Unit 3

BUSINESS PLAN AND DPR

3.1 CREATIVITY:

Creativity is simply the ability of imagination. ... Using imagination, an entrepreneur can put
aside the practical norms and think of something creative and innovative. However, a creative
mind has to have entrepreneurial skills to bring those creative ideas to life in a business setting.
Creativity does give an entrepreneur a competitive advantage, but how does one assess whether
they are creative enough or not?

Stages of  Creativity:

1. Idea germination
Exactly how an idea is germinated is a mystery; it is not something that can be examined under
the microscope. For most entrepreneurs, ideas begin with interest in a subject or curiosity about
finding a solution to a particular problem.
2.Preparation
Once a seed of curiosity has taken form as a focused idea, creative people embark on a conscious
search for answers. If it is a problem they are trying to solve, then they begin an intellectual
journey, seeking information about the problem and how others have tried to resolve it. Inventors
will set up laboratory experiments, designers will begin engineering new product ideas, and
marketers will study consumer buying behaviour.
3.Incubation
The idea, once seeded and given substance through preparation, is put on a back burner, the
subconscious mind is allowed time to assimilate information. Incubation is a stage of
‘mulling it over’. When an individual has consciously worked to resolve a problem without
success, allowing it to incubate in the subconscious will often lead to a resolution.
4. Illumination
Illumination occurs when the idea surfaces as a realistic creation. This stage is critical for
entrepreneurs because ideas, by themselves, have little meaning. Reaching the illumination stage
separates daydreamers and tinkerers from creative people who find a way to transmute values.
5. Verification
An idea once illuminated in the mind of an individual still has little meaning until verified as
realistic and useful. Thus, verification is the development stage of refining knowledge into
application.
Risks associated with creativity:

 Lack Of Direction From Yourself or Others. ...

 Being Afraid of Failure. ...
 Being Afraid of Rejection. ...
 Never Changing or Adapting to the Situation. ...
 Not Thinking Proactively. ...
 Rationalize and Never Improve

3.2 Innovation: Innovation is the process of creating and implementing a new idea. It is the
process of taking useful ideas and converting them into useful products; services or processes or
methods of operation. These useful ideas are the result of creativity, which is the prerequisite for
innovation. Creativity in the ability to combine ideas in a unique way or to make useful
association among ideas. Creativity provides new ideas for quality improvement in organizations
and innovation puts these ideas into action.

types of innovation: a) Traditional

b)Modern

 Incremental innovation

Most innovations are incremental, gradual and continuous improvements in the existing
concepts, products or services in the existing market.

Incremental innovations are just a little better than the previous version of the product or service
and has only slight variations on an existing product formulation or service delivery method.

example: TV

 Disruptive innovation

Disruptive innovation is a concept introduced by professor, academic and business consultant

Clayton Christensen first in an HBR article and later in his book called Innovator’s Dilemma.

Disruptive innovation is a theory that refers to a concept, product, or a service that creates a

new value network either by entering an existing market or by creating a completely new
market.

Example: Tesla Motors

  Sustaining innovation

Sustaining innovation is the opposite of disruptive innovation as it exists in the current

market and instead of creating new value networks, it improves and grows the existing
ones by satisfying the needs of a customer.

example : iphone

 Radical innovation

Radical innovation is rare as it has similar characteristics to disruptive innovation but is different
in a way that it simultaneously uses revolutionary technology and a new business model.  

Example: AI&Robotics

Innovation process:

1. Preparation

This involves paying real, detailed attention to what’s going on in the area of your business
where you want to innovate – what’s its purpose/who gets something from it/what,
fundamentally, are the outcomes it’s supposed to yield?

2. Generation

Once you’ve explored and understood the context in which you are wanting to innovate,
you can start to come up with ideas that deal with the things you’ve discovered are really
significant in that context.

3. Incubation

Once you’ve developed some options, sleep on them, or at least go away, do something
else and then come back to them. This will allow your brain to process them and make
better sense of them.
 4. Evaluation

Once you’ve slept on the options you’ve created, you can evaluate them from a more
objective perspective. A good approach is to use the themes you identified during
preparation. Do these options fulfil the purpose, give everyone what they need and yield
the fundamental outcomes?

5. Implementation

Some might say that this is the most challenging stage of the process – turning, with the
cooperation of colleagues, clients, suppliers and so on, a good idea into something that
works to everyone’s satisfaction!

Challenges of innovation:

 Technological failure of the innovation – The biggest risk any company takes in the
innovation process is whether or not the new product or idea will work once it is launched .

 Financial strain – Often, the innovation process is faced with the challenge of draining
out the company resources as returns are usually long-term as opposed to immediate.

 Market failure – For innovations which involve the introduction of new products or
technology to the market, it is imperative that the product meets the needs, tastes and preferences
of the consumers.

 Redundancy – With trends in the market constantly changing and many innovations
emerging, it is possible that a profitable innovation today may be redundant in the near future.

 Lack of capacity for implementation – This is especially a challenge for start-ups

where they lack the structural and financial capacity to roll out the innovation.

 Organizational risks – This refers to the risks that are faced in the structure and running
of the business once the innovation is introduced..

 Unprecedented risks – These are risks that would not have been foreseen and may be
influenced by factors outside the company’s control.

3.3 GENERATING BUSINESS IDEA

Entrepreneur has to search business opportunities. It’s an idea in the mind of an individual based
on valuable thought. Essentially, entrepreneurs need ideas to start and grow their entrepreneurial
ventures. Generating ideas is an innovative and creative process. Sometimes, the most difficult
aspect of starting a business is coming up with a business idea. Even if you have a general
business idea in mind, it usually needs to go through fine-tuning processes. Fruitful ideas often
occur at points where your skill set, your hobbies and interests, and your social networks
intersect. In other words, the best ideas for a new business are likely to come from activities and
people that you already know well.

Sources Of New Ideas

As Kaplan, (2003) argued that you may be surprised to hear that not all entrepreneurs come up
with unique ideas. According to Timmons and Spinelli, (2007), finding a good idea is the first
step in the process of converting an entrepreneur’s creativity into an opportunity.

Any good business ideas could be an invention, a new product or service, or an original idea or
solution to an everyday problem. A good business idea does not necessarily have to be a unique
products or services. Majority of the entrepreneurs credited their accomplishment to the
exceptional execution of ordinary ideas. The chances of success therefore will be far greater if
you can market a product that is similar to existing offerings, while providing greater value to
customers.

The sources of new idea are:

The 5W+H Method

Although it may seem like a random set of numbers at first glance, the 5W+H method is a really
meaningful way to cope with the creative drought. The technique represents basic questions you
need to ask when thinking about a specific topic: Who, what, where, when, why, and how?

Jason Richardson, a content creator at essay papers, shared his thoughts with us: “If you answer
each of the 5W+H questions precisely – regardless of the topic – you can get one step closer to
solving your problem. These answers should stimulate your brain to rethink the whole subject
and find a new angle of looking at things.”
Social Listening

Idea generation doesn’t mean you have to come up with a great suggestion single-handedly. On
the contrary, sometimes it’s enough to do a little bit of social listening and see what the target
audience has to say about a certain topic. You can use social networks like Facebook or Twitter
to find precious ideas coming from end-users.

Besides that, you can always organize an opinion poll to directly ask people what they want. For
example, a platform such as Survey Monkey allows you to launch a simple survey within
minutes, so why not use it as the idea generation tool?

Brainstorming

Brainstorming is a well-known method that people all over the world use for decades already.
What makes this tactic so popular? Well, it’s the fact that no one gets laughed at for proposing a
stupid idea. There is no right or wrong here – you just need to say the first thing that comes to
your mind and that’s it. After a quick brainstorming session, you just need to filter through all
suggestions and find the ones that have the biggest potential to succeed.

Role Playing

Walking in someone else’s shoes is everything but easy, but sometimes it’s the only way to
break the barrier and think of a brilliant idea. The process is simple: you just need to switch
places with your colleagues and try to embrace their point of view. It doesn’t guarantee
immediate results, but it often leads to interesting conclusions and brand new ideas.

Use Online Tools

The Internet is filled with interesting tools that can assist you in identifying alternative ideas.
You can choose between many different options, but the final decision usually depends on the
nature and peculiarities of your business. However, we can definitely recommend a couple of
valuable platforms here:

Evernote: Nothing hurts like coming up with amazing solutions and forgetting it along the way.
Evernote prevents this because it allows you to write down every thought instantly.
Ninja Essays: It’s a team of incredibly creative authors who can help you to brainstorm and craft
high-quality topics for your websites, blogs, or research papers.

Mind Mapping

Mind mapping is another method to get through the creative drought successfully. By definition,
a mind map is a diagram for representing tasks, words, concepts, or items linked to and arranged
around a central concept or subject using a non-linear graphical layout that allows the user to
build an intuitive framework around a central concept.

Let’s say you are writing a screenplay. In this case, you can put the main character in the center
of the map and then add links leading to all other elements of your movie – from plot and love
relationships to supporting roles.

Think In Reverse

The last solution on our list is very amusing. Instead of thinking about how to reach your goal,
you can think about how not to achieve it. For example, you can make a plan on how to reduce
the number of Instagram followers instead of increasing it. The so-called negative thinking often
leads people to unbelievable conclusions, which in turn brings them a bunch of new ideas.

(a) Develop ideas as an extension of an existing product (i.e. adding camera and song features to
a mobile phone).

(b) Create an improved service (fast delivery services).

(c) Market a product at a lower price (via e-commerce e.g. amazon.com).

(d) Add value to an existing product or service (i.e. reputable brand name or delivery service).

(e) Altering their quality or quantity.

(f) Introducing automation, simplification, convenience (i.e. smart product).

(g) Personal interests or hobbies 􀄃 many people find ways to turn their hobbies into successful
businesses.
(h) Work experiences, skills, abilities 􀄃 a business, related to the work you do.

(i) A familiar or unfamiliar product or service.

(j) Spot the latest trends.

(k) Changing the delivery method, packaging, unit size or shape.

(l) Increasing mobility, access, portability or disposability.

(m) Simplifying repair, maintenance, replacement or cleaning.

(n) Changing their color, material or shape.

A survey of entrepreneurs found that most new start-up companies are involved in industries
where they had significant work experience. The personal contacts and domain expertise
developed on the job have proven to be valuable to many individuals who contemplated
launching a business of their own. Anybody who intends to start a business in a new industry are
therefore encouraged to firstly become an "apprentice" for a suitable period of time. By doing
that, you could avoid costly mistakes and at the same time be able to assess whether you enjoy
the work before making a serious financial commitment.

Methods Of Generating Ideas

In general, entrepreneurs identify more ideas than opportunities because many ideas are typically
generated to find the best way to capitalize on an opportunity. Several techniques can be used to
stimulate and facilitate the generation of new ideas for products, services and businesses. The
following are various methods of generating ideas:

a) Brainstorming
This is a process in which a small group of people interact with very little structure, with the goal
of producing a large quantity of novel and imaginative ideas. The goal is to create an open,
uninhibited atmosphere that allows members of the group to “freewheel” ideas. Normally, the
leader of the group asks the participants to share their ideas. As group members interact, each
idea sparks the thinking of others, and the spawning of ideas becomes contagious.
(b) Focus Groups
These are group of individuals who provide information using a structured format. Normally, a
moderator will lead a group of people through an open, in depth discussion. The group members
will form comments in open-end in-depth discussion for a new product area that can result in
market penetration. This technique is an excellent source for screening ideas and concept.
(c) Observation
A method that can be used to describe a person or group of people’s behavior by probing:
(i) What do people/organisations buy?
(ii) What do they want and cannot buy?
(iii) What do they buy and don't like?
(iv) Where do they buy, when and how?
(v) Why do they buy?
(vi) What are they buying more of?
(vii) What else might they need but cannot get?
(d) Surveys
This method is proposed by Zikmund (1994). This process involves the gathering of data based
on communication with a representative sample of individuals. This research technique requires
asking people who are called respondents for information either verbally or by using written
questions. Questionnaires or interviews are utilized to collect data on the telephone or face-to-
face interview.
(e) Emerging Trends
The example is based on the population within your area may be getting older and creating
demand for new products and services.
(f) Research and Development
Research is a planned activity aimed at discovering new knowledge, with the hope of developing
new or improved products and services. Researching new methods, skills and techniques enable
entrepreneurs to enhance their performance and ability to deliver better products and services.
(g) Tradeshows and association meetings
This can be an excellent way to examine the products of many potential competitors, uncover
product trends and identify potential products.
 3.4 IDEA EVALUATION AND JUDGEMENT:

Take these steps to evaluate idea before setting up a business:

1. Write your business plan.

2. Assess market demand.
3. Research your direct and indirect competitors.
4. Get to know your customers–who are they, what do they want?
5. Ask for feedback on your idea.

1. Write your business plan

It’s easy to procrastinate and put off getting started on your business plan. But look at this as an
opportunity to get your ducks in order.  Jot down what your business idea is. Then follow-up
with sections on:

 The customer (your target group, sales projections, and customer loyalty)
 The company (legal form, location)
 About you (the founders, your mission, long-term goals)

Writing a business plan from the start can save you a whole lot of heartache down the line. Your
business plan’s job is to guide you through this process, encouraging you to consider your idea
thoroughly, and assess the risks before putting your all into a new venture. There are also lots
of example business plans you can check online to help you get started.

2. Assess market demand

1. What problem will my business solve for its customers?

2. How are people dealing with this problem at the moment?
3. Does my product or service already exist? If not, how will my company be different or
how will I improve on what’s already available?

3. Find your competitors Research direct & Indirect competitors

 Direct competitors companies who offer exactly the same product or service as you.
Indirect competitors sell different products or services which satisfy the same need.

4. Get to know your customers

 How old are they?

 Where do they live?
 Are they male or female?
 What kind of job do they have?
 Do they buy any products or services similar to yours? If so, how much do they spend
and how often?
 What are their goals?
 What are their hobbies?
 Which brands do they like, and why?

5. Ask for feedback

 Do people want to know more about your business?

 Have you received any inquiries?
 What are people saying in the comments section on social media?

 Business Opportunity Assessment:

1. Identification of the needs of the people

Business opportunity exists when a need is strongly felt by a large no of people in the society
which includes Interactions with buyers, whole sellers & retailers, market bulletins and
survey findings. Environmental scanning also projects various needs.
Ex: Tour organizers, fast food centers
2. Market survey reports & management consultants
Organisations providing market surveys and research reports and other management
consultants screen the environment, assess the demand and supply functions, evaluate
 technical feasibility of various opportunities and provide the guidance to potential
entrepreneurs.
Ex: Survey reports on agro products demand, drum stick as a source for vitamins to
pharmacy companies, Mango pulp for soft drinks
3. Trade journals, business magazines & news papers
Statistical information and reports are being published trade journals, industry associations
which can be used for searching business opportunity.
4. Inventions, discoveries & knowledge development
Industrial revolution itself is the outcome of various inventions & discoveries such as IoT, e-
commerce, satellite communication etc., which resulted in advancements of business ideas.
5. Technical & vocational skills
There are various business opportunities for the entrepreneurs with technical knowledge such
as:
 Electrical & electronic equipment
 Computer maintenance
 Garages & workshops
 Painting & greasing of industrial equipment
 Chemical analysis & quality testing
 Medical services
 Data services
6. Education
With the need for qualified workforce various training institutes have gained prominence to
choose for business. They include:
 Computer training centers
 Software development centers
 Web designers
 Life skills & spoken English training institutes
 Animation & VFX training
7. Monopoly business
 Innovative people perceive the existing monopoly as a greater entrepreneurial opportunity.
They choose a business to break the existing monopolist.
Ex: Shahnaz Hussain Herbal Beauty parlors
8. Imaginative attitudes
A highly imaginative attitude opens up various entrepreneurial opportunities. Such people are
highly creative in nature.
Ex:
 flower decorations & bouquets
 Boutiques
 Interior designers
 Event managers
 Ad agencies
 Costume designers
 Baby toys
9. Abundance/ shortage of raw materials
Entrepreneurial opportunities are available even if resources are highly abundant or shortage
exists. This provides competitive advantage
Ex:
 Woolen garments in hilly areas
 Ivory and wood products in forest areas
 Indian restaurants in foreign countries
10. Government schemes
The govt. has established network of supporting institutions for promotion of entrepreneurial
activities. Various schemes of these institutions can be a source of business opportunity.

3.5 CONDUCTING FEASIBILITY STUDY

Taking an idea from concept to viable cooperative takes many steps. None more valuable or
important than the feasibility study. In the section you will learn the key concepts to allow you to
formulate the idea and subject it to rigorous analysis to identify opportunities and challenges that
will make the cooperative successful.
A feasibility study should provide a comprehensive analysis and evaluation of the market,
operational, technical, managerial and financial aspects of your business concept or opportunity.
A comprehensive study can then evolve into the market-driven strategic plan that is the road map
for all subsequent decisions.

A feasibility study is the preliminary evaluation of a business idea, conducted for the purpose of
determining whether the idea is viable or worth pursuing. Feasibility study takes the guesswork
out of the business launch and provides an entrepreneur with a more secure notion that a business
idea is feasible or viable. Normally a feasibility study will be conducted to determine the
viability of an idea before proceeding with the development of the business.

Purpose:

1. Provide a thorough examination of all issues and assessment of probability of business

success.

2. Give focus to the project and outline alternatives.

3. Narrow business alternatives.

4. Surface new opportunities through the investigative process.

5. Identify reasons NOT to proceed.

6. Provide quality information for decision making.

Components of feasibility study

A feasibility study will provide various sources of information to the entrepreneur such as
follows:

1. Market feasibility

The market feasibility study is an assessment of the overall appeal of the market for the product
or service being proposed. Aspects of market feasibility study that should be carried out include:

A. Product/Service
b. Customers

c. Market Demand

d. Competitors

e. Market Share

2. Technical feasibility

•A technical feasibility study is concerned with determining whether the business has the
necessary technology and equipment to produce the intended product/service.

•Aspects of technical feasibility study that should be carried out include:

a. Technology and Equipment

b. Materials (type, quality, quantity)

c. Manpower

d. Location

3. Organisational feasibility

An organizational feasibility study is concerned with determining whether the business has the
necessary and sufficient human resource to bring a particular product/service idea to market
successfully. Aspects of organizational feasibility study that should be carried out include:

a. Organization Structure

b. Management Team

c. Compensation

d. Supporting Services

4. Financial feasibility

The financial feasibility study is an assessment of the financial aspect of the business.
 •Information in the financial feasibility study should include:

a. Startup Capital

b. Financial Sources (Internal/ External)

c. Profitability Analysis (Income statements, Balance sheets, financial statements)

5. Social Feasibility
A project may cross all the above barriers mentioned above and found very suitable but it will
lose its entire creditability, if it has no social acceptance. Though the social customs, conventions
such as caste community, regional influence etc. are creating hindrance for development of a
project should avoid all such social conflicts which will stand on the successful implementation
of the project. (e.g) Considering the interests of the general public; projects which offer large
employment potential, which channelize the income from less developed areas will stimulate
small industries.
Conducting Feasibility Study:

The steps in conducting feasibility study are:

Step 1: Conduct preliminary analysis

Preliminary assessment should consist of the following steps:

 First, outline the planned idea or action. This means looking at what you are looking to
achieve and why.

 Second, examine the market space and the commercial viability of the action. You want
to get an overall feel of what type of customers are you potentially attracting.

 Third, examine the unique characteristics of the idea and whether they are strength or a
weakness. The idea or action might have certain unique characteristics (i.e. location, price,
usability) and these might help your organization.

 Fourth, determine if there are insurable risks to the action.

If your preliminary analysis doesn’t find any insurmountable obstacles and the commercial
viability is possibly there, you can continue with the proper feasibility study.
 Step 2: Outlining the project scope and conducting current analysis

The scope must be detailed and outline the objectives of the feasibility study clearly.

Step 3: Comparing your proposal with existing products/services

You’ll also need to research the current competitive landscape in order to understand whether the
proposed idea or action is viable.

Step 4: Examining the market conditions

 Defining the target market.

 Studying the buying habits of the target market.

 Understanding the sale and market share outlook of the proposal.

 Outlining the product awareness required for the use of your product or service.
The

Step 5: Understanding the financial costs

One of the most important steps for concluding a feasibility study involves calculating the
financial costs related to the proposal.

Step 6: Reviewing and analysing data

Finally, you need to review your feasibility study carefully and examine the findings with time.

3.6 DPR (Detailed Project Report)

A Project Report is a document which provides details on the overall picture of the proposed
business. The project report gives an account of the project proposal to ascertain the prospects of
the proposed plan/activity.

Project Report is a written document relating to any investment. It contains data on the basis of
which the project has been appraised and found feasible. It consists of information on economic,
technical, financial, managerial and production aspects. It enables the entrepreneur to know the
inputs and helps him to obtain loans from banks or financial Institutions.
The project report contains detailed information about Land and buildings required,
Manufacturing Capacity per annum, Manufacturing Process, Machinery & equipment along with
their prices and specifications, Requirements of raw materials, Requirements of Power & Water,
Manpower needs, Marketing Cost of the project, production, financial analyses and economic
viability of the project.

An Objective without a Plan is a Dream. The Preparation of a Project Report is of great

significance for the Entrepreneur as well as the other Stake Holders in his business. There is a
variety of purposes which a Project Report or a Business Plan will fulfill. Hence, its need in
Modern Business.

Purpose of DPR:

 Its helps an Entrepreneur judge the viability & profitability of a given enterprise proposal.
If it reveals a proposal to be unviable, the Entrepreneur will avoid a grave error of
investing in an Unsound Venture.
 It is the basis for a Development Bank to sanction Long Term Financial Assistance & a
Commercial Bank to provide Working Capital Assistance.
 It aids the process of firming up Technical Arrangement , Choosing a Location, Selecting
Plant & Machinery, Determining Man Power , & Utility needs etc etc.. reqd for Project
Implementation.
 It generates a Knowledge Base for the Entrepreneur concerning such diverse facets as
Structure of Enterprise – Industry, Market, Raw Material supply & Technology etc.
 It educates the Entrepreneur regarding the Degree of Risk underlying the Enterprise
Proposal.
 It brings into sharp focus the Key Performance Determinants in the chosen line of
Business & thus makes the Entrepreneur realize the need to pay special attention to such
determinants.

Contents of DPR:

Following are the contents of a project report.

1. General Information
A project report must provide information about the details of the industry to which the project
belongs to. It must give information about the past experience, present status, problems and
future prospects of the industry. It must give information about the product to be manufactured
and the reasons for selecting the product if the proposed business is a manufacturing unit. It must
spell out the demand for the product in the local, national and the global market. It should clearly
identify the alternatives of business and should clarify the reasons for starting the business.

2. Executive Summary

A project report must state the objectives of the business and the methods through which the
business can attain success. The overall picture of the business with regard to capital, operations,
methods of functioning and execution of the business must be stated in the project report. It must
mention the assumptions and the risks generally involved in the business.

3. Organization Summary

The project report should indicate the organization structure and pattern proposed for the unit. It
must state whether the ownership is based on sole proprietorship, partnership or joint stock
company. It must provide information about the bio data of the promoters including financial
soundness. The name, address, age qualification and experience of the proprietors or promoters
of the proposed business must be stated in the project report.

4. Project Description

A brief description of the project must be stated and must give details about the following:

 Location of the site,

 Raw material requirements,

 Target of production,

 Area required for the workshed,

 Power requirements,

 Fuel requirements,
  Water requirements,

 Employment requirements of skilled and unskilled labour,

 Technology selected for the project,

 Production process,

 Projected production volumes, unit prices,

 Pollution treatment plants required.

If the business is service oriented, then it must state the type of services rendered to customers. It
should state the method of providing service to customers in detail.

5. Marketing Plan

The project report must clearly state the total expected demand for the product. It must state the
price at which the product can be sold in the market. It must also mention the strategies to be
employed to capture the market. If any, after sale service is provided that must also be stated in
the project. It must describe the mode of distribution of the product from the production unit to
the market. Project report must state the following:

 Type of customers,

 Target markets,

 Nature of market,

 Market segmentation,

 Future prospects of the market,

 Sales objectives,

 Marketing Cost of the project,

 Market share of proposed venture,

  Demand for the product in the local, national and the global market,

It must indicate potential users of products and distribution channels to be used for distributing
the product.

6. Capital Structure and operating cost

The project report must describe the total capital requirements of the project. It must state the
source of finance, it must also indicate the extent of owners funds and borrowed funds. Working
capital requirements must be stated and the source of supply should also be indicated in the
project. Estimate of total project cost, must be broken down into land, construction of buildings
and civil works, plant and machinery, miscellaneous fixed assets, preliminary and preoperative
expenses and working capital.

Proposed financial structure of venture must indicate the expected sources and terms of equity
and debt financing. This section must also spell out the operating cost

7. Management Plan

The project report should state the following.

 Business experience of the promoters of the business,

 Details about the management team,

 Duties and responsibilities of team members,

 Current personnel needs of the organization,

 Methods of managing the business,

 Plans for hiring and training personnel,

 Programmes and policies of the management.

8. Financial Aspects
In order to judge the profitability of the business a projected profit and loss account and balance
sheet must be presented in the project report. It must show the estimated sales revenue, cost of
production, gross profit and net profit likely to be earned by the proposed unit. In addition to the
above, a projected balance sheet, cash flow statement and funds flow statement must be prepared
every year and at least for a period of 3 to 5 years.

The income statement and cash flow projections should include a three-year summary, detail by
month for the first year, and detail by quarter for the second and third years. Break even point
and rate of return on investment must be stated in the project report. The accounting system and
the inventory control system will be used is generally addressed in this section of the project
report. The project report must state whether the business is financially and economically viable.

9. Technical Aspects

Project report provides information about the technology and technical aspects of a project. It
covers information on Technology selected for the project, Production process, capacity of
machinery, pollution control plants etc.

10. Project Implementation

Every proposed business unit must draw a time table for the project. It must indicate the time
within the activities involved in establishing the enterprise can be completed. Implementation
schemes show the timetable envisaged for project preparation and completion.

11. Social responsibility

The proposed units draws inputs from the society. Hence its contribution to the society in the
form of employment, income, exports and infrastructure. The output of the business must be
indicated in the project report

Formulation of a Detailed Project Report

Once a Potential Entrepreneur has made a tentative decision of exploiting a specific

opportunity, he will be advised to prepare a Detailed Project Report (DPR). A thoughtfully
prepared Project Report is an important tool as it helps him in anticipating & solving problems.
 It has been experienced that in preparing DPR , the Entrepreneur is forced to consider
several Financial & Implementation Problems well in advance, giving him enough time to solve
or prepare for them.

1) For whom is the Project Report:

This is meant for the Entrepreneur himself. This is an essential document to procure
assistance from Financial Institutions & to fulfill other formalities for the successful
implementation of the Project.

2) Who prepares the Project Report?

Many a time, the Entrepreneurs feel that he could relieve himself of the botheration of
preparing a Project Report by engaging a Consultant.

3.7 Business Plan

A business plan, as defined by Entrepreneur, is a “written document describing the nature of the
business, the sales and marketing strategy, and the financial background, and containing a
projected profit and loss statement.” However, business plan can serve several different
purposes.

Contents of B Plan:

 Executive summary -- a snapshot of your business

 Company description -- describes what you do
 Market analysis - research on your industry, market and competitors
 Organization and management -- your business and management structure
 Service or product -- the products or services you’re offering
 Marketing and sales -- how you’ll market your business and your sales strategy
 Funding request -- how much money you’ll need for next 3 to 5 years
 Financial projections -- supply information like balance sheets
 Appendix -- an optional section that includes résumés and permits

Steps for writing a B Plan:

1. Research, research, research.

To write the perfect plan, you must know your company, your product, your competition and the
market intimately.

2. Determine the purpose of your plan.

When you define your plan, make sure you have defined these goals personally as well.

3. Create a company profile.

Company profiles are often found on the company’s official website and are used to attract
possible customers and talent.

4. Document all aspects of your business.

Investors want to make sure that your business is going to make them money. Because of this
expectation, investors want to know everything about your business.

5. Have a strategic marketing plan in place.

A great business plan will always include a strategic and aggressive marketing plan. This
typically includes achieving marketing objectives such as:

 Introducing new products

 Extending or regaining market for existing products
 Boosting sales in a particular product
 Cross-selling (or bundling) one product with another
 Entering into long-term contracts with desirable clients
 Raising prices without cutting into sales figures
 Refining a product
 Having a content marketing strategy
 Enhancing manufacturing/product delivery
6. Make it adaptable based on your audience.

“The potential readers of a business plan are a varied bunch, ranging from bankers and venture
capitalists to employees,”

7. Explain why you care.

By explaining why you care about your business you create an emotional connection with others
so that they’ll support your organization going forward.

3.8 Methods of presenting a B Plan:

There are six steps for doing so:

1. Obtain leads and referrals.

Find names, addresses and phone numbers of the type of investors you wish to target. Ask people
you know for referrals. Network as much as possible.

2. Research your target.

Learn as much as possible about how much money people have to invest, industries they’re
interested in and other requirements. Search venture capital directories, Who’s Who, news
articles, websites and similar sources.

3. Make your pitch.

First, mail an introductory letter to your target letting them know you have a plan you'd like to
send. Sending unsolicited, unanticipated business plans with a mere cover letter won't typically
get your plan read. Not only are most people too busy to read whatever comes across their desk
or lands in their inboxes, they also don't want to be sued someday for “stealing your ideas,” even
if they never read your plan.

4. Try to meet people in person.

Despite the fact that we're living in a text, email and conference-call age, you should still try to
meet your recipient face to face, especially if you're seeking any type of funding.
5. Defuse objections.

Prepare a list of possible objections—potential competitors, hard- assumptions and the like—that
your investor may raise. Then prepare cogent answers.

6. Get a commitment.

You won’t get an investment unless you ask for it. When all objections have been answered, be
ready to offer one last concession—“If I give your representative a board seat, can we do this
today?”—and go for the close.

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