BUSINESS PLAN / FEASIBILITY TEMPLATE

GUIDELINES FOR ENTREPRENEURS

I. About The Entrepreneur
II. Description of the business
III. The Management plan
IV. The Marketing plan
V. Regulatory Environment and Uncontrollable Factor
VI. The Inputs
VII. Financial Management plan
VIII. Financial projections
IX. Supporting documents

I. ABOUT THE ENTREPRENEUR

Please answer the following questions.
A. Level of education:  Matric  FA/FSc  BA/BSc/BBA  MA/MSc/MBA  Phd
B. Business experience
C. Experience relevant to current project
D. Technical capability
E. Personal savings
F. Family’s savings
G. Other sources of funds and amount

II. DESCRIPTION OF THE BUSINESS.

A. Business Description
1. A cover sheet indicating the name, address and telephone number of the business and of all
principals.
2. Legalities-business form: proprietorship, partnership or corporation. The licenses or permits
you will need and/or have.
3. Business type; merchandizing, manufacturing or service.
4. Write your business vision.
5. Clearly identify goals and objectives and it should clarify why you want to be in business.
6. List your short term, medium term and long term objectives
7. Is it a new independent business, a takeover, or an expansion?
8. Why will the business be profitable? What are the growth opportunities? Will franchising
impact on growth opportunities?
SMALL & MEDIUM ENTERPRISES DEVELOPMENT AUTHORITY 1
 9. When your business will be open (days, hours)?
10. What you have learned about your kind of business from outside sources (trade suppliers,
bankers, other entrepreneurs, publications).

B. Product/Service
1. What are you selling.
2. Description of the product(s) to be produced, type, quality, etc.
3. Planned yearly production of each product
4. Sale price of product(s)
5. How your product or service will benefit the customer.
6. What is different about the product or service your business is offering.

C. Location
1. Describe the fundamental data and requirements on the location for the plant operation.
2. List possible locations and describe them.
3. Rate selected location on following factors on a 1(lowest) to 10 (highest) scale
 Close proximity to consumer markets
 Close proximity to raw material market
 Close proximity to international air and sea port
 Close proximity to labor force
 Availability of fiscal concessions
 Availability of commercial roads
 Availability of commercial transport
 Availability of commercial storages
 Availability of electric power
 Availability of commercially usable water
 Availability of effluent disposal system.
 Availability of tele-communication system
 Availability of commercial land for expansion.

III. THE MANAGEMENT PLAN

A. How does your background experience/skill help you in managing this business?
B. What are your weaknesses and how can you compensate for them? (hiring/inducting
consultants, expert, professional)
C. Construct an organizational chart for your project.
 D. Identify management positions that are to be filled by outside personnel.
E. Clearly state and define the goals, targets, duties and responsibilities for management
positions.
F. State the educational and skill requirement for management positions.
G. State measures to overcome dependence on key personnel.
H. State incentives for sound management practices and decisions.
I. Identify requirement of clerical staff, skilled labor and unskilled labor.
J. Is skilled labor easily available at affordable rates?
K. Clearly state and define the goals, targets, duties and responsibilities for clerical staff, skilled
labor and unskilled labor.
L. State the educational and skill requirement for clerical staff, skilled labor and unskilled labor.
M. What are your plans for training personnel?
N. What salaries and benefits, will you offer?
O. What benefits, if any can you afford at this point?
P. Who has the final decision making authority.
Q. How will business handle succession issue?

IV. THE MARKETING PLAN

A. The Market
1. Describe existing and potential market for your product.
2. Existing sales volumes for the entire industry
3. What are the current prices?
4. Rate the following attributes on the level of importance.

a) Barriers to entry
Low High
Economies of scale 1 2 3 4 5
Product differentiation 1 2 3 4 5
Brand identity 1 2 3 4 5
Capital requirements 1 2 3 4 5
Access to distribution channel 1 2 3 4 5
Government policy 1 2 3 4 5
Others (please explain) 1 2 3 4 5
 b) Competition based on:
Low High
Prices 1 2 3 4 5
Value addition 1 2 3 4 5
Product differences 1 2 3 4 5
Brand identity 1 2 3 4 5
Growth potential 1 2 3 4 5

c) Your customers’ strengths

Low High
Buyers collective purchasing 1 2 3 4 5
power
Buyers individual purchasing 1 2 3 4 5
power
Available substitutes 1 2 3 4 5
Switching costs 1 2 3 4 5

d) Your suppliers’ strengths

Low High
Volume of supply available 1 2 3 4 5
Variation of quality 1 2 3 4 5
Presence of substitutes 1 2 3 4 5
Threat of forward integration 1 2 3 4 5

e) Availability of substitutes to your product

 Nature of the product: necessity / luxury
 What are the substitutes to your product?
For substitutes Low High
Price competitiveness 1 2 3 4 5
Switching costs 1 2 3 4 5

5. List all products that you will sell?

6. Identify Stage of Industry Life Cycle (startup, early growth, rapid growth, declining growth /
early maturity, maturity, consolidation, decline)
7. How will demand respond to changes in price?
8. Is it a labor or a capital-intensive industry?
9. List down critical success factors for this industry.
10. Identify your customers by their age, sex, income, and education level.
11. Expected market share to be achieved
12. Are your markets growing? Steady? Declining? (Indicate source of market estimation i.e.
market surveys, government statistics, inference from related studies)
13. Is your market share growing? Steady? Declining? (If applicable)
14. Is there an export market? If so identify countries, foreign buyers, export channel.
15. Do you have a pre-purchase agreement with any customers?
16. Do you have any main trading partner(s) (buying houses, industries, outlets, etc)?

B. Competition
1. What is your competitive advantage (low cost producer / product differentiation, focus)?
2. Is it a sustainable competitive advantage?
3. What is the level of competition (none/monopoly, moderate, intense or it’s a cartel situation)?
4. Rate the following critical factors which customers consider while making the final decision.
Low High
Price 1 2 3 4 5
Quality 1 2 3 4 5
Accessibility 1 2 3 4 5
Brand Image 1 2 3 4 5
Guarantee 1 2 3 4 5
Sales Service 1 2 3 4 5

5. Rate your business as well as your competitors business against critical factors on a 1-10
scale.
Your Company Low High
Price 1 2 3 4 5
Quality 1 2 3 4 5
Accessibility 1 2 3 4 5
Brand Image 1 2 3 4 5
Guarantee 1 2 3 4 5
Sales Service 1 2 3 4 5

Your Competitors Low High

 Price 1 2 3 4 5
Quality 1 2 3 4 5
Accessibility 1 2 3 4 5
Brand Image 1 2 3 4 5
Guarantee 1 2 3 4 5
Sales Service 1 2 3 4 5

6. Where does competition originate from? (Organized sector, semi organized sector, un
organized sector)
7. Who are your direct competitors?
8. Who are your indirect competitors?
9. What have you learned from their operations? from their advertising?

C. Pricing and Sales

1. What are the current price levels of the industry?
2. How have prices behaved in the past?
3. What pricing strategy have you devised and why?
 Pricing below competition (market penetration)
 Pricing above competition (premium pricing)
4. Are Volumes important?
5. Is multiple pricing possible (different prices for different markets)?

D. Advertising and Public Relations

1. Nature of marketing required (industrial marketing or consumer marketing)
2. How will you attract, hold, increase your market share? How will you promote your sales?
3. Medium of advertising to be used (Print, electronic, banners, billboard, pamphlet, brochure,
booklet etc.)
4. Catchy phrases/slogans to arouse the interest of your readers, listeners or viewers.

V. REGULATORY ENVIRONMENT AND UNCONTROLLABLE FACTORS

A. Anti trust Laws (Monopoly Control Act)
B. Income tax structure relevant to industry.
C. Other taxes.
D. Price control regulation.
E. Are there any subsidies available or quotas applicable to this industry?
F. Duties on inputs/imports (if any).
 G. Labor laws.
H. Factory Laws
I. Environment/pollution control laws especially regulation regarding by-products and industrial
waste.
J. International Trade Laws related to the process of production and product/services itself
K. Anti-dumping law etc.
L. Cyclic/seasonal constraints (in case of seasonal demand/production).
M. Natural disorders effecting business (Floods, droughts etc.).

VI. THE INPUTS

A. Raw Materials
1. List all required raw materials (unprocessed or semi processed raw material, processed
industrial material, auxiliary material) and inputs (factory supplies, utilities)
2. Identify local and foreign component of raw material and inputs.
3. Describe in detail the chosen material and inputs stating
 Qualitative properties
 Quantities available
 Sources of supplies
 Seasonality
 Price, price trends, import duties
4. State purchase terms; like credit and any other written agreement.
5. Inventory control system

B. Machinery and Equipment

1. List of machinery and equipment required (local, import) along with supplier
2. Manufacturers / Supplier’s Delivery time, services and provisions for spare parts
3. Basis for selecting (price, quality, capacity, compatibility, etc)
Low High
Price 1 2 3 4 5
Quality 1 2 3 4 5
Capacity 1 2 3 4 5
Compatibility 1 2 3 4 5
Other (explain) 1 2 3 4 5
 4. Identify the local/foreign contractor(s) who construct the plant, connect utilities, and install
the machinery. Describe the process followed in their selection.
5. Detailed breakdown (customs duty, sales tax, income tax) of cost of machinery and
equipment.
6. Costs involved in import and freight of machinery and equipment.
7. Installation cost
8. Testing costs (Testing before execution of normal operation)
9. Other costs involved (upto installation).
10. Comparison of cost with alternatives.
11. Repair and maintenance

C. Civil Works and Infrastructure

1. Required area and cost of construction.
 Stores
 Factory Building/Services
 Management Building
 Other building
 Godowns
 Pavement
 Grounds
2. Furniture and Fixture and other office utilities

D. Utilities
1. Subscriptions, connection charges or other fees related to utilities.
2. Cost of installation of utility supply lines, piping, wiring etc.
3. Utilities consumption pattern and cost projection

E. Miscellaneous
1. Insurance expenses
2. Rent expenses (if any)

VII. THE FINANCIAL MANAGEMENT PLAN

A. Any bank references
B. Sources & Amounts of Start-Up/Operating Capital
C. Financial Assistance Being Requested
D. Loan applications you've filed.
E. Balance sheet
F. Breakeven analysis
G. What type of accounting system will you use? Is it a single entry or dual entry system?
 VIII. FINANCIAL PROJECTIONS:

A. INCOME PROJECTION STATEMENT

[Company Name]
For the Year ending 2000

1. Total net sales (Revenues) ---------------------------

a) Raw Material
b) Direct Labor
2. Cost of Goods Sold
3. Gross profit (1-2)
Operating expenses:
a) Electricity expense
b) Water expense
c) Gas expense
d) Telephone expense
e) Administration salaries
f) Legal/accounting expense
g) Advertising expense
h) Local transportation expense ---------------------------
i) Travel expense
j) Office supplies
k) Dues/Subscriptions
l) Rent expense
m) Depreciation expense
n) Insurance expense
o) License/permits
p) Interest expense (on loan)
q) Miscellaneous
4. Total operating expenses
5. Operating Income (3-4)
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6. Interest expense (on loan) ---------------------------
7. Net profit (loss) before taxes (5-6) ---------------------------
8. Taxes ---------------------------
9. Net profit (loss) after taxes (7-8) ---------------------------
B. BALANCE SHEET
[Company Name]
As of , 2000

Assets
Current Assets
Cash & bank
Accounts receivable
Inventory
Short-term investment
Prepaid expenses Total Current
assets
Long-term investment
Fixed Assets
Land
Buildings
Machinery & Equipment
Furniture
Automobile/vehicles Total Fixed
Assets

Other Assets
Total Assets

Liabilities
Current Liabilities
Accounts payable
Interest payable
Taxes payable
Total Current Liabilities
Long-term Loan
Total liabilities
Net worth (Owner's Equity)
Proprietorship or Partnership
1st Partner’s Equity
2nd Partner’s Equity
Retained Earnings
Total Net worth
Total Liabilities and Net Worth
 C. MONTHLY CASH FLOW PROJECTION
1. Cash on hand (beginning month)
2. Cash receipts
(a) Cash sales
(b) Collections from credit accounts
(c) Loan or other cash injections (specify)
3. Total cash receipts (2a+2b+2c=3)
4. Total cash available (before cash out) (1+3)
5. Cash paid out
a) Purchases (merchandise)
b) Purchases (office supplies)
c) Gross wages
d) Outside services (contractual work)
e) Repairs and maintenance
f) Advertising
g) Car, delivery and travel
h) Accounting and legal
i) Rent
j) Electricity bill
k) Water bill
l) Gas bill
m) Telephone bill
n) Insurance
o) Taxes (income, real estate, etc.)
p) Interest on loan
q) Loan principal payment
r) Capital purchases (specify)
s) Other start-up costs
t) Owner's withdrawal
u) Other expenses (specify each)
6. Total cash paid out (5a through 5u)
7. Cash position (end of month) (4 minus 6)
Essential operating data (non-cash flow information)
 Sales volume (dollars)
 Accounts receivable (end on month)
 Bad debt (end of month)
 Inventory on hand (end of month)
 Accounts payable (end of month)
 ELEMENTS OF A BUSINESS PLAN
Cover Sheet
Statement of
Purpose Table of
Contents

I. The Business

A. Description of business
B. Sponsors
C. Marketing
D. Competition
E. Operating procedures
F. Personnel
G. Business insurance
H. Financial data

II. Financial Data

A. Loan applications
B. Capital equipment and supply list
C. Balance sheet
D. Breakeven analysis
E. Pro-forma income projections (profit & loss statements)
1. Three-year summary
2. Detail by month, first year
3. Detail by quarters, second and third years
4. Assumptions upon which projections were based
F. Pro-forma cash flow

III. Supporting Documents

A. Tax returns of principals for last three years

B. Personal financial statement (all banks have these forms)
C. Copy of proposed lease or purchase agreement for building space
D. Copy of licenses and other legal documents
E. Copy of resumes of all principals
F. Copies of letters of intent from suppliers etc.