ESS 1

Business Plan

I Executive Summary
A. company name, address and phone number
Company name: EVEREST SOLAR SOLUTION(ESS)

Address: Kamal Pokhari, Kathmandu, Nepal

Customer call no:01-4477077

Email:ESS@mos.com.np, www.uress.com

B. contacts of key people

There are altogether three key people in the company. The detail of them are given below:

Mr. Rubbendra Maharjan

Address:

Temporary: Bhakhundol, Kabhrepalanchowk

Permanent: Mhepi, Kathmandu

Mobile:9841414466

Email: ruben_jugal@otmail.com

Designation: Research and Development Manager

Mr. Ashish Manandhar

Address:

Temporary: Bhakhundol, Kabhrepalanchowk

Permanent:Chhetrapati, Kathmandu

Mobile:9851025566

Email: asis_mane@hotmail.com

Designation: Operation and Maintenance Manager

Mr. Damodar Paudel

Address:
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Temporary: Bhakhundol, Kabhrepalanchowk

Permanent: Khurkot,Parbat

Mobile: 9841414141

Email: da_rocks@gmail.com

Designation: Account and Sales Manager

C. Our Business, Services and solutions

Everest solar solution presents the market with reliable, cheap and convenient solar solutions for
the people suffering from load shedding problems. Our company deals with all parts of solar
components and we basically serve solar facilities from survey to installation. ESS focuses on
present load shedding crisis and promotion of green energy in our country.

Our service will work out on installation and maintenance of solar energy mainly on urban area.
Promoting renewable energy our company will limit the uses of non renewable energy which
will be environmental friendly.

D. Our Market
Initially ESS has targeted the Kathmandu Valley residents as primary customers. Offices and
apartments are also among our customers. Kathmandu valley uses most of the electrical energy
in Nepal. Due to load shedding problem, people are rundown from their social and professional
life. This problem will be solved by our product and services. Our targeted customers have
knowledge about solar energy and its benefits.

Besides Kathmandu valley, we intended to expand our services outside the valley in near future.

E. Competition and marketing Strategy

There are around 7 companies which are directly and indirectly related to our business. Among
them 4 companies focus toward rural areas and associated with government, so they are not head
to head competitors. The remaining are companies which focuses on large organization instead
of residents.

Since our company will be in large scale, we will adopt cost leadership marketing strategy. To
promote our company different media like Advertisement media, newspapers, Business
magazines and Internet will be used. Besides we’ll be focusing on increasing the publicity of our
business through activities like: sponsoring in public Medias, organizing campaign, supporting
green energy program. Our company will provide flexible service to our customers in financial
context by providing installment facilities. Since our company will provide small to large scale
solar power installation, it will attract more customers with different potential. Our company’s
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Business Plan

web page will provide guidance and instruction to customer regarding our product and services
which will make easy access to our company.

F. Management team
ESS will have three key personals in the company who are the co-owners and also designated
officers of the company. They are:

Mr. Rubbendra Maharjan

Designation: R&D Manager

Education: Master in Renewable Energy

Expertise: Photo-voltaic phenomena

Mr. Ashish Manandhar

Designation: O&M Manager

Education: ME in electrical engineering

Expertise: Solar Energy

Mr. Damodar Paudel

Designation: Accounts and Sales Manager

Education: Master in Business Administration

Expertise: Public Relation

G. Financial forecast
ESS company requires capital of NRs.30,00,000 for the startup of its business. The amount
includes administration, overhead, marketing costs and also meet short term working capital
needs. The capital will be generated by equity of each of partners. The breakeven point is
obtained at 88.5 units for the starting year.
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Business Plan

II. VISION AND MISSION STATEMENTS

A. Vision statement
‘to change Nepal Into a nation where solar energy provides power to everyday needs.’

B. Mission statement
The mission of Everest solar solutions is to increase the quality of life of people of urban areas
by eliminating the problems created by load shedding. For this, ESS provides high tech, high
quality green energy alternative to home or office use.

Ç. Values and Principles on which business stands

✔ Load shedding should not be a problem to any person.
✔ Solar energy is a precious gift and we should take maximum benefit from it.

D. Competitive Advantage
ESS Company possesses significant competitive advantages over its competitors because of the
following reasons:

• Installment facility is provided so that everyone can afford solar electricity.

• Run by electrical engineers so that each customer’s energy needs is precisely calculated
to gain maximum efficiency.
• Proper customer care is provided by warranty and repair facility.
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Business Plan

Fig2: Life
Development
Solar
Profit
Sales electrification
cycle Diagram
Introduction
for solar
Growth
electrification
Maturity Saturation Decline
companies

Proper customer care is provided by warranty and repair facility.

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Business Plan
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Business Plan

III. BUSINESS AND INDUSTRY PROFILE

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Business Plan

Fig2: Life
Development
Solar
Profit
Sales electrification
cycle Diagram
Introduction
for solar
Growth
electrification
Maturity Saturation Decline
companies

A. Stage of growth
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Business Plan

The solar electrification companies of Nepal at present are at an infant stage. It is in introductory
stage but consciousness as well as needs of people is increasing at a good rate and the existing
companies are getting popular among upper class of residents. We think at this rate, the
popularity and the use of renewable energy will increase.

Our Company ESS is in the start up phase of business. As initial market we’ll serve the
residential customer and offices. Then we will proceed to large organizations and apartments
after getting publicity.

After covering our initial market, we are likely to attract the customers outside the valley.
Besides we are planning to expand our firm that deals only with parts of solar products

B. Company Goals and Objectives

Goal:

Our goal is to become the number one company in solar electricity business.

Objectives:
• To reach a target of installing 50 solar panels within the first 5 months.
• To spread our service out of valley within second year

C. Industry analysis
1) Industry background and overview
The first commercial renewable energy company of Nepal was lotus energy founded on 1993.
Till now there are about four companies which deal with solar energy. But among them, two
companies work to provide energy to rural areas only. They are NGOs and are funded by various
rural development projects. The remaining 2 also take rural areas as their primary target but they
deal with urban areas as well. We are the first company to take the urban areas as the primary
consumers and this can be a real opportunity. The demand for green alternative energy in urban
is constantly increasing as people are having a hard time coping with the problems caused by
load shedding crisis.

To tackle the load shedding crisis, there are companies which are providing other forms of
solutions such as generator services and inverter services. For these solutions, the consumer must
spend constantly on running costs such as cost for fuels and maintenance. Due to this high
running cost, people in urban areas want something that is hassle free, and cheaper in long term.
So they will be attracted to our services.

2) Significant trends
The trend of existing renewable energy companies is to collect money from different rural
development projects. None of the existing companies focuses on urban areas and hence they are
untapped opportunities.
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3) Growth rate
Currently lotus energy installs 5-6 systems per month in urban areas and this number is
increasing even though lotus has no advertisement campaigns. This shows that this rate will
increase once people are aware of the availability of such systems. Moreover, the main reason
for people not being attracted to solar systems is due to the initial high cost. From our installment
provision, people will not be burdened by initial high cost and hence sales will increase.

4) Key success factors In the industry

• Load shedding:
It has become a huge burden on the life style of urban people. People need other sources
of energy to do their jobs as well as for recreation. Also, load shedding problem is
forecasted to continue and grow till the next 6 years. So sooner or later, people will
search for alternative sources.
• Renewable source of energy:
Solar energy is renewable source of energy and due to this reason customers are not
burdened by any running cost. Once they install the system, they get energy for their
lifetime without having to pay any penny.
• Pollution free energy:
Photovoltaic (PV) modules (Solar Panels) gives free and environment friendly electric
power whenever we want it. PV modules generate electricity directly from sunlight and
their operation is completely noise and pollution free. Because they have no moving parts
to wear and tear, they will provide reliable power for decades.

5) Outlook for the future

Presently in many developed countries, there are laws which enable people to sell excessive
electricity generated from solar home systems to their regional electricity company. Similarly,
such types of laws are being discussed to be applied in Nepal. This process might be completed
in the coming 3 to 4 years. So after 3 or 4 years, demand for our products will increase rapidly.
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Business Plan

IV. BUSINESS STRATEGY

A. Desired Image and Position in the Market
We would like to stand out in the solar market through our service and product reliability. We want to be
the customer’s first choice by creating positive public image through different media. We want to create
an image of a company which provides green energy at cheap and easy installment facility.

B. SWOT Analysis
SWOT Analysis for ESS is done as follows:

1. Strength
• Good quality of service
• Strong public relationship
• Highly skilled manpower
• Understanding and Unity among the partners
• Strong relation with the manufacturers

1. Weakness
• Inexperience
• Inadequate information about customer’s needs

1. Opportunities
• Load shedding
• Target customer are unsatisfied with current available services
• Promotion of renewable energy from government level
• Subsidies and tax credit on the solar products

1. Threats
• Political instability
• Existing competitors

C. Competitive Strategy
The type of strategy we employ to create a market share for our company is focus strategy. We
will focus on the class of people who need electricity for their daily works, the class of people
who are having a really hard time to deal with the current load shedding problems.

By the time competition grows, we will have enough market shares and a distinct brand image.

To attract such customers we will engage in advertisement campaigns which will educate people
to use green solar energy, campaigns which will explain the long term benefits of using our
systems than using generators.
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V Company product and services

A. Description

1. Product or Service features

Complete solar home system customized to customers’ demands.
For this category of products, we will first survey the site and then calculate the required
power and its cost. The requirement of different customers may vary. It will include the
following components:
• Photovoltaic cells (PV): it is the source of energy, it will convert solar energy into
electrical energy. We will provide PV cells from Shell-Solar, the largest manufacturer
of solar panels in the world. The rating of such panels will vary from 65watts-peak to
200watts-peak.
• Charge controller: it will be used to control overcharge and over discharge of battery
which will increase battery life.
• Heat shrink: helps to overcome overheat of problem of battery
• Battery isolator: it will help to run system directly from solar panel after battery is
fully charged.
• Cable
• Battery: it is deep cyclic sealed lead acid battery from TaTa green.

Installment of solar panels only(for customers )

From our survey, we have found that about five percent of total population in valley has
been using inverters. Customer with this category would need solar panel only. Hence we
will install particular solar panel that will match with their system.

1. Customer benefits

✔ First of all the customers are facilitated by services that are customized regarding their
needs and perspectives.
✔ Installment facility will make them comfortable with financial context.

1. Warranties and Guarantees

The company shall provide its customers with guaranties and warranties for every
component. Failure of any guaranteed component will be repaired or replaced immediately
on request (any physical hampers will not be repaired).

2. Uniqueness
Customized system with respect to customers’ perspective is first key point of our
company which will satisfy variable needs of our customer.
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Business Plan

B. Patent or trademark protection

ESS will be register under the Ministry of Industry and Commerce as a service oriented business.
It will be a registered as a partnership company in Kathmandu Municipality. ESS will be legally
approved after its registration and imitation of our trademark will be punishable as per the
Ministry of Industry and Commerce.

C. Description of Service process

ESS believes in promoting green energy as well as increasing solar users. ESS creates
opportunities for customer to get benefits of solar energy in appropriate costs.

Ordering & Payment Procedures:

What are the ordering procedures?

1. Contact

In order to get our service, one needs to contact in our office. Our advertisement means shall
help our customers to get details of offices.
2. Selection of services
Our web page; www.uress .com features various products available and our services. The
customers can also search the product description and warranty we provide. They can be updated
with services we provide through our web page. The customers can select the types of the service
they want

3. Pricing
Pricing of the services will be mentioned in both in Nepalese as well as US Dollar in our web
page. For convenience customer can directly contact in our office.

Payment methods:

The payment is divided into full payment and installment basis:

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Business Plan

• Full payment: customer has to pay immediately after the installation of system. The cards
accepted are VISA, Master Card and Standard Chartered card.
• Installment basis: This payment method is valid for all customers. Customer have to
make fifty percent down payment at first after installation then customer shall pay in
installment basis with interest to finance company.

D. Future Service offerings:

We are planning for adding the services which will target offices and small hotels. ESS has plan
to deploy this service after two years of establishment of company
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Business Plan

VI MARKET STRATEGY

A. Target Market

1) Complete Demographic Profile:

The idea of ESS came due to the emerging market solar energy in Nepal. Every year thousands
of Nepalese are attracted toward particularly solar energy in the middle of alternatives energy
sources. They want to serve by solar energy to get relieve from load shedding and electricity
crisis.

Table: total population and targeted customer

YEAR POPULATION % Population
2007 39,51,423 5.2 %
2008 41,08,817 5.7 %
2009 45,67,565 6.5 %

2) Electronics equipments
List of Mostly used electronics eqipments

S.N. List of electronics equipments

1. CFLs (Tube light)
2. Computer
3. Laptop
4. Mobile charger

B. Customer’s Motivational Factors

The concept of solar energy is not new among the Nepali customers. According to our market
survey, most of our targeted customers are familiar with solar power installation and their
benefits. Majority of customers have positive thinking towards our business idea. We have
summarized some factors which help to motivate the customers to use our services. The
significant customer’s motivational factors are:

1. Better alternative source of energy

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Business Plan

In the long run, solar electricity is cheaper than buying it from the power company. There is a
start up cost, but then it starts paying for itself. Once you break even, everything after that is
profit.

2. Giving customer what they want

There is a huge variety of solar panel systems available. Some can cost tens of thousands of
dollars, and some cost just a couple hundred. This means customer can get into solar, with their
respective financial effort.

3. Environmental aspects:
Solar Energy is clean, renewable (unlike gas, oil and coal) and sustainable, helping to protect our
environment. It’s not affected by the supply and demand of fuel and is therefore not subjected to
the ever-increasing price of gasoline.

C. Market Size and Trends

1) How large is the market?
Solar energy market in Nepal is in growing stage. The location of the company is in Putali
Sadak, Kathmandu which shares major part of population. Since it is capital city, most of the
people are familiar with benefits of solar energy. This location shares major targeted
customer which will be beneficial for our service. Targeted customers have started to use
these types of services in Kathmandu valley. Since this type of service is in developing and
progressive stage, ESS will catch the present trend customizing the service with customers’
needs.

2) Is it growing or shrinking?
There are few companies who are directly related to our services. We are the competitors in
this market. Customers preferring solar energy are increasing day by day. Due its advantages,
people are more likely to have solar energy in their house and offices. Since our targeted
customers are familiar with solar energy and its merits, it is more liable to increase in market.
Hence our targeted market is in growing stage.

D. Advertising and Promotion

The advertisement is depending upon the target customers; where are they? How should we
communicate with them? ESS is going to answer these questions with the effective
advertisement ant promotion techniques. This section includes a description of all advertising
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means and medium we are planning to use as well as public relations program and promotional
materials (such as brochures).

We will adopt GUERRILLA marketing approach for marketing our service. As we have focused
in Kathmandu valleys’ customer in initial stage, we will use following media for advertisement:

1. Media to be used

We are planning to use two types of Advertisement; viz. Offline and Online advertisement. We
mainly focused on offline than online advertisement.

i. Offline Promotion:

Newspaper:

News paper is a good source of communicating with the potential customers, especially
of age group 20- 40 years. Our targeted customers prefer the English newspapers like The
Himalayan Times, The Kathmandu Post, and Nepal Times. We will advertise our
company service, contacts, features and website in those papers. As our allocation of cost
for offline advertisement is high, the advertisement will be weekly or may be monthly.

Magazines:
Another effective means of advertising for our company is magazines which has wide
reach to the target customer. Magazines offer long life span resulting in good chance of
being seen several times. Magazines ads are usually of high quality, resulting in strong
visual appeal. We will use business magazine like The Times Nepal, which are more
preferred by our customer. The selection of newspapers and magazines will depend on
the Cost per thousand (CPM).

Brochure:
Our company publishes a brochure annually including all the activities of the
company. Brochure helps to make customer up to date about income and expenses of the
company. The report of seminars and interaction programs held in the year is published
in it. A strong brochure can be the back bone to reflect the positive feedback from
customer for an institution. So we are planning to invest enough capital to publish own
brochure.
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Business Plan

Public Relation:
To increase public relation, we will organize program to create awareness about
alternative energy. This type of program will help to raise our company status in public
perspective and different media covering the program will help recognition of our
company existence. This will also help to make relationship with different professional
and expertise of different fields.

ii. Promotion through internet:

Since our targeted costumers are use to with internet, ESS shall be focusing in
advertisement through internet. We will use web page of our company that are cost
effective but reach the large number of customer,

2. Frequency of usage

We are mainly focusing in offline advertisement so our company will be updated in news and
magazines regularly. News paper will be used weekly and magazines fort nightly. Costs for news
paper and magazines are noted in table below. Our web page will be updated time to time.

3. Advertisement Cost:

S.N. Type of Advertisement Cost Allocated (Rs)

News paper
1. (The Himalayan Times) 50000
(Weekly)
Magazines
2. (The Nepal Times) 70,000
(fort nightly)
3. Web page 10,000
Brochure
4. 60000
(Annually)
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E. Pricing

1. Cost Structure
a. Fixed Cost:

Pre- Second
Operating First Year Year Third Year
Amount Amount
Fixed cost Amount (Rs) Amount (Rs) (Rs) (Rs)
computer (3) 90000
Furniture 100000
Fax and printer 30000
other 10000
Rent 240000 468000 468000
Salaries 336000 768000 768000
Insurance 20000 20000 20000
Total Fixed Cost 230000 596000 12,56,000 1256000

b. Variable Cost:

First Year Second Year Third Year

Variable cost Amount (Rs) Amount (Rs) Amount (Rs)
Transportation 30,000 48,000 48,000
Electricity 7200 10000 10000
Telephone bill 14,400 14,400 14,400
Tax 1,35,625 1,51,671 2,51,292
Total Variable Cost 1,87,225 2,24,071 3,23,692

2. Desired Image in the market

We will like to see ESS next to leading companies like Lotus in national market and next to
some international companies like Solar Shell in few years. We will like to establish a strong
brand image by the consistent quality services. As our vision we will always try to deliver
value to our customers, employees and to our nation as well.
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VII: Location and Layout

A. Location and demographic analysis
We have selected Kamal Pokhari as the appropriate location because of the proximity of
our suppliers.The rental rates are also cheaper in this part of the valley and building is
facilitated with telephone, internet and electricity facilities, so this location is appropriate
for our business.

1. Traffic count
About 55 vehicles per minute keep on running in the road during peak hours in
kamalpokhari area.
2. Lease Rates
Being the center of Kathmandu valley the rental rates is slightly lower than other areas in
putalisadak and kamalpokhari area so we are focusing in this area. We are planning to
rent a flat with two rooms with cost of 20000 per month in the starting year.
3. Labor Needs and Supply
ESS mainly needs the labor for transporting the equipments to the customer place and
helper for installing the system in customer’s home or office. Our business attracts the
people with required qualifiacation to fill of ther application for being an employer in
ESS since its central location and facilities provided.

A. Layout and ergonomics issue

ESS is established in two rooms in its starting, each room is with size of 20*20 sq. feet.
One room is allocated for reception and customer dealing with place for 3 head manager
of ESS. Another one is separated for storing the goods with a corner for resting of
employees to feel energetic when tired from working.
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Business Plan

Our working area is well equipped with furniture and standard lighting in the room. The
space will be sufficient to create workable environment inside the office. The working
area will have all the necessary facilities needed for the business.
Note: appendix contains the detail layout of office.

VIII COMPETITORS ANALYSIS

A. Existing Competitors
1. Competitive Profile Matrix

Major competitors: These competitors are the giants of online shopping in Nepal. They are:

1. Kevin solar solution

2. Swogun Energy PVT. LT

Swogun Energy PVT. LT

• Business type: manufacturer, retail sales, wholesale supplier, importer
• Product types: Solar Home System, Portable Power Pack solar system system, solar
batteries, charge controller and others.
• Service types: consulting, installation, project development services, research services,
site survey and assessment services, contractor services, maintenance and repair services
Kevin Solar Solution:
• Business type: manufacturer, exporter
• Product types: backup power systems, DC to AC power Inverters sine wave, Batteries
Deep Cycle, SMF Batteries, Solar Water Heating Systems, Solar Lighting Systems,
Online UPS, Automatic Lift Backup System, IGBT Based Home UPS, CFL Lights,
Cyber H-UPS, Sine Wave Inverter, Sine Wave UPS, DSP Sine Wave H-UPS, DSP Sine
Wave Inverter, DSP Sine Wave Online UPS, DSP Sine Wave Static UPS.
We have constructed the CPM of Kevin Solar solution, Swogun Energy PVT. LT and ESS as
following:

Table: Competitive Profile Matrix (CPM)

Kevin Solar Swogun Energy PVT.

Key Success Factors ESS
solution LT
Weight Rating Score Rating Score Rating Score
Innovative services 0.1 4 0.4 2 0.2 4 0.4
Price
0.2 1 0.2 2 0.4 3 0.6
Competitiveness
Financial Strength 0.1 4 0.4 2 0.2 3 0.3
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Service Quality 0.4 4 1.6 3 1.2 4 1.6

Customer Trust 0.2 3 0.6 3 0.6 2 0.4
Total 3.2 2.6 3.3

2. Strengths and Weakness of competitors

The major competitors are the established companies. They have established their service image
and they have good technology and financial strengths.

Kevin Solar solution

Strength
• Strong brand name
• They are manufacturer

Weakness
• Expensive delivery charge
• Slow delivery process

Swogun Energy PVT. LT

Strength
• Strong brand name
• Unique R&D deparment

Weakness
• location
• low interaction with customers

B. Potential competitors

Solar home installation company is medium scale company. So, there will always be possibility
of new competitors. Our potential competitors will be those who will focus on installation
service only in particularly in Kathmandu valley. Some of the potential customers are:

Kinetic Energy Pvt. Ltd.

• Business type: wholesale supplier
• Product types: solar lighting systems, batteries lead acid deep-cycle, solar charge
controllers, DC lighting, solar water pumping systems, batteries lead acid flooded, retails
sales, wholesale supplier, design.
• Service types: consulting, contractor services, research and development
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Nepal Energy Development Company (Pvt.) Ltd. (NEDCO)

• Business type: retail sales, wholesale supplier
• Product types: appliances, custom batteries, water heating systems, sun concentrating
photovoltaic systems, photovoltaic modules, compact fluorescent lighting, Compact
Flourecent Lamps (CFL), Complete Solar Home Systems, Complete Solar Water Heating
Systems.
• Service types: consulting, installation
• Address: Bharatpur-10, Chaubiskothi, Chitwan, Narayangarh, Narayani Nepal 26,
Bharatpur

Lotus Energy Pvt. Ltd.

• Business type: Manufacturer, Wholesale, Supplier, Retail Sales, Service, Installer
• Product types: Complete Solar Energy Systems, photovoltaic modules, rechargeable
batteries, Power backup systems, Solar charge controller, Solar pumps, Solar
Tukis(alternate to kerosene lamp), Solar LEDs, Solar prayer wheels, Solar ozone water
purification systems, etc. .
• Address: P. O. Box 9219, 1679 Thirbam Sadak 3, Bhatbhateni, Kathmandu, Bagmati
Nepal
• Telephone: +977 (1) 441 8203
• FAX: +977 (1) 441 2924
Impact on our business:
They are potential competitors with similar services we provide. If they plan to target in our
customer and location under these circumstances we will lose our potential customer. As well as,
market will saturate before than we estimated.
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IX DESCRIPTION OF MANAGEMENT TEAM

ESS is partnership business organization which will be owned and manage by its three partners.
The three partners will jointly share the ownership of the business and they will have equal
amount of equity, profitability and all of these members hold equal decision making authority.

ESS will operate with three departments—Research and Development Department ,Account and
Sales Department, Operation and Maintenance Department, at the office which is based in
Kamal Pokhari.
The partners are responsible for one department and they will make the decisions on their
respective department and the major decisions of the company will be jointly discussed.

A. Key managers and employees

1. Designation of Key managers

Name Designation
Mr. Damodar Paudel Accounts and Sales Department
Mr Ashish Manandhar Operation & Maintenance Department
Mr. Rubbendra Maharjan Research and Development Department

2. Key Employees:

1. Receptionist
2. Helper

The number of helper will be increased in the consecutive second year from one to four. The
female applicants are encouraged to be employed in the reception. Helper is required to be more
experienced so no complain may arise from customers.

3. Salary Structure of staffs:

Employee Salary/Month (Rs.)

R&D Manager 8,000
Accounts and Sales manager 8,000
Operation and Maintenance manager 8,000
Receptionist 8,000
Delivery Boy 8,000
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We designated the salary structure such that the employees do not have to make any
compromise in their self-esteem.the salary scale is equally divided from top to bottom
level of management.At the end of the year profit is shared among the three owners of
ESS.

A. Qualification of Management Team

Ashish Manandhar : ME in Electrical Engineering

Damodar Paudel : Masters in Business Administration
Rubbendra Maharjan : Master in Renewable Energy
Receptionist : Bachelors in Business Administration
Helper : Diploma level
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X PLAN OF OPERATION

A. Form of ownership

ESS will be operating as a partnership firm. All the three partners will jointly share the
ownership of the business and they will have equal amount of equity, profitability and all of
these members hold equal decision making authority. All the partners will be actively
involved in the day to day operations of the business. The partners have the responsibilities in
three departments. The main reason for operating as Partnership business is to establish such
a business that is strong in financing and management.

Three partner viz. Mr. Damodar Paudel, Mr Ashish Manandhar and Mr. Rubbendra
Maharjan will jointly invest the equity capital of Rs.1,000,000 each. The sources of equity
financing of the partners will be personal savings and their friends and family members.

B. Structure of the Company

ESS

R&D O&M Account

Manager Manager &Sales
Manager

Helper Reception
ist
C. Decision Making Authority

All the three partners off the ESS will have equal authority to make decisions. The partners are
responsible for one department and they will make the decisions on their respective department
and the major decisions of the company will be jointly discussed. All the major decisions of the
company must require the consent of each member.
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D. Compensation and Benefits Packages

As our mission “Solar energy is a precious gift and we should take maximum benefit from it.”,
we will never compromise in the quality of our service. The customers can check the condition
of the service installed and they can complain if unsatisfied with our work. We will always
remember “the customer’s satisfaction is our motto” during our business.
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Business Plan

XI FINANCIAL FORCASTS

A. Financial statement

1. Pro forma Income Statement

Income Statement of Everest Solar Solutions (in Rupees)

First Year Second Year Third Year
Net Sales Revenue 1,26,48,768 1,51,54,656 1,81,38,856

Cost of materials 93,28,000 1,11,76,000 1,33,76,000

Balance 33,20,768 39,78,656 47,62,856

Operating Expenses
Rent 2,40,000 4,68,000 4,68,000
Salaries 3,36,000 7,68,000 7,68,000
Telephone 14,400 14,400 14,400
Electricity cost 7,200 10,000 10,000
Insurance 20,000 20,000 20,000
Stationary 24,000 24,000 24,000
Transportation 30,000 48,000 48,000
Internet charge 12,000 12,000 12,000
Other 2,400 2,400 2,400
Total operating expenses 6,86,000 13,66,800 13,66,800
Balance 26,34,768 26,11,856 33,96,056

Depreciation
Computer 9,000 8,100 7,290
Furniture 10,000 9,000 8,100
Fax and printer 3,000 2,700 2,430
Electronic appliances 1,500 1,350 1,215
Total depreciation 23,500 21,150 19,035
Balance 26,11,268 2590706 33,77,021

Inventory 5,28,000 5,28,000 7,04,000

Balance 20,83,268 19,09,106 26,73,021

Advertisement cost 10,40,000 7,40,000 7,40,000

Balance 10,43,268 11,66,706 19,33,021

Tax(13%) 1,35,625 1,51,671 2,51,292

Net income 9,07,643 10,15,035 16,81,729
 ESS 29
Business Plan

B. Annual Expenses (in Rupees)

Category First year Second year Third year

Rent 2,40,000 4,68,000 4,68,000
Salaries 3,36,000 7,68,000 7,68,000
Telephone 14,400 14,400 14,400
Electricity cost 7,200 10,000 10,000
Insurance 20,000 20,000 20,000
Stationary 24,000 24,000 24,000
Transportation 30,000 48,000 48,000
Internet charge 12,000 12,000 12,000
Advertisement cost 10,40,000 7,40,000 7,40,000
Other 2,400 2,400 2,400
Tax 1,35,625 1,51,671 2,51,292
Total 18,61,625 22,59,471 23,58,092

Sales and profit statement

Sales Profit
st 1,26,48,768 9,07,643
1 year
2nd year 1,51,54,656 10,15,035
3rd year 1,81,38,856 16,81,729

20000000
18000000
16000000
14000000
12000000
10000000 sales
8000000 profit
6000000
4000000
2000000
0
1st year 2nd year 3rd year

Forecasts profits of first three years

 ESS 30
Business Plan

C. Pro forma Balance Sheet(at the end of first fiscal year)

Assets
Current Assets
Cash 9,07,643
Account receivable 0
Prepaid expenses 0
Inventory 20,83,268
Total Current Assets 29,90,911
Fixed Assets
Electronic appliances 15,000
Less Accumulated Depreciation 1500 13,500
Computer 90,000
Less Accumulated Depreciation 9,000 81,000
Fax and printer 30,000
Less Accumulated Depreciation 3,000 27,000
Furniture 100,000
Less Accumulated Depreciation 10,000 90,000
Total fixed Assets 2,11,500
Total Assets 32,02,411
Liabilities
Current Liabilities
Account Payable 0
Wages, Salaries Payables 0
Advertisement Payables 0
1st cost 2,35,000
Taxes Payable 0

Total Current Liabilities 2,35,000

Owner’s Equity
Partners’ Capital 29,67,411
Total Liabilities and Partners’ Equity 32,02,411
 ESS 31
Business Plan

Particular Pre-operating First year Second year Third year

Cash inflow
Equity 29,67,411

Sales 1,26,48,768 1,51,54,656 1,81,38,856

Total cash inflows 29,67,411 1,26,48,768 1,51,54,656 1,81,38,856

Cash outflow
Pre-operating expenses
(Purchase of fixed assets) 2,35,000
Cost of materials 93,28,000 1,11,76,000 1,33,76,000
Operative Expenses 6,86,000 13,67,800 13,66,800
Inventory 5,28,000 5,28,000 7,04,000
Advertisement cost 10,40,000 7,40,000 7,40,000
Tax 1,35,625 1,51,671 2,51,292

Total cash outflows 2,35,000 1,17,17,625 1,39,63,471 1,64,38,092

Net cash flows 27,32,411 9,31,143 11,91,185 17,00,764

Cash balance in the beginning 27,32,411 36,63,554 48,54,739

Borrowing/Repayment – – –

Cash balance at the end 27,32,411 36,63,554 48,54,739 65,55,503

3. Cash flow statement
 ESS 32
Business Plan

B. Breakeven analysis
First year
Fixed cost 25,8000
Selling price per unit 1,19,328
Variable cost per unit 91,000
Breakeven point in units 89 units

breakeven point=fixed costselling price per unit-variable cost per unit

The fixed cost includes:

Advertisement cost (Rs.10,40,000),
Initial start up cost (Rs.2,85,000),
Running cost for one year (Rs.6,55,000)
And the inventory cost(Rs.5,28,000)
Hence after sales of 89 units, we will go into profit.
 ESS 33
Business Plan

C. Ratio Analysis:
1. Net profit on Sales ratio:

Net profit on Sales ratio = Net profit ÷ net sales

First year Second year Third year

Net profit 9,07,643 10,15,035 16,81,729
Net sales 1,26,48,768 1,51,54,656 1,81,38,856
Net profit on Sales ratio 7.175 % 6.69% 9.27%

Conclusion :
After deducting all the expenses, 7.175 paisa of each sales rupees remains as a profit for us in the
first year. Then in second year due increase in expenses in addition of rooms and human resources,
it is decrease to 6.69 paisa of each sales rupees. After third year, it will increase to 9.27 paisa of
each sales rupess as no more additional expenses will be added. In other hand advertisement
expenses will be deducted after second fiscal year.

2. Net profit to equity (Return on Investment Ratio)

Net profit to equity Ratio= net profits before tax / shareholders equity

First Year
Net Profit 10,43,268
Owner’s Equity 32,02,411
Net profit to equity ratio 32.5%

Conclusion:
The earning of ESS is 32.5 percent on the money the partners have invested in ESS for first year.

3. Times interest earned ratio:

Times interest earned ratio= (earnings before interest and taxes)/ (total interest expense)

First Year
Earnings before interest and taxes 10,43,268
Total interest expense 1,35,625
Time interest earned ratio 7.69

Conclusion:
ESS earned 7.69 times more than its tax expenses.
 ESS 34
Business Plan

References
1. www.solarpanels.com
2. www.scribd.com
3. www.nea.com .np
4. www.lotusenergy.com
5. www.solarbuzz.com
 ESS 35
Business Plan

Appendices

Appendix no. 1
A. Location: Kamal Pokhari

Layout of the Office:

Plan of working area

Area of the office: 40*60 ft2

Room Size(ft*ft)

Account & sales section 5*5

 ESS 36
Business Plan

Store room 20*30

Reception 5*5

O&M 5*5

R&D 5*5

Appendix no. 2
Business plan survey

We have done a survey on the students of Kathmandu University coming from Kathmandu altogether
about 20 Students by distributing a questionnaire and make them free to express anything on the topic.

Here is the result and model of questions

QN1. How often load shedding is becoming an obstacles in your routine life?

a. Not so often
b. Is curse
c. Loving it

QN2. What may the best alternatives to solve present load shedding?

a. Inverters
b. Diesel generator
c. Solar plant
d. Anything you suggest

Among the participants two of them suggested that bio fuel can be used to stop loadshedding.

QN3. Do you know about green energy?

a. Yes
b. No

QN4. What you use to read during night for study?

 ESS 37
Business Plan

a. Solar lamps
b. Emergency lights
c. Candles
d. Don’t read when loadshedding

QN5. Do you think solar plant is costly?

a. Yes
b. No
c. Do not know

QN6. What is the main reason behind present energy crisis?

a. Political instability
b. Not enough hydropower plant
c. Leakage and theft of electricity

QN7. What you suggest about to reduce present load shedding and promoting use of solar energy?

Participant expressed their views on the use of solar plants some expressed about high cost of it,
So we need to search other alternatives but many of them wrote that sun is this is nature’s gift for us so
we must make benefits from it by using solarplants and promoting green energy.
 ESS 38
Business Plan

Appendix no. 3
Result of survey conducted among 20 persons

S.N Payment types No of person

1 Full payment 13
2 Installment 7
 ESS 39
Business Plan

Appendix no. 4

Glossary

Competitive advantage
The aggregation of factors that sets a small business apart from its competitors and gives it a
unique position in the market.

Equity: In property, the difference between the property’s current market value and the claims
against the property. In a firm the shareholder’s equity is the ownership interest in the firm.
Depreciation
Decrease in the value of equipment from wear and tear and the passage of time.

Partnership
An association of two or more people who co-own a business for the purpose of making a profit.

Guerrilla Marketing Strategy

Unconventional, low cost, creative marketing strategies designed to give small companies an
edge over their large, richer more powerful rivals.

Innovation
The ability to apply creative solutions to problems and opportunities to enhance.

Revenue
The entire amounts of income before any deductions are made.

Assets: Accounting term for everything a company owns and which has a monetary value listed
in the balance sheet.
Budget: A plan of future income and expenses during a specified period, such as one year. In an
operating budget the planned costs and revenues, expenditures and incomes are compared.
Variable Cost
Any costs that change significantly with the level of output.

Fixed Cost
Any cost of production that does not vary significantly with the volume of output.

Income Statement
A financial statement that represents a moving picture of a business, comparing its expenses
against its revenue over a period of time to show its net profit.

Balance Sheet
 ESS 40
Business Plan

A financial statement, that provides a snapshot of a business’s financial position.

Current Assets
Assets such as cash and other items to be converted into cash within one year.

Fixed Assets
Assets acquired for long-term use in a business.

Liabilities
Creditors’ claims against a company’s assets.

Current Liabilities
Those debts that must be paid within one year.

Cash Inflow
Cash flowing into the business from all sources over a period of time.

Cash Outflow
Cash flowing out of the business from all sources over a period of time.

Expense
Amounts paid for goods and services that may be currently tax deductible.

Return on Investment
The amount of profit (return) based on the amount of resources (funds) used to produce it.

Profit
Profit is the excess of income over expenses.

Differentiation Strategy
A strategy in which a company seeks to build customer loyalty by positioning its goods or
services in a unique or different fashion.
 ESS 41
Business Plan

Appendix no. 5
Resume of Key Managers

Name: Ashish Manandhar

Age: 27
Address: Chetrapati, kathmandu
Residence Ph: 01-4460365
Mobile: 9846060720
E-mail: fan_zepplin@hotmail.com

Present status:

Manager at CDC Advertising Pvt. Ltd.

Interest: Sports, Reading, Music, Chess

Academic Achievements
Serial Degree Achieved Awarding Institute Grades Obtained Remarks
No.
1. MBA KU 3.5 CGPA Distinction
2. B.E KU 3.03 CGPA First division
3. I.SC S. Xaviers 73% First Division
4. SLC Gandaki H.S.S 80.00% Distinction

Awards Achieved:

• Best cricketer of Kathmandu, 2008

• Face of Thamel, 2007

Presentation and Seminars:

Marketing seminar organized by KUSOM, 2007

 ESS 42
Business Plan

Name: Damodar Paudel

Age: 27
Address: Khurkot-5, Parbat
Residence Ph: 067-420341
Mobile: 9841419586
E-mail: damo_poudel4@hotmail.com

Present Status:
Account Manager in Himstar Electronics PVT LTD.

Interest: Reading, sports, travelling

Academic Achievements
Serial Degree Achieved Awarding Institute Grades Obtained Remarks
No
1. MBA KU 3.85 CGPA Distinction
2. BE KU 3.5 CGPA Distinction
3. I S C. NIST 77% First Division
4. SLC Kalika Ma.Vi, parbat 75% First Division

Other Degrees Obtained:

1. “Complete Windows Package” course from Brilliant Computers, 2006.

Awards Achieved:

• Gold Medal for highest CGPA, 2007

Presentation and Seminars:

• Seminar on Microeconomics organized By Nepal chamber of Commerce, 2006

• Presented paper on Microeconomics, 2007
 ESS 43
Business Plan

Name: Rubbendra Maharjan

Age: 28
Address: Jorpati-5, Kathmandu
Residence Ph: 01 – 4486163
Mobile: 9841291928
E-mail: gnr_Rubbendra @hotmail.com

Present Status:

Customer Service Officer at Prisma Electronics Pvt. Ltd.

Interest: Reading, Sports, Music

Academic Achievements
Serial Degree Achieved Awarding Institute Grades Obtained Remarks
No
1. ME KU 3.75 CGPA Distinction
2. B.E KU 3.65 CGPA Distinction
3. ISC KU 70% First Division
4. SLC Gyanodaya 80.2% Distinction

Other Degrees Obtained:

1. Microsoft Office Package Course from New Tech Institute,2007

1. 6 months training in Organizational Development and Leadership , Malthus Institute,
Putalisadak, 2006

Awards Achieved:

• Winner of Music Competition at Gyanodaya, 2002

Presentation and Seminars:

• Attended one day seminar on “Renewable Energy” ,2007

 ESS 44
Business Plan

Table of Contents
I Executive Summary..................................................................................................................................1
A. company name, address and phone number........................................................................................1
B. contacts of key people.........................................................................................................................1
C. Our Business, Services and solutions..................................................................................................2
D. Our Market.........................................................................................................................................2
E. Competition and marketing Strategy...................................................................................................2
F. Management team...............................................................................................................................3
G. Financial forecast................................................................................................................................3
II. VISION AND MISSION STATEMENTS.............................................................................................4
A. vision statement..................................................................................................................................4
B. Mission statement...............................................................................................................................4
Ç. Values and Principles on which business stands.................................................................................4
D. Competitive Advantage......................................................................................................................4
III. BUSINESS AND INDUSTRY PROFILE.............................................................................................5
A. stage of growth...................................................................................................................................5
B. Company Goals and Objectives..........................................................................................................5
C. Industry analysis.................................................................................................................................6
1) Industry background and overview..................................................................................................6
2) Significant trends.............................................................................................................................6
3) Growth rate......................................................................................................................................6
4) Key success factors In the industry..................................................................................................6
5) Outlook for the future......................................................................................................................7
IV. BUSINESS STRATEGY......................................................................................................................8
A. Desired Image and Position in the Market..........................................................................................8
B. SWOT Analysis..................................................................................................................................8
C. Competitive Strategy..........................................................................................................................8
V Company product and services................................................................................................................9
A. Description......................................................................................................................................9
1. Product or Service features..........................................................................................................9
2. Customer benefits........................................................................................................................9
 ESS 45
Business Plan

3. Warranties and Guarantees..........................................................................................................9

4. Uniqueness................................................................................................................................10
B. Patent or trademark protection..........................................................................................................10
C. Description of Service process..........................................................................................................10
D. Future Service offerings:...................................................................................................................11
VI MARKET STRATEGY.......................................................................................................................12
A. Target Market...................................................................................................................................12
1) Complete Demographic Profile:................................................................................................12
2) Electronics equipments..............................................................................................................12
B. Customer’s Motivational Factors......................................................................................................12
C. Market Size and Trends....................................................................................................................13
1) How large is the market?..............................................................................................................13
2) Is it growing or shrinking?.............................................................................................................13
D. Advertising and Promotion...............................................................................................................13
1. Media to be used............................................................................................................................14
2. Frequency of usage........................................................................................................................15
E. Pricing...............................................................................................................................................16
VII: Location and Layout..........................................................................................................................18
A. Location and demographic analysis...............................................................................................18
B. Layout and ergonomics issue.........................................................................................................18
VIII COMPETITORS ANALYSIS...........................................................................................................19
A. Existing Competitors........................................................................................................................19
1. Competitive Profile Matrix............................................................................................................19
2. Strengths and Weakness of competitors.........................................................................................20
B. Potential competitors.........................................................................................................................20
Kinetic Energy Pvt. Ltd.........................................................................................................................20
Nepal Energy Development Company (Pvt.) Ltd. (NEDCO)................................................................21
Lotus Energy Pvt. Ltd............................................................................................................................21
IX DESCRIPTION OF MANAGEMENT TEAM....................................................................................22
A. Key managers and employees........................................................................................................22
1. Designation of Key managers....................................................................................................22
2. Key Employees: .......................................................................................................................22
3. Salary Structure of staffs:...........................................................................................................23
B. Qualification of Management Team..............................................................................................23
 ESS 46
Business Plan

X PLAN OF OPERATION.......................................................................................................................24
A. Form of ownership.........................................................................................................................24
B. Structure of the Company..............................................................................................................24
C. Decision Making Authority...............................................................................................................24
D. Compensation and Benefits Packages...............................................................................................25
XI FINANCIAL FORCASTS...................................................................................................................26
A. Financial statement...........................................................................................................................26
1. Pro forma Income Statement......................................................................................................26
B. Annual Expenses ..............................................................................................................................27
C. Pro forma Balance Sheet ..................................................................................................................28
D. Cash flow statement..........................................................................................................................29
E. Breakeven analysis............................................................................................................................30
References.................................................................................................................................................33
Appendices................................................................................................................................................34
Appendices