Develop a Business Model For your Business

Writing an effective business plan requires a well defined business model. Here is a business model canvas worksheet that I use to generate the business model at my work.

Download the canvas by clicking: Click Here

Read the detailed business model generation canvas at: link

Issue Trees: Best place to begin the consulting

Consulting staffs can be sub divided into three groups on the grounds of responsibility they carry:

Finder: They basically look at the business, find out the naked eye problems, and talk to the organization in regard of the consulting service and convince them that the consulting service will make the business better. They are the bringers of the business and have a big picture of the company who is seeking the service.

Minder: They are the manager of the consulting service. They develop frameworks; build hypothesis and plan on how to move things ahead. They are responsible for the strategy development and management of the project.

Grinder: They are the doers of the project who actually collect data, make charts, analyze them and present their findings to the minder of the project. They move within the organization and deal with the management, employees, customers, and stakeholders to get to know what is happening in real. They are the one to test and find “what worked/ what didn’t worked & what works/what doesn’t works”.

As a minder/ grinder consultant, you are going to take charge of a business that is messed up from every angle. There are issues/conflicts in almost every step in the value-chain. So, where to begin? Here I suggest, begin with building the issue trees.

Issue trees breakdown the activities in an organization/ business aura and structure the ‘big-picture scenario’ that consulting works on. Issue trees are the collection of issues and sub breaking of those issues with a working hypothesis. As the finder of the project got basic ideas about the company, sit with the minder of the consulting project to discuss key issues happening in and around the organization. Together, then develop issue trees to make the consulting road-map. The Issues trees can be built on two aspects:

1. Diagnostic issue trees: Diagnostic issue trees are focused on finding out what key thing is happening in the business and what are the possible causes of it. It deals with the key constraints of the business and build out hypothesis on what may have led it to happen. Diagnostic issue trees are developed with a “Why” question and branches/sub- branches with the same.
   
   
2. Solution issue trees: Solution issue trees are focused on finding out what key thing is happening in the business and what may be the possible remedies for it. It deals with key constraints of the business and build up hypothesis on what can be the probable solution. Solution issue trees are developed with a “How” question and branches/ sub-branches with the same.

As suggested by MECE McKinsey consulting model, while developing the issue trees, look at the issues in a Mutually Exclusive way and then in a Collectively Exhaustive way to find out the problem. Once you have the clearly defined sets of problems look forward for the data gathering to get more insights.

Coffee Making Process

Coffee production refers to the conversion of green coffee beans into a soft drink. It includes the process of roasting the green beans, grinding the roasted beans and then mixing the grounded coffee with water.


Process of Making Coffee:

1. Roasting:
Roasting coffee transforms the chemical and physical properties of green coffee beans into roasted coffee products. When roasted, the green coffee bean expands to nearly double its original size, changing in color and density. Coffee can be roasted with ordinary kitchen equipment (frying pan, grill, oven, popcorn popper) or by specialized appliances.

2. Grinding:
Beans which are too finely ground for the brewing method in which they are used will expose too much surface area to the heated water and produce a bitter, harsh, "over-extracted" taste. At the other extreme, an overly coarse grind will produce weak coffee unless more is used.


Types of grinding:

a)     Burr Grinding (Link)
       (Conical burr grinders)

b)     Chopping (Link)
       (Two blades)

c)     Pounding (Link)
       (Mortar and Pestle: e.g. Domestic sugar grinding)

d)     Roller Grinding ( )


Principles of Grinding:

There are certain principles which must be acknowledged and understood because they are the cornerstone of successful grinding.

1. The greater the friction in grinding, the hotter the coffee bean gets while grinding. This changes the flavor.

2. The more uniform the particle size, the more control the brewer has.

3. The finer the grind, the more coffee area per bean, the greater the brewing area, the more flavor extracted from the bean.

4. The finer the grind, the greater the water resistance, the more pressure required to push water through the grind.





Ways of brewing the coffee:

1.  Decoction (Boiling)

The simplest method is to put the ground coffee in a cup, pour hot water over it and let cool while the grounds sink to the bottom.

2.   Infusion (Steeping)

The grounds are placed in the cylinder, and boiling water is then poured into it. The coffee and hot water are left in the cylinder for a few minutes (typically 4–7 minutes) and the plunger is pushed down, leaving the filter immediately above the grounds, allowing the coffee to be poured out while the filter retains the grounds.

3.   Gravitational Percolation (Drip Brewing)

The grounds are placed in the cylinder, and boiling water is then poured into it. The coffee and hot water are left in the cylinder for a few minutes (typically 4–7 minutes) and the plunger is pushed down, leaving the filter immediately above the grounds, allowing the coffee to be poured out while the filter retains the grounds.

4.  Pressurized Percolation (Espresso)

Espresso is made by forcing hot water at 91–95 °C (195–204 °F) under a pressure of between eight and fifteen bars (800–1500 kPa, 116–220 psi), through a lightly packed matrix, called a "puck," of finely ground coffee.

Nepal earns through Carbon Credits

What is Carbon Credit?

In 1992, the United Nations Framework Convention on Climate Change (UNFCCC) fixed a certain parameter beyond which developed countries cannot emit greenhouse gas (GHG). Later, in 1996, the Kyoto Protocol, which is linked to the UNFCCC, set a binding target for the developed countries to reduce GHG emissions within a certain timeframe.

However, irrespective of how environment-friendly they make their industries, the developed countries cannot significantly reduce GHG emissions. In this context, by way of compensation, the developed countries need to pay money to the developing countries for reducing carbon emission. In short, if a project avoids emitting one ton of carbon through clean-energy projects, we are entitled to US$7 (Although the price of one ton of carbon credits is $20 in the international market, we are ended up with a low price). There are several clean-energy projects running in Nepal which fetch us money for reducing GHG emissions. This is how Nepal is making money through carbon trading.


Communities Earning through Carbon Credit Sales:

Under the first-ever pilot Forest Carbon Trust Fund in Nepal, representatives from three watersheds in Dolakha, Gorkha, and Chitwan districts received a total sum of US$ 95,000  on behalf of community forest user groups at a ceremony organised at the International Centre for Integrated Mountain Development (ICIMOD) on 15 June 2011.

The 5,996 hectare Charnawati watershed in Dolakha sequestered a total of almost 4.6 million tonnes of carbon dioxide in 2011, an increase of 51,483 tonnes of carbon dioxide compared to 2010. Based on the above criteria, this watershed received an amount of US$45,535.
The 1,888 hectare Ludikhola watershed in Gorkha sequestered slightly less than 1.5 million tonnes of carbon dioxide in 2011, an increase of 36,680 tonnes over 2010. This watershed received an amount of US$ 27, 560.
The 2,382 hectare Kayarkhola Watershed in Chitwan sequestered slightly more than 2.5 million tonnes in 2011. This represented an increase of 12,087 tonnes over 2010. The lower increase in carbon sequestration in this watershed does not indicate lesser efforts by the communities to enhance the carbon stock – but rather, the high existing forest stock and the maturity of the forest, which means slower tree growth. The payment was adjusted to take this circumstance into account and the watershed received an amount of US$ 21,905.




Some Maths on Carbon Credits:

(1 US $ = NRs. 80 )

For Biogas plant

1 biogas plant (on an average) = 7 CER (annually)

This implies, 1 biogas plant's revenue = 7 * 10$ per ton

= 70 Dollars

= 70 * 80 =  Nrs. 5600.

Forest Calculation:

1 Hector = 10 ton = 10 * 10 * 80 = Nrs. 7000 

Thus, 10,000 m2 = Nrs. 7000

Talking from the viewpoint of private/individual applicant:  Since, AEPC got the consent for all biogas households regarding getting the amount generated through the sales of CER, individual households can not claim for it and even if they claim, mathematically, they are subject to huge loss. And in the case of forest credit, mathematics shows the trade is not profitable enough  even to pay the credit certifying consultant.

Steps in getting CDM and CER

The following is the steps of getting Clean Development Mechanism (CDM) and Certified Emissions Reduction (CER) certification. Getting this certification is a must for applying for carbon credits.


(Pre- Registration Activities)

1. For project activities with a start date on or after 2 August 2008, the project participants shall notify the designated national authority (ies) (DNAs) of the host Party (ies) of the project activity and the secretariat in writing of the commencement of the project activity and their intention to seek the CDM status within 180 days of the start date of the project activity.

2. The secretariat shall maintain a publicly available list of such notifications on the UNFCCC CDM website.

3. The project participants of a proposed CDM project activity shall complete a PDD, in accordance with the “Clean development Mechanism project standard”, and submit it/them together with supporting documentation, to the designated operational entity (DOE).

4. The DOE shall make the PDD or PoA-DD publicly available through a dedicated interface on the UNFCCC CDM website for global stakeholder consultation. The duration of the period for submission of comments for the global stakeholder consultation shall be 30 days. (Except for afforestation and reforestation (A/R), duration is 45 days)

5. At 180 days subsequent to the end of the period for submission of comments on the PDD or PoA-DD, the DOE shall provide, through a dedicated interface on the UNFCCC CDM website, an update on the status of its validation activity, unless it has submitted a request for registration of the proposed CDM project activity. The DOE Shall include one of the following statuses in the update.

   (a) The validation contract has been terminated.
   (b) The DOE has issued a negative validation opinion
   (c) DOE is seeking further clarification to the responses received from the project participants or the   coordinating/managing entity.
   (d) The DOE has finalized a positive validation opinion with the exception of the receipt of a valid letter of approval from one or more Party(ies) involved.
   (e) The DOE is performing validation activities and it has not yet sent any corrective action or clarification requests to the project participants or the coordinating/managing entity.

6. If deviation is done from the actual PDD, then there are other procedures. But, if there is no deviation then    the procedure is almost completed.

(Request for registration)

7. Submission of request for registration: The DOE, after determining that a proposed CDM project activity or PoA meets all relevant requirements in the “Clean development mechanism project standard” by following the relevant provisions of the “Clean development mechanism validation and verification standard” and other CDM requirements, can register for a request form for the CDM.

8. The secretariat shall maintain a publicly available list of all submitted requests for registration for which the applicable registration fee has been received on the UNFCCC CDM website. (In the case of Nepal the registration charge is not levied as there is a provision of reg-charge exemption for least developed countries.

9. The secretariat shall commence the completeness check stage in accordance with the schedule.

10. Upon positive conclusion of the information and reporting check stage, the secretariat shall publish the request for registration on the UNFCCC CDM website, and the request for registration shall be deemed received by the Board for consideration.

11. The secretariat shall, subject to the guidance of the Board, prepare and send to the Board a summary note on the request for registration within 14 days of the date of publication of the request for registration.

12. Registration process is duly completed.

(Post-Registration Activities)

13. If there are changes in regard to the formerly presented PDD, then other activities should be carried
out otherwise there are no specific activities to do.

(Pre-Issuance Activities)

14. Publication of monitoring report: The project participants of a registered CDM project activity or the coordinating/managing entity of a registered CDM PoA shall prepare (a) monitoring report(s) in accordance with the “Clean development mechanism project standard”, and submit it/them together with supporting documentation to the DOE.

15. At 180 days subsequent to the publication of the monitoring report, the DOE shall provide, through a dedicated interface on the UNFCCC CDM website, an update of the status of its verification activity.

(Issuance of Certified Emission Reductions)

16. Submission request for issuance: The DOE shall submit a request for issuance of CERs by using the “CDM project activity issuance request form” (F-CDM-ISS)ISS), as applicable, only after it verifies that the monitored GHG emission reductions or removal enhancements meet the relevant requirements in the “Clean development mechanism project standard” and certifies the quantity of CERs claimed in the monitoring report.

17. Processing request for issuance: The secretariat shall maintain a publicly available list of all submitted requests for issuance on the UNFCCC CDM website. The secretariat shall make publicly available the schedule of processing the requests for issuance, including the expected date of commencement. The secretariat shall schedule the commencement of the processing of the requests for issuance in accordance with the secretariat’s operational plans, i.e. monthly quotas, which shall also incorporate any relevant instructions from the Board.

18. Upon positive conclusion of the information and reporting check stage, the secretariat shall publish the request for issuance on the UNFCCC CDM website, and the request for issuance shall be deemed received by the Board for consideration.

19. If the Board’s final decision made is to issue the CERs, the Board shall instruct the CDM registry administrator to issue a specified quantity of CERs into the pending account of the Board in the CDM registry.

Alternative Energy in Nepal

The potential of alternative energies (wind, solar, biogas) in Nepal.


1. Wind

• "The studies by DANGRID a Danish consulting firm in 1992 
  reported that a potential to generate 200 MW of electrical power 
  with an annual energy production of 500 GWh from the wind
  resources along the 12 km valley between Kagbeni and Chusang 
  in Mustang." link

• "The  commercially  viable wind  potential  of  the  country  is  estimated  to  be  only  about  448  MW. The  annual average  energy  potential  is  about  3.387  MWh/m2". link

• Wind power potential in Nepal is 3000MW link

  2. Biogas

• There is a potential of 1.3 million biogas plants in Nepal. link
• There is a potential of 1.9 million biogas plants in Nepal.
  A Paper prepared for the MicroFinanceSummit 2010 in Kathmandu, Nepal. Prepared by Michael Wegstein, Financial Expert, (AEPC)Report of AEPC)
• "There are 3 Lakhs units of biogas plants installed in Nepal which generate 500 MW currently.", conversation with Mr. Roshan pandey, Energy Consultant at Green & Green Private Limited.

3. Solar

• "On an average the country has 6.9 sunshine hours per day totaling 2482 sunshine hours per year. link

• Nepal has the potential of 26000 MW of Solar Energy. link

• In Nepal,Sun shines 300 days a year A Paper prepared for the MicroFinanceSummit 2010 in Kathmandu, Nepal. Prepared by Michael Wegstein, Financial Expert, (AEPC)
• Nepal in Prime Solar Area, Average 5 Sun hours/day (Nepal receives  5.5-6.0 Kwh/m2/day while world leader in Solar Germany gets 2-3 kwh/m2/day) link

Business Plan Outline

1. Table of Contents

2. Executive Summary

3. Product Overview

4. Industry Overview    

          a. Industry Trend

          b. Rules and Regulations

          c. Competitive Analysis

5. Marketing Strategy
          a. Target Market

          b. Marketing Channel

          c. Pricing Strategy

6. Operational Plan
          a. Supply Chain

          b. Production and Distribution

          c. Operations

          d. Human Resources

7. Financial Plan

          a. Cost Estimates

          b. Cash Flow Statement

          c. Income Statement

          d. Balance Sheet

8. Appendix

Operations Management Consulting Toolkit

(Fig: Operations Management Consulting Toolkit)

This is the model I have used during my first consulting project at Nepal.

Agriculture and Livestock Insurance in Nepal

The Insurance board has finally introduced the most awaited directive on agriculture and livestock insurance. This is the first time agricultural insurance policy has been introduced in the country and it has been mandatory for all the non-life insurance companies to introduce policies in these sectors.

In the directive, the Insurance Board has  introduced six insurance products on paddy, vegetables, potato, poultry (chicken and duck), fruits (orange and junar) and livestock.

As per the directive, crops insurance covers the production cost incurred till the crops/horticulture are ready for the harvest. This includes cost involved in purchase of seedlings and fertilizers, and labor charge, among others. However, the directive says, insurance coverage will not be provided in case plantations are done on less than eight aanas (2,738 sq ft) of land in hilly region and one kattha (3,645 sq ft) of land in the Terai.

Meanwhile, livestock and poultry insurance will provide coverage to all types of cows, oxen, buffalos, yak, female yak, sheep, goat, swine, chicken and ducks based on sum insured fixed by the Insurance Board. Maximum sum insured for high-breed dairy cow and buffalo are Rs 150,000 and Rs 125,000, respectively. Similarly, sum insured for water buffalo and ox raised for reproductive purpose has been fixed at Rs 70,000, while insurance coverage for water buffalo's and oxen used for transportation purpose has been fixed Rs 40,000. Likewise, sum insured for sheep and goat raised for meat production cannot exceed Rs 8,000, while maximum insurance coverage for different types of chicken and duck have been fixed at Rs 1,200 and Rs 700, respectively.

Except in the case of commercial poultry where they annually pay 6% of the sum insured, farmers can buy the insurance policies by paying 5% of the sum insured and the policy agents can charge the commission up to 15%. But, if the insurant buys the policies in a group or by being a member then 15% discount is provided.

But in case the insured plant, animal or fowl has a life span of less than a year, then the premium amount will be calculated based on production cycle. The directive also says claim settlement process should be wrapped up within 30 days of first reporting the event.


The directive can be found in this link

Bio Gas in Nepal

1. List of recognized Bio-gas Companies in Nepal


Till Feb 15 2011, there are 81 biogas companies with 115 branches all over Nepal. All the contact details of the companies are provided in the link .

(http://www.bspnepal.org.np/images/pdfs/company-list%2067-68.pdf)


2. Nepal Biogas Promotion Association

It gives the basic details of how the biogas system works.

(http://www.nbp-association.org)

3. A glimpse into community and institutional biogas plants in Nepal

(http://books.google.com.np/books?id=QH1TnmKVHaYC&lpg=RA1-PA1-IA4&ots=zKF2PbQQnf&dq=institutional%20biogas%20plant%20in%20nepal&pg=PP12#v=onepage&q=institutional%20biogas%20plant%20in%20nepal&f=true)
5. Institutional Bio-Gas plant needs around 30-60 cubic metres of inside dome space.
(However, this depends upon the amount of wastage, usage and kind of plant.)

6. At the institutional/community level, the bio-gas usage findings are the following:

• sunga waste water treatment, thimi
• community biogas plant shrikhandapur
• mirabel hotel, dhulikhel
• ama ghar, godavari (hostel)
• godavari village resort (capacity: 12 metre^3)

7. Aepc database 2008.

• There are 200 institutional and community biogas project in Nepal.
• These were installed without governmment subsidy.
• There are approximately 90 institutional biogas plants in kathmandu whereas 12 community plants.

8.Budhanilkantha School

• The following news link provides the information about budhanilkantha school biogas project.

(http://gshah.wordpress.com/2008/11/20/minister-inaugurates-bio-gas-plant-in-budhanilkantha-school)

Trade Policy on Handmade paper products and Essential oil in Nepal

Herbs and essential oils:

· Testing and certification services will be made available by developing fully equipped testing laboratories in herbs production and processing, and efforts will be made to acquire international recognition in testing technology.

· Capital, technology and trainings will be made available for production, grading, storage and collection of high value herbs and essential oils required for the development of their commercial
farming.

· Value addition in the production of herbs based processed and semi-processed exportable products will be encouraged.

· Market research and promotional programs will be conducted to encourage exports of herbs and herbal products.

· Production will be encouraged through the cooperatives by according priority to the identified pocket areas for herbs production.

              
Handmade paper and paper products:

· Supply of raw materials will be expanded through conservation and organized production of Lokta, a wood pulp, for developing quality standards and increasing supply capacity of handmade paper and paper products.

· Capital, technology and trainings necessary to produce Lokta and Nepalese papers will be made available.

· Assistance will be given for the improvement of production technology of Lokta paper.

· Promotional programs will be carried out to diversify products based on handmade paper , and maximize utilization of the design center and market opportunities.


# (Handmade paper products comrise of Lokta papers and Argeli papers)

Conducting a Focus Group Discussion

The activity of conducting a focus group is divided into ‘three main phases’:

1. Before the Focus Group:
1. Define the purpose, i.e. objectives of the focus group
2. Establish a timeline
3. Identify the participants
4. Generate the questions
5. Develop a script
6. Select a facilitator
7. Choose the location
2. Conduct the Focus Group:
1. Materials required:

Notepads and pencils

Computer with presentation

Flip chart or easel paper

Focus group script

List of participants

Markers

Masking tape

Name tags

Refreshments

Watch or clock

b. U-shaped seating:

c. As participants arrive, the facilitator should welcome them.

d. Introduce yourself and carry the introduction session.

e. Proceed to the main session of discussion.

3. After the Focus Group:

1. Summarize each meeting.
2. Analyze the summaries.
3. Write the report.

What is a Focus Group Discussion (FGD)?

Description:

Focus groups are small-group discussions that give in-depth information and views on a specific topic. It is a form of qualitative research in which a group of people are asked about their perceptions, opinions, beliefs, and attitudes towards a product, service, concept, advertisement, idea, or packaging

Member Selection:
Focus groups are generally made up of six to 10 people who do not know each other. Generally, three to five different groups should be held for each project, using people from different backgrounds each time. Choosing group members with similar backgrounds and opinions can help them share ideas more easily.

Question Techniques:
Questions should be open-ended, to allow group members good scope for discussion. The moderator should pose questions that move from the general to the specific. The group should start with introductory questions that address the general topic.

Organizing the meeting. Focus groups typically cover about five main questions (each with sub questions or probes) in the span of 90 minutes. It is often helpful to state that the group will run for two hours to prevent conflicts arising from late arrivers or topics warranting further exploration.

#Elements of focus groups.

Element Focus Groups

Format Group session

Size 8-12 per session; invite twice as many

Length 1.5 to 2 hours

No. of sessions Varies; should be more than 1

Participants 1. Selected; by invitation only 
2. Similar characteristics

Forms of data 1. Conversation, including tone of voice

2. Silences (words and issues)

3. Body language

Data collection 1. Audiotape

2. Transcribe

Moderator 1. Flexible yet focused

2. Uses interview guide; modify based on early sessions

Formats for 1. Selected quotations

reporting                 2. Analysis of repeated themes

Duties of the moderator:

• Guide the discussion
• Follow the agenda
• Remind participants there are no right or wrong answers
• Avoid aggressive or personal attacks among the participants
• Ensure everyone participates and no one dominates

Sugarcane Juice in Nepal

When you go to the terai belt of Nepal in summer, you will see a pool of people in the roadside junctions drinking the immediately prepared sugarcane juice. Available in different flavours and mixes, sugarcane juice is the most popular soft drinks in the southern nepal.

Preparation of the juice is a simple. The juice maker uses a simple machine which takes the raw sugar canes as the input and then crushes it to make the juice. The juice is then treated with different flavors before serving it to the customer. The most popular flavors are the “Birenun”(Rocksalt) and “Mint”(Pudhina), while some drinkers prefer unflavored juice. Interestingly, since the juice is prepared at the roadsides 'Ice-Cubes' are put into the juice to make it colder. 

 (Boy making instant sugarcane juice at a park.) Image credit: Google

Sugarcane juice is preferred for immediate consumption while the storage of juice and its commercialisation is still left untouched. In the ktm valley, people go to the fruit shop to drink sugarcane juice which also includes the patients, particularly the jaundice patients. With the invention of sugarcane juice preserving technology by Tamil Nadu Agricultural University, the future in this segment seems to be promising. The technology allows the juice to be preserved up to a duration of six months. The process of preserving the sugarcane juice involves peeling, crushing, filtration, pasteurization and bottling. Sodium Benzoate and Ammonium Hydroxide is added as preservative. The bottled juice can be stored without any loss in the quality and flavour for six months at room temperature.

When it comes to nutritious product, even the middle class people give more weight to quality than the price. Since the quality of real juice, the no. 1 juice market leader, is questioned with many controversies one can easily tap into this market with a quality product.

Seed Fund in Nepal

Literally, seed money is the initial amount of capital required to dream a business. As the name suggests, this type of funding is an early stage investment (until the business is operating at breakeven stage) meant to support to physically initiate the business. This covers funding incurred in the initial stage of business even before conducting the ‘beta test’ i.e. conducting the market research, testing on a prototype, and spending on the operating  expenses.

Seed funding basically can be raised through through angel investing, friends/family funding, crowd funding and donation amount. Angel investors are those investors who listen to the business idea and fund the business on it’s basis. Angels do not have any personal/professional relationship with the funding proposer. They just listen to the idea and shortly judge the person to invest in his idea. The next funding option is the friends/family funding where the relatives and the close acquaintances invest in the idea. In this case, the investors have a close relation with the fund proposer so they know the capability of the person. So, in this category the investment is more dependent in the person and his credibility/trustworthiness than the business idea. Thus, making the business model called as FFF Model; friends, family and fools. Crowdfunding is the option to raise the required capital through the small contribution of many investors.  Crowdfunding does not provides dividend/other privileges to the investors. In fact, investors invest for the story behind the business rather than the expected rate of return.

(Fig: Startup Financing Cycle. Source: Wikipedia)

Seed Funding in Nepal:

Although  seed funding was late to be introduced in 2008 in Nepal, the segment seems to be growing rapidly. Currently, more than four institutions provide seed fund to let the wannabe entrepreneur start his/her business. The key players in this field are:

1. Uddhyami Impact Fund

Uddhyami Impact Fund - a Biruwa Ventures initiative was established in November 2012 with an aim to provide seed fund to the new startups. Organising a month long frequent interaction program, three business ideas are selected for the investment. The impact fund at it’s first phase of investment invests up to the five lakhs. The investment is done on two different basis viz. investment against equity, investment as a loan. Equity comprises of both the cash equity and sweat equity, hence supporting the financially struggling entrepreneurs.

2. Gazaab Social Ventures

In 2011, Gazaab Social Ventures, a micro-social venture capital fund, was launched in Nepal. Each year they organise business plan competition at various parts of the country and invest in the top business ideas. Recently, in 2012, they organised a business plan competition at Kathmandu where there were more than 100 competitors.  The competition was run for five days which at the end identified three business ideas to receive the seed capital upto five lakhs to commence/scale up their business. Gazaab invests the seed fund as a return for equity.

3. Change Fusion Nepal

Change Fusion Nepal  was founded in September 2008 to help local youth direct their vision and skills towards benefiting people and the planet through social entrepreneurship. Change fusion bridges the gap between the investors/donors and the aspiring entrepreneurs by bringing the both parties together and thus enabling the investors to fund the business. They invest the capital looking at the requirement of the business which takes the form of loan. There is no exact range of seed fund amount but they invest upto a couple of lakhs.

4. Youth and Small Enterprises Self Employment Fund (YSEF)

The Youth and Small Enterprises Self Employment Fund (YSEF), an initiative of Government of Nepal, was established to offer self-employment loan and free vocational training to unemployed young people from economically disadvantaged groups in Nepal. YSEF offers various skill-based training related to farming for profit, agricultural industry and service-oriented business. YSEF also provides a seed amount up to Rs. 200,000 as a loan at a low annual interest rate of 12% without any security deposit. YSEF has provided loans to 4206 projects in 37 districts in Nepal.

Despite the lack of proper laws, policies, guidelines, the number of players in this field is increasing. Since, calculation and timely revision of sweat equity is quite difficult, at times, it may invite conflict between the stockholders in the business. The next issue is if someone wants to exit the business and there is no one ready to buy back the business there would be a dilemma in this case. We lack policies and there is no proper mechanism to govern these sort of seed funding/venture capital issues. Introduction of venture capital laws is highly recommended.