Preparation of Business Plan…

By | January 28, 2019

Preparation of Business Plan – Project Report

After identifying the product / service in which you want to start a business, then, the next step is to prepare the business plan. This can also be called as Project report. Preparation of the business plan / project report is a very important step in the formation of the enterprise. This report talks about you and presents yourself to the investors / financiers. Therefore, due care should be taken while preparing the business plan / project report.

Please remember, that this project report covered here in this section is just to guide you only. Each project report is unique. This is because your business is unique and you operate in different circumstances, with different man power with different resources. Therefore, you need to customise this as per your business model, needs and demands.

Some of the basic topics to be covered are:

  • About Project: Comment on the locational advantage, availability of raw material, other utilities, infrastructure facilities, availability of labour / manpower / skilled labour etc. Also comment on required machinery, suppliers of machinery, their terms and conditions etc. Also comment on project implementation schedule in this section.

  • Management: In this section, comment on the management, their strengths, experiences and other abilities.

  • Clearances / Permissions / Approvals: disclose the status of various clearances / permissions required to operated.

  • Technology and manufacturing process: Comment on the technology that is going to be adopted, is it a proven technology or completely a new technology. Also comment on basis for selection of the technology. Also comment on the cost of acquiring / terms of use of the technology etc.

  • Commercial Viability: Comment on the existing and potential demand, existing players, their strengths and weakness, demand – supply gap if any and also comment on proposed plans on how to capture the market .

  • Financial viability: Under this section you need to comment on financial viability of your project. This includes, Cost of project and means of finance, Projected financials ( Projected sales, purchases and net profit etc ).

In this section discuss about some more important areas like,

  • Assessment of market

      • While assessing the market, first step should be identifying the product based on,

          • Demand – Supply gap of the product. What is the demand and supply of the product. Whether our product can meet the market requirements etc. conduct a survey in that area and ensure the market. Also understand the business practices in that area.

          • Scope for expansion of new markets, new products i.e. whether can expand to new markets with existing and with new products.

          • Competition, assess the strengths and weaknesses of the competitors. Also assess on what could be the possible reactions to new entrants or sudden reduction of price by the competitors.

          • Place, i.e. product manufacturing / market location, whether the place that you have selected adds to your profitability or not.

          • Understand business practices in that area. Be innovative an dplan accordingly.

  • Assessing the finances

      • Now for the shortlisted / identified activity estimate the required funds. Also, estimate the sources of funds. If any Bank finance is required shortlist the bank / Financial institute. While finalizing the Bank / FI consider the….

          • terms and conditions ex. repayment terms of the Bank(s) / financial institute(FI) etc. The repayment should be based on the income generation of the unit ONLY.

          • Cost of funds, i.e.Rate of interest, other charges etc.

          • Your ability to contribute capital.

  • Assessing the competition

      • Assess the competition for the product etc. While assessing the competition should consider the…

          • Understand the Industry / Activity

          • Survey the existing players, their SWOT (strengths, weaknesses, opportunities and weaknesses). This will help you in identifying your strength and there by identify your USP.

          • Assess the future market potential and also estimate how the competitors react to price i.e. price reduction by competitors or entry of a new entrants and their strategies etc.

          • Only permanent thing in the world is CHANGE. Therefore, assess the future trends of the customers. You should be ready to change the strategy dynamically and be ready to accept the challenge called “CHANGE”.

  • Quality assurances

      • Assess whether you can assure quality to your customers. Explore the possibility of getting the quality certifications like ISI, AGMARK, ISO certifications etc.

      • Establish a process where the quality is maintained.

      • Create and Ensure the Brand value.

  • Marketing

      • Asses on establishing the network. Also plan to update the network as per need.

  • Availability of people

      • The most valuable asset to your organisation is your people, your employees. Identify, the required skills for the product / service that you offer.

      • Analyse the availability of such skilled people, the cost of hiring as well as retaining them.

  • Complaint redressal

      • This is required if you want to continue in the market for a long period. In fact, This is the most important area of any organisation. A successful organisation is an organisation which has an effective complaint redressal mechanism.

  • Collateral Security: Comment here on the security that you propose to offer for the loan.

  • Other Aspects (if any):

  • While assessing the project have a realistic assessment. All your projections / estimates etc. should revolve around near reality. Never, you should forget this while preparing the project report.

  • We have appended here a model project report as well. This is a model project report and as said earlier, this should be customised as per your project / business plan. The aim of providing this report here is to give a general idea on the contents of a project report only. You may modify the report as per your needs and requirements.

  • If you need any clarifications / guidance / support, please do write to us on admin@sripatham.org or post a comment here. Be realistic in estimations and projections while preparing the project report and go ahead.

All the best

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