1

PHARMACEUTICAL FORMULATION UNIT

(TABLETS AND CAPSULES)

1 INTRODUCTION

The project proposes to establish a small scale unit to manufacture Pharmaceutical

Formulations (Tablets, Capsules, etc.).

The pharmaceutical industry can be divided into the bulk drug and formulations
segments. Bulk drugs are the active pharmaceutical ingredients (APIs) with medicinal
properties, which are used to manufacture formulations.

Bulk Drugs

The Indian pharmaceutical industry manufactures about 400 bulk drugs belonging to
various therapeutic segments. Formulations still account for a large share of the overall
pharmaceutical production (in value terms),

Form ulations

Formulations are the end-products of the medicine manufacturing process, and can
take the form of tablets, capsules, injectable or syrups, and can be administered
directly to patients.

Tablets are solid forms of the drug which include antibiotics, painkillers and vitamins.
Their weight ranges from 25 to 500 mg. Capsules are solid formulations with the
powder drug enclosed in a gelatin shell. The shell which disintegrates after swallowing,
serves to mask the taste of the active drug. Capsules are mostly antibiotics.

2
 Tablets Capsules

2 Product and its application

Tablets may be defined as solid pharmaceutical dosage forms containing drug

substances with or without suitable diluents and prepared either by compression or
molding methods.

The British Pharmacopoeia States that tablet are solid preparation each containing a
single dose of one or more active ingredients is obtained by compressing uniform
volume of particles. They have been in widespread use since the latter part of the 19th
century and their popularity continues. In the modern days also the tablet are
undoubtedly the most popular mode of presentation of solid dosages form intended for
oral administration.

Tablets remain popular as a dosage form because of the advantages afforded both to
the manufacturer viz simplicity and economy of preparation, stability, and convenience
in packaging, shipping, and dispensing and the patient viz. accuracy of dosage,
compactness, portability, blandness of taste, and ease of administration.

The tablets vary greatly is shape, size and weight which depends upon the amount of
medicaments and the mode of administration. Most commonly, the tablets are disk
shaped with convex surface. Although tablets are more frequently discoid in shape,
they also may be round, oval, oblong, cylindrical, or triangular.

They may differ greatly in size and weight depending on the amount of drug substance
present and the intended method of administration. Tablets are divided into two
general classes, whether they are made by compression – compressed tablets or
molding- molded tablets or tablet triturates (TT). Compressed tablets are usually
prepared by large-scale production methods while molded tablets generally involve
small-scale operation

3
Capsules are solid dosage forms in which the drug substance is enclosed in either a
hard or soft, soluble container or shell of a suitable form of gelatin. According to British
Pharmacopoeia, the capsules are defined as solid preparation with hard soft shells, of
various size, shapes and capacities, containing a single dosage of active ingredient. The
capsules are intended for oral administration.

The encapsulation of medicinal agents remains a popular method for administering

drugs. In prescription practices the use of hard gelatin capsules permits a choice in
prescribing a single drug or combination of a drug at the exact dosage level considered
best for the individual’s patients. This flexibility is an advantage over tablets. Some
patient finds it easier to swallow capsules than tablets and prefer this form of dosages.
The preference of promoted pharmaceutical companies to market the product in
capsules form even though the product has already been produced in tablets forms.
The capsules form of dosage offers the following advantages:-

 Capsules are tasteless, odorless and can be easily administered.

 They are elegant and attractive in appearance.
 The drugs having unpleasant order and taste are enclosed in tasteless shell.
 Can be filled quickly and congenitally, physician can the dosage and combination
suiting to individuals patient.
 Capsules are to easy handled and carry.
 The capsules forms are dosage is readability economically

The project envisages the manufacture of drug formulations mainly paracetamol, anta-
acid and iron-folic acid in tablet form, vitamin B complex in capsule form and ORS in
powder form. Other need based drug formulation could also be manufactured in tablet
or Capsule dosage form.

3 DESIRED QUALIFICATION FOR PROMOTER

The promoter should be having formal qualifications in the field of pharmacy (B.Pharm.
or M. Pharm). Further he / she should have experience of working in a unit
manufacturing such pharmaceutical formulations and recognition as Approved
pharmacist from Drug Control Authority.

4
4 INDUSTRY OUTLOOK / TREND

The Indian Pharmaceutical industry is highly fragmented with about 24,000 players
(around 330 in the organised sector). The top ten companies make up for more than a
third of the market. The Indian pharma industry accounts for about 1.4% of the world’s
pharma industry in value terms and 10% in volume terms.

The Indian pharmaceuticals market is the third largest in terms of volume and
thirteenth largest in terms of value, as per a report by Equity Master. India is the
largest provider of generic drugs globally with the Indian generics accounting for 20 per
cent of global exports in terms of volume. Of late, consolidation has become an
important characteristic of the Indian pharmaceutical market as the industry is highly
fragmented.

5 MARKET POTENTIAL AND MARKETING ISSUES, IF ANY

The Indian Pharmaceutical industry is highly fragmented with about 24,000 players
(around 330 in the organised sector). The top ten companies make up for more than a
third of the market. The Indian pharma industry accounts for about 1.4% of the world’s
pharma industry in value terms and 10% in volume terms.

Besides the domestic market, Indian pharma companies also have a large chunk of
their revenues coming from exports. While some are focusing on the generics market in
the US, Europe and semi-regulated markets, others are focusing on custom
manufacturing for innovator companies.

The Indian pharmaceuticals market is the third largest in terms of volume and
thirteenth largest in terms of value, as per a report by Equity Master. India is the
largest provider of generic drugs globally with the Indian generics accounting for 20 per
cent of global exports in terms of volume. Of late, consolidation has become an
important characteristic of the Indian pharmaceutical market as the industry is highly
fragmented.

5
The increased cost competitiveness of Indian producers (for various products),
established quality of products, and approval of manufacturing facilities by international
regulatory authorities (like the United States Food and Drugs Administration, or USFDA,
and the United Kingdom Medicines Control Agency, or UKMCA) have resulted in export
orders coming from both developed and developing markets.

India enjoys an important position in the global pharmaceuticals sector. The country
also has a large pool of scientists and engineers who have the potential to steer the
industry ahead to an even higher level. Presently over 80 per cent of the antiretroviral
drugs used globally to combat AIDS (Acquired Immuno Deficiency Syndrome) are
supplied by Indian pharmaceutical firms.

The Indian pharma industry, which is expected to grow over 15 per cent per annum
between 2015 and 2020, will outperform the global pharma industry, which is set to
grow at an annual rate of 5 per cent between the same periods. The market is
expected to grow to US$ 55 billion by 2020, thereby emerging as the sixth largest
pharmaceutical market globally by absolute size, as stated by Mr. Arun Singh, Indian
Ambassador to the US. Branded generics dominate the pharmaceuticals market,
constituting nearly 80 per cent of the market share (in terms of revenues).

India has also maintained its lead over China in pharmaceutical exports with a year-on-
year growth of 11.44 per cent to US$ 12.91 billion in FY 2015-16, according to data
from the Ministry of Commerce and Industry. Imports of pharmaceutical products rose
marginally by 0.80 per cent year-on-year to US$ 1,641.15 million.

Overall drug approvals given by the US Food and Drug Administration (USFDA) to
Indian companies have nearly doubled to 201 in FY 2015-16 from 109 in FY 2014-15.
The country accounts for around 30 per cent (by volume) and about 10 per cent
(value) in the US$ 70-80 billion US generics market.

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 India is primarily a retail-based branded generic market with 80% dispensed through
pharmaceutical outlets. As in most emerging economies, acute therapies dominate and
account for close to 70% of the market. Acute Therapies – target short duration
diseases – cough & cold, fever, pain – such as anti-infective, analgesics, pain-killers.

Chronic therapies – target lifestyle diseases and/or recurring in nature – such as

diabetes, cardiovascular, ophthalmology, and products used to treat central nervous
system ailments, are growing faster than acute therapy.

India's biotechnology industry comprising bio-pharmaceuticals, bio-services, bio-

agriculture, bio-industry and bioinformatics is expected grow at an average growth rate
of around 30 per cent a year and reach US$ 100 billion by 2025. Biopharma, comprising
vaccines, therapeutics and diagnostics, is the largest sub-sector contributing nearly 62
per cent of the total revenues at Rs 12,600 crore (US$ 1.88 billion).

6 RAW MATERIAL REQUIREMENTS

The unit would require Paracetamol, Folic Acid, Aluminum Hydroxide, and such other
active ingredients.

In addition to basic drug or a combination of drugs commonly known as therapeutic

ingredient or active ingredient, the tablet consists of a number of inert ingredients
which are called excipients or additives. These additives are added to give the qualities
of a good tablet. These additives are formulated in the form of powder or granules
before they are made in tablet form. In case of capsules also the active ingredient are
invariably formulated with the addition of excipients or additives.

However, their use is move predominant in the production of tablets. These additives
are classified in accordance with the function they play in the preparation of tablets or
in imparting certain characterizes of the tablets. Some of them are as follows

• Diluents : lactose, sodium chloride, starch, powdered sucrose, mannitol, calcium

carbonate,

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• Binders : starch, acacia, tragacanth, gelatin, glucose, lactose, sucrose, methyl
cellulose etc
• Granulating agents : maze starch and potato starch
• Lubricants: magnesium stearate, calcium stearate, stearic acid and talc.

The project would also require packaging materials and consumables. These include
empty hard gelatin capsules, boxes, bottles, caps, etc.

All of the above are easily available in India.

7 MANUFACTURING PROCESS

The Drugs and Pharmaceutical Industry in general is highly regulated in India.

Regulatory authorities at the Central level and the State level monitor the same.

At the Central level, the Central Drugs Standard Control Organisation (CDSCO),
Ministry of Health & Family Welfare, Government of India is the apex organisation. At
the state level the Food and Drugs Control Authority (FDCA) is the regulatory
authority.

Drugs & Cosm etics Act and Schedule M

These authority monitor and control the production of Drugs and Pharmaceutical
products under the provisions of the Drugs and Cosmetics (amendment) Act,
2005 & 2008 and guidelines (July 2015).

The revised Schedule M under this Act is the main basis which specifies the detailed
norms for location; building premises plant lay out, building, plant & machinery,
manufacture, sterilization, packaging, quality control and such other key components.

Good M anufacturing Practices (GM P)

The Drugs and Pharmaceutical Industry in general is highly regulated in India.

Regulatory authorities at the Central level and the State level monitor the same.

8
The revised Schedule M under this Act is the main basis which specifies the Further
the pharma units in general and such sterile products manufacturing units in particular
would also have to comply with following:

• Good Manufacturing Practices ( GMP),

• Current Good Manufacturing Practices(cGMP) and
• WHO-GMP

Good manufacturing practice (GMP) is a system for ensuring that products are
consistently produced and controlled according to quality standards. It is designed to
minimize the risks involved in any pharmaceutical production that cannot be eliminated
through testing the final product.

WHO-GMP certification is essentially for the plant set up, manufacturing facilities and
related aspects. However Certificate of Pharmaceutical Products (CoPP) is also
required for each of the products to exporting the same. This is given only after six
months (stability period) of getting WHO-GMP Certificate.

Current GMP (cGMP) is essentially an updation of the systems and facilities as per the
requirement of regulated pharma market at the international level

The above are in the form of guidelines and not part of any Act (except basic GMP).
However they are essential to follow and implement to fulfill the requirement of the
industry and the international market.

Further highly systematic documentation and record keeping is a must as per the
requirement of concerned authorities.

It is to be noted that the Department of Health and Family Welfare proposes to

introduce the Drug and Cosmetics (Amendment) Bill, 2015. This is in process. As
and when this is passed and put into effect by way of an Act, all the Drugs and
Pharmaceutical units (existing and new) would have to follow the norms under the
amended act.
Technology

9
Different technologies and processes are used at various stages for the
Manufacture of tablets and capsules are depending on the type of drug formulation.
Similarly, different types of packaging techniques are employed keeping in view the
type of drug formulation and target market.

The key steps of manufacturing for tablets and capsules are given below
M anufacturing process for tablets

Compression molding is the most widely used technology for the manufacture of tablets.
The project also envisages the use of compression molding technique. The
manufacture of compressed tablets involves the following four process operations.

 Formulation & Granulation

 Compression
 Coating ( if required – optional)
 Packaging

M anufacturing process for Capsules

The most commonly used dosages in capsules form hard gelatin capsules. In the
manufacturer of hard gelatin capsules following process operations are used:

 Mixing / blending and granulation

 Capsules filling
 Capsules packing

8 MANPOWER REQUIREMENTS

Sr. Designation Number Approx. Salary(

No. Rs. Per month)
1 Manufacturing chemist 1 15000/-
2 Production supervisor 2 20000/-
3 Manager 1 15000/-
4 Office staff & marketing executive 5 60000/-
5 Skilled workers 10 70000/-
6 Unskilled workers 7 35000/-
Subtotal 215000/-
Perks @ 15 % 32000/-
Total 2,47,000/-
9 IMPLEMENTATION SCHEDULE

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About seven months from the time of sanction of term loan.

Sr. Activity Time

No
1 Preparation of Project report One month
2 E M Registration & approval from One month
FDCA
3 Financial/Loan from Banker or Two months
Financial Institutions
4 Power connection/Building One month
construction Six months
5 Machinery procurement & Trial run. Two months
6 Recruitment of Staff & Labour One month
7 Actual commercial production One month

10 COST OF PROJECT

The total cost of project is estimated as below:

Sr. No Component Particulars Rs. In lakhs

1 Land 1500 sq. mts 7.00
2 Building 800 sq mts 30.00
3 Plant & Machinery including QC 45.00
4 Other Assets 1..50
5 P & P Expenses 1.00
6 Contingencies 4.50
7 WC Margin 5.00
Total 93.00

11 MEANS OF FINANCE

• Term Loan : Rs.65. 00 lacs

• Promoter own contribution : Rs.18.00 lacs

12 WORKING CAPITAL CALCULATION

11
 Particulars Duration Total Estimated
cost
( Rs. Lacs)
Raw materials/ 1 month 6.00
Packing materials
Working expenses 1 month 3.00
Finished goods 15 days 2.00
Receivable 30 days 4.00
Total 15.00
WC Margin 5.00

13 LIST OF MACHINERY REQUIRED AND THEIR MANUFACTURERS

Sr. Machine Number Approx. Cost

no.
1 Mechanical sifter, 30” diameter 1 Rs. 1,00,000/-
2 Powder and mass mixer 1 Rs. 3,00,000/-
3 Multi mill 1 Rs. 90,000/-
4 Granulator 1 Rs. 60,000/-
5 Double cone blender 2 Rs. 5,00,000/-
6 Tray drier with 48 trays 2 Rs. 3,60,000/-
7 Peristatic pumps 1 Rs. 50,000/-
8 Rotary tablet machine 2 Rs. 24,00,000/-
Semi automatic Capsule filling & 1 Rs. 75,000/-
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Sealing Machine
10 Automatic capsule loader machine 1 Rs. 1,30,000/-
11 De dusting unit 1 Rs. 55,000/-
Coating machine with SS coating pan 1 Rs. 2,90,000/-
12
30 “ diameter ( Optional )
13 Strip packing machine 2 Rs. 4,00,000/-
Quality Assurance & Quality Control - Rs. 3.00 lacs
14
equipments
15 SS Storage Tanks Rs. 2,50,000/-
Total Rs. 45.00 lacs

Indicative Sources:

• Cadmach machineries, Ahmedabad

• Pharmatech Enginers, Indore
• Ambica Machineries, Vatva, Ahmedabad
• ARV Engineering, Thane

Note: All machinery to be of WHO GMP standards

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14 PROFITABILITY CALCULATIONS

• Annual production capacity Recommended

• Pharmaceutical tablets – 1200 lacs

• Pharmaceutical capsules – 100 lacs

• Total Sales turnover: 150.00 lacs

• Cost of production & other expenses: 125.00 lacs
• Profit : Rs. 25.00 lacs

Profitability projections – Rs. Lacs (Indicative only)

Particulars YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5
Capacity utilisation (%) 60 75 80 80 80
Production ( Lac numbers)
Tablets 720.00 900.00 960.00
960.00 960.00
80.00
Capsules 60.00 75.00 80.00 80.00
Sales 90.00 112.50 120.00 120.00 120.00
Expenses 75.00 94.00 100.00 100.00 100.00
Gross profit 15.00 18.50 20.00 20.00 20.00
Profit to Sales (%) 16.60 16.40 16.80 16.80 16.80
Note: The profitability basis and projections are indicative and on approximate basis only.

Key Assumptions and The basis of profitability calculation:

As mentioned above, The Unit will have capacity of 1200 lakh tablets and 100 lakh
capsules per annum. The capacity build up is taken considering the sales related from
OEM/ Retail network that is built up by the entrepreneur based on his prior experience
in the industry.
This project has to have diverse group of Pharmaceutical formulations. The sales
prices of these products vary. Accordingly an average sales price of Rs. 8/- to Rs. 10/-
per unit has been assumed. The cost of production, inclusive of major cost heads such
as raw materials, labour & power has been considered based on prevailing industry
standards and assumed @ 80 %.

13
On indicative basis, power Costs are considered at Rs 7/- per Kwh and fuel cost is
considered at Rs. 50/- to 60/- per liter. The depreciation of plant is taken at 10-12 %
and Interest costs are taken at 12 % - 14% depending on type of industry. All these
are wherever applicable.
It may be kindly noted that basis / assumptions for such kind and size of the projects in
a profile can be on indicative basis only. At the same time it does provide a reasonably
accurate scenario.

15 BREAKEVEN ANALYSIS

FC X 100 : 15.00 X 100 = 1500

----------------------------------------
FC + Profit: 15.00 + 16.00 = 31

BEP = 48.30%

16 STATUTORY/ GOVERNMENT APPROVALS

The Drugs and Pharmaceutical Industry in general is highly regulated in India.

Regulatory authorities at the Central level and the State level monitor the same.

At the Central level, the Central Drugs Standard Control Organisation (CDSCO), Ministry
of Health & Family Welfare, Government of India is the apex organisation. At the state
level the Food and Drugs Control Authority (FDCA) is the regulatory authority.

Drugs & Cosmetics Act and Schedule M

These authority monitor and control the production of Drugs and Pharmaceutical
products under the provisions of the Drugs and Cosmetics (amendment) Act, 2005 &
2008 and guidelines (July 2015).

The revised Schedule M under this Act is the main basis which specifies the detailed
norms for location; building premises plant lay out, building, plant & machinery,
manufacture, sterilization, packaging, quality control and such other key components.

14
Good Manufacturing Practices (GMP)

The Drugs and Pharmaceutical Industry in general is highly regulated in India.

Regulatory authorities at the Central level and the State level monitor the same.

The revised Schedule M under this Act is the main basis which specifies the Further the
pharma units in general and such sterile products manufacturing units in particular
would also have to comply with following
• Good Manufacturing Practices ( GMP),
• Current Good Manufacturing Practices(cGMP) and
• WHO-GMP

MSME & GST registration, IEC Code for Export of end products and local authority
clearance may be required for Shops and Establishment, for Fire and Safety
requirement and registration for ESI, PF and Labour laws may be required if applicable.
And promoter has to take approval from Pollution Control Board.

17 BACKWARD AND FORWARD INTEGRATION

As backward integration, Entrepreneur may think of going for the production of bulk
drugs / APIs

18TRAINING CENTERS/COURSES

For pharmaceutical industry training and short term courses may be availed from the
Institutions such as NIPER , B V Patel PERD Centre and Pharmacy collages.. Also EDP
centers.

Entrepreneurship development programs help to run businesses successfully and are

available from Institutes like Entrepreneurship Development Institute of India (EDII)
and its affiliates all over India.

15
Disclaimer:
Only few machine manufacturers are mentioned in the profile, although many
machine manufacturers are available in the market. The addresses given for
machinery manufacturers have been taken from reliable sources, to the best of
knowledge and contacts. However, no responsibility is admitted, in case any
inadvertent error or incorrectness is noticed therein. Further the same have been
given by way of information only and do not carry any recommendation.

16
Use all the templets provided
below to design your own
BUSINESS PLAN
EXECUTIVE SUMMARY

This business plan is a projection for the period from ____ / ____ / 20____ till ____ / ____ / 20____

Name of the business: ____________________________________________________________________________________________________________

Contact address: _______________________________________________ Telephone: ____________________________________________

Type of business: Legal form: _____________________________________________

•• Manufacturer of the following good(s): Owners:_____________________________________________

•• Service operator to provide the following service(s):

_____________________________________________
•• Retailer running the following type of shop:
Managers: ____________________________________________
•• Wholesaler running the following wholesale business:
_____________________________________________
•• Other (please specify):
_____________________________________________
______________________________________________________________ Qualifications and experience in attached CVs

: Sources of start-up capital:

Customers: ____________________________________________________
___________________________________ ____________________
_______________________________________________________________
___________________________________ ____________________
Staff: _________________________________________________________
___________________________________ ____________________
______________________________________________________________
___________________________________ ____________________
______________________________________________________________
___________________________________ ____________________
 1. BUSINESS IDEA

Name of the business: ____________________________________________________________________________________________________________

Type of business:

Manufacturer Service operator Retailer Wholesaler Other: ___________________________________________________

The business is going to produce the following products: _____________________________________________________________________________

_______________________________________________________________________________________________________________________________

The customers will be: ___________________________________________________________________________________________________________

_______________________________________________________________________________________________________________________________

The business will sell in the following ways: _________________________________________________________________________________________

_______________________________________________________________________________________________________________________________

The business will satisfy the following needs of the customers: ________________________________________________________________________

_______________________________________________________________________________________________________________________________

My personal motivation to retain this business idea: _________________________________________________________________________________

 2.1 MARKET RESEARCH

Needs and preferences of Gaps (that competitors

Products Customers Competitors
customers have not fulfilled)
Product 1:

Product 2:

Product 3:

Product 4:
 2.2 Marketing Plan
Product

Good, service or range of products:

1.______________________ 2. ______________________ 3. ______________________ 4. ______________________

Quality

Colour

Size

Packaging

Certification
 2.3 Marketing Plan
Price

Good, service or range of products:

1.____________________ 2. ____________________ 3. ____________________ 4. ____________________

Cost

The price that customers are willing to

pay

Competitors’ prices

Price

Reasons for setting this price

Discounts will be given to the

following customers

Reason for giving discounts

Credit will be given to the following

customers

Reason for giving credit

 2.4 MARKETING PLAN
Place

Location:

_______________________________________________________________________________________________________________________________

_______________________________________________________________________________________________________________________________

This location is chosen for the following reasons:

_______________________________________________________________________________________________________________________________

_______________________________________________________________________________________________________________________________

The monthly cost of this location is: ____________________( → section 6.3) This cost includes: _________________________________________

Method of distribution:

The business will sell to:

Direct Retail Wholesale Others (please specify): __________________________________________

This method of distribution is chosen for the following reason:

_______________________________________________________________________________________________________________________________

_______________________________________________________________________________________________________________________________

_______________________________________________________________________________________________________________________________
 2.5 MARKETING PLAN
Promotion

Means Details Costs

Direct marketing

Advertising

Publicity

Sales promotion

→ section 6.3)
Total promotion costs (
 2.6 MARKETING PLAN
People

Position Recruiting criteria Training plan

 2.7 MARKETING PLAN
Process

Steps Description

1.

2.

3.

4.

5.

6.

7.
 2.8 MARKETING PLAN
Physical Evidence

Physical Evidence Description

Office premises and interior decoration

Internet presence and website

Packaging

Signage

Employee uniforms

Business cards

Mail boxes, etc.

 3. SALES ESTIMATION

Product Distribution Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec TOTAL
1. Direct

Retail

.....

Total

2. Direct

Retail

.....

Total

3. Direct

Retail

.....

Total

4. Direct

Retail

.....

Total

Total sales volume

Total sales in the market

Market share
 4.1 ORGANIZATION STRUCTURE

Tasks and responsibilities Position Staff

1.

2.

3.

4.

5.

6.

7.
 4.2 STAFF REQUIREMENTS AND COSTS
Contributions to
Task Required skills and experience Performed by Monthly pay pension fund and health
insurance

Total number of permanent staff

→ Section 6.3)
Total staff cost per month (
 5.1 LEGAL FORM OF BUSINESS

The business will operate as a: Sole Proprietorship Partnership Cooperative Limited Company

Other: __________________________

The reason for choosing this form of business is:

_______________________________________________________________________________________________________________________________

_______________________________________________________________________________________________________________________________

The owners will be:

Name: ___________________________________________________ Name: ___________________________________________________

Position in the business: ____________________________________ Position in the business: ____________________________________

Description of skills: Description of skills:

__________________________________________________________ __________________________________________________________

__________________________________________________________ __________________________________________________________

__________________________________________________________ __________________________________________________________

Relevant experience: Relevant experience:

__________________________________________________________ __________________________________________________________

__________________________________________________________ __________________________________________________________

__________________________________________________________ __________________________________________________________
 5.2 LEGAL RESPONSIBILITIES AND INSURANCE

The following taxes apply to the business: ___________________________________________________________________________________________

_______________________________________________________________________________________________________________________________

_______________________________________________________________________________________________________________________________

The following regulations apply to the employees: _____________________________________________________________________________________

_______________________________________________________________________________________________________________________________

_______________________________________________________________________________________________________________________________

The business will need the following licences and permits: Cost:

__________________________________________________________________________________________________ ___________________________

__________________________________________________________________________________________________ ___________________________

The business will have the following insurance:

__________________________________________________________________________________________________ ___________________________

__________________________________________________________________________________________________ ___________________________

Other legal responsibilities of the business:

__________________________________________________________________________________________________ ___________________________

__________________________________________________________________________________________________ ___________________________
 6.1 PRODUCT COSTING FORM
(for manufacturers and service operators)

Product 1:

1. VARIABLE COST PER ITEM

1 2 3 4
Estimated Estimated cost
Input Cost of purchase
quantity per item per item

Estimated Variable Cost per item (1) ( → section 6.5)

2. FIXED COST PER ITEM

Estimated total Fixed Cost per month (2) (see section 6.3)
Estimated total Variable Cost of the business per month (3) (see section 6.5)
Fixed Cost per Variable Cost (4) = (2)/(3)
Estimated Fixed Cost per item (5) = (4) x (1)

3. TOTAL COST PER ITEM (6) = (1) + (5)

 6.1 PRODUCT COSTING FORM
(for manufacturers and service operators)

Product 2:
1. VARIABLE COST PER ITEM

1 2 3 4
Cost of Estimated Estimated cost
Input
purchase (RS) quantity per item per item (RS)

Estimated Variable Cost per item (RS) (1) ( → section 6.5)

2. FIXED COST PER ITEM

Estimated total Fixed Cost per month (RS) (2) (see section 6.3)
Estimated total Variable Cost of the whole business per month (RS) (3) (see section 6.5)
Fixed Cost per Variable Cost (4) = (2)/(3)
Estimated Fixed Cost per item (RS) (5) = (4) x (1)

3. TOTAL COST PER ITEM (RS) (6) = (1) + (5)

 6.1 PRODUCT COSTING FORM
(for manufacturers and service operators)

Product 3:

1. VARIABLE COST PER ITEM

1 2 3 4
Cost of Estimated Estimated cost
Input
purchase (RS) quantity per item per item (RS)

Estimated Variable Cost per item (RS) (1) ( → section 6.5)

2. FIXED COST PER ITEM

Estimated total Fixed Cost per month (RS) (2) (see section 6.3)
Estimated total Variable Cost of the business per month (RS) (3) (see section 6.5)
Fixed Cost per Variable Cost (4) = (2)/(3)
Estimated Fixed Cost per item (RS) (5) = (4) x (1)

3. TOTAL COST PER ITEM (RS) (6) = (1) + (5)

 6.1 PRODUCT COSTING FORM
(for manufacturers and service operators)

Product 4:

1. VARIABLE COST PER ITEM

1 2 3 4
Cost of Estimated Estimated cost
Input
purchase (RS) quantity per item per item (RS)

Estimated Variable Cost per item (RS) (1) ( → section 6.5)

2. FIXED COST PER ITEM

Estimated total Fixed Cost per month (RS) (2) (see section 6.3)
Estimated total Variable Cost of the business per month (RS) (3) (see section 6.5)
Fixed Cost per Variable Cost (4) = (2)/(3)
Estimated Fixed Cost per item (RS) (5) = (4) x (1)

3. TOTAL COST PER ITEM (RS) (6) = (1) + (5)

 6.2 PRODUCT COSTING FORM
(for retailers and wholesalers)

FIXED COST CHARGE (%)

TOTAL FIXED COST PER MONTH (2) (see section 6.3)

= x 100 = %
TOTAL VARIABLE COST PER MONTH (3) (see section 6.6)
FIXED COST CHARGE (4)

1 2 3
Fixed Cost per item (RS) Total Cost per item (RS)
Product Variable Cost per item (RS) (1)
(5) = (1) x (4) (6) = (1) + (5)
 6.3 FIXED COST FORM

Details Cost per month (RS)

Rent (see section 2.4)

Electricity and water including waste water

Licences

Insurance

Labour (see section 4.2)

Consumables including recycling and disposal

Depreciation ( see section 6.4)

Transport

Repairs

Marketing (promotion) costs (see section 2.5)

Total Fixed Cost per month

 6.4 DEPRECIATION FORM

Equipment Estimated cost of purchase (RS) Estimated life of the equipment Depreciation per year (RS)

Total

Depreciation per month

 6.5 TOTAL VARIABLE COST PER MONTH

Quantity produced per month Variable Cost per item (RS)

Products Total Variable Cost per month (RS)
(see section 3) (see section 6.1)

Product 1:

Product 2:

Product 3:

Product 4:

Total Variable Cost per month

 6.6 MONTHLY PURCHASE FORM

Estimated number of items sold Variable Cost per item Total Variable Cost
Product
per month (RS) (see section 3) (purchase price) (RS) per month (RS)

Total Variable Cost per month

 7.1 SALES PLAN
Product Details Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total
Product 1:
Sale volume

Sales price (RS)

Sales value (RS) (1)

Product 2:
Sale volume

Sales price (RS)

Sales value (RS) (2)

Product 3:
Sale volume

Sales price (RS)

Sales value (RS) (3)

Product 4:
Sale volume

Sales price (RS)

Sales value (RS)

(4) Total sales value (RS)
(5) = (1) + (2) + (3) +(4)
 7.2 COST PLAN
Product Details Jan Feb Mar Apr May Jun July Aug Sep Oct Nov Dec Total
Product 1: Production volume

Variable Cost per item (RS)

Total Variable Cost (RS) (1)

Product 2: Production volume

Variable Cost per item (RS)

Total Variable Cost (RS) (2)

Product 3: Production volume

Variable Cost per item (RS)

Total Variable Cost (RS) (3)

Product 4: Production volume

Variable Cost per item (RS)

Total Variable Cost (RS) (4)

Total Variable Cost of the business (RS)

(5) = (1) + (2) + (3) + (4)

Total Fixed Cost (RS) (6)
Total cost (RS) (7) = (5) + (6)
 7.3 PROFIT PLAN
(Unit: )

Details Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total

Total sales value (1)

(see section 7.1)

Total Variable Cost (2)

(see section 7.2)

Gross Profit
(3) = (1) – (2)

Total Fixed Cost (4)

Net Profit
(5) = (3) – (4)
 7.4 CASH FLOW PLAN
(Unit: )
Details Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

1. Cash at the beginning of the

month (1)

2. Cash from cash sales

CASH IN

3. Cash from credit sales

4. Other cash in

5. Total cash in (2)

6. Purchase of goods

7. Payment of wages
CASH OUT

8. Purchase of equipment

9. Loan repayment

10. Other payments

11. Total cash out (3)

12. Cash at month end

(4) = (1) + (2) - (3)
 8. REQUIRED START-UP CAPITAL
For the period from: _______________________ to: _______________________
(Unit: )

INVESTMENTS Amount

Business premises

•• Construction or purchase of a building

•• Conversion or reconstruction of business premises

Equipment

•• Machinery and Tools

•• Furniture

WORKING CAPITAL

Stock of raw materials or finished goods

Licenses and fees

Marketing expenses

Salaries

Rent

Electricity and water

Contingency for emergency

TOTAL START-UP CAPITAL

 9.1 SOURCES OF START-UP CAPITAL
( Unit: )

Amount

Required start-up capital

Sources of start-up capital

•• Owner’s equity

•• Other sources

Total (must be the same amount as the required start-up capital)

Collateral (if applying for a loan)

 9.2 LOAN REPAYMENT SCHEDULE

Loan provider: _________________________________________________________________________________________

Total amount borrowed: _______________ Loan period: _______________ Instalment period: _______________

Interest rate: _______________ Grace period: _______________ 1st year capital cost: _______________ ( see section 7.2)

Insurance policy: __________________________________________________________________________________________

Instalment period Outstanding capital Instalment Capital repayment Interest Insurance

1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
Total