Kathmandu_ Third Year Project Work Bbs

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Saturday, January 8, 2011

third year project work bbs

Introduction

Meaning of Entrepreneurship.

Entrepreneurship is the the process of creating new ventures. It begins with an

innovative idea. It identifies opportunities. It mobilizes and invests resources to

exploit those opportunities. It involves innovation. It assumes risks to reap

rewards. It creates employment for self and others. It is key to the success of

small business.

According to Joseph Schumer, Entrepreneurship is based on purposeful and

systematic innovation.. it essentially consists in doing things that case not

generally done in the ordinary course of business routine.

According to Hisrich and Peter, Entrepreneurship is the process of creating

something different with value by devoting the necessary time and effort,

assuming the accompanying risks, and receiving the resulting rewards.

This above various writer definitions of entrepreneur ship point view is:

Thus, Entrepreneurship is the process of exploiting opportunities by

creating new venture through resource pulling risk talking innovation andmanaging for rewards. Entrepreneur ship results in the creation and

management of new business for growth and profit. It focuses on start-up

process. It is the capacity to create new opportunities for innovation, investment

and expansion in new markets, products and technology.

The entreprenetial process consists of the following elements:

Creation of

New venture

Reaping of Reward Entrepreneurship

Devotion of time

& effort

Assumption of Risks.

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Figure-1: Elements of Entrepreneurial Process

1.2. Meaning of Entrepreneur

The words Entrepreneur is derived from the French work which means

between takers or go between. Entrepreneur refers to an individual.

Entrepreneur performs the functions of entrepreneurship. They are creative

individuals. They have vision & inspiration to create new ventures. They identify

new business opportunity & takes advantage of it. They take risks; they are

better informed & possess greater experience. About all, they are achievement-

oriented individuals driven to seek new challenges & accomplishment.

Thus, we can know that the entrepreneur is a creative person and

innovator, a risk-bearer, a leader, an organizer, a self-motivator, a visionary & a

good imitator.

According to Richard cantilena,An entrepreneur is a risk-bearing agent

of production.

Thus, an entrepreneur defines simply as a risk bears.

According to ILO (International labor Organization), Entrepreneurs are

people who have the ability to see and evaluate business opportunities, together

with the necessary resources to take advantage of them & them ensure

appropriate action to ensure success.

According to David Holt, An entrepreneur is a person who starts a new

venture taking the initiative an risk associated with it and does so by creating

something new to provide value to consumers.

Thus, An Entrepreneur is a visionary individual who take risks by starting

something new though assembling and coordinating various resources for the

sake of uncertain rewards.

1.3 Description of Organization for study

Naso Gift collection is a small gift shop which is small business-related.

It is a sole-proprietorship business organization established with the authorized

capital of Rs 80000 in 2055/11/12 Mr. Sanjay Maharjan is a proprietor of the

business. The shop is registered after seven years of starting as private firm act

with Registration No. 2062/11/15. The shop is situated at the way of Nardevi to

pyaphat. The shop is placed at Yetkha, the house of Guthi. The shop is operating

by him and his wife. So nobody can be employing beside them. The shop is

dealing with gift items & greetings especially.

1.4. Description of subject for Study

1.4. A. Accounting Records for small Business.

Accounting is recording, classifying & summarizing financial transations

in a systematic way. It provides financial information to find out profit & loss of

small business. It provides records of changes in financial position. Small

business should have a simple accounting system. It helps them to make

business decisions well.

1.4.B. Importance of Accounting records to small business

1. It provides information about profit & loss, sales & changes in financial

position.


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2. It help day-to-day decision making.

3. It helps correct financial problems.

4. It provide comparative performance of the business.

5. It Provide financial statements for banks creditors & other purposes.

6. Its (having) Taxation problems can be effectively dealt with.

7. Its (having) fraud & theft by employee are revealed .

1.5. Objectives of Study

The main objective of the study has been pointed below:

1. To find out the accounting system of the small business as single entry

system.

2. To evaluate the accounting records of the small business.

3. To find out the composition of the income & expenditure of the small

business the like gift shop.

1.6 Significance of study:

The report has great significance for each & every persons. Some of

significance of study as follows:

1. It will be helpful the new entrepreneur who is thinking of starting new small

business.

2. It will be useful for the new entrepreneur who is trying to find out the

accounting procedures of the small business, like gift shop.

3. By studying this report, the students of the entrepreneurship & small

business management can get the practical knowledge of the small

business.

4. Similarly this report will be helpful for the coming bachelor students of the

management.

1.7. Limitation of study.

Though lots of efforts have been done to prepare this report, these are certain

limitations which are:

The study is concentrated on the accounting records & system as single


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entry data of the NASO gift collection of gift items business only.

These are different subject matters to be study in the entrepreneurship &small business management but only the accounting system has been

concentrated in this study.

Under the small business accounting, there are lots of subjects, titles &issues to be discussed but only the stocks, income & expenditure of the

business has been made the subject for study. The data are completely

historical & rigid.

1.8. Methodology:

1.8.A. Research design:

The study is designed in order to evaluate the product line of the N.G.C.

The study especially deals with the dept analysis will be descriptive and analysis

in order to answer the problem identified. Similarly, it will be guideline for future

researcher.

1.8.B. Source of data.

The data of primary in nature are gathered by personal interview. The

secondary data is collected from the N.G.C., Kathmandu. Annual reports of

Handicraft Association Nepal &

:www.nepalhandicraft.org

1.8.C. Data collection Methods

v First of all various relevant data and information collected from N.G.C.and reviewed.

v Interview with Mr. Sanjay Maharajan about related subject matter . (Forsome primary data) . It is completely F.G.D. (Focus Group Discussion).

1.8.D. Data processing Techniques

The collected data have been processed and tabulated in the forms of table.Similarly graphs and diagrams are presented after the data are processed

(managed).

1.8.E. Tools used.

Mainly the statistical & mathematical tools have been used to analyze & present

the data collected.

Chapter 2

2. Presentation & Analysis of data.

2.1 Purchase of different types of goods (Amount In Rs)

F/Y Creamier GiftItems

(Rs)

Handicraft gift

items (Rs)

Greeting

(Rs)

Other Items

(Rs)

058/59 20700 12000 2500 11000

059/60 22430 9525 2800 23000


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060/61 26575 25000 5000 36000

061/62 19156 7350 11000 28400

062/63

063/064

10110

11345

8450 12000 18000

Table No.1: Presentation of data

Figure No.1:Position of Purchase of different types of goods

Finding:- The N.G.C has been keeping the proper records of every types of

goods since past five years, By maintaining the stock book by the business it

has been easier to know which types of goods were purchased at what the

amounted-quantity for the particular period.

2.2: Sales of different types of goods (Amount In Rs)

F/Y Creamier Gift Handicraft Greeting Other items

058/59 20000 9975 2600 6000

059/60 18000 11750 2700 4500

060/61 19550 14050 4800 5700

061/62 9060 11000 5,500 4950

062/63 6425 10500 9600 6705

Table.No:-2 Presentation of Data of Sales

Fighter .3:- Positions of sales of different types of goods

Finding:-The N.G.C. has been keeping the records of every type of goods sincepast five years. By Maintains the stock book by the business it has been easier

to know which types of goods were sold at what the amounted quantity for a

particular period. This made easier to find out the remaining stock in shop and

easy to find damage or loss that took place while presenting the gift to decorate.

The difference on stock of the goods purchase & sold recorded in the stock

book made easier in sales planning & stock planning.

2.3. Net Income by sale of different types of goods.

F/Y Ceramic &

Handicraft

items

Greetings Other Items Total

Amount

057/58 44962.5 4340 1300 50602.5

058/59 44625 4500 8000 57125

59/60 44400 8000 11200 63600

060/61 30090 965 7700 46955

061/62 25387.5 16000 8905 5029.25

Table. No: 3:- Presentation of Net income


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less

Other 14000 14570 14600 12044 13385

Total 64800 75620 77790 87964 102990

Table.5:- Presentation of data of Expenditure

Figure.7:- Position of Total Expenditure

2.5. Findings:It is really good to see that the small business has kept each & every

detail records of the expenditure occurred in the operation of the business

activities. By keeping props accounting by these types of the small business it

will be easier for the department of the tax for estimating & learning taxes to

them. These will be the fairness in the operation of the day to day activities also.

These will also be less changes of being fraud & embezzlement by the workers

in the business.

2.6. Ratio of Expenditure in different heads to the Total

Expenditure

Particular 058/59 059/60 060/61 061/62 062/63

Personal

overheads46.29% 51.57% 39.85% 33.15% 36.37%

Rent 7.72% 6.62% 6.42% 4.87% 5.68%

Electricity 3.70% 3.17% 3.08% 2.34% 2.77%

Material

used2.77% 4.62% 3.44% 2.05% 3.06%

Office &

Stationery2.46% 1.52% 1.58% 1.64% 1.61%

Interest on

Lean- - 13.88% 33.15% 24.46%

Prevision forless

15.43% 13.22% 12.85% 9.75% 12.36%

Other 21.60% 19.26% 18.87% 13.05% 13.69%

Table.no.6:- presentation of Ratio of Expenditure

Figuer.no.8:- Present of Ratio of expenditure in column diagram

2.6 Findings:

It has been easier to find out how much amount of the different F/Y of thetotal place expenditure that took place, owners expenses has taken place most.

Then the expenditure for others expenses occurred more. Similarly the rent has

also covered important proportion in the competition of total expenditure. The

interest of loan is paid starting from F/Y 2059/60 because the loan is taken

before one year. From these historical each expenditures data, the proprietor of

N.G.C. can predict the feasible expenditure that might take place in the gift

items. This has been easier by the place in the accounting records that were

kept by the shop.

2.7. Major Findings.

The N.G.C. has been keeping props records of the stocks they are


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dealing with

The N.G.C has kept the props records of the sale of gift and greetingitems.

It has also maintained the records of income from the sale of gift items,Greeting and Other for the last five years. From this we can say the

business has kept proper

Accounting without which income of the business couldnt be calculated. As from the above presentation, we see that N.G.C has been not paying

tax to government because the firm is resisted in 2062. This cant justify

that business has been keeping clean & proper of accounting recordsbut as per the norms & principles of a Accounting is used for planning

future.

The N.G.C has also kept the proper accounts & records of the each &every expenditure for easiness of owners dedication for shop that took

place during operation of the business.

The N.G.C. has been following the Nepalese government fiscal year forkeeping the records of their each & every financial transaction, now.

2.8. SWOT Analysis:-

2.8.1. Strength:

1. Management independence is an important strength.

2. There is a quick decision mechanism.

3. The process of record keeping is easier & cost-effective than that of large

business

4. These small businesses have flexibility in operation

5. They are responsive to the customers i.e. customer oriented marketing

6. They are employment opportunity creator

7. Put on keeping good financial performance

8. Large businesses are also interdependence.

9. The location of the organization is also one of its strengths.

2.8.2 Weakness:-

1. There is a high risk of failure.

2. There is a lack of inadequate management skills.

3. Small businesses face different kinds of accounting & taxation problems.

4. There is a lack of sufficient fund.

5. There is a lack of up-date technology.

6. They are facing from good credit facilities.


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7. They face a lack of sufficient man-power.

8. Segregation of the different account heads is not possible in the small

business accounting system.

2.8.3 Opportunity:-

1. There is a chance of technology entrancement.

2. They can use professional & technical workers.

3. There is an opportunities for the women & ethnic group.

4. They can easily shift to occupational & industrial activates.

5. There is an option of practicing different product line decision.

6. There is a chance of adding further outlets in the process of growth.

2.8.4 Threat:-

1. There will be a lack of sufficient capital.

2. There is a lack of props government regulations which protect the copy

right of the goods produced by the small business.

3. Leaving of unnecessary taxes would increase the burden to the small

business.

4. Staying informed is another great challenge for the small business.

5. Lack of proper time management is seen as the owners they have to

perform the managerial activities.

6. There is a lack of managerial know how among the small business men.

7. Similarly, the domestic products have to compete with the foreign

products at present as Nepal has becomes the member of the WTO.

Strength

Threat SWOT Analysis

Weakness


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Opportunities

Finger:-10. SWOT Analysis

Chapter 33.1 Summary:

Nepal is one of the worlds developing countries. These are large

numbers of small business operating in the country. These businesses have

been playing a vital role in economic development of the country. So we can not

neglect its importance in our economy. Similarly the small business &

entrepreneurship development has the great importance in the developing

country as well as Nepal. These businesses will help in the boost up in the

national income of the country also. They can also provide quality services &

products by doing the franchise business to the public of the developing countyas like Nepal.

Under the gift & greetings business, they can verify into many kinds of

products. These products are come from production which is the way to laborite

the different classes of labor from skilled to semi skilled labor. So the small

business like gift shop as gift & greetings business also gives the job opportunity

to different types of labors. Thought the small businesses have the less

economic activities, they are also bounded for keeping proper accounting

system. It will be plus point for them by keeping proper accounting records

because it will be easier for the owners to know the actual financial position of

the business in the required time. It will be easier for the follow up for the

collection of goods in credits as well as own liabilities.

3.2. Conclusion

In the present context, the business houses of the Nepal whether in the

large or small are going through the worst situation? The economy of the country

has been badly affected by uncertain political & economic situation. They

problems are either internal or external. Even the big business with the large

investment & expensive technology are facing problem in operating smoothly,

we can predict how tough will be for the small business. There are lots of threats

& challenges in front of the small business entrepreneurs.

Its lot of hard work & struggle has to be done by the small business

entrepreneurs to just sustain in the market. The position of getting profitability is

the distant option, so, the small business entrepreneurs should highly creative &


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skillful. They have to think very carefully & analyze the market before starting

their business. As, by name also, small business the entrepreneur starts the

business with small fund in their hands. So he/she should be careful in

choosing & starting which types of small business & what types of products &

services they are going to introduce in the market.

In the context of the the accounting system of small business, they

should also keep proper records of each and every transactions. It will be easier

to know the actual financial position of the business simply. These accounting

records would be the supportive tools & feedback for over all financial

management of small business. It would help very well on comparative

performance study & financial problems facing by the business. Accounting

records in the small kind of business will be helpful for the future planning. So it

helps in prediction of the cost of fund, capital level of profitability in the business.

As each every transaction is recorded properly, important financial ratios for the

management control will be easier.

3.3 Workable Suggestion.

1. As the government has made the compulsion of taking the PAN by

the every scale of the business. It would be really a troublesome job

for the tax clearance & other paper works if the business has not

kept proper accounting records.

2. The gift shop should be capable in changing decoration as

presentation according to the market.

3. Cost effective accounting should be adopted by the small business

with good result.

4. The accounting should be kept at the time they occurred. As the

record keeping jobs goes on pending. It will be difficult for

accessing the tax to be paid to the local government.

5. Modern affordable technology should be adopted by the small

business to reduce the cost of employees just for keeping records

of the transactions. This will be feasible by installing suitable

accounting software to record the transactions.

6. Lots of afford should be done by the small business like gift shop to

exist strongly in the market.

7. The gift business should keep every types of labors skilled, semi-

skilled, etc for the production of good quality, quantity and verify of

products as Ceramics gift items, Handicraft gift items, Glasses gift

items, etc up to its feasibility of fund they can afford.


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Posted by sadan at 5:51 AM

Bibliography

1. Agrawal,

Govinda Ram Dr.

(2005) Entrepreneurship and small business management in

Nepal, M.K. Publisher & Distributors. Bhotahity, Kathmandu, Nepal.

2. Agrawal,

Govinda Ram Dr

(2005) Entrepreneurship Development in Nepal, M.K. Publishers

& Distributors. Bhotahity Kathmandu, Nepal.

3. Bajracharya,

Bhanu Chandra Dr

(2054) Business Statistics & Mathematics, M.k. Publishers &

Distributors. Bhotahiy, Kathmandu, Nepal.

4. Federation of Nepal Cottage & Small Industries (FNCSI) Several

volumes, cottage & Small Industries News. Central office, Bijuli

Bazaar, Kathmandu.

5. Pant, G.d. Prof. & Chaudhary, A.K. (2055) 3rd Edition Business

Statistics & Mathematics for BBS Bhudipuran Prakashan,

kathmandu, Nepal

6. Sharma Narendra (1998) 2nd Edition (Revised) A test book of

Accountancy And Audifing, Ekata Books Distributors Pvt.Ltd.

Thapathali, Kathmandu, Nepal.

7. Sharma, Narendra & Pradhan, Gopal Man (2002) Reprindted, A

testbook of book-keeping And Government Accountiong, Ekta

Books, Kathmandu, Nepal.

8. Sharma, Pushkar & Silwal, Dhurba, (2004) First Edition BusinessMathematics & Statistics, Taleju Prakashan Kathmandu.

Shresetha, Sunity & Amatya Sunil, (2004) First Edition Business Statistics

Boudh

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