Steps in Promotion
Promotion is the process of identifying some business idea or opportunity and taking steps to implement it through the incorporation and flotation of a company. It involves detailed study of the proposed business and formation of a company to carry on the business.
The steps involved in promotion are as fools:
- Discovery of a Business Idea: First of all, the idea of starting a business is born in his mind of the promoter. The idea may relate to manufacturing or selling a new product by new methods, introducing a product within uses, selling a product in new market or commercial use of an invention or patent. The promoter identifies the areas for profitable investment and takes all preliminary work to analyze the opportunity.
- Detailed Investigation: This step involves a detailed analysis of the capital investment, required expected volume of seas, degree of competition in the market, expected cost of production, degree of risk involved etc. The purpose of detailed investigation is to ascertain the profitability and possibility of the proposed business.
- Assembling the Resources: Ones the promoter is satisfied about the feasibility and viability of the project, steps retaken to collect financial and other resources for the proposed venture. Preliminary agreements dare made for purchase of assets. Appointment of personnel, etc. Decisions are taken regarding the size, location, layout, etc of business.
- Incorporation: It means getting the company registered under the Companies Act. For this purpose, various documents are prepared and filed with the Registrar of Companies. Memorandum of association and articles of association are the main documents. A suitable name of the company is selected. The promoter appoints bankers, brokers, underwriters and solicitors of the company.