“MSMEs are a major engine of growth and employment generation” – Arun Jaitley, Finance Minister.
Staying true to his words, Mr. Jaitley recently extended a substantial amount of INR 3,794 Crores towards the MSME sector for credit support, capital and, interest subsidy on innovation in the Budget 2018.
This is a welcome step by the Finance Minister, especially because the MSMEs received only 17.4% of the total credit available in the past.
If you are a part of the MSME sector, it goes without saying that this is a great opportunity for you to head to your bank and avail investment funds. So here are some crucial steps that you can take to see your idea come to life:
Make an Elevator Pitch
An elevator is a short description of your company. Say you met an investor in the lift and had to convince him to invest in your company or capture his interest in those 2-5 minutes you spend in the elevator, what would you say?
Making an elevator pitch will not only help you reinforce your plans but also expand on a detailed plan that can determine how much funding you need and for what.
Prepare a Business Plan
This is the most important step because the Business Plan will be the face of your company until you procure the funds. It is also what will enable you to figure out how to make your business profitable. But this is not it.
Here’s what makes a Business Plan so crucial:
- Consists of a complete organizational structure of your business.
- Defines how the business will function in the first place.
- Lays out the goals and targets of the business.
- Acts as a hands-on management tool that can be used to check if the business is on track.
- Helps you attract financing by successfully conveying the business idea to the stakeholders. Afterall, the business plan is what proves whether the business has the potential to make a profit.
Establish a POC – Proof of Concept
A POC is how you explain whether your idea is financially viable and is used by external parties to validate your business idea. It often involves extensive research and review about the industry as well as the proposed product/service.
Here is what a POC should consist:
- An examination report of the Revenue Model of the business. This should include projected revenues from products or services.
- An analysis of the cost of developing the proposed organizational or technological infrastructure.
- Realistic projections about the long-term finance.
- The cost of maintaining the involved services and market cap. In addition to external evaluation, a POC can also be used as a great tool to evaluate the business internally.
Prepare a Loan Application
Now that you have everything in place, it is time to apply for a loan by preparing a loan application. You may directly approach the bank but that could involve multiple hassles. Moreover, there is no additional support provided by them for your business.
This is where deAsra comes into the picture. deAsra is a SIDBI approved handholding partner for Mudra Loans that provide all-round support to small businesses. Not only does it help you successfully gain access to business funds, it also connects you with relevant industry experts and leaders.
Other facilities like the Udyog Mitra Facilitation provides all kinds of support to the entrepreneur through all stages of his/her business cycle. What’s more? A wide range of readily available tools that act as a support system to your business in terms of knowledge.
These include the deAzzle mobile app, business guides relevant to your industry, trackers, templates, etc.
deAsra is an official content partner of Instamojo.