Steps to set up a Project Check list of SIDBI

Project Selection Technology and Machinery Arranging Finance Unit De elop!ent SSI "egistration Appro als Clearances #uality Certification

$o% to Setup a Project& Project Selection It all begins with an Idea The overriding reason for anyone to think of establishing a SSI unit can be summarized in one word - opportunity. An opportunity to provide a product or service which can generate sufficient surplus. This is all the more true if one is a believer in the ma!im "Small is #eautiful". $owever ideas need to be filtered through a multi-layer sieve. This model is shown in the following flow% &oes the idea fire up your motivation' Is it a viable business proposition in your area' &oes it match the needs of your clientele' (heck it out with basic market research Test it out at market place (onsult with the e!perts )ook out for competition in the field Is it a sunrise industry' *our business opportunity +ro,ect conceptualization

-nce the ideas are screened and a viable business opportunity emerges the pro,ect has to be conceptualized in all its dimensions. The . +s of +ro,ect (onception is% P"'DUCT /Shape Size and 0ature1 P"'C(SS /Technology to produce the product1 P)AC( /)ocation of +lant1 PA"T*(" /Technological or 2inancial (ollaborator1

Making a Product Choice In a pro,ect conceptualization stage while making a product choice following factors are related to product need to be considered% +roduct )ine - &epth 3idth +ackaging #randing

3arranties After Sales Service

So!e other factors that one should consider %hile finali+ing the product choice are, 4ase of availability of raw-material +rocess Technology Accessibility to the market Incentive and support from 5overnment 6arket information is also important for product selection. +roducts which are likely to have a number of players in the market are best avoided. Some such products in the recent past have been plastic footwear audio cassettes disposable gloves and bulk drugs. In case the entrepreneur is looking for a product which has e!port potential the following additional 7uestions need to be asked% 3hat should be the contents of e!port-product portfolio' 3hat are the special re7uirements for packaging if one has to e!port the products' 3hat product adaptations are needed to be made for e!porting a product to a specific country' Are any 3T- conditionalities involved e.g. "child labour free" IS8999 certified 56+ followed etc.

The development of e!port-product portfolio can be done by considering . parameters viz. 4!ternal demand conditions Internal supply capability (omple!ity of marketing tasks Amount of investment re7uired to penetrate the market Analysis can be conducted using this four dimensional model. The obvious choice is a product which scores a high rating on first two parameters and low rating on last two parameters. 4:I6 /4!port Import #ank of India1 #ank has also developed an e!cellent model to conduct the e!port-product portfolio analysis based on three parameters viz. Supply (apability In +roduct 5roup &omestic 4nvironment 4!port 6arket Attractiveness This analysis gives rise to product groups with high potential or low potential. 3ith regard to special packaging re7uirements one has to be careful about laws of the country one is e!porting to. 2or instance while e!porting to Australia woodenpackaging cannot be done. +roduct adaptations for country;s specific needs look into things like whether voltage supply is <<9= or >>9= for electric appliances and for automobiles whether left-hand drive or right-hand drive is appropriate.

It has now become important to understand the implications of the various agreements which form part of 3T-. -nce the product is finalized choices of process technology emerge. Technology and Machinery Process Selection (hoices of process technology emerge once the product is finalised. 2or some comple! products process know how has to be imported. In such cases agreements for technology transfer should be made with due care to safeguard interest. A lot of appropriate technology is being developed at (SI? and &efense ?esearch )abs and some of this technology can now be bought. Indigenously developed process knowhow has intrinsic benefits such as appropriateness and relative ine!pensiveness. -hile checking out on a process technology. the follo%ing things need to /e considered %ith ut!ost care, 3hether process re7uires very high level of skilled workers or comple! machines' 3hether process re7uires large 7uantities of water and@or power' 3hether any process or product patent needs to be honoured while utilising the selected process technology Any special pollution or environmental regulations 2inally the appropriateness to the indian environment and conditions. 6achinery and e7uipment -ne of the ma,or deficiencies in the small industry scenario is the prevalence of outdated production and management methods hindering the efficient operation of small-scale units. It was also found that the most important reason for the reluctance of the small industrialists to install modern machinery and e7uipment was the lack of investible funds. The main ob,ective of 0ational Small Industries (orporation /0SI(1 is to provide financial technical and marketing support to SSIs. 0ow the +lace and ?ight +artner has to be selected and +ro,ect ?eport has to be prepared. Arranging Finance *o SSI unit can take off %ithout !onetary support0 This need for finance can /e classified into follo%ing types, )ong and medium term loans Short term or working capital re7uirements ?isk (apital Seed (apital@6arginal 6oney #ridge loans Financial assistance in India for SSI units is a aila/le fro! a ariety of institutions0 The i!portant ones are *SIC, 0ational Small Industry (orporation )imited SIDBI, Small Industries &evelopment #ank of India /refinance and direct lending1 SFCs, State level 2inancial (orporation e.g. &elhi 2inancial (orporation.

S!all Industry De elop!ent Corporations of arious states0 Co!!ercial1Co2operati e Banks0 DIC, &istrict Industry (entre.

)ong and medium term loans are provided by State 2inancial (orporations SI&#I and State Industrial &evelopment (orporations. #anks also finance term loans. This type of financing is needed to fund purchase of land construction of factory building@shed and for purchase of machinery and e7uipment. Term loans are secured against mortgage of assets such as land building machines e7uipment and other stocks. The short-term loans are re7uired for working capital re7uirements which fund the purchase of raw material and consumable payment of wages and other immediate manufacturing and administrative e!penses. Such loans are generally available from commercial banks. There is however a SI05)4 3I0&-3 S($464 for SSI units. Ander the scheme one agency either the bank or the financial institution funds both the term loan and working capital re7uirements. This scheme applies to all SSI pro,ects with pro,ect cost upto ?s. B million. The working capital loan is generally secured against +ledging of stocks raw materials and finished goods Advances against work-in-progress /3I+1 Advance against bills. 2or loans from financial institutions and commercial banks a formal application needs to be made. The details of documentation that need to be provided with the loan application are shown here. &ocumentation for )oan Application #alance Sheet and +rofit )oss Statement for last three consecutive years of firms owned by promoters Income Ta! Assessment (ertificates of +artners@&irectors +roof of +ossession of )and@#uilding Architects estimate for construction cost +artnership deed@6emorandum and Articles of Associations of (ompany +ro,ect ?eport #udgetary Cuotations of +lant and 6achinery A sanction or re,ection letter is issued by bank after its assessment of the application. After receiving a sanction letter applicants need to indicate in writing their acceptance of terms and conditions laid down by 2I@ #anks. Subse7uent loan is disbursed according to the phased implementation of the pro,ect. In today;s environment there are other choices apart from commercial banks and 5overnment owned financial institutions. These options include venture capital funds and non-government finance companies. Unit De elop!ent After deciding the issues of product and process the ne!t important 7uestion is where to set the unit up' 2or many tiny units and service-based units the home is perhaps the best starting point. Setting up an establishment is much more than putting a signboard up and waiting for customers to walk in. It re7uires negotiating a favourable plot or shed purchase

organising for proper construction of building design of interiors and finding good deals for e7uipment and machinery. Construction of Building -nce an industrial plot for the unit is secured then the ne!t ,ob is that of finding a suitable architect. &esign of factory building has to be in consonance with the type of industry and have an appropriate plant layout. An architect;s estimate of building construction is essential for loan applications. 2urther architect;s certificate for money spent on building is needed for disbursement of loan. 3etting the Utility Connections Among the utilities of prime importance are power and water. In many cases getting power connection causes delay in setting up of plant. Therefore it is imperative to commence work on these aspects with diligent follow up. +ower connections are generally of either )T /)ow Tension1 or $T /$igh-tension1 type. If connected load is upto DB $+ )T connection is provided. 2or connected loads of >E9 $+ or higher only $T connection is provided. A formal application needs to be made in a specified form to the state electricity board. An electrical inspector is deputed for evaluation of application to factory site after which the load is sanctioned. In areas of power shortage it is advisable to augment the power supply with a captive generating set. 3ater connection is also obtained likewise by applying in advance in formal forms. The water supply can be augmented by installation of tubewell. 3etting 4M5s "ight Men +ro,ections for manpower and staffing are made in the pro,ect report. $owever it is necessary to time the induction of manpower in a planned manner. The engineers and operatives must be available before the installation of the machinery. Machinery (hoosing and ordering of right machinery is also of paramount importance. In many cases technology or process provides us with specifications which is not provided then an e!tensive techno-economic survey of machinery and e7uipment available must be carried out. International trade fairs and engineering fairs are good places to look at available options. The entrepreneur must also consult e!perts dealers @ suppliers as well as users prior to making a selection of e7uipment and machinery. The advice of &I( SISI and 0SI( can also be sought. Materials 6aterials procurement and planning are critical to success of a start-up with a SSI unit. Inventory management can lead to manageable cash flow situationsF otherwise if too much is ordered too soon considerable amount of working capital gets locked up. -n the other hand non-availability may result in production hold-ups and idle machine and manpower. 2or essential imported raw material whose lead-time is large proper planning is all the more essential.

SSI "egistration Small Scale and ancillary units /i.e. undertaking with investment in plant and machinery of less than ?s. >9 million1 should seek registration with the &irector of Industries of the concerned State 5overnment. "egistering your SSI Unit The main purpose of ?egistration is to maintain statistics and maintain a roll of such units for the purposes of providing incentives and support services. States have generally adopted the uniform registration procedures as per the guidelines. $owever there may be some modifications done by States. It must be noted that small industries is basically a state sub,ect. States use the same registration scheme for implementing their own policies. It is possible that some states may have a ;SI&- registration scheme; and a ;State registration scheme;. Benefits of "egistering The registration scheme has no statutory basis. Anits would normally get registered to avail some benefits incentives or support given either by the (entral or State 5ovt. The regime of incentives offered by the (entre generally contains the following% (redit prescription /+riority sector lending1 differential rates of interest etc. 4!cise 4!emption Scheme 4!emption under &irect Ta! )aws Statutory support such as reservation and the Interest on &elayed +ayments Act. /It is to be noted that the #anking )aws 4!cise )aw and the &irect Ta!es )aw have incorporated the word SSI in their e!emption notifications. Though in many cases they may define it differently. $owever generally the registration certificate issued by the registering authority is seen as proof of being SSI1. States@ATs have their own package of facilities and incentives for small scale. They relate to development of industrial estates ta! subsidies power tariff subsidies capital investment subsidies and other support. #oth the (entre and the State whether under law or otherwise target their incentives and support packages generally to units registered with them. '/jecti es of the "egistration Sche!e They are su!!arised as follo%s, To enumerate and maintain a roll of small industries to which the package of incentives and support are targeted. To provide a certificate enabling the units to avail statutory benefits mainly in terms of protection. To serve the purpose of collection of statistics. To create nodal centres at the (entre State and &istrict levels to promote SSI. Features of the Sche!e Features of the sche!e are as follo%s, &I( is the primary registering centre

?egistration is voluntary and not compulsory. Two types of registration is done in all States. 2irst a provisional registration certificate is given. And after commencement of production a permanent registration certificate is given. +?( is normally valid for B years and permanent registration is given in perpetuity.

Pro isional "egistration Certificate 6P"C7 This is given for the pre-operative period and enables the units to obtain the term loans and working capital from financial institutions@banks under priority sector lending. -btain facilities for accommodation land other approvals etc. -btain various necessary 0-(s and clearances from regulatory bodies such as +ollution (ontrol #oard )abour ?egulations etc. Per!anent "egistration Certificate 4nables the unit to get the following incentives@concessions% Income-Ta! e!emption and Sales Ta! e!emption as per State 5ovt. +olicy. Incentives and concessions in power tariff etc. +rice and purchase preference for goods produced. Availability of raw material depending on e!isting policy. +ermanent registration of tiny units should be renewed after B years. Procedure for "egistration Features of the present procedures are as follo%s, A unit can apply for +?( for any item that does not re7uire industrial license which means items listed in Schedule-III and items not listed in Schedule-I or Schedule-II of the licencing 4!emption 0otification. Anits employing less than B9@>99 workers with@without power can apply for registration even for those items included in Schedule-II. Anit applies for +?( in prescribed application form. 0o field en7uiry is done and +?( is issued. +?( is valid for five years. If the entrepreneur is unable to set up the unit in this period he can apply afresh at the end of five years period. -nce the unit commences production it has to apply for permanent registration on the prescribed form. The follo%ing for! /asis of e aluation, The unit has obtained all necessary clearances whether statutory or administrative. e.g. drug license under drug control order 0-( from +ollution (ontrol #oard if re7uired etc. Anit does not violate any locational restrictions in force at the time of evaluation. =alue of plant and machinery is within prescribed limits. Anit is not owned controlled or subsidiary of any other industrial undertaking as per notification. De2"egistration A Small Scale Anit can violate the regulations in the following ways which will make it liable for de-registration%

It crosses the investment limits. It starts manufacturing any new item or items that re7uire an industrial license or other kind of statutory license. It does not satisfy the condition of being owned controlled or being a subsidiary of any other industrial undertaking.

Appro als 4very SSI unit has to comply with various regulations in force. These include regulatory ta!ation environmental and certain product specific clearances. This section looks into the methodology of obtaining these approvals and clearances. (8e!ption fro! Co!pulsory )icence )icensing in the Industries sector is governed by the licensing e!emption notification issued by 5ovt. of India in Guly <B >88> under the Industries /&evelopment and ?egulation1 Act >8B>. In SSI there are virtually no licensing restrictions. 0o industrial license is re7uired e!cept in case of H product groups included in compulsory licensing /these products groups mainly cover products that can only be made in large sector.1 #ut if a small-scale unit employs less than B9@>99 workers with@without power then it would not re7uire a license from the 5ovt. of India even for the H product groups covered in licensing under Schedule II of the notification. Sub,ect to this an entrepreneur can set up a SSI unit anywhere in the country without any restriction. The units are of course sub,ect to the locational@land use and zoning restrictions in force under the local laws. Clearances An entrepreneur has to obtain several clearances or permissions depending upon the nature of his unit and products manufactured. "egulatory or Ta8ation Clearances >. ?egistration under Sales Ta! Act - (ommercial Ta! officer of area concerned <. ?egistration under (entral 4!cise Act - (ollector of (entral 4!cise or his nominee for area E. +ayment of Income Ta! - IT- of the area concerned .. ?egistration of +artnership deed - Inspector 5eneral of area concerned B. (alibration of weights I measures - 3eights and 6easures Inspector of State H. +ower (onnection - &esignated -fficer of State 4lectricity #oard D. 4mployee strength e!ceeding >9 with power connection or <9 without power - (hief Inspector of 2actories (n iron!ent 9 Pollution "elated Clearances The method of granting consent under water and air pollution to SSI units has been simplified. 4!cept for >D critically polluting sectors given below in all other cases SSI units will merely have to file an application and obtain an acknowledgement which will serve the purpose of consent% >. 2ertilizer /0itrogen@+hosphate1 <. Sugar E. (ement

.. 2ermentation I &istillery B. Aluminium H. +etrochemicals D. Thermal +ower J. -il refinery 8. Sulphuric Acid >9. Tanneries >>. (opper smelter ><. Kinc smelter >E. Iron I Steel >.. +ulp I +aper >B. &ye and &ye intermediates >H. +esticides manufacturing and formulation >D. #asic &rugs and +harmaceuticals Product Specific Clearances >. 4stablishing a +rinting +ress - &istrict 6agistrate <. )icense for (old Storage (onstruction - &esignated -fficial in State E. +esticides - (entral@State Agricultural &epartment - 6inistry of Agriculture .. &rugs and +harmaceuticals - &rug license from State &rug (ontroller B. Safety 6atches@ 2ireworks - )icense under 4!plosives Act from &irectorate of 4!plosives 0agpur H. $ousehold 4lectrical Appliances - )icense from #ureau of Indian Standards D. 3ood 3orking Industry within J km from forest - &istrict 2orest -fficer J. 6ilk +rocessing I 6ilk products manufacturing units - Approval under 6ilk and 6ilk +roducts -rder from State Agricultural@ 2ood +rocessing Industries &epartment above a designated capacity. #uality Certification IS' :;;; Sche!e Cuality certification has become e!tremely important in competitive markets and especially in gaining foothold in e!ports. To avail the certification of IS--8999 a unit has to undertake significant costsF the small scale industries have been found wanting mainly on account of resource crunch to implement 7uality systems to obtain this certification. $owever as a paradigm shift SSI must make ;Cuality; a way of life. It has been decided to push the 7uality upgradation programme in the SSI Sector in a big way. A scheme has been launched to give financial incentive to those SSI units who ac7uire IS--8999 certification by reimbursing DBL of their costs of obtaining certification sub,ect to a ma!imum of ?s. 9.DB lacs per unit. In order to promote modernisation and technology upgradation in SSI the units are assisted in improving the 7uality of their products.

A new scheme has been launched to assist SSI units in obtaining IS--8999 or an e7uivalent international 7uality standard. Sub,ect to an upper ceiling of ?s. 9DB lacs each unit is given financial assistance e7ual to DBL of the costs incurred in ac7uiring the 7uality standard. The SSI units are also encouraged to participate in 7uality awareness and learning programmes organised specially for their benefit.

A Standard Business Plan Outline

As I write here about business plan outlines, please remember that your plan should be only as big as what you need to run your business. While everybody should have planning to help run a business, not everyone needs to develop a complete formal business plan suitable for submitting to a potential investor, or bank, or venture contest. So dont include outline points just because they are on a big list somewhere, or on this list, unless youre developing a standard business plan that youll be showing to somebody else who e pects a standard business plan. And in that case, if you do need a standard plan, then there are predictable contents of a standard business plan. !or e ample, a business plan normally starts with an " ecutive Summary, which should be concise and interesting. #eople almost always e pect to see sections covering the $ompany, the %arket, the #roduct, the %anagement &eam, Strategy, Implementation and !inancial Analysis. If you have the main components, the order doesnt matter that much, but heres the order I suggest.

1. 2. . #. '. *. ,. ..

Executive Summary: Write this last. Its just a page or two of highlights. Company Description: Legal establishment, history, start-up plans, etc. Product or Service: !escribe what youre selling. "ocus on customer benefits. Market Analysis: $ou nee% to &now your mar&et, customer nee%s, where they are, how to reach them, etc. Strategy and Implementation: (e specific. Inclu%e management responsibilities with %ates an% bu%gets. )a&e sure you can trac& results. Web Plan Summary: "or e-commerce, inclu%e %iscussion of website, %e+elopment costs, operations, sales an% mar&eting strategies. Management Team: !escribe the organi-ation an% the &ey management team members. inancial Analysis: )a&e sure to inclu%e at the +ery least your projecte% /rofit an% Loss an% 0ash "low tables.

I dont recommend developing the plan in the same order you present it as a finished document. !or e ample, although the " ecutive Summary obviously comes as the first section of a business plan, I recommend writing it after everything else is done. It will appear first, but you write it last.

Standard Tables and Charts &here are also some business tables and charts that are normally e pected in a standard business plan. $ash flow is the single most important numerical analysis in a plan, and should never be missing. %ost plans will also have Sales !orecast and #rofit and 'oss statements. I believe they should also have separate #ersonnel listings, projected (alance sheet, projected (usiness )atios, and %arket Analysis tables. I also believe that every plan should include bar charts and pie charts to illustrate the numbers. Expanded Plan Outline 1.0 Executive Summary *.* +bjectives *., %ission *.- .eys to Success 2.0 C mpany Summary ,.* $ompany +wnership ,., $ompany /istory 0for ongoing companies1 or Start2up #lan 0for new companies1 ,.- $ompany 'ocations and !acilities !.0 Pr ducts and Services -.* #roduct and Service 3escription -., $ompetitive $omparison -.- Sales 'iterature -.4 Sourcing and !ulfillment -.5 &echnology -.6 !uture #roducts and Services ".0 #ar$et Analysis Summary 4.* %arket Segmentation 4., &arget %arket Segment Strategy 4.,.* %arket 7eeds 4.,., %arket &rends 4.,.- %arket 8rowth 4.- Industry Analysis 4.-.* Industry #articipants 4.-., 3istribution #atterns 4.-.- $ompetition and (uying #atterns 4.-.4 %ain $ompetitors %.0 Strate&y and 'mplementati n Summary 5.* Strategy #yramids 5., 9alue #roposition 5.- $ompetitive "dge 5.4 %arketing Strategy 5.4.* #ositioning Statements 5.4., #ricing Strategy 5.4.- #romotion Strategy

5.4.4 3istribution #atterns 5.4.5 %arketing #rograms 5.5 Sales Strategy 5.5.* Sales !orecast 5.5., Sales #rograms 5.6 Strategic Alliances 5.: %ilestones (.0 )eb Plan Summary 6.* Website %arketing Strategy 6., 3evelopment )e;uirements *.0 #ana&ement Summary :.* +rgani<ational Structure :., %anagement &eam :.- %anagement &eam 8aps :.4 #ersonnel #lan +.0 ,inancial Plan =.* Important Assumptions =., .ey !inancial Indicators =.- (reak2even Analysis =.4 #rojected #rofit and 'oss =.5 #rojected $ash !low =.6 #rojected (alance Sheet =.: (usiness )atios =.= 'ong2term #lan

-eys t Better Business Plans

Write a better business plan by focusing on implementation.

1se a business plan to set concrete goals, responsibilities, an% %ea%lines to gui%e your business. 2 goo% business plan assigns tas&s to people or %epartments an% sets milestones an% %ea%lines for trac&ing implementation. 2 practical business plan inclu%es 13 parts implementation for e+ery one part strategy. 2s part of the implementation of a business plan, it shoul% pro+i%e a forum for regular re+iew an% course corrections. 4oo% business plans are practical.

Business plan .d n/ts0

!ont use a business plan to show how much you &now about your business. 5obo%y rea%s a long-win%e% business plan: not ban&ers, bosses, nor +enture capitalists. $ears ago, people were fa+orably impresse% by long plans. 6o%ay, nobo%y is intereste% in a business plan more than '3 pages long.

1 2 3 n& Sh uld a Business Plan Be4

#age count is not a good way to measure length. A ,>2page plan with dense te t and no graphics is much longer than a -52page plan broken up into readable bullet points, useful illustrations of locations or products, and business charts to illustrate important projections. %easure a plan by readability and summari<ation. A good business plan should leave a reader a good general idea of its main contents even after only a ;uick skimming, browsing the main points, in *5 minutes. !ormat, headings, white space, and illustrations make a big difference. Summaries are very important. %ain points should show up in a business plan as ;uickly as they do in a business presentation. ?nfortunately, many people still use page count as measurement. And in that conte t, some of the more practical, internal2use2only business plans can be only 5 or *> pages long. $orporate business plans for large companies can run into hundreds of pages. &he more standard start2up and e pansion plans developed for showing outsiders normally run ,>24> pages of te t @ easy to read, well2spaced te t, formatted in bullets, illustrated by business charts and short financial tables @ plus financial details in appendices. &he right length of the plan depends on the nature and purpose of the plan. Will it include descriptions of the company and management team for outsiders to readA 3oes it need an e ecutive summary good enough to stand aloneA 3oes it include detailed research, plans, drawings, and blueprintsA Is it worded to withstand legal scrutiny as part of an investment proposalA !orm follows function. 9enture contests often limit a plan to -> pages, sometimes 4>, rarely 5> @ and that includes detailed financials in the appendices. ?nfortunately the page limitation leads some contestants to very bad choices, as they cram content into dense typefaces and thick te ts, making their plans worse, not better. #alo Alto Softwares business plan contest ran four years. Several hundred plans entered that competition. !inalists never had less than ,> pages or more than 5> pages. %ost run ->24> pages. &hese are all ,>2-> pages of te t, not counting useful graphic additions to show locations, designs, menus, etc., and not counting the appendices pages containing monthly financial projections, resumes of team leaders, etc. Boull want to add some pages for the standard financialsC usually that means appendices with monthly tables for sales, personnel, income statement, cash flow, and balance sheet. Bou also want to include the main annual numbers of those tables in the body of the plan. 3ont ever shorten a plan by taking out useful graphics. #age count matters far less than readability. ?se business charts to illustrate numbers so your projections are easier to absorb. ?se photographs and drawings to show locations, products, sample menus, product pictures, and other illustrations as much as possible. /owever, dont ever add e tra graphics, like clip art, not directly relevant to the matter at hand, as if that would make a plan better.

The ,inancials

Cas! "lo# is the most important. (usinesses run on cash. 5o business plan is complete without a cash flow plan. Pro"it and loss, incorporating sales, cost of sales, operating e7penses, an% profits. 6his of course is also a pro forma income statement. In most cases it shoul% show sales less cost of sales as gross margin, an% gross margin less operating e7penses as profit before interest an% ta7es 8also calle% gross profit, an% contribution to o+erhea%9. 5ormally there is also a projection of interest, ta7es, an% net profits. Pro$"orma balance s!eet: 2si%e from cash an% income, there is the balance of assets, liabilities, an% capital. Sales "orecast: 6he form may +ary to suit the business, but it is har% to imagine a plan without a sales forecast. :ome plans forecast in e7cruciating %etail, some summari-e, but the forecast shoul% be there. In the simplest of plans, the sales forecast might be a single line in the pro-forma income statement. Personnel plan: /ersonnel costs are so intimately relate% to fi7e% costs that they shoul% often be set asi%e an% %iscusse%. In some simple plans, they too, li&e the sales forecast, can be just a line or two in the income statement. %usiness ratios: 6he numbers are there, when there is pro-forma income, cash, an% balance sheet, so the ratios can be calculate%. 6his isnt as necessary for an internal plan as for one for ban&ers an% in+estors, but some &ey ratios are almost always a goo% i%ea. 6hey shoul% probably inclu%e some profitability ratios li&e gross margin, return on sales, return on assets, an% return on in+estment; plus some li<ui%ity ratios such as %ebt to e<uity, current ratio, an% wor&ing capital. $ou alrea%y &now which ratios you li&e to use, an% how to calculate them. 2 ban&er will ha+e a similar +iew. %reak$even analysis: )ost of the brea&-e+en analyses inclu%e% with business plans ha+e little +alue, but most ban&ers an% analysts li&e to see them. Market "orecast: 2si%e from the sales forecast, which is essential, a mar&et forecast is also a goo% i%ea. =ow many potential customers are there> =ow %oes mar&et growth stan% to impact this business>