Page 148 - DMGT310_ENTREPRENEURSHIP_AND_SMALL_BUSINESS_MANAGEMENT

Unit 9: Financial Considerations

Notes
she was happy to see the conventional public sector bank appearance had been taken over
by a world class infrastructure with fully air-conditioned work area. She complimented
Mr Chauhan (one of the employees) for the wonderful advancements as she waited patiently
for passbook updation. It was only after she requested for cash withdrawal that she realized
that “all that was glittering was not gold”. As soon as she gave a cheque for encashment to
one of the employees he immediately reverted back with scornful tone “Madam we have
closed down the cash and you can only get cash tomorrow between 10-3.”

“But then I was being informed that things have changed at Mera bank.” she replied.
“You mean that you really think that we all can slog ourselves from 8 to 8? Come out of
your whims and fancies madam, with no extra staff to support 8-8, this is just a temporary
change and we will make sure that we revert back to the earlier 10-5 work schedule.”
Samina turned ablaze at such cold treatment that she received ‘from her own bank’ as she
puts it. She had a heated altercation with the employee and left a complaint to the branch
manager.
The branch manager is now perplexed; he is thinking on what went wrong in introducing
the change which was planned in advance and discussed. Theoretically, everything was
streamlined: loyal employees, good financial condition, sound training system to cope up
the challenges thrown by the changing banking system.
The branch manger is pondering on his line of action regarding the complaint: should he
ignore the complaint, should he issue a charge sheet against the employee, should he call
for a meeting of all the employees on this issue or should he look for outside help from a
consultant? For this is not the first complaint that he has received and this is not the only
employee against whom the complaint has been received. The fact is that employees are
not able to accept the change (read: the increased work hours). Which clearly indicates that
the problem lies in the system and needs immediate intervention.
Questions
1. What suggestion do you make to Mera Bank regarding the above problems?

2. Do you think employees should be made a part of planning for organizational
restructuring? Give reasons for your answers.
3. What suggestion do you make to overcome the above problem?

Source: Lall Madhurima, (2009), Entrepreneurship and Business Plan, Excel Books Pvt. Ltd.

9.5 Summary

Financial resources are essential for business, because it is called the life-blood of a business.
Financing refers to procurement of finance for the enterprise and its proper utilization to
fulfill the objectives. Finance is the backbone of an enterprise.
Capital is needed to start and operate the business, and make it grow. Financing means
those types of business activities which are directed for procurement and conservation of
the capital fund needed for meeting the financial requirements as well as fulfillment
of overall objective of the firm. Financing for new enterprises occupies an
important role.

In order to prepare an estimation of capital requirement, various types of expenditure that
should be taken into account are promotion and formation expenses, expenses for
purchasing fixed assets, expenses for expansion of business, expenses for current assets
and cost of raising capital etc.

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