What is TReDS and why was it developed? - By Egniol

What is TReDS, and why was it developed?

TReDS is essentially an online auction process for trade receivables, also known as discounting bills. In other words, it satisfies necessary short-term financing. TReDS allow trade receivables to be financed by a number of different lenders. Invoices and bills of exchange are both discounted under this plan. Credit is extended to the vendor, and the discount represents interest paid to the financier. There will be direct participants in TReDS from a variety of sectors, including buyers like government agencies and public sector organisations.

The Reserve Bank of India (RBI) has implemented the Trade Receivables Discounting System (TReDS) to make it easier for Micro, Small, and Medium-Sized Businesses (MSMEs) to obtain financing or discounts on their trade receivables from a variety of lenders. Companies, as well as government agencies and Public Sector Undertakings (PSUs), may be the source of such receivables.

For the many issues that arise from late payments, especially for MSMEs, this is a simple solution.

  • Lack of available funds prevents the company from growing and taking on new projects.
  • Expenses for maintaining normal operations can’t be met because cash flow is inadequate.
  • Negative effects on relationships and brand reputation due to late payments to vendors.
  • Due to not being able to pay off debts, your credit score will suffer, making it difficult to obtain credit in the future.

Over INR 500 crores in annual revenue necessitates use of the TReDS platform, as of 2 November 2018 per the Department of Micro, Small, and Medium Enterprises. Companies with a turnover of more than INR 500 crores and all Central Public Sector Enterprises are mandated to adopt a TReDS platform, according to the notice. As a result, these businesses are now required to become TReDS members.

For the purpose of ensuring that this notification is followed, the Registrar of Companies (RoC) in each state has been designated as the competent authority.

As a result of TReDS

  • MSMEs now have greater access to financing at competitive rates without having to provide additional collateral. Additionally, the financing is nonrecourse to the MSMEs.
  • Through better vendor financing negotiation, corporations can reduce procurement expenditures.
  • Multiple financiers have the opportunity to build Priority Sector Lending (PSL) asset portfolios on Trade Receivable Exchange platforms which aim to provide MSMEs with supply chain-related cash flow financing at competitive interest rates.

What is the Electrical Functioning of TReDS?

What is TReDS and why was it developed? - By Egniol

The invoice can be uploaded to the electronic platform by micro, small, and medium sized businesses. In India, the fee increases to 750 INR. After that, it is sent digitally to companies or retailers like Honda, Mahindra, Tata, etc., who are potential buyers, with the expectation of acceptance within a given time frame. The lenders provide discounts to the buyers and the winning bidder is the one who pays the interest rate, whether that’s the seller or the buyer. The seller’s account is credited by corporates or banks the following business day after the final settlement is processed by TReDS. The money is paid back to the financier at a later date. Invoices can’t go for less than the RBI-mandated MCLR (marginal cost of funds based lending rate).

During the on-boarding process, entities are required to submit KYC related documents along with resolutions or specific documents to the authorised personnel in order to ensure there is no window dressing. The MSME vendor would be given access credentials like usernames and passwords. Participants in TReDS would reach a one-time agreement among themselves. When a factoring unit is accepted, the buyer is bound by the terms of this master agreement, which includes the obligation to pay on the due date. There would be no recourse provided and no set offs would be allowed for disputes involving the quality of the goods.

In other words, TReDS facilitates the uploading, accepting, discounting, trading, and settles the invoices/bills of exchange of MSME Supplier by bringing together MSME Suppliers, Buyers (i.e. Corporates, Government Departments, and Public Sector Undertakings), and Financiers (i.e. Banks, NBFCs, and Financial Institutions). A valid invoice is uploaded by the MSME Supplier to the TReDs Platform, where it is checked for accuracy and given final approval by the Buyer. Approval triggers a bidding process in which multiple Financiers offer reduced rates on the approved invoice. If the MSME Supplier decides to accept the bid, it can do so at its own discretion; once the bid is accepted, the payment is processed, and the MSME Supplier’s account is credited with the discounted amount.

Benefits of TReDS for MSMEs

  • Quicker payments – MSME sellers typically receive funds within 48 hours of receiving approved invoices.
  • Multiple financiers – The TReDS provides MSMEs with a broader range of financial options. They can select the lowest bidder from among several financiers.
  • Borrowing without recourse means that MSMEs are not obligated to repay the financier if the buyer fails to repay.
  • Lower funding costs – TReDs use a transparent bidding process that enables MSMEs to find the best quote. Due to the buyer’s credit rating, the seller can obtain financing at competitive terms.
  • Off-balance-sheet financing – The TReDs provides a collateral-free bill discounting service that does not affect the balance sheet of the business’s other expenses because it involves the sale of receivables.
  • Working capital without collateral – Sellers can meet working capital requirements by bill discounting unpaid invoices.
  • Business expansion is made easier with timely payments and a consistent record of meeting working capital requirements.

TReDS is a digital portal. It enables MSMEs to obtain funds in advance against trade receivables. They can now more easily meet liquidity needs and better manage their business thanks to the increased speed with which they can access funds. 

Everything you must know about SWOT Analysis - By Egniol

Everything you must know about SWOT Analysis

What is a SWOT Analysis?

SWOT (strengths, weaknesses, opportunities, and threats) analysis is a framework for evaluating a company’s competitive position and developing its strategic plan. Internal and external factors, as well as present and future potential, are evaluated by SWOT analysis.

The purpose of a SWOT analysis is to facilitate a realistic, fact-based, data-driven examination of the strengths and weaknesses of an organisation, its initiatives, or its industry. The organisation must maintain the accuracy of its analysis by avoiding preconceived notions or grey areas and focusing on real-world contexts. Companies should utilise it as a guide, not as a prescription.

Comprehending the SWOT Analysis

SWOT analysis is a method for evaluating the performance, competition, risk, and potential of a business, as well as a product line, division, industry, or other entity.

Using internal and external data, the technique can steer businesses toward strategies that are more likely to be successful and away from those that have been less successful or are less likely to be successful. They can also seek advice from independent SWOT analysts, investors, or competitors regarding whether a company, product line, or industry is likely to be strong or weak and why.

Elements of the SWOT Analysis

Everything you must know about SWOT Analysis - By Egniol

Every SWOT analysis will include the four categories listed below. Despite the fact that the elements and findings within these categories will vary from company to company, a SWOT analysis is incomplete without the following:

Strengths

Strengths describe what an organisation excels at and what sets it apart from the competition: a strong brand, a loyal customer base, a strong balance sheet, and so on. For instance, a hedge fund might have developed a proprietary trading strategy that outperforms the market. The organisation must then determine how to use these findings to attract new investors.

Weaknesses

Weaknesses prevent an organisation from reaching its full potential. A weak brand, a higher-than-average turnover, high levels of debt, an inadequate supply chain, or a lack of capital are areas where the business must improve to remain competitive.

Opportunities

Opportunities are favourable external factors that could provide a competitive advantage to a business. If a country reduces tariffs, for instance, a car manufacturer can export its vehicles to a new market, thereby increasing sales and market share.

Threats

Threats are elements with the potential to cause harm to an organisation. A drought, for instance, poses a threat to a wheat-producing company because it can destroy or reduce crop yield. Other common threats include rising material costs, intensifying competition, and labour shortages, among others.

SWOT Table

Analysts present a SWOT analysis as a square divided into four quadrants, with each quadrant devoted to a component of SWOT. This visual layout provides a concise summary of the company’s position. Although not all of the points under a particular heading may be of equal significance, they should all provide essential insights into the balance of opportunities and threats, benefits and drawbacks, etc.

The internal factors are typically placed in the top row and the external factors in the bottom row. In addition, the items on the left side of the table represent more positive/favourable characteristics, whereas the items on the right represent more negative/worrisome characteristics.

Strengths

Weakness

Opportunities

Threats

Advantages of a SWOT Analysis

Everything you must know about SWOT Analysis - By Egniol

SWOT can’t answer all of a company’s questions. SWOT analysis helps with strategic decision-making.

It simplifies complex problem-solving. There may be too much data and relevant factors to consider when making a complex decision. By paring down ideas and ranking bullets by importance, a SWOT analysis can aggregate a large, potentially overwhelming problem into an easier-to-understand report.

The analysis requires external consideration. Too often, a company may make decisions based on internal factors. External factors can affect a business decision’s outcome. A SWOT analysis considers internal and external company factors.

SWOT analysis applies to most business questions. A company, group, or individual may be analysed. It can also analyse a product line, brand change, geographical expansion, or acquisition. SWOT analysis has many uses.

It uses multiple data sources. A company’s strengths and weaknesses are likely determined by internal data. The company must also collect external market, competitor, and macroeconomic information to identify opportunities and threats. A good SWOT analysis uses multiple, non-biased sources.

This analyses aren’t always expensive. Some SWOT reports aren’t overly technical, so many employees can contribute without training or outside consultation.

Why Do We Use SWOT Analysis?

A SWOT analysis is utilised to strategically identify a company’s improvement opportunities and competitive advantages. In addition to analysing the positive aspects of a company, SWOT analysis examines its weaknesses. Using this information, a business can make more informed decisions to preserve what it does well, capitalise on its strengths, mitigate risk associated with its weaknesses, and prepare for future events that may negatively impact the business.

The Final Analysis

The purpose of this analysis is to help with business strategy meetings. Everyone should discuss the company’s strengths and weaknesses, opportunities and threats, and ideas. Often, the SWOT analysis you envisioned before the session changes to reflect factors you missed without the group’s input.

It can be used for general business strategy sessions or for marketing, production, or sales. Before committing to a strategy, see how the overall SWOT strategy affects the segments below. You can also combine segment-specific and overall SWOT analyses.

SWOT has limitations as a planning tool. It should not be used alone when planning a business. Not every category point is equally important. SWOT isn’t weighted. Deeper analysis and a different planning method are needed.

What is a Business Risk & How can it be recognised? - By Egniol

What is a Business Risk & How can it be recognised?

What is Business Risk?

A company’s or organisation’s exposure to the possibility of experiencing decreased profits or complete failure is known as “business risk.” A business risk is anything that could potentially hinder the company’s progress toward its financial objectives. Many disparate elements can interact to increase the potential for loss for a company. Business risk can be increased when decisions are made at the highest levels of an organisation that are counter to the best interests of the company.

It’s possible, though, that a company’s exposure to risk has an external source. As a result, it’s impossible for a business to completely avoid peril. However, there are ways to reduce the impact of these risks on your business, and most companies do this by implementing a business risk management strategy.

Understanding Business Risk

A company’s ability to generate profits for their shareholders and other stakeholders could be jeopardised by the presence of significant business risk. The chief executive officer (CEO) of a company bears ultimate responsibility for the success or failure of the company, and his or her decisions can have a significant impact on the company’s bottom line.

Among the many variables that can affect a company’s business risk are:

  • Sales volumes, product popularity, and consumer tastes
  • Retail and production expenses
  • Competition
  • Global economic conditions
  • Rules set by the government

A lower debt ratio in the capital structure may be chosen by a company with a higher business risk profile to guarantee the regular payment of all debts. In the event of a decline in revenues, a company with a low debt ratio may be unable to meet its debt obligations (and this may lead to bankruptcy). On the other hand, when revenues rise, a firm with a low debt ratio is better able to meet its financial commitments thanks to increased profits.

Analysts use just four straightforward ratios—contribution margin, operation leverage effect, financial leverage effect, and total leverage effect—to quantify risk. Analysts can use statistical methods for more involved computations. Strategic risk, compliance risk, operational risk, and reputational risk are the most common types of business risk.

Diverse Forms of Corporate Risks

What is a Business Risk & How can it be recognised? - By Egniol

Strategic Risk

Any time a company deviates from its business model or plan, it introduces strategic business risk. It can be difficult, if not impossible, for a company to achieve its objectives if its operations deviate from its business model. An example of a strategic risk for Walmart would be if the company chose to position itself as the low-cost provider and Target then decided to undercut Walmart’s prices.

Compliance Risk

Compliance risk is the second category of dangers that a company faces. It is in highly regulated sectors and industries where the risk of noncompliance is greatest. The wine industry in the United States, for instance, employs a three-tier distribution system in which wholesalers sell wine to retailers who in turn sell it to consumers (who then sells it to consumers). Due to this system, wineries can no longer sell their wares directly to stores.

Numerous states in the United States, however, do not use this distribution system, so there is a risk of noncompliance when a company fails to learn the specific regulations of the jurisdiction in which it operates. A company runs the risk of breaking distribution laws in individual states if this happens.

Operational Risk

Thirdly, operational risk is a form of business risk. This threat comes from within the company and is most evident when normal business functions are ineffective. When HSBC’s internal anti-money laundering operations team failed to effectively prevent money laundering in Mexico in 2012, the bank faced a significant operational risk and was penalised heavily by the U.S. Department of Justice.

Reputational Risk

What is a Business Risk & How can it be recognised? - By Egniol

If a company’s reputation is damaged, for whatever reason (including but not limited to the occurrence of an event that was the result of a previous business risk), it runs the risk of losing customers and seeing brand loyalty plummet. HSBC’s standing in the market dropped after it was penalised for lax anti-money laundering procedures and subsequent fine.

The unpredictability of business risk makes it impossible to eliminate it entirely. Yet, there are a variety of tactics that companies can use to mitigate strategic, compliance, operational, and reputational risks.

When developing a business strategy, the first step for most brands is to pinpoint all potential danger areas. These dangers can come from both external sources and internal factors. It’s crucial to take measures to reduce business risks as soon as they become apparent. If there are any risks that can be identified, management should devise a strategy to mitigate them before they escalate.

Once a company’s management has devised a strategy for mitigating a risk, they should take the extra step of documenting the process in case a similar situation arises in the future. After all, risks in business tend to recur in cycles, just like the economy.

At the end of the day, most businesses implement some sort of risk management strategy. This can happen either before the company starts up or after it has encountered a setback. The goal of risk management is to make a company more resilient to the various threats it faces. In the event of an emergency, the plan should include tried and true ideas and protocols.

How Can You Prevent Emotional Investing? | Egniol

How Can You Prevent Emotional Investing?

Emotions are a part of being human. Investments are no exception to the rule that emotional decisions have negative outcomes. Impulsive trading and hasty decisions are the results of emotional investing, which can slow down the process of building wealth.

Investing without letting your emotions get in the way is essential for building wealth over time and keeping you on track to reach your financial goals. But how do we accomplish this? Come on, then, let’s find out.

Emotional Investing: What Is It?

When emotional investing, you let your feelings influence your investment decisions rather than hard data. It’s made up of a mixture of pessimism, optimism, fear, and greed. This style of investing is driven by emotional decisions and follows the herd. Investors tend to react in cycles to market volatility and swings.

What exactly are stock market impulses?

Stock market impulses can be defined as market-movement reactions. Markets for stocks almost never move in a straight line. There will be both good times and difficult times. Every bull market is followed by a bear market, and vice versa. This has caused an “impulse” in the market as investors react to the news.

Achieving investment goals is heavily reliant on the impulses or behaviour prompted by the emotions associated with buying or selling when markets are volatile.

What Can Be Done to Prevent Emotional Investments?

How Can You Prevent Emotional Investing? | Egniol

Stock market euphoria can be fatal. It can be detrimental to your financial well-being and your ability to achieve your personal goals in life. For this reason, it’s crucial to maintain emotional control. Here’s what you need to do to accomplish that goal:

1. Distinguish between stock performance and actual business success

Stock performance is frequently confused with business performance by investors. The performance of the underlying business should now be your primary concern, rather than fluctuations in the stock price. Bear in mind that a stock that is fundamentally weak can experience a period of rapid price appreciation.

In the same way, strong stocks suffer greatly during a bear market. Investigate the company’s foundations in both cases before making a financial commitment. Get information on the following issues:

  • Have you been able to turn a profit with this company?
  • Where do the company’s founders and backers come from, and what do they have to show for their efforts?
  • How much do you think the company could be worth in ten years?
  • To what extent do the basics of the business hold up?

Your ability to avoid emotional trading and maximise profits from the stock market hinges on the answers to these questions.

2. Inquire about the Big Picture

For various reasons, you’ve decided to start investing. The goals you set for your investments are what shape your portfolio. It’s important to step back and consider the big picture before making any impulsive investments.

  • Is there a change in my financial status?
  • Is the level of risk in my portfolio appropriate for me?
  • Is there enough variety in the offerings?
  • Is my time horizon for making investments still the same as it was when I first started?

If you find yourself answering “yes” to most of these, you may wonder why you feel the need to make any adjustments at all. Answering these questions can help you take your mind off of whatever is currently causing you discomfort.

3. Cease keeping a close eye on your investments

Stopping daily market tracking is a simple way to lessen the emotional toll of market fluctuations. During times of market volatility, anxiety levels will rise and the risk of emotional investing will rise if you check your investments frequently.

Those who were stuck with their investments through periods of market volatility in the past were handsomely rewarded. Tune out distractions and resist the urge to believe rumours. It is more likely that you will reach your financial goals if you don’t monitor your investments on a daily basis.

4. Don't Try to Predict the Market

Time spent trading is more important than trying to time the market. It is impossible for even the most seasoned investor to know exactly when the market will rise or fall.

Keep in mind that your portfolio’s performance will vary from the market’s performance. Attempting to time the market increases the likelihood of making incorrect predictions, which can have a significant impact on important aspects of one’s life.

5. Talk to a Financial Advisor

How Can You Prevent Emotional Investing? | Egniol

Involve a financial advisor to learn more about your situation and gain breathing room. The advice of experts can do wonders and help you see the big picture. Experienced financial advisors can smooth your way through turbulent markets and prevent you from making hasty trades or overestimating your risk tolerance.

It’s a chance to rethink your investment strategy and evaluate your comfort level with risk. You’ll be better able to think clearly and make educated choices when it comes to your investments.

6. Give your attention to what you can influence

When the market is in a tailspin, investors tend to fret over factors outside their control. In fact, the opposite strategy is the one that should be taken. You need to give attention to the things you can change, like:

  • Allocation of Capital Problem
  • An Adequate Safety Net
  • Optional Investments

When market volatility occurs, the markets will respond normally. You must control your emotions and refrain from making rash choices. Having a hearty meal shortly after doing so can be extremely painful.

Emotions have the potential to cloud our judgement and make rational decision-making impossible. You, as an investor, must keep your emotions in check and not let short-term volatility scare you away. The stock market is inherently unstable, so you’ll need to take sensible precautions. Identify your comfort level with risk and try to keep your emotions in check.

The importance of privacy policies for your business - By Egniol

The importance of privacy policies for your business

What is a Privacy Policy?

A privacy policy is a page on your website that explains to visitors how and why you’re gathering their personal data. It explains how you use the data, why you use it, and whether you share it with anybody else. Governments and businesses are not allowed to trespass on an individual’s privacy without their consent.

As we share our credit card numbers, address, birthdays, names etc. on various E-commerce & Social media websites, we need to know how companies are using this personal information. You can create your own privacy policy or use this website to generate templates as per the industry.

Below are the features of a Basic Privacy Policy  

  • A list and description of information collected
  • Where you find that information
  • Why did you collect it
  • How it is collected
  • Who else can see it and whether it will be shared or sold
  • The rights that users have over their data
  • How users can use those rights
  • Your contact information

Why does your Business need a Privacy Policy?

No matter how or where you operate—website, mobile app, desktop app, etc.—a Privacy Policy is undoubtedly one of the most crucial legal agreements for your online or offline business.

There are several reasons why you ought to have one in place at all times. Here are our top 7 justifications for why a Privacy Policy agreement is essential.

The importance of privacy policies for your business - By Egniol

1. It is the Law

In some countries like the USA, Germany, Ireland and others in the EU, a Privacy Policy is required by law if you collect personal information from users. A proper and legally complying policy should also include information like how you store the data, links to other policies on your website (cookie policy, terms of service) and how users can access or remove data. 

These protection laws are strict in the above countries and if one does not comply with them then they can be fined up to €20,000,000. Although it is not mandatory in all countries, it has several other advantages that we’ll discuss further in the blog.

2. To Build Trust

The most significant moral consideration may be being open with your users. A privacy policy gives your consumers and clients a clear understanding of why and how you handle their personal data.

This builds trust and your consumers will not only not feel hesitant before filling in information, but shall visit your online store/website again. Keeping the policy long & complex doesn’t help, as it causes confusion. Keep it short, precise and to the point, so your customer doesn’t miss it.

3. Third Parties Require it

A lot of businesses work with third-party companies or applications to provide enhanced services. In order to work with them, business partners need to disclose how they handle private data as privacy laws become stricter.

Unicorn Companies like Google, Apple, etc. need to have detailed privacy policies and how they handle sensitive information. Their algorithms and analytics work using personal information related to consumer behaviour and while working in sync with third parties, policies become crucial. 

4. To Avoid Legal Battles

Recent examples of Snapchat, Delta Air Lines and Google show us that robust policies need to be in place. A few loopholes and lawsuits can follow over questionable privacy policies and concerns.

The threat of legal action and potential penalties should force a business to develop policies that are understandable and cover all the information. With WhatsApp being fined $267 million in the EU because of a weakness in the policy, it is evident that policies play a major role when stakes are high and should be prepared carefully.

5. Secure, Informed & Comfortable

Recently, Dominos India and Akasa Air had a data leak which included the personal information of a lot of people. Incidents like these make a company lose brand value if they are repeated. Along with policies, it has to be made sure that data is kept safe and away from malware or hackers.

If customers are informed about the data they are giving, transparency is maintained and a comfortable business can be carried out. A sense of security is a must for any customer before he/she conducts business.

6. For SEO Marketing

For a business to rank on a search engine, SEO is an activity that they need to take care of. Websites that have strong privacy policies are preferred by search engines, which means you will have a better organic result ranking.

If you sell ads on your website, the ad sellers who have been around for a long would only collaborate with you if you have a privacy policy that is suitable. The search engine algorithms will trust your website, and you are more likely to rank higher.

7. To Keep up with Technology

As technology, products, services and business customers keep growing it becomes harder to manage so many things. Using technology, one can make sure their entire system runs seamlessly while complying with all privacy policies and keeping data safe.

Businesses that use cloud storage, need to take extra care as information is stored around different servers for convenience but the same needs to be protected. So as new technology comes by, the privacy policy keeps on updating.

In these times, not just having a privacy policy for the sake of it but to keep on changing it, being dynamic as new products and services are introduced should be the objective. If the data is being dealt with differently, then the same needs to be communicated to the users. This way, your customer remains aware and approves of the change in policy.

Egniol Group of Companies has already helped many Startups and MSMEs by providing start-up consultancy, website designing, digital marketing & legal services, so they can focus on their core strengths while we do the rest for them.

If you are a business, you can create your own privacy policy, or you could get in touch with us at info@egniol.co.in for a detailed consultation.

Effect of Goods & Services Tax (GST) on the Indian Agricultural Sector - By Egniol

Effect of Goods & Services Tax (GST) on the Indian Agricultural Sector

Indian Agricultural Sector & GST

Ever since GST was implemented across India in 2017, it created quite a stir as to how would things work, how it would impact various sectors, how would people get GST credit, and how it would reduce indirect taxes. Today we look at 2017 to 2022 how it has affected the Indian Agricultural Sector.

GST in India

To first understand the impact of GST we need to understand what is GST, the agriculture in India and then GST’s mark on it. In a nutshell, GST is Goods & Services Tax which went live in 2017 after a series of board meetings, the process of implementation and amendment bills. After the approval of Lok Sabha & Rajya Sabha, this new tax system was implemented to reduce a range of indirect taxes such as Value Added Tax (VAT), Service Tax, Purchase Tax, Excise Duty and so on which were being levied from the people. So, it is 1 tax that is applicable all over India.

Agriculture in India

The agriculture sector is crucial to the growth of the Indian economy. Rice, wheat, sugarcane, and spices are just a few of the agricultural products that India produces and exports to other countries. Agriculture is one of the key businesses providing employment in rural India. Consequently, taxation on the agricultural industry is quite important to the economy. The greatest contributor to India’s overall GDP is the agriculture sector. It accounts for roughly 16% of the Indian GDP.

In India, the agriculture industry is largely excluded from the GST. In essence, agricultural products including fresh seafood, dairy, fruit, and vegetables are exempt from the GST.

Positive Impacts of GST on Agri-Activities

Effect of Goods & Services Tax (GST) on the Indian Agricultural Sector - By Egniol

1. Better Supply Chain
Under the new regulations, no tax will be levied on the storage, which will lower the farmers’ tax burden. It also has reduced food waste associated with storage tax and has provided farmers with the opportunity to sell their goods at a good price.

2. Input Tax Credit with Tax Exemption
Each dealer is provided with an Input Tax Credit (ITC) for the tax previously levied for each addition. This creates a transparent and hassle-free system while the movement of agri-food. The previously imposed surplus tax is only collected (on consumption) if agricultural products are marketed by manufacturers or on the output of goods.

3. Reduced Transportation Time
As agricultural products are perishable, their transportation plays a vital role while distributing them. As a single tax rate has been imposed, it should empower and strengthen as now transporting has become convenient.

4. Intergovernmental Trade Made Easy
Earlier during intergovernmental trade, a lot of permissions and licences were required from states and which made every transaction difficult. This led to a lengthy process and there were complications when agricultural products needed to be transported. Because of GST, a lot of loopholes in this process have now gone, making the trade of such items very smooth.

Future Plans to be Achieved by GST

Effect of Goods & Services Tax (GST) on the Indian Agricultural Sector - By Egniol
  1. The overall aim of GST has lessened the burden on the agricultural industry. However, the government has had to increase taxes on items like fish, meat, chicken, dairy products, condensed milk, dried fruit, jellies, and other items. With time, the government plans to reduce taxes on the same, so there’s a balance maintained.
  2. The building cost has marginally increased because of 18% GST but on the other hand, people would be paying less tax overall.

Conclusion

Numerous indirect taxes, particularly agricultural taxes, were reorganised as a result of this unified tax. Farmers are allowed to sell agricultural products under the same tax structure on numerous markets and in several states, and hence the GST structure is essential to enhancing the agricultural sector.

Egniol Group of Companies has already helped more than 20,000 Indian Startups and MSMEs by providing start-up consultancy, and digital & legal services, so they can focus on their core strengths while we do the rest for them.

If you are an agri based start-up, you can get funding by enrolling under great schemes by the government. Get in touch with us at info@egniol.co.in for a detailed consultation and eligibility criteria.

Animal Husbandry Infrastructure Development Fund (AHIDF) - By Egniol

Animal Husbandry Infrastructure Development Fund (AHIDF) – A Key Decision

What is Animal Husbandry Infrastructure Development Fund (AHIDF)?

The Union Cabinet approved the Rs. 15,000-crore Animal Husbandry Infrastructure Development Fund (AHIDF) on 24.06.2020 as part of the Atma Nirbhar Bharat Abhiyaan stimulus package to guarantee growth in a variety of sectors, and its implementation guidelines have now been released.

India is working on improving cow breeds to raise milk output and is also tending to the processing industry. Milk production in India is currently at 188 million tonnes, but is forecast to increase to 330 million tonnes by 2024. However, the government is making an effort to increase that number to 40% from its current level of 20-25%.

In addition, it was disclosed that the Dairy Processing Infrastructure Development Fund (DIDF) is currently being put into action for infrastructure development in the cooperative sector, and that the Alternative Housing Infrastructure Development Fund (AHIDF) is the first scheme of its kind for the private sector.

After the necessary facilities are built, millions of farmers will benefit from the increased milk processing. Additionally, this will boost the already-modest export of dairy products. India’s Dairy industry must improve so that it can compete with that of New Zealand. Even with the Covid-19 lockdown, farmers were able to keep milk flowing to stores and consumers, to their satisfaction.

The government has been implementing various schemes to incentivize the investment made by the dairy cooperative sector towards the development of dairy infrastructure. The AHIDF was established because it is important to encourage and reward private sector participation in processing and value addition by SMEs and other businesses. The establishment of a private sector animal feed plant, as well as the establishment of a dairy and meat processing and value addition infrastructure, would be greatly aided by the availability of AHIDF.

Objectives of AHIDF

  • Fostering entrepreneurial spirit and creating new jobs
  • To Improve exports and raise the proportion of milk and meat products sold abroad.
  • To aid in expanding India’s ability to process milk and meat
  • To allow for more producer price realisation.
  • In order to provide the home market with high-quality milk and meat products
  • To accomplish our goal of providing our rapidly expanding population with sufficient, high-quality protein sources so that they can thrive.
  • To supply economically priced, high-quality concentrated animal feed for a variety of livestock and poultry species, including cattle, buffalo, sheep, goats, pigs, and hens.

Eligibility Criteria for AHIDF

Animal Husbandry Infrastructure Development Fund (AHIDF) - By Egniol

The Animal Husbandry Infrastructure Development Fund (AHIDF) provides financial assistance to the following types of organisations

  • Farmer-Producer Organization (FPO)
  • Private Corporations
  • Sole Proprietors
  • Organisations Eligible Under Section 8
  • Micro, small, and medium-sized businesses (MSMEs)

Farmer Producer Organizations (FPOs), Micro, Small, and Medium Enterprises (MSMEs), Section 8 Companies, Private Companies, and Individual Entrepreneurs (with a minimum 10% margin money contribution) would all qualify as beneficiaries of the Scheme. Scheduled banks would provide the remaining 90% in loan funding. Recipients who qualify will receive an interest subvention, from the Indian government of 3%. The loan’s principal amount will be forgiven for two years, and borrowers will have six years to pay it back after that.

Furthermore, the NABARD would be entrusted with managing a Credit Guarantee Fund established by the Indian government. Projects that have been approved and fall within the limits set by the MSME will receive a credit guarantee. The amount of the borrower’s credit facility that would be covered by the guarantee is limited to 25%. SIDBI’s Udyami Mitra portal is a convenient way for potential borrowers to apply for a loan from a scheduled bank in order to finance the purchase of machinery and equipment needed to begin or expand a dairy or meat processing and value addition operation.

Animal Husbandry Infrastructure Development Fund (AHIDF) - By Egniol

There is a significant opportunity that can only be realised with private sector investment. With the help of the INR 15,000 crore AHIDF and the interest subvention scheme for private investors, sufficient funds will be available to cover the initial investment needed for these projects. As a side benefit, these investments in processing and value addition infrastructure by eligible beneficiaries would boost exports of these processed and value added commodities.

Due to the fact that between half and two-thirds of the final value of dairy output in India is returned to farmers, the prosperity of this industry has the potential to have a dramatic effect on farmers’ incomes. The growth of organised off-take by cooperative and private dairies is directly correlated with the size of the dairy market and the income realised by farmers from milk sales.

Therefore, encouraging investment in AHIDF would not only result in a sevenfold return on private investment but would also encourage farmers to spend more money on inputs, which would boost productivity and, in turn, raise farmers’ incomes. Additionally, 35 lakh people would benefit from the approval of measures through AHIDF by creating direct and indirect employment opportunities.

According to the Hon’ble Union Minister of State for Fisheries, Animal Husbandry, and Dairying, the Government has decided to vaccinate 53.5 crore animals, with 4 crore animals having already been vaccinated. Technology is being used to better breeds of animals. Still, the processing industry is where we fall behind. Additionally, processing plants for fodder can be built with the help of the AHIDF. This will assist in realising the Hon’ble Prime Minister’s goal of a five trillion dollar economy and doubling farmers’ incomes.

More than half of the people in rural areas rely on livestock for their income. Nearly nine percent of working-age Indians can thank it for their livelihood. The livestock population in India is enormous. The livestock industry accounts for 4.11% of total GDP and 25.6% of the total Agriculture sector.

We at Egniol not only help you apply for the Animal Husbandry Infrastructure Development Fund, but we also help you find and apply for a variety of other government programmes that will benefit you.

Affiliate Marketing in India - Beginner's Guide - By Egniol

Affiliate Marketing in India – Beginner’s Guide

What is Affiliate Marketing?

One might wonder what affiliate marketing is, but the fact is that all of us have seen it but are just unaware of the terminology. So think, when was the last time you wanted to buy a phone, laptop, jacket, a BBQ grill, a pair of shoes, a nice watch or anything for that matter, and you went on to look for videos on YouTube which gave you to a tutorial/review of it. Either that, or you did not want to buy a product and just came across an ad and wished to buy it. You could also have browsed something like “Best chairs under ₹10,000” which gave you an article to help you reach a decision.

In all cases, there would be a link which you’d follow to reach a certain landing page where you could buy the product. If the creator or marketer who produced that piece of content provides you with their own link to buy it, then it is called an affiliate link, from which they make money. In other words, affiliate marketing is when you advertise the products or services of other people on your website in exchange for a cut of the sales you bring in. Commissions are frequently a proportion of the sale price, but sometimes they may be in the form of a fixed sum. 

Below 6 points will help you understand and get started with Affiliate Marketing

1. Choose a platform

With a wide range of social media platforms available, choosing a suitable platform is crucial when starting with Affiliate Marketing. However, for affiliate marketing, the 3 main effective platforms are Blogging, YouTube and Instagram. Blogging refers to creating your own website and providing informative SEO-optimized articles which would then take a reader to a certain product affiliate link. Similarly, on YouTube & Instagram, you would create static or video content in order to entice an interested buyer to click on the links.

2. Select a Niche

Affiliate Marketing in India - Beginner's Guide - By Egniol

Exploring all the categories or focusing on multiple things on the same website, Instagram or youtube can become a problem as your audience wouldn’t be able to connect well with you. Instead, catering to a similar kind of audience at one time generates more trust and gains you more affiliate partners.

It is preferable to engage with seasoned experts or influencers who create content for their audience. Professionals can assist you in producing reliable content that will increase traffic, keep readers interested, and increase affiliate sales.

3. Identify & Join Affiliate Programmes

Primarily there are 2 types of programs which are:
A) High-paying, low-volume affiliate programs
B) Low-paying, high-volume affiliate programs
There are other types too, but it is essential for beginners to understand these two before going any further.

In program A, the end product is a high ticket size product and usually sells less in volume. For example, a mid-range Business Software would cost around ₹20,000/month for which an affiliate marketer would make around 30%, but the pool of buyers will remain limited.

In program B, the product is usually one which has a higher audience and sells a good volume, but an affiliate marketer would make a small percentage for every product sold.

4. Drive Traffic to your Affiliate site by producing Excellent Content

Research was conducted where people were asked where they research and buy products that cost $100, and they mentioned names of popular affiliate sights. After all, providing value to the reader who has visited your website is what creates a lasting impact.

An organised YouTube channel with helpful playlists about gadgets, lifestyles, appliances, culinary or any area, and Instagram guides, pre-planning festive guides are some avenues where you can create good content.

5. Get People to Click on your Affiliate Links

Affiliate Marketing in India - Beginner's Guide - By Egniol

It is important that enough stress is laid on the fact that the consumer of your content clicks on YOUR link first. This has to be reiterated as only if your link is clicked, a cookie will be generated so that even if the person does not buy your product at that moment, it is confirmed that they indeed visited the product page through you and not manually searched for it themselves.

For example, if a person clicks on the affiliate link of the product you’ve advertised, it’s possible that they’re looking around and would come back later. Even though they visit the website on their own later and purchase, you an affiliate marketer will still get a certain amount just because the driving factor was the affiliate link.

6. Clicks → Sales

Not every click will result in a sale, but certain tactics can be implemented to boost that conversion. Looking for merchants with programs that already have a good conversion rate is a good idea, to begin with.

Over time, you will start getting more clicks, but as you know, it’s the actual sales that count in affiliate marketing. However, there are a few brands that also pay an affiliate marketer based on the visits if getting consumer reach is their goal.

Egniol Group of Companies aims to revolutionize Indian Startups and MSMEs by providing start-up consultancy, and digital & legal services, so they can focus on their core strengths while we do the rest for them.

If you are a start-up and need services like seed funding, government programs and other information, get in touch with us at info@egniol.co.in.

6 Characteristics of an Effective Team - By Egniol

6 Characteristics of an Effective Team

Effective Teamwork Makes the Dream Work

With big & small businesses laying great emphasis on the importance of assembling a good team, it is essential we discuss what makes a team better than the other. Miscommunication, wrong expectations, being on a different page, and late deliveries are some mishaps that keep happening, but how do we minimise or avoid them?

Just by keeping these few things in mind, a team can become more productive and lay a strong foundation for the future. Good teamwork also develops an enhanced company culture, which benefits the new members. A team leader makes sure that the correct execution is done and members benefit off of each other.

Have a look at the below points to gain a better understanding of how an effective team should work.

1. Crystal Clear Expectations

Effective teams first create shared goals with specific success criteria before getting to work. This gives their members a common goal to strive toward and specifies how they will be assessed, i.e., on the basis of measurable results rather than just the quantity of work they complete.

A proper plan, clear goals and gets the team on the same page and allow them to imagine the outcome which keeps them motivated. Regularly reviewing the status of the work progress further ensures that there would be fewer errors in other future tasks that the team is required to perform.

2. Selflessness in Teamwork

6 Characteristics of an Effective Team - By Egniol

In an ideal team, members fulfil their own duties and also help one another throughout the operation. Trust and deep commitment toward the team’s success, create a healthy environment and establish a positive workflow overall. Keeping one’s personal agendas aside, and working in harmony, should be a mutual objective.

Selfish team members who only remain concerned about achieving the bare minimum won’t make a significant impact in the long run. As said by Hellen Keller, “Alone we can do so little, together we can do so much.” This should be the mindset of the entire team.

3. Accountability

The importance of ownership has been stressed a lot in recent times. Similarly, a team member should be accountable for the entire team and not just for the tasks he/she has carried out. An accountable team is one that follows through on its commitments, finishes projects on time, and meets its goals.

Building robust systems for accountability like regular planning, goal-setting, or standards around sharing progress updates ensures accountability feels easy. Members must maintain discipline and follow the process and own up to their mistakes when something goes wrong.

4. Conflict Resolution

“Peace is not the absence of conflict, it is the ability to handle conflict by peaceful means.” In the same way, there are often situations in teams where opinions differ and conflicts can arise. This can be difficult, but a leader has to ensure that this is where real communication develops.

Although there are many voices, the goal and the message has to remain one. At times, individuals have to let go of their individual interests. Open communication, practising active listening, respecting viewpoints and remaining calm help members and the team maintain decorum.

5. Defined Team Roles

6 Characteristics of an Effective Team - By Egniol

Roles in a team can be divided into 3 categories, mainly Action-oriented, People-oriented and Thought-oriented. Depending on the skills of a person, a team leader is assigned and delegates tasks as per the skills of the member.

Communication between the Leader, Facilitator, Coach, Member, & Creative Director should be transparent in order to avoid any confusion. Building an effective team is like preparing a meal wherein the addition of the correct ingredients in the right quantity is of paramount importance to achieve the desired taste.

6. Flexibility

A flexible attitude ensures team members are given enough freedom to work and aren’t confined to work in the way they’re told. There can be multiple methods of doing a task, and nothing should be imposed before hearing out the opinions of all team members.

As we’ve experienced during the pandemic times, people have had to remain available at all times to ensure a team meeting is done. Coordination and adjusting according to the preferences of others is critical.

With a team of over 280 employees, we at Egniol Group of Companies aim to revolutionize Indian Startups and MSMEs by providing financial, digital & legal services, so they can focus on their core strengths while we do the rest for them

Get in touch with us at info@egniol.co.in if you need our expertise at any step of the business. Whether you’re an established company or a start-up, we consult you to dream bigger!

Psychological Factors that are Important to Boost your Sales

Psychological Factors that are Important to Boost your Sales

How are Sales & Psychology Related?

The study of sales psychology examines how a customer’s or prospect’s mental condition may affect their purchasing behaviour. After all, when one is selling, they have to know what entices a customer and where their convincing power lie.

You can read your client more effectively if you are familiar with some basic psychological hints, methods, and hacks. You have a better chance of winning the client’s business if you understand their psychology better. Since every single one of your consumers is unique, you can’t always sell a product or a service using a one-size-fits-all strategy. Different forms of attention are needed for different personality types.

Here are some factors that one may include in their pitch or presentation while selling their product or service to the client.

1. Social Credibility

The most important factor that you, your product or your brand need to have is social proof or credibility. People tend to go for a thing that other people have already tried and tested. This gives them the confidence that their investment would be worth and that someone else has given them unbiased feedback.

However, with time a lot of brands have figured out how to get fake testimonials or reviews which has made it of utmost importance that your brand image is good and recommendable. A company should have enough proof to back that its organic image is unique and not questionable. 

2. Effective Storytelling

Psychological Factors that are Important to Boost your Sales

Everyone loves a compelling story, and enough has been said about this in the past. Brands that are old and sell more are those brands whose story has aged well. For example, Apple, Nike, Microsoft, and many other companies started in a garage with a vision and grew eventually.

Storytelling is engaging, relatable, purposeful and gives the company a significant reason for its existence. Practising and narrating the story is important, as metaphors further give meaning to the tailored product or service that you’re offering.

3. Be a Friend first, Salesperson second

Instead of displaying a variety of metrics, focus on their feelings. Expressive personalities are also interested in your opinions. This calls for you to exercise the greatest degree of empathy and attempt to empathise on a personal level with this group.

Just like a friend, you listen to the client. Don’t directly try to oversell because more sales are made with contacts and friendships than salesmanship. Build a healthy relationship, understand requirements and then sell what you’re offering.

4. Reciprocity

The rule of reciprocity states that people would give something if they’ve received something. Setting up a free demo of your product or service will give your consumer a hands-on experience of your product. Trial closing refers to offering free modules, sample videos, free gifts or a discount on a new product.

It could also be a subtle way of testing the waters, and getting feedback, and could also promote repetitive sales. A small gesture can go a long way in retaining a customer, but this rule only works when generosity is there and nothing is expected in return.

5. Fear of Missing Out (FOMO)

Psychological Factors that are Important to Boost your Sales

Using phrases like “Limited seats left”, “applications ending soon”, and “early bird offer only” creates a sense of urgency and curiosity in the customer, and they’d be more likely to try the product or service you’re offering.

This factor works because a salesperson uses the threats of scarcity to his/her advantage. There’s a famous saying “The heart wants what it can’t save” and it makes sense as this tactic sparks a deeper desire in the person that there wouldn’t be enough quantities of the product available.

6. Fewer Options, More Clarity

Providing too many options at once to your client makes it harder for them to land on a decision. Choosing the product based on the needs of the client would help them relate more. If the same is conveyed on call or email, the client will surely believe that you have put in enough research behind them.

Also, by giving options, your prospect is more likely to shop around as they would like to research more options themselves. Choice overload only leaves people unsatisfied. Just like in a restaurant, many choices may confuse someone, and they’d get a suggestion from the chef.

Egniol Group of Companies is based in India with the vision of revolutionizing Indian Startups and MSMEs. With a workforce of over 280 employees, we aim to cater to our clients in the best way possible. 

Write to us at info@egniol.co.in if you need services like digital marketing, website designing, or start-up consultancy or Call us for expert consultation.