Assignment – Commerce Paper 1 (Module 2)
1. Steps in Setting Up a Business Unit
1. Idea generation – Identify a business opportunity based on market demand or skills.
2. Preliminary market research – Basic surveys to test viability.
3. Detailed feasibility study – Technical, financial and market checks.
4. Project report preparation – Roadmap with objectives, finance and risk analysis.
5. Choice of organisation – Sole proprietorship, partnership, company, cooperative.
6. Site selection – Based on raw material, transport, labour, market.
7. Financing – Estimate capital needs and arrange funds.
8. Legal formalities – Registration, licenses, permits.
9. Procurement of machinery and inputs – Installation and testing.
10. Recruitment – Hiring skilled and unskilled employees.
11. Trial production – Pilot runs and quality checks.
12. Marketing and distribution – Sales, branding, promotion.
13. Commercial launch – Full-scale operations.
2. Scope of Business
1. Industry – Activities related to production of goods (agriculture, manufacturing).
2. Commerce – Distribution of goods from producer to consumer.
3. Trade – Buying and selling of goods.
4. Aids to trade – Transport, banking, insurance, warehousing, advertising.
5. Services – IT, healthcare, consultancy, education, tourism.
6. Finance & Investment – Raising and managing funds.
7. Human resources – Recruitment, training, welfare.
8. Research & Development – Innovation and improvement.
9. Social responsibility – Consumer welfare, environment care.
10. International business – Import, export, global e-commerce.
3. Components of Business Environment
Internal Environment: Mission & objectives, management structure, employees, resources, company
image, technology.
External Environment:
• Micro: Customers, suppliers, competitors, intermediaries, creditors, public.
• Macro: Economic, political-legal, social-cultural, technological, global, natural.
4. Contents of Project Report
1. Introduction – Objectives and purpose of project.
2. Promoters – Background of entrepreneurs.
3. Business description – Nature and scope.
4. Market analysis – Demand, supply, competition, target customers.
5. Technical feasibility – Technology, machinery, raw materials.
6. Organisation setup – Structure and staff.
7. Financial plan – Capital requirement, profitability, break-even.
8. Production plan – Process and schedules.
9. Marketing plan – Pricing, promotion, distribution.
10. Risk analysis – Possible challenges and solutions.
11. Social & environmental aspects – Employment, CSR, sustainability.
12. Conclusion – Project viability.
5. Types of Feasibility Study
1. Technical feasibility – Availability of technology and resources.
2. Economic/financial feasibility – Profitability and funds.
3. Market feasibility – Demand, competition and pricing.
4. Legal feasibility – Compliance with laws and licences.
5. Operational feasibility – Smooth running with available resources.
6. Managerial feasibility – Skills of promoters/managers.
7. Environmental feasibility – Eco-friendly and sustainable.
8. Schedule feasibility – Completion within time frame.