project planning for small entrerprises

8/9/2019 Project Planning for Small Entrerprises

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Financial ManagementFinancial Management

Finance life blood of commerceFinance life blood of commerce

Long term financing Risk andLong term financing Risk and

Return trade offReturn trade off Working capital financing LiquidityWorking capital financing Liquidity

and Profitability trade offand Profitability trade off


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Project PlanningProject Planning

Identification of the productIdentification of the product

LocationLocation

Establishing the business unitEstablishing the business unit Arranging infrastructureArranging infrastructure

etting required permissionsetting required permissions

Arranging FinanceArranging Finance


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Project ReportProject Report

!"er"ie# of the Industry!"er"ie# of the Industry

$emand and supply position$emand and supply position

%a&or players%a&or players Process detailsProcess details

Pro&ect $etailsPro&ect $etails

Financial PlanningFinancial Planning


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FINANCIAL REQUIREMENTS OF A USINESS UNIT

NATURELON! TERM"TERM FINANCE#

S$ORT TERM"%OR&IN! CAPITAL#

PUR'POSE

() PURC$ASE OF FI*E+ASSETS

,) PRELIMINAR- AN+ PRE'

OPERATI.E E*PENSES/) MAR!IN ON %OR&IN!

CAPITAL

PURC$ASE AN+ $OL+IN!OF CURRENT ASSETS

SOURCE

() S$ARES,) SEE+ MONE-

ASSISTANCE

/) ORRO%IN!S"A# AN&S"# FINANCIAL INSTITU'TIONS"C# OT$ERS0) LEASIN!1) $IRE PURC$ASE

() O%NE+ FUN+S,) CRE+ITORS/) AN&S

0) FACTORIN!


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Financing Capital Cost of ProjectFinancing Capital Cost of Project

'echnical Analysis'echnical Analysis

(ommercial Analysis(ommercial Analysis

Financial AnalysisFinancial Analysis %anagement Profile%anagement Profile


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Tec2nical Anal3sisTec2nical Anal3sis

'echnology'echnology

LocationLocation

Plant and %achineryPlant and %achinery Ra# %aterialsRa# %aterials

LabourLabour

!ther inputs!ther inputs


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Commercial Anal3sisCommercial Anal3sis

A demand analysis for the product ofA demand analysis for the product of

the pro&ect)the pro&ect)

'he capacity of the unit to sell #ill'he capacity of the unit to sell #ill

depend upon the unsatisfied demanddepend upon the unsatisfied demand

for the product in the marketfor the product in the market


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Financial Anal3sisFinancial Anal3sis

(ost of the pro&ect(ost of the pro&ect

*ource of finance*ource of finance

(ost of Production and Profitability(ost of Production and Profitability (ash flo# estimates and proforma(ash flo# estimates and proforma

balance sheetsbalance sheets


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Financial Anal3sisFinancial Anal3sis

(ost of the Pro&ect(ost of the Pro&ect

LandLand

+uildings+uildings

Plant and %achineryPlant and %achinery

!ther Assets!ther Assets

Preoperati"e E,pensesPreoperati"e E,penses

%argin for #orking capital%argin for #orking capital


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Means of FinanceMeans of Finance

(apital(apital

+orro#ings from financial institutions+orro#ings from financial institutions

+orro#ings from banks+orro#ings from banks Loans deposits from friends-directorsLoans deposits from friends-directors

$eferred payments$eferred payments

*ubsidy*ubsidy LeasingLeasing


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COST OF THE PROJECT (Rupees inlakhs)

1. Land 102. Buildings 1

!. Plan" and #a$hine%& !0

'. Te$hni$al FeeR&al"& . O"he% *sse"s 10

+. P%eli,ina%& E-penses

. P%e/pe%a"ie E-penses

. P%isin % Cn"ingen$ies 20

3. #a%gin % 4%king Capi"al 1

T"al 11


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#E*5S OF F65*5C657 (Rupees in lakhs)

1. Sha%e $api"al 20

2. Rese%e and su%plus ..

!. Pu8li$ depsi"s

'. B%%9ings %, :nan$ial ins"i"u"ins '

. B%%9ings %, 8anks 20

+. Landepsi"s %, di%e$"%s 10

. ;ee%%ed pa&,en"s 10. Su8sid&

T"al 11


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Cost of pro45ction an4 Profita6ilit3Cost of pro45ction an4 Profita6ilit3

Pro&ected profit and loss accountPro&ected profit and loss account

(apacity(apacity utilisationutilisation

.o inflation considered.o inflation considered

.ormal increments.ormal increments

*traight line method of depreciation*traight line method of depreciation


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Cas2 flo7 statementsCas2 flo7 statements

Pro&ected +alance sheetPro&ected +alance sheet

*ource for finding repaying capacity*ource for finding repaying capacity

$*(R$*(R $ebt/Equity Ratio$ebt/Equity Ratio

Promoters0 contributionPromoters0 contribution


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project planning for small entrerprises

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