Business Guide an easy to understand

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Publication 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.

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  • 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 own business, you can work for other companies for a much higher salary, or you can work as an independent expert. 7. You learn what you strictly need. All these stages fit within a cyclic process. The start point depends on your aspirations and circumstances of your own development. You can choose your own scenario, by analysing advantages and disadvantages of each start point. 1. You learn You work for others You launch a business Advantages Disadvantages You already have a theoretical and practical basis: you have accumulated knowledge at the university and at your previous work place. You already know the mistakes You save time when planning and managing the business. You waste about 10 years by sitting at the desk and investing your potential in the success of another company. You become more reasonable, hence it is getting harder for you to undertake risks and cope with failure. You start your business when you already have to create a family and you have many responsibilities related to it. 6
  • 9. An easy to understand BUSINESS GUIDE 2. You work for others You launch a business Advantages Disadvantages You accumulate practical knowledge to maximum in a given field. Its easier for you to identify the speciality to learn and that is useful to you. You develop faster your skills. You make money while others are learning, you accumulate capital for your own business. 3. You launch the business You learn You learn You feel embarrassed for not having an education degree/diploma. Salary is lower compared to the other qualified employees. Insufficiency of theoretical knowledge. Insufficient quality of provided services. You need more time and consultancy to perform your tasks, and all these cost. You work for others (by providing services). You work for others (by providing services) While others learn theory and invest their potential in the development of already existing companies, people choosing this scenario dedicate 5-10 years of their career directly to their own business, invest these years in experience, in studying the market, in adjusting themselves to the market, in developing the product/service, concurrently learning what they need for the moment (from training courses, consultancy provided by specialists, etc.). Their success depends to a great extent on their self-discipline, continuing information, intuition and search for advice from specialists. The paradox is that these adventurers (usually aged between 18 and 25 years old) rely on their enthusiasm rather than on knowledge, therefore for them its easier to cope with some eventual failure and to try again without any hesitation. They are more courageous in implementing innovative plans, as they are less interested in risks and are more attracted by challenges and the will to earn more money and to be directors, to be admired for their spirit of initiative and for their capacity to mobilize all available resources. Advantages Disadvantages The earlier you start, the farther you will get and will obtain the wanted results. You have the occasion to learn from your own mistakes. You are more inclined to take your chance. You mobilize yourself better in case of failure, as you take it as a challenge. You learn as you work, from experience, while others have theoretical knowledge only. You have more time to dedicate yourself to your business, to develop it and make it profitable. You subscribe to courses already knowing what exactly you need and you benefit to the maximum from this. The risk to make mistakes because of the lack of theoretical and practical knowledge. Lack of trust from the others, they do not always take you seriously. You do not have sufficient financial resources. Hence, given that the third scenario has sufficient advantages, we encourage you to not waste your time and to make a decision regarding the launch of your business as soon as possible. And do not forget: Time is the measure of business. (Francis Bacon) 7
  • 10. 4. What field do you choose for your business? Part of the success in business is due to the fact that you like what you do and you can do what you like. It is important to choose the field that would match your capacities and aspirations, a field you would see yourself in, you feel confident about and enjoy it. This is the graphical representation of the essential factors in choosing a career, respectively, an activity field. Organisation Team work Initiative Leadership skills Negotiation Communication IT skills YOUR SKILLS AND CAPACITIES Relocation capacity Business Socia Close to home YOUR LOCATION FACTORS IN QUALIFICATION+ EXPERIENCE CHOSING THE CAREER Art Nature Science Technologye material benefits CONTACTE Parents YOUR TALENTS AND WILLS Friends YOUR PERSONALITY Reflexive Affective Sensorial YOUR VALUES AND MOTIVATION Intuitive Introvert / extravert Safety (of the future) Prestige Helping the others Independence Source: http://www.la-psiholog.ro/info/alegerea-carierei Also, personality psychology tests and career guidance tests will help you. Here are a few tests you can do online and will get an immediate interpretation of results: MBTI personality test (Jung) Professional interests test EQ Emotional intelligence test Capacity assessment test http://www.lapsiholog.ro/testepsihologice/testpersonalitate-mbtijung-16-tipuri http://www.lapsiholog.ro/testepsihologice/testinteres-profesional http://www.lapsiholog.ro/testepsihologice/test-eqinteligenta-emotionala Intelligence, logic, numerical reasoning, verbal reasoning, artistic talent, etc. ANNEX 1: Entrepreneurial capacity assessment test 8
  • 11. An easy to understand BUSINESS GUIDE And last but not least, assess your values, because although people speak about ethics and social responsibility in business, the business world is tough and does not always coincide with your values. For example, a doctor who is ready to help even a patient without money, a teacher who spends time over his schedule to check students homework, does not correspond to the business format, where you do nothing if you have no interest or financial benefit from the activity. In business, you will have to give up the free of charge work, refuse clients who have no money and forget about everything that consumes your time without bringing any income. In business, you will have to sue those who do not honour their payment duties, even if they have children and will cry when coming to you, because business is not you, it is a separate entity, a legal entity/private person, with its own commitments to employees, suppliers, who in their turn wait for their salaries, payments, etc. In business, you cannot rely on trust, kindness, friendship, but on concrete contracts, even with the members of your own family or with your business partners. A friendship founded on business is better than a business founded on friendship. (John Davison Rockefeller) What are the SMEs? SME = abbreviation for small- and medium-sized enterprises This notion is related to the classification of enterprises following certain criteria. Criteria for Moldova / Enterprises Number of employees Annual amount of sales (turnover) and annual amount of assets balance sheet (social capital) micro small medium big 1-9 10-49 50-249 250... < 3 mln lei < 25 mln lei < 50 mln lei > 50 mln lei Share in the total of registered enterprises Share in the amount of sales by all enterprises Number of employees (jobs) of the total number of employees in the private sector 97,5% (47,3 thousand) 34,6% (71887,6 mln lei) 57,7% (294,2 thousand) SMEs are the most frequently used form of business (in Moldova and the EU); they create the largest share of jobs and produce the largest amount of products and services In order to get inspired of whats in fashion and profitable in terms of fields of activity among the small- and medium-sized enterprises (SMEs), see bellow some statistics for 2011, provided by the National Bureau of Statistics. Fields of activity Trade Processing industry Real estate transactions, rentals, services provided to enterprises Other activities Transports and communications Agriculture, hunting, economy and forestry Constructions Hotels and restaurants Power, gas and water SME structure Income from sales 49,1% 41% 13% 10,2% 7,1% 16,6% 4,4% 11,3% 9% 6,8% 7,8% 5,1% 7,7% 5,5% 1,6% 3,2% 0,4% 0,4% Of these fields of activity, only the last two positions registered losses (did not have any profit). No nation was ever ruined by trade. (Benjamin Franklin) Recommendation: Choose that field of activity where your first clients would be your friends, relatives, contacts, colleagues, as well as the fields where you have relations, somebody you can rely on, where your friends could give your recommendations and offer you a valuable advice. 9
  • 12. In order to know the exact name of the field of activity you want for your business, access the CAEM Classification. CAEM Classification. When you choose your activities, try to avoid fields with a high degree of risk, which can cause you losses rather than incomes and eventually could be rejected by banks, should you need a loan. Here are a few of these activities, following the classification by the Forbes Magazine (famous in the whole world for its annual lists, like the list of the largest 2,000 companies in the world and the list of the 100 richest people on the planet): 1. Transports. This includes the taxi, limousine and ambulance businesses. You have to pay high insurance fees, there are losses due to the increase in fuel prices and competition in this area is tough. 2. Clothes stores. Risks here are due to the saturation of the market and fluctuation of sales depending on the season. Small firms may be eclipsed by the giants of the industry; besides, the change in tastes as the time goes endangers the business. 3. Restaurants and bars. This niche suffers the most because the cooked food industry is disappointing, it may suddenly reduce the number of clients due to competition. 4. Communications. This is considered to be a risky field for an independent supplier, because of the presence on the market of big companies, supplying the same services with attractive offers. 5. Tourism agencies and operators. PTo attract clients, agencies have to offer exotic destinations, where the on-line tourism firms are not that efficient. It is more difficult to defeat the scepticism of those clients who believe that travelling on their own is more convenient. 6. Food stores. This is about supermarkets, the sale of fruits and vegetables, where the same problem intervenes: the big chains, already well set up on the market and the risk of the fast spoilage of products. 7. Personal services: cleaning, laundry, shoemaking workshops, etc. Location is essential. Nobody will travel several kilometres to clean up/repair his staff. In this field you can work on attracting clients with low prices, but in this case, the amortization of your investment will be extremely difficult. 8. Car services. All vehicles have insurance, and insurance companies pay the repair costs, but they do not pay too high sums. Besides, most of the local and national dealers have extended their service offer and can cope with a very high number of vehicles, a luxury that small firms cannot afford. 9. Transportation of goods. Fuel price fluctuations make this business a risky one. At the same time, the more and more drastic rules imposed on transporters make this investment even more difficult. 10. Financial services, like currency exchanges, ATMs, money transfers. The multiple frauds make this business a risky one. Also, the increasingly tough legislation makes even some banks to stay away from it. 5. How can you get into the business world? Possibilities to enter into the business world Create a new business Buy an existing business Associate into an existing business Buy a franchise A description of each possibility to enter the business world is presented in the table below. 10
  • 13. An easy to understand BUSINESS GUIDE Possibilities to enter the business world Options Advantages Disadvantages Create a new business innovations possibility to choose the types of activity freedom of decision-making independence own management (you employ/discharge whom you want) you do not have to correct somebody elses faults you improve your self-respect, you get to be admired by the others challenge Buy an existing business or associate in an existing business smaller risk already existing clients You join at an already profitable or developing stage saving time, by joining directly in the development stage need to repair somebody elses faults detailed financial analysis the risk of not knowing the real reasons that made the former owner sell the business already established types of activity you do what you like and what you did not have enough courage to do by yourself The business is well established already You have a clear vision over the firms weaknesses and strengths you learn from your partner you share responsibilities and tasks you can rely on your partner in case of emergency (he works when you cannot and the opposite) in a partnership you can have more ideas, common interests, an efficient exchange of opinions Possibility to come with new proposals regarding the types of activity decision is made together with the partner, even if this is not convenient to you You have to share the profit Difficulties in case of conflict with your partners Financial analysis takes time types of activity are already established a business partner may leave a lot of responsibilities on you, relying on your friendship a too high price sometimes some decision-making restrictions (e.g., related to employment, planning, location, sale of franchise, etc.) strict observance of some standardised operations many reports, time consumed quite costly lawyers consultation this type requires negotiation skills (e.g., to negotiate the contract) Association in an existing business Buy a franchise The right to copy a profitable and successful business You get the know-how, the verified knowledge already created high image exclusive distribution rights (territorial protection) low possibility of becoming bankrupt Partial financing from the franchiser assistance provided by the franchiser (e.g., in marketing, design, training, management consultancy, research, advertising, etc.) bigger own investments (financial, time) higher responsibility more effort many market researches lack of experience In business, sir, one has no friends, only correspondents. (Alexander Dumas) E.g., service provision field (catering, remedial centres, business services, training and education, computers, domestic and social services, tourism, sport, entertainment, car services), retail 11
  • 14. In brief about franchise Franchise is a system of contractual relationships between enterprises, in which the party called franchiser provides the party called franchisee with the right to produce and/or sell certain products (goods), to provide certain services, in the name of and with the brand of the franchiser, as well as the right to benefit from its technical and organizational assistance. The one who buys a franchise is called franchisee, and the one who sells the franchise is called franchiser. The franchising partners have individual accounts and balances in banks, provide an independent bookkeeping and statistical reporting in line with the legislation of their residence country. Types of franchising Corporate franchising (industrial, manufacturing) Commercial franchising (distribution, services) It provides for the participation of the franchisee in the whole production cycle of the franchiser It provides for the marketing of the finished production (goods) or provision of services by the franchisee a) permanent contacts between the franchiser and the franchisee; b) permanent exchange of information; c) detailed regulation of the activity and high level of responsibility of the franchisee. a) narrow specialization of the franchisee in marketing a certain type of products (goods) or in providing a certain type of services; b) payment of royalties to the franchiser from the total amount of sales; c) franchisees risk related to the marketing of products (goods) or provision of services; d) low level of regulation of franchisees obligations. Examples: CAMPARI, SCHWEPPES, COCA-COLA, PEPSI-COLA etc. Examples: SANTAL, VERITAS, YVES ROCHER, MC DONALDS, PIZZA HUT, HERTZ, AVIS, HILTON, HOLIDAY INN In Moldova, the most appropriate is to buy a franchise. Franchise-based businesses in Moldova (franchisee) Mango, Celio, Mexx, Olsen, Sele, McDonald`s, Fornetti, Domestic businesses selling franchises (franchiser) Andys Pizza, Fornetti, Alina Electronic, Neuron Grup, Shell, Buon Giorno, Zara, Hugo Boss, Petrom, Xerox, DHL, 1C Pepsi-Cola, Coca-Cola Civil Code (art. 1171-1178) Franchising contract Law of the Republic of Moldova on franchising 1335-XIII of 01.10.1997 10 reasons to buy a franchise 1. Turnkey business. You exclude all the hard work related to finding the location, negotiating the rent, and employing reliable contractors. 2. Already tested system. By having an already tested system, you exclude all mistakes you may commit. 3. High chances to succeed. If you follow the way set up by the franchiser, you are on the right way to running a successful business 4. Corporate image and recognised brand. Consumers buy already known products, people prefer working in already known companies. 5. It will be easier to get the funding. Bankers pay attention to successful franchise chains (lower risks, in-house 6. Training. The franchiser will teach you how to run the franchise in exactly the same way as the other franchises are managed. 7. Continuous support. You will always enjoy the support from your franchiser and you can ask for assistance the other franchisees any time. 8. Marketing. The franchiser can deal with everything related to marketing or it can give you a model to follow. 9. Exclusive territory. Together with the franchise, you also get the exclusive territory to conduct your business on. 10. You get multiple locations. Owners holding more than one franchise come to administrate more and more locations. In Moldova, a franchise for a restaurant can be purchased for EUR 10,000. Apart from the franchise registration fees, you have to monthly pay 6% of the turnover and 1% for advertising. 12
  • 15. An easy to understand BUSINESS GUIDE 6. How to identify a business idea? Business ideas can be inspired from: Yours and your friends hobbies and pas sions Progress in soci ety, new preference s of consumers Visiting exhibit ions, trgurilor, fairs, travels Your work experie nce, other peoples businesses Local economy, daily problems, low-quality prod ucts Mass-media, business literatur e Your values, or values of the firm , of your fiends New legislation, government initi atives Discussions with experts, entrepreneurs, ap plying creativity techni ques ,,All riches have their origin in mind. Wealth is in ideas - not money. (Robert Collier) If you are a less creative person, there are techniques helping you to identify business ideas. Here are some of them: Brainstorming (every person in the group generates as many ideas as possible, regardless of their quality, nobody is criticising them, let your imagination loose. Subsequently, the best ideas are selected to be applied in practice. This method can also be applied individually). Create and exploit the idea bank (put down the ideas, dreams you have for the moment, all you see and like or you find interesting, and then come back to this folder to inspire yourself) Philips 6-6 (6 persons, each has 1 minute to generate an idea, all say their ideas in turn, it takes 6 minutes) PRES (somebody is proposing ideas, which are rationalized in the group, with good examples given, each participant comes with suggestions) List of consecutive questions (ask yourself why do you want a business, and depending on the answer, formulate another question, so that at the end you come to the business idea) 111 business ideas in crisis times Eduard Rosca The rule of my life is to make business a pleasure, and pleasure my business. (Aaron Burr) 13
  • 16. What business ideas would function in the rural area? When starting up a business in the rural area, one has to first of all analyse competition in the area he intends to work, the infrastructure, along with the market potential and possibilities to access grants, etc. Here are a few suggestions for business ideas that could function at the rural level: On-line handicraft shop; Mobile vulcanisation services; Car wash; Grow ecological vegetables; Grow seedling; Produce natural juice; Create greenhouses (for flowers, decorative plants, vegetables); Agricultural production storages (with controlled climate); Fruits and vegetables washing services; Artificial football or golf field, to be rented for money; Interior arrangements and open space designs (gardens, parks); Sport hall; Modern tailory; Private kindergarten; Construction and repairs of houses; Mounting and reparation of utility communications (interior power networks, sewerage and water supply, heating systems, etc.); Manufacturing of products and constructions from metal, welding services; Fixing household appliances, radio, TV, video devices; Shoe repair shop; Furniture repair shop; Washing and cleaning services; Hairdressers; Pheasants, ostriches breeding; Quails, ostriches, snails, vipers, etc. breeding; Veterinary services; Manufacturing wood products (carpentry); Rural tourism. EXAMPLE: A viper produces 1,5 grams of venom a year, and a gram of venom is sold for 1,000 euro. Vipers grow in glass terrariums and have to be fed twice a month with mice. The optimal temperature in terrariums is between 22-25C, and a viper brings about 12 broods a year. Venom can be collected a few times per month. Your clients will be representatives of pharmaceutical companies all around the world; therefore it is good to contact companies from various countries to sign pre-contracts. The conclusion of pre-contracts will help you obtain financing, in case you have no funds. Although this is a dangerous business and requires a lot of attention, it could generate high profits Once you have identified the business ideas that you like and meet your personal (family, social, sport, health, personal and professional, etc.) objectives, make a comparative analysis and choose what is more convenient for you. 14
  • 17. An easy to understand BUSINESS GUIDE Mark every idea: 5 for certain, 4 yes, 3 dont know, 2 dont think, 1 no way Idea 1 Evaluation criteria 5 4 3 Idea 2 2 1 5 4 3 Idea 3 2 1 5 4 3 2 1 Are you interested in dealing with this type of business? Personal qualities Do you have the necessary knowledge and qualities? Do you have a big potential in marketing? Market requirements Does the market you want to work on have a fast growing pace? Are the materials you need easy to access? Does your idea require high expenditures for advertising? Competition Technology Does your idea have any advantages compared to your competitors? Do you know the technological process? Do you have conditions and the equipment needed for the activity? Is it legal to implement this idea? Can the idea be adjusted? Risk Is the risk related to opening this business high? Is it easy to launch this business? Are the initial expenditures acceptable? Durability Are there financial sources for this business? Is the initial investment recovering period short? Sum of accumulated points Every idea can accumulate 80 points maximum. Choose the idea that has accumulated the most points. Recommendations: Make the decision on your business idea independently; Do not avoid fields with competition; Do not fully copy an already existing business; Do not focus on revolutionary ideas only. You should better try to improve a service or a product that already exists. Apply your creativity to promote a banal idea in an original way; Check if the idea is viable (if you manage to collect the necessary resources to start up the business and to cover the primary investment costs). Read success stories, communicate with people who can inspire you, who are good advisers and reliable allies. Community delivers creativity. (Michael Card) Creativity is thinking up new things. Innovation is doing new things. (Theodore Levit) How do you protect your business idea? You have a business idea and you have to meet some potential investors. How can you protect your idea, avoid ending up in a situation when the latter implement your idea by themselves (steal it)? In Moldova, there are no laws protecting business ideas. In exchange, we can suggest you some advice you can take into account at your first meeting with the investor: Do not unveil all the details of your business idea; Ask an expert or a lawyer to draft for you a contract with exact clauses on confidential data and exclusive intellectual property right; Identify the elements without which your business could not function, i.e., the know-how, and present your idea without unveiling this know-how. However, if you want to protect your idea, you could patent it in Russia or Romania, because the Moldovan law does not stipulate this possibility. 15
  • 18. 7. What legal form of organization is appropriate for your firm? Ai 2 opiuni de baz, s faci afaceri n calitate de persoan fizic sau juridic. Natural person (Civil Code, chapter I) Individual Enterprise Peasant Farm Entrepreneurial Patent Legal person (Civil Code, chapter II) LLC Limited Liability Company JS Joint Stock Societyi GP General Partnership LP Limited Partnership Cooperative Law on entrepreneurship and enterprises No 845 of 03.01.1992 Individual Entrepreneur legally competent natural person, practicing the entrepreneurial activity on his/her own name and risk, without being a legal entity, and is registered in line with the law. Law of the Republic of Moldova on the state registration of legal persons and individual entrepreneurs, No 220-XVI of 19.10.2007 Entrepreneurial Patent this is a state normative certificate, certifying the right to carry out the type of entrepreneurial activity indicated in it for a certain period of time. Law on entrepreneurial patent No 93-XIV of 15.07.1998 In this law you will find information on the issuance of patents, their validity, as well as the fee and the payment mode for the entrepreneurial patent Peasant Farm an individual enterprise, based on private property over farmland and other assets, on personal work of the members of a family (members of a peasant farm), with the goal to obtain agricultural products, carry out their primary processing, prevailingly selling own agricultural production. Law on peasant (farmer) farms No 1353-XIV of 03.11.2000 Limited Liability Company a legal entity, with social capital divided in social parts according to the establishment act and with obligations guaranteed with its patrimony. Law on limited liability companies No 135 of 14.06.2007 Civil Code (art. 145-155) Joint Stock Company is a company with social capital entirely divided into shares and with obligations guaranteed with its patrimony. Law on joint stock companies No 1134 of 02.04.1997 Civil Code (art. 156-170) General Partnership is a company, whose members are practicing entrepreneurship, under the articles of incorporation, in the name of the society and are responsible for the companys obligations in a solidary and unlimited manner. Civil Code (art. 121-135) Limited Partnership is a company which, in addition to the members who practice entrepreneurship in the name of the society and who are responsible for its obligations in a solidary and unlimited manner (acting partners), also has several funding members (limited partners) who do not participate in the companys entrepreneurial activity and bear the risk of losses resulting from the companys activity, within the limit of their input. Civil Code (art. 136-144) Cooperative is the voluntary association of private persons and legal entities, organised on corporate principles in order to favour and guarantee, through the joint actions of its members, their economic, as well as other legal interests. Civil Code (art. 171-178) 16
  • 19. Through the founders property Responsibility for bonds Structure Property made up of the founders own goods Single founder or a group of people(ex. family members) The founders are not obliged to participate in the societys activities. IE + the name of 1 founder at least Family business Agriculture, craft industry, education Individual entrepreneur Registered capital Sector Name Legal forms Subsidiary solidary responsibility through the property of the society. Two months after the approval of the annual accounting report, the members are obliged to recoup losses through additional contributions. The acting partners display solidary and unlimited accountability for the bonds of the associates who are not directly linked to its activity. Variable, from the participation sharee 2-20 private persons or legal entities. A private person or legal entity can associate in only one GP. Every participant can represent the society in relations with third parties. The leadership may be held by 1 person (on a proxy basis) or in a collegial manner. Every member = 1 vote, unless it is stipulated otherwise. Subsidiary solidary and unlimited responsibility of the acting partners for the societys bonds. The inactive partners are responsible for losses within the limit of their contribution. The society bears no responsibility for the associates bonds that are not related to its activity. 20,000 lei Registered capital divided into shares SMore extended and less flexible structure than the LLC. Founded by one or more private persons or legal entities. Closed JSC not more than 50 shareholders, a limited number of people can buy shares. Open JSC the rightto estrange shares without any restrictions. Additional rights for the shareholders owning no less than 5% and 10% Of Shares (Civil Code, Art. 167, 168) Through the property of the society, within the limits of the participation share. The society bears no responsibility for the associates bonds. The founders of the society are responsible for their bonds. Through the property of the society, within the limits of the participation share Single founder or a number of associates (50 at the most) Variable, from the participation share Not less than 5 members, private person or legal entity (minimum age 16) VVariable, from the participation share Not less than 1 inactive partner and 1 acting partner. 20 people at the most. The acting partners lead. The inactive partners (members financing the business) do not involve in the enterprises activity. One and the same person can be acting partner in only one LC and cannot be a member of GP. . In small businesses, in which the associates operate jointly Big enterprises, in the banking sector, telecommunications,. Trade, insurances, furniture production. The most widely spread among small and medium-sized enterprises, in the farming sector, tourism, sociological research, services 5400 lei Co-op + the main goal of the activity To favour and guarantee the conomic and legal interests of the members through their joint actions. Cooperative LC + the name/s of acting partners In small enterprises. Low amount of services provided or produced. Close relations between the founders Limited Partnership GP + name/s of associates General Partnership JSC + name Joint Stock Company LLC + name Limited Liability Company Organizational and legal forms An easy to understand BUSINESS GUIDE 17
  • 20. Individual Enterprise or LLC? IE + No minimum initial capital is needed. + There are no restrictions as regards the goods that lay the foundation of the business. + It is not requested to create reserve capital. + It is simpler to manage because the founder can manage it on his/her own, or hire a manager (it takes fewer specialists to manage a business), there is less bureaucracy. LLC - Minimum initial capital of MDL 5,400 is needed. - The way money and goods can be used as registered capital is established by law. - It is mandatory to form reserve capital (accounting for 10% of the registered capital) through annual amounts payable of not less than 5% of the net profit of the LLC. - It is more complicated to manage it because there may be several associates, holding various shares in the registered capital; complex legal and financial regulations must be respected (more bureaucracy). Consultancy services are more expensive. + The enterprise is responsible for bonds, with its property only being at stake. The associates bear responsibility for the society's bonds only within the limit of the shares that belong to them. This means minimum risk for the founders. + Banks and creditors find them more trustworthy. - The founder is responsible for the enterprise's bonds, with his/her whole property being at stake, excepting goods which, according to legislation, cannot be followed up. Higher financial risks. The founder may lose the family's goods in case of failure. - It is limited in terms of financing; as a rule banks do not take such enterprises seriously. + (advantages), - (disadvantages) Advantages and disadvantages of small and medium-sized enterprises (SME) SME advantages Relatively more easy business management (less bureaucracy, quicker spread of information, fast decision-making process); More efficient control (less staff, closer interaction with employees, quicker integration of the employees into the team); Quicker integration of the company into the regional network; Enhanced adaptability to economic fluctuations, early compliance with changes in the production process; Quick launch of innovation products/services; Management's promptitude to the need to settle local issues; Production of high-quality goods or provision of high-quality personalized services, the company's uniqueness; Closer cooperation between clients and goods producer/service provider; Lower capital needs, simple production technologies; Quicker capital rotation; Possibility of limiting micro crediting if your own capital is insufficient; Possibility of extending the SME into a big business (for instance, Bill Gates started his business when he was 16, worked out software with some classmates, subsequently he became the founder of Microsoft); tate backs small businesses more often. SME disadvantages The enterprise is dependent on one or more people; Lack of staff having comprehensive management knowledge because of the low number of personnel; The unofficial nature of relations within the SME may tell on the positive development of the business. The owner is busy with urgent daily problems instead of planning the enterprise's activity for a long run; Enhanced competition on the part of bigger companies; More difficult access to big loans, poor financial and technical basis; The need to launch a large-scale advertising campaign in order to remain on the market; Increased risk level (dependence on external factors and not on decision-makers); Drawbacks in the small business legislation. SME role: Creates new jobs, thus decreasing the unemployment rate. Contributes to the country's economic development. Diversifies the range of goods and services on the market, thus promoting innovations. Encourages competition among big enterprises. Promotes rational use of local resources. Facilitates the operation of big enterprises by producing goods and providing services. Enhances the qualification of the staff and trains them for holding posts in big enterprises. 18
  • 21. GHIDUL ANTREPRENORULUI pe nelesul tuturor 8. How do you register a firm? STAGE 1: Get ready What do you need to have with you? iIdentity cards of the founders and administrator (if he/she is different from the founder) A list of possible names for the enterprise Documents on the companys headquarters, which could be: founders residence imobilhouse provided by a non-founder physical person (document confirming the property right and notarized decision, by which the founder allows using this house for performing the legal activity); real estate legally rented from a legal entity (notarized rental contract and letter of guarantee of the owner) What do you need to know? Legal form of your firm; The term you want your firm to be opened for. The CIS registers an enterprise within maximum 5 working days (3 working days in the case of an IE) from the date of submitting the whole set of documents. The firm can be also registered in 4 and 24 h), as well as on days off or holidays. Types of activities you want to perform (maximum 5 will be included in the establishment act). Consult the Classification of Economic Activities in Moldova (CAEM) Fees approved by the Government for the paid services provided by the CIS. Registration costs: Registration costs Registration fee Issue of documents Reservation of the name Abstract from the Register Publication in the CIS bulletin Approval of the name at the Terminology Centre Stamp Normal regime 24 h 4h MDL 250 (in 5 days) MDL 54 (IE in 3 days) MDL 108 (5 days) 39 lei MDL 500 MDL 216 MDL 216 78 MDL 252 MDL 54 lei MDL 40 lei MDL 1000 MDL 432 MDL 432 MDL 156 MDL 189 MDL 239 State fees for registration and amendment http://cis.md/content/61 STAGE 2: Act Go to the territorial office of the State Chamber of Registration with the set of documents For addresses, telephones go to http://cis/gov/md/content/68 Telephone for information: 022 274 406 There is also a possibility to register the firm through a representative with power of attorney, as well as the individual entrepreneur can do it on the internet. Procedure and conditions for the on-line provision of services http://cis.md/content/60 19
  • 22. STAGE: Wait The CIS checks if you have any debts to the national public budget and whether you have previously registered any enterprises, which are no longer operating and have not been liquidated in the way established by law. The CIS verifies the name of the legal entity. You have to fill in a registration request according to the provided template. You have to pay the registration fee to the bank and submit the payment note to the CIS. The CIS acceps documents for registration. The CIS checks whether the administrator (another one but the founder) works part time for another unit as an administrator. The CIS issues a certificate allowing you to open a provisional account in a bank and to deposit the social capital. The CIS orders the production of the stamp. The CIS indicates the exact date and hour, the office and the registrars name, for you to collect the establishment acts. The CIS registers your enterprise and issues the registration papers Go to the CIS on the established date and time, without delays, with the bank certificate as a proof you have submitted the social capital You have to choose the bank you want to work with and you consign your social capital (minimum 40% for a LLC + the remaining 60% in maximum 6 months from the registration date, the sole shareholder integrally pays 100%). Individual entrepreneurs are denied state registration in the following situations: 1. The physical person is already registered as an individual entrepreneur; 2. The person is deprived, by court ruling, of the right to practice entrepreneurial activities. STAGE 4: Check the registration acts Decision of the State Chamber of Registration on the registration (coincides with the registration date of the legal person); Registration Certificate (with a unique identification number IDNO, which matches the fiscal code); Abstract from the State Register; Articles of incorporation (Decision on the Establishment, Statute); Stamp and certificate on the stam manufacturing; Notice on the registration for tax, statistical, medical and social purposes. 20
  • 23. GHIDUL ANTREPRENORULUI pe nelesul tuturor Articles of incorporation will be issued to the administrator, because according to the Civil Code (art.61), the legal entity exercises, from the incorporation date, its rights and fulfils its duties through the administrator. While the individual entrepreneur as the sole founder is also the administrator In the future, you will have to go to the CIS in the following situations: 1. To order an Abstract from the State Register; 2. To register any amendments to articles of incorporation or to data introduced in the State Register (within maximum 30 days after the approval of the amendment decision); 3. Temporary suspension of the activity (maximum 3 years). When changing the headquarters: You have to inform the CIS and the (territorial) Fiscal Inspectorate about the change in maximum 7 days; Publish a notification in the Official Monitor. 9. What do you do after your firm is registered? STEP 1: Analyse bank offers in order to open a current account What shall you pay attention to? 1. Banks reputation 2. Banks location (to be in the area of your work, close to the territorial IFS, CNAS, CNAM) 3. Service fees 4. Products/services provided to legal entities (service of accounts, salary cards, web-client, credits, exchange rates, etc.) 5. Efficiency 6. Customer loyalty programmes STEP 2: Open a current account 1. Go with your articles of incorporation to the bank where you will fill in an application for opening a current account; 2. Return to the bank in about 5 days (after it receives the notification from the Fiscal Inspectorate); 3. Sign the specimen signature forms; 4. Read carefully the contract on opening a current account, sign it; 5. You will be provided with your accounts data. STEP 3: Register your firm with the fiscal, statistical, medical and social authorities Take the originals and copies of the documents mentioned in the scheme on the next page to the following territorial offices: 1. IFS (State Fiscal Inspectorate) Annex 2 2. CNAM (National Health Insurance Company) Annex 3 3. CNAS (National Office of Social Insurance) Annex 4 4. BNS (National Bureau of Statistics) Annex 5 21
  • 24. After you have registered your firm with the CNAM, CNAS and the BNS: IFS For the fiscal visit act Registration Certificate Abstract from the State Register Decision on the registration of the enterprise Statute / Articles of incorporation Identity card of the founder Identity card of the administrator Employment order of the bookkeeper Rental agreement of the subdivision, offices, branches Codes of activities from the Notification on the Fiscal, Statistical; Medical and Social Registration 2 plastic fastener folders For the subdivisions registration certificate (original+copy): Identity card Rental agreement Registration certificate Abstract from the state register Filled in form Within maximum 10 days after the issue of the registration certificate: CNAM Identity card Registration certificate Filled in form Within maximum 10 days after the issue of the registration certificate: CNAS Registration certificate Abstract from the State Register Decision on establishment Notification on the fiscal, statistical, medical and social registration Bank account details Certificate on the stamp production Identity card of the founder/founders Taxpayers form to the social insurance budget (filled in) Copies must have the firms stamp applied on them Within maximum one month after the issue of the registration certificate: BNS 22 Notification on the fiscal, statistical, medical and social registration Registration certificate Abstract from the state register
  • 25. GHIDUL ANTREPRENORULUI pe nelesul tuturor 10. What mandatory payments, taxes and fees do you have to pay? Taxpayer, subject to taxation = the person who is obliged to pay taxes and fees Compulsory payments The shares of compulsory payments are established on a yearly basis by Government Decision and are stipulated in: Tax Code of the Republic of Moldova (2012) Law on state social insurance budget for 2012 No 270 of 23.12.2011 201 Law on compulsory medical insurance funds for 2012 No 271 of 23.12.2011 23% of the labour remuneration fund for each employee, calculated monthly, paid by the employee on a monthly or quarterly basis up to the 10th of the month following the reporting period Compulsory social insurance contributions 6% retained from the employees salary. Individual entrepreneurs and patent holders 4,704 lei per year, pay every month not less than 1/12 of the amount, up to the 10th of each reporting month For what? Allowances, aids, pensions, for preventing diseases and for the recovery of labour capacities, death allowances. For the insured persons 7% (3.5% paid by the employer, 3.5% by the employee), monthly, when the salary is paid. Compulsory medical insurance premiums Individual entrepreneurs and patent holders 2,982 lei per year, payment is performed on a yearly basis, within 3 months after the day when the law on compulsory medical insurance fund for the respective year enters into effect). For what? To cover costs related to the treatment of diseases and affections of the insured persons Taxes and fees Tax Code of the Republic of Moldova (2012 (2012) state local Income tax Tax on immovable property VAT (Value Added Tax) Territory development tax Excises Tax for commercial units and social service provision units Private tax Customs, road, etc. tax Tax for passengers of motor transportation service on localities routes Tax for the use of natural resources, market tax, parking tax, resort tax, advertising placement tax, on local symbology, etc 23
  • 26. Taxes and fees ( www.fisc.md ) Income tax 7% of the ATI for peasant farms 12% of the ATI for legal entities SMEs, non-payers of VAT: -up to 100,000 of profits 3% of the operational activity -100,000 / 600,000 can chose the 3% taxation regime For physical persons: 7% of the ATI 25,200 lei Legal entities shall submit the declaration up to the last day of the month following the payment, based on the IRV09 report, to the IFS branches. Physical persons have to submit the declaration up to March 31 of the following year (in case he/she had 2 or more jobs in different enterprises over the year). Tax on immovable The share established on an annual basis by the LPA property ( Tax Code, art. 280) (for agricultural or 0.05% - 0.3% of the taxable basis industrial land plots, buildings, constructions (estimated value of assets on January 1 of the fiscal year) ATI (annual taxable income) ATI = gross income deductions exemptions Deductions = ordinary and necessary expenditures by taxpayers for the activity of the enterprise. Exemptions: 8,640 lei/year personal exemption for physical person ( Tax Code, art.33 FC) 1,920 lei per year/each dependent ( Tax Code, art.35) 8,640 lei/year exemption for spouse who works, but does not benefit from exemptions. Payment in 2 equal shares (up to August 15 and October 15 of the fiscal year). Those who integrally pay the tax by June 30, are entitled to a 15% discount from the tax. apartments) Private 1% of the sale value of assets subject to privatisation. tax 5% of payments are retained at transfer, to cover costs related to the restructuring or privatisation of the object. Land 10-30 lei for each 100m2, plus other categories of owners in tax other localities are paying other taxes. Excises The share of excises ( Tax Code, art. 122): -in lei per meas.un. in natural expression (e.g., 1.85 lei per 1 litter of malt-made beer). -in % from the value in lei of the goods, without taking into account excises and the VAT (e.g., 25% of the value of a fur clothing) (for certain consumption goods) Value Standard among: 20% of the value of goods imported and/or Added Tax supplied in Moldova. (VAT) Compulsory: supplies >600,000 lei (in the fiscal period) Optional: supplies 100,000 lei 600,000 lei VAT exemption: Tax Code art. 103 Reduced rates: 88% bread, breadstuffs, diary, certain medicines 6% natural, liquefied gas 0% goods and services for export, power and thermal energy for the population, others can be found in Tax Code, art.104 Tax on 1% of the total income of the enterprise. advertising activity Customs tax, road tax Annexes 1-6, title IX of the Tax Code Territory Average quarterly number of the staff list and founders that development tax are not included in the staff list 20 lei / person. Tax on trading and/or Share for towns, villages. social services units It is different from town to town. To be paid to the state budget or to the budget of the administrative-territorial unit before the conclusion of the buy-sell agreement of public property assets. The exact amount of the land tax and tax on immovable property are established on an annual basis by the representative authorities of the local public administration. Registration as excise payer: before starting the activity, it is necessary to get the excise certificate by filling in an application at the State Tax Service ( Tax Code, art.126 list of necessary documents) To be paid on a monthly basis. Registration as VAT payer: Fill in the application to the IFS before the last day of the month when the amount of 600,000 lei was exceeded. To be paid before the last day of the following month. Paid on a trimestral/annual basis up to the last day of the following month. Paid on an annual basis, up to April 30 or when the vehicle is purchased or rented. Quarterly payment before the 25th of the month following the reported trimester. Depending on the occupied area, location, type of goods. Tax for providing public 500 lei / vehicles with maximum 8 seats motor transportation 1,000 lei / 9/16 seats, 1,500 lei / 17-24 seats, 1,900 / 25-35 services on localities seats, 2,100 lei / 36 seats routes Depending on the transportation unit and depending on the number of seats. Natural resources tax, 1 leu / 1 c.m. of water extracted from the water fund market tax, car parking 16 lei / 1 c.m. of mineral water extracted for bottling tax, etc. 0.06 lei / 10 c.m. of water used by hydropower plants A relevant report shall be submitted to the territorial IFS, and payments have to be made to the administrative-territorial units budget before the last day of the month following the reporting period. 24
  • 27. GHIDUL ANTREPRENORULUI pe nelesul tuturor 11. What reports, declarations, basic forms do you have to submit? Territorial off. Type of declarations/reports Submission term CNAM Nominal registration list (2 copies) for each person employed/discharged apart Before the 7th of the month following the employment/discharge CNAS The REV1 + REV 2 declaration (1 copy) for each employee/founder who does not have the CPAS code Within 10 days after the employment date + copy of the identity card of the insured person. The REV2 form is made up of 2 parts, after filling it in, one goes to the business, another one to the CNAS territorial subdivision. Quarterly, before the 15th of the first month of the following trimester. Individual entrepreneurs and patent holders have to submit the 4 BASS Declaration on an annual basis, before 10 January of the following year. 4 BASS Declaration REV5 + REV2 Declaration (1 copy) for each employee apart, on paper format (up to 10 employees), and on electronic format as well (compulsory) for more than 10 employees. On a yearly basis, before 25 February (for up to 25 employees), or before 25 April (for over 20 employees). The verso of the REV2 form shall be filled in only in case of the packs containing the REV5 forms. Annual financial report SNC5 (balance sheet) On a yearly basis before 31 March of the following year. It has to be submitted by companies with over 49 employees and a revenue of over 15 mln lei. On a yearly basis, before 31 March of the following year. It has to be submitted by companies with over 49 employees and a revenue of over 15 mln lei. On a monthly basis, before the 10th of the following month. On a quarterly basis, before the 25th of the following month. BNS Simplified financial report SNC4 Report 1M (labour remuneration) Raportul 5C (consumurile i cheltuielile ntreprinderii) IFS TAT 07 (territory development tax) MED 08 (deductions for the medical insurance premiums) VAT declaration and the TVA FACT Form annex IRV 09 IAL 09 (lease payments, payments made to physical persons) IAS 09 (employees) VEN 08 (income tax by legal entities) On a quarterly basis, before the last day of the following month. On a monthly basis, before the last day of the following month. On a yearly basis, before 31 January of the following year (if the IRV 09 was submitted). On a yearly basis, before 31 March of the following year. It is developed in parallel with the financial report. Templates of declarations, forms, reports 12. What documents and software do you need for accounting? Go to the State Enterprise Editura de Imprimare Statistica and buy: Certification sheets Standard type forms of primary documents with special regime Production forms Address: MD-2001, Chisinau, 34, Bucuresti Str., Tel: 022 275 391 (production department) or tel: 022 270 789 (administrator Vitalie Pavlov) E-mail: statistica@editura.mldnet.com 25
  • 28. Documents you have to submit to the publishing house when placing the order: 1. Registration certificate (original and copy) 2. Abstract from the register (original and copy) 3. Identity card (original and copy) 4. Stamp You can also order these forms electronically, on the following website: www.stat.hq.md In case you place an electronic order, you will be asked for the following information: Personal data: full name, telephone number, e-mail, Skype, messenger, Data on the company: legal name, fiscal code, telephone number, the address on which the order is made, e-mail, website; Delivery time, or the exact date and hour for the delivery address. ATTENTION!: All forms are numbered and you have to use them strictly in order. In case of a mistake, you have to cancel it, by writing CANCELLED, and keep both copies. What do you have to buy at the initial stage? Shipping invoices (in case you are not a VAT payer, it is issued when making a delivery of goods or services); Vehicle log book (to write off the fuel, in case you have vehicles being used by your firm); Document on the purchase of goods (when you buy something for your firm from a legal entity); Document on the purchase of lease services and associated costs; Commissions (to mandate others to sign on your behalf, without giving them the stamp). Payment notes (when you do not have a cash register and your activity implies that you have the right to make cash settlements without having a cash register, or when the cash register is out of order and you have stated this to the IFS); Copying paper (2) to fill in invoices, etc. Types of activities where you can make cash settlements without cash registers Marketing of agricultural products cultivated by economic agents on their own or rented land in markets, fairs and other places authorised by the local public administration. Marketing by peasant (farmer) farms of agricultural products to other economic agents, as well as agricultural services provided by these, with the issue of payment notes. Marketing of cult objects and religious literature, rituals and ceremonies carried out by religious organizations in places of worship. Marketing of newspapers, magazines, lottery tickets. Services provided by the urban (communal) transportation based on travel tickets and/or subscriptions (at a fixed price, printed). Veterinary services, services for the urgent repair of dwelling space, engineering installations, furniture, home appliances, provided by economic agents to the population, at clients location, with the issue of payment notes. Pharmaceutical activity in medical units in rural settlements without pharmacies, with the issue of payment notes. Activities carried out by patent holders on the basis of the patent of entrepreneur Activities for which the computerised control and administration system assures the issue of fiscal invoices on special paper with protection signs, printing the series and number of the fiscal invoice from the diapason assigned by the Main State Fiscal Inspectorate, which are also fulfilling the function of payment notes (payment in cash). Activity of financial institutions, licensed and regulated through the normative acts of the National Bank of Moldova, except for the currency exchange operations to physical persons Reception (collection) of compulsory fiscal payments, as well as of non-fiscal payments by fiscal bodies and/or mayoralties, with the issue of the strict registration documents of the State Fiscal Inspectorate. Provision of services by advocates. Notarial activity. Reception of payments for services through self-service ATMs issuing cash payment receipts Providing meals to pupils and staff in the general primary and secondary educational institutions during the academic year. At the end of the daily management, the special regime primary document shall be filled in the payment note, containing the totality of performed commercial transactions. Marketing to the population of food service related products and services during fairs, exhibitions, festivals and various cultural-sports events in parks and streets, as well as in other public places, authorized by the local and/or central public authorities with the notification of the respective fiscal body. At the end of the daily management, the special regime primary document shall be filled in the payment note, containing the totality of performed commercial transactions 26
  • 29. GHIDUL ANTREPRENORULUI pe nelesul tuturor As for the rest, for cash settlements, you must have a cash register (CCM cash control machine). For this: Step 1. Buy from firm X the following: 1. Cash register (2 000 5 700 lei) 2. CCM Register 3. Technical register Step 2. Firm X registers the cash register with the territorial IFS, based on the documents listed below. Step 3. Firm X gives you the documents from the IFS within maximum one week and will train you how to use the cash register and to fill in the registers. To register the cash register with the territorial IFS, you will need the following documents: Template application Copy of the registration certificate / copy of fiscal code assignment Copy of the abstract from the state register Copy of the Licence on the activity profile of the enterprise Copy of the document on the CCM purchase Copy of the Contract on the CCM technical maintenance CCM register Technical register (technical passport) of the CCM CCM users manual The firm you have purchased the cash register has to provide you with the following documents: Technical register CCM users manual Contract on the technical maintenance of the cash register Invoice ATTENTION!: 1. You have to keep the cash book during the whole period of operation of the cash register and 3 years after its deregistration. 2. At the beginning of the fiscal year you must submit the cash book for the previous year to the IFS (even if it has not been completed yet) and to register a new cash book, for the current year. The same you have to do when the cash book is completed before the end of the year. 3. You have to produce the Z report on a day-to-day basis if fiscal receipts have been issued. 4. The Main State Fiscal Inspectorate, the Financial Guard and their territorial subdivisions are verifying the use of the CCMs Removal and application of the seal on the CCM is performed in the following situations: - When the CCM is registered with the territorial IFS; - When mandated persons are carrying out controls, if necessary; - If a repair or technical maintenance is required, with the opening of the CCM. Regulation on the registration and control over the use of cash control machines. Specialised software for accounting records As a rule, there are specialised software keeping accounting records, like 1 C: Contabilitatea 8. This software is for the automation of the accounting and fiscal records, including the compulsory production of reports at the enterprise, in line with the Moldovan legislation in effect. This software is a licenced one and must be purchased from authorized persons 27
  • 30. Advantages of 1C: Contabilitatea 8: All records are made in one software; Automation of the organizational and economic activity; Possibility to keep records of various types of commercial activities in one data base; Performs calculation of wages and staff administration; Wide opportunities for administrative recording and structure of analytical reports, supports multicurrency recording. IImplementation of 1C is performed with the support of the instructor from the authorized company. The software will cost you between 300 and 700 US dollars, depending on the complexity of operations you have to perform. To work with this software, you need to attend a training course (minimum one month, 40 academic hours, average cost 400 lei). ATTENTION!: Accounting must be kept permanently, from the very first day your enterprise is registered and during the entire period of its existence, even in periods of economic inactivity, because you need to produce fiscal, statistical, social and medical insurance reports, as well as other reports. Employing a bookkeeper or contracting bookkeeping services? In the case of SMEs, the bookkeeper may be employed part-time and paid according to the number of worked hours, based on a service contract. This would cost you about 500 - 1,000 lei/month, depending on the amount of work performed by your firm. The bookkeeper must be a reliable and qualified person with rich experience. This is the type of person you should not make savings from his/her salary, in order to avoid paying later penalties and fines. The average salary of a qualified bookkeeper is 300 euro What is better, to employ a bookkeeper or to contract outsourced bookkeeping services? Employing a bookkeeper Confidentiality of data; Better knowledge of the firms situation; Responsibilities are transferred to the contracted company (certain bookkeeping operations, for example, primary bookkeeping, calculation and transfer of income taxes); Promptness in solving urgent problems; Specialized bookkeeping solutions The bookkeeper deals with your firm only or/and has an established work programme. Outsourcing firms have advanced technologies or software packages able to immediately improve some outdated bookkeeping computerised processes; Permanent presence in the office; Advantages Contracting bookkeeping services Disadvantages Good quality/price ratio. Permanent expenditures bookkeepers salary; You have to provide him/her with working space; You have to set up his/her working space. Costs related to the digitalization of bookkeeping documents (costs of a large capacity scanner, of software packages may exceed the costs of the outsourcing service); A third firm might discover irregularities in the activity of your firm. 28
  • 31. GHIDUL ANTREPRENORULUI pe nelesul tuturor 13. What is the authorization procedure? After the state registration, the enterprise has to obtain various special authorizations in order to start up and run a business. Authorization licences, permits, certificates, notifications, approvals, coordinations. Authorization = an act of authority of the local public administration, granting the right to carry out a certain activity, based on certain documents specific for each type of application apart. According to the Moldovan legislation, certain activities are subject to licensing and/or authorization. There are several types of authorizations, for confirming certain technical requirements, separate norms under a certain aspect, for example: sanitary authorization, veterinary sanitary authorization, activity and import/export authorization, retransmission authorization, etc.: Sanitary authorization for all trade, public catering and social service units. Veterinary sanitary authorization for functioning issued to agro-food markets, eggs selling booths, veterinary pharmacies, units marketing cut meat and fish, products of animal origin. The most frequently met is the sanitary authorization. Who is subject to the state sanitary-epidemiological supervision? Any economic unit or parts of it, regardless of its ownership form, for which sanitary-hygienic and antiepidemical requirements are established and which requires the supervision of their observance, except for those objects where there are no people working, and the labour and environmental factors (air, water, soil, food products) do not have a negative influence over the populations living environment and health What is subjected to sanitary authorization? Entrepreneurship activities representing risks for the health of the population and which do not run counter the sanitary legislation in effect. List of authorizations, approved by the Government Decision No 920 of 30.08.2005. Types of activities subjected to sanitary authorisation. Who requests the sanitary authorization? The administration of economic units, to which the object(s) subjected to the state sanitary-epidemiological supervision is subordinated, according to requirements mentioned in the Sanitary authorization for functioning. When applying for an authorization, the administration has to specify the type of activity the authorization is sought for. Economic agents bear personal responsibility, according to the legislation in effect, for creating optimal working and health and safety conditions for their employees, and for the quality of food and products they produce or sell (store) to the population. What is the procedure for obtaining a sanitary authorization? The economic agent has to submit a request according to the template to the territorial preventive medicine institutions. The sanitary authorization procedure by the institutions of the State Sanitary-Epidemiological Service is conducted within 10 working days from the submission of the application and of the necessary documents. When ready, the authorization for functioning is signed by the chief state sanitary doctor of the territory (of by his deputies). Supervision materials, results of laboratory investigations and previous measurements (not older than 12 months) can be used for the purpose of the authorization process. 29
  • 32. PFor the newly built, reconstructed, reprofiled, upgraded (primarily) the authorization shall be issued at the commissioning acceptance stage,with the following documents submitted: a) Copy of the registration certificate of the economic unit; b) Copy of the property deed or space lease agreement; c) List of groups of products/goods, that have to be manufactured, stored, marketed (to be included in the application). To extend the sanitary authorization for functioning, in the case when no amendments to the activity type were performed during the reference period, the application shall be accompanied by the report on the attestation results of the work places. In case of changing or extending the activity, the respective economic unit shall apply to the territorial preventive medicine institutions for a new sanitary authorization. If the economic unit does not meet the sanitary-epidemiological functioning conditions it has been authorized for, and the administrator did not suspend the functioning of the object on his/her own initiative, the chief state sanitary doctor of the territory shall withdraw the sanitary authorization by issuing a decision on suspending the activity of the enterprise. The activity shall also be suspended if the unit is functioning with an expired sanitary authorization. Economic agents are obliged to inform institutions of the State Sanitary-Epidemiological Service about amendments in the units structure and exceptional circumstances (breakdown of backbone aqueducts, water intakes, water treatment stations, sewerage network, ventilation system, intoxication and professional diseases cases, etc.). Economic agents may contest decisions of the chief state sanitary doctors (their deputies) on the sanitary authorization (approval) of objects according to provisions of the Law No 1513 of 16.06.1993 on the sanitary and epidemiological support to the population (art.44). The location and functioning of the itinerant trade network is allowed only with the approval by the territorial hygiene and epidemiological centres and based on the sanitary authorizations for such type of activity DECISION OF THE MOLDOVAN GOVERNMENT on the approval of the Regulations on the functioning of itinerant trade network and trade Regulations in markets in the Republic of Moldova, No 517 of 18.09.96. Authorizations for functioning issued by the Local Public Administration To conduct certain trade activities, you will also need the authorization from the local public administration. The trade and public food service directorates of the municipal mayoralties and district executive committees issue authorizations for the location of trade units. In Chisinau, the City Hall issues the following authorizations to trade units and/or service provision units: Period For trade units and/or service provision units: Up to 5 years Located on private property areas Not more than 5 years Located in rented areas Up to 3 years Stands and pavilions Up to 1 year Stalls, stands, trailers, vehicles and other iterant temporary trade units The authorization for functioning is issued within maximum 15 working days after the submission of the application and documents. 30
  • 33. GHIDUL ANTREPRENORULUI pe nelesul tuturor 14. What is the licensing procedure? In order to be issued a license, legal entities have to submit an application to the Licensing Chamber, with the following data indicated: Full name of the enterprise; Legal address; Fiscal code; Type of activity subject to licensing; Address of branches; List of documents attached to the application confirming the competence to carry out the type of activity the license is sought for. Documents to be attached: Copy of the registration certificate of the enterprise; Certificate confirming the enterprise has no debts to the state consolidated social insurance budget; Other documents depending on the licensing conditions of one or another type of activity. The Chamber will consider the submitted documents and will approve the decision on issuing the license or on rejecting the application within a maximum term of 15 working days, from the day the application is received. The notification on the decision approved will be sent to the applicant in written form, within a maximum of 3 working days from the date the decision is made. Licensing authorities: - Licensing Chamber (issues licenses for the majority of activities); - National Bank of Moldova; - National Commission of Financial Market; - National Energy Regulatory Agency; - National Regulatory Agency for Electronic Communications and Information Technology; - Coordinating Council of Audiovisual. Contact details for the Licensing Chamber Address: Republic of Moldova, MD-2001, Mun. of Chisinau, 124, Stefan cel Mare Blvd Contact information: tel. (+373) 22 54 21 14, hot line (+373) 22 27 22 21 Web: http://www.licentiere.gov.md/ Types of activities governed by licensing: Law 451/30.07.2001 on licensing some types of activities. Types of activities proposed to be entirely removed from the fields governed by licensing. http://www.licentiere.gov.md/public/files/Ghid/Taxe_genuri_16.02.11.pdf 15. What is the trademark registration procedure? Trademark any sign or combination of signs that can be represented graphically, serving to differentiate products or services of certain physical persons /legal entities from others. The most frequently met types of trademarks are: verbal, representational, combined, tridimensional, and of other type. The competent body authorized to register trademarks in Moldova is the State Agency for Intellectual Property of the Republic of Moldova (AGEPI). www.agepi.md How do you register a trademark? To register a trademark, you have to fill in the template application for trademark registration and submit it to the AGEPI. The application must refer to one trademark only. Cererea trebuie s se refere la o singur marc. 31
  • 34. The application shall contain: formularul cererii, prin care se solicit nregistrarea mrcii; reprezentrile grafice ale mrcii. The template application requesting the trademark registration; Graphic representations of the trademark. A number of other documents, according to the Regulations on the trademark submission, examination and registration procedure, might be also submitted upon request. Trademark registration stages: Submission of the application; Examination of the observance of conditions for submitting the trademark registration application; Publication of the submitted application data; Examination of the application; Trademark registration and issue of the protection title. Each stage is performed over a certain period of time. Any physical person or legal entity is entitled to submit a trademark registration application both in Moldova and abroad. The holder of the registered trademark has the exclusive right to own the trademark, to use it and to ban the unauthorised use of it. The validity term of the trademarks registration is 10 years; it can be renewed for another 10 years whenever its necessary. Fees for the trademark registration service Templates from AGEPI (http://www.agepi.md/md/trademarks/form.php AGEPI contact information: Tel. (+373-22) 400607, 400608; Antechamber: (+373-22) 400500; Fax: (+373-22) 440119 24, Andrei Doga Str., Block 1, Chisinau, MD-2024, Republic of Moldova 16. How do you manage human resources? For your company to operate efficiently, you need high-skilled, sufficient and motivated staff. To this end, you will have to undergo the following stages: 1. Planning 2. Recruitment 3. Selection 4. Employment 5. Training 6. Motivation 7. Control 8. Appraisal Labour Code of the Republic of Moldova 1. PLANNING People are definitely a company's greatest asset. It doesn't make any difference whether the company's product is cars or cosmetics. A company is only as good as the people it keeps. (Mary Kay Ash) 32
  • 35. GHIDUL ANTREPRENORULUI pe nelesul tuturor How many people do you need to start a business? When starting a business, you have to save as much money as possible on salaries and to prepare yourself morally to do the job of several people. At the initial stage, you will have to learn to be: 1. manager 2. office manager 3. accountant, courier 4. marketing and sales manager 5. human resources manager Being in charge of several fields in the company will give you the advantage of drafting the job description, as you will know precisely what the assignments of vacancies are and, last but not least, you will be able to better keep under control your employees, because you will already know what they will have to do and how much time every task takes. However, if you feel that you are unable to assume all the above-mentioned roles, you will have to resort to services provided by specialists (accountant, sales manager) and you may need to employ a personal assistant (who should carry out the duties of office manager, courier and help you with daily tasks). You may pay the accountant per hours, and the sales manager may be remunerated on the basis of a commission from contracts signed for the firm (thus you will take minimum risks and make minimum investments). The planning of staff should be directly proportionate to: - workload - complexity of tasks - the incomes of the enterprise - your qualification Your main goal is to form a strong team with good personal and professional qualities. Try not to hire relatives, friends and acquaintances only because they are looking for a job and would like you to help them. You should think first of all of the real capacity of your enterprise and of its ability to meet payments. The staff planning should be worked out in a strategic manner and coordinated with the financial forecasts What is the organizational structure of an enterprise? Organizational structure = all people, organizational subdivisions and relations between them, established in such a way as to meet the planned objectives. An organizational structure should: point out the objectives and action plan showcase the authority able to manage the enterprise; highlight the framework within which activities are held. The organizational structure can be: 1. of leadership or functional form 2. of production or operational form. Here are some examples of organizational structures: DIRECTOR-GENERAL RESEARCH AND DEVELOPMENT DIRECTOR PRODUCTION MANAGER COMMERCIAL AND MARKETING DIRECTOR ECONOMIC DIRECTOR HUMAN RESOURCES DIRECTOR HEAD OF EXPORT SERVICE 33
  • 36. DIRECTOR SECRETAR BIROU JURIDIC ACCOUNTANT RELAII CLIENI MANAGER SUPERVISORS INSTRUCTORS PERSONAL CURENIE C PROJECT MANAGER D PROJECT MANAGER DIRECTOR-GENERAL A PROJECT MANAGER B PROJECT MANAGER EMPLOYEE 1 EMPLOYEE 1 EMPLOYEE1 EMPLOYEE 1 EMPLOYEE 2 EMPLOYEE 2 EMPLOYEE 2 EMPLOYEE 2 EMPLOYEE 3 EMPLOYEE 3 EMPLOYEE 3 EMPLOYEE 3 These parts include the following components: position all objectives, tasks, competences and responsibilities assigned to every employee of the company for certain periods of time; assignments leadership and executive assignments; department the totality of some similar posts and assignments, in which people specialized in a certain sector operate, and which are located in a certain area and are subordinated to a single person; organizational relations links between the component parts of the structure: authority, cooperation, control and representation relations; hierarchic weight the number of people headed by management personnel; hierarchic level all organizational subdivisions. The number of hierarchic levels depends on the size of the company, the diversity of activities and the complexity of production. 2. RECRUITMENT Personnel recruitment = the process of ensuring a sufficiently high number of high-skilled candidates in order to select those who meet the best the requirements of the posts that your enterprise needs. What to pay attention to when recruiting your staff? When a vacancy appears, first of all make sure that this post is still needed or perhaps you may reassign its tasks to already existing positions; Identify and attract the highest possible number of candidates in order to ensure the needed number of employees in terms of both quantity and quality; Recruit in the shortest time possible and make the lowest spending possible. 34
  • 37. GHIDUL ANTREPRENORULUI pe nelesul tuturor When recruiting, you must have all information about the features of the position, as well as the qualities of its future holder. A basic job description must include: 1. The name of the post 2. The place of the post in the organizational structure 3. Main assignments 4. Responsibility 5. Requirements (Technical Knowledge, Experience, Abilities) 6. Success criteria 7. Role of the position Sample job description RECRUITMENT SOURCES TMENT Sources inside the company present employees their friends and relatives previous applicants Sources outside the company colleges and universities vocational schools specialized agencies employment agencies, labour market other enterprises Advantages: - you get to know better the strengths and weaknesses of w the candidate; - you attract candidates more easily - recruitment takes place faster and is less expensive - employees feel that you trust them and take into consideration their recommendations. Advantages: - you may attract a higher number of possible candidates; possi - new employees = new sources of ideas and new knowledge; - less spending on staff training. Disadvantages: - you dont benefit from new ideas that new employees may bring in; - conflicts may erupt between employees; - employees that were not promoted may be disheartened. Disadvantages: - risk of employing people who will fail to cope with the position; - staff recruitment cost is much higher; - it will take longer for the new employees to find their way about and to integrate into the team. How to recruit staff? 1. Advertising you post an advertisement describing the position. It should be worded as precisely and politely as possible. It should be distributed on the largest possible area in order to get a maximum number of people meeting the criteria specified in the description. 2. Ask your acquaintances for recommendations ask your colleagues, associates, acquaintances to provide information about people interested in the vacancy. 3. Go to higher education institutions and talk directly to graduates, find a person whom you would grow up (in whom you will invest time and money), but who will be loyal to you for a longer period. 4. Use headhunting agencies which persuade high-skilled people from other companies to come to you. In this case, you will have to pay for the agencys services, to offer a higher wage and better working conditions. 35
  • 38. Useful tips: Do not hurry to employ; Say NO to nepotism; Pay attention to young people who have the potential and willingness to work; Do not avoid hiring aged people they may have excellent experience in the field; Pay specific attention to personal qualities of potential employees; Call the phone numbers mentioned in CVs to check the truthfulness of the provided info. Recruitment websites: www.angajare.md www.jobinfo.md www.makler.md www.anofm.md www.joblist.md www.moldovajob.md www.bestjobs.md www.jobmoldova.md www.munka.md www.cariera.md www.joburi.md www.rabota.md www.hr.md www.locurimunca.info www.topjobs.md 3. PERSONNEL SELECTION Personnel selection = choosing the most competitive or appropriate candidate for a certain vacancy in line with certain criteria Process of selecting Human Resources 1. Employment application, submitting a CV and a cover letter 2. Pre-selection interview 3. Selection test 4. Comprehensive selection interview 5. Checking references (recommendations) 6. Medical test 7. Employment decision, assigning the post As a rule, interviews have two to three stages, so that you get to know as much as possible about potential employees. Tips for interviews: Let the interviewee speak more; Analyse the candidates strengths and weaknesses, their previous career; Do not ask questions implying the answer; Be polite and listen carefully to the candidates personal presentation; Give some easy task to potential employees to see how they cope with it; Give no feedback during the interview. After the interview, make an objective analysis of the gathered information and select the person who meets the job description the best and who would integrate better into the current working team. It is very important that the job requirements match the employees skills. Holding an inappropriate position may demand additional efforts and time from the employee. So, you need the right person for the right post. 36
  • 39. GHIDUL ANTREPRENORULUI pe nelesul tuturor 4. EMPLOYMENT A.) Persons selected in the previous stage submit their employment application to the employer. B.) The employer, by the order (instruction, decision) of the employer, informs, under signature, the employee within 3 working days after the signing of the Individual Employment Contract (IEC) by the parties. C.) The employer must inform the employee about: The job entrusted to him/her, labour conditions, his/her rights and obligations Internal regulations and collective labour contract Safety arrangements, labour hygiene, anti-fire security measures and other labour security and health rules Sample of Interior Order Regulation Anti-fire rules Labour Code, Articles 222-244 D.) Employer and employee agree on the Individual Employment Contract (IEC) While signing the IEC, the employee shall present the following documents: Identity card or another ID paper; Work record book, excepting cases when the person is being employed for the first time or if this is his/her second office; Military record documents for recruited and reserve servicemen; Education diploma, a certificate attesting his/herspecial training for jobs requiring special knowledge or qualities; Medical certificate, in cases provided for by the legislation in force. The enterprise must have medical records for every employee, comprising annual results of fluorography, of family physician and gynaecologist consultations, as well as a picture of the employee. Documents may be demanded during inspections by the National Public Health Centre. http://www.cnsp.md Labour Code, Article 57 Employers do not have the right to request other documents from employees. E.) The Job Description is attached to the IEC. It comprises the job's responsibilities, qualifications of the employee and other useful data. The more comprehensive and precise the job description is, the more easily it will be for the employee to understand what is expected from him, what success in the company implies, and more easily for the manager to monitor and appraise the employee's activity. A party shall be informed in written form about the grounded refusal of the other party to formalize the IEC during 5 working days. F.) The employer shall make the necessary records in the employee's work record book. 37
  • 40. You can buy the following items at TehnoDesign & K Ltd in the Chisinau municipality: 1. Work record books (for those employees who do not have one or for those who are employed for the first time) 2. Register for keeping records of the work record books circulation (in which all work record books are registered, even those that have not been issued by your company, when employed or dismissed) 3. Register for keeping record of forms (all work record books that you bought for your employees). What do you need to have with you? 1. identity card (a copy) 2. registration certificate 3. registration number of the VAT payer 4. bank requisites 5. stamp Contact data: tel. 241284, fax 234929, Chisinau, 29, Mateevici Street Work record books: Labour Code, Article 66 are processed for employees working in the company for more than 5 working days; are bought only for employees who are employed for the first time; must be recorded in the Register of the work record books; are kept by the employer as along as the IEC is valid; are handed to the employee on the resignation day. The government establishes how the work record books are filled in, kept recorded. Disciplinary sanctions are not written down in the work record book. The reasons for terminating the IEC must be recorded, along with the article, paragraph, point and letter of the legislation. The employer is obliged to issue a a labour certificate to the employee within 3 working days, , upon the letters written request, which should specify his/her job in the enterprise, specialty, qualification, position, length of work and the wage amount. Individual employment contract Individual employment contract (IEC) = an agreement between the employee and the employer, by which the employee commits to work in a certain specialty, qualification or post, to respect the internal regulation of the entity, whereas the employer commits to ensure the working conditions provided for in the Labour Code, in normative documents comprising provisions of the labour legislation, in the collective labour contract, as well as to pay the full wage in time. CLabour Code, Art. 45 IEC parties: citizens of the Republic of Moldova, foreign citizens and stateless people. Employee private persons, at least 16 years old 15-year-old private people (only with their parents written consent) Employer private person able to work legal entity When signing the IEC, it is prohibited to limit directly or indirectly the rights dependin on the gender, race, ethnic origin, religion, address, political options or social origin. 38
  • 41. GHIDUL ANTREPRENORULUI pe nelesul tuturor Mandatory content of IEC (Labour Code, Article 49) Name and first name of the employee Identification data of the employer Contract duration The date when the contract enters into force Specialty, profession, qualification, position Assignments of the post Job-related risks Rights and obligations of the employee Rights and obligations of the employer Labour payment terms, including base wage, supplements, bonuses and material aid Compensations and allowances, including for working in difficult, unhealthy and/or dangerous conditions Workplace Working days and days-off Probation period on a case-by-case basis Duration of annual leave and conditions of granting it Provisions of the enterprises collective labour contract and internal regulation as regards the employees working conditions Social insurance terms Health insurance terms Optional IEC provisions: Labour Code, Art. 51 mobility clause; confidentiality clause (the sides agree not to disclose any data or information they were familiarized with while the IEC was in force all along the working period and for a year at the most after the IEC expired, in line with the enterprises internal regulation, collective labour contract and individual employment contract); other provisions that do not run counter to the legislation in force; provisions regarding the compensation for transport spending, utilities and dwelling. Probation period: Once the candidate/candidates are selected, you may suggest a probation period of up to 90 days to make sure that the selected people cope with the job offered, that they like what they do and that they integrated well into the work team. Labour Code, Art. 60 Employees Unqualified workers and employees having signed a limited IEC of 3 to 6 months Employees having signed a limited IEC of more than 6 months Qualified employees Decision makers Maximum probation period 15 calendar days 30 calendar days 3 months 6 months The probation period does not include sick leaves or grounded and documented absence and can be set only once. Probation periods are prohibited for the following employees: Labour Code, Art. 62 a) young specialists; b) people under 18; c) people employed on a contest basis; d) people transferred from another enterprise; e) pregnant women; f ) disabled people; g) people elected in elective offices; h) people employed on the basis of an individual employment contract of less than 3 months. 39
  • 42. Should the result of the probation period be unsatisfactory, this must be attested to in an order (instruction, decision) on the dismissal of the employee, which is issued by the employer before the completion of the probation period, without the severance payment. Labour Code, Art. 63 (2) The employer has no rights to demand the employee to perform any activities tha are not stipulated in the individual employment contract, except for the cases provided for in this code. IEC duration: Labour Code, Art. 54 1. on an indefinite term, as a rule (if it is not stipulated in the IEC). 2. on fixed term, of maximum 5 years, to carry out seasonal work, in the following cases: (Article 55, Labour Code) The fixed-term IEC is signed with: Labour Code, Art. 55 a) managers of enterprises, deputy managers and chief accountants b) people carrying out temporary (maximum 2 months) or seasonal work c) retired people d) people whose IEC is suspended or who are on leave e) people transferred to temporarily work outside the Republic of Moldova f ) people who are on probation, undergo vocational training, day-time courses at educational institutions g) people dealing with arts and culture h) scientists from research and development institutions, teaching staff and rectors of universities, etc. The employee has the right to concurrently sign IEC with other employers (holds more than one office). The IEC is drafted in two copies in written, which are signed by the parties, are assigned a number from the register of the enterprise, and have the seal of the enterprise. One copy of the individual employment contract is handed out to the worker; the other stays with the employer. The employee benefits from all the rights and fulfils all the obligations stipulated in the labour legislation, the internal regulation of the enterprise, the collective labour contract and the individual employment contract. The IEC is amended only on the basis of an additional agreement signed by the parties, which is annexed to the contract and is a component part of it. Labour Code, Art. 68 Business trips 60 working days at the most (Labour Code, articles 174-176) Temporary transfer Only on the basis of the employees written consent Carried out on the basis of a separate IEC 1 year and may be extended for 1 more year at the most The employee is entitled to compensations for transport and accommodation spending, as well as to a special allowance in line with the legislation in force, with the collective labour contract and the individual employment contract. Suspension of the individual employment contract Labour Code, Art. 75-79 IEC suspension = the suspension of the work carried out by the employee and of the payment of compensations (wages, bonuses, and other payments) by the employer. The employee is informed, under signature, about the order (instruction, decision) of the employer, on the suspension date at the latest (excepting circumstances that go beyond the parties will). 40
  • 43. GHIDUL ANTREPRENORULUI pe nelesul tuturor Circumstances of IEC suspension: Labour Code, Art. 75-79 1. on the agreement of the parties 2. at the initiative of one of the parties 3. in circumstances that go beyond the will of the parties circumstances that go beyond the will of the parties on the agreement of the parties a) maternity leave; b) disease or trauma; c) quarantine; e) joining the military service or civil service; f) force major circumstances; g) the employee is taken to court for a crime incompatible with his/her work; the IEC is suspended until the court delivers its final ruling; h) the medical examination deadline is defied on the fault of the employee; i) medical conclusion ascertains contraindications that do not allow the employee to carry out the work stipulated in the individual employment contract; j) a request by inspection or law-enforcement bodies in line with the legislation in force; k) coming to work under alcoholic, narcotic or toxic intoxication, attested to by a certificate issued by relevant medical institutions or by a document issued by a commission formed of an equal number of representatives of the employer and employees; l) participation in a strike in line with the Labour Code; m) establishment for a fixed term of the degree of physical disability due to a work accident or to a job-caused disease; n) other cases provided for by the legislation in force. a) granting a non-paid leave for more than one month; b) taking a vocational training or probation, which impose a leave of more than 60 calendar days; c) technical unemployment; d) taking care of a sick child aged under 10; e) taking care of a disabled child; f) other cases stipulated in the legislation. at the initiative of one of the parties a) child care leave children up to 6 years old; b) sick leave granted on the basis of a medical certificate in order to take care of a sick family member up to one year; c) taking a vocational training outside the enterprise, according to Article 214 paragraph (3); d) holding an elective office in the public administration bodies, trade unions or employers associations; e) unsatisfactory working conditions from the point of view of labour and health safety; f) other reasons stipulated in the legislation; g) during an internal investigation in line with the Labour Code. Technical unemployment = the temporary impossibility of the enterprise or of one of its subdivisions to continue its production activity due to objective economic reasons. Maximum length of technical unemployment = 6 months per one calendar year. During this period, the employees are at the disposal of the employer and benefit from a minimum allowance of 75% of the base wage (on the basis of the employers order), excepting cases when the IEC was suspended in line with Article 77, letter c). The articles 82-90 of the Labour Code stipulate all reasons for terminating the individual employment contract: Art. 82 Termination of the individual employment contract in circumstances that go beyond the will of the parties. Art. 83 Termination of the individual employment contract for a fixed period Art. 84 Voidness of the individual employment contract Art. 85 Resignation Art. 86 Dismissal Art. 87 Prohibition of dismissal without the consent of the trade union Art. 88 Procedure of dismissal in the event of the enterprises liquidation and of staff cuts Art. 89 Reinstatement to office Art. 90 Employers responsibility for unlawful transfer to another job or dismissal The day when the individual employment contract is terminated is regarded as the last working day The IEC is terminated pursuant to the order (instruction, decision) of the employer. The employee is informed about it, under signature, not later than the date he/she is relieved of his/her duties. 41
  • 44. Resignation The employee has the right to resign (the individual employment contract is terminated at his/her own initiative), by announcing the employer about that in written form 14 calendar days before. Labour Code, Art. 85 Should the employee resign in connection with his/her retirement, the assignment of a degree of physical disability, leave for taking care of a child aged under 14 or a disabled child, enrolment to an education institution, change of the residence visa, election in an elective office, employment at another enterprise on a contest basis, the violation by the employer of the individual employment contract and/or the collective labour contract and of the labour legislation in force, the employer is obliged to accept the resignation in the period indicated in the submitted and registered request, to which the document confirming his/her right is attached. The head of the enterprise, deputy heads and the chief accountant have the right to resign before the termination of the individual employment contract in the cases stipulated by the contract, after announcing the employer about that in written form one month before resigning. Dismissal Dismissal = cancellation of the individual employment contract signed for an indefinite period, and the fixed-term individual employment contract at the initiative of the employer. Labour Code, Art. 86 Dismissal is allowed for the following reasons: unsatisfactory results during the probation period liquidation of the enterprise or the termination of the activity of the employer as legal entity staff cuts the worker does not cope with his/her post or cannot carry out his/her job because of health problems which are confirmed by a medical certificate the change of the owner (concerning the head of the enterprises, deputy heads and chief accountant) repeated violations of labour duties during one year, provided that disciplinary sanctions were applied before ungrounded absence from work for more than four hours in a row in a working day signing in under alcoholic, narcotic or toxic intoxication established as stipulated in Article 7 letter k stealing material or financial goods from the enterprise (including in small amounts), this should be established by a court ruling or by the decision of a relevant body culpable actions taken by the employee who deals directly with money or material means, if the employer loses trust in the employee because of these actions repeated serious violation of the statute of the educational institution by a an employee of the education sector during one year (Article 301) immoral offence committed by an employee of the educational sector, which is incompatible with his/her position use of physical or mental violence against pupils by an employee of the educational sector even once (Article 301) the signing by the head of the enterprise, deputy head or chief accountant of some groundless legal document that inflicted material damage to the enterprise serious violation of the work duties by the head of the enterprise, deputy head or chief accountant, even if this happened only once fake documents submitted by the employee to the employer while signing the individual employment contract (Article 57, paragraph (1)), provided that this fact is confirmed as stipulated. employees holding several offices are dismissed if the employer signs an individual employment contract with a person who will have his/her main job at the enterprise and will carry out the same tasks (Article 273) reinstatement to office by court ruling of a person who held the job before, if it is impossible to transfer the employee to another post in line with the code in force transfer of the employee to another enterprise with the consent of the employee and both employers the employee's refusal to continue working because of the change of the owner of the enterprise or its reorganization and subordination to another body the employee's refusal to be transferred to another job for health reasons ascertained by a medical certificate (article 74, paragraph (2)) the employee's refusal to be transferred in another populated area where the new headquarters of the enterprise is located (article 74, paragraph (1)) other reasons stipulated in the code in force and other legislative documents. 42
  • 45. GHIDUL ANTREPRENORULUI pe nelesul tuturor It is prohibited to dismiss employees in the following cases: they are on sick leave, they are on annual leave, they are on study leave, they are on maternity leave, they are on partly-paid leave meant to take care of children aged under 3, they are on additional unpaid leave to take care of children aged from 3 to 6, if they are fulfilling state or public obligations, and if they are temporarily transferred to another job, except for cases when the enterprise is liquidated Labour Code, art. 88 For reinstatement to office please see Labour Code, art. 89 Wages Wages are paid on a regular basis, but not less often than once a month for the employees remunerated on the basis of monthly base wages. Wages may be transferred on the employees' card account. The amount of the wage must be directly proportionate to the employee's performance, his/her contribution to the development of the enterprise, knowledge, experience, efforts and competence. The amount of the wage and bonuses and the way of payment should be stipulated in the individual employment contract Types of wages Minimum wage 1,300 lei per month Average wage Batch wage = depends on the workload or output Direct wage Emphasis on quantity 3,550 lei per month = depends on the time worked Emphasis on quality When the job is risky or the workload is too big Other rewards: Supplements to the wage Bonuses For noxious working conditions, overtime work, etc. For special achievements Commissions As % from sales or cash receipts Profit-sharing As % from profit from contribution to the companys results I dont pay good salaries because I have much money. I have much money because I pay good salaries. (Robert Jan Amos Komensky) 43
  • 46. Working hours. The normal length of the employees working time shall not exceed 40 hours a week. For certain categories of employees, listed by legislation, the length of the working time shall not exceed 35 hours a week. As a rule, the working time per week is uniformly divided, being of 8 hours a day during 5 days and two days-off or 6 working days and one day-off. Normal daily length of the working time is 8 hours. The maximum daily length of the working time shall not exceed 10 hours within the limits of the normal working time of 40 hours a week. For certain types of activities, enterprises or jobs, the daily length of the working time may be of 12 hours with a break period of 24 hours at least. Night work. Work carried out between 22:00 and 6:00 is regarded as night work. The length of the working time (shift) is reduced by one hour. It is prohibited to involve certain categories of employees in night work (young people aged under 18, pregnant women, etc.). Night work is remunerated with a supplement of at least 0.5 of the base wage per time unit established for the employee. Additional work (overtime work) may be demanded by the employer and is carried out only with the employee's written consent. The employee may be demanded to work overtime without his/her consent only in exceptional cases stipulated by law and within the limit of 240 hours during a calendar year. The first two extra hours shall be paid no less than 1.5 base wages set for time unit, and the next extra hours shall be paid no less than twice the rate of pay. Weekly rest. The employees are entitled to 2 days-off in a row, usually, on Saturday and Sunday. In any case, the uninterrupted weekly rest shall not be shorter than 42 hours, excepting cases when the workweek lasts 6 days. Work on rest days. It is prohibited to work on rest days, excepting cases of additional work. Public holidays. The following are the public holidays in the Republic of Moldova, during which the average wages are preserved: 1st of January New Year 7 and 8 January Christmas 8 March International Women's Day First and second days of Easter According to church calendar The Monday a week after Easter Day of Rejoicing 1 May International Workers' Day 9 May Victory Day and commemoration of heroes who died for the independence of Motherland 27 August Day of the Republic 31 August Our Language holiday Dedication Day of the populated area where the enterprise is based Declared by the local council of the municipality, city, town and village as stipulated by law Working on public holidays are only employees of enterprises that cannot stop their operation because of technical conditions and production process (continuous flow companies), utility services and those where urgent works are carried out. Length of annual leave - the paid annual leave lasts no less than 28 calendar days, excepting public holidays. 44
  • 47. GHIDUL ANTREPRENORULUI pe nelesul tuturor How to calculate wages? The net wage (as received by the employee) = Gross wage taxes imposed on the employee Taxes paid by the enterprise Taxes withheld from the employee's wage Health insurance 3.5% Social fund 23% Exemptions from which the employee benefits Health insurance 3.5 per cent Pension fund 6% Income tax Personal exemption 720 lei The income tax is calculated from the income liable to tax. Income tax = 7% of the income liable to tax (if the income liable to tax does not exceed 2,100 lei per month) + 18% of the income that exceeds 2,100 lei. Example: Income liable to tax=4,000 lei 2,100 lei*7%=147 lei (4000-2100)*18%=342 lei Overall income tax=147+342=489 Income liable to tax = Gross wage - monthly exemption - taxes withheld from the employee's wage Taxes withheld from the employee's wage = health insurance (3.5%)+ pension fund (6%)+ income tax Example X = 7400 lei So, Health insurance paid by the employer 3.5% 259 lei Social fund 23% 1, 702 lei Mandatory medical insurance premium paid by the employee 3.5% 259 lei Pension fund 6% 444 lei Income tax withheld from the wage [(7,400-259-444-720)-2,100] *18% + (2,100 *7% ) 844.86 lei Thus, Paid by the enterprise 1961 lei Paid by the employee (withheld from the gross wage) 1547.86 lei Net wage (7,400-1,547.86=5,852.14 lei) 5. Training Training and vocational development = activity allowing your employees to acquire new knowledge and skills, thus contributing to: ensuring the enterprise's competitiveness ensuring the degree of vocational performance of the employees; fulfilling efficiently the work tasks and responsibilities; improving the quality of services; increasing the degree of motivating the employees. Training methods: 1. lat the workplace: training, rotation, doubling. 2. outside the workplace: seminars/refresher courses, studies in various education institutions, probation periods, etc. It is recommendable to draw an annual training plan, for instance, according to the following box: Training plan Training subject Trainer Period Length, hours Trainees It is also very important to assess the efficiency of training the staff usually one month after the training. 45
  • 48. 6. Motivation In the company you have one resource; its people and the management of those people. It is motivation that makes the difference between mediocrity and excellence. It is the glue that holds together the objectives and strategies of the organization. (Cadbury Schweppes personnel director Adrian Gozzard) Why is it necessary to motivate your employees? Because a motivated employee is a productive employee, and a productive employee is profitable! Motivation strategies: using rewards to motivate the staff: money and verbal rewards ensuring equity: the employees expect that what they give to the organization should be equivalent to what they receive from it; involving the employees increasing the degree of participation of the employees in the process of taking organizational decisions; efficient management specific and consistent tasks, efficient use of the employees skills and time; creating good working conditions. Good management is the art of making problems so interesting and their solutions so constructive that everyone wants to get to work and deal with them. (Paul Hawken) 7. Control r You need to monitor the employees activity to ensure a harmonious development of the enterprise. Control over staff will help you avoid unpleasant situations related to possible conflicts, financial losses, output capacity, etc. The following are several efficient control techniques: 1. 2. 3. 4. 5. Control through rules and formal regulations Financial control (budget spent for working hours, raw material, etc.) Control with the help of machines and devices Control through the assessment of performances Meetings with employees 8. Staff appraisali Staff appraisal = establishing how well every employee fulfils his/her job duties. The appraisal is carried out in order to decide on rewards, incentives, promotion, measures to train and develop the employees, improve the content of positions, etc Evaluation types (a) Performance appraisal, analyses the past achievements and failures of employees in order to improve their future activity. (b) Potential appraisal, cassesses the degree to which the employees are ready for promotion and/or future training (c) Reward appraisal, in order to decide on a salary increase. Staff appraisal methods: 1. Critical incident method (recording delays, ungrounded absences) 2. Essay method (the employees draft brief written reports on their performance) 3. Quantitative index method (example, output, goods quality, number of complaints etc.) 4. Appraisal questionnaire (ticking a list of qualities and knowledge to qualitatively fulfil the job) 5. Bottom-up appraisal (the employees are not appraised by their leaders but by their followers) One machine can do the work of fifty ordinary men. No machine can do the work of one extraordinary man. (Elbert Hubbard) 46
  • 49. GHIDUL ANTREPRENORULUI pe nelesul tuturor 17. How do you promote and sell your products/services? Marketing = the art of selling; a process of persuading possible clients to buy. While dealing with marketing, one should focus on meeting the clients needs and on gaining profit. Marketing objectives: 1. Maximize consumption ing 3. Maximize the consumers possibilities of choosing 2. Maximize the consumers degree of satisfaction 4. Maximize q a ity quality egy, So, once you have a good marketing strategy, you will get to know what is demanded on the market, you will be more receptive to its needs, will display creativity and will maximize efficiency. Evaluate SELL Promote Plan Marketing mix (strategies) Study Client relations (periodic surveys) Product/service Company Brand Sales Clients Competitors Product Service forecasting and drafting strategies for the fol following aspects: Marketing mix = f PRICE PRODUCT (Clients, competitors) NG MARKETING MIX (4P) P) PROMOTION PLACEMENT, MENT, distribution ution Every component of the marketing mix is depicted in the box on the next page. f eting e o If you dont have a competitive advantage, dont compete. (Warren Buffett) 47
  • 50. 48 What are your competitors prices? What competitor has the highest/lowest price for a similar product? What is the share of your sales on the market (market share)? What is the sale forecast? What do you have to do to increase your market share? What is the maximum potential? What is the market share of your competitors? Who has the largest market share and why? Catalogue price Discounts Privileges Payment period Loan terms To set a price that would generate maximum profit and would be a competitive tool Price What sales methods do you chose: direct or via middlemen? What would you tell a customer in 30 seconds to persuade him/her to buy your product/service? How do your competitors sell their goods? What team do they have? How will you attract new clients? How will you distribute your products? Who will be in charge of promoting and selling the goods? What message do you want to extend to possible clients? Working out offers Mechanisms for promoting sales, brands, and the company Promotion actions Sales methods Client relations Sales team To inform current and possible clients about the features of the product/service, to renew their attention to products, whose demand has been in decline, to stimulate clients to buy Promotion - "The purpose of business is to create and keep a customer." (Peter Drucker) Questions What is your target group(consumers)? What is their age, gender, job, education? Who are your present clients? Who are your potential clients? What do consumers want, how do they behave? What is their life style, what are their preferences? What do they do for a living? What are their needs? Who influences their purchase decisions? What is the current demand for your goods/services on the market? What is the demand forecast? What are the features of your products/services? What are the benefits of your products/services? What do consumers think of your product? Who are your competitors? What market segment do they cover? What products do your competitors have on the local market and what are their features? What makes your product/service better or worse? Competitors Content About products/services: Variety Quality Features Aspect Wrapping Post-sale services Clients needs, opinions Goal To elaborate a product/service meeting the consumers needs to a maximum degree, To answer the questions what to produce, how much, in what form and quality, when and for whom Product Marketing mix strategies Where will your business be located? Where are the clients? What is their purchase power? How far away from the sale market are you? What are your possibilities of employing high-skilled labour force? What competitors operates nearby? Are the goods accessible to the clients? Do you have access to raw material, electric energy, sewerage network, water supply, communications (post services, telephone, Internet etc.),roads? What is the state of roads? Is the public transport accessible? Do you have financial services (banks, loan associations) in the neighbourhood? Distribution channels Coverage Range of goods Stocks Warehouse Supply Location(map) Transportation To choose ways of bringing the product/service to your client, to provide the product/service at the right time Placement
  • 51. An easy to understand BUSINESS GUIDE Example of comparative analysis of the competitors: Success factors Your firm Rival firm A Rival firm B Rival firm C Range of goods Quality Promotion Location Serving clients Others TOTAL Points Rate every factor (5 excellent, 4 good, 3 medium, 2 - poor) Sum up the points. The higher the rating, the better the competitive position is. The bigger the difference in the rating of your company and the one of your competitors, the higher the competitive advantage of your company is. The following are several stages that you need to pass to make sure your product/service will sell well: Factorii succesului Carry out a market survey (focused on clients, competitors, prices etc.) Who do you turn to when you carry out a market survey? Primary sources Secondary sources Get to know your clients Get to know what you compete with Invest in branding You gather information yourself. You discuss directly with clients (meetings, by phone, e-mail, questionnaires); you ask them what their needs and wishes are when they buy some product. You discuss the price with them and ask them whether it suits them. Data collected by other organizations (the National Statistics Bureau, for instance). Specialized magazines, the Chamber of Commerce and Industry, etc. Define your target group. Find out what their needs and wishes are. Perhaps they want better quality or lower prices; perhaps they want a more comprehensive offer, or a prompt reply. It is crucial to know what your clients expect from a product or service that you want to launch on the market. A new product becomes successful only if it is better or cheaper than the one of your competitors. Adults do not give up their purchase habits so easily. To try a new product, they should be either unhappy about what they are presently supplied or to be very attracted by the image or features of the new product. When it comes to youths and children, their reaction is slightly different. You stand big chances to have them want to try the new product if it carries the inscription NEW!. But even in such a case, you should not expect too much loyalty from this segment. Competition has the advantage of being already present on the market and in the consumers mind. What you need to do is to differentiate yourself and to inform your possible consumers about some relevant benefits. You have one single chance to make a first good impression. The name, the logo, the slogan, the business cards and even the wrapping, depending on the case, represent the first contact between the product and client. It is easier to promote a name that associates the product with the sector of activity. Slogans are a sales instrument as they may persuade people to act, they may point out the benefits or may define the category of which the product is part. The logo should have a visual impact on clients and help them remember and recognize the product. Invest in their promotion so that your target group gets to know them. People buy benefits. Turn the features of your products into benefits for your clients. As a matter of fact nobody is interested in the technical features of devices. The customers want to buy advantages offered by the technology. When you launch a new product and are at the beginning of a business adventure, I assume that you do not have a huge promotion budget. 49
  • 52. Promote Factorii succesului Send a letter to your possible clients to inform them about the launch of the new product, its benefits and how they can get it. The advantage of the online communication resides in the fact that you can address a wider public interested in what you want to announce. In this respect, such social networks as Facebook are very useful. Advertise your product through the media, TV channels, radio stations, billboards, advertising in busses and minibuses, promotion campaigns, degustation, presentations, etc P.R. (Public Relations) Allot time to write to your clients, to answer questions and to try and win a good reputation for you and your product. Build an image of an expert for yourself. Prove through your results that people have important things to learn from you and it will be much easier for you to sound trustworthy during business meetings. The clients who read your works will easily recognise you in a business environment and certainly you will have to take fewer efforts to prove your professional authority. Set the price correctly If the products sale price is too low, you will fail to cover your spending, if it is too high, it will have a negative impact on sales. You will have no profit or will have a minimum profit in both cases. Price formation implies the idea of profit, therefore price-related strategies should be a priority. A correct price may reduce stocking or distribution prices and thus will have a positive impact on the amount of sales and respectively on profit. The price should be competitive (for instance, lower than the one of your rivals), but it should generate the wanted profit (and not a survival profit). Make sure that your sales income covers all the spending. Make a sales forecast. You cannot post low prices for high-quality products. You must plan your budget. But avoid competition based on price only, lay the emphasis on: personalization, orientation towards the client, specialization, quality, values, services, comfort, safety, delivery, guarantees, cleanness, and attractive financial options. How do you plan the price? Price strategies Competitive prices Set the price depending on your competitors prices. Requirements are determined by the clients incomes and wishes, but also by the competitors offers. Costs plus trade markup Producers add 15% to production costs, distributors add 20% and sellers add 40% to the price of the sold goods. Sales Setting prices equal to or lower than the ones of your rivals in order to attract clients. It is efficient for a short term Promotions When the product does not enjoy high demand and your stocks are large, you focus on the diminution of losses and not on profit. Discounts Offer special prices for certain products or for a certain amount of goods. This way you may promote new products too. Versions Offer samples for a lower price and the product itself for a higher price, if the same product/service is sold in several versions. Breaking in The lowest price possible in order to attract as many customers as possible in the shortest time possible so as to conquer the market. Initially, when the product is launched, you may offer a higher price. Subsequently, as the offers get less numerous, and the product gets increasingly known, you may want to decrease the price. Price manipulation A small price, a big deal 50 Go for a smaller price than the ones of your rivals in order to win confidence and clients. But it shall not be so small as to arise suspicions about the products quality. Offer promotions, lower prices, discounts etc. You may specify what the initial price of the product was.
  • 53. An easy to understand BUSINESS GUIDE Premium prices High but short-term profit. Clients believe that a higher price means better quality, image, a better location of the shop, home delivery, a nice bag. Some people buy the brand and not the product. The name sells the product.. Approximate prices Generate a positive psychological effect. It is not by accident that quite often you can see prices like 9.99 instead of 10. Effect of the digits 0 and 9 People associate the digit 9 with value and the digit 0 with quality. Food in restaurants costs 50 lei, but 5.99 lei in fast-food. The strategy does not pursue the profit but the way in which the product is perceived. Is it valuable or of quality? Encourage people to use the product for a long time People pay for quarterly aerobics subscription, but in a month they give up as they take it for free. Others who pay monthly will attend aerobics classes on a regular basis. Premium prices Luxury companies are a perfect example for this strategy. The image, the wrapping and the delivery of the product may justify its high price. Reference prices For instance, in supermarkets, cheaper products are placed near more expensive products and, as a rule, their prices are 15% lower. Big and small losses Give people the instalment payment option. It does not matter that they will pay more after settling all instalments; what matters is the psychological effect on clients. Enhance the products value Price and quantity Go for TV advertising and provide new details every time it is broadcast. Offer more for the same price. Useful advices given to your clients (whose implementation practically costs you nothing) Advices Check the content of the offer Reply to messages in the shortest time possible Relations with clients The info you provide must be clear and trustworthy. Check on your friends whether it is clear or still vague. Consider constructive criticism. You should answer in 48 hours at the latest; otherwise you will lose possible clients. If you do not have a specific answer, at least tell them that you received the message and will give them an answer as soon as possible. At the same time, persuade the client that it is worth getting back to you and placing an order. Clients erase them Thank the client, display maximum interest. If you get the clients personal telephone number, you won, because you can call them periodically to ask them whether they are satisfied with the product/service and to suggest something new. You may send birthday congratulatory messages. Display a positive, friendly, professional attitude You should cope with your clients requirements, discontent and questions in a decent manner. Be patient, understanding and useful. You should always have answers to any question, for instance I know exactly what you need. Be careful and make sure that products reach the clients on time Supply the goods in the shortest time possible and deliver on your promises. Be responsible and do not ignore your clients problems. Answer both questions and discontent. Show that you care and find a quick solution. The client will appreciate that. Take into account any discontent and thank the client for every suggestion and try to put it into practice provided that it is objective. Award your clients loyalty Offer stable clients bonuses, presents, discounts, something special to which you contributed yourself (such as a hand-made greeting card or a handembroidered cap bearing the symbols of the company). Show you are always available Assure your clients that they may contact some of the companys representatives at any time. If you cannot provide 24/24 services, at least let your clients know when they can get an answer. (set a phone machine, post a message on the door, etc.) A satisfied person will get back to you and will bring other clients. If clients like the product, even when they do not have money, they will be motivated to find some and come and buy the product. Give quality Offer free-of-charge samples Organize lotteries This way you will keep in touch with your clients until the winner is announced. The present must be connected with the promoted product. Profit in business comes from repeat customers, customers that boast about your project or service and that bring friends with them. (W. Edwards Deming) 51
  • 54. How do you locate your business? The first question you need to answer is whether you need an office at all. Why? Because there are many activities that you can initially carry out at home. Which ones? 1. Providing marketing services, call centre (in particular online) 2. Journalism 3. Translations 4. Consultancy services 5. Tailoring-crocheting 6. Repairing electrical devices 7. Baby-sitting 8. Housekeeping 9. Arts (drawing, craftsmanship) 10. Fashion design/architecture/interior design 11. Writing/assessing projects g 12. Editing books/textbooks xtbooks Working from home Advantages you work whenever and however you want you dont need to spend money on transport you can work even wearing your pyjamas, it does not matter what you ware you have a flexible working schedule you dont need to pay any rent you are in a familiar and comfortable environment Disadvantages no socialization you cannot directly monitor your employees (unless you bring them home) you get fatter (you move less) you have no privacy in your own house, you start taking it as an office your family members may divert your attention from work you have limited space As an alternative option, you may resort to legal addresses put up for sale, such as the Intelligent Office. Intelligent Office = the service of taking over and redirecting e-mail messages and letters sent by post, telephone calls, fax messages, answering phone calls, providing access to additional business-support services. So, you have all the benefits of a modern, furnished and well equipped office, but without being burdened by the concern to rent offices and hire staff. Advantages and services of an Intelligent Office: Your company is headquartered in a modern building; You have the possibility of having a prestigious legal address for your company and on your business card; You dont have to pay rent fees or maintenance fees, utility services and other additional taxes; The Intelligent Office is your reception service; Telephone calls, fax messages, letters are received in a professional manner and on behalf of your company, and, at your instructions, will be redirected to your telephone number, at home, in your office or wherever you are; You have access to a wide number of offices which you can pay per hour and which can be used for business meetings, seminars, presentations, training, and conferences. The halls are provided with telephone lines, individual phone numbers and Wi-Fi. 52
  • 55. An easy to understand BUSINESS GUIDE Who can benefit from Intelligent Office services? Those who are initiating a business or who are in a transition period, working from home and are not ready yet to cover the spending for a new office. Those who do not want to work without office staff or who do not have this need on a permanent basis. Those who want to check the market before using a permanent office. Companies that need offices of the highest quality for the sake of their good image. Those who need a prestigious address in order to ensure good relations with their clients. Those who have business trips very often. When you decided that you do need an office, you should answer the following questions 1. How close is your office to your clients and competitors? 2. To what extent is the office accessible in terms of transport means? What is the state of the roads? 3. Is the office visible, accessible to your clients? Is the entrance from the street? 4. Is the office spacious enough? Are its rooms well divided? 5. How much is the rent? Is the price advantageous compared with market prices? 6. Is there a parking lot there? 7. Has it been renewed? When did the last renovation take place? 8. What facilities does it offer? For instance, Internet connection, access to utility services. 9. Is the WC visible from the hall where the clients are received? 10. Is the illumination system good enough? 11. Are there enough plugs? 12. Does the WC operate all right? 13. Do the rooms have separate entrances? 14. Can the reception hall be viewed from the entrance door? 15. Is there a smoking place? 16. Who are your neighbours? 17. How close are your rivals? 18. Is there any possibility of placing outdoor billboards? 19. What is the office meant for? (if you rent an apartment, you will have to change its destination to get a licence.) How much space do you need? These are the four basic compartments for the service s sphere. for the director, accountant, manager Customer service office Sanitary block, kitchen refreshing area, with possibility to make a tea Administrative office Closet/room for storing materials for the secretary and customer relationship manager for materials, boxes, chairs, etc 53
  • 56. 18. How to draft a financial plan? You need to develop a financial plan in order to see whether your investments will be rewarding, will bring you profits in a reasonable period of time. At the same time, the information included in your financial plan will help you to easier explain the concept of your business and argument the investment to a potential funder. Unfortunately, when you are at the very beginning of your business, you have not yet results to help you making a credible and sound proposal to your creditor. Therefore, you have to resort to estimative indicators. But these must be as clear and realist as possible, to be consistent with sales and not the opposite. Financial plan development stages Determine the amount of the investment 1. 2. 3. 4. 5. 6. 7. 8. Forecast incomes and expenditures Determine the profitability Determine the amount of the investment Forecast incomes and expenditures for the first years of activity Establish the proceeds and payments schedule Identify the investment recovery term Establish the needed funding from own sources and from other sources Determine the cost of external funding (commission, interest, pledge, etc.) Draft the reimbursement plan of attracted credits Verify whether the business is/will be profitable The investment can be performed from 3 sources: Equity Borrowed ed al capital nk (ex. bank s) credits) Cash entries (money earned from activity) Determine the amount of the investment To know how much money you need to invest, you have to calculate the initial needed expenditures. Forecast of investments (food market) Start up the business Purchase commercial equipment Advertising Rent of the market Purchase the first lot of merchandise TOTAL INVESTMENTS Funded from own sources 2-year loan with 30% interest rate 54 lei 10 000 30 000 5 000 1 500 20 000 80 000 40 000 40 000
  • 57. An easy to understand BUSINESS GUIDE These are the categories of expenditures, you can also see in THE CHART OF ACCOUNTS OF THE FINANCIALECONOMIC ACTIVITY OF ENTERPRISES No 174 of 25.12.97. The Chart of Accounts developed based on National Accounting Standards (S.N.C.), taking into account requirements for producing financial reports and management accounting. Therefore, in practice, you will meet this very often. TYPES OF EXPENDITURES OPERATIONAL Cost of sales ACTIVITY EXPENDITURES General and administrative expenditures Cost of sold merchandise Cost of provided services Cost of assembling-construction works Cost of leasing services Commercial costs Expenditures related to marketing operations Expenditures related to packages and packing of products and goods Expenditures related to the delivery transportation Expenditures related to publicity Expenditures related to warranty reparation and service Expenditures related to doubtful debts Expenditures related to the reimbursement and price reduction for the sold goods Other commercial expenditures General and administrative expenditures Expenditures related to the wear, reparation and maintenance of general usage fixed assets Expenditures related to the depreciation of non-material assets Expenditures related to wages paid to the administrative and management staff Taxes, fees and payments, except for the income tax Expenditures related to charity and sponsorship Labour safety related expenditures Representation expenditures Travel expenditures Other general and administrative expenditures Other operational expenditures Expenditures related to the sale of other current assets Expenditures related to the current lease Expenditures related to fines, penalties, amends Expenditures for amending the current assets assessment methods Expenditures related to interest rates for credits and loans Undistributed indirect production expenditures Shortages and losses from the damage of values Expenditures associated with the scrap production Other operational expenditures NON-OPERATIONAL Investment activity Expenditures related to the immaterial assets output ACTIVITY EXPENDITURES expenditures Expenditures related to the long-term tangible assets Expenditures related to the long-term financial assets output Expenditures from the reassessment of long-term assets at their output Expenditures associated with shareholding in other enterprises Expenditures related to operations with related parties Other expenditures related to the investment activity Financial activity expenditures Expenditures related to the payment of royalties Expenditures related to the financed lease of long-term tangible assets Expenditures related to exchange rate differences Other expenditures related to the financial activity Exceptional losses Losses due to natural disasters Losses due to political disturbances Losses due to amendments in the country's legislation EXPENDITURES (SAVINGS) RELATED TO INCOME TAX 55
  • 58. Be balanced with your expenditures. You need to know to make the difference between useless, needed and useful expenditures; you need to see what exactly you can give up and what you cannot. To plan cash inputs, you need to make calculations on several categories of incomes. According to the Chart of Accounts, these are the following: CATEGORIES OF INCOMES INCOMES FROM Incomes from sales OPERATIONAL ACTIVITY Other operational incomes INCOMES FROM Incomes from the investment NON-OPERATIONAL activity ACTIVITY Incomes from the sale of products Incomes from the sale of goods Incomes from the provision of services Incomes from construction contracts Incomes from leasing Incomes from the sale of other current assets Incomes from current lease Incomes from fines, penalties, amends Incomes from amending the current assets assessment methods Incomes from the recovery of material damage Other operational incomes Incomes from the immaterial assets output Incomes from the long-term tangible assets Incomes from the long-term financial assets outputs Incomes from equities Incomes from interest rates Incomes from the reassessment gap of out long-term assets Incomes from shareholding in other enterprises Incomes from operations with related parties Other incomes from investment activity Incomes from financial activity Incomes from royalties Incomes from the financed lease of long-term tangible assets Incomes from exchange rate differences Incomes from free of charge in assets Incomes from state subsidies, bonuses, awards and sponsored amounts Incomes from non-competition contracts Other incomes from the financial activity Exceptional incomes Damages paid to recover losses due to natural disasters Other exceptional incomes Once you have done forecasts on cash entries, you will see whether part of it is sufficient to cover expenditures related to the investment activity, after all other expenditures are covered. If the enterprise has no sufficient means for the investment and you do not have own capital available for the moment, then you can appeal to funders and ask for a credit/grant. EXAMPLE Incomes from sales Cost of the sold merchandise Gross profit Commercial expenditures Expenditures related to the staff remuneration Rent of the market Amortization of equipment Other expenditures Total operational expenditures Operational profit Interests on loan Profit before taxation 600000 450000 150000 5000 60000 15000 6000 12000 98000 48000 12000 36000 Often, in order to determine whether a credit is indeed required, the percent of sales method is applied. 56
  • 59. An easy to understand BUSINESS GUIDE EXAMPLE 1. To be performed on a management date: Balance sheet of the enterprise (lei ) ASSETS Long-term assets Available cash Debtors debts Stock of goods and materials Total assets Value 56 000 2 000 15 350 46 650 120 000 LIABILITIES Value Statutory capital Statutory profit Financial creditor debts Commercial creditor debts Total liabilities 55 000 45 000 8 000 12 000 120 000 Situation of incomes of the enterprise Name Value (lei) Sales Net profit Paid dividends % of sales 85 000 8 100 5 800 100 10 7 2. Calculate the percent (%) of sales of balance sheet positions, but only those having a direct relation with sales: ASSETS % Long-term assets * 100% Sales Cash available * 100% Sales Debtors debts *100% Sales Stocks *100% Sales Total assets 65,8% Share capital - 2,3% Non-distributed profit - 18,0% Creditor debts Sales Creditor debts Sales Total liabilities 9,4% 54,8% 140,9% LIABILITIES % 14,1% 23,5% 3. The forecasted level of sales shall be estimated as follows: a) According to the information from the Incomes of the Enterprise table, the enterprise, on the management date, has achieved sales in the amount of 85,000 lei b) Following the market investigations, the enterprise noticed that the demand for the product/service offered by it is much higher than the amount available so far; c) The enterprise decides to increase its sales from 85,000 lei to 130,000 lei. 4. The amount of the funding needed to ensure the respective growth of sales, shall be determined by performing the following calculation stages: a) Make the difference between "total assets and total liabilities: 140,9% - 23,5%=117% b) Increase in forecasted sales = = forecasted level of sales (130,000 lei) - sales performed in the reporting month (85,000 lei): 130 000 lei 85 000 lei = 45 000 lei; c) Total of funding needed to increase sales by 45,000 lei: 45 000 lei x 117% = 52 650 lei. 5. Calculate the net profit and dividends, estimated for the new level of sales: a) Estimated net profit: 130 000 lei x 10 % = 13 000 lei, where: 130 000 lei amount of forecasted sales; 10% (net profit to sales on the management date); b) Estimated dividends: 130 000 lei x 7 %= 9 100 lei, where: 7% (dividends to sales on the management date); c) Non-distributed forecasted profit will be the difference between the forecasted net profit (13,000 lei) and forecasted dividends (9,100 lei): 13 000 lei 9 100 lei = 3 900 lei. 57
  • 60. 6. Determine: Net borrowing Net borrowing Total funding needed to increase sales (see item 4. c.) minus Forecasted non-distributed profit = 48 750 lei = 52 650 lei minus 3 900 lei A useful list of financial indicators is shown in Ann ex 6. Here are the aspects that funders are primarily interested in: 1. Balance sheet 2. Report on financial results 3. Report on cash flow 4. Liquidity, solvency, return, feasibility 5. Financial stability, developing dynamics (in time) 6. Long-term tangible assets 7. Rationale of forecasts 8. Investment recovery term 9. Risk assessment Start up a business that does not require large infusions of capital at the beginning. You need to focus on business ideas generating profit, because the funder will only give you a credit if your financial plans show that investment is profitable. Liquidity capacity of the enterprise to honour its short-term liabilities, including the interest rate which is usually paid on a monthly basis. Solvency capacity of an economic agent to pay its debt to the creditor, on the preliminarily established payment term. Feasibility complex analysis, preceding the decision on investments, aiming at establishing the opportunity and performance of some objectives on investments. Return capacity of the enterprise to generate profit (credit reimbursement source), This is the return calculation formula: Avetage profit level Profitability = yearly quarerly monthly *100 % volume of investment Leverage = increase of decrease in equity return following the use of a credit L = (Re Interest rate) * K borrowed / K own Financial return = Economic return +/- Leverage Breakeven (critical amount) = minimum amount of provided services ensuring a non-loss activity of the enterprise, the level at which the income of the business covers all expenditures only. The breakeven shall be calculated in order to know whether the activity will start bringing profits. Breakeven= Fixed costs Variable 1Costs Sales Suppose the investment accounted for 40,000 lei and has a length of 4 management periods (years/trimesters/month). 58
  • 61. An easy to understand BUSINESS GUIDE Management period ( years/ trimester/months) Profit (lei) 1 2 3 4 TOTAL 5 500 6 700 8 400 9 600 30 200 Average profit: 30,200 lei/ 4= 7,550 lei Rate of return on investment (ROI): ( 7 550 lei/40 000 lei ) x 100% = 18.8% Whether to accept or not the return of the project is on the investors decision. If ROI>= 25%-30% then the project is considered profitable, because the investor has the capacity to cover other eventual expenditures, at the same time having profits and recovering its investment. Recovery period of the investment amount (regardless of its origin) = number of years/trimesters/months needed to recover the initial investment from the net cash available, generated by the operations specific to the project. The recovery term of the investment reveals the liquidity amount of a project and the speed by which the invested money is recovered. Example Net cash flows, forecasted for four management periods: Management period (years/trimesters/months) I II III IV TOTAL Forecasted net cash flow (lei) 75 000 95000 98 000 130 000 398 000 225 000 (total amount of investment) = 75,000 (cash flow, period I) + 95,000 (cash flow, period II)+55, 000 (part of the cash flow, period III-a). 55,000 : 98,000= 0.6 of period III-a Hence, the investment recovery period is 2.6 years/trimesters/months. For your financial forecasts to be more trustworthy and conclusive, you may produce your financial plan in two versions (optimist and pessimist), because the reality is usually somewhere in the middle. You must be always prepared for the worst case scenario. And do not forget to periodically update your plan, since the financial environment is a quite flexible one, bringing changes at the level of figures as well. Think what you should do in case things do not develop as expected. Make three scenarios for each decision, in this way you will be prepared for any situation. Planning is usually performed for 3-7 years (e.g., in case of services, the forecasting period is shorter, in agriculture - longer). Financial planning basic components Cash flow Financial results (profit/losses) Balance sheet Year 1 Year 2 Year 3 monthly quarterly quarterly quarterly quarterly quarterly yearly yearly yearly Cash flows (in and out cash) show where does the money come and go, show the solvency (capacity of an economic agent to pay its debt to the creditor, on the preliminarily established payment term) 59
  • 62. In Sales in cash Credits and loans Entries of debts from debtors Sales of non-used fixed assets Proceeds from interests or dividends Issue of shares Other fees, royalties, incomes etc. Out Purchases in cash Payments to creditors Payment of wages and bonuses Purchase of fixed assets Reimbursement of credits and loans Payment of dividends, interests and taxes Other payments Financial result shall be calculated as follows: Revenue income Cost of sales = Gross Profit Gross Profit Expenditures per period = Taxable Profit Taxable Profit Tax on income = Net Profit The balance sheet shows the financial situation and presents the image of assets (economic goods), liabilities (equity, debts) of a commercial society, at a certain moment. It represents the value of economic goods in correlation with funding sources. ANNEX 6 : Financial indicators When developing your own financial plan, you can inspire yourself from the Business Plan Model included in Annex 9 B Risks assessment Risk = the incapacity of the enterprise to adjust itself in time and at the lowest cost to variations of the environment it activates. i TYPES OF RISKS operational, commercial risk financial risk innovational risk p political, social, legislative risk natural risc changes in consumers' preferences increa increase in products prices c new competitors failure to fulfil financial liabilities national currency rates fluctuations evolution of bank interests failur failure to pay debts contr contractual penalties security leak on business wrong product design failur failure to reach planned technical parameters overc overcome of cost estimate accidents at work unfavourable amendments of legislation, increase in taxes politi political instability introd introduction of restrictions unfavourable climatic conditions earth earthquakes, volcanic erruption droug drought, floods, storms, landslides epide epidemics ownership risk complete or partial deterioration of assets (buildings, equipment, values me in merchandise and materials, etc storm storms risk of manufacturing marketing of a lower amount of production than planned increase in material expenditures accidents and deteriorations of equipment obtaining inconsistent production, rejections by consumers accidents at work 60
  • 63. An easy to understand BUSINESS GUIDE When you know the risks, you can prevent them by developing strategies on combating them. These strategies must include risk reduction and avoidance measures. Risk reduction organizational measures Examples Risk avoidance By depositing money in the bank on a daily basis, you eliminate losses caused by possible thefts Risk limitation Establish a maximum amount of expenditures, a certain share of products that can be sold on credit. Risk diversification Distribution of resources per projects which are not interrelated. Risk transmission Contracts on keeping and transport of shipments, sale, service and supply contracts etc. (when for the party transmitting the risk, losses are much more significant) Risk insurance Transmission of some risks to insurance companies (e.g., Casco, insurance of enterprises goods, harvest, livestock insurance, insurance against accidents, theft insurance, professional liability insurance) 19. What to write in a business plan? Business plan (BP) = a confidential document, containing the objectives and goals of the enterprise, indicating in details how to achieve them Pentru ce?What for? 1. To describe your business 2. To get to know what resources you need 3. To plan the activity so that to make it profitable 4. To establish a goal and the objectives to achieve it 5. To show that the effort-effect ratio justifies the investment 6. To get the business funding agreement BP = an entrepreneurship management tool (an action plan), a document, based on which you can get a bank credit or attract investments Types of business plans Summary BP Full BP 10-15 pages 20-40 pages Basic information about the business Detailed description of the business When the amount of the required financial means is small When the business environment is being tested Operational BP >40 pages Detailed business plan, with the detailed description of tasks for each subdivision When the required amount is relatively high (e.g. 20,000 euro) 61
  • 64. BP structure Title page Contents Summary Background of the firm (Introduction) Description of the business (summary) Components Full name of the firm Legal address Contacts Directors full name, signature Date when plan is drafted Reference to the confidentiality of the information Optional: business plan outlining goal Basic compartments (indicating the pages) Brief description of the business Reflects the essence of the BP, the goal of developing it Brief information on the market, product, staff Financial resources necessary to achieve the plan Expected economic-financial results To wake up investors, creditors interest To be written after finishing the BP Data on the registration of the firm Legal form of the enterprise Founders Area of activity Goal and objectives of the business Location Founders Partners Possible investors Offices SWOT analysis What is the SWOT analysis: The SWOT analysis = a strategic method, used to evaluate factors and phenomena affecting a project or an enterprise. This method allows to establish the projects goals and to identify internal and external factors facilitating or stagnating their achievement. SWOT analysis Internal factors External factors Positive influence Strengths (qualities of the project or staff, offering advantages as compared to the others involved in the process) Opportunities (possible external factors offering secondary opportunities in achieving the goal) Strengths What are you doing well? What are your resources? What are your advantages in front of competitors? Opportunities E.g., result of the market growing, change in the lifestyle, solution of problems associated with current situations, a positive perception of your business from the market, or the capacity to offer a better value, leading to a growing demand for the offered services. Description of products or services 62 Technological, quality features Assortment, nomenclature Needs satisfied by these Packing, design Catalogues, pictures, drafts Why clients will prefer this product namely Negative influence Weaknesses (aspects that are weakening the project) Threats (possible external factors that can create obstacles in achieving the goal) Weaknesses E.g., lack of experience, limited resources, lack of access to technology or capacity, low service offer, or a weak location of your business. Threats E.g., competition, intolerable increase in process by suppliers, governmental regulations, economy failures, negative effect of the media, change in consumers behaviours that could reduce the amount of your sales, or the introduction of a more advanced technology outdating your products, services or equipment.
  • 65. An easy to understand BUSINESS GUIDE Market and marketing strategy Market characteristics, structure and size Market evolution Your firms market share Actual and prospective clients Analysis of consumers needs Price policy Location Distribution channels Product/service promotion Competitors (strengths and weaknesses) about 3-4 Comparative advantages Sales strategies Organization and management Financial plan Management team and its features Needed staff Organizational structure Bookkeeping information and reports Periodic cash flows (quarterly, monthly, yearly, etc.) Estimation of quarterly, monthly or yearly sales, incomes or expenditures, depending on the requirements of investors or of the credit societies Loan proposal Credit form Conclusions Annexes and references Ways of developing a Business Plan: The BP is developed by the head and is passed on to be added up by the heads of departments Each department develops its proposal, and the entrepreneur integrates them into a plan The BP is developed by external consultants-experts ANNEX 8 Business plan notebook is a draft business plan, where you only write in square brackets your information. ANNEX 9 Business plan model of an individual entrepreneur in the rural sector. 20. Where to find money for the business? Here are a few sources for money for your business: 1 Hoard (your own savings) Money sent from abroad (remittances) 2 Money of your associates, business partners Money paid in advance by your clients, suppliers 3 Loans from banks, microfunding companies g p Loans from your acquaintances, friends 4 Grants (non-reimbursable money) from state programmes, national and international funds, through NGOs, etc. 63
  • 66. To access the rest of the money from funders, usually, you have to invest from your own resources (savings, remittances) at least 20% of the sum needed to start up the business. A credit or a loan is an important small business funding source. In Moldova, as a rule, loans can be taken from commercial banks, business funding societies, foundations, NGOs, etc. The loan granting process varies from one bank to another, depending on the credit type and purpose. Usually, the procedure is the following: 1. Preparing for and carrying out the first meeting with the creditor. Useful tips: Explain the essence of the project, do not lay emphasis on guaranteeing the credit; Show that you are ready, you have the potential and the necessary experience to implement the project; Be informed/well prepared with documents, you must have the financial documents and contracts concluded with your business partners; You need to have the verbal and written explanation of your project; Prepare the business plan according to the model requested by each bank apart; It is recommended to independently develop the business plan, because after the first meeting with the creditor, you will have to amend it. 2. Submitting the crediting application by the small business enterprise, with the following information mentioned: Credit amount; Utilization term; Utilization goals; Offered guarantees. The following information, documents, also has to be submitted: Business plan; Authorizations, licenses, Balance sheet of the enterprise, Report on financial outcomes, Sell-buy contracts, Documents confirming commitments to reimburse the credit, Other documents, as required. The applicant who is not a client of the bank shall also submit the the registration certificate of the enterprise, the abstract from the State Register and the statute. What to pay attention to before submitting a credit application? a) The interest rate included in the credit contract man be: Fixed does not change during the validity period of the contract; Floating can be modified by the creditor; Yearly, monthly, weekly, daily; Single calculated from the amount of the credit from the contract for the entire validity period, regardless of the credit reimbursement scheme; Effective annual interest rate calculated based on the interest and on all commissions made; Real effective interest rate = effective interest rate, minus inflation rate. The interest rate can be calculated automatically on almost all Moldovan banks websites. Calculation of the monthly interest rate is made according to the formula: (Credit balance * annual interest rate * no of days in the month) Interest rate = 365 Credit balance = credit amount at the end of the previous month 64
  • 67. An easy to understand BUSINESS GUIDE b) Credit utilization period Civil Code, art. 263 c) Interest rate paying frequency monthly, quarterly, at the final date from the credit contract, on fixed dates, etc. Civil Code, art. 869 and art. 1237 3. Once all documents have been submitted, the application is analysed by the banks credit board. The creditor performs an informal assessment of the potential debtor, by applying the 5 C method: 1. Character - competence of the managerial team, creditors confidence; 2. Capacity projects feasibility, capacity to reimburse the credit by the due date; 3. Capital reasonable amount personally invested by the debtor along with the credit; 4. Conditions quality of the debtors marketing, market demand and supply; 5. Collateral (guarantees) decision whether the credit has to be guaranteed and by what. The table below describes one of the informal assessment methods of the potential debtor. Nr criteria CRITERION 1 Mortgage liquidity, administrative-territorial area 2 Residence time on the same address 3 Profession 4 Period of service at the last work place 5 Credit history 6 Civil status 7 Number of dependants ASSESSMENT - Score Owned villa Owned apartment Housing stock rent Individual dwelling house 0 to 6 months 7 months to 1 year 1 year to 3 years 3 years to 5 years More than 5 years Higher education Secondary education Dealer Specialized worker Pensioner Worker Activity sector: budgetary/private Labour contract type Size of the employer (small/big company) Less than one year 1 to 2 years 2 to 5 years 5 to 8 years More than 8 years None Demand deposit or savings Committed appropriations (credits) The BIC (Biroul Istoriilor de Credit SRL Credit History Bureau) collects from all commercial banks information on debtors (physical/legal persons) and information on the credits status and sends this information to the BNM. The bank can get information from the BIC with your written agreement only. If you refuse to give your consent, you risk to be refused the credit. - Single - Married - Divorced - Widower/widow - 0 persons - 1 person - 2 persons - 3 or more persons 65
  • 68. 8 Monthly net income (lei) 9 Guarantees - 10 TOTAL SCORE 11 Categories of applicants 200-500 501-1000 1001-1500 1501-2000 2001-3000 over3000 Irrevocable bank guarantees received from the first rank domestic and foreign banks Bank deposit Insurance of credits and interest rates at an approved insurance-reinsurance society Mortgage Pledge with dispossession Pledge without dispossession Debt assignment Surety bonds General pledge Up to 7 8-13 14-25 inclusively E D C 26-30 Over 30 B A Note: An applicant scoring less than 14 points cannot be accepted for crediting. Commercial banks have an internal credit policy (which is being changed and supplemented annually) and is developed in line with the credit policy established by the BNM, but in a more specified way. For example, credits are automatically REFUSED to applicants who: 4. 4. Live on rent Apply for a credit in another administrative-territorial unit Have a period of service at the last work place of less than one year Have a net income of less than 1000 lei Are aged retirement age according to the legislation in effect If the applicant meets all banks requirements, a Credit or Loan Contract will be concluded. What are the types of credits? As a rule, banks classify credits in the following categories: Standard Payment on time Observance of all credit conditions Supervised Problems related to the maturity reimbursement of credit and interest rates Diminution of the probability to reimburse the credit, if no measurements to solve the problem are undertaken Substandard Impossibility to fully recover the credit Probability that the bank will register losses, if deficiencies are not solved Losses can be caused by: Unfavourable or worsening financial situation of the debtor Credit insurance is insufficient or is worsening Other unfavourable factors leading to the impossibility of reimbursing the credit according to the existent reimbursement conditions Doubtful Reimbursement or liquidation of the credit based on the existent conditions, values and guarantees is uncertain Probability of losses is extremely high, but there are certain factors that could contribute to improving the reimbursement situation Compromised Credits that cannot be reimbursed to the bank, which means that their further registration as bank assets is not guaranteed. 66
  • 69. An easy to understand BUSINESS GUIDE Credits/Loans Debtor Physical persons Legal persons Period Short term Medium term Long term Activity field Agriculture/food industry Industry/trade For legal economic activities, included based on patent. For legal economic activities. Up to one year 1-5 years More than 5 years Harvesting, livestock, fishing, forestry Wholesale or retail, service provision Energy industry Purchase, construction, reconstruction Through a suretyship contract, a party (trustee) commits himself to the other party (creditor) to fully or partially, free or onerously execute debtors obligation. Civil Code, art. 1146 Bank guarantee Written commitment, undertaken by a bank or by another financial institution (guarantee), to the request of another person (credit release authority), to pay to the authorising officer (beneficiary) a sum of money on the basis of the written demand from the beneficiary. Civil Code, art. 1246 Insurance policy Providing means Credit insurance Constructions, purchase of real estate For consumption In MDL In foreign currency In cash No cash Pledge Surety bonds Currency Electricity, petrol, coal, other fuel, etc. A certificate by which the insurance company commits itself to pay to the creditor the insurance premiums for the credit in case the insured risk is produced. Civil Code, art. 1308-1309 Credit Ordinary credit provision and reimbursement Credit line Revolving Overdraft Factoring Household, family, personal expenditures Use in Moldova For import activities Cash Money transferred to the account Real right, on the basis of which the creditor (pledgee) can pretend the satisfaction of his claims Civil Code, art. 454 Paid integrally. Reimbursed according to the reimbursement schedule. In case of early integral payment, the credit shall be considered fully paid on that day. Paid in rates. Reimbursed according to the agreement of parties, in rates, or according to the reimbursement schedule. In case of early integral payment, the credit shall be considered fully paid on that day. Similar to the credit line. The advantage of the revolving credit is the debtors possibility during the entire period of the credit contract to reimburse partially or integrally the credit amount and to borrow again, partially or integrally, every time he needs. Short-term credit, even up to a month, intended for the execution of current payments. Mainly offered to disciplined clients with a bank service positive history. Based on the Contract of factoring, the provider of goods and services (adhering entity) undertakes to transfer debts that appeared at present or would appear in future from contracts on sale of goods, providing of services and performing of works for third parties of a factoring enterprise (factor), and the last-mentioned undertakes at least two of the following obligations: a) finance the adhering entity, including loans and advance payments; b) bookkeeping of debts; c) ensure carrying out of debts-call-and-cashing procedures; d) assumption of risk for debtor's insolvency for assumed debts (del credere). Civil Code, art. 1290 67
  • 70. What is a tax credit? The state offers tax credits temporary exemption from the payment to the budget of the income tax. Tax credit amount amount of the taxable income. Who benefits from the tax credit? Enterprises with maximum 19 employees and an amount of annual net sales of own products and/or services provided of maximum 3 million lei; Peasant farms. This exemption is granted for maximum 3 years (tax holiday), provided that 80% of the exemption amount is invested in the development of own production and services, and new jobs. What shall you do to benefit from a tax credit? The enterprise shall submit to the Territorial State Tax Inspectorate a request to conclude a Credit Agreement. The IFS will take 3 days to consider the application, and in case of a positive answer it will invite the administrator of the enterprise to sign the agreement, and in case of refusal, it will inform in written the enterprise about the reasons Scanned template of credit request form Here are a few types of credits you could access. C.B., Contact details Types of credits S.A. Corporatia de INVESTITIONAL Loan (including from the RISP and IFAD project sources) Finantare Rurala Eligible beneficiaries Legal entities Chisinau MD-2069, 10/5, Ion Creanga Str Tel: 59-55-59 Fax: 59 56 59 E-mail: office@microfinance.md Balti 5, 1 Mai Str, ap.3a Tel:+373 231 94273 Fax:+373 231 66 154 E-mail: balti@microfinance.md Orhei 21/2, Renasterii National Str., Tel:+373 235 32131 Fax:+373 235 32131 E-mail: orhei@microfinance.md Calarasi 19, M.Eminescu Str. Tel: +373 244 20088 Fax: +373 244 20088 E-mail: calarasi@microfinance.md Edinet 67, Independentei Str. Tel:+37324623320 Fax:+37324623320 E-mail: edinet@microfinance.md Hinceti 146, Mihalcea Hincu Str. Tel:+37326925870 Fax:+37326925870 E-mail: hincesti@microfinance.md Soroca 12, Mihai Malamud Str. Tel:+37323030314 Fax:+37323030314 E-mail: soroca@microfinance.md Stefan Voda 4a, 31 August Str. Tel:+37324222148 Fax:+37324222148 E-mail: tefanvoda@microfinance.md Loan destination Loan amount Maximum term Loan grace period Interest rate Loan reimbursement Interest rate payment Pledge Commission FERMIER Loan Eligible beneficiaries Loan destination Loan amount Maximum term Loan grace period Interest rate Loan reimbursement Interest rate payment Pledge Commission Investments in business Minimum 30 000 MDL, maximum 2 000 000 MDL 7 years (84 months) Individual, maximum 12 months 14% variable (in case of immovable pledge insurance),15% variable (in case of mixed pledge insurance (immovable + movable), 16% variable, in case of movable pledge insurance) Individual schedule Monthly or quarterly 100% - 130% From 2% to 3% (depending on the term and approved amount) Enterprises and peasant farms with activities in the agricultural field Current assets in agriculture Minimum 100 000 MDL, maximum 300 000 MDL 18 months Individual, maximum 12 months 12% fixed, if the term is up to 12 months, variable, if the term is over 12 months Individual schedule Monthly or quarterly 100% - 130% 3% of the approved amount MIJLOACE CIRCULANTE Loan (Current Assets Loan) Eligible beneficiaries Legal entities Loan destination Current assets for business Minimum 30 000 MDL, maximum 2 000 000 MDL Loan amount 3 years (36 months) Maximum term 68 Necessary documents www.microfinance.md Documents on the credit request and utilization: -Credit request (template form) -Economic motivation for the credit (template form) -Applicants statement (template form) or other documents on credit utilization and need for funding*. *Intentions/Investments/acquisition contract, construction permit, construction authorisation, design, payment order, invoices, customs declarations that need to be paid or any other document. Applicants identity document: -Identity card (copy) Documents confirming the revenue sources: -Wage certificate (template form) -or Income statement for the last 2 years -or Documents on holding shares in registered businesses* -or lease agreements of owned objects, works contracts and others -Contracts or Abstracts from bank accounts (with turnovers) -International transfers receipt confirmations (release order) -Certificate on incomes and expenditures (template form) *In case business is the main revenue source, you shall submit financial documents certifying the business performance, according to requirements mentioned in the legal entities column Documents on assets proposed as guarantee: Immovable assets: -Abstract from the State Register of Immovable Assets, issued by the Territorial Cadastral Office*. (original) -Documents certifying the ownership right over the immovable asset. (copy) -Certificate from the State Fiscal Inspectorate on the absence or existence of debts to the budget*. (original) -Assessment report of the immovable asset (assessment performed by an independent evaluator)* (copy)
  • 71. An easy to understand BUSINESS GUIDE C.B., Contact details Cahul 22/7, Republicii Str. Tel:+37329933074 Fax:+37329933074 E-mail: cahul@microfinance.md Types of credits Loan grace period Interest rate Loan reimbursement Interest rate payment Pledge Commission Loan (No Pledge Loan) Eligible beneficiaries Loan destination Loan amount Maximum term Loan grace period Interest rate Loan reimbursement Interest rate payment Pledge Commission ProCredit Bank 65, Stefan tel Mare Bld, office 901, Chisinau Tel.: (+373 22) 279351 Fax: (+373 22) 273488 E-mail: office@procreditbank.md Individual, maximum 12 months 14% variable (in case of immovable pledge insurance), 15% variable (in case of mixed pledge insurance (immovable + movable), 16% variable, in case of movable pledge insurance) Individual schedule Monthly or quarterly 100% - 130% From 2% to 3% (depending on the approved amount) Legal entities with loan balance at the Corporation, insured Investments or current assets in business Up to 20% from the total balance of active loans on the day the request is made, but not exceeding 200,000 MDL Within the existing loan maturity, but not longer than 2 years (24 months) Without grace period +2% to the interest rate of the existing loan, variable Monthly Monthly Without pledge 3% 1.Credits for current and fixed assets Issued to entrepreneurs (legal entities firms, private entrepreneurs and physical persons), performing their activity in Moldova. Conditions: To get the credit, you need to have a stable business, without interruption when submitting the request. Debtors minimum activity period: trade/services 3 months, production 3 months, agriculture 12 months. Fees: Currency MDL Purpose For current assets For fixed assets Amount From 32,000 MDL Term Up to 36 months Up to 60 months Interest rate* From TDA 9m+5% From TDA 9M+5% to TDA 9M+11/5% to TDA 9M+12% Loan disbursement 2-3%, non-recurring commission *Interest rate is floating and is modified twice a year TDA 9M (interest rate for the 9-month deposit) = 10% Currency Purpose Amount Term Interest rate* Necessary documents -Owners permission to pledge the right of use/ lease of the related to the immovable assets*. **It can be submitted after the loans approval, but before the loan is released. Movable assets, equipment: -Documents confirming the ownership right over the assets proposed as guarantee: invoice, customs statements, payment orders, contracts, etc. (copy) Transport/Agricultural machinery: -Registration certificate (copy) -Compulsory civil liability insurance for car owners (copy) -Certificate on the means of transport from the State Register of transports (original) Shares: -Certificate of state registration of securities (original) Abstract from the Register of Shareholders, from the state independent registrar on the absence of interdictions applied to securities (original) -Abstract from the Register of Shareholders on the structure of shareholders and their shares (original) Documents required for physical persons: Identity card (passport) Patent/enterprise state registration certificate Documents required for legal entities: Identity card (passport) of the manager and founders Enterprise state registration certificate USD For current assets For fixed assets From 2,500 USD Up to 36 months Up to 120 months From LIBOR+6.5% From LIBOR+6.5% up to LIBOR+14.5% Up to LIBOR+17.5% Loan disbursement 1-3%, non-recurring commission *Interest rate is floating and is modified twice a year LIBOR (LIBOR for 6 months) = 0.8085% 69
  • 72. C.B., Contact details Types of credits ProCredit Bank Currency 65, Stefan tel Mare Bld, office 901, Chisinau Tel.: (+373 22) 279351 Fax: (+373 22) 273488 E-mail: office@procreditbank.md EUR pentru mijloace circulante pentru mijloace fixe de la 2 500 EUR pn la 36 luni pn la 120 luni de la LIBOR+5% de la LIBOR+5% pn la LIBOR+13% pn la LIBOR+16.75% Loan disbursement 1-3%, non-recurring commission *Interest rate is floating and is modified twice a year EURIBOR (EURIBOR for 6 months) = 1.617% Purpose Amount Term Interest rate* 2. Credits for the purchase of real estate The loan is intended for legal entities (small entrepreneurs, companies) that want to purchase real estate for their business. Conditions: In order to receive the loan, you have to have a stable business, operating for at least 6 months (trade / services / production). Fees: Currency USD EUR Purpose For current assets For fixed assets Amount From 2 500 EUR Term From 120 months to 144 months Interest rate* LIBOR+12% From LIBOR+10.25% Loan disbursement 2%, non-recurring commission *The interest rate is floating and changes twice a year LIBOR (LIBOR for 6 months) = 0.8085% EURIBOR (EURIBOR for 6 months) = 1.617% 3. Credits for agriculture Loans for your investments in agriculture, with which you can: 1. Purchase agricultural machinery, equipment, combines, tractors, materials and equipment for irrigation systems 2. Build and maintain greenhouses or warehouses 3. Purchase arable land, etc. Advantages: - advantageous interest rates for loans in lei (from 7%) for the purchase of machinery and equipment from the banks partners: MGM, Agropiese TGR and AgroSera-Prim - convenient loan reimbursement schedule, depending on the specific character and seasonality of your business. -Grace period up to 12 months -Minimum term of application analysis -Without hidden commissions -Possibility to get subventions from the state. Fees: Currency MDL Purpose For current assets For fixed assets Amount From 26 000 MDL Term Up to 36 months Up to 60 months Interest rate* From TDA 9M+5% From TDA 9m+5% Up to TDA 9M+11.5% Up to TDA 9m+12% Loan 2-3%, non-recurring disbursement fee *Interest rate is floating and changes twice a year TDA 9m (interest rate for 9-month deposit) = 10% 70 Necessary documents Documents required for physical persons: Identity card (passport) Patent/enterprise state registration certificate Documents required for legal entities: Identity card (passport) of the manager and founders Enterprise state registration certificate
  • 73. An easy to understand BUSINESS GUIDE C.B., Contact details Types of credits Bd. tefan el Mare 65, of. 901, Chiinu Tel.: (+373 22) 279351 Fax: (+373 22) 273488 E-mail:office@procreditbank.md Currency Purpose Amount Term Interest rate* USD For current assets Currency Purpose Amount Term Interest rate* ProCredit Bank Necessary documents EUR For current assets For fixed assets From 2 000 USD Up to 36 months Up to 120 months From LIBOR+6.5% From LIBOR+6.5% Up to LIBOR+14.5% Up to LIBOR+17.5% Loan disbursement 1-3%, non-recurring commission *Interest rate is floating and changes twice a year LIBOR (LIBOR for 6 months) = 0.8085% Documents required for physical persons: Identity card (passport) Patent/enterprise state registration certificate Documents required for legal entities: Identity card (passport) of the manager and founders Enterprise state registration certificate For fixed assets From 2 000 EUR Up to 36 months Up to 120 months From LIBOR+5% From LIBOR+5% Up to LIBOR+13% Up to LIBPR+16.75% Loan disbursement 1-3%, non-recurring commission *RInterest rate is floating and changes twice a year EURIBOR (EURIBOR for 6 months) = 1.617% Mobiasbanc Groupe Societe Generale 81A, Stefan cel Mare si Sfant Bld. Chisinau, MD-2012 Tel/fax: 54-19-74 office@mobiasbanca.md 256-456, 256-555 calitate@mobiasbanca.md 1. ORDINARY LOANS Classic loans allow you to benefit from traditional financing for a well-defined term and purpose, by reimbursing the loan in rates according to the approved schedule, depending on your companys cash flow. Maximum term: 36 months Advantages: Possibility to benefit from a grace period when reimbursing the credit For investment funding, the loan disbursement can be done by instalments, according to your needs. The interest rate will be calculated from the actually disbursed loan. You have the possibility to contract a loan or up to 30 000 lei without pledge! 2. SETUP LOAN Do you need to buy new and competitive equipment for your activity? We offer you a dedicated financing product, combining advantages of the bank crediting and commercial service, resulting from the banks partnership with a wide network of economic agents trading the needed equipment. Advantages: Possibility to purchase the needed product under advantageous and safe conditions. Large number of partners with a wide offer of products of equipment, transports and tractors. Limited term for the examination of loan applications and immediate access to the financed product. 3. MICROLOANS If you want to develop your business, but you do not have sufficient financial resources, Mobiasbanca offers you fast and affordable financing solutions, both for current needs, investments and for financing any other expenses Microloans. List of documents to be annexed to the credit application: http://www.mobiasbanca.md/diles/ro/docs/li sta%20documentelor.pdf http://www.mobiasbanca.md/files/ro/docs/ce rere%20de%20acordare%credit%20PJ.pdf Credit application template List of documents to be annexed to the credit application: http://www.mobiasbanca.md/diles/ro/docs/li sta%20documentelor.pdf List of documents to be annexed to the credit application: http://www.mobiasbanca.md/diles/ro/docs/li sta%20documentelor.pdf 71
  • 74. C.B., Contact details Mobiasbanc Groupe Societe Generale 81A, Stefan cel Mare si Sfant Bld. Chisinau, MD-2012 Tel/fax: 54-19-74 office@mobiasbanca.md 256-456, 256-555 calitate@mobiasbanca.md Types of credits a) Credit Rapid ideal for emergency needs! minimum experience of the applicant 3 months currency MDL, USD, EUR Loan amount between 20 000 MDL and 75 000 MDL or equivalent in USD/EUR Potential beneficiaries: - Authorised individuals and those engaged in the entrepreneurial activity - Individual enterprises - Peasant farms - Self-employed - Companies Reimbursement term: - maximum 24 months (working capital loans) - maximum 36 months (investment loans) Guarantees: No collateral securities/Real guarantees Advantages: You do not need real guarantees for loans up to MDL 75 000 for a period of up to 36 months; Your request will be answered quickly; Minimal package of documents required. b) MicroCredit perfect to ensure a good continuity of your activity! Minimum experience of the applicant: 3-12 months Currency MDL, USD, EUR Loan amount between MDL 75 001 and MDL 200 000 or equivalent in USD/EUR Potential beneficiaries: - authorized individuals and those engaged in the entrepreneurial activity - individual enterprises - peasant farms - self-employed - companies Reimbursement term: - maximum 24 months (working capital loans) - maximum 48 months (investment loans) Guarantees: immovable and/or immovable Advantages: No pledges are needed for loans up to MDL 100,000 for a period of up to 48 months This is a loan you can use for working capital financing and/or other overheads, equipment purchase Flexible approach to collateral You get expert advice on choosing credit solutions tailored to customers needs. c) Small Credit the best for a safe and profitable investment! Minimum experience of the applicant: 6-12 months Currency: MDL, USA, EUR Loan amount: between MDL 200 001 and MDL 1,500,000 or equivalent in USD/EUR Potential beneficiaries: - Authorized individuals or those engaged in the entrepreneurial activity - Individual enterprises - peasant farms - self-employed - companies 72 Necessary documents List of documents to be annexed to the credit application: http://www.mobiasbanca.md/diles/ro/docs/li sta%20documentelor.pdf
  • 75. An easy to understand BUSINESS GUIDE C.B., Contact details Mobiasbanc Groupe Societe Generale 81A, Stefan cel Mare si Sfant Bld. Chisinau, MD-2012 Tel/fax: 54-19-74 office@mobiasbanca.md 256-456, 256-555 calitate@mobiasbanca.md Types of credits Reimbursement term: - maximum 24 months (working capital loans) - maximum 60 months (credits for investments) Guarantees movable and immovable assets Necessary documents List of documents to be annexed to the credit application: http://www.mobiasbanca.md/diles/ro/docs/li sta%20documentelor.pdf Advantages: Efficient administration of all financial needs of your business with one credit This is a credit you can use to fund your working capital and/or other overheads, purchase equipment Flexible approach to collateral You get expert advice on choosing credit solutions tailored to customers needs. d) ImoPro Credit for commercial real estate Minimum experience of the applicant: 3-12 months; Currency: MD or USD Loan amount: up to 2 000 000 or equivalent in USD; Potential beneficiaries - Authorized individuals or those engaged in the entrepreneurial activity - Individual enterprises - peasant farms - self-employed - companies Reimbursement term: maximum 120 months Guarantees movable and immovable assets The ImoPro Credit is intended for growing economic agents, looking for new or larger space for their business and intending to purchase, build and finish the construction of a building, purchase land for commercial construction or agricultural use. 4. EASY GO LOAN Set of documents available on: The EASY GO Loan is the most reliable financing of your import activity and working capital, intended for legal entities. The fastest grant decision: only 1 banking day, based on a minimum package of documents. http://www.mobiasbanca.md/easy_go Currency Purpose Period Amount Interest rate Reimbursement Guarantee Insurance EASY GO in EUR/USD EASY GO in MDL EUR/ USD MDL Import activity financing Working capital financing Maximum: 18 months Maximum: MDL 500,000 or equivalent in currency Variable Equal monthly rates or individual schedule Real guarantees: Real estate min.50% Stocks max.20% Movable property max 30% Personal guarantees (suretyship, cession of receivables, etc.); Loan coverage with real guarantees must be at least 120%. The real estate pledge is compulsorily insured in the favour of the bank. 73
  • 76. C.B., Contact details Mobiasbanc Groupe Societe Generale 81A, Stefan cel Mare si Sfant Bld. Chisinau, MD-2012 Tel/fax: 54-19-74 office@mobiasbanca.md 256-456, 256-555 calitate@mobiasbanca.md Types of credits Necessary documents List of documents to be annexed to the credit application: 5. Revolving credit line Beneficiaries: legal and physical persons, engaged in entrepreneurship, registered in line with the legislation in effect of Moldova, with any legal form and with an experience of work of minimum 6 months. Loans are granted in MDL, USD, EUR Crediting period: maximum 36 months Minimum limit: MDL 100,000 or USD/EUR 10 000 Maximum limit: the equivalent of EUR 500,000 The limit is revised on a yearly basis. http://www.mobiasbanca.md/diles/ro/docs/li sta%20documentelor.pdf 6. Loans from IFO sources (International Financing Organizations) In this regard, the bank benefits from lending lines directed to the development of certain economic sector, loans being granted in cooperation with: EBRD European Bank for Reconstruction and Development IFC International Finance Corporation BSTDB Black Sea Trade and Development Bank EFSE European Fund for Southeast Europe IDA International development Association and FIDA International Fund for Agricultural Development through the Directorate of credit lines within the Finance Ministry. Loans for investments and working capital Credits for financing of agriculture and rural business Financing of foreign trade Special for young people http://www.mobiasbanca.md/credite_ofi 7. EIB funding sources (European Investment Bank) http://www.mobiasbanca.md/credite_eib Beneficiaries: Small and Medium Enterprises* (SMEs) in particular, located in Moldova, as well as Medium Enterprises and public entities for their energy and environmental projects. Advantages: The SMEs accessing loans from the EIB sources benefit from more favourable interest rates in comparison with standard interest rates for similar credits from other sources. Eligible purposes: The EIB aims at financing all investments and expenses incurred in the SMEs development through eligible projects. Eligible beneficiaries Currency Term Amount of EIB financing Total cost for each project Investment loans Independent SMEs EUR/USD Min.2 years, max 10 years** Up to 100% of the loan, but maximum the equivalent of EUR 12.500.000 Up to EUR 25.000.000 Eligible beneficiaries Working capital loan Enterprises with less than 500 employees Currency Term Eligible expenses may include EUR/USD Min.2 years Raw material, workforce, stocks, trace receivables, etc. 74
  • 77. An easy to understand BUSINESS GUIDE Contacts, C.B MOLDOVAAGROINDBANK Central office: MD-2005 Republic of Moldova mun. of Chisinau, 9, Cosmonautilor Str., Telex: 163263 AGRO MD SWIFT: AGRNMD2X Fax:/ +373 22/ 22 80 58 Email: aib@maib.md Types of credits 1. Credits for Small Enterprises The maximum amount of the loan is 65% of the debtors amount of annual sales (but not exceeding 15.250 thousand lei) Term: It is established individually for each debtor, resulting from the average rotation period (in days) of debtors means and possibilities to reimburse the credit. Maximum term 18 months. In some cases, the term can be 24 months, provided that this needs results from the specific nature of debtors activity. Necessary documents - Articles of incorporation and other documents, depending on the organizational legal form of the client - Credit application - Financial reports - Documents confirming the ownership right over the assets proposed as pledge to the Bank The loan is granted in national currency (MDL), US Dollars (USD) and EURO (EUR) InfoTel service (24/24) Minimum requirements for potential clients: Tel:/ +373 22/ 85 65 55 Loans are offered to enterprises working for at least 12 months. Email:inform@maib.md Liquid balance sheet and no losses registered for the current year. Cards assistance service: Lack of outstanding debts to the bank and budget at the moment of submitting Tel:/+373 22/ 45 06 03 the credit application. Good credit history (if credits were used in the past) Beneficiary must be a client of the bank. 2. Credits for microenterprises and small enterprises, recently created and/or starting their activity from zero The credit amount is from USD 1,000 to USD 30,000 (equivalent in lei) for small enterprises, and from USD 1,000 to USD 5,000 (equivalent in lei) for microenterprises. Credits are offered in Moldovan lei for a period of: - 18 months to increase the working capital - 36 months for investments The applied interest rate depends on the term of the loan and varies from 18.5% to 22% per year. - Credit application - Articles of incorporation - Enterprises that have performed activities have to submit financial reports for the activity period - List of assets proposed as pledge and documents confirming the ownership right on them Loans are guaranteed with liquid assets, the value of which at the moment the credit is offered can be equal with or less than the credit amount. 3. Overdraft http://maib.md/ro/overdraft-intMici/ This credit is offered in national currency (MDL) for a term of up to one year. The applied interest rate depends on the term of the loan and varies from 13.75% to 14.75% per year. Main insurance cession of Beneficiarys cash flows. An additional insurance can be the pledge of land plots, immovable objects, other asset, guarantees and suretyships of third persons. Requirements to the Beneficiary: The Beneficiary must correspond to the banks client definition and to receive stable cash proceeds on his accounts, in the amount needed for the debt service and for his current activities. 4. Credits for working capital The maximum amount of the loan is 50% of the debtors amount of annual sales (but not exceeding 1.500 thousand lei) Maximum term: 18 month In some cases, the term can be 24 months, provided that this needs results from the specific nature of debtors activity and this term is clearly reasoned. The loan is granted in national currency (MDL), US Dollars (USD) and EURO (EUR) Grace period: maximum 2 months Articles of incorporation and other documents depending on the organizational legal form of the client Credit application Financial reports Documents conforming the ownership right on the goods proposed as pledge to the Bank Insurance: pledge / pawn pledge of assets, suretyship and guarantee. Minimum requirements to potential clients: Loans are offered to enterprises working for at least 12 months. Liquid balance sheet and no losses registered for the current year. Lack of outstanding debts to the bank and budget at the moment of submitting the credit application. Good credit history (if credits were used in the past) Beneficiary must be a client of the bank. 75
  • 78. How does the SMEs benefit from support from the state? The state provides support to the SMEs by creating favourable conditions for starting up and developing businesses, by creating a convenient normative and legislative framework, ensuring the necessary climate, etc. The state supports the SME sector in a differentiated way, depending on the type of activity, the functioning period and size of economic agents, subjects of the small and medium size enterprises sector, by applying different supporting forms and methods and financing sources. State structures supporting the development of small and medium size enterprises Ministries Central public administration authorities Local public administration authorities Other authorized bodies Entities benefiting from the state support provided to the development of SME sector Micro enterprises Small enterprises Medium enterprises The SME developing and facilitating the SMEs access to finances are the basic priorities of the Ministry of Economy within the Strategic Development Programme. In order to achieve them, over 2012-2014, the Ministry of Economy set up the Small and Medium Enterprises Programme, which is divided into sub-programmes. Sub-programme Access to finances Support infrastructure in business Entrepreneurial culture Dialogue between the public sector and the SME sector Purpose To facilitate the access of SMEs to financing resources and stimulate the conversion of savings into investment means by diversifying and developing government programmes To stimulate the SME sector competitiveness enhancement by ensuring the development of the business support infrastructure, including high production capacities, improvement of the SMEs products quality, according to international standards, improvement of marketing capacities, as well as of other promotion and development instruments. To promote the entrepreneurial culture and managerial performances of the SMEs, as well as stimulate the creation of new enterprises. To intensify the dialogue between the government and the SME sector, by applying similar dialogue instruments and forms in the community of states with good collaborations practices between the business environment and authorities. Strategic objectives for implementing the Small and Medium-sized Enterprises Programme for the period 2012-2014 Objectives Harmonize the legislative framework in the SME field with the European recommendations and implement regional and European programmes supporting this sector Funding remarks Budget of the Ministry of Economy (ME) (wages). Sub-programme: Access to finances Sectoral support programme Economic Stimulation in Rural Support the producing SMEs in the rural sector, by attracting Areas, funded by the EU. financial assistance grants for the development of its producing capacities. Foreign assistance (Rural Investment and Services Project Facilitate the access of young entrepreneurs in rural areas to financial resources, by implementing Component II of the Youth RISP1, funded by the World Bank; Rural Finance and Small Enterprise Development Project (IFAD 1); European Commission Economic Empowerment Programme. Grant, International Organization for Migration. State Budget, Sectoral Support Programme Economic StimulaStimulate investment of savings in business development by tion in Rural Areas, funded by the EU, International Organizaimplementing the Programme for Attraction of Remittances tion for Migration. into Economy PARE 1+1. State Budget, Sectoral Support Programme Economic StimulaIncrease access of small entrepreneurs to bank credits by tion in Rural Areas, funded by the EU administrating the Credit Guarantee Fund for SMEs and its capitalization. State Budget Facilitate the access of SMEs to public acquisition contracts by consolidating the access to information about acquisition opportunities and stimulating contracting public authorities to split contracts into lots. 76
  • 79. An easy to understand BUSINESS GUIDE Sub-programme: Business support infrastructure IIntegrate the SMEs into business-incubators, by creating new busi- State Budget, Sectoral Support Programme Economic Stimulaness incubators and developing the network of business incubators. tion in Rural Areas, funded by the EU MEs budget (wages). Strengthen the institutional structure of the ODIMM. Foreign assistance. Develop the business support infrastructure by creating a National Business Excellence Centre within the ODIMM. The Government, through the Ministry of Economy and Trade, develops, coordinates, monitors and evaluates policies and actions aiming at providing state support to the SME sector development. The Organization for the Small and Medium Enterprises Sector Development (ODIMM) within the Ministry of Economy and Trade is the structure in charge with the implementation of the state policy on supporting the SME development. The ODIMM promotes the creation of small businesses, particularly in rural areas, , and supports the development of existing enterprises. This organization facilitates the the access of SMEs to financial and informational resources. Also, the ODIMM provides guarantees for loans granted by commercial banks, as well as provides various information on SME financing opportunities. It is important to mention that funds are allocated from the state budget on a yearly basis for the implementation of certain actions supporting the SME sector development The table below describes the on-going projects in the SME sector, through which you can access loans. On-going crediting and financing projects in the SME sector No Project Implementation period Goal / Activities Target group Contacts 1. PARE 1+1 2010-2012 Programme on Attracting Remittances in Economy 15 February 15 March (collection of applications for non-reimbursable financing) Stimulate the creation and development of - lmigrant workers SMEs by migrant workers and beneficiaries of - beneficiaries of remittances. The programme functions based remittances on the 1+1 rule, hence one leu invested from remittances is supplemented with one leu offered as a grant within the pilot programme. Entrepreneurship training, informative materials, free assistance to start up a business, financing through grants of up to 200,000 lei, monitoring. Address: 48,. Serghei Lazo Str, office 303, Chisinau Telefon: (+373 22) 22 50 01 Fax: (+373 22) 29 57 97 E-mail: info@odimm.md Web: www.odimm.md www.businessportal.md Contact person: Viorica Cerbusca 2. PNAET National Youth Economic Empowerment Programme Develop entrepreneurship skills of the youth, based on the optimal knowledge and management of resources and facilitate the access of young entrepreneurs to financial resources needed to start up and develop own business. - young persons, 18-30 years, who want to develop their own business in rural areas and/or to extend their own business in rural areas, creating new jobs. Adresa: 48, Serghei Lazo Str., office 311, Chisinau Telefon: (+373 22) 22 53 84, 22 57 99 Fax: (+373 22) 29 57 97 E-mail: seminare@odimm.md Web: www.odimm.md www.businessportal.md Contact person: Carolina Tapordei - Micro and small enterprises operating all across Moldova. Adresa: 48, Serghei Lazo Str., Office 303, Chisinau Telefon: (+373 22) 22 50 79 Fax: (+373 22) 29 57 97 E-mail: garantare@odimm.md Web: www.odimm.md www.fgc.odimm.md Contact person: Tatiana Chiriac 2012-2013 - entrepreneurial training and consultancy; - preferential loans of up to 300,000 lei (reimbursement period max.5 years) with non-reimbursable grant (40%); - post-financing monitoring. 3. FGC Special Credit Guarantee Fund On-going Facilitate the access to financial resources for micro and small enterprises. Provide loan guarantees for traders without sufficient forfeit. For: 1. active businesses: - up to 50%, but not more than 700,000 lei; - 5 years. 2. Start-ups: - max.70%, but not more than 300,000 lei; -3 years 77
  • 80. No 4. Project Implementation period TAM/BAS On-going Business Advisory Service Goal / Activities Partial financial coverage of costs for consulting services. Maximum subsidy offered to eligible companies amounts to EUR 10,000, but not more than 70% (excluding taxes) of the project amount. 5. JNPGA Valid Programme for SNEs Sector Support and Development Facilitate the purchase by SMEs of a large variety of production equipment. 6. 2KR Increasing Food Production Project On-going Develop agriculture and increase food production in Moldova. 7. RISP II Rural Investment and Services Project March 2006 June 2012 8. PAC Competitiveness Improvement Project Until 30 June 2012 Target group Contacts - SMEs (from 10 to 250 employees, max.500 employees), working in: production, trade and services, operating on the market for at least 2 years. - SMEs all across Moldova Address: Moldova, MD-2012, Chisinau, 63, Vlaicu Parcalab Str., floor 10 Tel: (+373 22) 21 16 14 (+373 22) 23 52 24 Fax: (+373 22) 21 15 85 E-mail: basmoldova@ebrd.com Web: http://www.bas.md Address: 180, Stefan cel Mare Bld, office 812, Chisinau Telefon: (+373 22) 29 67 18 Leasing for a period of one year, providing a 40% (excluding Fax: (+373 22) 29 67 19 grant. The purchase value varies from MDL 500 Chisinau and Balti) E-mail: office.giu@jnpga.md 000 to MDL 2.5 million. Web: http://www.jnpga.md Contact person: Alexandru Ceban - private legal entities; -farmers; -physical persons. (provision of services for mechanized farming) Addess:18, Calea Basarabiei Str., Chisinau Telefon: (+373 22) 27 84 63 Purchase of agricultural technology by (+373 22) 54 98 81 instalments. E-mail: office@2kr.moldnet.md (initially, beneficiaries get 50% of the total cost, Web: www.2kr.moldnet.md the rest by instalments in 2 years). VAT is not Contact person: Vasile Condrea included. Facilitate the access of rural entrepreneurs to - any person Addess: 9, Cosmonautilor Str., knowledge and funding. interested in office 544, Chisina - consultancy services; starting a Telefon:(+373 22) 22 24 65 - preferential credits of up to USD 150,000 on business (based on (+373 22) 22 24 67 medium and long terms to initiate and/or develop patent, peasant Fax:(+373 22) 24 44 69 businesses in rural areas and providing postfarm, individual E-mail:risp@capmu.md creation assistance during the first year of activity; enterprise or SRL); Web: www.capmu.md - preferential credits of up to USD 100,000, with - enterprises and Contact person: a 20% grant, for the installation or improvement entrepreneurs Olga Sainciuc of irrigation systems to the eligible beneficiaries. (rural area) Provide long-term resources, intended for - enterprises with improving capacities of enterprises to increase at least 75% of exports. private property (generating revenues Maximum 1 EUR mln from exports) Financing of investments EUR 800 000, Term 8 years Participating Financial Institutions (where credit applications shall be submitted): - CBMoldova-Agroindbank JS.; - CBMobiasbanca JS.; - CBEnergbank JS.; - CBVictoriabankJS Project Implementation Unit Telefon: (+373 22) 29 67 23 Fax: (+373 22) 29 67 24 E-mail: piu@mec.gov.md Adresa: 57/1 BanulescuBodoni Str., Chisinau 9. IFAD II Until March 2013 Agricultural Revitalization Project Contribute by participative action to - SMEs implement strategic development plans of localities, and namely in the agricultural field. Preferential loans of up to USD 200,000 for up to 15 years. 20-30% of the loan value is offered as conditioned non-reimbursable grant. 78 Addess: 162, Stefan cel Mare Bld., office 1303, Chisinau Telefon: (+373 22) 21 05 42 Fax: (+373 22) 22 52 57 E-mail: office@ifad.md Web: www.ifad.md Contact person: Ion Russu
  • 81. An easy to understand BUSINESS GUIDE No Project 10. IFAD IV Implementation period Until 2016 Rural Financial Services and Marketing 11. Fund for Enterprises On-going from Moldova and Ukraine 12. Seventh Framework 2007-2013 Programme Goal / Activities Address: 162, Stefan cel Mare Bld., office 1303, Chisinau Telefon: (+373 22) 21 05 42 Fax: (+373 22) 22 52 57 E-mail: office@ifad.md Provide preferential credits. Web: www.ifad.md Provide competitive grants for investments in Contact person: public infrastructure. Victor Rosca Consolidation of privatised enterprises. - Entrepreneurs Address: 12, Petru Movila Str, ap. 4, Chisinau and companies Invest in shares and transactions, including by who demonstrate Telefon: (+373 22) 88 72 01 providing direct loans to entrepreneurs and +31 88 602 8101 funding the leasing for equipment and/or serious prospects and a high rate of E-mail: amunteanu@wnisefk.com assets. Contact person: profit. Cristina Harea arco.vanwessel@agentschapnl.nl Contact person: Arco Vanwessel Web: http://www.horizoncapital.com.ua Provide financial support to increase - SMEs Address: 1, Stefan cel Mare si innovation capacity and competitiveness of - Associations/ Sfant Bld., office 334, SMEs. Telefon: (+373 22) 27 22 54 groups of SMEs - Organise initial training of researches; - Research groups (+373 22) 57 77 07 - Co-financing of regional, national and within universities E-mail: mrda@mrda.md international programmes; intprojects@asm.md and research - Offer scholarships for researchers who go outside institutes, etc Web: http://fp7.asm.md Europe; Contact person: - Offer international reintegration grants. Lidia Romanciuc Ensure sustainable development of the agro-food sector and rural communities. 14. GTZ Develop the agricultural and food-industry sectors in the districts of Ungheni and Calarasi. - Consultancy services - Seminars - Grants for the acquisition of the needed equipment and materials, with a mandatory contribution from the beneficiary - Study visits; - Promoting connection between farmers, processing companies and delivery market. On-going 15. MoSEFF Financing Line for Energy Efficiency in Moldova Until March 2012 Contacts Increased access to financial services for the small - Rural enterprises owners, women with non-agricultural activity and young farmers, as well as entrepreneurs and enterprises with non-agricultural processing. 13. Subsidiary for Farmers On-going Modernising the Agricultural Sector in the Republic of Moldova Target group - SMEs - Farmers from the districts of Calarasi and Ungheni - Groups of producers and processors registered as peasant farms, which would include 3 members at least - Women - Young farmers. Stimulate the application of advanced - Any company with technology in companies from Moldova in at least 51% private order to improve energy systems. capital (except for companies dealing - Loans with a grant portion (5-20%), from EUR 25,000 up to EUR 2 mln; term: up to 6 years; (for the with production and distribution of tobacco funding of renewable energy and energy efficiency products, alcoholic projects). beverages, gambling - Free technical assistance games and arms). Address: 162, Stefan cel Mare si Sfant Bld, Chisinau Telefon: (+373 22) 21 01 94 (+373 22) 22 38 80 E-mail: info@aipa.md Web: www.aipa.md Contact person: Petru Maleru Address: 31a Bulgara Str., Chisinau Telefon: (+373 22) 22 72 92 Fax: (+373 22) 22 83 19 E-mail:andrei.zapanovici@gtz.de Web: www.gtz.de Contact person: Andrei Zapanovici Address: str. Vlaicu Prclab 29/1, Chiinu Telefon: (+373 22) 22 34 99 Mob: (+373) 601 34 669 E-mail: info@moseff.org Web: http://www.moseff.org Contact person: Corina Guu-Chetruca 79
  • 82. No Project Implementation period 16. Competitiveness Improvement Project 17. SIDA Up to the end of March 2012 On-going Innovations Against Poverty 18. Programme for 2012 stimulating the creation and development of microenterprises by young entrepreneurs. The Agency for Projects and Programmes Implementation for the SMEs 19. National Rural Goal / Activities Consolidate the competitiveness of companies - Economic agents in Moldova by improving the quality of their from the products and services. production and service sectors - Promotional grants for implementing the Quality Management System for the following two wide fields: 1) consultation services for the development of feasibility studies, business plans, etc., 2) training services. Develop products, services and market - SMEs from systems for the benefit of people from underdeveloped underdeveloped countries. countries. - Small grants of up to EUR 20,000, but which exceed 50% of the investment; - Large grants of up to EUR 200,000, but not more that 59% for development projects. Develop entrepreneurial skills among the - Young youth and stimulate the creation and entrepreneurs development of start-ups by facilitating the access to financial sources. Budget allocated for the Programme in 2012 is of MDL 21,000,000. - grants, worth up to 30,000 Euros of eligible expenses - guarantees for loans for development of business plans, as well as exemption from fees for registration and registering and social security contributions for up to 4 employees. 2012 Development Center (II PAC pylon) Target group Total financial allocation for the programme: 15 project submission sessions - EUR 1.41 billion Contacts Address: 151, Stefan cel Mare Bld, floor 1, office 4, Chisinau Telefon: (+373 22) 24 51 48 (+373 22) 22 33 10 E-mail: sergiuh@chamber.md Web: http://chamber.md/index.php?id=412 Contact person: Harea Sergiu E-mail: info@innovationsagainstpoverty.org Web: www.innovationsagainstpoverty.org sau www.sida.se Address: 22, Puskin Str., office 312 Chisinau Telefon: (+373 22) 23 22 13 (+373 22) 69984441 E-mail: cdamoldova@gmail.com solutii@sfaturi.biz Web: www.sfaturi.biz -Farmers Address: 22, Puskin Str., office 312 -Enterprises in the Chisinau rural sector Telefon: (+373 22) 23 22 13 (+373 22) 69984441 E-mail: cdamoldova@gmail.com solutii@sfaturi.biz Web: www.sfaturi.biz 20. The Start 2012 2012 Programme brings 10 million lei to young entrepreneurs 80 Develop entrepreneurial skills among the youth and facilitate their access to financing. - Encourage and stimulate the creation of new SMEs, as well as enrichment of economic performances of the existing ones. - Non-reimbursable financial allocation max.70% of the value of eligible costs, but not exceeding 100,000 lei per beneficiary. Budget for 2012: - MDL 10,000,000, of which: stage I 800,000 lei for entrepreneurial training workshops Stage II MDL 9,200,000 to fund the implementation of the best business plans. - Stage I: Individuals who a) are Moldovan citizens; b) did not benefit from funding within this Programme; c) have secondary or higher education. - Stage II: Commercial societies (microenterprises, SMEs). Address: 22, Puskin Str., office 312 Chisinau Telefon: (+373 22) 23 22 13 (+373 22) 69984441 E-mail: cdamoldova@gmail.com solutii@sfaturi.biz Web: www.sfaturi.biz
  • 83. An easy to understand BUSINESS GUIDE No Project Implementation period 21. The First Forestation of 2012 Agricultural Land Plots Session 1: 1-30 March Goal / Activities Target group Improve environment conditions in the rural area by using and sustainable management of agricultural land plots. - Individuals; - Legal entities; - Groups of Payments Agency for Rural Session 2: 2-31 May associations of Development and Fishing physical and legal Session 3: 16 August a4 Over EUR 176 million available for the first (APDRP) forestation of agricultural land plots. persons; September - Local public Session 4: 15 November - Funds are covered in the amount of 100% from authorities, owners of public money (co-financing is not mandatory) 14 December agricultural land plots. - These funds will be offered as direct payments per year and per hectare calculated depending on Eligible beneficiaries must have agricultural the relief (field, elevation, mountain). land plots with an - For the forestation of one hectare of agricultural area of over 0.5 land, on a field, the beneficiary gets EUR 1,330. hectares (5,000 s.m). Contacts Address: 22, Puskin Str.,, office 312, Chisinau Telefon: (+373 22) 23 22 13 (+373 22) 69984441 E-mail: cdamoldova@gmail.com solutii@sfaturi.biz Web: www.sfaturi.biz Apart from the state SME funding projects, there is a number of projects implemented by NGOs, offering possibilities to access grants in the small- and medium-size enterprises development field. Remittances Developing Moldovan Communities is one of these projects. No 1. 2. 3. Project Implementation period Target group Contacts Families of the young recipients of remittances, population of 100 rural localities in the 4 target districts (Orhei, Soldanesti, Rezina, Telenesti) in the Centre region of Moldova. Junior Chamber Registration in the context The purpose of this contest is to support and promote - Young persons aged between 18 International Moldova is opened by March 22 ideas of the young people who want to open their and 35 years (JCI Moldova) and own business. Contest organised every National Association of year, beginning with 2002 The contest is divided in 5 stages, and at the end, out Young Managers (ANTiM) of the 50 finalists, the board selects only 19, winners National Youth Business of amounts of money between EUR 3,000 and Plan Competition 10,000. ASA Business Valid Provide financial services to farmers and - Peasant farms; entrepreneurs at favourable conditions, thus - Individual Business Support and contributing to the rural development. Assistance Agency enterprises; The SME crediting in the rural area, particularly the - Cooperatives of newly created SMEs, or those without crediting history. entrepreneur; - investments in production means; - LLC; -agricultural and non-agricultural production activities; -agricultural and industrial processing activities; - Joint stock societies. -increase in current assets; -collection and commerce activities. Address: Orhei, 50,. M.Sadoveanu Str., Remittances Developing Until March 2013 Moldovan Communities Goal / Activities The project aims at contributing to connecting the migration process with the economic development of Moldova and to efficiently use the positive effects / consequences of migrants in order to develop rural communities in the target area. Telefon: (+373) 235 32945 (+373) 79700751 (+373) 68924154 E-mail: adr@adr-centru.md Rural Development Agency Center (ADR-Center Registration to the CBP2012 is performed via the website www.cbp.antim.org http://www.moldcell.md/rom/ private/node/15117 http://unimedia.md/?mod=ne ws&id=44775 Address: 22, Puskin Str., office 312, Chisinau Telefon: (+373 22) 23 22 13 (+373 22) 69984441 E-mail: cdamoldova@gmail.com solutii@sfaturi.biz Web: www.sfaturi.biz Eligibility criteria differ from founder to founder, depending on the projects objectives. For example, to access the Remittances Developing Moldovan Communities Grant Programme, the applicant has to meet the following eligibility criteria: To be a migrant from Moldova or first, second degree relative beneficiary of remittances; To be a citizen of the Republic of Moldova; Is aged between 20 and 45 years when applying to the programme; Wants to launch his own business in Moldova or to develop the existing business; Can confirm, with the supporting documents that he is or was a labour migrant or is or was a beneficiary of remittances. 81
  • 84. No Project Implementation period Goal / Activities Target group Contacts 1. GEA Valid Efficient Business Administration Programme, funded from the State Budget Improve the qualification in the entrepreneur- - Future ial field to ensure an efficient administration entrepreneurs and of the own business. active entrepreneurs practicing Free courses on 8 training modules at choice. economic activities under any organizational legal form. 2. BCI Stimulate the innovation use of remittances in productive rural investments July 2012 June 2012 Develop managerial capacities of beneficiaries of remittances. Increase investments from remittances. Prevent the brain drain from Moldova. - Free entrepreneurial training courses; - Assist enterprises to initiate businesses and post-creation, including the development of business plans; - Develop and distribute the Introductory Guide to Business brochure; - Develop and distribute the Successful Entrepreneurial Practices brochure; - Organize study visits to companies in Romania. Beneficiaries of remittances and emigrants back to Moldova from the following districts: Ungheni, Hancesti, Anenii Noi, Ialoveni, Straseni, Calarasi, Nisporeni, Telenesti, Criuleni, Rezina, Soldanesti and Dubasari 3. Modular staff development training within the enterprise February 2012 October 2014 Develop staff within Moldovan enterprises by elaborating staff development modular trainings. - 10 companies from Moldova will be selected. 4. SES Consultancy by Experts from Germany Valid 5. PUM Consultancy by Experts from Netherlands Valid - SME Telefon: (+373 22) 77 59 71 Gsm: (+373 22) 69 37 36 85 E-mail: alapanoff@yandex.ru Web: www.pum.nl Contact person: Ala Panov 6. CNFA 2009-2013 Farmer to Farmer Program Facilitate the access of SMEs to international innovative knowledge. - Consultancy by foreign experts; - Seminars in the beneficiarys country and in the Netherlands; Traineeships from 2 to 3 weeks in the Netherlands; Identify business partners in other countries Free consultancy services by US experts to improve performances through a professional approach of technical and financial issues. - Agricultural enterprises; - Groups of farmers from Moldova. Address: 57/1, BanulescuBodoni Str., office 312, Chisinau Telefon: (+373 22) 24 03 12 Fax: (+373 22) 24 03 13 E-mail: info@moldova.cnfa.org Web: www.cnfa.org Contact person: Eugenia Iurcu, Diana Rotaru 82 Address: 48, Serghei Lazo Str., office 311, Chisinau Telefon: (+373 22) 22 57 99 Fax: (+373 22) 29 57 97 E-mail: info@odimm.md Web: www.odimm.md www.businessportal.md Contact person: Cornelia Zelinschi Address: 27, Mihai Eminescu Str., Chisinau Telefon: (+373 22) 85 50 80, (+373 22) 85 50 77, E-mail: office@bci.md Web: www.bci.md Contact person: Artur Macovei Continuous Training Centre of the Chamber of Commerce and Industry of the Republic of Moldova Telefon: (+373 22) 23-52-94 e-mail: cfc@chamber.md Contact person: Aurelia Slanina, consultant CFC Facilitate the access of SMEs to international - SMEs; Address: 48, Serghei Lazo Str., innovative knowledge. - Public institutions; office 303, Chisinau Telefon: (+373 22) 22 53 80 Organize thematic seminars in the beneficiarys - Local authorities; Fax: (+373 22) 29 57 97 - Education country. E-mail: o.melniciuc@odimm.md institutions; Web: www.ses-bonn.de - International Contact person: institutions. Olga Melniciuc
  • 85. An easy to understand BUSINESS GUIDE No 7. Project Farmers school for agriculture and development Implementation period On-going Goal / Activities Target group Support private entrepreneurs, with innovative - SMEs from the ideas, by promoting the access to knowledge in villages of the order to increase their competitiveness. Drochia, Riscani, Singerei and - Entrepreneurial training courses; Glodeni districts. Training courses in various fields of agriculture. Courses are free and are held in the autumn winter period. 8. 9. CEED II Competitiveness Enhancement and Enterprise Development Until 2014 ENTRANSE 2 Your Business 2011-2013 Enhance competitiveness of Moldovan companies on the world market by increasing and extending the key growth areas and investment sales. - Entrepreneurs Support the development of SMEs, increase the employment level of entrepreneurs and, hence, increase the number of new jobs, by reducing poverty and supporting the SME sector development in Moldova. - Start-ups; - Entrepreneurs with feasible business ideas from the town of Soroca. - Create and develop the pilot business incubator in the town of Soroca; - Provide support to existing business incubators; - Develop and promote the informational portal for SMEs and entrepreneurs www.businessportal.md; - Develop the training programme for business incubators residents (fields: textiles and machinery; informational technologies and computing; wine production Contacts Address: 81, Mircea cel Batrin Str., Balti Telefon: 231-92544 Fax: 231-92546 E-mail: info@procore.md Web:http://www.procore.md/? pagina=noutati&id=8 Contact person: Sergiu Mihalov Address: 29, Sfatul Tarii Str, Le Roi, floor 5, MD-2012, Chisinau Telefon: (+373 22) 83 99 00 Fax: (+373 22) 83 99 20 E-mail: office@ceed.md Web:http://moldova.usaid.gov/ moldova_economic.shtml Contact person: Tatiana Dumbrava Address: 48, Serghei Lazo Str., office 307, 309, MD-2004, Chisinau Telefon: (+373 22) 83 83 45 Fax: (+373 22) 83 83 44 E-mail: info@entranse.md Web: www.businessportal.md Contact person: Lucia Usurelu What are business incubators? Business incubators = are efficient SME and new jobs creating mechanisms. They increase the success rate of startups, from 45 up to 85%, working based on the best established and tested practices. They are created to support the development of enterprises at the beginning of their activity, which have ideas, but do not have the know-how, do not know how to draft a business plan and do not have financial resources to rent, at the market process, an appropriate location for their business. This is where the incubator intervenes: apart from providing the necessary logistic support, it also organizes training courses, helps to develop business plans, and teaches how to draft a project to attract the funds made available by internal or external financers; in a nutshell, beneficiaries learn here to take the first steps towards launching a business. Once the company is developed, it leaves the incubator it was born in and starts functioning on its own account. Advantages of business incubators Space for carrying out the activity Necessary facilities for the activity Assistance by consultants specialised in business management Cooperation between investors within the incubator Costs are mainly covered by the state or international organizations Disadvantages of business incubators When the firm is developed (already has a number of employees), it will have to cede the space to another applicant The network of business incubators is quite small and poorly disseminated 83
  • 86. In the Republic of Moldova, the setting up of a network of business incubators is an efficient instrument to promote entrepreneurship and public-private partnership, also being an important modality for reutilizing buildings of enterprises from the public sector that are not functioning. At the same time, business incubators are a method to control the utilization of funds for human development and poverty reduction. The following Business Incubators are functioning across Moldova: Name BI Casa Antreprenoriatului BI Soroca Town Ungheni Soroca BI ELIRI-INC Chisinu BI ASEM Chisinu BI Impuls Balti BI ProAgroIndPrivat Hincesti Incubatorul de Afaceri Regional Cimislia (Regional Business Incubator Cimislia) Cimislia Description Offers 32 office rooms to help local potential or current entrepreneurs to start up or develop their business. At the moment, 90% of the available office rooms are being used This is the first incubator with mixed profile created in Moldova, providing small entrepreneurs with production space and office rooms. Currently, 17 companies are incubated, of which, 50% are start-ups. Founded in 2000. Co-founders are the ELIRI Institute, Chisinau City Hall, Technical University of Moldova, State Agency for Industrial Property Protection (AGEPI) and a commercial bank. Officially opened on 23 September 2005. Its mission is to support studentsentrepreneurs from the ASEM, by providing them with professional, technical, administrative and consultancy assistance in the business field. Founded in 2001, with the support of the German Company Sudzucker. The project represents the joint efforts of the Chamber of Industry and Commerce and the German Economic Service. This incubator is a public association, founded in 2001. The main objective of the incubator is to provide assistance to entrepreneurs to open a business and to support the existent business. Proposed to be funded from the National Fund for Rural Development. Projects applicant is the Cimislia District Council. Apart from the business incubators, in Moldova there are also. 3 Scientific-Technological Parks and 1 innovation incubator. Scientific-Technological Park = a complex hosting scientific research centres, technological and innovation nests. Continuous training offers, forecasting, all facilities needed to organize fairs, exhibitions and market development. They are closely connected with the higher education structures, business and government structures. Name Scientific-Economic Park Academica 27 residents Scientific-Technological Park Inagro 8 residents Specialised in intensive and ecological agriculture Scientific-Technological Park Micronanoteh Specialized in microelectronics and nanotechnologies Innovation incubator Inovatorul 4 residents Universal specialization 84 Contacts Address: 5, Miorita Str., Chisinau, Republic of Moldova Tel: +373 22 88 25 60 Fax: +373 22 88 25 60 Address: 58, Dacia Str., Chisinau, Republic of Moldova Tel: +373(22)93-06-50 Fax: +373 (22) 66-42-79 Webpage: www.inagro.md E-mail: inagro@mail.ru Address: 5, Miorita Str., Chisinau, Republic of Moldova Tel: +373 22 88 25 60 Fax: +373 22 88 25 60 Address: 5, Miorita Str., Chisinau, Republic of Moldova Tel: +373 22 88 25 60 Fax: +373 22 88 25 60
  • 87. An easy to understand BUSINESS GUIDE It is also recognised that the organization of small and medium enterprises as clusters increases their competitiveness, as this represents an important framework for the development and growth of private companies. In this context, the Government will do its best to create a legislative framework stimulating the development of clusters. Cluster = a group of producers, users and/or beneficiaries, whose goal is to implement the best practices from the EU in order to improve the competitiveness of economic operators. What are the benefits of a company from belonging to a cluster? Increase of competitiveness and in the employment rate, through the interconnection of people, skills, competences and knowledge; Increase in the efficiency, as it is easier to work in a network with clients and suppliers; Stimulate innovations, because interaction with clients creates new ideas and a strong pressure over innovation; Increase in chances for the internationalisation of SMEs; Successful opportunities for start-ups and spin-offs; Ensure the capacity to influence education profiles, in order to align them to the requirements of companys requirements for qualified human resources. The Fund of Entrepreneurship Support and Small Business Development The Fund of Entrepreneurship Support and Small Business Development is a state organization, acting in accordance with the Moldovan legislation. It was created to fund actions oriented towards the development of entrepreneurship, small business, based on private propriety, including farmers and competition. The fund is subordinated to the Moldovan Government and ensures the funding of national state programmes supporting the small business, its development projects and measures, participates in the funding of local small business support programmes. The fund supports, first of all, small business agents, working in the production area, and is entitled to set up for them other priority activity types and to stimulate them within the limits of the available means. The funds is created from the following resources: Up to 0.5% from the state budget revenue; Revenue from own activity; Means allocated within the international technical and financial assistance; Other sources that do not run counter the legislation in effect. The fund is actively collaborating with non-government associations of the small business agents and provides them with legal assistance. State subsidies in agriculture The Moldovan Government grants subsidies to agricultural producers, in the amount of MDL 400 million in the following fields: 1. Stimulate the crediting of agricultural producers by financial institutions; 2. Stimulate the insurance of production risks in agriculture; 3. Stimulate investments in setting up multiannual plantations and promoting wine sector products; 4. Stimulate investments in the growing of vegetables on protected land plots (winter greenhouses, glasshouses, tunnels); 5. Stimulate investments in the acquisition of agricultural outfit, machinery and equipment for the irrigation systems, frost protection systems and anti-hail systems; 6. Stimulate investments for the technological outfit and renovation of livestock farms; 7. Stimulate the acquisition of breeders and maintenance of their genetic fund; 8. Stimulate investments for the development of post-harvesting and processing infrastructure. The monthly distribution of the subsidising fund of agricultural producers is the task of the Ministry of Agriculture and Food Industry, in coordination with the Ministry of Finance. DECISION on approving methods for use of subsidizing fund for agricultural producers for 2012, No 57, of 31.01.2012. Fiscal initiatives The State Fiscal Service of the Republic of Moldova has initiated a series of reforms and reorganizations, aiming at aligning to the best international fiscal practices. Reforms objectives consist in increasing the voluntary conformation of taxpayers by providing best quality services and reducing costs and the time needed to honour their duties to the national public budget. In order to achieve the mentioned objectives, the SFS has drafted a Strategic Development Plan for 2011-2015. 85
  • 88. 21. Business ethics and social responsibility Business ethics = the promotion of adequate behaviour among both managers and their subordinates, based on moral principles and norms developed over time in relations between enterprises. These principles are used to determine correctness or incorrectness in business relations. Several basic principles of the business ethics: Economic and social responsibility of the company: The goal of business is not only to bring welfare upon stores and factory's, but upon the entire society. The company has the obligation of making a profit because part of this profit was allocated to society by the payment of taxes and duties," Panasonic brand creator Konosuke Matsushita said. Thus, the duty of business people as citizens is to make a reasonable profit. The company is regarded as responsible not only towards the owner, but also towards clients, providers, NGOs, creditors, local communities etc. Trust between participants in the economic life: a) trust in relations with providers both sides shall respect their obligations and avoid surprises of any kind; b) trust in relations with consumers provide services of the promised quality, and true-to-life information; c) trust in relations with employees ensure a better communication environment, more loyalty among the employees, less work conflicts. Honest communication and fair treatment: a) towards the company's clients; b) towards the employees; c) towards donors; d) towards the community. "For you to gain, those you will deal with should gain as well." (Alan Greenspan) You need to follow some ethic principles if you want to enjoy success in business in the long run: treat all employees as unique, valuable people; back the growth and development of every employee; respect the employees' families; be honest to your business partners; create a sexual harassment-free working environment; create a safe working environment; promote fair recruitment, marketing and sales practices; deliver on your promise, respect your contractual obligations and the assumed commitments; treat other people just like you would like them to treat you; negotiate from a win-win position; respect confidential data; call your employees by their names and talk to them respectfully; encourage a balanced working and rest schedule; be fair and equitable when it comes to financial matters; never mischaracterize people, products or services; display a positive attitude towards the people from your business environment; do not take or give bribes. A business following healthy moral principles is a prosperous business. Lately, an increasing number of companies have been assuming social responsibilities, which, albeit not stipulated in legislation, bring huge benefits to both society and to the corporate reputation: improvement of the employees' living and working conditions (in terms of health, education, recruitment and working conditions; vocational training, retirement, equal and non-discriminatory chances of employment, promotion and dismissal); involvement in environmental protection activities; consumers' protection; sponsorship for education, arts and sports; charitable actions. 86
  • 89. An easy to understand BUSINESS GUIDE 22. Business success and failures Beginners need to realize that they are not the first to start their own businesses and that to err is human. Here are the first and most frequent errors made by beginners: Business errors Inadequate and wrong market survey Wrong assessment of competitors Lack of innovation Lack of consistency and focusing Simplistic assumptions Unrealistic projects Inadequately set prices Advices Make no assumptions of what your clients would like, without asking them first. Avoid direct confrontation with already operating businesses. Do not confine to a single kind of business. Decide exactly what you need to do and what you do not. Follow your commitments step by step. Avoid the "Chinese tea" syndrome (it's good at any time and everywhere). Choose the market segment accurately. Before planning your spending, you should evaluate your possible clients and deadlines for the first sales. Set as realistic timeframes as possible. SSet reasonable prices. Find out the market's reaction. Low prices do not necessarily mean increased sales. Good quality does not match low prices, just like poor quality does not match high prices. The market will accept high prices provided that your products are of better quality, more sparing, more sustainable, operate better and need less service investment than the ones of your competitors. Insufficient initial capital The launch of the business will cost more and will take longer than planned in the budget. Include spending for unexpected situations in the budget. Keep the capital. Have a global view of all spending. Do not take wishes for needs. Too much superfluous spending Draft the forecast of cash flow carefully and thoroughly. Analyse the forecast daily and Lack of attention towards cash flow update it on a regular basis. Nobody knows or can understand your business better than you. Start by doing what you Assigning the sales task to an employee know and like doing better. Use your acquaintances. Pay due attention to the clients that are part of your market Not knowing your clients segment. Elaboration of an inappropriate marketing Study the market very carefully. Use promo tests and analyse results carefully. programme, which does not match the product or service. Counting only on two or three clients Extend your circle of clients. When you make a major investment decision, do not rely on the income coming from one client only. Work out a reserve plan for the situation when your most important client quits. Incorrect attitude towards the employees Try to understand what motivates people, communicate efficiently with your employees, make sure that all tasks and responsibilities are assigned in the best way possible. Create your own management style. Ignoring obvious things Monitor key indexes carefully in order to reduce losses. Hire the appropriate employees and learn to assign responsibilities. Hire a business expert Tendency to act alone or counsellor. It is easier to break verbal agreements than the written ones. Make sure all your contracts Verbally agreeing on contracts are concluded in written form. Allocate time for self-education. Read no less than one specialized book and take courses Lack of commitment towards monthly. self-education Neglecting your own image Pay special attention to the following aspects: - business card (mini promotion); - your look (appearance); - attitude (self-confidence); - the language of gestures and behaviour; - smile (pleasant presence); - expression of your eyes (displaying attention and interest); - vocabulary (the language used); - oratory (tone, intensity, rhythm and intonation) - car (personal image); - venues visited (point out your style and nature). Inadequate location of your business The company should be located as close to your target group as possible and should be as accessible as possible. 87
  • 90. Although the business world is not always easy and you will go through troubles and failures, you have to find internal resources to move forward and win. Do not forget you are not alone in the business, you are the person on whom many other people and whole processes depend. Keep on going, and the chances are that you will stumble on something, perhaps when you are least expecting it. I never heard of anyone ever stumbling on something sitting down. (Charles F. Kettering) It doesnt hurt to try. One cannot succeed without running a risk (of course, within admissible and thoughtout risks). To succeed in business, take into account the following advices: Do not reckon that all good ideas are opportunities and will be successful. Do not allow others to teach you what kind of business to launch. Do not take the lack of competition for an extraordinary opportunity. Do not look for business concepts that will change the world. Avoid your friends and familys opinions about your business idea. Do not start me too businesses an exact copy of other businesses. Do not initiate a business that does not coincide with your personal goals. Do not start a business without drafting a business plan. Avoid counsellors offering to work out a business plan for you at a reasonable price. The success combination in business is: Do what you do better... and: do more of what you do (Jack Welch) The most successful businessman is the man who holds onto the old just as long as it is good, and grabs the new just as soon as it is better. (Lee Iacocca) Drive your business, let not your business drive you. (Benjamin Franklin) Management is doing things right; leadership is doing the right things. (Peter Drucker Success stories Ostrich farm Cleopatra Dumitrescu, residing in central Moldova, has launched an ostrich farm. She launched her business in 1996 being inspired by what she had seen in the USA. She relied on her experience of poultry breeding. Initially she opened a small farm of 7 adult ostriches and 12 baby ostriches she had bought from various farms in Western Europe in order to avoid inbred mating. She bought some 18 eggs for incubation, an incubator and a baby ostriches nursery. The farm was based in a building that belonged to a kolkhoz once. Thus, the problem of fitting up the farm was quickly solved as the buildings already existed and all they needed to do was to build the separating fences and shelters. Presently, Cleopatra Dumitrescu has 24 adult ostriches, laying eggs, each of them enjoys an area of 700 to 800 square metres in the external fold, which is much above the European norms, which provide for not less than 250 square metres for a bird. Before turning 1, an ostrich costs from 60 to 65 euros. At the age of 1, when one ostrich weighs 90-100 kg, butcheries buy them at 2.5 euros per kg, thus you have a profit of over 100 euros per bird. An egg for incubation costs from 180 to 700 lei, depending on how many you buy. An egg for consumption costs from 160 to 400 lei. When slaughtered, at the age of 10-14 months, one ostrich gives 35 kg of tender lean meat, over 1 square metre of leather and about 1.5 kg of feathers. If the ostriches are not slaughtered, they are kept for reproduction: a male reaches sexual maturity at the age of 30 months and females at the age of 20 months. When delivered, a baby ostrich is 25 cm tall and weighs about 1 kg. They grow 25-30 cm a month. The adults are 2.5 m tall and weigh over 150 kg. They live over 50 years. 88
  • 91. An easy to understand BUSINESS GUIDE Rat farm Mike Hannam, a house painter from Canadas Ottawa, has never thought that one day he would do . rat business. He started breeding these animals to have food for his menagerie made up of a python and several lizards. But the rats were propagating their kind so quickly that very soon the cages were overpopulated. It was then that he thought of selling surplus to other reptile owners, discovering that there was an insufficiently exploited market segment. The business took shape in the following several weeks. First of all, Mike got in touch with the lab of an Ottawabased university, which provided him with complete information about breeding rodents, as well as competent advices from experts. Subsequently, Mike laid the basis of the firm Pied Piper Rats farm, leased equipped halls of a former mink farm and set to work. Initially, Mike Hannam had two females and one male. Unlike other businesses, the production issue was not a matter of concern: pregnancy at female rats lasts three months and one male rat may couple with 1,200 females a month. Due to this huge reproduction capacity, the farm now has 6,000 rats. To sell them, Hannam posts advertising in magazines meant for animal owners, but he also participates in all sorts of shows of exotic animals. Zoo parks are among his best clients as they have a large number of consumers: snakes, lizards, eagles, hen hawks and owls, who eat mainly rats. Owners of livestock order up to 100 rats at a time (with the price varying from 35 cents to 1.8 dollars), whereas zoo parks order several thousands. Like many other entrepreneurs, Mike Hannam had troubles with the fiscal inspectorate. His activity was not assimilated to the one of agricultural producers (in this case taxes would have been lower) for reason that he was trading livestock. But when Mike explained that he was selling dead and frozen rats, which are rather unattractive as livestock, the inspectors changed their mind. Private dustman The young entrepreneur Gotz Klein found a very simple niche on the market of services in Tubingen. As there was not enough room on the citys streets for big garbage vehicles, he offered his services of dustman to the residents and companies from the area. His idea produced results. Presently, his garbage van carries over 10 tons of garbage per month to the citys garbage pit. His clients are owners of beer houses, boutiques, sausage factories, as well as private people. He levies monthly 6,000 euros, of which about two thirds are profit. There are similar areas in Moldova, hence the business may be successful here too. To launch it, you need an authorization from the city hall, an old van and a mobile phone. Target mainly residential zones, in particular private houses with bumpy roads, from where it is difficult to promptly ship and stock the garbage. To be successful, you have to have your heart in your business, and your business in your heart. (Thomas Watson) 89
  • 92. ANNEX 1 Capacity assessment test for entrepreneurs This test will help the future entrepreneur to understand how well he can organize and run a business. Each question has three optional answers. Choose the closest answer, by ticking the corresponding letter. A. Do you often start doing something from your own initiative? a) I do everything by myself. I do not need anybody to push me. b) If somebody helps me at the beginning, everything will go well after this. c) One minute of patience, ten years of peace. If possible, I try to do nothing. B. What is your attitude towards people? a) I like people. I can get on well with anybody. b) I have plenty of friends. I do not need anybody else. c) Most of the people are irritating me. C. Could you be a leader? a) I can attract many people, when I start doing something. b) I can give orders, if somebody tells me what to do. c) I can work together with others, if I want so. D. Are you able to assume responsibilities and to complete any activity you begin? a) I like undertaking responsibilities and finalizing any activity I start. b) I can undertake responsibilities, if necessary, but I prefer to leave the responsibility with somebody else. c) There will always be an active person who would like to be the leader. I will offer him/her this responsibility with pleasure. E. Are you a good organiser? a) Before I start any work, I prefer to make a plan. Usually, I am the one who establishes the sequence of actions, when the team is getting ready for the activity. b) All jobs are going well in ordinary situations. In case of problems, I might abandon the job I have started. c) If everything is already organized and a problem arises, I leave things to work themselves out. F. Are you a good worker? a) I can work as much as required. I work a lot, if this is in my best interest. b) I can work well for a certain time. If I am getting bored, I abandon the job. c) I do not see the point in working a lot. G. Are you capable of making decisions? a) When necessary, I can make prompt decisions, which usually, are the correct ones. b) Yes, if I have sufficient time to think about. When I make quick decisions, usually they turn out to be inadequate. d) I do not like situations when I have to make decisions. H. Can people believe in what you are saying? a) Certainly. I only say what I really believe. b) I tend to always be the right level. But sometimes, I say what is more appropriate for that moment. c) Why to be worried about, the interlocutor does not know anyway whether I do or not say the truth. I. Do you keep your promises? a) If I have the possibility to do something, nothing can stop me. b) Usually, I tend to complete the job I have started, if things are going well. c) If I am not successful from the first time, I abandon. Why to waste time? J. What is your health condition? a) I never get tired! b) I have sufficient energy for almost everything I want to do. c) I feel I am getting tired faster than most of my colleagues. Count how many answers of type a)_________b)________c)________ you have. Majority Interpretation of results a It is likely that you have the very qualities needed to efficiently manage an enterprise. b You might face difficulties, therefore it would be good for you to find a reliable partner to compensate your drawbacks. c Even a good partner could not help you. Think well whether it is worth the effort or urgently start a serious training! 90
  • 93. An easy to understand BUSINESS GUIDE ANNEX 2 Territorial Offices of the State Fiscal Inspectorate IFS teritoriale Address Chisinau Municipality 9, Cosmonautilor Str. DAF* Centru DAF Buiucani DAF Ciocana DAF Botanica DAF Riscani Balti Anenii-Noi Basarabeasca Briceni Cahul Cantemir Calarasi Causeni Cimislia Criuleni Donduseni Drochia Dubasari Edinet Falesti Floresti Glodeni Hincesti Ialoveni Leova Nisporeni Ocnita Orhei Rezina Rascani Singerei Soroca Straseni Soldanesti Stefan-Voda Taraclia Telenesti Ungheni UTA Gagauzia Comrat Ceadir-Lunga Vulcanesti 2012, 65. Mitr. Varlaam Str. 2004, 2, Mihai Viteazul Str. 2042, 24/1, M. Sadoveanu Str. 2043, 7/2, Teilor Str. 2068, 3a, Kiev Str. 3101, 128, tefan cel Mare Str. 6501, 1, Sciusev Str. 6702, 55, Karl Marx Str. 4701, 28, Independentei Str. 3901, 2, Tolstoi Str. 7301, 2, Trandafirilor Str. 4401, 130, Alex. cel Bun Str. 4301, 14, Pacii Str. 4101, 10, Stefan cel Mare Bld. 4801, 108, 31 August Str. 5101, 4, Feroviarilor Str. 5201, 15, Independentei Str. 4571, village of Cocieri, 28, V. Lupu Str. 4601, 101, Independentei Str. 5901, 20, Moldovei Str. 5001, 2, Victoriei Str. 4901, 2, Suveranitatii Str. 3401, 123, Mihalcea Hincu Str. 6801, 57, Alexandru cel Bun Str. 6301, 3, Dosoftei Str. 6401, 2, Suveranitatii Str. 7101, 72, M. Viteazul Str. 3501, bul. M. Eminescu Str. 5401, 5, 27 August Str. 5601, 44, Independentei Str. 6201, 115, Independentei Str. 3001, 10, Stan Poetaj Str. 3701, 31, M. Eminescu Str. 7201, 2 A, Boris Glavan Str. 4201, 1, Libertatii Str. 7401, 3, Valeriu Cebanov Str. 5801, 69, Renasterii Str. 3601, 17, Nationala Str. 3801, 24, Comsomolului Str. 3801, 24, Comsomolului Str. 6101, 33, Lomonosov Str. 5301, 60, Gagarin Str. Telephone/Fax 0 22 823302 Fax: 0 22 226180 0 22 823185 0 22 823021 0 22 823074 0 22 823241 0 22 823132 0 231 23502 0 265 24744 0 297 23040 0 247 22248 0 299 29813 0 273 22287 0 244 22848 0 243 22248 0 41 22174 0 248 20413 0 251 24900 0 252 23595 0 248 52188 0 246 24782 0 259 23979 0 250 22682 0 249 23873 0 69 23573 0 268 22136 0 263 22437 0 264 23535 0 271 21146 0 235 20522 0 254 21870 0 256.23287 0 262 22690 0 230 23006 0 237 22061 0 272 22287 0 242 22350 0 294 23640 0 258 22248 0 236 27302 0 298 23150 0 298 25363 0 291 92539 0 293 21613 *Fiscal Administration Department 91
  • 94. ANNEX 3 Territorial Agencies of the National Health Insurance Centre Territorial agencies Address E-mail, web Bender Cahul MD 3100, Balti Municipality, 5A, Sf. Nicolae Str. District of Anenii Noi, village of Varnita, 64, Tighina Str. MD 3900, Cahul, 16, Stefan cel Mare Str. atbalti@cnam.md http://atbalti.cnam.md ATBender@cnam.md ATCahul@cnam.md Causeni MD 4300, Causeni, 54, Gagarin Str. ATCauseni@cnam.md Chisinau Chisinau Mun., 18, Vasile Lupu Str. Balti Edinet atchisinau@mail.md www.atchisinau.com.md MD 3800, Comrat, 44, Pobedy Str., polyclinic, ATComrat@cnam.md floor 5 MD 7100, Ocnita, 63, 50 ani ai Biruintei Str., ATEdinet@cnam.md Hincesti Orhei Hincesti, 238, Mihalcea Hincu Str. MD 3401, Orhei, 81, Negruzzi Str. ATHincesti@cnam.md ATOrhei@cnam.md Soroca MD 3000, Soroca, 19, Alexandru cel Bun Str. ATSoroca@cnam.md Taraclia MD 7400, Taraclia, 5a, Cotovschi Str, ATTaraclia@cnam.md Ungheni MD 3600, Ungheni, 17, Nationala Str. ATUngheni@cnam.md Comrat Telephone/Fax 0 231 63399 0 265 46256 0 299 22371 Fax:0 299 22371 0 243 26122 Fax: 0 243 26503 0 22 593791 0 298 26997 Fax: 0 298 26997 0 271 23854 Fax: 0 271 22203 0 269 22939 0 235 20265 Fax: 0 235 20265 0 230 26418 Fax: 0 230 26418 0 294 24142 Fax: 0 294 24142 0 236 22758 Fax: 0 236 22758 ANNNEX 4 Territorial Offices of the National House of Social Insurance Territorial offices Address Anenii-Noi Anenii-Noi, 4, 31 August Str. Balti Balti 3100, 47, 31 August Str. Briceni Briceni 4700, 44, Independentei Str. Cahul Cahul 3209, 6, Piata Independentei Str. 92 Telephone/Fax 0 265 21076 0 265 23543 0 265 21078 Fax: 0 265 24646 0 231 22548 0 231 29052 0 231 22078 0 231 92311 Fax: 0 231 22548 0 247 23536 0 247 25685 0 247 25803 0 247 24977 Fax: 0 247 23536 0 299 32858 0 299 21735 0 299 33574 0 299 36172 Fax: 0 299 32858
  • 95. An easy to understand BUSINESS GUIDE Territorial offices Address Cantemir Cantemir 7301, 2, St. Voda Str. Calarasi Calarasi 4400, 19, M. Eminescu Str. Causeni Causeni 4300, 9, A. Mateevici Str. Chisinau Botanica Sector, 2032, 108, Burebista Str. Cimislia Cimislia 4100, 7, Sfinta Maria Str. Comrat Comrat 3805, 42/1, Tretiacova Str. Criuleni Criuleni 4801, 12, Biruinta Str. Donduseni Donduseni 5100, 12, Comarov Str. Drochia Drochia 5202, 15, Independentei Bld. Edinet Edinet 4601, 101, Independentei Str. Telephone/Fax 0 273 22569 0 273 23216 0 273 22283 0 273 23216 Fax: 0 273 22569 0 244 23724 0 244 23701 0 244 23225 0 244 21884 Fax: 0 244 23724 0 243 22071 0 243 22962 0 243 24140 0 243 23176 Fax: 0 243 22071 0 22 532083 0 22 553003 0 22 507608 0 22 559860 Fax: 0 223588 0 241 22739 0 241 21034 0 241 24185 0 241 21033 Fax: 0 241 22739 0 298 22548 0 298 29132 0 298 23258 0 298 22975 Fax: 0 298 22548 0 248 21723 0 248 22788 0 248 20973 0 248 20973 Fax: 0 248 21723 0 251 21135 0 251 24421 0 251 25459 0 251 24411 Fax: 0 251 21135 0 252 26939 0 252 26940 0 252 24831 0 252 26740 Fax: 0 252 26939 0 246 25895 0 246 22686 0 246 22484 0 246 22479 Fax: 0 246 21053 93
  • 96. Territorial offices Address Floresti Floresti 5000, 2, Victoriei Str. Glodeni Glodeni 4900, 21a, Tricolorului Str. Hincesti Hincesti 3400, 123, M. Hincu Str. Ialoveni Ialoveni 6800, 18, Alexandru cel Bun Str. Leova Leova 6300, 35, Unirii Str. Nisporeni Nisporeni 640, 10, Suveranitatii Str. Ocnita Ocnita 7101, 47, Independentei Str. Orhei Orhei 3505, 113, Vasile Lupu Str. Rezina Rezina, 1, 27 August Str. Riscani Riscani 5600, 2, Ion Neculce Str. 94 Telephone/Fax 0 250 24203 0 250 26392 0 250 20441 0 250 26389 Fax: 0 250 24203 0 249 22548 0 249 25629 0 249 25044 0 249 25700 Fax: 0 249 22548 0 269 25801 0 269 24645 0 269 23106 0 269 25480 Fax: 0 269 25314 0 268 21505 0 268 24174 0 268 22540 0 268 22548 Fax: 0 268 2375 0 263 23273 0 263 24581 0 263 23609 0 263 22249 Fax: 0 263 24581 0 264 23798 0 264 22051 0 264 22538 0 264 23779 Fax: 0 264 23798 0 271 22548 0 271 24233 0 271 21389 0 271 22205 Fax: 0 271 22548 0 235 22548 0 235 32360 0 235 20276 0 235 23757 Fax: 0 254 2299 0 254 22991 0 254 21537 0 254 21693 Fax: 0 254 22991 0 256 22548 0 256 24043 0 256 23439 0 256 22895 Fax: 0 256 22548
  • 97. An easy to understand BUSINESS GUIDE Territorial offices Address Singerei Singerei 6200, 2A, Vinitchi Str. Soroca Soroca 3000, 20, Stefan cel Mare Str. Straseni Straseni 3701, 31, M. Eminescu Str. Soldanesti Soldanesti 2770, 5, 31 August Str. Stefan-Voda Stefan-Voda 4201, 3, 31 August Str. Taraclia Taraclia 7400, 46, Sovetscaia Str. Telenesti Telenesti 5801, 87, Renasterii Str. Ungheni Ungheni 3600, 8, Gh. Meniuc Str. Vulcanesti Vulcanesti 5300, 103, Lenin Str. Telephone/Fax 0 262 24350 0 262 24740 0 262 24348 0 262 24244 Fax: 0 262 22548 0 230 30164 0 230 22437 0 230 22376 0 230 22427 Fax: 0 230 30164 0 237 22039 0 237 22725 0 237 23021 0 237 20035 Fax: 0 237 20035 0 272 23892 0 272 25712 0 272 25839 0 272 25536 0 272 25671 Fax: 0 272 25633 0 242 23502 0 242 25119 0 242 24496 Fax: 0 242 23502 0 294 23028 0 294 23054 0 294 23465 0 294 23025 Fax: 0 294 23028 0 258 24971 0 258 25013 0 258 22197 0 258 24972 Fax: 0 258 24971 0 236 26992 0 236 22683 0 236 23230 0 236 26898 Fax: 0 236 26992 0 293 22548 0 293 23287 0 293 23287 0 293 22165 Fax: 0 293 22548 95
  • 98. ANNEX 5 Territorial Offices of the National Bureau of Statistics Chisinau Mun. MD-2028, Chisinau, 53 a, Hincesti Highway Head of Directorate (section) Savva Janeta Balti Mun. MD-3114, Balti, 96 "a", Victoriei Str. Tertea Ion 0 231-32021 balti@statistica.md Anenii Noi MD-6501, Anenii Noi, 6, 31 August Str. Gavriluta Valentina 0 265 22961 aneniinoi@statistica.md Basarabeasca MD-6702, Basarabeasca, 55, C. Marx, Str. Vlad Valentina 0 297 22360 basarab@statistica.md Briceni MD-4700, Briceni, 6, Prieteniei Str. Traista Vasile 0 247 23231 briceni@statistica.md Cahul MD-3901, Cahul, 63, M. Funze Str. Condrasova Natalia 0 299 25547 cahul@statistica.md Calarasi MD-4403, Calarasi, 1, P. Halipa Str. Stratan Zinaida 0 244 20780 calarasi@statistica.md Cantemir MD-7301, Cantemir, 11, Trandafirilor Str. Tabureanu Victoria 0 273 22059 cantemir@statistica.md Causeni MD-4304, Causeni, 31, Eminescu Str. Sirghi Victoria 0 243 22146 causeni@statistica.md Ceadir-Lunga MD-6101, Ceadar-Lunga, 10, Lunaciarski Str. Butcus Veaceslav 0 291 23885 clunga@statistica.md Cimislia MD-4101, Cimislia, 10, Stefan cel Mare Str. Girnaja Maria 0 241 22642 cimislia@statistica.md Criuleni MD-4801, Criuleni, 90, 31 August, Str.0 RotaruTatiana 0 248 22295 criuleni@statistica.md Donduseni MD-5102, Donduseni, 29, A. Donici Str. Briceag Tamara 0 251 22007 donduseni@statistica.md Drochia MD-5202, Drochia,1 b, 31 August Str. Sandiuc Dina 0 252 22600 drochia@statistica.md Ceban Eugenia 0 248 52474 dubasari@statistica.md Directorate (section) Post address Dubasari (Cocieri) MD-4571, Cocieri, 63, Renasterii Str. Telephone E-mail 0 22 739581 chisinau@statistica.md Edinet MD-4601, Edinet, 24, M. Eminescu Str. Greciuhin Silvia 0 246 22680 edinet@statistica.md Falesti MD-5902, Falesti, 27, Moldovei Str. Sinica Constantin 0 259 22430 falesti@statistica.md Floresti MD-5001, Floresti, 42, Victoriei Bld. Bujac Valentin 0 250 22308 floresti@statistica.md Glodeni MD-4901, Glodeni, 1, L. Tolstoi Str. Ceban Tamara 0 249 23250 glodeni@statistica.md Hincesti MD-3401, Hincesti, 1, M. Cibotaru Str. Petcu Valentina 0 269 24978 hincesti@statistica.md Ialoveni MD-6800, Ialoveni, 17, Alexandru cel Bun Str. Covas Ludmila 0 268 23995 ialoveni@statistica.md Leova MD-6301, Leova, 37, Unirii Str. Gasan Nina 0 263 22947 leova@statistica.md Nisporeni MD-6000, Nisporeni, 61, Alexandru cel Bun Str. Presecaru Zinovia 0 264 23151 nisporeni@statistica.md Ocnita MD-7101. Ocnita, 47, Independentei Str. Patica Ludmila 0 271 22565 ocnita@statistica.md Orhei MD-3501, Orhei, 153, V. Lupu Str. Lungu Natalia 0 235 31047 orhei@statistica.md Rezina MD-5400, Rezina, 63 "a", Pacii Str. Budurin Ala 0 254 22588 rezina@statistica.md Riscani MD-7101, Riscani, 16, 31 August Str. Zorila Ludmila 0 256 22296 riscani@statistica.md Singerei MD-6200, Singerei, 136, Independentei Str. Locoman Tatiana 0 262 29193 singerei@statistica.md Soldanesti MD-7201, Soldanesti, 11, N. Testemitanu Str. Sempered Tatiana 0 272 22044 soldanesti@statistica.md Soroca MD-3005, Soroca, 128, Stefan cel Mare Str. Zeru Igor 0 230 22527 soroca@statistica.md Stefan-Vod MD-4201, Stefan Voda, 1, Libertatii Str. Bognibov Dmitrii 0 242 22799 stvoda@statistica.md Straseni MD-3700, Straseni, 56, M. Eminescu Str, Croitor Vladislav 0 237 27651 straseni@statistica.md Taraclia MD-7400, Taraclia, 7, Pacii Str. Celarscaia Nina 0 294 25569 taraclia@statistica.md Telenesti MD-5801, Telenesti, 18, Vasile Alecsandri Str. Esanu Ion 0 258 22335 telenesti@statistica.md Ungheni MD-3600, Ungheni, 21, Decebal Str. Mutu Denis 0 236 23100 ungheni@statistica.md Vulcanesti MD-5300, Vulcanesti 86, Lenin Str. Gaidarji Maria 0 253 24396 vulcanesti@statistica.md U.T.A. Gagauzia (Comrat) MD-3800, Comrat, 36, Tretiakov Str. Topal Ivan 0 298 22559 comrat@statistica.md 96
  • 99. An easy to understand BUSINESS GUIDE ANNEX 6 Financial Indicators Indicator Liquidity Indexes Net working capital Calculation method Current assets ST Debts General liquidity Immediate liquidity Accounts receivable turnover ratio Days sales outstanding Inventory turnover ratio Profitability indicators Gross profit margin Current assets /Short-term debts Cash /Short-term debts Net sales/Average receivables balance One year/Accounts receivables turnover ratio Assets turnover ration Net sales /Average balance of total assets Economic rentability Net profit /Average balance of total assets Return on equity Net profit /Average balance of equity Meaning It shows the part of current assets that exceed current debts and represents the capacity of net current assets to change into cash in order to maintain the financial balance and to comply with maturing bonds of the enterprise Indicator of the short-term debts reimbursement capacity Indicator of the short-term liquidity Indicator of the relative amount of the receivables balance and of the credit policy efficiency Indicator of the average period receivables are collected Cost of sold production /Inventory average balance Indicator of the relative inventory size Gross profit Net sales It is used to determine the contribution of each leu from sales to obtain the net profit Indicator of the efficient utilization degree of economic resources in sales Indicator of the profitability degree of each leu invested in the utilized economic resources Indicator of the profitability degree of owners investments Long-term solvency indicators Degree of debt Total debts /Total assets Degree of solvency Long-term debts /Equity Indicators showing the ration to which the total asset is funded from other sources but the own ones Financing degree from equity 97
  • 100. ANNEX 7 Normative Framework for Entrepreneurs Laws of the Republic of Moldova Civil Code of the Republic of Moldova Fiscal Code of the Republic of Moldova Labour Code of the Republic of Moldova LAW on State Social Insurance Budget for 2012, No 270 of 23.12.2011 LAW on accounting No 113-XVI of 27.04.2007, Official Monitor No 90-93/399 of 29.06.2007 LAW on pharmaceutical activity No 1456 of 25.05.1993 LAW on rent in agriculture No 198-XV of 15.05.2003 LAW on savings and credit associations No 139-XVI of 21.06.2007 LAW on internal trade No 749-XII of 23.02.1996 LAW on evaluation of conformity of products No 186-XV of 24.04.2003 LAW on franchising No 1335-XIII of 01.10.1997 LAW on pledge No 449-XV of 30.07.2001 LAW on investments in entrepreneurial activity No 81-XV of 18.03.2004 LAW on state registration of enterprises and organizations No 1265-XIV of 05.10.2000 LAW on leasing No 59-XVI of 28.04.2005 LAW on the import and export of goods from the Republic of Moldova by natural persons No 1569-XV of 20.12.2002 LAW on industrial parks No 164-XVI of 13.07.2007 LAW on scientific-technological parks and innovation incubators No 138-XVI of 21.06.2007 LAW on entrepreneurial patent No 93-XIV of 15.07.1998 LAW on basic principles regulating entrepreneurial activity No 235-XVI of 20.07.2006 LAW on protection of competition No 1103-XIV of 30.06.2000 LAW on labour protection No 625-XII of 02.07.1991 LAW on advertising No 1227-XIII of 27.06.1997 LAW on wages No 847-XV din 14.02.2002 LAW on protection and support of small business No 112-XIII of 20.05.1994 LAW on sales of goods 134-XIII of 03.06.1994 LAW on compulsory insurance fund for medical assistance for 2012, No 271 of 23.12.2011 LAW of financial institutions No 550-XIII of 21.07.1995 LAW on public acquisitions No 96 of 13.04.2007 LAW on granting long-term preferential loans to certain categories of young students No 1142 of 14.07.2000 LAW on sanitary-epidemiologic security of the population No 1513 of 16.06.1993 LAW on savings and loans associations No 1505-XIII of 18.02.1998 LAW on business cooperatives No 73-XV of 12.04.2001 LAW on peasant (farmer) farms No 1353-XIV o 03.1 1.2000 LAW on state registration of legal persons and individual entrepreneurs No 220-XVI of 19.10.2007 LAW trademarks and appellations of origin of products No 588-XIII of 22.09.1995 LAW on trademarks protection No 38-XVI of 29.02.2008 LAW on regulating entrepreneurial activity through licencing No 451-XV of 30.07.2001 LAW on general security of products No 422-XVI of 22.12.2006 LAW on Limited Liability Companies No 135 of 14.06.2007 LAW on Joint Stock Companies No 1134-XIII of 02.04.1997 LAW on supporting small and medium enterprises sector No 206 of 07.07.2006 98
  • 101. An easy to understand BUSINESS GUIDE ANNEX 8 BUSINESS PLAN NOTEBOOK BUSINESS PLAN Example of front page: Within crotchets you will have to fill in the business plan with information referring to your company Inserting a coloured picture with your product right at the beginning is a good idea. Include the following information: [Your companys name] [Month, Year when the plan is developed] Business plan copy No [x] This is a confidential document. It cannot be distributed. [Name of the person] [Title] [Legal address [Town, Post code] [Telephone] [E-mail] [Webpage] 99
  • 102. Contents Here is an example of contents. When you finish the plan, make sure you have changed the page numbering Business summary 1. Mission 2. Description of the company (Data on the firms registration. Organizational legal form. Founders. Field of activity.) 3. The Business (Goal and objectives of the business. Location. Offices. Partners.) 4. Product of service (Technological characteristics, quality. Assortment, nomenclature. Packing, design. Catalogues, pictures, drawings.) 5. Market and marketing strategy (Markets characteristics, structure and size. Market evolution. Companys market share. Current and potential clients. Analysis of consumers needs. Price policy. Distribution channels. Product/service promotion. Sales strategies.) 6. Competition (Competitors. Comparative advantages.) 7. Risks/Opportunities (SWOT Analysis) 8. Administrative team (Managerial team and its characteristics. Required staff. Organizational structure.) 9. Required capital (Debts paying strategy.) 10. Financial plan (Accounting information and reports. Periodic cash flows (trimestral, monthly, annual, etc.). Estimates of quarterly, monthly or yearly sales, revenues of expendtures, depending on requirements of investors or credit societies.) Conclusions Annexes and references 100
  • 103. An easy to understand BUSINESS GUIDE Business summary If this presentation if not successful, your business plan will never be bought by investors. We recommend you to formulate this brief presentation after you finish drafting the business plan. Given that the purpose of this brief presentation is to capture investors attention, it has to be brief, clear and concise. Mission Our companys mission is [describe the main purpose of your company, or simply state the mission]. Companys presentation [The Company] was initiated on [date] and [describe what is it dealing with, e.g., manufacturing products for children, distribution of pencils, provision of medical services]. This is a [organizational legal form, for example LLC, JS, etc]. Companys headquarters are on [main address, as well as the address of other facilities]. Business We produce [description of the product you manufacture or the service you provide]. Our company is under the [project stage, set-up stage, growing], and just has [designed the first product, employed the first sales executive, registered the first national order]. Over the last [period], our company reached a turnover of [x] and registered a [profit, loss, breakeven]. By further direct funding, our company is expecting to increase its turnover from [x] and gross profit up to [x] in [xxxx] and to reach a turnover of [x], as well as a raw profit of [x] for year [xxxx+1]. We can get all these, because the respective funds will allow us to [describe how you are going to use the funds, for example: a) marketing for the new product, b) build or extend the facilities, to cope with a largest supply, c) add a new location of retail sale or of new distribution methods, d) intensify researches and development of new products, or improve the existing ones]. Product or service Describe the product or service in easy to understand terms. [The Company] produces the following: [brief list of the provided products, classified by the amount of sales they generate of by their importance in the production line]. Alternatively, [the Company] provides the following services: [brief list of provided services, classified by the amount of sales they generate of by their importance in the production line]. At present, our [service or product] is at the [inception, growing, maturity] stage. We have planned to continue with this [product of service], with the following modifications to extend the line: [x, y and z]. Determinants in [our product manufacturing or service provision] are [x and y]. Our [Product or service] is unique, because [x, y or z] and/or we have an advantage on the market given our [licence, promptness, brand name]. Market and marketing strategy We define our market as [manufacturing and sale of...]. Who are your clients? Where are they and how will you reach them? How will you educate clients to buy from you? Competition We compete directly with [name of competitor] - or We do not have any direct competitors, but there are substitutes for our [products or services] on the market. Our [product of service] is unique because [x] and/or we have a competitive advantage given [promptness, brand name, low production costs]. Risks/Opportunities (SWOT Analysis) The most important risks for our business for the moment are [market risk, price risk, producer risk, management risk]. We consider we can eliminate these risks, because [x]. Our opportunities are significant; we have the possibility to [dominate a market niche, become a strong company in the industry] if [x]. Administrative team Managerial team and its characteristics. Required staff. Our team is made up of the following members, who can implement the plan: [x] men and women, covering [x] years of experience; [y] years in marketing, [y] years in product development and [y] years in [others]. Financial plan We need [x], which would allow us to [describe why we need funds and why this opportunity is worth to be taken into account]. We can guarantee and reimburse this [loan, investments] in [x] years, by [dividend from the excess profit, re-capitalizations, sale of the company or public offer]. Plan financiar Financial resources required for the implementation of the plan. Expected economic-financial results. By this moment, the investor must have a clear idea about the current stage of the business. If you bore him/her or if he/she has difficulties in finding the information he/she needs, he/she will not talk to you. You must give him/her a full picture, even if brief, about the financial situation and situation of sales. Last year This year Next Year In two years Sales: Gross profit: Income tax: Balance Sheet Summary Assets: Liabilities: Nominal value: 101
  • 104. Further on, describe in details all items included in your business plan. Relaia cu clienii 1. Mission Our target is to become [describe the major objective of the company; for example: leader in the manufacturing and trade of brand tyres, or the first name in the light cheeses industry]. We aspire to get a reputation on the market as a manufacturer and distributor of [products saving time, which are better, sold at a fair price on the market {x}]. We can come to this point by [the prompt development of products, clear understanding of the market trends and needs, etc.]. To achieve our objective, [companys name] needs [capital, larger and more efficient facilities]. For this purpose, we want to treat the interested parties, clients, as well as the society with [description of the reputation the company wants to have]. These groups see our company as [describe the benefits that each of this groups would have if associating with this company]. 2. Companys presentation Data on the firms registration. Organizational legal form. Founders. Field of activity. [The Company] was founded on [date] and [describe what is it dealing with, for example, manufacturing products for children, distribution of pencils, and provision of medical services]. This is a [organizational legal form, for example LLC, JS, etc.]. Companys headquarters are on [main address, as well as the address of other facilities]. We have approximately [x] s.m. of office space and [x] s.m. of [production or storage space]. Current capacity is of [x] units per month. If we exceed [x] units per month, we will need additional space. We expect the current facilities to remain in line with requirements of the company for another [2 years, on year, one week] after funding. [Companys name] activates in the industry [with toxic environment, ammunition and weapons, genetic engineering, explosive] or [uses substances controlled in the manufacturing or service provision process] and falls under the jurisdiction [name of the governmental agency]. [Companys name] holds all the necessary functioning authorisations and has all inspections up-to-date. These authorizations include: [brief list and their description]. Explain how you work in cooperation with other companies in order to improve performances of your company. [Companys name] has developed strategic important and profitable alliances with the following bigger and stronger companies: [Describe each company, position on the market, details about the partnership and involved risks]. For example, we have cooperation contracts on marketing with [x], which is [the market leader for...], and this will allow us to sell together with them [e.g., our pencils for children].The mutual support in the en-detail sales, as well as the possibility to cooperate for the wholesale with their base of customers, can help us penetrate much faster on our market. The risk in this partnership is that they could [also decide to sell these pencils] and thus eliminate us from the process. Another kind of strategic relationship our company benefits from is our development as a joint stock company, together with [x]. Alone we would never be able to fund researches for the new type of [Swiss degrease cheese, melting smoothly], but having access to their earlier researches [related to melting] we will be able to reduce by half the time required for the development of the new product. By using their [equipment, people], which were not used to their maximum potential, we could avoid costs related to [capital, additional wages]. We agreed to pay a fee of [x] to this partner for its role in the final success of the product. We have a strategic relationship with a series of suppliers. In the exchange of a commitment to purchase [over 80% of the needed raw material from them], they agreed to [no supply the market for a maximum period of six month, or to offer us a preferential price]. [Companys name] also has strategic relations of [e. g., manufacturing of original equipment] with a series of clients. This allows us to sell a large and constant amount of [e.g., wheels for roller-skates] to [e.g., shoemakers, who use them to sell full sets of roller-skates]. By this, a lot of products reach the market, although it does not ensure the brand recognition. 3. Business Scopul i obiectivele afacerii. Amplasarea. Sedii. Parteneri. Eventuali investitori. [Companys name] is a [manufacturer, distributer, trader, service provider] of [description of the product you manufacture or the service you provide]. The company is under the [project stage, set-up stage, growing], when it has just [developed a new product, employed the first sales executive, registered the first national order]. 4. Product or service Explain how your product functions, or how is the service you provide used. Technological characteristics, quality. Assortment, nomenclature. Packing, design. Catalogues, pictures, drawings. What are the stringent needs of the market satisfied by your products? What do you bring new to the market? [The Company] manufactures the following products: [list of products to be inserted here, classified by the amount of sales they generate of by their importance in the production line]. Make sure the readers will be able to refer to pictures of the product, diagrams, licences or other descriptive materials. Or: [The Company] provides the following services: [list of services provided to be inserted here, classified by the amount of sales they generate of by their importance in the production line]. Currently, our [product or service] is at the [inception, growing, maturity] stage. The [products or service] was designed for the first time in [xxxx] and since then, it has been improved or redesigned [x] times. Provide a brief background of the product development, introductions or improvements that led you product to what it is today. A tabular format is the most indicated for this description. Products aspects or characteristics that are unique This is an extremely important paragraph. Investors must notice something which is unique, in the ownership or under the protection of your company, related to the product or service. 102
  • 105. An easy to understand BUSINESS GUIDE Our products are unique because of the [secret ingredient, our production licence, our manufacturing process]. There are also other companies that can offer [products or services] somehow similar, but we are capable to differentiate ourselves on the market, given [ x ]. We have [applied or obtained] licence for [x], presented in annex [x]. Our main product, [x], is intended for the following needs of customers: [x], and brings them the following benefits: [x]. Tell us about the unique features that increase the value or the production line or of the process for consumers and the way you intend to transform these characteristics into a competitive advantage for the company. Research and development Research and development within the company is based on [name of the person or company contracted], whose major objective is to use what is available on the market to [design the products solving certain problems, or that bring superior benefits to customers]. Over the last [period], the research and development activities resulted in the following products and innovations: [list of products and innovations]. [Companys name] spent [% of revenue] last year for research and development and intends to spend [%] in the following [period]. Sometimes, our research and development activity brings innovations without using data from the market or from customers. Our selection criterion of products in this case is the following: [relatively low investment requirements, positive outcomes from the investment, compatibility with current strategy, feasibility in development and production, relatively low risk, common buyer]. Our research and development activity will require additional sources for the future. These will include [people, capital] to [speed up the development process, test results in a more efficient manner]. New products and secondary products. To answer to the needs of the market, we intend to enrich the [product or service] by extending the spectrum to include [x, y and z]. We intend to introduce on the market these products in the period of [ ... ], which corresponds to [a big commercial exhibition, industrial event]. Apart from this, we intend to introduce the following new products in the next season: [x, y and z]. Production Our [products, service] is [manufactured by us, assembled by us from component parts acquired from various suppliers, (the service) is provided by our employees, or is subcontracted to field consultants]. [The raw materials, components] used for our products are available directly from several suppliers, meeting our quality standards. Determinants in [manufacturing our products or providing our service] are [x and y]. List and explain requirements related to equipment, materials and labour. Are the elements from above to hand? Do you have different variants of suppliers? Make a list with requirements for inventory, technical quality and value, as well as dangerous materials. Uniqueness Our [product or service] is unique, because [x, y or z] and/or we have an advantage on the market thanks to our [licence, promptness, brand]. 5. Market Characteristics of the market, its structure and size. Market evolution. Market share of your firm. Current and potential clients. Analysis of consumers needs. Price policy. Distribution channels. Product/service promotion. Sales strategies. Unfortunately, this is the most important section and the most poorly presented one in the majority of business plans. Do your best to describe as fully as possible the market you compete on and what are your advantages on the market. Defining the market [We expect to compete, We compete] within [define the niche] from [define the industry]. This market was of about [x] in [en-gross, en-detail] over the last [period available], according to [quoted source]. We consider that the major trend for the future in this sector will be focused on [environment, enhanced quality, value-oriented], as concerning the provided products. The market research carried out by [quote the source] suggest that this market will [increase/decrease] up/down to [x] by [xxxx]. We expect that the niche we compete on to [grow, decrease, stay at its current level] in this period of time. The major forces that can affect this are [decrease in costs of computers, explosion of domestic businesses, trend of big families to have less children and to dandle pets]. The area with the largest growth in industry will be of [x]. Identify sources of this information, as well as how updated they are. Market segment We define our market segment as [segment for writing and drawing tools in the industry of products intended for schools/families/offices, segment of degreased products in the food industry]. This segment was a [changing, stable] one of over the last years. Experts in the industry [name them] estimate that [x] will be characteristic for the following years. The big market segments are [segment a, segment b, segment c]. Make a general list with types of clients you could reach Segment [a] on the market is based on [product type], sold for retail prices between [x and y]. The largest share of sales from this segment is with delivery, performed with the help of [catalogues, retailers, manufacturer agents, etc.]. A typical consumer of our product is a person who, maybe, at present, is using [an alternative product or service] for [a certain purpose]. They are motivated to buy our product because [it is valuable, of high quality and useful]. We know this from [the answers by consumers, information collected at exhibitions, advertising researches] and we consider that our products are perceived by consumers as being [appreciated, with superior performances, with an extraordinary taste]. However, our product has the following drawbacks: [higher price than the majority of cheese products available, weak identification of the brand on the consumption goods market]. We are trying to position our product on place [x], in order to reduce this vulnerability. 103
  • 106. Marketing. Sales strategies Our marketing plan is based on the following fundamentals: We expect to penetrate segment [x] on the market/markets. We will succeed in doing it by using [retail sales, order by post, multidimensional market, Internet] as primary distribution channel(s). In time, we plan to capture [%] of the market share Positioning We will position our product as [having a higher value compared with the price, of a superior quality, cheap and attractive], representing points that have not been attacked yet by competitors. A demographic group [the old age people, generation X] particularly needs this product namely. We will adjust the positioning of our product in line with this.. Price Our price strategy is [describe the strategy or at least the philosophy]. We came to this price strategy through [costs, grow profit objectives, market prices, perceived value]. We revise our price strategy on a [monthly, quarterly, yearly] basis, to make sure we do not lose any potential profit. Clients seem to be ready to pay up to [x], because [explain the reasons why].. Distribution channels CThe distribution channels we use for our product are [wholesales, catalogues, retail sales, etc.]. This is the best way for our product to reach consumers because [consumers profile, geography, seasonal fluctuations]. Our competitors use [wholesales, catalogues, retail sales, etc.]. Our distribution channel will come in being the most advantageous, because [x].. Our current and the most important clients are: [the first five, each described in one-two phrases]. The attached graphic [see annex z] describes the way our product reaches the consumer Advertising, promotion, exhibitions with sales Your goal is to introduce, promote and support your products on the market. Although it costs, a well-planned and executed advertising company is in fact an investment. [Companys name] has developed a full advertising and promotion strategy, which will be implemented by the best company in the field, once the necessary funds are received. We will be present in a few national magazines, as well as in the commercial press. We will design by ourselves the ads and we will get involved in the advertising campaigns of our partners. Our advertising plan is to permanently be in touch with editors and writers [of commercial magazines, serving our industrial sector]. We will identify subjects that would [enhance our reputation, disclose us to consumers]. We intend to promote the product in various ways [spot sampling, demonstrations on the occasion of some special events, donations by fund raisers], as well as through other events with a high commitment degree. The objective of the entire promotion campaign is to [extend the audience, position our product on the top from the brands point of view, strengthen our relations with the community. [Companys name] participates in the following exhibitions with sales: [... ] Present a list describing in brief the organisations sponsoring or participating in exhibitions, as well as your presence in these events. We benefit from a [stand of x meters, allowing us to present the existing products and introduce the new ones, or we prefer to participate in exhibition fairs as visitors, to walk around, while presenting the products to qualified buyers only, who will come to our office nearby]. The following factors are taken into consideration once we decide to participate or not in an exhibition fair: will this event help up to convey the message of our company to the target audience? Is the location of the fair important? Is the period good? Is this a not to be missed event? 6. Competition Tell us about our competitors from the point of view of your product, price, localization, promotion, management and financial position. Fake or incomplete information are here translated into dishonesty and neglect towards investors, bankers, etc. Do not cheat yourself and your competitors (and to not cheat your investors) about competition. Consult industrial files from the local library. Search in the on-line databases, where you can find the competitive profiles of other companies. Read industrial magazines and search in advertising agencies. We do not have any direct competitors, but on the market there are alternative [products or services] or our direct competitors are [a, b and c]. Give an example for each [for example, Acme Inc. is a manufacturer and distributor of pencils in the north region, with sales of up to 3 million dollars. Acme Inc. is a branch of Acme Corp, a public company, with a turnover of 800 million dollars. The branch sells pencils, pens and other writing and drawing tools. The recent trend for the branch was stationing, as the mother company did not make available the capital needed to upgrade the equipment. Acme Inc. is run by a Deputy Chairman, who is there for six months. The former manager worked for Acme Inc. 11 months] Competitors [use/do not use the same distribution channels as us, they place their ads in the same as we/in other commercial newspapers]. If advertising is on a regular basis, we assume it is efficient! Our [product or service] is unique because [x] and/or we have a competitive advantage, due to [promptness, brand name, low production costsi]. 104
  • 107. An easy to understand BUSINESS GUIDE 7. Risks/Opportunities. SWOT Analysis There is also another important part of our business plan. Knowing the risks and drafting a strategy is mandatory in order to attract an investor. There are several types of risks, particularly among the prosperous, enterprising businesses. Make sure you take into account these things and find for each of them an appropriate strategy. SWOT analysis = strategic planning method, used to assess factors and phenomena affecting a project or an enterprise. This method allows to establish the projects goals and to identify internal and external factors facilitating or stagnating their achievement. SWOT analysis Internal factors External factors Positive influence Negative influence Strengths (qualities of the project or staff, offering you an advantage in from of the others involved in the process) Opportunities (possible external factors that offer you secondary opportunities in achieving the goal) Strengths What are you doing well? What resources do you have? What are your advantages compared to your competitors? Opportunities E.g., the result of the markets growth, change in the life style, and settlement of problems associated with the current situation, a positive perception of your business from the market, or capacity to offer a higher value, which will lead to an increased demand for your services. Weaknesses (aspects weakening the project) Threats ((possible external factors that can hinder implementation of the goal) Weaknesses E.g., lack of experience, limited resources, lack of access to technology or capacity, inferior offer of services or a weak localization of your business. Threats EE.g., competition, intolerable increase in prices by suppliers, government regulations, economic fails, negative effect of the media, changes in consumers behaviour, reducing your sales, or the introduction of a new much more advanced technology, making your products, services or equipment out of date. If we are able to overcome these risks, our company will have the possibility to [dominate a niche in the market, become a power in the industry]. We consider that our brand can become known as [the place where entrepreneurs find funding, place where people find the good taste]. We believe we can achieve this objective in the following [x] years In particular, our basic product [x] has the possibility to [change the industry, affect many lives, and improve performances in field [x]. This would also offer us the possibility to try markets we have not approached yet, like [international sales, ethnic market, gen X]. 8. Administrative team The managerial team and its characteristics. Staff required. Organizational structure. Our team is made up of the following members, who can implement the plan: [x] men and women, covering [x] years of experience; [y] years in marketing, [y] years in product development and [y] years in [others]. If you have more than a few people to occupy these positions, then you are lucky. Tell us whom do you rely on, their age and how much do they hold of companys shares. Managers and basic employees Age [A], President [B], Vice president of marketing [C], Vice president of sales [D], Vice president for finance [E], Vice president for research and development [F], Vice president of manufacturing [G], Supervisor [H], Company of lawyers Shares Ownership The Company has [x] authorized shares for social capital, of which [x] issued. The following persons or organizations are important owners of the company: Name [A. B. Founders] [C. R. Inventors] Administration team Other investors No of shares held 52 22 10 10 % Ownership [52%] [22%] [10%] [10%] 105
  • 108. Professional support We have brought together a team of specialists, including [Company of Lawyers] [Accounting Company] [Other Consultants] Also, we have ensured the assistance and support of the following experts in industry and business, to help to the decision-making, strategic process, as well as to define opportunities Highlight the members of the board of directors, providing details about their experience, as well as what important persons or institutions they can get in touch with. 9. Required capital Write about the capital you need and about your debts reimbursing strategy. We need [x], to ensure our growth for the following [two years, one year, one month]. At the same time, we will need another [x] to come to a positive cash flow. The initial phase of the funding will be used to [complement the development, purchase equipment, introduce and trade our new/next line of product, fund the working capital, buy a competitor). We can cover this [loan, investment] in [x] years, by [dividends from the excess profits, recapitalization, sale of the company, public officer]. Define how much time you need to reimburse the credit, or give a profit to your investors. And tell us how you will do the reimbursements, as well as the strategy to be used to cover the loan. 10. Financial plan Accounting information and reports. Periodic cash flows (trimestral, monthly, annual, etc.). Estimates of quarterly, monthly or yearly sales, revenues of expenditures, depending on requirements of investors or credit societies. We recommend you to modify financial reports on a monthly basis for the first or two years, then on a quarterly basis. Include also the year for data, if available. Introduction of [a new line, improved line]. We have planned to introduce these products strictly according to the following programme: [include the detailed programme]. At the same time, we expect to be able to sell a rate of [x] units per month. Sales will grow in [x] month from the introduction. The cost of sold goods will [decrease in per cent], as we buy more efficiently from the market and use the new equipment to produce units at lower costs. The gross profit will remain the same, because [the newly introduced products will register a higher profit rate, while the profit rate for the old lines is expected to decrease]. Sales and administration costs will grow in absolute value, but will decrease as percentage value, because while expenditures are growing, [mention the most significant elements or elements that will change significantly], sales will grow faster. The research and development activity, which appears as a high per cent of sales, will be reduced as percentage in time. The number of employees will increase after the funding by [x], which includes [xxx]. Take into account the fact that those estimates to not represent anything if taken alone. The ration by which you have calculated the figures and how realistic you were when making them is important for investors. Make the connection between discussions about the size of the market, time needed for marketing, acceptance on the market and competitors pressure to make sure these figures are correct. Speak about very high figures, as well as about those changing significantly from a period to another. Also include discussions about the rationality of increase in sales, increase in costs, etc. Monetary flow and analysis of the breakeven These are reports of capital importance, even more important than the Balance Sheet and Profit and Loss Account. The monetary flow and analysis of the breakeven represents everything for investors. We have assumed that our investors will accept a term of [x] until the monthly acquisition of [x]. At the same time, we have assumed that the term will shorten to [x] days. Also, we have assumed we can receive [x] from clients in [x] days, given the [special programmes with clients, production arrangements, credit cards etc.]. We assume that the first share of the [loan, investment] will be made in [month], and the remaining in [month]. We can reach the breakeven by month [x]. Sales are estimated to be at [x] by that date. Conclusions Based on our estimations, we consider that a [loan, investment] to our company is a justified investment. To move forward, we need a [loan, investment] of [x] by [date]. Annexes and references An often met error is the one when the content of the business plan is charged with too many details. For this, there are other useful documents. This will provide an investor with a better picture about the company, out of figures. Make sure you have included visual materials, like: Literature and brochures about the product Folders with sales Coverage by media Abstracts from industrial publications Relevant licences Data on market researches Organized advertising campaigns Useful pictures of facilities, warehouses, etc 106
  • 109. An easy to understand BUSINESS GUIDE ANNEX 9 Business plan model of individual entrepreneurs in the rural area INDIVIDUAL ENTERPRISE BULMAGA VLADISLAV BUSINESS PLAN LAUNCHING MARKETING ACTIVITIES OF CONSTRUCTION MATERIALS BENEFICIARY: IE Bulmaga Vladislav DIRECTOR: BULMAGA Vladislav LEGAL ADDRESS: MD-5813, village of Brinzenii-Vechi, district of Telenesti, Republic of Moldova CONTACT TELEPHONE: 0-258-70-915; 069-27-22-65 E-MAIL: vladislav.bulmaga@mail.ru May, 2010 107
  • 110. Contents: I. Business summary II. Business plan 2.1. Defining the business 2.2. Business and service 2.3. Market and clients 2.4. Marketing 2.5. Competition 2.6. Risks/Opportunities 2.7. Management and staff 2.8. Required capital 2.9. Financial plan 2.9.1. Planning revenues from the sale of construction materials 2.9.2. Planning revenues from the sale of manufactured goods 2.9.3. Planning revenues from the activity of the food market 2.9.4. Planning annual expenditures 2.9.5. Credit reimbursement schedule 2.9.6. Breakeven 2.10. Financial outcomes planned for 2010-2013 III. Annexes Annex 1 Copy of the registration certificate of the enterprise Annex 2 Abstract from the State Register Annex 3 Authorizations 3.1. Sanitary-veterinary authorization 3.2. Sanitary authorization for functioning Annex 4 Offer of construction materials Annex 5 Certificates of Merit Annex 6 Pictures of yard pavement Annex 7 Pictures 108
  • 111. An easy to understand BUSINESS GUIDE I. Business summary The Individual Enterprise Bulmaga Vladislav was created on 12.08.2002 and is administrated by Bulmaga Vladislav. The main activities of the enterprise are the retail of food products, wholesale of construction materials and production of fortan and yard paving. Apart from the wholesale of construction materials, the IE Bulmaga Vladislav is selling food products. Also, the enterprise produces on demand yard paving, offering to its clients also the borders needed for these paving. These products are of a high quality and are on high demand on the market. The mission of the IE Bulmaga Vladislav is to fully and timely satisfy the demand of businesses and population for qualitative products. The IE Bulmaga Vladislav plans to reach by 2013 a market share of 50% and to increase its turnover by 48.81% compared with 2009. At the same time, the enterprise intends to create new jobs and to become the strongest supplier of construction materials in the district of Telenesti. To achieve its objectives, the IE Bulmaga Vladislav intends to purchase in May 2010 construction materials (cement, rotband, amserglob, fugenfuller, roof slate, bricks, timber, plasterboard, pressboard, nails, screws, wire net, vineyard poles, etc.) worth MDL 600,600 (EUR 36,400), and over the period May 2010 - May 2013 to distribute them on the local market. In order to reach qualitatively and quantitatively to the level of its competitor in the district, the enterprise will invest in this business EUR 3,600 (MDL 59,400 MDL) and for this it requires a credit of EUR 36,400 (MDL 600,600). The credit will be reimbursed on a quarterly basis, over a period of three years, from the revenues of the enterprise from the marketing of the purchased and manufactured construction materials, as well as from the activity of the food market and will be guaranteed through a pledge. For this year, the IE Bulmaga Vladislav already has an order for the production of 3,000 m2 of yard paving, and for 200 m3 of fortan. The demand for these products can grow significantly by the end of 2010 and Bulmaga Vladislav has to extend his production capacity and to quickly adjust his supply to the markets needs. The IE Bulmaga Vladislav is selling its goods on the internal market, its clients being so far natural persons, but following the extension of the business, the enterprise will also capture legal persons as clients. As a rule, 70% of costs of a construction are the construction materials. Hence, with the help of the IE Bulmaga Vladislav, natural and legal persons in the district of Telenesti will save time and money in constructions, since they will have access to all this spectrum of materials they need, at a low price. To influence the client to buy construction materials, the enterprise will focus on the quality of the supplied goods, convenient price, and exactitude in delivery, efficiency in service, wide assortment and modern solutions in constructions in line with international trends. In parallel, a customer loyalty system, by offering them preferential prices, delivery bonuses and customized approach, will be developed. And last but not least, the IE Bulmaga Vladislav intends to make donations to churches and to sponsor social and cultural events. In 2009, the enterprise donated MDL 10,000 for the reconstruction of the stairs of the church in the village of Brinzenii-Vechi, district of Telenesti. II. Business plan 2.1. Defining the business The Individual Enterprise Bulmaga Vladislav was created on 12.08.2002. The main activities of the enterprise are as follows: Retail on non-specialised markets, with predominant sale of food products and soft drinks; 109
  • 112. Wholesale of wooden materials, construction materials and sanitary outfit; Wholesale of hardware, paints and glass; Manufacture of concrete, plaster and cement elements (see Annex 1, Annex 2). The enterprise is administrated by Bulmaga Vladislav, who has an experience in the field of 11 years. The headquarters of the IE Bulmaga Vladislav are in the centre of the village of Brinzenii-Vechi, in sector 215, and are made up of: - 1 market with the area of 105 s.m., intended for the wholesale of construction materials; - 1 good market with the area of 100 sm The enterprise has 4 warehouses with a total area of s.m., one is used for the storage of food products, and the other three for the storage of construction materials. At present, the main activities of the enterprise are the retail of food products, wholesale of construction materials, (cement, rotband, amserglob, fugenfuller, roof slate, bricks, timber, plasterboard, pressboard, nails, screws, wire net, vineyard poles, etc.) and manufacture of yard paving and fortan. The mission of the IE Bulmaga Vladislav is to fully and timely satisfy the demand of businesses and population for qualitative products. The main objectives of the IE Bulmaga Vladislav are: Short term Long term - to sell construction materials at affordable prices and lower compared to competitors in order to faster attract clients; - to stabilize the amount of supply of construction materials; - to have a permanent supplier of construction materials, in order to benefit from discounts and a preferential relationship; - to have a portfolio of materials corresponding to and satisfying a wide spectrum of consumers needs; - to make its clients loyal; - to fully satisfy the market demand - to extend its portfolio of construction materials - to increase market share by 10%; - to increase turnover by 48.81 % in 2013, compared with 2009; - to create new jobs; - to extend the delivery market by attracting new clients from villages in the Telenesti district; - to increase the rhythm of sales and dynamic of the amount of sales; - to keep prices for materials and delivery services at an accessible level; -to become the strongest supplier of construction materials in the district of Telenesti 2.2. Business and service The IE Bulmaga Vladislav" is one of the largest suppliers of construction materials in the district of Telenesti, Republic of Moldova. As a rule, 70% of costs of a construction are the construction materials. Hence, with the help of the IE Bulmaga Vladislav, natural and legal persons in the district of Telenesti will save time and money in constructions, since they will have access to all this spectrum of materials they needs, at a low price. The supply of construction materials by the IE Bulmaga Vladislav," full and diversified, meets both the current technical requirements and diverse economic options of its clients. The logistics of the enterprise supplies its clients with all materials in due time. As the last years show, the local demand for construction materials is continuously growing and the enterprise does not have the capacity to satisfy it. In this regard, the IE Bulmaga Vladislav", by obtaining the credit of EUR 36,400 (MDL 600,600) intends to make an advantageous investment in construction materials and to increase its offer of qualitative materials on the domestic constructions market. In this way, the IE Bulmaga Vladislav" could become by 2013 a leader in the marketing of construction materials and fortan and yard paving manufacture in the district of Telenesti, Republic of Moldova, as its production capacity will grow, the demand will be fully satisfied, new clients will be contracted, new jobs will be created, the amount of sales will grow, as well as the market share of the enterprise. At the same time, the IE Bulmaga Vladislav" will have better chances in tenders, and clients could access the requested assortment in due time, avoiding searching for construction materials at other suppliers in the region 110
  • 113. An easy to understand BUSINESS GUIDE By funding the acquisition of construction materials and raw material for the manufacture of fortan and yard paving, the IE Bulmaga Vladislav" is expecting to increase its turnover by 48.81% by 2013. To achieve its short-term and long-term objectives, the IE Bulmaga Vladislav intends to purchase in May 2010 construction materials (cement, rotband, amserglob, fugenfuller, roof slate, bricks, timber, plasterboard, pressboard, nails, screws, wire net, vineyard poles, etc.) from supplier IE Petica Gheorghe" in the village of Sarateni (district of Telenesti) worth MDL 600,600 (EUR 36,400), and over the period May 2010 - May 2013 to distribute them on the local market. Following this, the enterprise will be able to reach qualitatively and quantitatively to the level of its only competitor in the district. Apart from the wholesale of construction materials, the IE Bulmaga Vladislav" is trading food products. These businesses are located in the premises, the owner of which is Bulmaga Vladislav (see Annex 7). Also, the enterprise produces on demand yard paving, offering to its clients the borders needed for these paving. These products are of a high quality and are on high demand on the market. The enterprises observes the veterinary requirements according to the Law in effect on the acquisition, storage and marketing of products of animal origin (see Annex 3, 3.1.). The IE Bulmaga Vladislav" also holds the sanitary authorization for functioning for the manufacture and marketing of construction materials, valid until 6 May 2014 (see Annex 3, 3.2.). The service provided by the IE Bulmaga Vladislav," and namely the trading of construction materials, was structured in 2005-2010 as follows: Product 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Quantity sold 2005 Quantity sold 2006 Quantity sold 2007 Quantity sold 2008 Quantity sold 2009 Total Quantity sold 2005-2010 Cement Rotband Amserglob Fugenfuller Gypsum Roof slate Bricks Timber Plasterboard Pressboard Nails Wire net Vineyard poles Yard paving Fortan Total MDL Total EUR 150 tons 200 tons 250 tons 270 tons 350 000 21 212 1800 m2 200 m3 648 000 39 273 180 tons 3 tons 5000 sacks 80 sacks 35 sacks 2500 units 13000 units 180 m|3 160 m3 150 m3 250 kg 500 m.l. 1400 units 2700 m2 250 m3 1 878 488 113 847 1050 tons 3 tons 5000 sacks 80 sacks 35 sacks 2500 units 13000 units 180 m3 160 m3 150 m3 250 kg 500 m.l. 1400 units 4500 m2 450 m3 3 366 488 204 029 210 000 12 727 280 000 16 969 As for the manufacture of fortan and yard paving, the amount of this production is growing every year, due to the increasing demand for these materials on the market. Hence, for this year, up to now, the IE Bulmaga Vladislav" already has an order for the production of 3,000 m2 of yard paving, and for 200 m3 of fortan. The demand for these products can grow significantly by the end of 2010 and Bulmaga Vladislav has to extend its production capacity and to quickly adjust its supply to the markets needs. The IE Bulmaga Vladislav" has established commercial relations with legal persons at the local and district level, has an impeccable reputation and is moving forward with slow steps, enjoying the appreciation from the local public administration (see Annex 5). Although the product IE Bulmaga Vladislav" is not unique on the market, the competitive advantage of the IE Bulmaga Vladislav" is the promptness by which it reacts to its clients demands, delivers the goods and sells the wholesale products. The brand IE Bulmaga Vladislav" becomes a widely recognised one and on increasing demand on the market. 111
  • 114. 2.3. Market and clients The IE Bulmaga Vladislav" is selling its goods on the internal market, its clients being so far natural persons, but following the extension of the business, the enterprise will also capture legal persons as clients. The enterprise is located in a well-developed sector of the commune. If revenues increase, the administration will consider the opening of new branches in other villages of the Telenesti district. The following are a few of the permanent clients of the IE Bulmaga Vladislav": Name Product 1 Banari Serghei 2 3 Banari Maria Bolocan Mihai 4 5 6 Bulmaga Sava Bulmaga Ion Cirlan Viorel 7 8 Chiriac Viorel Comerzan Veaceslav 9 Coroi Vadim 10 Damascan Alexandru 11 Damascan Vasile 12 Darii Valerii 13 Gritarovschi Valeriu 14 Muntean Sergiu 15 Musteata Viorel 16 Sirbu Pavel 17 Sirbu Vasile 18 Teslari Viorel 19 Tirsina Leonid 20 Tcaciuc Veaceslav TOTAL Quantity purchased /2009 Vineyard poles Wire net Cement Bricks Cement Cement Cement Timber Roof slate Cement Cement Cement Iron fence Fence hats Bricks Cement Concrete fence Bricks Fence hats Cement Fence hats Cement Plaster MP75 Plasterboard Wire net Vineyard poles Cement Yard paving Borders Cement Yard paving Borders Cement Cement Roof slate Timber Vineyard poles Cement Roof Slate Timber Plasterboard Plaster MP75 25 units 4 m. 10 sacks 2000 units 3 tons 4 tons 20 tons 3 m3 50 units 4 tons 10 sacks 40 tons 30 units 50 units 5000 units 15 sacks 40 units 5000 units 45 units 4 tons 15 units 1 ton 2 tons 15 units 10 m.l. 110 units 2 tons 100 m2 30 units 1 ton 200 m|2 20 units 3 tons 10 tons 150 units 6 m|3 25 units 6 tons 30 units 4 m3 10 units 20 sacks Price/m.u. MDL 65 325 70 3,50 1400 1400 1400 2400 64 1400 70 1400 285 45 3,50 70 140 3,50 45 1400 45 1400 1600 105 325 65 1400 100 24 1400 100 24 1400 1400 64 2400 65 1400 64 2400 105 76 Total MDL 1625 1300 700 7000 4200 5600 28000 7200 3200 5600 700 56000 8550 2250 17500 1050 5600 17500 2025 5600 675 1400 3200 1575 3250 7150 2800 10000 720 1400 20000 480 4200 14000 9600 14400 1625 8400 1920 9600 1050 1520 300165 MDL 18192 EUR Construction materials offered by the IE Bulmaga Vladislav" are intended for persons aged 18-60 years. According to the 2005 census, the population of the Brinzenii-Vechi/Brinzenii-Noi commune accounted for 3,100 residents. Of them, 1,760 persons are aged 18-60 years. Hence, about 56.7% of the population can become the potential clientele of the IE Bulmaga Vladislav". 112
  • 115. An easy to understand BUSINESS GUIDE The IE Bulmaga Vladislav" intends to increase its market share from 40% to 50% by 2012. To keep and extend its position on the market, the enterprise will adopt the following strategy: Seasonal discounts; Improvement of the fortan and yard paving manufacturing technology; Production of new construction materials; Permanent extension of the assortment of construction materials; Establish a price fair for all social categories; Raise the clients servicing level. To influence the client to buy construction materials, the enterprise will focus on the quality of the supplied goods, convenient price, and exactitude in delivery, efficiency in service, wide assortment and modern solutions in constructions in line with international trends. The sale of construction materials will have a seasonable character. Maximum sales will be reached in the summer-autumn season and will decrease in the winter-spring period. The IE Bulmaga Vladislav" ensures the delivery of materials within the Telenestri district and the downloading with a specialized vehicle. At request, the enterprise can rent the vehicles and machinery the client needs. Depending on the value of the purchased goods, the client can get the delivery free or charge or with discount. The IE Bulmaga Vladislav" will tend further to position itself on an imposing place on the market by construction materials which are attractive from the price and quality point of view. 2.4. Marketing One of the marketing objectives of the IE Bulmaga Vladislav" is to become a strong supplier of construction materials on the local and national market, through diversity-quality-price-quality and by the principle Minimum profit, maximum beneficiary. Due to its growing amount of construction materials, the market price will be widely accessible, the demand will increase and, thus, the profit will constantly grow. The IE Bulmaga Vladislav" will focus on a direct approach of its potential clients at the national level, on the mouth-to-mouth advertising (through its clients satisfied with the quality of service). At the same time, the enterprise will participate in exhibitions of construction materials and specialized national events. The IE Bulmaga Vladislav" will permanently study the dynamic of the market demand, consumers behaviour, price and sales policy of competitors, adjusting its offer. In parallel, a customer loyalty system, by offering them preferential prices, delivery bonuses and customized approach, will be set up. The IE Bulmaga Vladislav" will focus on keeping natural persons as clients and subsequently capturing legal persons as potential clients. The loyalty-capturing strategy will contribute to the slow, but stable growing of the enterprise. At any interactions with consumers, the agents of the IE Bulmaga Vladislav will ask them for feedback and will continuously improve its performance. Even if clients of the IE Bulmaga Vladislav are preponderantly from the wholesale market, the retail clients will not be neglected either. The Bulmaga Vladislav enterprise plans to make donations to churches and to sponsor social and cultural events. In 2009, the enterprise donated MDL 10,000 for the reconstruction of the stairs of the church in the village of Brinzenii-Vechi, district of Telenesti 2.5. Competition The IE Bulmaga Vladislav does not have competitors at the village level. As for the district level, there is only one competitor (LLC Iurie Daraban), with a longer period of activity, a more varied assortment of products and in larger quantities. Hence, to reach a market share similar to the one of its competitor, the LLC Iurie Daraban, the enterprise needs to extend its offer of construction materials, in order to qualitatively and quantitatively satisfy the market demand. By 2013, the enterprise intends to increase its market share from 40% to 50%, and in 2010, it intends to participate in several public auctions, competing by quality, diversity, affordable prices and punctuality in the delivery of goods. 113
  • 116. Market share LLC "Iurie Daraban" 60% IE. "Bulmaga Veaceslav" 40% Analysis of strengths and weakness of the competitor: Competitor Strengths LLC Iurie Daraban Weaknesses long experience; varied assortment; popularity. long time for the delivery of goods; quality of products sometimes low; unfavourable location; high prices. Comparative analysis of competitors: Indicators Competitor Max. no of points (1-5) Assortment Price Quality Location of enterprise Distribution of product Image of enterprise Total score E. Bulmaga Vladislav LLC Iurie Daraban 5 5 5 5 5 5 30 3 5 5 5 5 4 27 5 4 4 4 3 5 25 Benefits of the investment requested for the purchased of the needed materials are as follows: - Clients satisfied with the presence of the construction materials supplier in their locality; - Clients satisfied with the high quality of construction materials and their diversity; - Clients satisfied with the good price-quality ratio; - Growing profit of the enterprise; - Enhancement of the competitive capacity; - Enhancement of the charity capacity of the enterprise (reconstruction of the church). 2.6. Risks/Opportunities SWOT Analysis: Strengths Weaknesses affordable and stable prices; wide assortment of construction materials; favourable location, closer to the client, compared to its unique competitor; delivery of construction materials to the destination; investments in marketing; high potential of the market. Opportunities reduced stock of construction materials at the moment|; shortage of investment resources for increasing the stock of construction materials. Threats/risks high demand for the supplied construction materials; extension of the activity; taking of new segments of market; development of competitiveness; development of reputation; obtaining the recognition of the brand. 114 natural risks (natural disasters); technical risks (failure of the transportation means delivering the goods); risk to loose loyalty relationships with suppliers; risk of unstable clients; economic crisis; financial risk; risk of new competitors; quality risk.
  • 117. An easy to understand BUSINESS GUIDE 2.7. Management and staff The administration staff of the IE Bulmaga Vladislav is made up of two people: - Bulmaga Vladislav - administrator, experience in the area - 11 years; - Bulmaga Tatiana - chief accountant, experience in the area - 9 years. As a result of obtaining this credit to invest in construction materials, the enterprise will increase the amount of its production and activity, hence it will offer new 6 jobs. Employees of the enterprise Staff Position Persons Wage, lei Bulmaga Vladislav Administrator 1 3000 Bulmaga Tatiana Chief accountant 1 2200 Bulmaga Iurie Sales manager 1 1900 Morari Pavel Driver 1 1900 Rotari Anatol, Sirbu Igor, Cecan Radu Bulmaga Nicolae Workers 4 1500 Tasks - plan and organize the production process; - certification and documentation of production; - control the production process; - commercialize the production; - monitor the work process; - keep books of the company; - control the collection of financial sources from clients; - budget payments; - manage credit reimbursement. - marketing; - commercialize the production; - organize the delivery of construction materials to destination. - deliver construction materials from the supplier; - deliver construction materials to clients. - manufacture the fortan; - manufacture the yard paving; - execute goods loading/unloading works. Total monthly wages MDL Total annual wages MDL 15000 180000 2.8. Required capital The IE Bulmaga Vladislav needs to invest in the business EUR 40,000 (MDL 660,000), of which, EUR 3,600 (MDL 59,400) own capital and EUR 36,400 (MDL 600,600) borrowed capital. d borr Investment Own capital EUR 3,600 / 9% Borrowed capital EUR 36,400 / 91% The investment will ensure the increase in the turnover of the en enterprise in the following 3 years. The credited amount will be used exclusively to purchase construction m materials. To benefit from preferential sively prices for construction materials and to be able to satisfy the high demand on the market, the IE Bulmaga Vladislav has to purchase these materials in May. The demand for these products is high, as the construction season starts and the largest amounts of sales can be registered in the summer-autumn period namely. Business programme: Activity Order the construction materials Access the credit Purchase the construction materials Commercialize the construction materials Final reimbursement of the credit Date, period April 2010 May 2010 May 2010 From June 2010 September 2013 115
  • 118. The credit will be reimbursed on a quarterly basis, during 3 years, from revenues obtained from the sale of construction materials. To reimburse the credit, approximately EUR 44,000 will be needed (of which, EUR 36,400 for the credit, EUR 5,460 interest rate, EUR 1,340 difference of the currency rate, EUR 800 bank commissions and other fees). Also, the credit reimbursement can be guaranteed with the properties of the IE Bulmaga Vladislav (see Annex 7): Food market 100 s.m. MDL 300,000 = EUR 18,180 Construction materials market 105 s.m. MDL 100,000 = EUR 6,060 Warehouse (fortan and yard paving are manufactured) 60 s.m. MDL 80,000 = EUR 4,850 Own house 170 s.m. in the village of Brinzenii-Vechi, district of Telenesti MDL 500,000 = EUR 30,300 Track MAN 12152 F MDL 170,000 = EUR 10,300 Vehicle Mercedes Benz 124 MDL 80,000 = EUR 4,850 Excavator MTZ 80 MDL 55,000 = EUR 3,350 2.9. Financial plan The following exchange rate has been taken as a basis for calculations: 1 EUR=16,5 lei 2.9.1. Planning revenues from the commercialization of construction materials During one reporting year, the stocks of goods will be fully sold and part of the obtained revenue will be directed to honour the credit service bonds (credit+interest rate), the other will be reinvested in working capital, as the following tables show: general table and annual tables General table Year 2010 (MDL) Annual sales Credit reimbursement Interest rate reimbursement Capital for reinvestment 2012 (MDL) 2013 (MDL) 736.537,00 200.200,00 30.030,00 506.307,00 687.320,00 50.050,00 7.507,50 629.762,50 2011 (MDL) 591.927,00 200.200,00 30.030,00 361.697,00 421.956,00 150.150,00 22.522,50 249.283,50 Year 2010 Price MDL 2010 purchased Product Cement Rotband Amserglob Fugenfuller Plaster MP 75 Gypsum-based adhesive Eurofin Primers Water soluble paints Enamel paints Coler paints Brushes Roof slate Bricks Timber Plasterboard 12,5 mm Pressboard DSP Pressboard DVP Pressboard OSB Screw plugs and screws 116 Purchase price 1.200,00 90,00 52,00 66,00 70,00 Quantity 30 80 70 100 150 m.u. 1 ton 1 sack 1 sack 1 sack 1 sack total invested 36.000,00 7.200,00 3.640,00 6.600,00 10.500,00 2010 sales Sale Sold price quantity m.u. 1.400,00 30 1 ton 98,00 80 1 sack 64,00 70 1 sack 80,00 100 1 sack 76,00 150 1 sack Revenue from sales 42.000,00 7.840,00 4.480,00 8.000,00 11.400,00 63,00 70,00 50 30 1 sack 5 kg 3.150,00 2.100,00 70,00 75,00 50 30 1 sack 5 kg 3.500,00 2.250,00 130,00 23,00 20,00 10,00 70,00 2,90 2.200,00 95,00 235,00 210,00 320,00 14,00 70 100 200 300 700 10000 100 100 50 50 50 200 5 kg 1 kg 1 unit 1 unit 1 unit 1 unit 1 m3 1 unit 1 unit 1 unit 1 unit 1 kg 9.100,00 2.300,00 4.000,00 3.000,00 49.000,00 29.000,00 220.000,00 9.500,00 11.750,00 10.500,00 16.000,00 2.800,00 135,00 27,00 24,00 14,00 75,00 3,50 2.450,00 105,00 255,00 235,00 355,00 20,00 70 100 200 300 700 10000 100 100 50 50 50 200 5 kg 1 kg 1 unit 1 unit 1 unit 1 unit 1 m3 1 unit 1 unit 1 unit 1 unit 1 kg 9.450,00 2.700,00 4.800,00 4.200,00 52.500,00 35.000,00 245.000,00 10.500,00 12.750,00 11.750,00 17.750,00 4.000,00
  • 119. An easy to understand BUSINESS GUIDE Plastic pipe Metal pipe Metal wire Angles Fitting Wire net Vineyard poles Iron fence Concrete fence Cable Plugs Breakers Covers Vita One lamps Water flexible pipes Hummer Saw file Tongs Shovel Spade Fork Nails Total Credit reimbursement, interest rate Reinvested capital 28,00 38,00 1,50 25,00 12,00 210,00 55,00 320,00 120,00 18,00 8,00 9,00 110,00 25,00 8,00 70,00 40,00 28,00 28,00 27,00 45,00 12,00 100 200 200 100 250 300 700 50 50 400 100 100 30 150 200 15 20 20 30 30 30 150 1m 1m 1m 1m 1m 1 m.l. 1 unit 1 unit 1 unit 1m 1 unit 1 unit 1 unit 1 unit 1m 1 unit 1 unit 1 unit 1 unit 1 unit 1 unit 1 kg 2.800,00 7.600,00 300,00 2.500,00 3.000,00 63.000,00 38.500,00 16.000,00 6.000,00 7.200,00 800,00 900,00 3.300,00 3.750,00 1.600,00 1.050,00 800,00 560,00 840,00 810,00 1.350,00 1.800,00 600.600,00 34,00 42,00 2,70 32,00 14,00 250,00 65,00 365,00 145,00 22,00 10,00 11,00 135,00 28,00 12,00 90,00 60,00 48,00 48,00 47,00 65,00 17,00 100 200 200 100 250 300 700 50 50 400 100 100 30 150 200 15 20 20 30 30 30 150 1m 1m 1m 1m 1m 1 m.l. 1 unit 1 unit 1 unit 1m 1 unit 1 unit 1 unit 1 unit 1m 1 unit 1 unit 1 unit 1 unit 1 unit 1 unit 1 kg 3.400,00 8.400,00 540,00 3.200,00 3.500,00 75.000,00 45.500,00 18.250,00 7.250,00 8.800,00 1.000,00 1.100,00 4.050,00 4.200,00 2.400,00 1.350,00 1.200,00 960,00 1.440,00 1.410,00 1.950,00 2.550,00 687.320,00 57557.50 629.760,00 In the following two years, the revenue obtained from the sale of construction materials and after the reimbursement of the respective tranches of the credit, the same construction materials will be purchased, but in other quantities. Year 2011 Price MDL Product Cement Rotband Amserglob Fugenfuller Plaster MP 75 Gypsum-based adhesive Eurofin Primers Water solution paints Enamel paints Colour paints Brushes Slate Bricks Timber Plasterboard 12,5 mm Pressboard DSP Pressboard DVP Pressboard OSB Screw plugs and screws Plastic pipe Metal pipe Metal wire 2011 purchased Purchase price Quantity m.u. total invested Sale price 2011 sales Sold quantity m.u. Revenue from sales 1.200,00 90,00 52,00 66,00 70,00 35 85 80 100 150 1 ton 1 sack 1 sack 1 sack 1 sack 42.000,00 7.650,00 4.160,00 6.600,00 10.500,00 1.500,00 100,00 65,00 80,00 80,00 35 85 80 100 150 1 ton 1 sack 1 sack 1 sack 1 sack 52.500,00 8.500,00 5.200,00 8.000,00 12.000,00 63,00 70,00 50 30 1 sack 5 kg 3.150,00 2.100,00 70,00 78,00 50 30 1 sack 5 kg 3.500,00 2.340,00 130,00 23,00 20,00 10,00 70,00 2,90 2.200,00 95,00 235,00 210,00 320,00 14,00 28,00 38,00 1,50 70 100 200 300 700 10500 100 100 75 75 75 200 110 230 330 5 kg 1 kg 1 unit 1 unit 1 unit 1 unit 1 m3 1 unit 1 unit 1 unit 1 unit 1 kg 1m 1m 1m 9.100,00 2.300,00 4.000,00 3.000,00 49.000,00 30.450,00 220.000,00 9.500,00 17.625,00 15.750,00 24.000,00 2.800,00 3.080,00 8.740,00 495,00 135,00 28,00 25,00 15,00 75,00 3,50 2.500,00 110,00 255,00 240,00 360,00 20,00 36,00 44,00 2,90 70 100 200 300 700 10500 100 100 75 75 75 200 110 230 330 5 kg 1 kg 1 unit 1 unit 1 unit 1 unit 1 m3 1 unit 1 unit 1 unit 1 unit 1 kg 1m 1m 1m 9.450,00 2.800,00 5.000,00 4.500,00 52.500,00 36.750,00 250.000,00 11.000,00 19.125,00 18.000,00 27.000,00 4.000,00 3.960,00 10.120,00 957,00 117
  • 120. Angles Fitting Wire net Vineyard poles Iron fence Concrete fence Cable Plugs Breakers Covers Vita One lamps Water flexible pipes Hummer Saw file Tongs Shovel Spade Fork Nails Total 25,00 12,00 210,00 55,00 320,00 120,00 18,00 8,00 9,00 110,00 25,00 8,00 70,00 40,00 28,00 28,00 27,00 45,00 100 250 300 700 50 50 400 100 100 30 150 200 15 20 20 30 30 30 1m 1m 1 m.l. 1 unit 1 unit 1 unit 1m 1 unit 1 unit 1 unit 1 unit 1m 1 unit 1 unit 1 unit 1 unit 1 unit 1 unit 12,00 150 1 kg 2.500,00 3.000,00 63.000,00 38.500,00 16.000,00 6.000,00 7.200,00 800,00 900,00 3.300,00 3.750,00 1.600,00 1.050,00 800,00 560,00 840,00 810,00 1.350,00 32,00 16,00 250,00 68,00 370,00 150,00 23,00 10,00 11,00 135,00 28,00 14,00 93,00 60,00 50,00 50,00 50,00 68,00 100 250 300 700 50 50 400 100 100 30 150 200 15 20 20 30 30 30 1m 1m 1 m.l. 1 unit 1 unit 1 unit 1m 1 unit 1 unit 1 unit 1 unit 1m 1 unit 1 unit 1 unit 1 unit 1 unit 1 unit 1.800,00 629.760,00 17,00 150 1 kg Credit reimbursement, interest rate Reinvested capital 3.200,00 4.000,00 75.000,00 47.600,00 18.500,00 7.500,00 9.200,00 1.000,00 1.100,00 4.050,00 4.200,00 2.800,00 1.395,00 1.200,00 1.000,00 1.500,00 1.500,00 2.040,00 2.550,00 736.537,00 230.230,00 506.310,00 Year 2012 Price MDL 2012 purchased Purchase price Product Cement Rotband Amserglob Fugenfuller Plaster MP 75 Gypsum-based paint Eurofin Primers Water solution paints Enamel paints Colour paints Brushes Roof slate Bricks Timber Plasterboard 12,5 mm Pressboard DSP Pressboard DVP Pressboard OSB Screw plugs and screws Plastic pipe Metal pipe Metal wire Angles 118 Quantity m.u. total invested Sale price 2012 sales Sold quantity m.u. Revenue from sales 1.200,00 90,00 52,00 66,00 70,00 30 75 75 85 115 1 ton 1 sack 1 sack 1 sack 1 sack 36.000,00 6.750,00 3.900,00 5.610,00 8.050,00 1.500,00 100,00 65,00 80,00 80,00 30 75 75 85 115 1 ton 1 sack 1 sack 1 sack 1 sack 45.000,00 7.500,00 4.875,00 6.800,00 9.200,00 63,00 70,00 40 30 1 sack 5 kg 2.520,00 2.100,00 70,00 78,00 40 30 1 sack 5 kg 2.800,00 2.340,00 130,00 23,00 20,00 10,00 70,00 2,90 2.200,00 95,00 235,00 210,00 320,00 14,00 28,00 38,00 1,50 25,00 70 90 150 200 600 9000 80 75 60 60 60 150 80 150 130 100 5 kg 1 kg 1 unit 1 unit 1 unit 1 unit 1 m3 1 unit 1 unit 1 unit 1 unit 1 kg 1m 1m 1m 1m 9.100,00 2.070,00 3.000,00 2.000,00 42.000,00 26.100,00 176.000,00 7.125,00 14.100,00 12.600,00 19.200,00 2.100,00 2.240,00 5.700,00 195,00 2.500,00 135,00 28,00 25,00 15,00 75,00 3,50 2.500,00 110,00 255,00 240,00 360,00 20,00 36,00 44,00 2,90 32,00 70 90 150 200 600 9000 80 75 60 60 60 150 80 150 130 100 5 kg 1 kg 1 unit 1 unit 1 unit 1 unit 1 m3 1 unit 1 unit 1 unit 1 unit 1 kg 1m 1m 1m 1m 9.450,00 2.520,00 3.750,00 3.000,00 45.000,00 31.500,00 200.000,00 8.250,00 15.300,00 14.400,00 21.600,00 3.000,00 2.880,00 6.600,00 377,00 3.200,00
  • 121. An easy to understand BUSINESS GUIDE Fitting Wire net Vineyard poles Iron fence Concrete fence Cable Plugs Breakers Covers Vita One lamps Water flexible pipe Hummer Saw file Tongs Shovel Spade Fork Nails Total 12,00 210,00 55,00 320,00 120,00 18,00 8,00 9,00 110,00 25,00 8,00 70,00 40,00 28,00 28,00 27,00 45,00 200 200 500 50 50 250 80 80 25 150 150 15 20 20 35 35 35 1m 1 m.l. 1 buc 1 buc 1 buc 1m 1 buc 1 buc 1 buc 1 buc 1m 1 buc 1 buc 1 buc 1 buc 1 buc 1 buc 12,00 165 1 kg 2.400,00 42.000,00 27.500,00 16.000,00 6.000,00 4.500,00 640,00 720,00 2.750,00 3.750,00 1.200,00 1.050,00 800,00 560,00 980,00 945,00 1.575,00 16,00 250,00 68,00 370,00 150,00 23,00 10,00 11,00 135,00 28,00 14,00 93,00 60,00 50,00 50,00 50,00 68,00 200 200 500 50 50 250 80 80 25 150 150 15 20 20 35 35 35 1m 1 m.l. 1 buc 1 buc 1 buc 1m 1 buc 1 buc 1 buc 1 buc 1m 1 buc 1 buc 1 buc 1 buc 1 buc 1 buc 1.980,00 506.310,00 17,00 165 1 kg Credit reimbursement, interest rate Reinvested capital 3.200,00 50.000,00 34.000,00 18.500,00 7.500,00 5.750,00 800,00 880,00 3.375,00 4.200,00 2.100,00 1.395,00 1.200,00 1.000,00 1.750,00 1.750,00 2.380,00 2.805,00 591.927,00 230.230,00 361.695,00 Year 2013 Price MDL Product Cement Rotband Amserglob Fugenfuller Plaster MP 75 Gypsum-based adhesive Eurofin Primers Water solution paints Enamel paints Colour paints Brushes Roof slate Bricks Timber Plasterboard 12,5 mm Pressboard DSP Pressboard DVP Pressboard OSB Screw plugs and screws Plastic pipe Metal pipe Metal wire Angles 2013 purchased Purchase price 1.200,00 90,00 52,00 66,00 70,00 Quantity 20 65 65 65 65 m.u. 1 ton 1 sack 1 sack 1 sack 1 sack 63,00 70,00 45 45 130,00 23,00 20,00 10,00 70,00 2,90 2.200,00 95,00 235,00 210,00 320,00 14,00 28,00 38,00 1,50 25,00 45 45 65 75 220 6500 70 40 40 40 40 100 70 90 90 80 total invested Sale price 2013 sales Sold quantity m.u. Revenue from sales 24.000,00 5.850,00 3.380,00 4.290,00 4.550,00 1.500,00 100,00 65,00 80,00 80,00 20 65 65 65 65 1 ton 1 sack 1 sack 1 sack 1 sack 30000 6500 4225 5200 5200 1 sack 5 kg 2.835,00 3.150,00 70,00 78,00 45 45 1 sack 5 kg 3150 3510 5 kg 1 kg 1 unit 1 unit 1 unit 1 unit 1 m3 1 unit 1 unit 1 unit 1 unit 1 kg 1m 1m 1m 1m 5.850,00 1.035,00 1.300,00 750,00 15.400,00 18.850,00 154.000,00 3.800,00 9.400,00 8.400,00 12.800,00 1.400,00 1.960,00 3.420,00 135,00 2.000,00 135,00 28,00 25,00 15,00 75,00 3,50 2.500,00 110,00 255,00 240,00 360,00 20,00 36,00 44,00 2,90 32,00 45 45 65 75 220 6500 70 40 40 40 40 100 70 90 90 80 5 kg 1 kg 1 unit 1 unit 1 unit 1 unit 1 m3 1 unit 1 unit 1 unit 1 unit 1 kg 1m 1m 1m 1m 6075 1260 1625 1125 16500 22750 175000 4400 10200 9600 14400 2000 2520 3960 261 2560 119
  • 122. Fitting Wire net Vineyard poles Iron fence Concrete fence Cable Plugs Breakers Covers Vita One lamps Water flexible pipe Hummer Saw file Tongs Shovel Spade Fork Nails 12,00 210,00 55,00 320,00 120,00 18,00 8,00 9,00 110,00 25,00 8,00 70,00 40,00 28,00 28,00 27,00 45,00 90 90 250 60 60 90 80 65 25 65 65 15 15 15 20 20 20 1m 1 m.l. 1 unit 1 unit 1 unit 1m 1 unit 1 unit 1 unit 1 unit 1m 1 unit 1 unit 1 unit 1 unit 1 unit 1 unit 12,00 100 1 kg Total 1.080,00 18.900,00 13.750,00 19.200,00 7.200,00 1.620,00 640,00 585,00 2.750,00 1.625,00 520,00 1.050,00 600,00 420,00 560,00 540,00 900,00 16,00 250,00 68,00 370,00 150,00 23,00 10,00 11,00 135,00 28,00 14,00 93,00 60,00 50,00 50,00 50,00 68,00 90 90 250 60 60 90 80 65 25 65 65 15 15 15 20 20 20 1m 1 m.l. 1 unit 1 unit 1 unit 1m 1 unit 1 unit 1 unit 1 unit 1m 1 unit 1 unit 1 unit 1 unit 1 unit 1 unit 1.200,00 361.695,00 17,00 100 1 kg Credit reimbursement, interest rate Reinvested capital 1440 22500 17000 22200 9000 2070 800 715 3375 1820 910 1395 900 750 1000 1000 1360 1700 421.956,00 172.672,5 249.283,50 Price plan (MDL) Indicators Product m. u. Cement Rotband Amserglob Gypsum Fugenfuller Roof slate Bricks Timber Plasterboard Pressboard Nails Wire net Vineyard poles Fortan Yard paving 1 sack 1 sack 1 sack 1 sack 1 sack 1 unit 1 unit 1 m3 1 unit 1 unit 1 kg 1 m.l. 1 unit 1 m3 1 m2 Current 2008 2009 (min-max (min-max price) price) 80-82 68-70 97-100 104-106 63-65 64-68 78-80 82-84 3,20-3,50 3500-3600 - 76-78 65-80 65-70 3,30-3,50 2300-2400 100-105 225-355 15-25 250-300 63-65 420-450 95-100 2010 (min-max price) 70-75 96-98 64-68 78-80 80-90 70-78 3.30-3,60 2450-2475 105-110 265-360 15-25 250-320 65-68 420-450 95-110 Expected 2011 2012 (min-max (min-max price) price) 75-78 75-80 98-100 100-105 68-70 70-75 78-82 90-100 75-80 3,30-3,80 2450-2500 105-112 265-365 18-30 265-320 65-70 425-455 95-120 82-85 95-103 75-82 3,40-3,90 2475-2550 107-115 268-367 20-30 270-330 68-73 430-460 100-120 2013 (min-max price) 75-80 100-105 70-75 82-85 95-103 75-82 3,40-3,90 2475-2550 107-115 268-367 20-30 270-330 68-73 430-460 100-120 2.9.2. Planning of revenues from the sale of fortan and yard paving, including poles for this: The IE Bulmaga Vladislav" has already received the order for the manufacturing of 200 m3 of fortan and 3,000 m2 of yard paving, worth MDL 390,000, for this year. In the following years, the demand for these products will increase and, according to the calculations below, the enterprise plans to increase its sales up to MDL 1,605,000 by 2013. 120
  • 123. An easy to understand BUSINESS GUIDE Year 2010 2011 2012 2013 Total Quantity fortan (a) 200 m3 210 m3 210 m3 220 m3 Price (b) 450 MDL 450 MDL 450 MDL 450 MDL Quantity of yard paving (c) 3000 m2 3055 m2 3105 m2 3110 m2 Price (d) 100 MDL 100 MDL 100 MDL 100 MDL 1605000 MDL Total revenue (a*b+c*d) 390000 MDL 400000 MDL 405000 MDL 410000 MDL 2.9.3. Planning revenues from the activity of the food market For the crediting period, the company plans to have the following incomes from annual sales: MDL 37'442 for the period May this year - 31.01.2010, NDL 54'733 in 2011, MDL 63'817 in 2012 and MDL 74'008 in 2013. 2.9.4. Annual expenditure planning YEAR 2010 (MDL) 2011 (MDL) 2012 (MDL) 2013 (MDL) 32 558 55 814 54 566 57 062 600 600 629 760 506 310 361 695 own contribution own contribution own contribution own contribution 633 158 685 574 560 876 418 757 Commercial expenditures 14 651 25 117 25 116 25 116 Wages 105 000 180 000 180 000 180 000 18 721 32 093 32 093 32 093 123 721 212 093 212 093 212 093 Operational expenditures 7 508 30 030 30 030 22 522 Financial activity expenditures 5 748 9 854 9 854 9 854 784 786 MDL 962 668 MDL 837 969 MDL 688 342 MDL Cost of food products sales Cost of construction materials sales Cost of sales - fortan and yard paving Total cost of sales Other general and administrative expenditures Total general and administrative expenditures TOTAL Expenditures 2.9.5. Credit reimbursement schedule: Period and amount of credit reimbursement and associated interest rate Reimbursement trimester Income from sales MDL Reimbursed amount MDL sau EUR December 2010 March 2011 June 2011 September 2011 December 2011 March 2012 June 2012 September 2012 2 December 2012 March 2013 June 2013 September 2013 TOTAL 1.114.762 297.818 297.818 297.818 297.818 265.186 265.186 265.186 265.186 226.491 226.491 226.491 4.046.249 57.557,50 57.557,50 57.557,50 57.557,50 57.557,50 57.557,50 57.557,50 57.557,50 57.557,50 57.557,50 57.557,50 57.557,50 690.690,00 3.488,33 3.488,33 3.488,33 3.488,33 3.488,33 3.488,33 3.488,33 3.488,33 3.488,33 3.488,33 3.488,33 3.488,33 41.860,00 121
  • 124. 2.9.6. Break-even For the crediting period, the IE Bulmaga Vladislav has planned the following financial results: Year/Financial results Net sales 2010 1114762 2011 1191270 2012 1060744 2013 905964 Cost of sales 633158 685574 560876 418757 Gross profit 481604 505696 499868 487207 Indirect expenses 151628 277094 277093 269585 Net profit 329976 228602 222775 217622 In 2009, the Companys turnover registered the following values: Net sales MDL 1943555 Gross profit MDL 281960 Net profit MDL 150277 Gross and net profit dynamics: Indicators Gross profit Net profit Rata profitului net Net profit rate 2009 MDL 281960 150277 14.50% 7.73% 2013 MDL 487207 217622 53.77% 24.02% Absolute deviation 205247 67345 Relative deviation 72.80% 48.81% In 2009, the Companys net profit was of 7.73%, and plans to increase it up to 24% following the business development. Hence, the Company aims at increasing the gross profit by about MDL 205,000, and the net profit by about MDL 67,000, i.e., the IE Bulmaga Vladislav will increase its turnover by 48.81%. 2.10. Financial results planned for 2010-2013 Expenses MDL Cost of sales Trade expenses, of which: 2298365 90000 60 000 Transportation Marketing and advertising Overheads and administrative expenses of which : Wear and tear of fixed assets Repair of fixed assets Wage expenses Donations and charity Other overheads and administrative expenses Other operational expenditure, of which: Rent Associated with payment of interest rate for credits and loans Financial activity expenses, of which: Exchange differences Other financial activity expenses TOTAL Expenses 30 000 760000 Revenue MDL Revenue income, of which: : From the sale of construction materials From the sale of fortan and yard paving From the activity of the food market 1 605000 230000 30 000 30 000 645 000 35 000 20000 90 090 90 090 35 310 22110 13200 3 273 765 Total Income Hence, expectation for the end of 2013, are cumulatively, the following: Investment in 2010 in the acquisition of construction materials: MDL 660 000 (EUR 40 000 ) Gross profit: 4 272 740-2 298 365 = MDL 1 974 375 (EUR 119 659) Indirect expenses: MDL 3 273 765 ( EUR 198 410) Net profit: 4 272 740-3 273 765 = MDL 998 975 (EUR 60 544) 122 2437740 4 272 740
  • 125. An easy to understand BUSINESS GUIDE Following the implementation of this business plan, the IE Bulmaga Vladislav will register a total gross profit for the period of the crediting years of minimum EUR 60,000. Hence, investing further in the business own capital already the enterprise will be on the first place of the local market as a supplier of construction materials, and having its own capital already, the enterprise could open markets for the sale of construction materials in other localities of the Telenesti district. Trends of the IE Bulmaga Vladislav are positive, ascending and profitable! III. Annexes Annex 1 Copy of the registration certificate of the enterprise 123
  • 126. Annex 2 Extract from State Register 124
  • 127. An easy to understand BUSINESS GUIDE Annex 3 Authorizations 3.1. Sanitary-veterinary authorization 125
  • 128. 3.2. Sanitary authorization 126
  • 129. An easy to understand BUSINESS GUIDE Annex 4 Construction materials pricelist 127
  • 130. Annex 5 Certifications of merit 128
  • 131. An easy to understand BUSINESS GUIDE Annex 6 Pictures of yard paving 129
  • 132. Annex 7 Pictures Food market and construction materials market 130
  • 133. An easy to understand BUSINESS GUIDE Annex 8 Warehouse (where also the fortan and yard paving is manufactured) and own house 131
  • 134. Annex 9 Track MAN 12152F and Mercedes Benz 124 vehicle (own transportation means) 132
  • 135. An easy to understand BUSINESS GUIDE ANNEX 10 Useful links Agency for Payments and Intervention in Agriculture State Agency on Intellectual Property National Employment Agency National Agency for Rural Development National Bureau of Statistics Business Advisory Services Programme Moldova (BAS Programme) Business Portal Chamber of Commerce and Industry Licensing Chamber State Chamber of Registration National House of Social Insurance National Exhibitions Centre National Centre for Public Health Centre for Fighting Against Economic Crimes and Corruption National Health Insurance Company International Fund for Agricultural Development Labour Inspection National Institute of Standardization and Metrology Moldovan Investment and Export Promotion Organization Organization for SME Development (Ministry of Economy) Farmer to Farmer Program Joint Operational Programme Romania-Ukraine-Republic of Moldova 2007-2013 State Register of Legal Acts State Fiscal Service Others www.aipa.md www.agepi.md www.anofm.md www.acsa.md www.statistica.md www.bas.md www.businessportal.md www.chamber.md www.licentiere.gov.md www.cis.md www.cnas.md www.moldexpo.md www.cnsp.md www.cccec.md www.cnam.md www.ifad.md www.inspectiamuncii.md www.standard.md www.miepo.md www.odimm.md www.cnfa.mc www.ro-ua-md.net www.justice.md www.fisc.md www.24h.md www.business24.ro www.businessportal.md www.mybusiness.md For staff recruitment and publication of vacancies: www.angajare.md www.jobinfo.md www.makler.md www.anofm.md www.joblist.md www.moldovajob.md www.bestjobs.md www.jobmoldova.md www.munka.md www.cariera.md www.joburi.md www.rabota.md www.hr.md www.locurimunca.info www.topjobs.md 133
  • 136. Bibliography: 1. Birca Alic, Human Resources Management, ASEM, Chisinau, 2005 2. Bugaian L., Roscovan M., Solcan A., Todirascu ., How to Start-up a Business, Practical guide for entrepreneurs, Chisinau, 2010 3 Guide for entrepreneurs, instructors and consultants, Business Planning BIZPRO, Chisinau, 2003 4 Guide for entrepreneurs, instructors and consultants, Legal Aspects of Entrepreneurship, BIZPRO, Chisinau, 2003 5 Guide for entrepreneurs, How to get a credit from bank and non-bank institutions in the Republic of Moldova, BIZPRO, Chisinau, 2003 6 Guide for entrepreneurs, instructors and consultants, From the Start with Optimal Business Ideas, BIZPRO, Chisinau, 2003 7 Practical Guide for Migrants, How To Make Business In Moldova?, volume 3, Chisinau, 2007 8 Organization for SME Sector Development, Legislative Guide to Entrepreneurial Activity, Chisinau, 2007 9 Organization for SME Sector Development, I Want To Launch My Own Business, Guide for starting entrepreneurs and business service providers, Chisinau, 2007 10 Suleanschi S., Veverita V., First Steps in Business, Guide for starting entrepreneurs, Chisinau, 2009 www.24h.md www.bizcity.ro/stiri/cum-promovezi-eficient-un-produs-nou-lansat.html?id=32033 www.business24.ro www.businessportal.md www.caam.utm.md/files/docs/ANTREPRENORIAT_c2.pdf www.contabilus.wordpress.com www.flux.md/editii/20105/articole/8734/ www.mybusiness.md www.profituri.ro/curs/ideioptime.pdf www.startafaceri.blogspot.com 134