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BizEdge
July 2012
INDEX
A monthly newsletter for business
owners & entrepreneurs
1. Changing Times pg 2-6
2. Special Feature:
BizEdge SME Conference pg 7-14
3. Out of Box pg 15
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1. Changing Times
News that impact your business
After e-commerce, now is the turn of social commerce!
The fast increasing social media population
hooked onto Facebook, Twitter, etc is set to
give a big boost to the already burgeoning
domestic e-commerce market that has
touched the Rs 50,000 crore-mark last year,
says an industry study. According to latest
Internet & Mobile Association of India
numbers, with 150 online population, the
country is the third largest in terms of internet
users after China and the US. Out of this, 50
million are on Facebook and 13 million on
Twitter, taking the size of social media
universe to 63 million. This also makes the
country the second largest Facebook
market after the US, while the sixth largest for
Twitter, says ICICI Merchant Services and First
Data general manager Amrish Rau, adding
most of these social media members are
also actively taking up e-commerce
transactions. "Going by the current growth
rates, social e-commerce is the next step in
evolution, combining the comfort and ease
of use of social media and e-tailing," says
Rau. Social commerce continues to gain
popularity around the globe, especially in
the US, with the rising popularity of e-gifting,
under which users send tangible gifts to their
loved ones from retailers through Facebook
and email, he adds.
Source: ibnlive.in
Access to finance a big concern of SME sector: CII
Data Industry body CII today said it is in the
process of working with banks and other
financial institutions to address concerns
over access to funds for micro, small and
medium enterprises (MSME)."Access to
finance is one of the prime areas of concern
for Indian SMEs. We are trying to address the
concern along with banks and other
financial institutions,"
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1. Business News
"Large companies can play a critical role in
helping MSMEs access finance and
technology.”
"In going with an OEM (Original Equipment
Manufacturers) approach, we have found
that it is easy to reach SMEs through OEMs.
Also large OEMs are able to visualise the
benefits and get it over to the SMEs”
Source: Economictimes
PlanCom paper for focus on SME growth
A paper, presented by the Planning
Commission at a meeting with state
planning boards, says small businesses are a
way to faster growth, as SMEs are more
attuned to the domestic economy. When
asked, the author of the presentation,
Pronab Sen, principal advisor, said the paper
looked at objective conditions. He said
corporate sentiment was down due to
problems related to the Euro zone and other
domestic issues. In this situation, the focus
should be on the small scale sector.
• Small businesses are a way to faster
growth, as SMEs are more attuned to
the domestic economy
• As external conditions are not in
India's hands, the country must focus
on things which are under its control
• For pushing up the SME sector,
governance needed to be improved.
• SMEs need to be given more fund
SMEs’ infrastructure, such as power,
issues must be addressed.
Source: Business-Standard
Centre for greater role of SMEs in defence electronics
The government is committed to
encouraging the involvement of the private
sector in defence, especially in the strategic
electronics space, said Union Minister of
State for Defence M M Pallam Raju here. He
also added, this should bolster the
indigenisation of defence technologies and
help increase the role of SMEs and also help
face any external threat. Speaking to
reporters “If the strategic electronics sector
develops niche technologies on (a) par with
the West, then this is possible. All modern
warfare systems depend on electronics
system and development of strategic
electronics is extremely important for the
country,” he said. Raju said, the government
is committed to helping the small and
medium (SME) industries in having a greater
participation in developing defence
technologies as well as projects under off-set
clause. “It is important we build our own
domestic industrial base in hardware and
also to ensure there is no breach of security
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in cyberspace,” he added. The Indian
electronics industry has shown an upward
trend during the 11th Plan, growing from Rs
5,400 crore in 2007-2008 to Rs 7,948 crore in
2011-12 and is projected to cross Rs 10,000
crore during the present year .
Source: Business-Standard
79 SME units fall sick a day
Blame it on the difficult business environment
or on administrative delays or even on the
lack of management skills. But, the truth is
that 79 small business units are turning
financially unviable every day in the country.
This translates to three units falling sick every
hour, according to data compiled by the
Micro Small and Medium Enterprises -
Development Institute (MSME-DI).
Of the total 1.33 crore SME units in the
country, more than two lakh are sick now.
Around 29,000 units are being added to the
sick list every year. It has also led to an
outstanding bank credit of over Rs 7,000
crore.
The Reserve Bank of India (RBI) declares a
small scale industry (SSI) unit sick if any of the
borrowal accounts of the unit remains
substandard for more than six months or
there is erosion in the net worth due to
accumulated losses to the extent of 50% of
its net worth in the previous accounting year.
Source: Times Of India
Urgent need to make ICT solutions affordable for MSMEs
To survive growing competition, Indian
micro, small and medium enterprises must
adopt information and communication
technologies, and there is an urgent need to
make these solutions affordable for them,
said a senior official from the Ministry of
MSMEs.
"If the sector has to survive and find a place
of its own, it must be competitive both
nationally and globally. And, if it wants really
to be competitive in the global world today,
one important tool is Information Technology
(IT)," MSME ministry.
Indian MSMEs can become competitive in
the global market by using affordable ICT
solutions, he added. The official pointed out
that problem of affordability is hindering
adoption of ICT among MSMEs.
Source: smetimes.in
Facebook, Ficci to campaign in six cities to woo SMEs
After striking an alliance with Federation of
Indian Chambers of Commerce and Industry
(Ficci) to guide small and medium
entrepreneurs on using the internet to
expand their business, social media giant
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Facebook plans to launch roadshows in six
major cities as part of its “SMB Boost”
programme. Facebook has kick started its
“Small and Medium Business Boost”
programme in India, after its successful roll-
out in the United States, United Kingdom and
Europe. Just as it teamed up with the British
Chambers of Commerce, the company has
tied up with Ficci recently to help smaller
firms understand the potential benefits of
advertising on the site. “In the next eight
months starting by the end of July, both Ficci
and Facebook will be organising roadshows
in six major cities across the country,” said ,
Ficci. The apex body and Facebook have
identified Faridabad and Hyderabad as the
first two locations to conduct such
programmes.
Source: Business-Standard
Indian SMEs slowly adapting cloud environment
A large number of Indian Small and Medium
Enterprises ( SME) are taking to cloud
computing gradually according to an online
survey. This is surely a positive trend and we
only hope it gets better. But one alarming
fact in this positive trend is that several Indian
SMEs are still struggling to utilize the
economic benefits that the cloud offers
them. Since the cloud offers strong network
connectivity, SMEs are finding this as a boon
since effective networking means more
profit and increased clientele.
Even the cost-effective techniques that and
initiatives that the cloud provides will serve
as cutting-edge tools to the SME sector.
Experts are of the opinion that SMEs need
proper awareness and guidance towards
effective cloud-service utilization. They also
opine that this guidance and initiation will
enable them to achieve greater success
and improve their current financial status as
well. So, SMEs in India need to take steps
towards cloud services implementation and
derive maximum benefits from the cloud.
Source: ciol.com
RBI Circular on ECB
RBI has issued a circular on June 25, 2012,
pursuant to which, Indian companies are
permitted to incur ECB for repayment of
Rupee loans availed from the domestic
banking system and/or for fresh Rupee
capital expenditure, under the approval
route, subject to the following conditions:
i. Only companies in the manufacturing and
infrastructure sector are eligible to avail of
such ECB, provided such companies
(i) have been consistent foreign exchange
earners during the past three financial years
and (ii) are not on the default list/caution list
of RBI;
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ii. Such ECBs may be utilised solely for
repayment of the Rupee loan(s) availed of
for “capital expenditure” that has been
incurred earlier and still outstanding in the
books of the domestic banking system
and/or for fresh Rupee capital expenditure.
In other words, an ECB cannot be used for
retiring domestic working capital debt. The
overall ceiling for such ECBs is US$10 billion.
Source: rbi.org.in
!!
Filing of Balance Sheet and Profit and Loss Account in Extensible Business Reporting Language (XBRL) Mode
The Ministry of Corporate Affairs vide
General Circular No. 16/2012 dated
06.07.2012 has mandated the following
select class of companies to file their
Balance Sheet and Profit & Loss Account in
XBRL mode for the financial year
commencing on or after 1.4.2011.
� all companies listed with any Stock
Exchange(s) in India and their Indian
subsidiaries; or
� all companies having paid up capital of
Rupees five crore and above; or
� all companies having turnover of Rupees
one hundred crore and above; or
� all companies who were required to file
their financial statements for FY 2010-11,
using XBRL mode.
Source: mca.gov.in
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Collabrant’s BizEdge series aims to provide access to cutting edge information, relevant industry insights and practical inputs to SMEs to resolve problems and facilitate growth.
On 10th of August 2012, Collabrant Incubators hosted a first
of its kind conference meet for business leaders
representing the SME industry, in association with ICICI
Bank and Axon Network. CRISIL and Tata Docomo were
our knowledge and telecom partners respectively. The
business conference followed by cocktail and dinner was
organized at Keys Business Hotel, Hosur Road on Friday
evening. It was attended by 70 delegates and featured
prominent speakers from the fields of business, finance,
banking and IT. The event was inaugurated by Shri K.R.
Ramamoorthy, former chairman and CEO of Corporation
Bank and non-executive chairman of Vysya Bank.
The key topics discussed during the evening were:
Cutting Edge: SME Ratings by Mr Yogesh Dixit
Director, CRISIL SME Ratings
Banking Solutions by Mr. Suresh M, Regional Head
ICICI Bank
Access to Market-Strategy Myth & Reality by Mr M
Sundarraj, founder director at Collabrant Incubators
Scaling New Heights by Mr. Satish Kumar, Head-
Strategy At Prateek Group
2. Special Feature
‘BizEdge-Cutting Edge To Your Biz ‘
Mr Ramamoorthy, former chairman Corporation bank inaugurating the event with Mr PK Sambamoorthy founder director at Collabrant Incubators on the podium.
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Growth Capital by Mr Ananta Sarma, CEO, SIDBI
Venture Capital
IT solutions On Cloud by Mr Ravindra Krishnappa
Director-Strategy, Axon Network Solution
Presentation Excerpts:
1) Cutting Edge Solution for MSMEs-
CRISIL SME Ratings
-CRISIL has completed ratings for 32,000 SMEs which has
provided SMEs increased access to funds at competitive
rates
-Credit facilities of CRISIL-rated MSMEs grew at 30%
compared to sector average of 20%
Benefits of getting rated for credit:
-Enhanced access to funds
-Credit facilities of CRISIL-rated SMEs grew at 30% compared to sector average of 20%
- A strong feedback and self-improvement tool
-Credit rated firms delivered sales and profit growth of 31%
and 25% as against sector average of 25% and 18%
respectively
-55% of rated SMEs see significant value in the rating
-Better borrowing rates and enhanced access to finance
-Aggregate interest savings of Rs.225 crore for rated entities
-Value proposition validated by repeat business without
subsidy
-Rating renewal rates are 40%
Mr Srivatsan, Founder Director at Collabrant Incubators welcoming the delegates and speakers to the first edition of BizEdge
Mr Yogesh Dixit, Director at CRISIL SME Rating addressing the delegates
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Four key features of CRISIL SME ratings:
-Affordability: MSMEs can avail of a rating for just Rs. 8,000 as
govt subsidies 75% of rating fees
-Unique two-dimensional scale to evaluate (business
performance capabilities and financial strength)
-Simple one-time rating process
-Wide acceptability by lenders
2) Banking Solutions-ICICI Bank
ICICI Bank presented the available banking products from ICICI for enterprises. They highlighted the salient features and benefits of products like FX Online,, Business loans, Advisory services etc
3) Access to Market-Strategy Myth & Reality-Collabrant Incubators
-Ideation is easy, execution is hard
-India co-exists with Bharat. Future growth is going to be in
tier 3,4 cities. But Tier 1 and 2 have ready business
infrastructure
- India is a land of many mini markets, not one of which is
large enough to make marketers happy
-The key is to be clear about which India do you want to
cater to? Each Tier has its own peculiar market economics.
The success of any business strategy depends on 3 critical
factors:
a) Access to funds, b) Access to talent and c) Access to
market intelligence
ICICI Bank’s regional Head, Mr Suresh M addressing the audience about banking solutions
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A 2-stage process for taking your products/services to the
market:
Stage1: Business Plan and Model
Stage2: Pilot Run
Why Pilot - It helps to minimize risk and save both money and
reputation. It gives you a reality check about the idea and
provides consumer insights and vital channel feedback
which is then used to tweak and refine the business model.
What does it take to build a robust organization?
-Developing Strategic Customer Insight & Sustainable
Business Building
-Building Appropriate Financial Structure & Management
Controls
-Balancing & Aligning Conflicting Stakeholder / Partner
interests
-Organizing People-Processes & Technology
All businesses need tight alignment at every level. Alignment
is the key word for market success.
3) Scaling New Heights-Prateek Group
-A success story of how a 3 crore-turnover company evolved
into a 500 crore company by living by its core principles of
Innovation, Quality & Delivery, Expertise and Values
-Prateek Apparels is into manufacturing, design and retail. In
retail it has successfully launched Coupon-a discount large
format retail store and F-Square-a fast fashion neighborhood
store and e-commerce
Mr M. Sundarraj, Founder Director at Collabrant Incubators presenting on Access to Markets-Strategy Myths and Realities
Mr Satish Kumar, Head Strategy at Prateek Group presenting a case study, Scaling New Heights
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Prateek's Pathway to success:
-Having a Clear Vision
-Identifying opportunities
-Building strengths around the opportunities
-Grabbing market share
-Building sustainable growth models
-Capitalizing on strengths
Key Building Blocks:
-Synergizing strengths
-Identifying opportunities
-Harnessing opportunities
-Building a strong core team of entre-leaders
(Entrepreneurship driven leaders)
-Fostering sense of community and well being among
employees
-Nimble and Lean organization
-Focus on efficiency and elimination of wastage
Our Telecom partners TATA DoCoMo showcased enterprise mobile solutions that can benefit SMEs
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4) Growth Capital-SIDBI Venture Capital
Equity share capital:
-The costliest yet the most effective form of growth capital
-Financial pressure in the short term minimal
-Enables the company to leverage further equity,
preference shares as well as debt
-If taken from venture capitalist, additional inputs relating to
corporate governance, strategy and management can be
obtained
SIDBI’s risk capital for growth
-Risk capital in form of Mezzanine Products as Growth Capital
He spoke about the 2 funds – Samridha and India
Opportunity fund (IOF) and about the investment criteria.
Samridha targets eight low-income states who supplies
products and services to SME and large corporates. It is an
impact investment fund.
IOF is a MSME dedicated Fund with USD 132 million funds
raised for investments. Sound business plan, strong
management team, Long term competitive advantage and
should provide good returns with exit possibilities. It invest in
manufacturing and service sector.
SIDBI Venture Capital CEO, Mr Ananta Sarma engaging the audiences with growth capital solutions
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5) IT Solutions On Cloud-Axon Network
-Real time market intelligence gives you the competitive
edge
Current set of IT problem faced by SMEs
-Disconnection problems
-Too many, too many logins, no single POV
-Islands of data, no trigger on exception
• Different departments need different tools for functioning
• Search & serve model will NOT work
What is needed?
-Efficient Email with SPAM filters
-Website hosting
-CRM tool to track leads and pipeline
-Branch office chat and voice tool
-Accounting tool
-HR Tool – Manage and track employees
-Customer support tool – Ticketing system
-PBX solution
-An ERP to manage
-Inside (IN ventory, f IN ance, IN dividuals, IN centives)
-Outside (Sales / Service, Image, Perception, Partner)
-Data store - Back up and restore of data
-On demand, connected & quick
Advantages of cloud
a)Try before you buy, b )No Capex, only Opex model
c) Highly Scalable, d) Support costs are significantly low
e) Integration with other cloud apps like Dropbox, Evernote
Mr Ravindra Krishnappa, Director Strategy at Axon Network addressing the audience about advantages of cloud computing
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There was an interactive Q & A session where businessmen
could resolve their doubts and seek clarification. After the
presentations, the session was open for networking and
socializing over cocktail dinner. So this was a gist of the first
edition of “BizEdge-Cutting Edge To Your Biz” series. We
would like to thank everyone involved for making this event
a grand success and are looking forward to the next edition
of BizEdge conference soon.
For more details on the presentation topics or to participate
in the next round of BizEdge conference please write to us at
info@collabrant.in
Mr K R Satyanarayana, Associate Director at Collabrant in conversation with delegates
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Stop, Smile, Ponder,
Amaze, Mull over !!
3. OUT OF BOX
READING ZONE
Top 5 Business Bestsellers for the month:
1) Uncommon Service-Francis Frei, Anne Morriss
2) From Values To Action- Harry M Jansen Kraemer
3) Mobile Wave-Michael Saylor
4) New Power Base Selling-Jim Holden, Ryan Kubacki
5) 4 Disciplines of Execution-Chris McChesney, Sean Covey, Jim Huling
Source: 800CEOread.com
Driverless Car is a reality now
The Google Driverless Car is a project by Google that involves developing technology for driverless cars. The project is currently being led by Google engineer Sebastian Thrun, director of the Stanford Artificial Intelligence Laboratory and co-inventor of Google Street View.
http://en.wikipedia.org/wiki/Google_driverless_car
Exploring the Red Planet
Read about Mars and Curiosity Rover’s epic voyage to the red planet.
http://www.nasa.gov/mission_pages/msl/index.html
World’s best art museums now in your home
Google’s art project is a virtual world museum showcasing some of the best art from around the world. Now you don’t need to be in London to visit the London Gallery of Art.
http://www.googleartproject.com
BizEdge is a monthly newsletter service brought to you by
Collabrant. Drop in your suggestions and
feedback at newsletter@collabrant.in
Collabrant Incubators Pvt Ltd.
Collabrant offers specialized business solutions to start up
ventures and SMEs looking for hands-on implementation
support in go-to-market strategy, financial planning/structuring
and manufacturing process improvement / product
development; in sum, helping entrepreneurs & companies
build & nurture robust organizations to meet business goals.
Read more about us at http://www.collabrant.in or write to us
at info@collabrant.in
Disclaimer:
The material in the newsletter is only for private circulation and is not intended to constitute any advice. The contents of the newsletter is for information and not a substitute for professional advice. Collabrant makes no representations or warranties express or implied with respect to information provided in this newsletter or for its completeness or accuracy. Collabrant disclaim all responsibility and accept no liability for consequences of any person acting or refraining from acting on such information. Any queries on the newsletter can be addressed to newsletter@collabrant.in
©Collabrant Incubators Pvt Ltd Bangalore, 2012
Collabrant Incubators Pvt Ltd
Office Address
Bangalore:
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Email: info@collabrant.in