Promotion:
Promotion refers to the thought or idea that comes into mind for establishing a company and prepare for the same. The person(s) or partnership firm or even a Joint stock company who executes the idea is called a promoter of the company.
Points to consider by promoter:
1. Idea of promoting the company:
The promoter first need to research and assess the need of the new company. He needs to be clear whether the new company will be established for developing and selling a new product or a service, etc.
2. Primary and detailed investigation:
- Once the promoter gets clarity about the new product or service he wish to sell through the new company, he needs to conduct thorough primary as well as detailed investigation to test if the idea will work in the market.
The idea is now to be tested on practical grounds with a strong business perspective. Various aspects such as selecting the right product and service for the business, profitability of the business, etc. are thoroughly investigated for successful implementation of the business.
- Initially a primary test and survey is done. Based on the results, detailed study and analysis is done is the market.
- Also, information regarding how much capital will be needed, how will it be raised, sourcing raw material, demand and market trend, equipment and machinery needed, land and human resources, transport facilities, power, water availability, etc. is gathered at in depth.
3. Mobilizing resources:
- The promoter needs to mobilize i.e. start deploying human and physical resources.
- The promoters enter into contracts to obtain land, raw material, machinery, services, hire employees, etc.
4. Financial arrangement:
- The promoters need to decide how and from where they will raise the finance i.e. capital for the company.
- For example, whether they should raise their own funds or obtain it by issuing shares, obtain loan, borrow, etc.
