University Of Chester

Managing Human Capital and

Entrepreneurship
BU7203

Student Id: 1425448

Part I
Entrepreneurial Drawbacks and Benefits
Contents
Introduction to entrepreneurship..................................................................................................................1
Literature review.........................................................................................................................................2
Advantages and drawbacks of entrepreneurship..........................................................................................3
Economical or financial drawbacks.........................................................................................................3
Political and legal drawbacks..................................................................................................................4
Socio cultural drawbacks.........................................................................................................................4
Technological drawbacks.........................................................................................................................5
Development in the area of entrepreneurship awareness.............................................................................5
Conclusion...................................................................................................................................................6
References...................................................................................................................................................7

Introduction to entrepreneurship
The recent decade has witnessed some dramatic changes in management style and big
companies are trying to downsize their manpower with different campaigns. These variations has
caused for job insecurity, stressful working environment, increased competitiveness and
innovation for new opportunities in the modern business world. New ideas are the root map for
the entrepreneurial projects, skilled and talented employees are started moving towards
entrepreneurship rather than working for paycheques. Entrepreneur is a person who initiates
business or commercial activities with chances of loss or profit (Sule, 2013). It is not necessary
activity should focus only on profit, it can be social development. According to Zimmerer,
Scarborough and Wilson (2008), Entrepreneurship is having potential impact on global economy,
the modern business world believes that economic development and success is possible with
entrepreneurship development. Entrepreneurship is a global economic engine, which brings
positive change in peoples life.
Many entrepreneurs are committed to achieve success by creating innovative customer
centric product and services, innovative marketing strategies, and diversified knowledge.
Entrepreneurs are not only concentrating on economic prosperity, but many of them are trying to
provide improved lifestyle to the people. Those who possess the right entrepreneurial leadership
qualities will remain in the race of economic revolution. Entrepreneurs are pursuing a novel
opportunity while lacking access to required resources (Eisenmann, 2013), and they carries

economical, technical, operational and financial risk in their enterprise activities. As an

entrepreneur is not easy to sustain in this competitive business world, they will face many
challenges. It is not necessary to have great knowledge, skills, money to become an entrepreneur
and there is no set of characteristics, but desire, self-confidence, high energy and diversity may
lead to success (Scarborough, 2012).
In recent years we can find massive development in the area of entrepreneurship. There
are many new companies attracted people with innovative strategies and products and numbered
with huge profit. For example: Facebook, Google, Apple, Cobra, alibaba.com, amazon.com,
Xiaomi and so on. However it is not excluded from the hitches, it may arise from any corner of
the business. This essay focuses on potential drawbacks from economic, political, socio cultural
and technological aspects and different entrepreneurial strategies to address those problems.
Spotting the new opportunities with strong determination and dedications may help to start-up a
business.

Literature review
As an entrepreneur needs to have a strong vision and desire to start his own business
(Suger, 2010), there are many instances entrepreneur will fail at first time and it give good
experience and knowledge to update the vision and desire to get succeed (Scarborough, 2012),
for example: Gail Borden, Stuart Skorman, Colonel Harland Sanders, Henry Ford and so on.
Today all the businesses should face the uncertain economic condition, the study says there is
competitive advantage if entrepreneur is well aware of potential financial drawbacks to tackle the
future problems (Cooney, 2012). Most of the startup ventures remain in the same position due to
insufficient capital, limited resources, lack of skilled employees, high level competition,
government ignorance, strong policies and so on.
Entrepreneurial education is become mainstream education to the young students to
produce successful entrepreneurs In the US and Europe. Oosterbeek, Praag and Ijsselstein (2010)
stated that awareness of required knowledge and skills through education is having less impact
than self-experience and realistic perception. Anyone can generate the good idea for business
start-ups but everyone is not capable of turning them into business, nevertheless being aware of
potential entrepreneurial drawbacks and innovative strategies may add value for start-up

(Barrow, Burke, Molian and Brown, 2011). One-third of new ventures close within two years,
half within five years, and only one in four is still around 15 years after opening day and failed
entrepreneurs are more likely to get successful in second time (Schrager, 2015). The
effectiveness of entrepreneurship training depends on the person personality and behavior.
Awareness of entrepreneurial drawbacks will provide great knowledge, courage, right direction,
self-preparedness to face all the future problems. There are many opportunities to start a business
but acquiring resources can be biggest problem due to credibility issues, however entrepreneurial
know how helps them to prepare well for the establishment (Buruns, 2011)

Advantages and drawbacks of entrepreneurship

Being an entrepreneur there are many benefits such as complete control on business,
opportunity to change the desire into action, freedom of self-expression and self-actualization,
opportunity to earn more and more, opportunity to develop your community and society,
freedom of work, and live up to your dream and passion. Owning a business provides complete
freedom to implement your ideas and managerial decisions. There is no limitation to earn profit
and working hours, one can work more hours to earn more money, and the complete benefits of
excess working will be enjoyed by him/her only. However besides these benefits there are many
problems to become an entrepreneur.
Entrepreneurship is well developed concept in the world of business, there are many
researchers, academicians and business analyst have conducted comprehensive research on
potential drawbacks and advantages. Entrepreneurs can start their business in every corner of the
world and able to attract and interact with customers, due to technological advancements,
globalization and economic advancements. Scarborough (2012) is mentioned about changing
trend of entrepreneurship; traditional way of earnings is no more attractive for the people due to
recession, advanced lifestyle, technology and advanced education system. According to Gallup
survey (2013) there are more than 55 percent of young Americans are interested to start their
own business and their favorite start-up place is right at home. Entrepreneurship is one of the fast
growing concepts and most of the young generation is aimed to become next Zuckerberg or Jane
Chen. There are no hard core qualities and specified features, but strong determination, desire,
energy, vision and risk bearing capacity may lead to success. However it also has some variations

due to insufficient resources, bounded opportunities, philanthropic issues and sustainability

issues (Hall, Daneke, Lenox, 2010).

Economical or financial drawbacks

Financial problems includes source of investment, investment strategies, uncertainty of
income, risk involvement, allocation of finance and sustainability. All the financial problems are
interrelated to each other; arranging finance for entrepreneurial venture is a difficult task,
financial institutions and investor looks for security to their investment. Due to this many startup
business will face financial difficulties in the initial days. Limited source of capital will impact
on investment strategies; to achieve success entrepreneur should focus on long as well as short
term investment strategies, but it depends on availability of fund, type of source and cut off time.
Without appropriate investment strategies business cannot achieve good profit and it does not
provide guaranteed salary, it may effect for business as well as entrepreneur personal life.
Owning business always carries high level of risk because owner will be held responsible for the
business losses. Improper allocation of financial resources leads to sustainability issues.
However entrepreneurial education and awareness programs will help to address the issues with
right strategies and remains depending on macroeconomic growth. Due to lack of financial
sources entrepreneur may face many challenges and may lose the competition without any
reason (Storey, Greene, 2010)

Political and legal drawbacks

Political and legal drawbacks deals with tax policies, government rules and regulations,
political power shift and so on. Entrepreneurs have to fulfill legal requirement start business; it
always differs from one country to another. Due to legal issues the project approval may take
more time, delay in business process leads to excess expenses and loss of opportunity. Imposing
more tax on business products will reduce the cash flow and profitability, due to this cost of
product will become expensive and entrepreneur loses the competitive advantage. Every business
concentrates on power, due to political power changes new businesses will face many challenges.
Employment regulations, corruption issues, and registration guidelines will have regular effect
on business. However these challenges will remain same until political transformation, and
entrepreneurs are working hard to reduce through effective policies and communication

programs. Transparency in legal terms reduces the differences and misunderstanding between
government and business owners (Wagner, 2012).

Socio cultural drawbacks

This challenges arises due cultural differences and social barriers, it includes tradition,
religion, community issues, lifestyle, working environment and experience, education and habits.
Tradition, belief and languages are indirectly related to the entrepreneurship success, language is
an integral part of business, without that it is very difficult to manage in foreign countries. To
attract more customer entrepreneur should aware of tradition and beliefs, it will help to reach
targeted customers. Some cases religion and community do not accept the product due to their
beliefs. However socio cultural issues are declining in the era of globalization and people are
expecting improvement in lifestyle. Entrepreneurial education is an effective tool for skills
development, personal attitude and qualities and also reduces the socio cultural barriers
(Volkmann, Wilson, Mariotti, Rabuzzi, Vyakarnm and Sepulveda, 2009)

Technological drawbacks
Technical knowledge plays an important role in entrepreneurial success, todays business
highly related with technology. If entrepreneur is not aware of technological advancement, he
may become less competitive compare to others. Moreover the traditional business methods are
time consuming, expensive and less attractive, when compare to modern business techniques.
Due to financial difficulties many startups cannot afford new technology. Some entrepreneurs
cannot manage this transition effectively and their business loses direction and momentum
(Thompson, 1999).
There are many other factors influences to the entrepreneurship activities such as poor
infrastructure, interpersonal skills, competitive nature, personal life, management skills, external
environment, psychological attributes, friends and family, corruption, central bank policies,
employees interest, philanthropic issues and so on.

Development in the area of entrepreneurship awareness

According to Scarborough (2012) entrepreneurs innovates the ideas to improve peoples
life and solve their day to day problems. Innovation is the key tool to create value for product or

services, it leads company to gain brand image in the marketplace. There are many researchers
suggested that, there is a necessary to develop dynamic methods to improve entrepreneurial skills
and qualities. Entrepreneurial education will be beneficial and effective in business startup to
liquidation and also very useful to improve start-up vision (Huber, Sloof and Praag, 2014).
Confidence and clear vision plays very important role in decision making in implementing new
ideas into business. In many instances entrepreneurs fails with great ideas due over-confidence,
bad marketing strategies, and lack of efficiency, experience and resources. Koellinger, Minniti
and Schade (2007) stated that many entrepreneurial startups failure and low return on
investments due to excessive people are entering into the entrepreneurial world. Awareness of
entrepreneurship drawbacks will help to design your ideas or products according to the market
interest, and able to understand the gap between market expectation and existing offers. These
qualities will support to generate sufficient energy and belief to enter the entrepreneurial world.
According to Steinhouse and West (2008) if you have sufficient energy and belief in both
yourself and offer, you will find buyer, also believes that enthusiasm and strong determination
are the best tools to improve experience to serve better.

Conclusion
Entrepreneurship is not new to the business world and believed that one of the key driver
for economic kick start. It also considered an effective tool to increase profitability,
employability and revenue generator for the country. In recent years there are many universities
and institutions are conducting programs to develop entrepreneurial skills to address potential
drawbacks. This study shine lights potential drawbacks of entrepreneurship and awareness
effectiveness. All the drawbacks are closely related to each other, financial and economical
barrier are having major impact on business success. However government and central financial
institutions are providing financial assistance to face these problems. Technology plays an
important role in building self-confidence and connects every corner of the world. Socio cultural
problem will affect the brand image, company culture and demand for social development. Many
entrepreneurs are using these problems to reach local communities and build positive network to
enhance their business. However drawbacks influences to closure of new ventures, there are
many examples expensive financial sources will cause for company profitability. In US and
Europe government providing interest free investment and tax benefits to promote

entrepreneurial and small scale startups. Knowledge of barriers will increase the confidence of
handling those with innovative strategies. However these problems will introduce the alternative
and innovative strategies to the world of entrepreneurship. It also believed that entrepreneurial
education can be effective tool to build entrepreneurial interest.

References
Barrow, C., Burke, G., Molian, D., & Brown, R. (2011). ENTERPRISE DEVELOPMENT: The
Challenges of Starting, Growing and Selling Businesses. Hampshire, United Kingdom:
Cengage Learning.
Buruns, P. (2011). Entrepreneurship and Small Business (3rd ed.). New York, NJ: PALGRAVE.
Coobey, T. M. (2012). Entrepreneurship Skills for Growth-Orientated Businesses. Copenhagen,
1-23.
Eisenmann, T. R. (2013, January 10). Entrepreneurship: A Working Definition - HBR. Retrieved
from https://hbr.org/2013/01/what-is-entrepreneurship
Gallup. (2013). THE 2013 GALLUP-HOPE INDEX. New York, NY: Gallup Business Journal.
Hall, J. K.,

Daneke, G. A.,

&

Lenox, M. J.

(2010).

Sustainable

development

and

entrepreneurship: Past contributions and future directions. Journal of Business Venturing,

25(5), 439. doi:10.1016/j.jbusvent.2010.01.002448

Koellinger, P., Minniti, M., & Schade, C. (2007). I think I can, I think I can: Overconfidence
and entrepreneurial behavior. Journal of Economic Psychology, 28(4), 502-527.
doi:10.1016/j.joep.2006.11.002
Oosterbeek, H., Praag, M. V., & Ijsselstein, A. (2010). The impact of entrepreneurship education
on entrepreneurship skills and motivation. European Economic Review, 54, 442-454.
Rosendahl, H. L., Sloof, R., & Praag, C. M. (012014). European Economic Review,. Amsterdam,
The Netherlands: Tinbergen Institute.
Scarborough, N. M. (2012). Effective Small Business Management An Entrepreneurial Approach
(10th ed.). Upper saddle River, NJ: Pearson/Prentice Hall.
Schrager, J. (2015, January 28). How Small-Business Owners Can Avoid Burnout. The Wall
Street Journal. Retrieved from blogs.wsj.com/experts/2015/01/28/how-small-businessowners-can-avoid-burnout/
Steinhouse, R., & West, C. (2008). Think like an entrepreneur: Your psychological toolkit for
success. Harlow, England: Prentice Hall.
Storey, D. J., & Greene, F. J. (2010). Small business and entrepreneurship. New York, NY:
Financial Times Prentice Hall.

Suger, L. (2010, October 29). Lord Sugar: "You can't buy a bottle of entrepreneur juice! It's
either

there

or

not"

Smarta

[Web

log

post].

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from

http://www.smarta.com/blog/2010/10/lord-sugar-you-cant-buy-a-bottle-of-entrepreneurjuice-its-either-there-or-not/
Sule, O. E. (2013). Low and High Potentials of Entrepreneurial Development within the
Framework of Indigenious Small Scale Management in Africa. International Journal of
Business Administration, 4(3), 41.

Thompson, J. L. (1999). A strategic perspective of entrepreneurship. International Journal of

Entrepreneurial Behaviour & Research, 5(6), 279-296.
Volkmann, C., Wilson, K. E., Mariotti, S., Rabuzzi, D., Vyakaranam, S., & Sepulveda, S. (2009).
Educating the Next Wave of Entrepreneurs. Retrieved from World Economic Forum
website:

http://ncee.org.uk/wp-

content/uploads/2014/06/educating_the_next_wave_of_entrepreneurs.1.pdf
Wagner, M. (2012). Entrepreneurship, Innovation and Sustainability. Sheffield: Greenleaf.
Zimmerer, T., Scarborough, N. M., & Wilson, D. (2008). Essentials of entrepreneurship and
small business management (5th ed.). Upper Saddle River, NJ: Pearson/Prentice Hall.

Managing Human Capital

and Entrepreneurship
BU7203
Sony

[Type the abstract of the document here. The abstract is typically a short summary of the contents of the
document. Type the abstract of the document here. The abstract is typically a short summary of the
contents of the document.]

Contents
Introduction to one stop financial services..................................................................................................3
Mission and Vision statement..................................................................................................................3
Our products and services........................................................................................................................3
Investment service...............................................................................................................................3
Financing services...............................................................................................................................5
Consultancy services...........................................................................................................................5
Size of the business.................................................................................................................................6
Office equipment and personnel..............................................................................................................6
Organizational structure..............................................................................................................................6
Marketing Plan............................................................................................................................................8
Operational Plan........................................................................................................................................10
Financial Plan..............................................................................................................................................1

Figure 1: Stock market trading platform.........................................................................................4

Figure 2: Forex trading platform.....................................................................................................4
Figure 3: Commodity trading platform............................................................................................5
Figure 4: Industry contribution towards employment.....................................................................6
Figure 5: Organizational chart (One source financial solutions).....................................................7
Figure 6: Organisational plan.........................................................................................................11
Figure 7: Allocation of expenses...................................................................................................12
Figure 8: Break-even point analysis..............................................................................................14

Table 1: Competitor stock broking charges...................................................................................10

Table 2: Sales forecasting for 1st year............................................................................................11
Table 3: Expected expenses of one source financial solutions......................................................13

Table 4: Expected annual cash flow statement..............................................................................14

Table 5: Expected Income statement of One source financial solutions.......................................15

Introduction
One source financial services
One source financial solutions an ambitious innovative service provider for financial
problems. The company is planning to start in Chester and planning to extend its operation
throughout United Kingdom. The main aim is to provide all types of financial services under one
roof and reduce the cost and time. Financial management is one of the critical part and most
important for every individual due to this firm is planning to make it easy for everyone. It caters
Equity, Commodity and Forex broking services, Portfolio management services, Investment and
financing advisory services, Home loan, personal loan, business loan and mortgage services and
international remittance services. Company is having partnership with leading stock brokers and
financial institutions to achieve its objectives.
Mission and Vision statement
To become most reputed financial services in UK
To make sure financial solutions ready available to everyone
To bring maximum services under one roof
To maximize investor trust and interest
Our products and services
Company is working as a subsidiary for all leading stock broking firms and financial
institution. The main stream financial services on investment solutions, beyond that company
offering wide range of products and services.
Investment service
Company is offering wide range of investment solutions to the general public, they
mentioned below:
Stock broking: Company provides opportunity to trade in LSE listed share through real time
online and offline execution. It includes cash market intraday and delivery services, derivative
market future, option and contract for differences (F&O, CFD), initial public offering (IPO) and
research advises on investment.
Bond market: In this segment provides analytical services to invest in best rated government and
corporate bonds.

Mutual funds: Offers offline and online trading services, performance tracker and research
advice.
Figure 1: Stock market trading platform

(Source: http://www.moneyam.com)
Figure 2: Forex trading platform

(Source: http://www.esignal.com/trading-software/esignal-ondemand.aspx)

Commodity market: Provides trading platform for online and offline trade execution, long term
and short term investment suggestions.

Figure 3: Commodity trading platform

(Source: http://adithyacommodity2013.blogspot.co.uk/p/pictures.html)

Forex market: Provides online and offline trading services, intraday and delivery trading tips and
international remittance services.
Portfolio management services: Offers well diversified high growth portfolio development.
Insurance broking: Offers insurance services to individual, commercial and personal vehicles and
businesses.
Financing services
Company provides wide range of loan facilities to the customers, such as Home loan,
personal loan, business loan for small industries, and loan takeover.
Consultancy services
Company offers management consultancy services, such as merger and acquisition
assistances, capital structure preparation, business development plans, and corporate training and
development services.

Size of the business

Initially it is planning to open with one branch in Chester, so it will be small scale, sole
proprietorship company. Financial services is a major contributor to the UK GDP and economy,
as on 2014 statistics report industry trade surplus was 34.8 billion and assets under management
is almost 4.8 trillion. UK is one of the leading financial service centers and industry considered
to be leading employment provider (UK statics, 2014).
The below figure shows the size of the UK financial services and contribution form the
specific industry.
Figure 4: Industry contribution towards employment

Office equipment and personnel

It is a small scale business unit and planning for conservative investment in office
equipment. Planning to own 8 to 10 desktop computers, 3 LCD TVs, 4 telephones, 1 recording
equipment, 25 chairs, 6 long tables, 2 office tables, 1 microwave and 6 application shelf.
Company is looking for less no of employees due to lack of financial availability; it includes 1
managing director, 2 operational managers and 4 support staffs.

Organizational structure
To achieve organizational objective, company should have effective organizational
structure to process activities from one layer to another. One source financial solution is a sole
proprietorship company and owner carries ultimate authority of the business. Entrepreneur

believes in his own capabilities than other people supports. Company is planning to have
investment (sleeping) partners to raise operating capital. The authority of investment partner will
be limited and there is no operational and managerial control. For the financing and investment
decision their consent and advices will be considered. Company is planning to have flexibility in
organizational plan, according to the growth organizational structure will be altered. The current
organization plan is mentioned below.
Figure 5: Organizational chart (One source financial solutions)

(Source

Managing
Director

Operational
Manager
(Finance)

Relationshi
p Manager
1

Relationshi
p Manager
2

Operational
Manager
(Marketing)

Relationshi
p Manager
3

Relationshi
p Manager
4

: Author)

The above figure 4 exhibits the organizational hierarchy of the company; managing
director is the ultimate power in the company, He involves in all the activities of the company,
primarily executing offline orders, manages customers portfolios, customer relationship
management and loan processing, besides this gives directions to finance and marketing
managers on daily operations. Operational manager (finance) deals financial market operations
such as handling customer queries, offline trading, loan documentation, international remittance
and financial planning for the company. Marketing manager mainly focus on marketing and sales
activities, acquisition of customers, insurance and mutual fund sales, arranges corporate training,
manages company advertisement and helps in company operations. Relationship manger 1 and 2

highly involved with customers such as offline trading, online support, network building,
sharing, marketing and sales, loan documentation, back office support, market research, low and
medium net worth portfolio management and so on. Relationship manager 3 and 4 also carries
same level of responsibilities unlike 1 and 2, but major focus on marketing and sales and
business development.
All the employees are interrelated to each other, apart from their core responsibilities, they are
committed to provide customer oriented services and considered to be part of the One source
family.

Marketing Plan
Based on financial services market research, company is planning to introduce its product
and services.
Pricing strategy: Pricing is very sensitive area in marketing, it closely impact on entire company
operations. "Pricing is actually pretty simple...Customers will not pay literally a penny
more than the true value of the product." - Ron Johnson. Based on this understanding,
secondary market research on brokerage charges, and comparison of leading broker services and
charges, company prepared competitive pricing on its products. Company is planning to enter
with combination of customer based and competitor based pricing. Introducing special
introductory offer to attract more customers with combo package, such as 0.03% for intraday,
0.3% for delivery on transaction value and min of 10.99 per trade or whichever is higher will be
charged in stock broking and commodities. In forex trading 0.025% will be charged on
transaction value. Portfolio charges will be based on the size of the portfolio, min investment size
is 3000 and 5% upfront commission will be collected after successful (profit) trade, 3000-10000
investment -0.3%, 10000-50000 investment 1.5% and above 50000 nil will be collected at the
end of the 3rd quarter (trading commission and Govt. tax will be collected). On loan products
depends on the loan amount and purpose it varies from 0.5% to 3%. Corporate training depends
on the organization and no of applicants it will be charged, but min charges 150/session. A
remittance charge also depends on transferring amount, but min 2/transaction. Consultancy and
advisory services charges depend on service expectation and market condition.

The below mentioned table 1 shows the competitive commission charges from the
leading stock brokers on stock broking and commodity trading.

Table 1: Competitor stock broking charges

Share-dealing services
Product
RING395
X.O.CO.UK
IWEB
BEAUFORT SHAREDEALING
CLUBFINANCE
SHAREDEAL ACTIVE
SIPPDEAL
CHARLES STANLEY
INTERACTIVE INVESTOR
THE SHARE CENTRE
FIRST DIRECT SHARES
SAGA SHARE DIRECT
HARGREAVES LANSDOWN
HALIFAX/BOS
BESTINVEST
TD DIRECT INVESTING
BARCLAYS STOCKBROKERS
HSBC INVESTDIRECT
FIDELITY
ALLIANCE TRUST
LLOYDS TSB
REDMAYNE BENTLEY

Occasional investor
7.90a
11.90
35
16
101
19
19.90
45
80
32
22
23.90
23.90
23.90
75
55
54.70
25.90
79.20
73
62
50a

Semi-frequent investor
47.40a
71.40
85
96
106
114
119.40
120
120
132
132
143.40
143.40
143.40
150
150
155.40
155.40
169.20
198
212
486a

Frequent investor
474a
714
625
960
410
1,140
594
1,210
1,210
1,008
1,152
1,190
1,104
1,434
960
1,074
1,554
1,134
1,141
1,548
1,472
3,000a

(Source: http://www.which.co.uk/money/savings-and-investments/guides/stockbrokersexplained/the-cost-of-stockbrokers-compared)

Promotions: Company strongly believes in word of mouth advertisement and cost effective
promotions. Organizing free training sessions in leading B-Schools and promoting them to invest
in financial markets. Circulation of company brochure in city areas, collection of data base and
tele marketing, advertisement in social media, special promotional offers, referral benefits and
community development programs.

Production forecast and control: Production forecasting is the method of data prediction to plan
and improve production output. Company is planning to use simple average method to forecast
the growth from one quarter to another. It considers achievable growth for future calculations
and it helps to understand the company stand in competition. Based on market understanding,
UK international financial report and Scotland financial services analysis report, 60% annual
sales growth is possible (Monaghan, 2014). And also targeted customers are above 21 years
working professionals, import and export companies, pension holders and small business owners.
The following table shows the best possible business growth for 1st year.
Table 2: Sales forecasting for 1st year

Products
Stock Broking
Commodity
Forex
Mutual fund
Loan products
Portfolio services
Insurance
consultancy service
Business loan
(Source: Author)

1st Quarter
31,525,000
15,762,500
31,525,000
78,813
945,750
63,050
3,153
1,576
157,625

2nd Quarter
36,494,128
18,247,064
36,494,128
91,235
1,094,824
72,988
3,649
1,825
182,471

3rd quarter
42,246,515
21,123,258
42,246,515
105,616
1,267,395
84,493
4,225
2,112
211,233

4th quarter
48,905,622.01
24,452,811.00
48,905,622.01
122,264.06
1,467,168.66
97,811.24
4,890.56
2,445.28
244,528.11

It is small scale industry to have good control company is planning to have weekly
review on targeted sales, cost control, marketing strategies and promotion.
Distribution: Company is planning to have offline and online trading services, personalized
mutual fund and insurance sales, classroom based management training programs.

Operational Plan
Planning is one of the key factors for business success; poor plan will be dangerous for
startup firms. Firm should consider all the material and immaterial facts to develop effective
organizational and strategic plan (Hofstrand,2009). Most of the financial services providers are
using online and offline trading services, based on competitive analysis company planning to
have quick review on all the areas. To maintain good relationship with customer, using effective
CRM system and evaluate employee performance, implementing incentive schemes and

performance appraisal system. The image 5 shows the operational strategies to adopt for business
development.
Figure 6: Organisational plan

(Source: http://www.yale.edu/fin-bus/businessops/about.html)

For online trading company will provide online trading platform to the customer through
Wi-Fi, and for offline trading company planning to use BT satellite connection to avoid real time
quote. Furthermore as per requirement of the partner company, documentation process will be
carried to maintain legality and transference. To achieve long term growth company will have
combination of short and long term strategies. To maintain healthy working environment
introducing appreciation method, so each employee will be appreciated with financial and nonfinancial benefits. Focusing on 24hrs online communication system to serve better to the
customer and improve quality of service frequent training and development programs to
employees. Inclusion of customers into business operations gives values to the business, and
helps to understand competitiveness in the market. To have strong and effective business process,
daily report will be generated and key factors will be discussed to achieve more and more.

Financial Plan
Business is always connected to financial resources, poor management of resources will
cause for low liquidity, a good financial plan considers investment, cost of capital, generous
towards expenses and underestimate income (Startup, 2012). Financial plans provides the
overview of company operations and objectives, it should provide comfort level to run business
operations.
Business expenses: According to the plan business required 95000 to start its operation, all the
expected expenses are considered to produce optimum finance plan. Successful financial plan
should give more exposure for anticipated expenses in future, so that it will give freedom.
Table 3: Expected expenses of one source financial solutions
Expected Expenses
Particulars
Startup Expenses
Legal expenses
Office Equipment
Rent
Salary
Office Expenses
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Deposit and Reserve
Other Expenses
Total
(Source: Author)
Figure 7: Allocation of expenses

Amount
2500
2000
10000
12000
25000
10000
8000
20000
10000
95000

10%
Startup Expenses

Legal expenses

3%2%
10%
Office Equipment
5%

15%
Rent

Salary

Building Advance

Operating Expenses
12%

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8%
Deposit

Other Expenses
10%
25%

Sources
: Authors)

The above table3 show the required investment to start this business, the maximum
requirement from operating expenses, it includes legal cost, startup cost, rent, salary,
advertisement, office expenses and other expenses. Operating expenses are considered for 12
months, so that it is not an immediate requirement and it can be managed with business cash
flow. But it is included to provide safety and time for business performance, however business
income cannot be expected from the starting day. The 2nd major investment required for deposit
and reserve, it includes initial deposit for sub broking license, deposit for office building and
reserve for unexpected expenses. Next requirement from office equipment, it is a long term
investment and considered as a non-current assets.

Table 4: Expected annual cash flow statement

Expected cash flow

Expected Sales volume

Total Sales

Expected

Annual Retu
1st

Products
Stock Broking
Commodity
Forex
Mutual fund
Loan products
Portfolio services
Insurance

Quarter
31,525,000
15,762,500
31,525,000
78,813
945,750
63,050
3,153

3rd quarter

4th quarter

36,494,128
18,247,064
36,494,128
91,235
1,094,824
72,988
3,649

42,246,515
21,123,258
42,246,515
105,616
1,267,395
84,493
4,225

48,905,622
24,452,811
48,905,622
122,264
1,467,169
97,811
4,891

1,576

1,825

2,112

2,445

157,625

182,471

211,233

244,528

consultancy service
Business loan
Total

2nd Quarter

1st year
159,171,265
79,585,633
159,171,265
397,928
4,775,138
318,342
15,918
7,958
795,857

The above table 4 exhibits the expected cash flow from the various business activities. The
expected annual growth was 60% and sales returns for the 1 styear around 143,015. The major revenue
from stock broking and forex trading, and it also shows the well diversified business products.

The comparison between income expenses shows that, the project is beneficial and break
even period is 8 months, this is the optimum case. If consider worst case analysis it may vary
20% on its annual sales income.
Figure 8: Break-even point analysis

200000
150000
100000
50000
0
Jan

Feb

Mar

Apr

May

Jun

Expenses

Jul

Aug

Sep

Oct

Nov

Dec

Income

The above table shows the income expenses comparison for 12 months, and in the end 8 th month
this project will achieve no cost and no profit.

47,7
23,8
39,7
1,9
14,3
3,1
1

7,9
3,9
143,0

Table 5: Expected Income statement of One source financial solutions

Income statement for the year

Particulars
Sales
Less: Operating expenses
Startup Expenses
Legal expenses
Rent
Salary
Operating Expenses
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Other Expenses

Dr

Net Income
(Source:Author)

Cr
143016
2500
2000
12000
25000
10000
8000
10000
69500

143016
73516

The above table 5 shows the expected income and expenses for the year, this project able
to produce 73516 profit in 1st year after covering all the expenses.