Q. Discuss the various components of a BUSINESS PLAN.

OUTLINE
TITLE PAGE
Include the following information on the title page of your business plan:
• Name of your business
• Date the business plan was prepared or last modified
• Contact information of the business owner(s) (name, address, phone number, fax number, e-mail address)
• If the business plan was prepared by someone else, please include their contact information as well

SECTION 1 – PROJECT DESCRIPTION
1.1 Description of the Project
• What is your company’s name? If your business is a start-up, what is the proposed name of your company?
• Is this project a start-up, expansion, modernization, or purchase of an existing business?
• What is the location, or proposed location, of your business? Include the street address and the name of the community.
• Who is (are) the owner(s)?
• Is the business a sole proprietorship, partnership, or corporation? If there is more than one partner/owner, indicate what percentage of the company each person will own.
• What are your company’s days and hours of operation? If your business is seasonal, during which months will you operate?
• Give a brief description of the products or services that you will offer.
• Why are you undertaking this project? What are your goals and objectives? For example, you may wish to be your own boss or you need to create a job for yourself. You may also wish to state your objectives in terms of sales, desired market share, job creation, etc.
• What made you think of this particular business idea? Why do you think this idea is viable?
• How long will it take to acquire the facilities, equipment, and personnel, etc. to start or expand your operations?

1.2 History of the Business (if purchasing a business)
• Give a brief overview of the business.
• How many years has the business been operating?
• Are the current owners the original owners? If not, why was the business sold before?
• Why is the current owner selling?
• How has the business evolved over the past few years? If sales have declined or if the company is going out of business, why has this occurred?
• What are some of the strengths of this existing business? What opportunities do you see in purchasing this business?
• What are the weaknesses of this existing business? How do you plan to overcome these weaknesses or challenges?
• Have you engaged the services of a professional advisor to review the company’s financial statements or to conduct a valuation of the company? If so, what were his/her findings or comments?

SECTION 2 – MANAGEMENT PROFILE
2.1 Management Profile
• Describe the involvement of each partner/owner and key management staff. List their positions, responsibilities, and salary/compensation.
• Describe the qualifications of all the partners/owners and key management staff. What strengths do you or they bring to the business in terms of work or other related experiences, expertise, education, qualities, and/or skill sets? If possible, please include a resume.
• In your personal opinion, are there any management skills you or your partners are lacking or need improvement in? If so, what are they and how will you improve these skills? For example, you may hire a bookkeeper, delegate certain tasks to employees, or participate in workshops designed to help you improve your management skills.
• If the business structure is a partnership, you should consider having a partnership agreement signed by all of the partners. If you have a partnership agreement, you should include a copy with your business plan. If you have not prepared an agreement, but will do so, please mention this in this section.
• How will the business continue operating should something happen to the owner, key manager, or one of the partners (e.g., illness, death, retirement, partner leaves business, etc.)? For example, will a family member take over or will the business be sold, etc.?
• Please provide the names, addresses, and phone numbers of any professional advisors you may have (e.g., accountants, lawyers, insurance companies, bankers, and consultants).

SECTION 3 – MARKET RESEARCH
3.1 Industry Research
• Describe the industry, or business environment, in which your business will be established. What type of industry conditions exist or what can you tell us about the industry you will work in (e.g., information on trends, performance, outlook, opportunities, etc.)?
• What type of research did you conduct to learn more about industry conditions? Where did you obtain this information? For example, did you obtain industry data or statistics from Statistics Canada or the Canada/NB Business Service Centre; did you review reports, newspaper articles, industry studies or related documents; or did you speak with people working in the industry?
• Based on the research you conducted on the industry in which your business will be established, what kind of potential or opportunities exist for your business?
• Based on the research you conducted on the industry in which your business will be established, have you identified any potential threats that could affect your business (both in the start-up phase and once you are operating)? If so, please describe and explain how you will deal with these risks. For example, if there are many competitors in this industry, how will your business successfully establish itself in this industry and remain viable?
3.2 Target Market/Customer Profile
• Describe who your primary target market (customers) will be. Be specific. Explain who they are. You can define your target market by age, income level, population, location, etc. (e.g., small businesses, middle-income homeowners, women ages 19-35, Atlantic Canadians, etc.)
• Why is this group your target market? What trends affect this group of people? How, where, and why do they buy these products or services?
• What research did you conduct on your target market? For example, did you survey potential customers, obtain letters of interest, speak with similar businesses, or refer to specific studies, etc.? What did you learn about your target market from this research? Don’t forget, the survey must be designed to provide you with relevant information that will help you to know your target market.
• If you have obtained contracts or letters of interest from potential customers, please include copies with your business plan guide. Any additional information, such as survey results, should also be included.
3.3 Competitive Analysis
• Who are your competitors? List them (or if there are many, summarize) and provide a brief description of their business in terms of products/services, location, market share, growth potential, number of years in operation, reputation, size, pricing, warranty, etc.
• What are the strengths and weaknesses of your competitors in terms of product/service and business operations? What are the strengths and weaknesses of your business in terms of product/service and business operations?
• What advantages will you have over the competition? How will you be different? You may wish to refer to the research you conducted on your target market to help identify what factors or features are critical when positioning yourself ahead of the competition.

3.4 Sales Potential and Market Share
• Based on your market research and who your target market is, what are your estimated sales for Years 1 and 2? Explain how you arrived at these numbers.
• What percentage of the market share do you feel you will achieve?
SECTION 4 – MARKETING PLAN
4.1 Products and Services
• Explain in detail what products and/or services you will be offering. While you may have briefly touched on this in Section 1, in this section you need to stress your products or services’ features. What makes them unique or innovative from that of your competitors? How will these products or services satisfy your target markets’ needs and/or wants?
• If applicable, describe any plans you may have to change or update existing products, and/or to offer new or related products or services, in the next 3-5 years. Explain how these plans will be carried out.
4.2 Price
• What will be the price(s) of your products or services?
• What will your prices include (e.g., cost of product, labour, warranties, etc.)? Will you offer discounts or special rates?
• How did you determine your pricing strategy (e.g., calculated cost of goods sold, compared pricing to competitors, etc.)?
4.3 Promotion/Advertising
• Describe your promotional strategy. How will you advertise or promote your products or services to your target market (for example, trade shows, direct mail, newspaper ads, Internet, word-of-mouth/referrals, radio ads, direct selling, business cards, etc.)? When designing your promotional strategy, be sure to ask yourself how each form of advertising will help attain your target market.
• When will you advertise (e.g., monthly, seasonally, special events, etc.)?
• How much will your advertising cost? Please include a detailed budget for your proposed advertising activities. This schedule/budget should also be reflected in your cash flow projections.


4.4 Place/Distribution
• Indicate how you will distribute your products or services and where your customers will be able to buy your products or services (e.g., store location, other stores, placing orders by phone, etc.) In regards to your means of distribution, what are the benefits to the clients (e.g., convenience, faster service, more personal service, etc.)?
• What will be your selling terms (e.g., cash, cheque, debit, Mastercard, Visa, etc.)?

SECTION 5 – BUSINESS OPERATIONS
5.1 Personnel
• Will you need to hire employees? If so, how many and when will they be hired (first year, second year, etc.)? Will these positions be full-time, part-time, or seasonal? If you will hire employees, in preparing your cash flow projections don’t forget to include employment insurance and CPP expenses as part of your estimated cost of wages and salaries.
• What types of jobs will be created? Provide a brief job description for each position you will fill. What will be the wage or salary for each position?
• If job training is required, describe the type of training that is needed, including its duration and cost.

5.2 Products and Services
• Give a general description of what materials, labour, and equipment will be used to make your products or provide your services.
• Who are your suppliers? Can these supplies be obtained from more than one source? What are your terms of payments? Are your supplies perishable? Do you have adequate storage facilities? Do you have a buying policy?
• What level of inventory will you carry?
• What is the cost of production for each product or cost of delivering a service?

5.3 Business Regulations
• Do you need permits and licenses to operate? If so, please explain.
• Are there any government policies and regulations that will affect your business?
• Do patents, trademarks, or other forms of intellectual property play a role in your business?
• What environmental regulations, if any, apply to your business?
• If your business will use any hazardous materials, how will these materials be handled and disposed of? If applicable, what safety precautions will you have in place to avoid any health hazards?

5.4 Record Keeping
• Describe your record keeping system. For example, will you be maintaining your financial records manually or with the assistance of a computer program (such as Simply Accounting), or will you be engaging the services of a bookkeeper or accountant?

SECTION 6 – LOCATION AND FACILITIES
6.1 Location
• Give a description of your business location. How is this location suitable for your particular business (e.g., proximity to markets, central to where customers live/work, sufficient parking, proximity to suppliers or labourers, etc.)?


6.2 Facilities
• Describe your facilities. Are they owned or leased? If leased, what are the terms?
• Will renovations be required? If so, include quotes in the appendices. Also attach a floor plan or sketch/photo of the premises, if available.

SECTION 7 – FINANCIAL INFORMATION
7.1 Source and Application of Funds
• Include a list of your start-up, expansion, or project costs. What items do you need financing for (e.g., land, renovations, equipment, etc.) and how much financing is required for each item? What sources of financing are you seeking to help cover these costs? Use the worksheet below or write down your information separately.
• Don’t forget to include quotes for major items to be purchased, such as property, renovations, or equipment.
• Please provide a list of items (along with their $ value) that you will contribute to the business as equity investment (e.g., in-kind or financial).

7.2 Projected Cash Flow Statements
Projected Cash Flow Statements will estimate monthly inflows (cash coming into the business – e.g., revenues, loan proceeds, etc.) and monthly outflows (cashing going out of the business – i.e., business expenses). These projections will help you identify whether your business will have enough money to cover its monthly expenses.
• Include two year projected cash flow statements from the time the project will start.
• Please include a list of key assumptions with your projects. How did you arrive to these financial projections?
• Note: To calculate your monthly balance each for month, take your “Total Cash Coming In” for that month and subtract “Total Cash Going Out” for that month. Your accumulated balance is the accumulation of monthly balances. For example, the accumulated balance for Month 2 is the Monthly Balance for Month 2 + the Monthly Balance for Month 1. The accumulated balance for Month 3 is the Monthly Balance for Month 3 + the Accumulated Balance at the end of Month 2, and so forth.

7.3 Historical Financial Statements
• If your business is already in operations, or if you are purchasing an existing business, please include the historical financial statements for the past three years of operation. If the business has been operating for less than three years, please include what financial statements you have to date.

SECTION 8 – APPENDIX
Include any additional information you feel would be of benefit to the evaluator. This information may include:
• Resumes
• References
• Letters of interest or intent
• Market research data (e.g., surveys and survey results, industry reports, etc.)
• Supplier information
• Information on products (pictures, brochures)
• Quotes and estimates
• Confirmation of obtained financing
• Historical financial statements
• Floor plan sketch










Q. How to appraise a project so as to decide on its adoption?
The exercise of project appraisal simply means the assessment of project in terms of its economic, social, and financial viability. It is the multi-dimensional analysis of the project. Financial institutions and banks make a critical appraisal of the projects submitted on the basis of data provided by the entrepreneur. The factors considered by the institutions for appraising the project are technical, financial, commercial, ecological, social and managerial aspects. Emphasis is largely on the cash flows and the viability of a project.
Project appraisal being a scientific tool follows a specific pattern. Potential environment for the project can be assessed by analyzing the reasons of economy, which provides a framework for the assessment. This exercise involves investigation of 6 different aspects. :

Economic: indicates priority use.

Technical – involves scale of project and process adopted

Organizational: stability is examined

Managerial: adequacy and competence critically scrutinized

Operational: capability of the project.

Financial implementation: determines the financial viability for sound implementation and efficient operation.











Role of SIDBI

SIDBI was estbd on April 2, 1990. It was to be “the principal financial institution for the promotion, financing and development of industry in the small scale sector and to co-ordinate the functions of the institutions engaged in promotion and financing or developing industry in the small scale sector and for matters connected therewith or incidental thereto.
Four basic objectives are set out in the SIDBI charter. They are;
· Financing
· Promotion
· Development
· Co-ordination
1. Refinance Assistance:
SIDBI had been providing refinance assistance to the State Level Finance Corporations / State Industrial Development Corporations / Banks, etc. against their loans granted to small scale units.
2. Financial Support (Short-term Loans to Banks):
This is a new scheme of refinance introduced by sidbi during 1998-99. Under this, assistance is provided to scheduled commercial and cooperative banks in respect of their outstanding portfolio relating to small scale industrial sector, against which no financial support has been availed of from any other institution.
3. Special scheme under refinance schemes:
Single Window Scheme:
This is operated thru scheduled comm. Banks. Eligible state coop banks, scheduled urban coop banks, state fin corporations, and industrial dev corporations. Under this the primary lending institution provide from a single window both term loans for fixed assets an loans for working capital inclusive of all fund based facilities.
4. Bills Financing:
Granting assistance thru bills is the other important method of providing finance by SIDBI. It undertakes direct discounting (equipment, components), rediscounting (bills) etc.
5. Project Financing:
Sidbi extend direct assistance to small scale industries through its various project related financing schemes like project financing schemes, i.e. assistance is given to new small scale industries for modernization, technology up gradation, diversification, and expansion of existing well run units in small scale industrial sector.









What is export marketing?
Export marketing is when a company tries to increase sales outside their domestic market whilst maintaining production within the country.

Typically a company will seek financial support from a government agency like Enterprise Estonia and join a foreign trade (selling) mission or exhibition.
Another common tactic is for companies to participate in domestic exhibitions/events where the Chamber of Commerce or a Trade Council has attracted foreign buyers to meet the exporters.
Sampling, brochure distribution (CD Roms and Videos too) are popular too.
And the role of the internet is growing.It is now essential for exporters to have a website.
Why?Because if you, as an Estonian exporter, want to take full advantage of the growing use of internet usage by buyers then your website must be:
1. Easy-to-use
2. Easy-to-understand
3. Technically accessible
4. Credible
5. Engaging & Persuasive
6. Highly visible (easy-to-find)

Plus you should create a well thought out content strategy so potential (and existing) clients, the press, partners and any other stakeholders can find what they need and want…easily.If you get it right the there are some major benefits.You can:
1. Engage with potential new clients in foreign markets without leaving Estonia
2. Communicate with customers and prospects in a cost-efficient way
3. Improve your credibility and reputation for modernity
4. Create a professional image of a being a ’significant company’
5. Promote new products and services, quickly and cheaply
6. Sell online (actual transactions i.e. e-commerce)
7. Attract partner enquiries and manage a partner network
8. Distribute important company news and positioning material to the media