Preliminary Business Proposal

Executive Summary of Proposed Business

Introduction
The Company
Products
The Market
Financial Considerations
Our financial Objectives are:
To establish a profitable business with a positive net income within two years; finance annual operating expenses
from retained earnings within three years.
To reduce cash flow requirements by financing Capital structures and land for expansion over a 15 year term;
pay out long-term capital loan within 5 years.
Break-down of required Financing:
Item Description
Production Inputs
Property and Equipment
Personnel
Rent

Cost

YDF loan/grant Contribution

Total
Background Information
Company Directors Details
Contact
Position

Telephone

E-mail Address

Bank

Banking Details
Location

Account Name

Account Number

Advisory and Consultancy services providers Details

Contact
Position
Telephone
E-mail Address

Table1: Contact Details

Mission Statement
Vision
Objectives
There objectives of this business plan are developed in consideration of 4 major aspects:
Marketing
Production
Labour
Financial
To establish a profitable business with a positive net income within two years; finance annual operating expenses
from retained earnings within three years
To reduce cash flow requirements by financing Capital structures and land for expansion over a 15 year term;
pay out long-term capital loan within 5 years.

2.0Details of Proposed Business (2.0)

2.1 Production Program
2

No.

Item Description

Yield @
70%

Unit Price

Annual Sales
Revenue

Total
2.2 Product Costing
2.2.1
Description

Capacity
Utilisation

634546.00 4.0ha

Prime Cost Factors (Product A)

Area(Ha Quantity
Unit
)

Unit Price

Total (BWP)

Prime Cost Factors (Product B)

Area(Ha Quantity
Unit
)

Unit Price

Total (BWP)

Total
2.2.2
Description

Total
2.2.3
Crop

2.2.4
Crop

Prime Cost Breakdown

Component A

Process 1

Component B

Component
C

Component D

Component E

Total

Process 4

Process 5

Total

Conversion Cost Breakdown

Process 2

Process 3

2.3 Machinery/Equipment (Existing)

3

No.

Description

No. in
Existence

Price per
Unit (P)

Total Value Names and addresses of

(P) the suppliers

1.
2.
3.
4.
Total

109395.10

2.4 Machinery/Equipment (Additional/Start-up)

No.

Description

No.
Required

Price per
Unit (P)

Total Value Names and addresses of the

(P) suppliers

1.
2.
3.
4.
5.
6.
7.
8.
9.
Total

407082.80

2.5 Raw Materials Requirement

No.

Item Description

Quantity
per year

Total Annual Requirements

Price per Total
Source
Unit (P)
Value (P)

1.
2.
Total
2.6 Utilities
Particulars

No.

69682.52
Annual
Requirement

Total Annual
expenses (P)

Remarks

1.
2.
3.
4

4.
5.
Total

2.7 Labour
Particulars

No.
1.

Skilled

2.

Semi-skilled

3.

Unskilled

4.

Directors Salary

5.

Sub-total
Labour load (30%)

No. of People

75200.00

Total Wages & Salaries Remarks

(P) (Per year)

Total
2.8 Administrative and Selling Expenses
No.
Item
Quantity
1. Office Equipment

163534.80

Amount (P)
20171.54

2.

Marketing & Distribution (Fuel etc.)

7823.60

3.

Sales Commission

4.

Public Relations

Total

27995.14

3.0Market Study

4.0Cost of the Business

4.1 Fixed Assets
No.
1.

Item
Land

Existing
200 000.00

2.

Building

57 000.00

3.

109395.10

4.

Machinery/Equipment (2.2
& 2.3)
Furniture & Fixtures

5.

Others i.e. Vehicle, start-up

20 000.00

Total

366395.10

4.2 Working Capital (account for grace period)

Item
Duration

No.

Value (P)
Additional
*350000.00*

57000.00
407082.80

516477.90

20000.00
407082.80

773477.90

Value (P)

1.

Raw Materials Stock

6 months

Annual value
(Pula)
69682.52

2.

Labour

6 months

163534.80

3.

Admin & Selling expenses

6 months

27995.14

4.

Utilities

6 months

75200.00

5.

Repair & Maintenance

(3%)*
Insurance

6 months

10092.37

6.

Total
200000.00

12 months

Total
346504.80
*This is only a provisional factor and will depend on age of equipment etc.

173252.40
6

4.3 Total Project Cost

No.
Particulars
1. Fixed Assets (4.1)
2.

Working Capital (4.2)

3.

Preliminary and pre-operative Expenses

Value (P)
773477.90
173252.40
5000.00

Total
4.4 Financial Requirements
No.
Particulars
1. Loan for fixed capital items)

951730.30

Value (P)

Remarks
407083.80

2.

Working Capital Loan

173252.40

3.

Own investment/equity

366395.10

4.

Grant/Sponsorship

5.

Any other
Total

5000.00
951731.30

4.5 Means of Finance potentially available

No.
Particulars
Value (P)
Remarks
6. Loan (for fixed capital items)
157828.50
7.

Working Capital Loan

8.

Own investment/equity

9.

Grant/Sponsorship

67162.50

225000.00

10. Any other

Total
Note: Total of 4.3 and 4.4 should be the same.

450000.00
7

4.6 Project Profitability Analysis

No.
1.

Description
Sales Revenue (2.1)

Value (P)
634546.00

2.

Manufacturing Expenses (2.4+2.5+2.6)

308417.32

3.

Administrative & Selling Expenses (2.7)

27995.14

4.

Repair & Maintenance Expenses (4.2.5)

10092.37

5.

Interest on loan

6.

Depreciation

7.

Gross Profit [1. ( 2. +3. +4. +5. +6.)]

8.

Income Tax (22%)

52173.35

9.

Net Profit (7. 8)

156520.03

0.0
79347.79
208693.38

4.7 Cash Flow Projections

Cash Inflow

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

1.

Beginning
cash
2. Cash Sales
3. Credit Cash
4. Other receipts
Total Inflows
Cash Outflow
5.
6.
7.

Cash
purchases
Debt Cash
Salaries,
Wages

Dec

8.
9.

Drawings
Loan
payments
10. Interest
11. Others
12. Investments
Total Outflows
13. Ending Cash

5.0Supplementary Details (i.e. Owners)

5.1 Property Owned
5.2 Own Insurance Policy
5.3 Any Interest in other
businesses
5.4 Present monthly income

6.0References
No.

Name

Address

Occupation

Date:
Place:
Signature: