Need help from an MBA guy.

[ajuvignesh]

Hi all,
I need some advise from MBA guys or others with the business knowledge.

So, Im planning to start a small business and I would like to know more about the terms like
- Distributor landing price
- Retailer landing price
- Markup
- Markdown
- profit margin etc.
and the calculations associated with it.

Can you recommend a book or set of books that covers all these and much more? Tried my luck with AI with book suggestions and it didn’t turn out to be good.

Please help.

 

[ketansethi1987]

Hi all,
I need some advise from MBA guys or others with the business knowledge.

So, Im planning to start a small business and I would like to know more about the terms like
- Distributor landing price
- Retailer landing price
- Markup
- Markdown
- profit margin etc.
and the calculations associated with it.

Can you recommend a book or set of books that covers all these and much more? Tried my luck with AI with book suggestions and it didn’t turn out to be good.

Please help.

Many factors to be considered here.
Are planning to start trading business or manufacturing?
Is it product related or service related business?
What type of business organisation you plan to register?
Selling directly to your customers or through retailers?
Online or offline?

 

[ajuvignesh]

Many factors to be considered here.
Are planning to start trading business or manufacturing?
Is it product related or service related business?
What type of business organisation you plan to register?
Selling directly to your customers or through retailers?
Online or offline?

Hi. Thanks for responding.

Starting manufacturing business. It is a snack manufacturing business. It is a product related business. As of now, Im planning for pvt limited. Selling to distributors. Both online and offline. Online sales will be handled by the company. Offline would go through distributors.

 

[ketansethi1987]

Hi. Thanks for responding.

Starting manufacturing business. It is a snack manufacturing business. It is a product related business. As of now, Im planning for pvt limited. Selling to distributors. Both online and offline. Online sales will be handled by the company. Offline would go through distributors.

First of all I would suggest not to go for a Private Limited Company form of business organization. Go for a sole proprietorship or a partnership. There are unnecessary requirements which are to maintained every year when you have a Pvt. Ltd. Company so avoid that for now. Later on your Proprietorship or partnership can be converted to Pvt. Ltd. if required.
You should get your trademark registered first. Get a PAN in name of the business or you can use your own PAN as well.
For selling online you will need a GST number.
Then see what price are the similar products being sold online and offline. Calculate all your costs per package and you shall be able to derive all the prices you want like dealer price, distributor price etc.

 

[arj]

On setting up, proprietorship has taxation is based on income tax slabs unlike others. a pvt ltd which has more compliance but at 22%. partnerships are at 30%

I assume you have made a business plan for this ? ideally google for a startup mentorship program who will help you with all this .
more than books you ideally need to look for a mentor.

Edit: Proprietorship on Manufacturing has an impact on liability of capital equipment so yeah one of the others. but please consult with some mentor than jut on these forums

 

[ajuvignesh]

First of all I would suggest not to go for a Private Limited Company form of business organization. Go for a sole proprietorship or a partnership. There are unnecessary requirements which are to maintained every year when you have a Pvt. Ltd. Company so avoid that for now. Later on your Proprietorship or partnership can be converted to Pvt. Ltd. if required.
You should get your trademark registered first. Get a PAN in name of the business or you can use your own PAN as well.
For selling online you will need a GST number.
Then see what price are the similar products being sold online and offline. Calculate all your costs per package and you shall be able to derive all the prices you want like dealer price, distributor price etc.

Thank you so much.
I do have a gst, msme, etc for another company of a very different domain. It is under proprietorship. Can I put this new business under the old one’s umbrella with any benefits?

 

[ajuvignesh]

On setting up, proprietorship has taxation is based on income tax slabs unlike others. a pvt ltd which has more compliance but at 22%. partnerships are at 30%

I assume you have made a business plan for this ? ideally google for a startup mentorship program who will help you with all this .
more than books you ideally need to look for a mentor.

Edit: Proprietorship on Manufacturing has an impact on liability of capital equipment so yeah one of the others. but please consult with some mentor than jut on these forums

Thank you so much. I will take your advise and search for a mentor.

If you don’t mind, can you explain a bit on “Proprietorship on Manufacturing has an impact on liability of capital equipment?”

 

[arj]

Thank you so much. I will take your advise and search for a mentor.

If you don’t mind, can you explain a bit on “Proprietorship on Manufacturing has an impact on liability of capital equipment?”

If you own capital goods (such as manufacturing equipment) in a proprietorship, there is no dfference between your personal assets and business assets. So if the business faces financial issues your personal property can be at risk because the liability could be unlimited whch could mean a big personal loss.

if you form a company , the business becomes a separate legal entity. The company owns the capital goods, and your liability is limited to your investment in the business..

 

[ajuvignesh]

If you own capital goods (such as manufacturing equipment) in a proprietorship, there is no dfference between your personal assets and business assets. So if the business faces financial issues your personal property can be at risk because the liability could be unlimited whch could mean a big personal loss.

if you form a company , the business becomes a separate legal entity. The company owns the capital goods, and your liability is limited to your investment in the business..

Understood. Thanks for the detailed explanation, arj.

 

[ketansethi1987]

Thank you so much.
I do have a gst, msme, etc for another company of a very different domain. It is under proprietorship. Can I put this new business under the old one’s umbrella with any benefits?

Yes you can put the new business under the old one. The best benefit is that you will not need to make several balance sheets and accounting and filing would be much easier. Account is one of the biggest headaches so one should keep it to the minimum. You will have to add the new business under the old GST and there might be other formalities too but the main one is adding it in the GST.

 

[Nitin K]

Thank you so much.
I do have a gst, msme, etc for another company of a very different domain. It is under proprietorship. Can I put this new business under the old one’s umbrella with any benefits?

If you want to limit your business liability then you can start a limited Liability partnership (LLP) with your family member. It would be a separate entity and the liability of the partners are limited. Hence less risky and personal assets won't get affected in case of debt or law suit since it is a separate entity. But you may need a separate gst and msme.

 

[ajuvignesh]

Yes you can put the new business under the old one. The best benefit is that you will not need to make several balance sheets and accounting and filing would be much easier. Account is one of the biggest headaches so one should keep it to the minimum. You will have to add the new business under the old GST and there might be other formalities too but the main one is adding it in the GST.

Thank you.

If you want to limit your business liability then you can start a limited Liability partnership (LLP) with your family member. It would be a separate entity and the liability of the partners are limited. Hence less risky and personal assets won't get affected in case of debt or law suit since it is a separate entity. But you may need a separate gst and msme.

Thank you. Can I add my mom/father as a business partner? Both are above 70. Will there be any issues to get loan for myself in such cases?

 

[Nitin K]

Thank you.

Thank you. Can I add my mom/father as a business partner? Both are above 70. Will there be any issues to get loan for myself in such cases?

Most welcome. Yes you can add your mother/father as a partner. The minimum age requirement is 18 yrs and maximum in an LLP is not specified.
Basically the stipulation is that the record of the incoming partner concerned should be clean with no offences & with good mental health too so as to enter into contracts.
I am not an MBA nor a CA hence it would be great if you can consult a CA on this to clarify any doubts and loan eligibility for the same. An LLP has the advantages of a sole proprietorship in decision making but with a limited liability advantage.

 

[ajuvignesh]

Most welcome. Yes you can add your mother/father as a partner. The minimum age requirement is 18 yrs and maximum in an LLP is not specified.
Basically the stipulation is that the record of the incoming partner concerned should be clean with no offences & with good mental health too so as to enter into contracts.
I am not an MBA nor a CA hence it would be great if you can consult a CA on this to clarify any doubts and loan eligibility for the same. An LLP has the advantages of a sole proprietorship in decision making but with a limited liability advantage.

Thanks Nitin. Looks like everything is positive. Will consult an accountant as you advised.

 

[Akshr]

ChatGpt and the deep research tools can give you some ideas and basic info as well. They will know these things approximately. You can try different prompts.

I know this is a lame post, "just use chatgpt"

But they are genuinely helpful in this case.

 

[Nitin K]

Thanks Nitin. Looks like everything is positive. Will consult an accountant as you advised.

Most welcome Ajuvignesh. Wishing you all the best for your future venture.

 

[ajuvignesh]

ChatGpt and the deep research tools can give you some ideas and basic info as well. They will know these things approximately. You can try different prompts.

I know this is a lame post, "just use chatgpt"

But they are genuinely helpful in this case.

Yeah. I did get help with chat gpt. But a book would give a complete picture and interlinks.

Most welcome Ajuvignesh. Wishing you all the best for your future venture.

Thank you, Nitin.

 

[ketansethi1987]

Thank you.

I am a CS myself but not practicing it have few friends in the field. Let me know if you need any assistance in getting things registered. You may DM for the same.

 

[ajuvignesh]

I am a CS myself but not practicing it have few friends in the field. Let me know if you need any assistance in getting things registered. You may DM for the same.

Thank you so much. I will dm you soon.