SI**,E R1G.G3 R11G.&3 R)G&

CH&-#ES S+&;#EA R&) R1!3 R1/!13

I;+E-&C+IE I;ES+/- R73 R1!3 R1/!13

+HE SH&-E CE;+-E R$! R1$! R1/337

I-S+ ,I-EC+ SH&-ES R!! R1$! R1/1)!

S&


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Production forecast and control? Production forecastin# is the %ethod of data prediction to plan

and i%prove production output. Co%pany is plannin# to use si%ple avera#e %ethod to forecast

the #rowth fro% one uarter to another. It considers achievable #rowth for future calculations

and it helps to understand the co%pany stand in co%petition. Based on %arket understandin#/

UH international financial report and 'cotland financial services analysis report/ *3S annual

sales #rowth is possible 29ona#han/ !31&4. "nd also tar#eted custo%ers are above !1 years

workin# professionals/ i%port and e>port co%panies/ pension holders and s%all business owners.

(he followin# table shows the best possible business #rowth for 1st year.

+a'le 2: Sales )!re"asting )!r 1st .ear

Products 1st uarter !nd uarter $rd uarter &th uarter

'tock Brokin# $1/)!)/333 $*/&G&/1!7 &!/!&*/)1) &7/G3)/*!!.31Co%%odity 1)/,*!/)33 17/!&,/3*& !1/1!$/!)7 !&/&)!/711.33

=ore> $1/)!)/333 $*/&G&/1!7 &!/!&*/)1) &7/G3)/*!!.31

9utual fund ,7/71$ G1/!$) 13)/*1* 1!!/!*&.3*

oan products G&)/,)3 1/3G&/7!& 1/!*,/$G) 1/&*,/1*7.**

Portfolio services *$/3)3 ,!/G77 7&/&G$ G,/711.!&

Insurance $/1)$ $/*&G &/!!) &/7G3.)*

consultancy service 1/),* 1/7!) !/11! !/&&).!7

Business loan 1),/*!) 17!/&,1 !11/!$$ !&&/)!7.11

2'ource? "uthor4

It is s%all scale industry to have #ood control co%pany is plannin# to have weekly

review on tar#eted sales/ cost control/ %arketin# strate#ies and pro%otion.

Distribution? Co%pany is plannin# to have offline and online tradin# services/ personali-ed

%utual fund and insurance sales/ classroo% based %ana#e%ent trainin# pro#ra%s.

/perati!nal *lan

Plannin# is one of the key factors for business success poor plan will be dan#erous for

startup fir%s. =ir% should consider all the %aterial and i%%aterial facts to develop effective

or#ani-ational and strate#ic plan 2ofstrand/!33G4. 9ost of the financial services providers are

usin# online and offline tradin# services/ based on co%petitive analysis co%pany plannin# to

have uick review on all the areas. (o %aintain #ood relationship with custo%er/ usin# effective

C+9 syste% and evaluate e%ployee perfor%ance/ i%ple%entin# incentive sche%es and


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perfor%ance appraisal syste%. (he i%a#e ) shows the operational strate#ies to adopt for business

develop%ent.

igure : /rganisati!nal plan

2'ource? http?www.yale.edufin


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inan"ial *lan

Business is always connected to financial resources/ poor %ana#e%ent of resources will

cause for low liuidity/ a #ood financial plan considers invest%ent/ cost of capital/ #enerous

towards e>penses and underesti%ate inco%e 2'tartup/ !31!4. =inancial plans provides the

overview of co%pany operations and obectives/ it should provide co%fort level to run business

operations.

Business e>penses? "ccordin# to the plan business reuired RG)333 to start its operation/ all the

e>pected e>penses are considered to produce opti%u% finance plan. 'uccessful financial plan

should #ive %ore e>posure for anticipated e>penses in future/ so that it will #ive freedo%.

+a'le 3: Epe"ted epenses !) !ne s!ur"e )inan"ial s!luti!ns

Epe"ted Epenses

*arti"ulars &m!unt

Startup Epenses 2500

#egal epenses 2000

/))i"e Euipment 10000

-ent 12000

Salar. 25000

/))i"e Epenses 10000

&d$ertisement 000

,ep!sit and -eser$e 20000

/ther Epenses 10000

+!tal =5000

2'ource? "uthor4

=i#ure ,? "llocation of e>penses


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3%2%

10%

5%

12%

25%

10%

8%

15%

10%

Startp !"penses #egal e"penses O$ce !ip&ent 'il(ing )(*ance

Rent Salar+ Operating !"penses )(*ertise&ent

Deposit Other !"penses

'ources

? "uthors4

(he above table$ show the reuired invest%ent to start this business/ the %a>i%u%

reuire%ent fro% operatin# e>penses/ it includes le#al cost/ startup cost/ rent/ salary/

advertise%ent/ office e>penses and other e>penses. Operatin# e>penses are considered for 1!

%onths/ so that it is not an i%%ediate reuire%ent and it can be %ana#ed with business cash

flow. But it is included to provide safety and ti%e for business perfor%ance/ however business

inco%e cannot be e>pected fro% the startin# day. (he ! nd %aor invest%ent reuired for deposit

and reserve/ it includes initial deposit for sub brokin# license/ deposit for office buildin# and

reserve for une>pected e>penses. 0e>t reuire%ent fro% office euip%ent/ it is a lon# ter%invest%ent and considered as a non


26/27

&nn

*r!du"ts1st

Duarter2nd Duarter 3rd uarter 4th uarter

1st .ear

St!"( Br!(ing $1/)!)/333 $*/&G&/1!7 &!/!&*/)1) &7/G3)/*!! 1)G/1,1/!*)

C!mm!dit. 1)/,*!/)33 17/!&,/3*& !1/1!$/!)7 !&/&)!/711 ,G/)7)/*$$

!re $1/)!)/333 $*/&G&/1!7 &!/!&*/)1) &7/G3)/*!! 1)G/1,1/!*)

Mutual )und ,7/71$ G1/!$) 13)/*1* 1!!/!*& $G,/G!7

#!an pr!du"ts G&)/,)3 1/3G&/7!& 1/!*,/$G) 1/&*,/1*G &/,,)/1$7

*!rt)!li! ser$i"es *$/3)3 ,!/G77 7&/&G$ G,/711 $17/$&!

Insuran"e $/1)$ $/*&G &/!!) &/7G1 1)/G17

"!nsultan". ser$i"e 1/),* 1/7!) !/11! !/&&) ,/G)7

Business l!an 1),/*!) 17!/&,1 !11/!$$ !&&/)!7 ,G)/7),

+!tal

(he above table & e>hibits the e>pected cash flow fro% the various business activities. (he

e>pected annual #rowth was *3S and sales returns for the 1styear around R1&$/31). (he %aor revenue

fro% stock brokin# and fore> tradin#/ and it also shows the well diversified business products.

(he co%parison between inco%e e>penses shows that/ the proect is beneficial and break

even period is 7 %onths/ this is the opti%u% case. If consider worst case analysis it %ay vary

!3S on its annual sales inco%e.

igure : Brea(9e$en p!int anal.sis

,an Fe- Mar )pr Ma+ ,n ,l )g Sep Oct .o* Dec

0

50000

100000

150000

200000

!"penses /nco&e

(he above table shows the inco%e e>penses co%parison for 1! %onths/ and in the end 7 th %onth

this proect will achieve no cost and no profit.


27/27

+a'le 5: Epe"ted In"!me statement !) /ne s!ur"e )inan"ial s!luti!ns

In"!me statement )!r the .ear

*arti"ulars ,r Cr

Sales 14301

#ess: /perating epenses

Startup Epenses 2500

#egal epenses 2000

-ent 12000

Salar. 25000

/perating Epenses 10000

&d$ertisement 000

/ther Epenses 10000

=500 14301

;et In"!me 7351

2'ource?"uthor4

(he above table ) shows the e>pected inco%e and e>penses for the year/ this proect able

to produce R,$)1* profit in 1st year after coverin# all the e>penses.

assignment part 1.docx

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