Entrepreneurship
Module - 5
Launching of small business
Meaning of Launching a New Business:
Launching a new business refers to the process of starting and officially introducing a new
business venture into the market. It involves taking an idea, planning it thoroughly,
organizing the necessary resources (such as capital, manpower, and equipment), and then
beginning operations to offer products or services to customers.
Key Elements of Business Launch:
1. Business Idea Development: Identifying a unique or needed product/service.
2. Business Planning: Preparing a business plan with goals, market strategy, and financial
projections.
3. Legal Setup: Registering the business, obtaining licenses, and following regulations.
4. Resource Mobilization: Arranging finance, hiring staff, and acquiring assets.
5. Product/Service Readiness: Ensuring the product or service is ready for delivery.
6. Marketing and Promotion: Creating awareness through advertising, social media, or launch
events.
7. Start of Operations: Officially opening for business and serving customers.
Purpose of Launching a Business:
To bring a new product or service to market.
To solve a specific customer problem or fulfill a need.
To generate profit and create value for stakeholders.
To innovate or improve existing solutions.
1. Finance and Human Resource Mobilization
A. Finance Mobilization
Starting a business requires capital. Finance mobilization means arranging the necessary
funds to cover startup costs and operations.
Sources of Finance:
1. Self-Financing (Bootstrapping):
Using personal savings or borrowing from family and friends.
Advantage: No interest or equity loss.
Suitable for early-stage startups or small ventures.
2. Debt Financing:
Borrowing from banks or financial institutions.
Includes term loans, working capital loans, overdrafts.
Must repay with interest.
3. Equity Financing:
Selling shares of your company to investors.
Includes Angel Investors (wealthy individuals) and Venture Capitalists.
No repayment needed, but investors get ownership and influence.
4. Government Support:
MUDRA Loans, Startup India, and SIDBI schemes provide loans and subsidies to small
businesses.
5. Crowdfunding:
Raising small amounts from a large number of people via platforms like Kickstarter or
Indiegogo.
Financial Planning:
Budgeting: Estimating startup costs like rent, salaries, equipment.
Cash Flow Management: Ensuring sufficient liquidity to pay bills and salaries.
Break-even Analysis: Determining when the business will start making profits.
B. Human Resource Mobilization
People are the backbone of a business. HR mobilization involves hiring, training, and
retaining the right talent.
Steps:
1. Manpower Planning:
Identifying required roles (e.g., marketing head, sales staff, developers).
Determining how many people and what skills are needed.
2. Recruitment:
Using job portals, social media, referrals, or hiring agencies.
Startups often prefer hiring freshers, interns, or freelancers for cost efficiency.
3. Selection:
Screening resumes, conducting interviews, and choosing candidates with the right attitude
and potential.
4. Training & Development:
Onboarding new employees.
Teaching product knowledge, customer service, or software tools.
5. Retention Strategies:
Offering good work culture, flexible hours, performance bonuses, and career growth.
Startups often use Employee Stock Ownership Plans (ESOPs) to motivate employees.
2. Operations Planning
Operations involve the day-to-day functioning of a business.
Key Components:
1. Process Design:
Mapping out each step in delivering the product or service.
Examples: For a bakery – ingredient sourcing → production → packaging → delivery.
2. Location Selection:
Choosing a place based on logistics, customer access, rent, and availability of labor.
Example: E-commerce startups often set up warehouses near big cities.
3. Capacity Planning:
Estimating how much product/service can be offered.
Avoids underproduction or overproduction.
4. Technology and Tools:
Use of ERP systems, POS machines, inventory software, CRMs.
Automating repetitive tasks increases efficiency.
5. Quality Control:
Implementing checks to ensure consistency and customer satisfaction.
Example: Using customer feedback forms, regular testing, and audits.
3. Market and Channel Selection
A. Market Selection:
Identifying the right customer base is critical for success.
Steps:
1. Segmentation:
Divide the market based on age, income, behavior, geography.
Example: A luxury fashion brand targets urban, high-income groups.
2. Targeting:
Choose one or more segments to focus on
3. Positioning:
Craft a unique message to attract that segment (e.g., “eco-friendly shoes for college
students”).
4. Market Research:
Surveys, interviews, competitor analysis to understand customer needs and preferences.
B. Channel Selection:
Types of Distribution Channels:
1. Direct Channels:
Selling through your own website, store, or sales team.
Greater control but more responsibility.
2. Indirect Channels:
Using third-party sellers like Amazon, Flipkart, or retail stores.
Less control, but wider reach.
3. Digital Channels:
Social media, email, influencer marketing, search engines.
Cost-effective and targeted marketing.
Channel Strategy:
Startups often adopt an Omnichannel Strategy (mix of online + offline).
Channel selection depends on product type, target market, and cost.
4. Growth Strategies
Growth means expanding the business in terms of sales, market, and profit.
Types of Growth Strategies:
1. Market Penetration:
Increase sales in the current market.
Methods: Offers, loyalty programs, better customer service.
2. Market Development:
Sell existing products in new regions or segments.
Example: A café opening branches in other cities.
3. Product Development:
Create new or upgraded products for current customers.
4. Diversification:
Launch new products in new markets.
Riskier, but can provide high returns if successful.
Other Strategies:
Franchising: Allow others to open branches using your brand (e.g., Subway).
Partnerships & Alliances: Joint ventures or collaborations.
Online Scaling: Use e-commerce or apps to reach more customers.
5. Product Launching
Launching is the process of introducing a new product to the market.
Phases:
1. Ideation:
Brainstorm ideas based on customer needs and gaps in the market.
2. Prototype/MVP Development:
Build a minimum version of the product to test with early users.
3. Testing:
Beta testing, feedback collection, refinement.
4. Marketing Campaign:
Pre-launch promotions, teaser ads, social media build-up.