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Name of the Company, Address, Directors, Contact Person & Phone numbers.

./' Logo (if any), Month and Year in which the plan is issued MISSION STATEMENTIEXECUTIVE SUMMARY. BUSINESS CONCEPT: ./' National & economic trends. ./' Industry analysis (trends & growth). ./ Legal & Administrative hurdles (if any) ./ Market, Customers & expected market share (sales assumption). ./ Business location (factory, office). ./' Products & Services. ./' Staff & equipment requirement (in brief),

Product Protection, Insurance. ./ Long term goals MARI<ETING PLANS: ./' Competition structure, SWOT. ./ Target Market, Methods of Distribution. ./ Promotion, Guarantee IService Warranty. ./ Pricing Strategy & Sales Strategy. PRODUCTION PLANS: ./' Physical plant & machinery requirement ./ Brief description of the production process (sketch), ./ Product design, packaging, shape size etc...(photograph) ./ Details about raw materials, list of suppliers, ./ Machinery & equipment and personnel required. CORPORATE STRUCTURE: ./ Legal form of business.

,," Dutiesand responsibilities key personnel. . of

./ Hiring plans (full time/part time, executive, non executive, qualification). ./ Contract professionals. ./ Compensation plans, 1'&0 initiative. FINANCIAL PLANS ./ Sources of finance & the capital structure proposed. ./' Projected Balance Sheet & Income Statement for the first year.
./ FinancialRatios. ./' Breakevenanalysis,ROI. RISK ASSESSMENT/CONTINGENCY PLANS
REFERENCESI APPENDIX: ***********************************************************************
I) The business plan needs to be necessarily on a new idea or concept 2) Teams will have dual roles, both as entrepreneurs and investors. As entrepreneurs, each team will develop a business opportunity and obtain 'fictional' funding from the other team. As investors, each team funds one entrepreneurial team .There are two obvious rules. First, no team can fund itself. Second, a team cannot both invest in another team and also receive funding from that same team. 3) During presentation, at least one member of the funding group should be present to briefly justify the investment decisions. 4) A hard copy of the business plan should be submitted during the presentation. ./'


Sumanta Sharma

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Howe-commerce canhelpSMEs develop sustainablexport trategy a e s

BibhutiB Mahapatro

lvin Toffler'sbook "FUtureShock and the Third Wave "refers to three revolutions: agricultural, industrial and information teclmology. We are now witnessing the networking revolution. Small and medium enterprises (S.MEs)playa vital role in building the economy of a country. The sector has helped in reduction of unemployment in India. It is often said that small is beautiful particularly in the context of small scale industries. S.MEs in India constitute more than 80 per cent of the total number ofindustrial enterprises andform the backbone ofindustrial development. But they suffer from problems of sub-optimal scale of operations and technological obsolescence. Indian S.MEsare also facing tough competition from global companies due to liberalisation, change in manufacturing strategies and turbulent and uncertain market environment. But despite all these, they still playa vital role in the growth of the economy. Small industries have a 40 per cent share in industrial output, producing over 8,000 value added products. They contribute nearly 35 per cent of direct exports and 45 per cent of the overall exports from the country. They are one of the biggest employment providing sectors after agriculture employing as many as as 28.28 million people.

Strategic importance
Tillsomeyears back,Indian S.MEs were growingslowly taking the limited opportunities and government regulalions. Today,there is an increasing recognition

across the world about the importance of S.MEsin national economic development. Although many S.MEs have been passing through difficult times particularly in the context of the new World Trade Organisation (WTO) regime, they have been able to stay in business because of their confidence and flexibility to adopt to changing needs by quickly bringing about improvements in production processes, designs and marketing strategies. Today, Fortune 500 constitutes only 10 per cent of the US economy. It is the small companies who are contributing to the global economy in no small measure. Seven per cent of US exports are channelled by companies with 19 or fewer employees. The United States is by far the biggest exporter of goods and services in the world. In fact statistics on SMEs indicate that they are set to continue to dominate the global economy even in the 21st century. Big companies are restyling themselves as networks of entrepreneurs and have begun outsourcing from smaller companies. And this is where SMEs will gain and ultimately enjoy the fruits of economic reforms. In an era of globalisation and economic reforms, S.MEscannot be silent spectators, but will have to take advantage by quick restructuring, streamlining and diversifying their activities in accordance with the need of the hour. SMEs provide significant employment when compared to large enterprises and also playa key role in the development of a community as they optimise environmental skills and vocational training.



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E-commerce and SMEs

SMEs across the world have a strong export focus. Many of them in countries like China, Japan, Taiwan and South Korea focus on the global market. The expansion of Information and Communication Technology (ICT) should help many of them leapfrog the global barriers easing the traditional constrains that they face in the area of market access, information, human resources development, venture capital and credit usage. The use of ICT will also bring about the changes in the managements of SMEs. ICT, particularly those related to e-commerce, offer potential benefits for SMEs that include the strengthening of customer relationships, reaching a new market, optimisation of processes and procedures, cost reduction, improving business knowledge, attraction of investments and creation of new products and services. Therefore, e-commerce enables SMEs to be more responsive to and interact with customer needs. In addition, e-commerce allows SMEs to be better focused in

their customer communications, to realise cost reductions in inventories, as well as in advertising and product promotions. E-commerce also allows SMEs compile market intelligence regarding general consumers, suppliers and competitors more effecti vely. Bigcompanies rerestyling a As they develop their sales and services cathemselves snetworksof a pabilities over Internet, SMEs will be able entrepreneurs havebegun and to use the medium outsourcing fromsmaller not just to promote existing products and companies services but also to identify and provide greater customisation. Froin the perspective of the international trade,

Illustration:ANIRBAN BORA


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Benefits Challenges

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SMEs ansetup"VirtualShop" much c at cheaper cost E-Commerce newbusiness offers

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Internet potentially enlarges geographical and sector markets by cutting through many of the distribution and marketing barriers that usually prevent SMEs from entering foreign markets. By eliminating traditional barriers such as distance, time zone differences, communication costs and access to international markets that usually prevents SMEs from competing with large firms, SMEs can diversify into newer markets. By conducting business online, SMEs in the developing countries can upgrade their brands and

also enhance their brand image. However, some of these benefits could be counter-balanced by a series of potentially negative if appropriate corporate and regulatory policies are not developed. With increase usage of the Internet for trading, in April 2000, the Global Organisation and Management Council of The Conference Board met in Washington to discuss organisation design implications of e-business development. Each of the global corporations present was experimenting with various business-to-business (B2B)and business-to-customer (B2C)configurations. It was clear that there is still considerable confusion between e-commerce (dealing with Internet, digital communication and IT applications that facilitate buying or selling processes) and e-business (optimising an organisation's performance through the adoption of digital technology and the use of Internet or Intranet as the primary communication media). Estimates on Internet penetration rates by firms' size in several OECD countries suggest that Internet uptake is lower in SMEs than in large firms, though smaller firms are catching up quite rapidly. For SMEs to take full advantage of potential ben~ efits of ICT, a number of prerequisites have to be met. Among these are access to reliable and cost-, effective telecommunication infrastructure, ability to introduce national business models. Progress in these areas will require joint efforts of public and private sectors, at the national, regional and multilateral levels. There are a host of policy issues that developing countries face in this sector which are quite distinct from those faced by developed countries. One of the challenges is to equip SMEs to benefit from and use Internet as a tool for export promotion and development. The other is to ensure and manage the growth and development ofInternet as a public utility that would also promote development. The former requires investments in infrastructure like telecommunication. The latter involves the growth and regulation of Internet facilitities at a universal scale. A strategy and policy perspective for developing countries, can be envisaged at the three different levels (business community, national and international), which has to be coordinated among them.

Role of government
The government should make efforts to enhance the investment climate to attract and retain venture capital and investment in SMEs with a potential for rapid growth in e-commerce. SMEs that could benefit from this type of investment include both new start-up e-business firms and other more traditional enterprises that are now im-



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plementing their e-commerce strategies. Government must ensure a fair taxation on business conducted via e-commerce in relation to tax treatments. It is also a task of the government to address security issues to build trust and confidence in the electronic marketplace. Policy measures might range from the insurance of authenticity of electronic dor:;uments; privacy and confidentiality of personal and corporate records; participation in establishing internationally acceptable rules and guidelines for the recognition of electronic signatures; digital signatures and certification authorities as well as restrictions imposed on the export of technology especially with respect to encryption standards; and legal resource mechanism in disputes. An area where government action is needed is the empowerment of local SMEs through "trade efficiency" measures. National action is required to ensure that local SMEs actually use the tools of e-commerce to which they might have access to. Such tools cover a broad range of instruments from trade facilitation, customer automation and transport optimisation. One important area is electronic treatment of customs documentation. This reduces cost and time involved in paperwork (as in Singapore) as stated; it is an integral part of business initiatives, it is important for the government to contribute to rising he-awareness" (through seminars, workshops, training and other related activities) of B-commerce and fostering coordination between business in efforts to integrate productive chains through the use of e-commerce. Regional and international fora should come forward to develop common standards to facilitate e-commerce among countries in the region. Domestic regulations and standard should base on marketoriented principles that are internationally harmonised and reflect market realities. In these efforts aimed at capacity building in developing countries, the developed countries should undertake technical cooperation that is intended to achieve wider use of e-commerce and exchanges of its benefits with developing countries.

BibhutiB Mahapatrois Reader t PG,Departmentof Business a Management,FakirMohan University,Balasore, rissa, D References: t, Mr.S,'I( Satpathy, Growthpotentialand Strength andWeakness of SMEs:tsMarketGlobalization EcOtlOmic I & Reforms, 's.LC Cunack.200S. O

2. StrategicImportanceof SMEsand RuralNonfarm Sector,S.Gupta

DirectorHC&EPL, Kolkata,. and 3, Dr,Pravas K,Misra,Centrefor AdvancedStudyin Psychology, NetworkingStrategies developmentof SMEs,2005. for 4, J.K.Rath,Director,MECHEM PVTlID., StrategicImportanceof SMEs, International orkshopon SMEs,Bhubaneswar, 005. W 2 5, A.P Roy,ManagingDirector,StarElectrodes PrivateLtd,Globalization and SMEs:InternationalWorkshopon SMEs,Bhubaneswar, 005, 2 6, SunilKayal, MD, Mohit Industries" Networking Strategies the for Development f SMEs, nternationalWorkshopon SMEs, o I Bhubaneswar,2ooS

7. BrianDive,TheHealthyOrganization:A revolutionaryapproachto people& ManagementThe Future.Com, g: 252, KoganPageLondon p Streling,VA,2005, 8,Abe, akoto ndMotohiko awakami M a K (1997)"A Distributive ,
Comparison Enterprises izein Koreaand Taiwan" ,Developing of s Economicsxxxv4.Instituteof DevelopingEconomics , ,Japan,December. 9. ADB(AsianDevelopmentBank)(2000), "IT and Development: Prospectus nd Policies" In Asian Developmentbankoutlook Update a

2000.ADB,Manila.the Philippines . 10, ALADI (AssociationLatino mericanaintegration) of A d ,(2000) "EI

commercialntraregionalen el intercambioregional:Secretaia general i r December. 11. Aoki M, and R.doreEd,(1994): "TheJapanese Firms,Sources of Competitive Strength",OxfordUniversityPress. 12. APEC (2000a),"TowardsKnowledgebasedEconomiesin APEC ,reportbyAPEC economicSummit.November, 13. BisangRCBonvecchi, .Korsakov B and A, Ramos(1996) :La transformacion industrial en los noventa,Unprocesocon final albeirto, Desarrollo Economico,Vol.36,Numero especial" . 14. Berry, lbert andJoseEscandon A (1994) "Colombia'sSmalland Medium-sizedExporters TheirSupportsystem",policyResearch and working PaperNo. 1401, Wo~d Bank. 15, Berry, lbertand Brianlevy,(1994)"SMEsCompetitiveness: A The

power fNetworking o andSubcontracting ", Inter-American Bank,

WashingtonDCIFM-l0S, 16, Australia,Government f (2000) DrivingForces the new Silk o on Road:Theuseof Electronic Commerce Australianbusiness. by

17.ASEAN (2000)E-ASIAN force www.e-aseanft.orglabout.html. " Task ",

18. APEC (1994) TheAEPCsurveyof Smalland Medium Industries, AEPC Committeeon Tradeand Investment. 19, Arnum,Eric(1999) "Final Report:InternetTopologyand Connectivity in the Americas" ,Presented TechnicalConference the to for implementation IABIN,Brasilia,15-18 of April.
20. APEC (2000b): guide for SMEs in the APEC Regions,2oo0 edition:





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