Small Firm:

Smart Approach To Be Self Employed

Overview

� Statistical analysis of survey data

� Analysis of Initial & Current Capital Investment

� Profit Analysis: Year 2011-2012

� Frequency Distribution of Primary Motivations to Start a Business

� Right Age to Start a New Business� Right Age to Start a New Business

� Success Probability for New Comer

� Interpretation of the Study outcomes

� Conclusion

Capital Investment Scenario

65%

Initial Capital Investment

00-10

10-20

20-30

30-40

40-50

5%2%3%

Current Capital Investment

00-50

50-100

100-150

23%9%

5%

40-50

50-60

90%

150-200

200-250

250-300

Capital Investment Scenario (continues..)

� Average Starting Capital: 11.25 lacs

� Average Current Capital: 27.30 lacs

� Average age of firms: 9.3 Years

Capital Growth Rate per Year :15.34% � Capital Growth Rate per Year :15.34%

� 80% of firm owners reinvested to increase their capital

after satisfying their own requirements

Profit Analysis: Year 2011-2012

25

30

35

40

Frequency Distribution of Profit for Y 2011-12

0

5

10

15

20

00-30 30-60 60-90 90-120 120-150 150-180

Frequency (f)

Profit Analysis: Year 2011-2012

Primary Motivations To Start A Business

Frequency Distribution of Primary Motivations for Starting a

Business

Class Frequency (f) Relative Frequency (f)

To make money 18 33%

To create job security of own 12 22%

To be independent 23 42%To be independent 23 42%

To be powerful 1 2%

To be famous 1 2%

Total 55 100%

Primary Motivations To Start A Business

32%

22%

42%

Pie Chart

To make money

To create job security of own

To be independent42%

2%2%

To be independent

To be powerful

To be famous

Right Age to Start a New Business

30%8%

5%

Respondent Opinion

20s

30s

40s

58%

40s

Unsure

Start business at age 30s gives leverage:

• To gain knowledge of existing market

• To develop own network

• To develop professional maturity

65% of our respondent draw profit more than 30%. If 10 new investor comes in what is the probability of 7 or more investors to draw more than 30% profit.

� μ= nп = 10*.65 = 6.5; (here n=10, п=.65)

�

Success Probability for New Comer

)1( ππ −= ns

� S=1.51

�

� Z=0.00; P (Z=0.0)=0.

� Which refers 50% chance to gain more than 30% profit

)1( ππ −= ns

S

xZ

µ−=

=µ

Interpretation of The Study Outcomes

Starting a Small Firm:

� Requires less amount of investment

� Gives a steady growth potentiality

� Ensures a good amount of profitability

� Offers a smart way to work independently� Offers a smart way to work independently

� With a good winning possibility

Conclusion

From the study and the statistical analysis of the study data we can conclude “Starting a small firm is a smart approach to be self employed”

Thank You