INVESTMENT PLAN

ITEM FIXED INVESTMENT

Off. Equip Land Building Vehicle Machines Other invest

PROFIT & LOSS STATEMENT

EQUITY LOAN

TOTALCOST
1000 3000 500 1500 1200 2800

ITEMS Sales Less: Direct Cost of good sold Gross Profit

Tsh

Tsh 10,000 5,000 5,000

6800

3200

TOTAL fixed Asset (TFA) PRE-OPER.INVEST

License& Registration Total POI
TOTAL ..w/out wrkg Capt.

10000

0 0 10000

0 0 6800

3200

Less: Ind. Oper. Cost Office rent 500

WORKING CAPITAL Direct cost

Raw material Ref BEP Direct labour Factory overhead eg Mainte, elect, water, mtls transp, Depr of build and Eqp & Indirect labour

Selling & Admn

2,500 2,000 500 5,000

1,500
500

Depr. Of total asset (TFA/TFA yrs) TOTAL Operating profit Less: Interest Expenses

2,500

2,500 2,500 250 2,250 255 2,025

TOTAL

Ind. oper Cost bef.depr & POI Office rent Selling & marketing cost Salary of top mgt =Admn mgt TOTAL Total Annual Wrkg Capital Working capital Req. (60% of Annual working capital) Projected total Cost

500 200 1,300 2,000 7,000 4200 14,200

Net profit Before tax Less: Tax (10%) Net profit After tax

4200 11000 3200

A business plan is a detailed, self-explanatory plan of action which sets out every possible aspects of the planned establishment of
the enterprise

Importance of Business plan

The Importance of a Business Plan It encourages the small business entrepreneur to arrange his or her thoughts logically. It encourages the entrepreneur to think about a future strategy for his or her business enterprise. It encourages the entrepreneur to pay attention to different components of the feasibility of his or her business idea. It provides a framework whereby the small business entrepreneur can explain the future direction of the enterprise to others. It encourages the entrepreneur to face reality and so anticipate problems. It is a plan of action in accordance with which the small business entrepreneur can manage his or her enterprise after it has been established. It is an important aid for negotiating finance or trade credit. It is an important instrument for decision-Making. It is an aid in tendering for contracts. It provides a basis for future planning. It can help to improve an enterprises performance.

Main Sources of business Idea

Copying existing business
This is a copy cat. Observe what others are doing and do the same. Easy to enter but un profitability

Innovate new product & new Service

This is new business concept for fulfilling customer needs. This is caused by technological , Social, economic changes .etc.

Identification of need that are inadequately fulfilled by the existing business (Identification that are not covered by existing business) This combines personal frustration & taking business concepts that perform well every where.

Entrepreneur This is often associated with the founder of new enterprise. The enterprise wasnt available at previous .
Inheritance is not an entrepreneur. Copying the existing business is not entrepreneur. Entrepreneur is Innovation which is a better way of doing things. E.g. Converting pollutant into new consumer need.

Entrepreneur Characteristics
A. Achievement Competencies Opportunity seekingSees and act on a new business opportunity Persistence-----------Takes repeated or different action to overcome an obstacle Committed to the work contract----Accept full responsibility for problems in completing a job for a customer Demand for quality and efficiency----Strives to things better, faster, or cheaper. Risk taking-----takes the moderate risk B. Planning competences Goal setting----Set clear and long term goal Systematic planning & networking----Evaluate alternatives Information seeking-------Use contract to obtain useful information C. Power competences Persuasion and networking----Use deliberate strategies to influence the others Self confidence----Has strong belief in self and own ability

PEOPLE WHO SEE OPPORTUNITY

They are normally most successful

Bse---The main aim of business is making profit. Profits normally are associated with opportunities that allow the business
to glow steadily.

SCIENCE leads TECHNOLOGY because

Science generates knowledge, while knowledge is implemented by techn to facilitate dev. Science focus on know why This generate knowledge Tech concern with know how This facilitate production of material wealth

Impact of Science and technology

They enable maximum utilization of resources They lead to positive effects, Eg They lead to negative effects Eg

Good ------- Improvement of Infrastructure & Communication,Social services Bad face----Air pollution,Noise, Dirty, Unemployment Ugly----------Desertification, Deseases, Atomic bombs

Appropriateness of Technology
Objectives, Values, Surroundings

Technological Evaluation for proper technology Assessment

Technological factor eg Technical utility Economical factor eg Economic feasibility Environmental factor eg Impact on life Population factor eg Growth of family Resource factor eg Availability of skilled man power Socio cultural factor Political legal factor

LINKAGE MECHANISMS
Direct Linkages
Operation of trans-national corporations Licensing arrangements Hiring of experts and contractors Training of technical staff abroad Purchase of machinery, equipment and components Exchange of information at international meetings - Flow of books, journals and other publications Exhibition and trade fairs.

Indirect Linkages

(MARKETING

CONCEPTS) The production concept

holds that consumers will favour those products that are widely available and low in cost.

MKT strategt/Prod Strategy

The product concept

holds that consumers will favour those products that offer the most quality or performance.

Premium strategy

Value Strategy

L Prc Superbvalue strategy

The selling concept

holds that consumers, if left alone, will ordinarily not buy enough of the organizations products

4 Over Changing Strategy

5 Medium Value Strategy

6 Good value Strategy

The Marketing concept

holds that the key to achieving organizational goals consists in determining the needs and wants of target markets and delivering the desired satisfactions more effectively and efficiency than competitors.
Strategy no 1,2,3,5,6 & 9 are successful ventures. These are better ventures Strategy no 7 is used once you are alone Strategy no 4,7 & 8 are used for Profit Maximization but difficult to survive. They are worse ventures Strategy no 1 & 3 (premium & super b value strategy) best value of money ( Most effective) or more competitive.

7 Rip off Strategy

8
False economy Strategy

9 Economy Strategy

L QTY