Resource Mobilisation Class 11 Notes Entrepreneurship Chapter 7 - CBSE

Chapter : 7

What Are Resource Mobilisation ?

Resources

Anything or means required to support the activities of organisation to achieve predetermined organisational goals are referred as resources.

Resource Mobilisation

It is the process of getting resources from resource provider using different mechanism, to implement the organisations work for achieving predetermined goals.

  • Having right type of resources
  • At right time
  • At right price
  • Optimal utilization of resource

Planning Effective Resource Mobilisation

  • Step-1: Evaluate and judge the need for resources.
  • Step-2: Identify the type of resources required.
  • Step-3: Locate the availability of resources.
  • Step-4: Effective communication with the suppliers of resources.
  • Step-5: Evaluate the quantity of resources required.
  • Step-6: Identify the problems pertaining to mobilisation of resources.
  • Step-7: Arrange funds for acquisition of resources.
  • Step-8: Plan out inventory management for the procured resources.

Type Of Resources

  • Physical
  • Financial
  • Human
  • Technical
  • Material
  • Intangible

Estimating Financial Requirements

One of the most critical problems which every entrepreneur faces is securing financing for the venture which is very acute at start-up.

Capital Is Required For

  • Commencement
  • Day to day operations
  • Modernisation activities
  • Expansion
  • Diversification
  • Research and development activities

Financial Planning

It involves raising of funds and their effective utilisation, keeping in view the overall objectives of the firm.

Objectives
  • Raising of Funds
  • Deployment of Surplus funds

Importance Of Financial Planning

  • Availability of funds at right time
  • Cost effectiveness
  • Optimum use of funds
  • Coordination among different business functions
  • Avoidance of wastage of resources

Capital Requirement

Fixed capital requirement

Capital required to be invested in fixed assets.

Working capital requirement

Capital required to be invested in current assets for day to day operations.

Features of Fixed Capital

  • Not easy to withdraw it is like a permanent capital.
  • Generally procured through long term financial resources.
  • Invested in procuring fixed asset.
  • Basis of income generation capacity.

Arrangement of Fixed Capital

  • Issue of shares
  • Issue of debentures
  • Inviting public deposits
  • Ploughing back of profits
  • Long term borrowing from banks and financial institutions.

Factors determining working capital

  • Nature and size of business
  • Business cycle
  • Gestation period
  • Volume and procurement of raw material
  • Manual or Automation
  • Need to stock up inventories
  • Turnover of working capital
  • Terms of credit

Arrangement of Working Capital

  • Short/medium term borrowings
  • Public deposits
  • Other finance companies
  • From internal sources

Capitalisation

It is the total amount of long term funds received by a business from its shareholders and creditors.

Types of Capitalisation
  • Over-capitalised
  • Under-capitalised

Both the situations is not good for the organisation

Capital Structure

Capital Structure refers to the proportion between owned funds and borrowed funds.

Pattern
  • Equity shares
  • Both equity and preference shares
  • Equity and debentures
  • Equity profit and debentures

Source Of Finance

Finance is the critical element for the success of business. An entrepreneur must consider all possible sources of capital and select the one which provide the needed funds at minimal cost and minimal loss of control.

Types of Financing Sources

Equity financing
  • Ploughing back of profits
  • Equity shares
  • Preference shares
  • Seed capital
Personal Financing
  • Personal savings
  • Friends and relatives
  • Chit funds
  • Deposits from dealers
Venture Capital
  • Angle investors
  • Venture Capitalist
Debt Financing
  • Debenture
  • Public Deposits
  • Loan from Bank
  • Loan from financial institutions
  • Grants
  • Loan from specialised financial institutions
  • Private money lenders
  • Trade credit

Public Financing

Other Sources of Finance

Internal

Finance availability from within the firm

External

Finance from outside the firm’s own resources

Mentorship

It is a developmental partnership through which one person share knowledge, skills, information and perspective to foster the personal and professional growth of someone else.

Mentor

A mentor is a trusted guide, adviser, wise intellect person who uses the mind creatively especially in occupational settings.

Business Mentor

The person who is capable and willing to offer invaluable advice, support and guidance to a new entrepreneur is referred as business mentor.

Types of Mentoring

Construction Mode
  • Formal mentoring
    • Traditional Mentoring
    • Special Project Mentoring
  • Informal mentoring
Delivering Mode
  • One to one mentoring
  • Group mentoring
  • Online mentoring
  • Peer mentoring

Classification Of Business Enterprise

Business is defined as an human activity directed towards producing or acquiring wealth through buying and selling of goods.

Classification of Business

  • Activity
  • Size
  • Ownership

Classification based on capital invested

Small Scale
  • The individual unit whose investment in plant and machinery does not exceed ₹5 crore.
Medium Scale
  • The unit where the investment in plant and machinery is more than ₹5 crore but dosen’t exceeds ₹10 crores.
Large Scale
  • The unit where the investment in plant and machinery exceeds ₹10 crore.

Micro Enterprises: Investment in equipment does not exceed ₹10 lakhs.

Small Enterprises: Investment in equipment is more than ₹10 lakh but does not exceed ₹2 crores.

Medium Enterprises: Investment in equipment is more than ₹2 Crores and less than ₹5 crores.

Sources Of Information

Information is the processed data. An information services is where you get your information from.

Producer of Information
  • Government Agencies
  • Academic Institutions
  • Private Sector
  • Individuals

Importance Of Information For Entrepreneur

  • Helps to evaluate the feasibility, Viability, application and utility of the idea.
  • Helps to understand the prevailing market conditions and market forces governing the environment.
  • Types of resources required and their suppliers.
  • Expected profitability.
  • Know about competitions, their strengths and weaknesses.

Sources Of Information

  • Primary
  • Secondary
  • Tertiary