Business Guide an easy to understand
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DESCRIPTIONPublication produced within the project "Remittances Developing Moldovan Communities" implemented by Hilfswerk Austria International in partnership with the National Assistance and Information Centre for NGOs in Moldova CONTACT with financial support of European Union. The views expressed in this publication belong exclusively to authors and do not necessarily reflect the views of the European Commission.
- 1. Hilfswerk Austria International Elaina Consulting S.R.L. an easy to understand BUSINESS GUIDE by Elena Catisev and Diana Jumiga A study produced within the Remittances Developing Moldovan Communities Project, implemented by Hilfswerk Austria International in partnership with the National Assistance and Information Centre of NGOs in the Republic of Moldova - CONTACT, with the financial support of the European Union Opinions expressed in this study exclusively belong to the authors and do not necessarily reflect the point of view of the European Union. This project is funded by the European Union Project implemented by Hilfswerk Austria International Delegation of the European Union to the Republic of Moldova 12, Kogalniceanu Str, Chisinau, MD-2001, Republic of Moldova Tel: (+373 22) 50 52 10 Fax: (+373 22) 27 26 22 85, Alexandru cel Bun Str., Chisinau, MD-2012 Republic of Moldova Tel: (+ 373 22) 21 25 41 Fax: (+ 373 22) 21 25 54
- 2. ABBREVIATIONS: AGEPI Agenia de Stat pentru Proprietatea Intelectual Art - Article CAEM Classification of Economic Activities in Moldova NPHC National Public Health Centre IEC Individual Employment Contract CIS State Chamber of Registration LC Labour Code CNAM National Health Insurance Company CNAS National Office of Social Insurance BNM National Bank of Moldova BNS National Bureau of Statistics IFS State Tax Inspectorate SMEs Small- and Medium-sized enterprises IE Individual Enterprise K - capital Max maxim CCM cash control machine Min minim No number JS Joint Stock Company LP Limited Partnership GP General Partnership NAS National Accounting Standards LLC Limited Liability Company
- 3. An easy to understand BUSINESS GUIDE CONTENTS: 1. What does business mean? 2. Is entrepreneurship for you? 4 3. When do you launch your business? 6 4. What field do you choose for your business? 8 5. How can you get into the business world? 10 6. How do you identify a business idea? 13 7. What legal form of organization is appropriate for your firm? 16 8. What is the registration procedure of a firm? 19 9. What do you do after your firm is registered? 21 10. What mandatory payments, taxes and fees will you have to pay? 23 11. What reports, statements and basic forms will you have to submit? 25 12. What documents and software will you need for accounting? 25 13. What is the authorization procedure? 29 14. What is the licensing procedure? 31 15. What is the trademark registration procedure? 31 16. How do you manage human resources? 32 17. How to promote and sell your product/service? 47 18. How to develop a financial plan? 54 19. What to write a business plan? 61 20. Where to find money for your business? 63 21. Ethics and social responsibility in business. 86 22. Success and failure in business. 87 ANNEXES: 1. Capacity assessment test for entrepreneurs 90 2. Territorial offices of the State Fiscal Inspectorate 91 3. Territorial Agencies of the National Health Insurance Company 92 4. Territorial Agencies of the National Office of Social Insurance 92 5. BNS (National Bureau of Statistics) 96 6. Financial Indicators 97 7. Normative framework for entrepreneurs 97 8. Business plan notebook 99 9. Business plan model 107 10. Useful links 133 BIBLIOGRAFIE 134 CD cu mostre de acte, formulare, legi etc. 1
- 4. Dear reader, This guide has been developed within the Remittances Developing Moldovan Communities Project, with the financial support of the European Union. Why? To motivate you, a beneficiary of remittances, to invest in business the money sent by your relatives from abroad. Did you know that? Approximately half a million of Moldovans (25-30% of the population) work abroad. According to the World Bank Report, Moldova is one of the leaders as concerning the share of remittances to the GDP (23.2%), ranking second after Tadjikistan. According to data by the National Bank of Moldova, in the first trimester of this year, the amount of money remitted to Moldova from abroad via banks stood at USD 288.72 million. Evolu on of remi ances in Moldova 1,66 1,45 1,18 1,24 27,40% 2008 2009 2010 Remi ances, billion USD 21,40% 23,20% 2008 2011 21,70% 2009 2010 2011 Remi ances, % in GDP In the rural area, the share of remittances to the total product is even higher, being an important and stable income source for more than 25% of localities and an essential poverty prevention factor. As you notice, Moldovas economy strongly depends on remittances, but unfortunately, only 7% (officially) of the money of our fellow countrymen working abroad is invested in business to generate new incomes and to contribute to the countrys development. Use of remittances in Moldova What do you choose? 1. To spend the money you receive from your relatives abroad in order to buy current consumption products, bringing you momentary satisfaction only? Business 7% Savings 21% or Current consum.72% 2 2. To invest remittances in your business and earn more money, create new jobs, contribute to the welfare of citizens, hence, develop Moldovas economy?
- 5. An easy to understand BUSINESS GUIDE What do we intend by this guide? 1. 2. 3. 4. 5. 6. 7. To help you understand whether business is for you To show you that it is not difficult at all to launch a business in Moldova To offer you the maximum of useful information, so that you save money for consultancy services To show you where you can access money when you start your business To give you business ideas where you could invest remittances To develop your entrepreneurship skills To give you in the annexed CD the templates of documents you will have to work with What can you learn from this guide? 1. that money should not be spent, but invested in a business to generate more money 2. that launching a business in Moldova is interesting, accessible and profitable 3. that there are many opportunities to invest in Moldova 4. that state-run and international organizations in Moldova assist you through various domestic business funding and support programmes 5. that your business can provide you with material and spiritual satisfaction 6. that your business provides you with a job and stability in the future 5 reasons making this guide worth to be read: 1. You will get concrete answers to questions you might have at the start of your business 2. Minimum theory, maximum practical information 3. Few words, plenty of schemes and graphic presentations 4. Accessible and easy to understand language 5. The information we give you in a schematic way will be useful for you in the future and will help you save money, time and energy. Should you have any questions in the future, please do not hesitate to contact the team of experts from Elaina Consulting S.R.L. Chisinau, 71, A. Mateevici Str., office 8a, Republic of Moldova, MD-2009 Tel. 022 24 00 26, 07988098 www.elaina-consulting.com And last but not least, author Elena Catisev and co-author Diana Jumiga, together with the team Elaina Consulting SRL, the Public Association Hilfswerk Austria in Moldova and the European Commission wish you good luck and success with your business Remember: The most terrible thought you must be afraid of is to not be wrong. Only a person, who does nothing, is never wrong. You should rather be afraid that after 10, 20, 30 years of work in a company you might wake up pointing your finger at the TV and saying: that was my idea. Read this guide, invest remittances in your idea and make money! Be a good example for the others, help yourself and help your country. 3
- 6. 1. What does business mean? The word business in English means the condition of being busy, that is business = to make money on your own from the fact of being busy. You do not go to work, you do not do what you are being told to and you do not wait for somebody to pay the salary established for this but You decide on your own what needs to be done, you work as much as needed, to be able to make your own salary that you want to get. Entrepreneur = a person who undertakes the risk in the context of organizing a new enterprise, creating a new product/ service, is an innovator, shows initiative, invests means, applies skills and undertakes responsibilities for possible failure, in order to make money and satisfy his/her own interest, by observing the law. Law on entrepreneurship and enterprises No 845 of 03.01.1992 2. Is entrepreneurship for you? We cannot classify the pros and cons for entering the business world. At the end, all depends on WHAT YOU LIKE the most. We can offer you a check list to help you make a reasonable decision. Tick off all phrases describing you and count how many of YES and NO you get. Own business YES NO Work for myself. Work when I want, the way I want and with whom I want. I create new jobs and feel myself useful in society. Unlimited earnings (MDL 0, MDL 1 million, etc.). Take my salary when I want. Have employees reporting to me on the assigned tasks. Create by myself my working conditions. Take my salary only when my firm has profit (I bring money to the firm I take my salary, I do not bring money to the firm I do not take my salary). Work as much as needed. Risk investing time and money, although the result is not guaranteed. Have no guaranteed vacation, trimestral bonuses. Have no stable schedule. Sometimes, have no time for my family duties. Search for clients on my own. Work in stressful conditions, be open for big physical and psychical efforts. I WANT TO I AM READY TO 4 Work for the others. Avoid risks. Have a stable schedule, vacation, salary, trimestral bonuses. Have time for all family responsibilities. Serve clients found by others. Have a limited earning (e.g., MDL 3,000 / month),even if you have worked more than stipulated in the contract. Report to the boss and write reports Take the money on a certain date only. Do not take advance money from my salary. Work when, in the way and with whom others tell me. Be subordinated to my boss and report to him when he asks. Work under the work conditions created by others.
- 7. An easy to understand BUSINESS GUIDE Own business I AM OFTEN TELLING TO MYSELF I LIKE TOTAL YES NO Usually, I manage to do what I intend to. I am confident in my own capabilities. I am ready to start from the beginning in case of failure. My family supports me. I have successful people I can learn from and who can encourage me. I want to make my salary on my own. I have a lot of initiatives; I am an adventurer and innovator. I am healthy; I can cope with the stress for a longer period. I can control myself. I have a passion for business, for an active and risky living. I do not believe in my capacities of being an entrepreneur. I let my hands down at the first failure. Family duties are a priority for me. I am surrounded by people who have never done business, but they give me advice demotivating me. I want somebody to pay my salary. I get ill frequently, I have a heartache, I am stressed, and I fall into depression. mobilising financial, material and human resources. Making decisions. being creative. being mobile. developing myself. knowing all my weaknesses and strengths. Being the director, the person everybody listens to. . YES being provided with material, financial and human resources to carry out my activity. fulfilling somebodys indications. avoiding the responsibility of making decisions. Be an expert in one field only. NO If NoNo, then business is for you. But in order to be fully sure about this, see whether you have the following qualities: Individual features can lead to success only if oriented towards clients interests. YOU ARE Brave, optimist, active, assiduous, stressresistant, responsible, realist, moderate, communicative, inventive, resourceful, independent, empathic, practical persuasive, economic, punctual, flexible to changes and innovations, with leadership and communication skills, with work experience, you can impose a competitive spirit in the team, you can learn from mistakes YOU LEARN To efficiently plan and manage your time and resources (financial, human, informational) To be able to apply your management, marketing, bookkeeping, etc. knowledge (at least to be able to control the others to make sure they do a good job). Business people are those who apart from their natural talent, WORK to CONTINOUSLY develop their personal and professional qualities, with the aim TO MAKE MONEY and TO GIVE MONEY to those helping them. Researchers confirm that only 5-10% of the population has an entrepreneurial talent. As you have noticed, natural qualities are not sufficient to be an entrepreneur. If you want to have your own business, you will have to develop your skills and learn many new things. In business, three things are necessary: knowledge, temper and time. (Owen Felltham) 5
- 8. 3. When do you launch your business? As soon as possible, as the older you get, the harder it is to assume risks. You get to have stricter family duties, more complicated responsibilities. At the same time, you need some time to accommodate yourself to the business environment and to get to have some profit. "In the business world, everyone is paid in two coins: cash and experience. Take the experience first; the cash will come later. (Harold Geneen) Here is a frequent scenario 1. You learn a speciality, graduate from a faculty (3-5 years). You learn You work for others 2. You work for a company, apply your knowledge from the university, and learn new things (2-4 years). 3. You launch your own business and apply the knowledge from your previous work place. 4. You learn from your own mistakes, you accumulate a valuable experience and new knowledge (5 years). 5. You sell your knowledge at a good price through the services provided by your company. You launch your own business 6. When you get bored of your...
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