1.
Welcome
Mr.Ramesh K RautMr.Ramesh K Raut

2.
Business
Development Plan

3.
Suggested Readings Books
• David H. Holt: Enterpreneurship, Prentice Hall of India,
New Delhi,
• Hisrich, Robert D. and Michael P. Peters:
Entrepreneurship.
• Furatko, Donald F. and Harold P. Welch: Strategic
Entrepreneurial Growth,Harcourt Publishers: New York.
• Agrawal, G.R., Entrepreneurship and Small Business
Management in Nepal, M.K. Publisher, Kathmandu, 2005.
• Various international journals like : Harvard Business
Review (hbr), Journal of Management,
• National Journal like : New Business Age, Boss Magazine
• Publication of FNCCI : Doing Business in Nepal etc.

4.
Objectives of the Course
To help the students to prepare a
comprehensive, well-researched
business plan for a business
opportunity.
To encourage student to initiate their
own business on the basis of their BDP.
( to develop as a job creator)
To promote as a professional B D
Planner/ Financial Planner.

5.
• Contd….
To equip student to understand and
analyses the BDP as a :
Banker : Able to analyze the BDP
whether loan should sanction or not.
Investor : Able to analyze the BDP
whether investment should invest or not.
Venture Capitalist: Able to analyze the
BDP whether the project feasible or not.

6.
Qualities of Successful Entrepreneur
Self Confident and optimistic
Able to take calculated risk
Respond positively to challenges
Flexible and able to adapt
Knowledgeable of markets
Able to get along well with others
Independent minded
Versatile knowledge

7.
Energetic and diligent
Creative, need to achieve
Dynamic leader
Responsive to suggestion
Take initiatives
Resourceful and preserving
( safeguarding)
Perceptive with foresight
Responsive to criticism

8.
Process of Developing New Venture

9.
BDP is prepared in following cases
To start new project / business.
To operate existing project with
increasing the capacity or make
advancement in operation.
To add the new project with running
existing project.
To operate the existing project in normal
course of action systematically.

10.
Purpose of BDP
Internal Purpose:
to craft the clear & comprehensive vision
of the organization.
to invite the existing shareholders for
additional investment in the project.
to motivate the staffs to achieve the
goal.
to show the commitment by top
management.

11.
• Contd….
External purpose:
to attract the potential investors /venture
capitalist.
to assure the lenders / bankers
to fulfill the legal requirements as per the
instruction of government & authorities.

12.
Contd….
To minimize the cost, risk and
uncertainties,
To formulate effective strategy,
To safeguard the entrepreneurs from
failure of business because it has been
already identified the weaknesses and
threats.
To visualize the future of organization

13.
• Contd…
It enhance the knowledge about on
project/ business
It prevent / drop out the unrealistic
projects,
To attract the funding agency
To convince the stockholders
To assure the stakeholders

14.
Structure of Business Plan
There is no hard and fast rule of BDP
structure ,
Major components should include under
appropriate heading.
Length of plan and its structure may be
differ as per the project’s cost, nature,
Environment, risk and investor’s interest.

15.
Cover & Prefatory Pages
Title of the Plan /Cover page
Acknowledgement ( optional)
Executive Summary
Table of Contents
List of tables and figures

16.
Main Text of BDP
Some of these contents areas may be
more or less important depending on the
kind of business plan.
Rather the content and format of the
business plan is determined by the goals
and audience.
A business plan should contain whatever
information is needed to decide whether
or not to follow a goal.

17.
Supplementary Part
Registration documents of entities like
license, MOA / AOA, PAN etc.
Ownership certificates
Agreements and authorization copies
CV of promoters
Photographs of layout, plant, location
and product.

18.
Contd…………
Map and designing
Calculation sheets.
Renewal certificates ( to show
genuineness of business)
Awards, recognition if available,
Note: these documents help to make the
BDP more strong and realiable.

19.
Who prepare the business
plan?
Internal Expert :
Entrepreneur / experts working with
business prepare the BDP.
.External Expert / Outsourcing
Freelancers consultant may hire by the
company. A team of Management
expert, finance expert, technical expert
prepare business plan.

20.
Expertise required
Knowledge of Business / Economy
Knowledge of Product/production
Knowledge of Market
Knowledge of Org & Mgmt.
Knowledge of Laws
Knowledge of corporate Finance

21.
Is BDP public document?
Some think that BDP is private matter
and should be highly confidential. They
reluctant to provide access to
unnecessary audience.
Some want to publicize BDP to attract
more and better investors.
Good BDP is a assets of the Company
which can be sold in a reasonable price.

22.
How to write BDP?
Exploring areas of interest
Selection of suitable project,
Market survey / Field Study &
Consultation on
Legal and Social aspect
Technical aspect
Financial aspect
Environmental aspect
Establishment of business entity

23.
Literature review
 Articles related to BDP,
 Real Business plan of different projects,
 Project guidelines issued by Departments of
Industries
 Publication of Government authorities, FNCCI,
NCC, NRB, MOF etc.
 Books related to entrepreneurship
 International and national journal of Management,
Entrepreneurship etc.
 Websites of OECD, UNCTAD, Business School etc.
 www.doingbusiness.org

24.
Contd..
Macro economics condition,
Social norms and values
Relevant acts, rules, regulations,
Government priority sector,
Industrial policy,
Industrial Relations,
Income Tax and VAT provisions,

25.
Guideline for selection of suitable
project
Major consideration…
Your project would be better if not :
Trading business
Mega project
Complex and lack of expertise in country
Import based (more than 50% raw
materials from outside)
Easy to penetrate in market

26.
Continued….
Project should be:
Easy to manage by your own capacity
Easy to establish and operate
Suitable and acceptable in our society
Unique in its nature,
Sustainable
Eco friendly

27.
Continued…..
Influential to equity investor outside your
family,
Influential to banker to enjoy leverage
advantages ( Debt to total capital ratio to
be at least 50%)
Be assure that the existing infrastructure
is sufficient to operate the business.

28.
Criteria of Selection
Realistic and affordable
Small and Medium size / SME
Interested area of entrepreneur,
Less competitive area
Favourable environment for business
Attractive to new generation
Sustainable and secure
Convincing to lenders / venture capitalist

29.
Legal and Social Aspect
 To initiate the business a legal entity to be
required,
 Nature of business and size of the project
determines the formation of entity.
 Sole proprietorship Firm (only one
shareholder),
 Partnership ( at least 2 partners),
 Private limited (1–50 shareholders),
 Public limited (at least 51 to unlimited
shareholders)
 Cooperative (at least 25 members ).

30.
Legal Aspects: Acts to be considered
Company Act
Partnership Act
Private firm registration act Income Tax
Act
VAT Act
Cooperative Act
Industrial Enterprise Act,

31.
Other Acts / Rules to be
considered
 Nepal Environmental Policy and Action Plan,
1993
 EIA Guideline for the Forestry Sector, 1995
 Environment Protection Act ,1996 and
Environmental Protection Regulation, 1997
 Lands Act, 1956 (Revised 1965)
 Nepal Industrial Development Corporation Act,
1958
 Aquatic Animals Protection Act, 1961
 Forestry Act, 1963
 Irrigation Act, 1963

32.
Acts / Rules to be considered
• Labour Act, 1991
• Nepal Electricity Act, 1964
• Tourism Industry Act, 1965
• Plants Protection Act, 1972
• National Parks and Wildlife Conservation Act, 1973
• Pasture Land Nationalization Act, 1974
• Decentralization Act, 1982
• Solid Waste Management and Resource Mobilization Act, 1986
• Royal Academy of Science and Technology Act, 1988
• Water Resources Act, 1992
• Forest Act, 1993
• And so on………….

33.
Other Policies to be Considered:
 Eleventh Interim Plan 2008 -2010
 Local-Self Governance act , 1998
 New Industrial Policy ,2010
 Trade Policy, 1982
 Trade and Transit Agreement (with India),1992
 Import and Export (Control) Act, 1997
 Collaborative Forest Management Guideline,
2003
 Procedural Guideline for the Sale of Forest
Products 2060 B.S.

34.
LABOUR ISSUES
In the manufacturing sector, all small
enterprises with less than ten workers
are categorized as informal.
Labour act attracted if 10 or more
workers employed in the entity.
Trade Union is another major factors to
be considered.

35.
Local issues
• Pokhara is a leading city in tourism
industry, consider “Nepal Tourism Year-
2011” and make your plan,
• Lekhnath Municipality is growing as new
industrial zone.
• Education and Health tourism is another
issue in Pokhara, think about it.

36.
Technical Aspect
Technical know how is most vital factor
of the business,
High technology requires high
investment and high skilled manpower. It
increases repair & maintenance cost
and decreases operating expenses.
Technology may be obsolete accidently
which causes more loss to the firm,

37.
Financial Aspect
Finance is important factor that influence
the decision of the firm most.
Capital structure should be optimum.
Consider working capital and cash flow
Projection of revenue and expenses
should base on real ground.

38.
Length of Plan
• The length of Business Plan depends on various
factors like : purpose ( for whom) and nature
( what type ) and size ( How much) .
• If business plan prepare to seek millions of
amounts as a equity capital to start a risky
venture, it should do a lot of explaining and
convincing.
• If the plan for internal purposes, to manage an
ongoing business, a much more abbreviated
version should be fine.
• More risky business requires more explanation to
convince the investors.

39.
Length of Plan…
New venture requires more explanation,
Mega project are also obviously long,
Project that requires Foreign Investment
also need more explanation,
Small and Medium size project, familiar
project and existing project need short
explanation,
Lengths and depth of BDP depends on
the users demands and interest.

40.
Structure of BDP
Part I: Background / Introduction of the
Company
 Legal status
 Ownership
 V M G O of company
 Location
 Existing status of the company –
 Resources:-financial, sales revenue,
Expenditure,

41.
Continued…
Introduction the project
Objectives
Strategy
Rationale
Location
Uniqueness of project
Milestone / highlights of project

42.
Part II: Production
About the Product
Production Materials
Availability of materials
Cost of Materials
Alternative sources of materials
Production Techniques
Production Plan

43.
Contd…
Equipments
Purchase of Equipments
Capacity of Equipments
Operation of Equipments
Repair, Maintenance of Equipments
Availability of work force
Factory Location and Layout
Foundation of Equipments and operation
initiation
Capacity of Equipment

44.
Chapter III : Management &
Human Resource Plan
Structure of the organization
Human Resources Policy
Job Description
Need of Indirect staff
Need of Direct staffs
Need of Expertise
Training, development etc.

45.
Chapter IV : Environmental /
SWOT Analysis
Macroeconomic analysis
Demand and supply analysis,
Assessing the various risk
political,
economic,
socio cultural,
technological,
legal

46.
Analysis of competitors,
Suppliers,
Labour market
Analysis of internal factors
Labour Union
Promoters / shareholders
Organisational values and norms

47.
Chapter V : Marketing Plan
Present Scenario of product
Gap Analysis
Marketing Strategy
Marketing Plan
Marketing Functions –4Ps
Marketing Challenges

48.
Chapter VI : Financial Calculation &
Analysis
 Existing Investment ( if business is already set
up)
 Proposed Investment / new investment
 Details of fixed assets
 Details of Working Capital
 Capital Structure
 Sources of Equity
 Sources of Debt / Loan ( LTL, STL)
 Loan Repayment Schedule/ Amortisation
Schedule

49.
Contd…
Estimation of Sales / Revenue
Estimation of Variable cost
Estimation Overhead Expenses
Estimation Production cost
Estimation of Financial Cost
Projected Income Statements
Projected Balance Sheet
Projected Net Working Capital
Projected Cash Flows
Break Even Point

50.
• Cond…
Evaluation the projects by using
Pay Back Period,
NPV,
IRR,
PI
Sensitivity Analysis

51.
Major Financial Ratios
Return of Investment (Net Income /
Investment)
Return of Equity ((Net Income / Equity)
Current Ratio (Current Assets / Current
Liabilities)
Quick Ratio (Current Assets / Current
Liabilities)
Interest Coverage Ratio (Interest/EBIT)

52.
Debt to Total Capital Ratio ( Debt/Total
Capital)
Net Profit Margin ( Net Profit / Sales)
Gross Profit Margin ( Gross Profit /
Sales)
Operating Profit Margin I( Operating
Profit/Sales)
Total Assets Turnover Fixed Charge
Coverage Ratio (DSR)
Debt to Equity Ratio ( Debt/Equity Ratio)

53.
Underlying Assumptions
Cost of materials,
labour
utilities,
No. of Operating Days,
Working Hours
Basis of salary,
Allowances,
Depreciation,

54.
Insurance,
repair & Maintenance
Compensation etc.
Pricing Policy
Capacity of Project
Growth rate of production and Sales
Credit Policy and Receivables
calculation
Inventory Policy

55.
Conclusion & Recommendation
Conclusion
The Project is Technically viable
 and Financially Feasible
Recommendation with Suggestions
To success of the project, following
things to be considered……………..

56.
Qualities of Good BDP
Convincing
Understandable
Realistic
Sincere
Trustworthy
Plausible
Practicable
Uncomplicated

57.
Affordable
Feasible
Popular
Sustainable
Economical
Profitable
Socially acceptable
Unique

58.
Top Business Personalities
Steve Jobs

59.
Rupert Murdoch

60.
Lloyd Blankfein

61.
Warren Buffett

62.
Rex Tillerson

63.
Bill Gates

64.
Jeff Immelt

65.
Katsuaki Watanabe

66.
A.G. Lafley

67.
John Chambers

68.
Li Ka-shing

69.
Lee Scott

70.
Lakshmi Mittal

71.
Jamie Dimon

72.
Mark Hurd

73.
James McNerney

74.
Marius Kloppers

75.
Steve Schwarzman

76.
Carlos Slim

77.
Indra Nooyi

78.
Ratan Tata

79.
Bob Iger