Project report for Online business

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Introduction

E-commerce has transformed the way business is done in India. The Indian E-commerce market is expected to grow to US$ 200 billion by 2026 from US$ 38.5 billion as of 2017. Much of the growth for the industry has been triggered by an increase in internet and smartphone penetration. The ongoing digital transformation in the country is expected to increase India’s total internet user base to 829 million by 2021. The new normal life after the COVID -19 will defenitely make the purchase behaviour of the user at the same time the business models too. people prefer to buy thngs without direct contact and the invent of new cheap devices, people tend to go digitally.Propelled by rising smartphone penetration, launch of 4G network and increasing consumer wealth, the Indian E-commerce market is expected to grow to US$ 200 billion by 2026 from US$ 38.5 billion in 2017.Smartphone shipments in India increased eight per cent y-o-y to reach 152.5 million units in 2019, thereby making it the fastest among the top 20 smartphone markets in the world. We saw the changes during lockdown as people tend to buy mostly through online mediums than direct purchases. Internet penetration in India grew from just 4 per cent in 2007 to 52.08 per cent in 2019, registering a CAGR of 24 per cent between 2007 and 2019. The number of internet users in India is expected to increase from 687.62 million as of September 2019 to 829 million by 2021.

 

Market potential & Strategy

Owing to the increasing internet user base and favorable market conditions, India has a lot of potential in the e-commerce industry. Growing at an exponential rate, the market value of the e-commerce industry in India was approximately 50 billion U.S dollars in 2018. This number was estimated to reach 200 billion U.S. dollars by 2027. Since 2014, the Government of India has announced various initiatives, namely Digital India, Make in India, Start-up India, Skill India, and Innovation Fund. The timely and effective implementation of such programs will likely support the growth of E-commerce in the country. The behavioral pattern of the user dramatically changed post-COVID-19. So the scope of eCommerce based business is on the higher side. The E-commerce industry has been directly impacting micro, small & medium enterprises (MSME) in India by providing means of financing, technology, and training and has a favorable cascading effect on other industries as well. The Indian E-commerce industry has been on an upward growth trajectory and is expected to surpass the US to become the second-largest E-commerce market in the world by 2034. Technology-enabled innovations like digital payments, hyper-local logistics, analytics-driven customer engagement, and digital advertisements will likely support the growth in the sector. The growth in the E-commerce sector will also boost employment, increase revenues from export, increase tax collection by ex-chequers, and provide better products and services to customers in the long-term. The rise in smartphone usage is expected to rise 84 percent to reach 859 million by 2022. We will market through social media, google, SEO/SEM, etc. The cost of digital marketing is cheap compared with the traditional mode of advertisement. At the same time, the effectiveness comparing to the cost is at the higher side too. By giving catchy ads on social media, people will notice, and also by giving offers and innovative digital marketing techniques, the sales can skyrocket. 

 

PROJECT REPORT

Online business

Your address

Introduction

E-commerce has transformed the way business is done in India. The Indian E-commerce market is expected to grow to US$ 200 billion by 2026 from US$ 38.5 billion as of 2017. Much of the growth for the industry has been triggered by an increase in internet and smartphone penetration. The ongoing digital transformation in the country is expected to increase India’s total internet user base to 829 million by 2021. The new normal life after the COVID -19 will defenitely make the purchase behaviour of the user at the same time the business models too. people prefer to buy thngs without direct contact and the invent of new cheap devices, people tend to go digitally.Propelled by rising smartphone penetration, launch of 4G network and increasing consumer wealth, the Indian E-commerce market is expected to grow to US$ 200 billion by 2026 from US$ 38.5 billion in 2017.Smartphone shipments in India increased eight per cent y-o-y to reach 152.5 million units in 2019, thereby making it the fastest among the top 20 smartphone markets in the world. We saw the changes during lockdown as people tend to buy mostly through online mediums than direct purchases. Internet penetration in India grew from just 4 per cent in 2007 to 52.08 per cent in 2019, registering a CAGR of 24 per cent between 2007 and 2019. The number of internet users in India is expected to increase from 687.62 million as of September 2019 to 829 million by 2021.

Market potential & Strategy

Owing to the increasing internet user base and favorable market conditions, India has a lot of potential in the e-commerce industry. Growing at an exponential rate, the market value of the e-commerce industry in India was approximately 50 billion U.S dollars in 2018. This number was estimated to reach 200 billion U.S. dollars by 2027. Since 2014, the Government of India has announced various initiatives, namely Digital India, Make in India, Start-up India, Skill India, and Innovation Fund. The timely and effective implementation of such programs will likely support the growth of E-commerce in the country. The behavioral pattern of the user dramatically changed post-COVID-19. So the scope of eCommerce based business is on the higher side. The E-commerce industry has been directly impacting micro, small & medium enterprises (MSME) in India by providing means of financing, technology, and training and has a favorable cascading effect on other industries as well. The Indian E-commerce industry has been on an upward growth trajectory and is expected to surpass the US to become the second-largest E-commerce market in the world by 2034. Technology-enabled innovations like digital payments, hyper-local logistics, analytics-driven customer engagement, and digital advertisements will likely support the growth in the sector. The growth in the E-commerce sector will also boost employment, increase revenues from export, increase tax collection by ex-chequers, and provide better products and services to customers in the long-term. The rise in smartphone usage is expected to rise 84 percent to reach 859 million by 2022. We will market through social media, google, SEO/SEM, etc. The cost of digital marketing is cheap compared with the traditional mode of advertisement. At the same time, the effectiveness comparing to the cost is at the higher side too. By giving catchy ads on social media, people will notice, and also by giving offers and innovative digital marketing techniques, the sales can skyrocket. 

Project at a glance

Name & Address of Unit

Ecommerce

Your address

Details of unit
Phone : 123
Constitution : Proprietership
Number of employment : 10
Total project cost : *******
Fixed Capital : *******
Working Capital : *******
Total Bank loan : *******
Promoter(s) contribution : *******
Term loan : *******
Name & address of promoter(s)
Name : Your name
Designation : Proprietor

Project Feasibility Ratio

Debt Service Coverage Ratio (Average) :1.87
Current ratio (Average) :2.63
Year 1Year 2Year 3Year 4Year 5
Current ratio 1.53 2.06 2.62 3.19 3.76
Quick ratio 1.13 1.56 2.10 2.64 3.18
Interest coverage ratio 3.87 5.55 7.00 9.48 14.71
Debt equity ratio 2.863 2.080 1.528 1.020 0.542
TOL/TNW 3.02 1.45 0.79 0.43 0.21
DSCR 1.65 1.86 1.90 1.94 1.97
Gross profit Sales Percentage % 29.23 % 28.54 % 28.18 % 27.86 % 27.50 %
Net profit Sales Percentage % 10.84 % 10.56 % 11.10 % 11.57 % 11.90 %
BEP in % of installed capacity % 49.90 % 27.12 % 27.12 % 27.12 % 27.12 %
BEP in sales of Rs 2,620,800.00 1,840,695.65 1,972,173.91 2,103,652.17 2,235,130.43
Return On Capital Employed 0.26 0.34 0.34 0.33 0.33

Project Feasibility graph

Revenue v/s Expense Expense Splitup
 
Revenue
 
Expense
Net profit Sales % Quick ratio

Project Cost

Sl. no Item Amount Rs
1 Working Capital *******
Total *******

 

Working Capital Computation

Sl. no Item Amount Rs
1 Consumables / stock in hand *******
2 Work in progress *******
3 Finished goods *******
4 Working expense. *******
5 Receivables/Sundry debtors *******
6 Payables *******
7 Total working capital *******
8 Own Contribution *******

Total Yearly Expense

Sl. no Item Amount Rs
Total *******

Application of Fund

Sl. no Item Subsidy % No. Rate Amount Rs
Total Investment *******
Total Subsidy *******
Net Investment *******

Means of Finance

Sl. no Item Amount
1 Term Loan *******
2 Working capital Loan *******
3 Total loan *******
4 Term Loan contribution *******
5 Working capital contribution *******

Profitability Statement

Year 1(!*) Year 2 Year 3 Year 4 Year 5
Revenue from operation
Sales ***** ***** ***** ***** *****
Add :
Closing stock 0.00 0.00 0.00 0.00 0.00
Total ***** ***** ***** ***** *****
Less :
Opening stock 0.00 0.00 0.00 0.00 0.00
Stock purchase ***** ***** ***** ***** *****
Salary ***** ***** ***** ***** *****
Repairs and maintenance charges ***** ***** ***** ***** *****
gas ***** ***** ***** ***** *****
ELECTRICITY bill ***** ***** ***** ***** *****
Total ***** ***** ***** ***** *****
Gross profit ***** ***** ***** ***** *****
Less :
Rent ***** ***** ***** ***** *****
Telephone/Postal &internet charge ***** ***** ***** ***** *****
Total ***** 0***** ***** ***** *****
Depreciation ***** ***** ***** ***** *****
Interest on TL ***** ***** ***** ***** *****
Interest on WC ***** ***** ***** ***** *****
Total ***** ***** ***** ***** *****
Profit before tax ***** ***** ***** ***** *****
Income Tax ***** ***** ***** ***** *****
Profit after tax ***** ***** ***** ***** *****

Cash flow statement

Cash Inflow Pre operative period Year 1 Year 2 Year 3 Year 4 Year 5
Capital 0.63 0.00 0.00 0.00 0.00 0.00
Subsidy 0.00 0.00 0.00 0.00 0.00 0.00
Termloan ***** 0.00 0.00 0.00 0.00 0.00
Profit before tax with interest 0.00 ***** ***** ***** ***** *****
Increase in WC loan 0.00 0.00 0.00 0.00 0.00 0.00
Depreciation 0.00 ***** ***** ***** ***** *****
Increase in Current liability 0.00 0.00 0.00 0.00 0.00 0.00
Total Cash Inflow ***** ***** ***** ***** ***** *****
Cash Outflow
Fixed Assets ***** ***** ***** ***** ***** *****
Increase in Current asset 0.00 0.00 0.00 0.00 0.00
Interest on TL 0.00 ***** ***** ***** ***** *****
Interest on WC 0.00 0.00 0.00 0.00 0.00 0.00
Income Tax 0.00 ***** ***** ***** ***** *****
Decrease in Term loan ***** ***** ***** ***** *****
Drawing 0.00 0.00 0.00 0.00 0.00 0.00
Total Cash Outflow ***** ***** ***** ***** ***** *****
Opening balance ***** ***** ***** ***** ***** *****
Net Cashflow 0.00 ***** ***** ***** ***** *****
Closing balance 0.00 ***** ***** ***** ***** *****

Balance sheet

Liability Pre operative period Year 1 Year 2 Year 3 Year 4 Year 5
A. Share holders funds
Capital ***** ***** ***** ***** ***** *****
Reserve & Surplus 0.00 ***** ***** ***** ***** *****
B.Non current Liabilities
Termloan ***** ***** ***** ***** ***** *****
C.Current Liabilities
Working capital loan 0.00 0.00 0.00 0.00 0.00 0.00
Account payable 0.00 0.00 0.00 0.00 0.00
Total Liability ***** ***** ***** ***** ***** *****
Asset
A. Non current Assets
Fixed Assets ***** ***** ***** ***** ***** *****
B. Current Assets
Inventory 0.00 0.00 0.00 0.00 0.00 0.00
Trade receivables 0.00 0.00 0.00 0.00 0.00 0.00
Cash and cash equivalence ***** ***** ***** ***** ***** *****
Total Asset ***** ***** ***** ***** ***** *****

Repayment of Term loan

Year Installment Outstanding at the beginning Principal repayment Interest Amount paid Outstanding at the end
1 1 ***** ***** ***** ***** *****
1 2 ***** ***** ***** ***** *****
1 3 ***** ***** ***** ***** *****
1 4 ***** ***** ***** ***** *****
1 5 ***** ***** ***** ***** *****
| | | | | | |
| | | | | | |
5 56 ***** ***** ***** ***** *****
5 57 ***** ***** ***** ***** *****
5 58 ***** ***** ***** ***** *****
5 59 ***** ***** ***** ***** *****
5 60 ***** ***** ***** ***** *****

Debt Service Coverage Ratio

Particulars Year 1 Year 2 Year 3 Year 4 Year 5
Receipts
a).Net Profit 0.00 0.00 0.00 0.00 0.00
b).Depreciation 0.00 0.00 0.00 0.00 0.30
c).Interest on termloan 0.00 0.00 0.00 0.00 0.00
Total 0.00 0.00 0.00 0.00 0.00
Repayments
a).Loan Principal 0.00 0.00 0.00 0.00 0.00
b).Interest on termloan 0.00 0.00 0.00 0.00 0.00
Total 0.00 0.00 0.00 0.00 0.00
DSCR 0.00 0.00 0.00 0.00 0.00

Depreciation

Particulars Rate Year 1 Year 2 Year 3 Year 4 Year 5
Building 0.00 0.00 0.00 0.00 0.00 0.00
Less Depreciation 0.00 0.00 0.00 0.00 0.00
Written down value 0.00 0.00 0.00 0.00 0.00
Computers/ Printers /Photocopier/Electronic gadget 00 0.00 0.00 0.00 0.00 0.00
Less Depreciation 0.00 0.00 0.00 0.00 0.00
Written down value 0.00 0.00 0.00 0.00 0.00
Furniture & fixtures 00 0.00 0.00 0.00 0.00 0.00
Less Depreciation 0.00 0.00 0.00 0.00 0.00
Written down value 0.00 0.00 0.00 0.00 0.00
Racks & storage/Interior works 00 0.00 0.00 0.00 0.00 0.00
Less Depreciation 0.00 0.00 0.00 0.00 0.00
Written down value 0.00 0.00 0.00 0.00 0.00
new item 00 0.00 0.00 0.00 0.00 0.00
Less Depreciation 0.00 0.00 0.00 0.00 0.00
Written down value 0.00 0.00 0.00 0.00 0.00
new 00 0.00 0.00 0.00 0.00 0.00
Less Depreciation 0.00 0.00 0.00 0.00 0.00
Written down value 0.00 0.00 0.00 0.00 0.00
Air-conditioning 00 0.00 0.00 0.00 0.00 0.00
Less Depreciation 0.00 0.00 0.00 0.00 0.00
Written down value 0.00 0.00 0.00 0.00 0.00
Other investments 00 0.00 0.00 0.00 0.00 0.00
Less Depreciation 0.00 0.00 0.00 0.00 0.00
Written down value 0.00 0.00 0.00 0.00 0.00
Total less depreciation 0.00 0.00 0.00 0.00 0.00
Total written down value 0.00 0.00 0.00 0.00 0.00

Conclusion

The project as a whole describes the scope and viability of the Trading industry and mainly of the financial, technical and its market potential.The project guarantee sufficient fund to repay the loan and also give a good return on capital investment. When analyzing the social- economic impact, this project is able to generate an employment of 5 and above. It will cater the demand of Trading and thus helps the other business entities to increase the production and service which provide service and support to this industry. Thus more cyclic employment and livelihood generation. So in all ways, we can conclude the project is technically and socially viable and commercially sound too.

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