Business

Affiliate marketing is an advertising model in which a company compensates third-party publishers to generate traffic or leads to the company’s products and services. The third-party publishers are affiliates, and the commission fee incentivizes them to find ways to promote the company. What is affiliate marketing? Affiliate marketing is a revenue-sharing marketing method in which an affiliate, such as a blogger or YouTuber, advertises a business’s goods or services to help it meet its sales or marketing goals. In turn, affiliates earn a percentage of the sales or customer traffic made due to their marketing efforts. A business might work with an affiliate for a couple of reasons: Increasing sales, web traffic, and brand awareness Connecting with a specific affiliate audience (e.g., a shoe company that partners with a fitness blog to target fitness-minded readers) Whilst revenue-sharing is not a new marketing concept, modern affiliate marketing typically refers to online digital marketing in which affiliates link to a business’s product or service online and receive a percentage of sales or web traffic.  According to the Internet and Mobile Association of India (IAMAI), the affiliate marketing business will exceed ₹66,168.07 million by 2025 How does affiliate marketing work? Affiliate marketing involves four main partners, who each play a unique part in the marketing process: The affiliate (or “publisher”): The individual or entity that promotes the merchant’s product or service The merchant: The individual or entity selling the product or service promoted by the affiliate The affiliate network: An intermediary between an affiliate and a merchant’s affiliate programme. While an affiliate network is not strictly necessary for an affiliate and merchant to connect, it is a common channel for such relationships. The customer: The individual who purchases a product through an affiliate. Merchants and affiliates collaborate to connect them with the affiliate’s audience to convert them into customers. Types of Affiliate Marketing Unattached Affiliate Marketing: This is an advertising model in which the affiliate has no connection to the product or service they are promoting. They have no known related skills or expertise and do not serve as an authority on or make claims about its use. This is the most uninvolved form of affiliate marketing. The lack of attachment to the potential customer and product absolves the affiliate from the duty to recommend or advise. Related Affiliate Marketing: As the name suggests, related affiliate marketing involves the promotion of products or services by an affiliate with some type of relationship to the offering. Generally, the connection is between the affiliate’s niche and the product or service. The affiliate has enough influence and expertise to generate traffic, and their level of authority makes them a trusted source. The affiliate, however, makes no claims about the use of the product or service. Involved Affiliate Marketing: This type of marketing establishes a deeper connection between the affiliate and the product or service they’re promoting. They have used or currently use the product and are confident that their positive experiences can be shared by others. Their experiences are the advertisements, and they serve as trusted sources of information. On the other hand, because they’re providing recommendations, their reputation may be compromised by any problems arising from the offering. Advantages and Disadvantages of Affiliate Marketing Affiliate marketing can yield great rewards for the advertising company and the affiliate marketer. The company benefits from low-cost advertising and the creative marketing efforts of its affiliates, and the affiliate benefits by earning additional income and incentives. The return on investment for affiliate marketing is high as the company only pays on traffic converted to sales. The cost of advertising, if any, is borne by the affiliate. The advertising company sets the terms of an affiliate marketing program. Early on, companies largely paid the cost per click (traffic) or cost per mile (impressions) on banner advertisements. As technology evolved, the focus turned to commissions on actual sales or qualified leads. The early affiliate marketing programs were vulnerable to fraud because clicks could be generated by software, as could impressions. Now, most affiliate programs have strict terms and conditions on how to generate leads. There are also certain banned methods, such as installing adware or spyware that redirect all search queries for a product to an affiliate’s page. Some affiliate marketing programs go as far as to lay out how a product or service is to be discussed in the content before an affiliate link can be validated.So an effective affiliate marketing program requires some forethought. The terms and conditions must be clearly spelled out, especially if the contract agreement pays for traffic rather than sales. The potential for fraud in affiliate marketing is possible.Unscrupulous affiliates can squat on domain names with misspellings and get a commission for the redirect. In exchange, however, a company can access motivated, creative people, to help sell their products or services to the world. Pros Access to a broader market Better accounting of qualified leads Low-cost advertising Cons Subject to fraud Less creative control Vulnerable to theft FAQs What is affiliate marketing? Affiliate marketing is a performance-based marketing strategy where businesses reward affiliates for each customer or visitor brought by the affiliate’s marketing efforts. Affiliates earn a commission for driving sales or generating leads for the business through their unique affiliate links. How does affiliate marketing work? In affiliate marketing, an affiliate promotes a product or service through unique affiliate links provided by the business. When a customer clicks on the affiliate link and makes a purchase or completes a desired action, the affiliate earns a commission. The affiliate’s performance is tracked through cookies, unique tracking codes, or other tracking methods. Who are the key players in affiliate marketing? The key players in affiliate marketing include merchants or advertisers (businesses selling products or services), affiliates (individuals or entities promoting those products or services), affiliate networks (platforms that connect merchants and affiliates), and customers (the audience purchasing through affiliate links). Practice area’s of B K Goyal & Co LLP Income Tax Return Filing | Income Tax Appeal | Income Tax Notice | GST Registration |

A direct-to-consumer (D2C) strategy offers a powerful way to gain complete control over your supply chain – from manufacturing and sourcing to marketing, sales, and distribution. What does D2C stand for direct-to-consumer. A company produces a given product in its own facility, as well as distributes it within its own channels.D2C e-commerce is a type of digital business model where the manufacturer and/or producer sells products or produce directly to consumers from their web store (i.e. business to consumer). A more traditional retailer business model goes from the manufacturer and/or producer 👉 to a wholesaler 👉 to a distributor 👉 to retailers 👉 and then finally to a consumer. The D2C e-commerce model — and e-commerce built for D2C — quite literally “cuts out” the middleman. The traditional retailer business model deals with bulk purchases, so for a manufacturer to start selling direct-to-consumer they’d have to start selling individual items and build up their consumer brand. This essentially is why most manufacturers have not yet switched to a D2C strategy, as their entire business revolves around selling products in bulk. Benefits of the D2C model Brand experience: D2C brands have full control over how their products are presented and marketed. This allows for a consistent brand image and messaging, which in turn helps improve brand recognition and customer loyalty. Customer relationship: D2C companies have direct access to customer feedback, preferences, and purchasing behaviour. This data enables them to personalise offerings, improve products, and enhance the overall customer experience. Profit margins: By bypassing intermediaries, D2C brands can retain a larger portion of the revenue generated from each sale. This can lead to higher profit margins compared to traditional retail models. Market trends: D2C brands have the flexibility to adapt quickly to changing market trends, introduce new products, and adjust pricing strategies without the need for approvals from external parties. Decision making: D2C companies have access to detailed data and analytics. This information can be used to make informed business decisions, from product development to marketing strategies. Product offerings: D2C brands can tailor their products to meet specific customer needs and preferences. This level of customisation can lead to higher customer satisfaction and loyalty. Pricing: The leading reason consumers shop directly with brands is because of better pricing. D2C brands have the freedom to set their own pricing strategies without being bound by traditional retail markups. They can experiment with pricing models to find what works best for their target audience. Enhanced customer experience: With direct control over the entire customer journey, D2C brands can provide a seamless and personalised experience from browsing to purchase to post-sales support. Go-to-market: D2C brands can bring products to market more quickly since they do not have to go through the lengthy process of negotiating with third parties or waiting for shelf space in retail stores. Inventory management: Direct access to real-time sales data allows D2C brands to manage their inventory more efficiently, reducing the risk of overstocking or stockouts. Challenges for D2C companies Competition: The D2C space can be highly competitive with numerous brands vying for consumer attention. Standing out in a crowded market requires a well-defined value proposition and effective marketing strategies. In industries with low barriers to entry, the market may become oversaturated with D2C brands. This can lead to price wars and decreased profitability. Acquisition costs: Acquiring new customers in the D2C space can be expensive. Gaining consumer trust can be challenging for new or lesser-known D2C brands, as consumers may be more inclined to trust established, well-known brands. Companies may need to invest heavily in marketing, advertising, and customer acquisition efforts, which can impact profitability. Limited exposure offline: Without a presence in physical retail stores, D2C brands can miss out on a portion of the market that prefers to shop in brick-and-mortar locations. This can limit brand exposure to certain demographics. Supply chain: Managing the entire supply chain, from manufacturing to distribution, can be complex and resource-intensive. This includes inventory management, quality control, and logistics, all of which require careful attention. Digital channels: Relying heavily on ecommerce platforms for sales can be risky as it leaves businesses vulnerable to changes in online algorithms, policies, fees, or disruptions in the digital landscape. Managing multiple sales channels requires a strong ecommerce software stack and staff to manage it. Retention: While D2C brands have direct access to customers, they also bear the responsibility of attracting and retaining them. Competition for customer loyalty can be fierce and maintaining a strong relationship requires ongoing effort. Returns and service demands: Handling customer returns and providing high-quality customer service can be resource-intensive. D2C brands must be prepared to address customer concerns promptly and effectively. B2C vs D2C: What’s the difference? D2C and B2C are business models that describe how companies interact with their end customers. While both D2C and B2C sell to individual consumers, the key difference lies in the distribution and sales channels. D2C specifically refers to a model where companies sell directly to consumers, without third-party involvement. Whereas B2C encompasses a broader range of businesses that sell to consumers, whether through direct or indirect channels. FAQs What is D2C business? D2C stands for Direct-to-Consumer. It refers to a business model where companies sell their products directly to consumers, bypassing traditional intermediaries such as retailers or wholesalers. This approach allows brands to have more control over their brand image, customer experience, and pricing. How does D2C business differ from traditional retail? In traditional retail, products typically go through a series of intermediaries before reaching the end consumer, such as wholesalers and retailers. In a D2C business model, the company sells directly to consumers through various channels, such as online stores, social media, or physical stores owned by the brand itself. What are the advantages of a D2C business model? Brand Control: Companies have more control over their brand image and messaging. Customer Relationship: Direct interaction with customers fosters stronger relationships. Data Ownership: Direct sales provide valuable customer data for marketing and product development. Flexibility in Pricing: Companies can set their own prices without interference from intermediaries. Quick Adaptation: D2C brands can respond quickly to market trends and consumer feedback. Practice area’s of B K Goyal & Co LLP Income Tax Return Filing

The deduction of tax at source (TDS) has been very helpful in the collection of taxes in the country by targeting the source of income itself. TDS eases the taxpayer’s burden of paying tax when it is time to file their income tax returns. That is because, at the time of filing income tax return they can take the credit for the taxes deducted at source.  One of the most important and common type of payments that a business entity makes is towards professional fees or fees for technical services. Some illustrative examples of professional fees are fees paid to a lawyer, doctor, engineer, architect, chartered accountant, interior decorators, advertisers, etc. Technical services would include the rendering of managerial, technical or consultancy services. Such payments made to residents are covered under section 194J.The Indian tax system has various provisions to ensure timely and accurate payment of taxes. Section 194J of the Income Tax Act, 1961, is one such provision that deals with the TDS (Tax Deducted at Source) on payments made to professionals and technical service providers. However, the line between technical service and professional service can often be blurry, leading to confusion and potential tax liabilities. In this article, we will explore the Difference between Professional & Technical Services under Section 194J of the Income Tax Act, of 1961. Section 194J under Income Tax Act, 1961 Section 194J deals with the TDS on fees for professional or technical services. The term “professional services” refers to services provided by professionals such as doctors, lawyers, architects, and chartered accountants. On the other hand, “technical services” refer to services that require technical knowledge or expertise and are provided by professionals such as engineers, consultants, and software developers. Section 194J states that any person who pays fees to a resident person for certain services is liable to deduct TDS. TDS, however, is to be deducted at the rate of 10% when the amount of payment in a year reaches Rs.30, 000/-. Meaning of Professional Service under Section 194J It refers to the services supplied by a person in the medical, legal, architectural, or engineering fields. Accountancy, advertising, interior decorating, technical consultation, and any other profession approved by the CBDT Board under Section 44AA are also included. To date, CBDT has notified the professions of a film artist, company secretary, and authorized representatives in accordance with Section 44AA. Under Section 194J, the CBDT has also alerted athletes, commentators, event managers, anchors, umpires and referees, physiotherapists, coaches and trainers, team physicians, and sports columnists. Meaning of Technical Service under Section 194J According to income tax rules, ‘fees for technical services’ comprise management, technical, and consulting services but do not include payments considered salary by the receiver of such income. Technical services may be defined as services that entail technical skill or expertise in technology. The scope of managerial services may be described as the operation and management of the client’s business. Consulting services are advisory services that provide clients with the essential guidance and counsel for their business. Difference between Professional & Technical Services The main difference between technical service and professional service is the nature of the service provided. While professional services are based on the knowledge and expertise of the professional, technical services are based on technical expertise and skill. For example, a lawyer provides professional services, while an engineer provides technical services. However, it is important to note that there can be instances where a service can be both technical and professional in nature. For example, an architect may provide technical services related to designing and engineering structures, but their services may also involve professional expertise in areas such as project management and cost estimation. Under Section 194J, the TDS rate for fees paid for technical services is 2% of the payment, while the TDS rate for fees paid for professional services is 10% of the payment. This difference in TDS rates reflects the difference in the nature of the services provided. However, determining whether a service is technical or professional can be challenging, as there are no clear guidelines or definitions provided by the Income Tax Act, 1961. In such cases, it is advisable to seek the opinion of a tax expert or consultant to avoid any potential tax liabilities. Under Section 194J, which payments are subject to TDS? TDS is deducted on payments received for professional and technical services under Section 194J. This section takes into account the following payments: Professional fees for services in medical, architecture, law, or engineering. Fees charged for technical services rendered by consultants, technical consultants, managers, and so on. Royalty payments in exchange for literary works, scientific discoveries, inventions, patents, and so on. Compensation paid to a corporate director (excluding salary) Non-compete fees are payments given for reasons other than hiring for a project or consulting, such as sharing patents, licenses, franchises, trademarks, and so on. TDS u/s 194J for professional/technical services shall be deducted at the corresponding rate in  What is the TDS rate according to Section 194J? Any payments designated as transactions under Section 194J are subject to the following taxation: If the professional/technical services provider provides a PAN (Permanent Account Number), a flat charge of 10% is applied to the transaction amount (payee). If the payee does not give a PAN (Permanent Account Number), a flat fee of 20% is applied to the transaction amount. The TDS rate for contact centre operators is lower, at 2% of the transaction value. All of the rates listed above are subject to the minimum TDS exemption established in Section 194J. Who is required to deduct TDS under Section 194J? Every person who is required to pay for professional or technical services must deduct TDS under Section 194J if the annual threshold of Rs. 30,000 is attained. There are a few exceptions: Individuals and HUFs are not required to deduct TDS when using services only for personal purposes. Individuals and HUFs operating on business with a turnover or gross receipt of less than Rs. 1 crore in the preceding year are exempt

Dropshipping is a popular way to sell online without stocking and shipping goods. That means no inventory, no warehousing costs, no packaging, no last-minute delivery headaches—essentially, you can outsource everything that happens after a shopper makes a purchase. What is Dropshipping? Dropshipping in India can be stated as a business where the seller does not maintain inventory or products. In this kind of set-up, the seller uses the services of a manufacturer (third party) who produces and delivers the product.  The seller does not have to manage the inventory. In the dropship process in India, he takes orders from the customers and informs the manufacturers, and then the manufacturer delivers the product to the customer. Most of the time, the seller does not even see the product. It is directly delivered to the customer by the manufacturer.  Unlike traditional online retail businesses, dropshipping companies in India have to select products, then perform marketing strategies to promote the product and provide after-sales services. The age-old practice of manufacturing products, inventory management, and shipping and delivering business has taken a setback. Dropshipping process Every Dropshipping business has one standard flow of the process that is normally followed by every drop shipper in India. The process can be briefly mentioned as follows: Select Products- The dropshipper can select products for the prospective business from independent suppliers. Integration with a dropshipping market is also possible these days. Online store- The products that are selected can be now imported to the online store with or without prices. The supplier does not have any stake in the prices and profit margin since this decsion is up to you.  Order of Customers-The customers browse through your store, check out the products and pay and purchase. Notification to the supplier- The order received from your customer is then notified to the drop shipper supplier, and you also have to make payment to them on behalf of the shopper. Shipping and delivery through supplier- The drop shipper supplier now ships and delivers the product directly and informs the tracking number. Many suppliers also offer white label shipping. In that case, you can ask the supplier to get your branding done on the product. Pros and Cons of Dropshipping Setting up an online store is very convenient in this business. There is no stress or cost of inventory management for the products. The drop shipper only selects the product and the payment method, and the online store is inaugurated. The product line is extensive as it is not limited only to ones that you can manufacture or trade-in. You can add a variety of products from all over the world to the online store. There is no cost for inventory management and storage. The production, as well as storage, is handled by the manufacturer or the supplier. The drop shipper can focus on expanding business through marketing and other means as the operational budget is considerably reduced. The operation of the business is not limited to any specific place. With the internet facility in hand, the drop shipper in India can operate the business from anywhere and cover the entire horizon. When you source the products from the suppliers, it implies that you can easily change the inventory as per the taste and preference of the customers and the latest trends. Therefore the inventory of the products is highly flexible and can be quickly adjusted. Cons of Dropshipping Business Product quality is one area where the drop shipper does not have any control. However, dealing with a trusted and single supplier or suppliers from reliable sources such as Sprocket or Modalyst can reduce the risk to some extent. Customer service or after-sales service can be tricky and hard. As there may be queries arising from the customers of which you may not be aware. This can be overcome through keeping an in-depth knowledge about the product and getting regular updates from the supplier. The exchange and returns may also be managed by the drop shipper and not by the supplier. Also, the refund process needs to be handled by the drop shipper at times. The shipping cost is a major issue many times as the supplier may be from a different place than yours. And the shipping cost will be calculated from the supplier’s warehouse to the customer’s place where the prices can vary based on different circumstances such as an increase in tax etc. How to start a Dropshipping business in India The step by step guide on how to do dropshipping in India is mentioned below: 1. Online Store To initiate the dropshipping business, the person can start from any of the eCommerce websites.  2. Selection of Products There are different views on selecting the products first or the suppliers first. Some theories suggest that it is beneficial to select a supplier first and then sell the products he offers, while the others suggest selecting a trending product and then deciding on the supplier. Whichever way it is, initiate with the niche products that target a specific audience. Tools such as marketplace and Google trends assist in conducting research on shopper’s interests. Trending products would always be sold more, bringing in high profit. However, this is an absolute benefit of dropshipping in India that as soon as the trend changes, the person can change the product or the supplier. There is no stress of overstocking the inventory. 3. Supplier Selecting that one supplier from hundreds of available ones is a real hardship. It is essential to have a trustworthy supplier and provide the utmost value that you are looking for. Also, the products should be genuine and of high quality.There are no set rules, but while selecting a supplier, you can look at some of the pointers such as: It is recommended to choose a supplier who himself is a manufacturer as it would be difficult to track the long chain of purchase. It will be more authentic and also such suppliers would have a large inventory in-store. Before finalising the product and the supplier, it

Finance and Accounting have grown in importance in today’s competitive business environment, where corporate organisations must provide an accurate and fair picture of their financial status. As a result, the use of accounting in the business sector has become an essential aspect. The Company Secretary must offer comprehensive and accurate information about the company’s financial activities to management for decision making. This emphasises the need of keeping accurate, up-to-date, and conforming books of account. Cost and management accounting is a branch of accounting which helps in reducing cost, improving profit and helps in increasing the efficiency of the organisation and provides this information to the management which will help them in improving decision-making. Mainly cost accounting is concerned with managing the cost of production of goods and services where a cost accountant tries to analyse the cost of production and report the deviation so that necessary steps can be taken as per requirement. Cost accounting and management accounting is a very crucial process for the proper utilisation of resources. Cost accounting and management accounting are the branches of accounting that have been developed due to the limitations of financial accounting. Management accounting is concerned with helping managers to take important decisions in the company. So by combining these two terms Cost and management accounting provides information about the financial and operational performance of the organisation which will help in taking valuable decisions for the organisation. Concept of Cost The amount of resources given up in return for particular products or services is referred to as the cost. Money or money’s equivalent represented in monetary terms are the resources given up. The Chartered Institute of Management Accountants, London defines cost as “the amount of spending (real or notional) expended on, or related to a given object or activity”. This activity of a company may be the production of a product or the provision of a service, both of which entail spending under numerous headings, such as materials, labour, miscellaneous expenditures, and so on. A manufacturing organisation is interested in determining the cost per unit of the product created, whereas a service organisation, such as a transportation undertaking, canteen, electrical company, municipality, and so on, is interested in determining the expenses of the service it provides. In its most basic form, the cost per unit is calculated by dividing the total expenditure by the total number of units produced or services delivered. However, this strategy is only effective if the manufacturer only manufactures one product. If the company produces more than one product, the total spending must be divided across the numerous items so that the cost of each product may be determined independently. Even if just one product is produced, it may be important to examine the cost per unit of each expenditure item that contributes to the total cost. When a large number of products are created, the situation gets more difficult, and it is important to break down the cost per unit of each product into several components of expenditure that make up the entire cost. Concept of Cost Management A specialised discipline of accounting known as cost accounting deals with the classification, accumulation, assignment, and control of expenses. Cost accounting is described as follows by the C.I.M.A. London’s Costing terminology: “The creation of budgets, standard costs, and real costs of activities, processes, products, and the study of variations, profitability, or the social use of money.” Cost accounting differs from costing in that the latter merely offers the foundation and data needed to calculate costs. Once the data is made available, costing may be done mathematically using memo statements or by using the integral accounting approach. Objective of Cost Accounting Cost accounting is the systematic recording and analysis of costs in order to determine the cost of each product made or service supplied by an organisation. Information on the cost of each product or service would allow management to determine where to cut expenses, how to set pricing, how to maximise revenues, and so on. Thus, the primary goals of cost accounting are as follows: Analyze and categorise all expenses in relation to the cost of products and operations. To determine the cost of production for each unit, task, operation, process, department, or service and to create a cost standard. Any inefficiencies and the level of different types of waste, whether of materials, time, money, or in the usage of machinery, equipment, and tools, must be reported to management. Analysis of the causes of disappointing outcomes may point to corrective actions. To supply data for periodic profit and loss statements and balance sheets at such intervals, e.g., weekly, monthly, or quarterly, as the management may require during the fiscal year, not only for the entire organisation but also for departments or particular items. Also, in the profit and loss statement, must explain in detail the actual causes for profit or loss disclosed in total. To identify the sources of manufacturing cost savings in terms of processes, equipment types, design, output, and layout. Daily, weekly, monthly, or quarterly updates may be required to guarantee timely and positive action. To offer real cost numbers for comparison with estimates, and to serve as a reference for future estimates or quotations, as well as to aid management in their price-fixing policies. To show how standard costs are produced, what the cost of production should be, and how the actual costs that are finally recorded may be contrasted. To show comparative cost statistics for various time periods and output volumes. To provide information to enable management to make different short-term decisions, such as price quotations to special clients or during a slump, make or buy decisions, allocating priorities to various items, and so on. Importance of Cost Accounting Costing as a Management Tool: Management benefits greatly from cost accounting. It delivers thorough costing information to management in order for them to keep effective control over stores and inventory, boost organisational efficiency, and reduce waste and losses. It makes it easier to delegate responsibility for essential tasks and rate

Royalty payments allow business owners to make money from their ideas or to use well-known brands to sell products. So, what is royalty in business, and why is it important for employers to know? Business owners should understand how royalties work before entering into a royalty agreement as a licensee or licensor. Introduction Royalty refers to a contractual payment by a person for the use of assets belonging to another person. The payment includes royalty for the use of intangible assets, such as copyrights, trademarks, or franchise model agreements. Royalty is also paid for the use of natural resources, such as mining leases. Royalty agreements generally give limited right to use assets or resources. There are two parties to a royalty agreement—the party granting the right to use an asset or resource is the licensor and the party who accepts the right to use and pays for the right is the licensee. Royalty agreements are often meant for commercial exploitation of assets or resources. The person paying royalty generally pays it as a percentage of the turnover or gross receipt. Royalty agreements are legal in nature and can involve elaborate negotiations on the terms and conditions of the grant of right to use. The commonly known royalty agreements are music rights or publishing rights of books in return for a percentage of the sales. Royalty is a passive income stream, providing benefit to people who create intangible assets or work of art. Musicians owning music rights, cinema rights, and authors often grant the right to use their copyrighted material and earn income. Royalty agreement includes licence agreements to use assets or properties in return for a payment. In the case of non-renewable energy sources, royalties are generally paid to the government of the State. An example of royalty paid to the State is mining royalty. Also, in the case of extraction of oil and natural gas, royalties are paid to the State. In respect of television channels, royalties are paid by television channels to satellite companies. What are royalties in business? As a business owner, you need to know what is royalties’ definition and how the meaning of royalties applies to your company. Royalties are fees that one party pays to another in exchange for the use of their intellectual property, land or rights. A person or company can license their ideas, giving other people or companies permission to use their logos, trademarks or products themselves. Royalties are usually a small percentage of business revenue that can be paid out for a certain time period or in perpetuity. They can be negotiated case-by-case to adhere to the needs or wishes of both business parties involved. Why are royalties important to business owners? Royalties in business can be mutually beneficial for both the party who owns the intellectual property and the party who wants to use it. Your business can profit from the use of an idea, product or brand name while enjoying the legal protections of a licensing agreement. You can also earn royalties for your business by licensing your own intellectual property. Royalty financing occurs when a business owner agrees to pay an investor a royalty in exchange for upfront funding. It’s a common way of raising capital to expand a business in exchange for a percentage of profits. Business owners who own and operate a franchise location pay a royalty to the franchise owner in exchange for the use of their business model, branding and products. How do royalties work? Business owners agree on the percentage or flat-rate royalty amount in a licensing agreement that they sign with the owner of the intellectual property or assets. Each licensing agreement or royalty contract should have a description of the intellectual property being licensed and details on how the payment amount will be calculated.  Determining royalty costs- Every licensing agreement has different terms, including a minimum royalty payment, maximum royalty payment or timeframe for payments. Some royalty payments are based on a variable percentage, meaning that the royalty percentage is small when sales are low and increases when sales are high. Royalties can be paid out based on the number of units sold or as a percentage of net revenue or gross sales. How much do franchisees pay in royalties? Royalty costs for franchisees can be anywhere from 4% to 12% of revenue depending on the type of business. These fees are usually collected by the franchisor monthly and are based on a percentage of your total revenue. High-volume franchises, like food franchises, usually have the lowest fees. These monthly royalty payments are where franchisors make their money because over time, they exceed the upfront franchise fees. FAQs How are royalties calculated? Royalties are usually calculated based on a set percentage of revenue. Multiply the total revenue from the intellectual property by the agreed-upon decimal percentage to find the correct amount. What are royalties in business? The business royalties definition can either refer to a payment that you make to another company for use of their protected ideas in your business, or a secondary income stream that your business generates from licensing out its own intellectual property. Practice area’s of B K Goyal & Co LLP Income Tax Return Filing | Income Tax Appeal | Income Tax Notice | GST Registration | GST Return Filing | FSSAI Registration | Company Registration | Company Audit | Company Annual Compliance | Income Tax Audit | Nidhi Company Registration| LLP Registration | Accounting in India | NGO Registration | NGO Audit | ESG | BRSR | Private Security Agency | Udyam Registration | Trademark Registration | Copyright Registration | Patent Registration | Import Export Code | Forensic Accounting and Fraud Detection | Section 8 Company | Foreign Company | 80G and 12A Certificate | FCRA Registration |DGGI Cases | Scrutiny Cases | Income Escapement Cases | Search & Seizure | CIT Appeal | ITAT Appeal | Auditors | Internal Audit | Financial Audit | Process Audit | IEC Code | CA Certification | Income Tax Penalty Notice u/s 271(1)(c) | Income Tax Notice u/s

Earnings before interest, tax, depreciation and amortisation (EBITDA) is a financial metric that helps calculate a company’s financial performance and cash flow. EBITDA is a precise calculation of financial performance because it shows earnings before financial and accounting deductions. What Is Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA)? EBIDTA is the acronym for Earnings Before interest taxes depreciation and amortization. It is instrumental in determining a company’s overall financial performance. It is a measure of a widely used metric that companies use to measure performance with respect to industry average and competitors. It is a good way to measure the core profit runs but it can be misleading at times as it excludes the cost of capital investments like land. It is sometimes used as an alternative to net income and is a more precise measure of analysing performance because it shows earnings before deductions are made (accounting and financial). It’s not mandatory for companies to disclose their EBITDA legally. It can be worked out using the information provided in the company’s financial statements (as the earnings, interest and taxes are available in the company’s income statement whereas depreciation and amortization are found in the notes to operating profit or in the cash flow statement). Understanding EBIDTA EBIDTA is an earning metric that does not include the different ways in which a company may use debt equity cash or other capital resources to fund its operations. It does not include depreciation and taxes (as the former may not reflect a company’s ability to generate capital whereas the latter can vary from time to time and is affected by multiple conditions which are not directly related to a company’s operating results). While it is not considered part of the generally accepted accounting principles by the SEC but SEC requires that companies that register securities reconcile EBITDA to net income. It is a handy tool for normalising a company’s performance results which makes evaluation easy and quick. It is a useful formula for companies to check their long-term growth potential and showcase it to the investors so they can easily compare it with existing businesses but if misused it can be used to show that a company’s earnings are greater than they are. Negative EBITDA generally represents poor cash flow but a positive one doesn’t always mean that the business has high profitability so you need to check and make note of the factors that have been excluded or included while calculating EBITDA. Components of EBITDA Earning Earning simply refers to the money a company has earned over a certain period. It can be calculated by simply subtracting the operating expenses from the total revenue of the company. Interest This component refers to all the expenses related to borrowing and financing through debt (companies finance their projects by issuing stocks or borrowing money both of which involve interests). Taxes Ebitda does not include taxes while calculating the company’s earnings. Amortization It is the expense related to the eventual expiration of intangible assets like patents. Depreciation Depreciation represents the decrease in the monetary value of tangible assets as time passes. It includes assets like cars, machines etc. The formula for calculating EBITDA There are two ways in which you can calculate EBITDA for understanding the company’s potential growth. Using operating income EBITDA = Operating Income + Depreciation + Amortization EBITDA is calculated by adding operating income depreciation and amortization. Operating income is the profit made by the company (obtained after deducting operating expenses, i.e. the cost of running the daily business) It helps the investors segregate the earnings from the company’s operating performance by excluding interests and taxes. Using net income The formula for calculating EBIDTA using net income is: EBITDA = Net Income + Taxes + Interest Expense + Depreciation + Amortization This formula is used in net income and adds it back to the taxes, interest expenses, depreciation and amortization to find the operating income. Importance of a good EBIDTA A good EBIDTA helps companies get funds and analyse its potential growth in the near future. It generally means that the company is doing well in a particular sector when compared to its competitors or peers. It is not rewarded or punished for the same. Limitations of EBIDTA While EBITDA is an important metric there are certain limitations and drawbacks to it. First and foremost, it does not fall under generally accepted accounting principles (GAAP) as a measure of financial performance. This is because its calculation can vary from company to company depending on the factors used. Some companies use this loophole to highlight EBITDA over net income as it is more flexible and try to cover up the problems in their financial statements. This is a very important red flag for investors as EBITDA can not be solely relied on when they want to analyse the company’s performance as it can be misleading at times. They might want to look out for companies that suddenly start highlighting EBITDA when they were doing so in the past. It can indicate heavy borrowings or issues in raising capital due to high development costs. Here are some other drawbacks of EBITDA: Exclusion of monetary value of assets There is a common misconception that EBITDA represents cash earnings but it ignores the cause of assets which is a crucial factor for determining cash earnings. It goes on to include only the profit as a function of sales and operation as if the assets and finance provided to the company do not hold any value. Exclusion of working capital Yet another factor that seems to be missing from it is the working capital and the replacement of old equipment. It includes the profit made by selling a product but does not include the inventory required to fill its sales channels. In the case of a software company, EBITDA does not include the cost involved in developing the software versions, its maintenance or the upcoming products. Dynamic starting points While the formula may seem to be simple enough (as it only involves excluding the interest payments, tax charges, depreciation and amortization from the total earnings) but there can be different earning figures which can be used as the starting point for EBITDA. This means that one can use any earning as an initial point which makes EBITDA susceptible to the

Opening a medical store requires many registrations and must follow legal procedures before selling medicines. India’s pharmacy and healthcare sectors have grown tremendously due to the increase in corporate and multi-speciality hospitals. Establishing a medical store is a good option for entrepreneurs having less capital and want to invest in the healthcare sector.Healthcare sector in India is growing remarkably due to increase in hospitals especially multi-specialty hospitals as the diseases are increasing at a fast pace and to cope with such situation, medications and hospital facilities become the need of an hour. The medical business in India does not affect even in the situation of pandemic or economic crisis. Pharmacies and Medical stores are considered to be the last distribution channel of medicines and other pharmaceutical essentials and this is the most profitable business of all times as compared to others. But before commencing this venture, proper analysis and planning of the same is very crucial otherwise it would result in failure of business. Types of Medical Stores in India he type of medical store that an individual can establish are as follows: Hospital medical store: It is a medical store opened inside the hospital to cater to the needs of the patients who come to the hospital. Standalone medical store: It is the most common form of medical store. It is small or medium-sized stores opened in residential areas that the residents visit to purchase essential medicines. Chain pharmacy or franchise outlets: These are medical stores in malls and shopping complexes and are part of a chain of pharmacies with branches in different areas. They are usually large-sized medical stores. Township medical stores: These types of medical stores are opened in a township to cater to the needs of the people residing in the town or a village. Stores in government premises: These medicine stores are opened under various government policies and schemes and are directly under government control. They are usually opened inside Government offices and buildings. Hospital medical stores, chain pharmacies, and township medical stores are generally established under a larger corporate hospital or entity such as a company. The standalone and township medical stores are usually set up as shops by proprietors or partners. A person wishing to open a medical store must first decide the type of medical store they want to set up and apply for its registration and other licences. Prerequisite for opening a Medical Store in India Degree– A professional degree of B pharma/M pharma for a owner is necessary for opening medical store in India and if such person does not have such degree then he has to employ a person as a pharmacist having such degrees or diploma. Location– Before commencing a business of medical store or pharmacy choosing of a location is an important thing to consider. A good location will always help shops to perform well and sustain in a long run. Making contact– Owner shall get in touch with medicine manufacturing company or the wholesalers to get the stock of medicines at his shop and hence it will give a better profit margin. But a high order quantity is required. Distributors and suppliers of medicines and other product can also be approached by the owner itself in his locality. Medical Store area– For starting a medical store, an area of about 100 sq feet is required and should have adequate space for refrigerator, racks, drawers, pallets, etc. Proper cemented floor and concreted roof should be there without any cracks and flakes in the premises. Storage– A refrigerator is required to store injections such as insulin, antibiotics, vaccines and other medicines which is required to store at comparatively low temperature. Investment– The initial investment on a medical store depends upon the location, area, city and other factors such as whether premises is on rent or owned, whether owner is the pharmacist only or he needs to employ some other person as his pharmacist, etc. Documents required– There are several documents required to apply for a medical store or pharmacy in India. Documents required to set up Medical Store in India Application Form in the prescribed format with respect to Pharmacy License Covering letter that specifies the purpose of application along with the name, signature and designation of the applicant Challan for depositing fees for obtaining drug License Declaration form Key plan for using such premises Site plan including the design layout for the premises ID proofs and photos of the owners or all the partners of the premises Residential Address proof of the pharmacist and the applicant Education qualification certificate of the pharmacist If the premises to be used is on rent, then proof of ownership as well as rental agreement and declaration by the owner of premises Certificate of Incorporation or MOA, AOA or partnership deed as a proof of constitution of Company Non-conviction affidavit of proprietor or partner or directors as the case may be under the Drugs and cosmetics Act, 1940 If registered pharmacist or competent personnel is hired than his appointment letter Affidavit of such registered pharmacist or competent person working on full time basis Licenses and Registrations required for setting up Medical Store in India Land Registration– An owner can have its own piece of land registered as a medical shop or pharmacy by submitting sale agreement or rent agreement. For registering a land for this purpose involvement of various legal entities shall take place. Registration of business as Medical Store– Registration of Medical stores are governed by The Indian Pharmacy Act, 1948 and according to such Act, every medical store shall get itself register by submitting all the required documents to the governing body. Various Types of medical stores shall get itself registered either as a private company or sole proprietorship or as an LLP. Company registration– Registration of business either as a private limited company or as an LLP, etc. is very important. An applicant can apply for either proprietorship registration, partnership registration, OPC registration, Private limited company registration, LLP registration, Shop registration, etc. Tax Registration– GST registration is must and essential for a medical business

Incorporation of the Institute. (1) All persons whose names are entered in the Register at the commencement of this Act and all persons who may hereafter have their names entered in the Register under the provisions of this Act, so long as they continue to have their names borne on the said Register, are hereby constituted a body corporate by the name of the 1[Institute of Cost Accountants of India,] and all such persons shall be known as members of the Institute. (2) The Institute shall have perpetual succession and a common seal, and shall have power to acquire, hold and dispose of property, both movable and immovable, and shall by its name sue or be sued.   Amendment 1. Substituted for “Institute of Cost and Works Accountants“, by the Cost and Works Accountants (Amendment), Act 2011, w.e.f. 1-2-2012. Practice area’s of B K Goyal & Co LLP Income Tax Return Filing | Income Tax Appeal | Income Tax Notice | GST Registration | GST Return Filing | FSSAI Registration | Company Registration | Company Audit | Company Annual Compliance | Income Tax Audit | Nidhi Company Registration| LLP Registration | Accounting in India | NGO Registration | NGO Audit | ESG | BRSR | Private Security Agency | Udyam Registration | Trademark Registration | Copyright Registration | Patent Registration | Import Export Code | Forensic Accounting and Fraud Detection | Section 8 Company | Foreign Company | 80G and 12A Certificate | FCRA Registration |DGGI Cases | Scrutiny Cases | Income Escapement Cases | Search & Seizure | CIT Appeal | ITAT Appeal | Auditors | Internal Audit | Financial Audit | Process Audit | IEC Code | CA Certification | Income Tax Penalty Notice u/s 271(1)(c) | Income Tax Notice u/s 142(1) | Income Tax Notice u/s 144 |Income Tax Notice u/s 148 | Income Tax Demand Notice | Psara License | FCRA Online Company Registration Services in major cities of India Company Registration in Jaipur | Company Registration in Delhi | Company Registration in Pune | Company Registration in Hyderabad | Company Registration in Bangalore | Company Registration in Chennai | Company Registration in Kolkata | Company Registration in Mumbai | Company Registration in India | Company Registration in Gurgaon | Company Registration in Noida  Complete CA Services CA in Delhi | CA in Gurgaon | CA in Noida | CA in Jaipur | CA Firm in India RERA Services RERA Rajasthan | RERA Haryana | RERA Delhi | UP RERA

A canteen means a food venture usually established inside premises, like colleges, schools, hospitals, companies, etc. The varieties of food available in these canteens vary based on the business scale. They serve food at a lower price when compared to restaurants and hotels. A canteen can be run by a company, association or an individual. They need to obtain permission from the premises owner to run their business. They also need to have an FSSAI (Food Safety and Standards Authority of India) license before they start the business. FSSAI ensures that they serve the best food quality. how to start a canteen business in India. Demand of canteen business in India is very high.  To start a canteen business in India we require systematic investment or capital. Utilizing your cooking skills in the canteen business is not at all a bad idea. When you are planning to have your canteen business, you must be well aware with regard to different documents and licenses which are must needed to run a smooth canteen business without any legal interruptions. Is canteen business profitable in India? About 98% of the unorganized catering industry in India is far from inclusive growth, despite the fact that the wedding industry of one lakh crore every year is growing by 25%–30%. Also, a significant number of developments in commercial and corporate events are taking place. Canteen business is a unavoidable, when there is many players in the market. What are the different options of Canteen Business in India? 1. Canteen in School 2. Canteen in College 3. Canteen in Hospital 4. Canteen in different companies 5. Canteen in Railway 6. Canteen in Hostel How to start a canteen business in India? Steps to follow for canteen business in India Decide the budget and capital Make a proper canteen business plan Get a food license and permit Prepare the layout of the kitchen Prepare equipment list Hire sufficient staff Advertisement & Marketing Different process of getting order etc. Decide on the budget and capital: Decide on the budget and capital. The budget may different as per choice. We make a plan to set our money proficiently on on-site appliances, rental costs, licenses, transports, and other expenses.If we do not have sufficient money to start a canteen business, then we can start contacting investors. If we can present our business as an attractive and promising one, we will be able to attract investors cheaply. These days, several Government sectors provide schemes to small business owners. Make a proper canteen business plan: Read the market, try to take well-attested feedback from customers, and consider how you can “fill the empty”. This is helpful to get more customers and pre-orders before the business is completely set up.Afterthought, decide on the location that needs and storage requirement also. Required permanent cooking and storage facility if we planning to a full-time business. Get a food license and permitBefore starting a canteen business need to take different types of permits and licenses. Few licenses have issued by the Government of India for dealing with food items. The vendor registration with FSSAI is compulsory for the food catering business. Also need to take different licenses i.e. shops & establishment, sewage, fire, and water, etc. Prepare the layout of the kitchen: For order, serving will need more than 25 people and the space of the kitchen will at least 100 Sqft. Canteen businesses would bring more clients due to efficient and hygienic food. The rent for places would differ for each place. The average rent for 100 Sqft. the kitchen area would be between Rs. 8000 to Rs 10,000, the location is a prime factor. Prepare equipment list: Need to invest capital on-site equipment. Burner stoves, fryers, and refrigerators, storage cabinets, sinks, cooking oven, serving equipment, coffee/beverage station, cambro, tin foil, plastic wrap, garbage bags, disposable containers, etc. Hire sufficient staff: For successful business need hand workers. Responsiveness, adequate, Enthusiasm, Ambition, and dedicated employees are required. Maintain uniforms for all staff when they become trained. Advertisement & Marketing: We can give advertisement in newspaper, television and social media. Advertisement is the best way for increasing demand in the market. Advertisement will promote our business. We can create our own website; it is helpful in build trust for our business. Different process of getting order and payment etc. – Most people want to do give payment through mobile or card, so availability is extremely important. Take order and payment at the table. We will give a self-order system, kitchen display screen, etc. Which is suitable for the canteen business we can pick. Which licenses are needed to start a canteen business in India? FSSAI is the most important license for food quality. It is also compulsory for canteen businesses to take FSSAI license in order to meet legal requirements. The Food Standards and Safety Authority of India (FSSAI) is the top authority which is responsible for regulating and supervising food safety. FSSAI license is compulsory as per the law. How many types of Registration? 1) Basic FSSAI Registration: If you have just started your canteen business and have not crossed the turnover of more than Rs. 12 lacs, then this basic license is for you.  As per FSSAI Act. 2) State FSSAI Registration: If you have just started your canteen business and have crossed the turnover of more than Rs. 12 lacs and upto 20 crores then this state license is for you.  As per FSSAI Act. 3) Central FSSAI Registration: If you have just started your canteen business and have crossed the turnover of more than Rs. 20 crores then this central license is for you.  As per FSSAI Act. Necessity of FSSAI License for Canteens Canteens are popular, especially amongst office-going people and college students. The safety of food served in canteens depends on the preparation process and quality of ingredients. Many canteens are situated in open-air areas, such as the rooftop of business premises, and are thus exposed to dirt. They were known for maintaining low hygiene standards as only two