How to Start a Business

How to Start a Business

As of now every youngster looking to start their own business, it is a very good sign but heavy risk as well as. To star any business it has to be very necessary to draft, mind, and examine the proper strategy. I will try to exhaust my best experienced that I got in last 20 years consultancy.

Any business start with three way i.e. Proprietary, Company with Pvt./ Public/LLP ltd. and last Partnership firm.

Proprietary Company: It is a sole own, one handed company. Proprietor has to take Shop & Establish License, PAN No., VAT & CST No. (if applicable), Service Tax No. (if applicable) and necessary other license related to their industries or business.

Company: Pvt. Ltd & LLP can registered with two directors or more while Public Ltd, company can be registered with minimum seven directors or more.  It has to be registered with Registrar of Company. It has to take Shop & Establish License, PAN No., VAT & CST No. (if applicable), Service Tax No. (if applicable) and necessary other license related to their industries or business.

Partnership Firm (PF): PF can be start with two partners or more. It has been executed on Rs.500 Non Judicial Stamp paper under Partnership Deed and Notarized by the Notary holder. Partnership Firm can be registered under the govt. act within the one year of its execution. It has to take Shop & Establish License, PAN No., VAT & CST No. (if applicable), Service Tax No. (if applicable) and necessary other license related to their industries or business.

If you would like to start any business it is necessary to observe and examine following things;

Strength: It is very necessary to understand your strength you have to understand your ability, caliberness & knowledge. If you fail to analysis it you will definitely going to suffer in future.

Weakness: Every person don’t want to admire their weakness, this is the only weakness among the all entrepreneur. Every genius have their own weakness, they must have to accept it and try to overcome from it. Weakness is a point it cannot be explain in word but it can experienced and it’s a reality.

Capital: Every person must have to know what the limit of their investment is. If your business will start with investment of Rs.100 then you invest only Rs.75 and keep aside balance Rs.25 for emergencies. It is because, from the very first day you will come to know fund short fall in the business. If you will success to overcome from it you will definitely going to be successful entrepreneur and if you won’t then you will become only survivor business entrepreneur.

Product: It is very important what you are going to sell in the market, you cannot sale water in Water Lake, like that you have to understand market, its demand and supply method. Product is a key instrument for every entrepreneur, keep in mind that failure never comes up again.   

Staff Selection: In staff selection don’t give any personal interest, respect talents and qualities and reward them which they deserve.

Accounting: Account department is a heart of every entrepreneur, if you fail to keep proper accounting you will never going to be ever successful in your life. Always keep in touch with your account department for every billing, every recovery and every payment. In accounts Fund flow management is very important, every day count interest that leads to least your profit. Healthier accounts management leads you to healthier entrepreneur.

Taxation: Last & least be particular in tax payment; always keep aside the tax payment to pay it time to time. Do not try to tax evasion or conceal of income it is never going to gain you, it will only harm you.     

We Shall Assist you in 
Business Planning
Assistance in developing the product/service
Fund raising, Banking Assistance
Intellectual Property Rights Support
Company formation Support / legal support
Assistance in connecting with potential customers
Any other  

Thanks & Regards

Vinayak Gaonkar

9869621072

rvinternational4673@gmail.com

WHAT DO YOU MEAN BY BOSS & WHO IS BECOME LEADER

What do you mean by Boss & who is become Leader  

Boss means a person who is handling Business, Entrepreneur, Company or an Organisation with the inanition of gaining profit. While Leader a person who may be a boss or a subordinate who’s main intention to keep balance among organisation and subordinate without affecting the profit ratio.

Boss: Boss always thing about the organisation to maximize the profit with minimum efforts. He/she is a key person of organisation, without them nobody can run the business. Boss might have neglect personnel problem of subordinate but he/she is right at their place because sentiment can’t run any business. Boss measurably depends upon their subordinate like Managers, Supervisors, and directors to take any hassles free decisions. If boss wants to get their organisation to the extent of successful entrepreneur level they have to care of following measures;

• Boss must have to go through all departments weekly reports with responsible persons for each department, who is answerable for any misleading.
• Once in a month he/she can be visit each department and have conversation with subordinate thereon.   
• In every six month policy of execution should have to be shuffle with each department at excremental level.
• Always take care of inward stock and outward stock and reconcile it with external agencies.
• All administrative expenditure must be compare in every three months.
•  All direct expenditure should be compare with production of each batch.
•  All safety measures must have to be compliance.
• Always take care of time gap between recoveries from debtors & payment to creditors; it should not be affects each others.
• All departments 15days meeting is must to get proper conversation among them and to understanding between each department.
• All decision or expenditures should not be cross limits of available cash flows and projected fund flows.
• At the time of annual year, organisation chart must be shuffle with their achievement in full year.   
• And at last reward to each subordinate for their devotion towards the organisation according to their achievements.

Leader: Leader is a person known as an interpreter, mediator, angel or coordinator between subordinate and organisation. He/she can have the quality to get work done in minimum efforts and in low budget. leader gives more attention on sentiments to keep balance in organisation. Sometime leader can be a boss but moreover other expertise appointed as leader. Leader must have following futures in them

•  they must have quality of understanding and power of convincing.
• both boss and subordinate must have to be delighted whenever leader comes across to them.
•   Leader must know about each subordinate personally (if possible) or otherwise must ask for to meet influencive subordinate as much as possible. 
• Leader must have feeling that they are part of the organisation not an employee of organisation.
• Leader must have decision making power and have freedom to implement his power in the absence of superiors.
• Leader must have regular friendly conversation with superior and with the subordinate.
• Leader can give importance to subordinate problems but to the extent of organisation sake only.
• Leader must prepared for that he must have to lead in any situation either it is favorable or not.
•  At last leader must have to trained their subordinate to that extent in the absence of them work cannot be affected at all.

Thanks & Regards

Vinayak Gaonkar

9869621072/9869273067

    

 

         

   

What Type of Document Require for Pre & Post Shipment Export Consignment

Documentary Requirements

Air Waybills

An airway bill is a proof of shipment of goods by air. Air Waybills serves as a proof of receipt of the goods for shipment, an invoice for the freight, a certificate of insurance, a guide to airline staff for the handling, dispatch and delivery of the consignment. An airway bill has the following inclusions:

• The shipper and consignee details.
• The airport of departure and destination.
• The goods description (weight, measure or shipping marks).
• It must be signed and dated by the actual carrier or by the named agent of a named carrier.
• It must mention whether freight has been paid or will be paid at the destination point.

 Bill of exchange

A bill of exchange is a special type of written document under which a certain amount of money is being asked by the exporter to be paid by the importer in future and the importer also agrees to pay the exporter that amount of money on or before the date mutually agreed upon. This document has special importance in wholesale trade where large amount of money is involved.

Following persons are involved in a bill of exchange:

• Drawer: The person who writes or prepares the bill.
• Drawee: The person who pays the bill.
• Payee: The person to whom the payment is to be made.
• Holder of the Bill: The person who is in possession of the bill

On the basis of the due date there are two types of bill of exchange:

• Bill of exchange after date: In this case the due date is counted from the date of drawing and is also called bill after date.
• Bill of exchange after sight: In this case the due date is counted from the date of acceptance of the bill and is also called bill of exchange after sight.

Bill of Lading (B/L)

Bill of Lading is a document given by the shipping agency for the goods shipped for transportation from one destination to another and is signed by the representatives of the carrying vessel.

The main parties involve in a bill of lading are:

• Shipper: The person who send the goods.
• Consignee: The person who take delivery of the goods.
• Notify Party: The person, usually the importer, to whom the shipping company or its agent gives notice of arrival of the goods.
• Carrier: The person or company who has concluded a contract with the shipper for conveyance of goods

The bill of lading must meet all the requirements of the credit as well as complying with UCP 500. These are as follows:

• The correct shipper, consignee and notifying party.
• The carrying vessel and ports of the loading and discharge.
• The place of receipt and place of delivery.
• State whether freight has been paid or is payable at destination.
• Date should be on or before the latest date for shipment specified in the credit.
• State the actual name of the carrier or be signed as agent for a named carrier.

Certificate of Origin

The Certificate of Origin is required by the custom authority of the importing country for the purpose of imposing import duty. It is usually issued by the Chamber of Commerce and contains information like seal of the chamber, details of the good to be transported and so on. The certificate must provide that the information required by the credit and be consistent with all other document, it would normally include: 

• The name of the company and address as exporter.
• The name of the importer.
• Package numbers, shipping marks and description of goods to agree with that on other documents.
• Any weight or measurements must agree with those shown on other documents.
• It should be signed and stamped by the Chamber of Commerce.

Commercial Invoice

Commercial Invoice document is provided by the seller to the buyer. Also known as export invoice or import invoice, commercial invoice is finally used by the custom authorities of the importer's country to evaluate the good for the purpose of taxation.

The invoice must have the following inclusions:

• Be issued by the beneficiary named in the credit (the seller).
• Be addressed to the applicant of the credit (the buyer).
• Include the description of the goods exactly as detailed in the credit.
• Be issued in the stated number of originals (which must be marked "Original) and copies.
• Include the price and unit prices if appropriate.
• State the price amount payable which must not exceed that stated in the credit
• Include the shipping terms.

Insurance Certificate

Also known as Insurance Policy, it certifies that goods transported have been insured under an open policy and is not actionable with little details about the risk covered.

It is necessary that the date on which the insurance becomes effective is same or earlier than the date of issuance of the transport documents.

Also, if submitted under a LC, the insured amount must be in the same currency as the credit and usually for the bill amount plus 10 per cent.

The requirements for completion of an insurance policy are as follow:

• The name of the party in the favor which the documents have been issued.
• The name of the vessel or flight details.
• The place from where insurance is to commerce typically the sellers warehouse or the port of loading and the place where insurance cases usually the buyer's warehouse or the port of destination.
• Insurance value that specified in the credit.
• Marks and numbers to agree with those on other documents.
• The description of the goods, which must be consistent with that in the credit and on the invoice.
• The name and address of the claims settling agent together with the place where claims are payable.
• Countersigned where necessary.
• Date of issue to be no later than the date of transport documents unless cover is shown to be effective prior to that date.

Inspection Certificate

Certificate of Inspection is a document prepared on the request of seller when he wants the consignment to be checked by a third party at the port of shipment before the goods are sealed for final transportation.

In this process seller submits a valid Inspection Certificate along with the other trade documents like invoice, packing list, shipping bill, bill of lading etc to the bank for negotiation. On demand, inspection can be done by various world renowned inspection agencies on nominal charges.

Letter of Credit

The International Chamber of Commerce (ICC) in the Uniform Custom and Practice for Documentary Credit (UCPDC) defines L/C as:

"An arrangement, however named or described, whereby a bank (the Issuing bank) acting at the request and on the instructions of a customer (the Applicant) or on its own behalf:

• Is to make a payment to or to the order  third party ( the beneficiary ) or is to accept bills of exchange (drafts) drawn by the beneficiary.
• Authorised another bank to effect such payments or to accept and pay such bills of exchange (draft).
• Authorised another bank to negotiate against stipulated documents provided that the terms are complied with.

A key principle underlying letter of credit (L/C) is that banks deal only in documents and not in goods. The decision to pay under a letter of credit will be based entirely on whether the documents presented to the bank appear on their face to be in accordance with the terms and conditions of the letter of credit.

Packing List

Also known as packing specification, it contains details about the packing materials used in the shipping of goods. It also includes details like measurement and weight of goods.

The packing List must:

• Have a description of the goods ("A") consistent with the other documents.
• Have details of shipping marks ("B") and numbers consistent with other documents

Thanks & Regards

Vinayak Gaonkar

9869621072/9869273067

What is Pre Shipment Credit

Pre-Shipment Credit

Introduction

Pre Shipment credit is issued by a financial institution when the seller wants the payment of the goods before shipment. The main objectives behind pre-shipment credit or pre export finance are to enable exporter to:

• Procure raw materials.
• Carry out manufacturing process.
• Provide a secure warehouse for goods and raw materials.
• Process and pack the goods.
• Ship the goods to the buyers.
• Meet other financial cost of the business.

Types of Pre Shipment credit

• Packing Credit
• Advance against cheques/draft etc. representing Advance Payments.

Packing Credit

This facility is provided to an exporter who satisfies the following criteria

• A ten digit importer exporter code number allotted by DGFT.
• Exporter should not be in the caution list of RBI.
• If the goods to be exported are not under OGL (Open General License), the exporter should have the required license /quota permit to export the goods.

Packing credit facility can be provided to an exporter on production of the following evidences to the bank:

• Formal application for release the packing credit with undertaking to the effect that the exporter would be ship the goods within stipulated due date and submit the relevant shipping documents to the banks within prescribed time limit.
• Firm order or irrevocable L/C or original cable / fax / telex message exchange between the exporter and the buyer.
• License issued by DGFT if the goods to be exported fall under the restricted or canalized category. If the item falls under quota system, proper quota allotment proof needs to be submitted.

The confirmed order received from the overseas buyer should reveal the information about the full name and address of the overseas buyer, description quantity and value of goods (FOB or CIF), destination port and the last date of payment.

 Advance against Cheque/Drafts received as advance payment

Where exporters receive direct payments from abroad by means of cheques/drafts etc. the bank may grant export credit at concessional rate to the exporters of goods track record, till the time of realization of the proceeds of the cheques or draft etc. The Banks however, must satisfy themselves that the proceeds are against an export order.

Thanks & Regards

Vinayak Gaonkar

9869621072/9869273067

What is Post Shipment Credit

Post-Shipment Credit

Introduction

Post Shipment Finance is a kind of loan provided by a financial institution to an exporter or seller against a shipment that has already been made. This type of export finance is granted from the date of extending the credit after shipment of the goods to the realization date of the exporter proceeds. Exporters don’t wait for the importer to deposit the funds.

Types of Post Shipment Finance

The post shipment finance can be classified as:

• Export Bills purchased/discounted.
• Export Bills negotiated
• Advance against export bills sent on collection basis.
• Advance against export on consignment basis
• Advance against undrawn balance on exports
• Advance against claims of Duty Drawback.

1. Export Bills Purchased/ Discounted. (DP & DA Bills):

Export bills (Non L/C Bills) is used in terms of sale contract/ order may be discounted or purchased by the banks. It is used in indisputable international trade transactions and the proper limit has to be sanctioned to the exporter for purchase of export bill facility.

2. Export Bills Negotiated (Bill under L/C):

The risk of payment is less under the LC, as the issuing bank makes sure the payment. The risk is further reduced, if a bank guarantees the payments by confirming the LC. Because of the inborn security available in this method, banks often become ready to extend the finance against bills under LC.

However, this arises two major risk factors for the banks: 

• The risk of nonperformance by the exporter, when he is unable to meet his terms and conditions. In this case, the issuing banks do not honor the letter of credit.
• The bank also faces the documentary risk where the issuing bank refuses to honor its commitment. So, it is important for the negotiating bank, and the lending bank to properly check all the necessary documents before submission.

3. Advance against Export Bills Sent on Collection Basis:

Bills can only be sent on collection basis, if the bills drawn under LC have some discrepancies. Sometimes exporter requests the bill to be sent on the collection basis, anticipating the strengthening of foreign currency.

Banks may allow advance against these collection bills to an exporter with a concessional rates of interest depending upon the transit period in case of DP Bills and transit period plus usage period in case of issuing bill.

The transit period is from the date of acceptance of the export documents at the bank’s branch for collection and not from the date of advance.

4. Advance against Export on Consignments Basis:

Bank may choose to finance when the goods are exported on consignment basis at the risk of the exporter for sale and eventual payment of sale proceeds to him by the consignee. However, in this case bank instructs the overseas bank to deliver the document only against trust receipt /undertaking to deliver the sale proceeds by specified date, which should be within the prescribed date even if according to the practice in certain trades a bill for part of the estimated value is drawn in advance against the exports.

In case of export through approved Indian owned warehouses abroad the times limit for realization is 15 months.

5. Advance against Undrawn Balance:

It is a very common practice in export to leave small part undrawn for payment after adjustment due to difference in rates, weight, quality etc. Banks do finance against the undrawn balance, if undrawn balance is in conformity with the normal level of balance left undrawn in the particular line of export, subject to a maximum of 10 percent of the export value. An undertaking is also obtained from the exporter that he will, within 6 months from due date of payment or the date of shipment of the goods, whichever is earlier surrender balance proceeds of the shipment.

6. Advance against Claims of Duty Drawback

Duty Drawback is a type of discount given to the exporter in his own country. This discount is given only, if the in-house cost of production is higher in relation to international price. This type of financial support helps the exporter to fight successfully in the international markets. In such a situation, banks grants advances to exporters at lower rate of interest for a maximum period of 90 days. These are granted only if other types of export finance are also extended to the exporter by the same bank. After the shipment, the exporters lodge their claims, supported by the relevant documents to the relevant government authorities. These claims are processed and eligible amount is disbursed after making sure that the bank is authorized to receive the claim amount directly from the concerned government authorities.

Foreign Exchange Controls

Foreign Exchange Controls

Foreign exchange controls are various forms of controls imposed by a government on the purchase/sale of foreign currencies by residents or on the purchase/sale of local currency by non-residents. According to Indian exchange control regulations, "foreign exchange" means foreign currency and includes all deposits, credits and balances payable in any foreign currency,  any drafts, travelers cheques, letter of credit, bill of exchange and promissory notes.

Every deal in export trade is a two way transactions, i.e., the buyer pays the consideration money and the seller receive the value of merchandise sold. Thus, the importer has to arrange for foreign currency (by converting his home currency) through his bank, which asks its foreign branch or correspondent at the exporter's place of domicile for ultimate payment to the exporter. The purchase and sale of foreign currencies take place in two different countries. Therefore, to bridge the gap, there is the need for a foreign exchange market, which plays the part of a clearing house, through which the twin purposes of purchases and sales of foreign exchanges are offset against each other.

Transactions in foreign exchange are effected broadly at four different levels:

1. between the banks (which are authorised to deal in foreign exchange, i.e., authorised dealers) and their customers,

2. Between the banks themselves in the same market (i.e., interbank) at times supplemented by the central banks;

3. Between the banks and their branches in different foreign centers; and

4. between the central banks.

The activities in the first two levels are, in fact, confined to the local or domestic markets while the dealings at the other two levels are an international plan. Under the Foreign Exchange Regulation Act (FERA) all receipts from exports and other sources have to be surrendered to the RBI.