Your Business

Plan Workbook

PREFACE

This workbook is prepared for both veterans and civilians who either want to start their own businesses, or who want to expand and improve their businesses. This is a very important aspect of business development and requires careful undertaking by both the trainer and trainee. This business plan handbook was developed in collaboration with a number of VOCA volunteers, partners and organizations. These include: Organizations and Partners. Soroti Catholic Diocese Integrated Development Organisation (SOCADIDO) Soroti District Association of NGOs Network (SODANN) Uganda Veterans Assistance Board Vision Terudo (Teso Rural Development Organisation) World Learning, Inc. World Vision, Soroti Project office. American Peace Corps

Volunteers Mr Dave Hammond Prof. Surrendra Singh Mr. Clair Hein Ms Donna Kerner Mr. Bob Nottleman

Thanks goes to Dave Hammond whose TOT in January and February of 1996, provided the backbone to this handbook. His input during the September/October, 1996 pilot TOT for "Your Business Plan handbook" and "Your Business Plan workbook" were of valuable benefit in the development of the materials. Donna Kerner's field testing of these materials during veterans training and subsequent feedback from the same is also highly appreciated. Appreciation also goes to Bob Nottleman for his contribution to the materials during the January/February Grand ToTs. Our appreciation also goes to Mr. Clair Hein and Prof. Surrendra Singh who worked hand in hand with VOCA staff, Mr. Martin Owiny to develop "Your Business Plan Workbook" and "Your Business Plan Workbook" and the Trainers Guide to the two. Special thanks also goes to VOCA staff Ms Elsie Mukasa for the development of the graphics, design and layout of these materials. This handbook was funded by the United States Agency for International Development (USAID).

HOW TO USE THIS WORKBOOK This workbook is designed to be studied and filled out by a trainee in conjunction with a trainer.

You are therefore advised to go step by step through it with the help of your trainer. Do not rush through it or try to understand it immediately, but allow your trainer to take you chapter by chapter, step by step, exercise by exercise. To complete this workbook, use the answers in the recommended sections of the handbook to fill out your workbook. If you do this, you will then have a business plan that you understand and which you can present to a lending institution. What is a business plan? In a business plan, you think about and work out what will happen in a business. This will help you put your business in order, plan how your business will grow and see the problems you may face when it starts. A business plan has a number of parts to it. PARTS OF A BUSINESS PLAN I) Title page II) Summary III) Goals for your business IV) Management and organization V) Marketing plan VI) The work plan VII) The financial plan - Start-up capital - Projected income statement - Cash flow plan - Break even analysis - Balance Sheet - Profit and loss statement A business plan will help you: Understand your business better, Expand and improve your business, Decide whether to continue in business or not, It can help you start looking for financial assistance, It also helps you prepare for the future of your business.

*You should revise your business plan every year.

EXECUTIVE BUSINESS PLAN SUMMARY

To answer this section please refer to page 98 and 99 of YOUR BUSINESS PLAN HANDBOOK EXECUTIVE BUSINESS PLAN SUMMARY

The business (group) __________________________located in _______________

It was formed for the following purposes _________________________________

_____________________________________________________________________

Since we were formed we have accomplished _____________________________

_____________________________________________________________________

In the next year, we plan to _____________________________________________

_____________________________________________________________________

We produce (or render service) _________________________________________

_____________________________________________________________________

We sell our products or services to ______________________________________

_____________________________________________________________________

We have a plan of activities to produce our product/service outlined in the following

Business plan.

Decisions are made by ________________________________________________.

We expect to make a profit of _________________during __________________ .

We will use the profit to _______________________________________________

_____________________________________________________________________.

If the activity goes as planned the benefit to the group and the community will be

__________________________________________________________________

_____________________________________________________________________

Our cash flow analysis shows that we will have enough money to pay our

bills on the requested loan of ________________________ which will be used to

_____________________________________________________________________

We will repay the loan by ____________ with money from the sales of _______

_____________________________________________________________________

LOAN REQUEST (Complete only if seeking a loan)

Business (Group) _____________________________________________________ How large a loan do you need? _________________________________________ _____________________________________________________________________

When will you need the money? ________________________________________ ______________________________________________________________________ How will the money from the loan be used? ______________________________ _____________________________________________________________________ _____________________________________________________________________ How will the loan help you make a profit? _______________________________ _____________________________________________________________________ _____________________________________________________________________ What security do you have to guarantee the loan’? ________________________ _____________________________________________________________________ _____________________________________________________________________ When will you repay the loan? __________________________________________ _____________________________________________________________________ How will you be able to repay the loan? Where will you get the money to repay the loan? _____________________________________________________________________ _____________________________________________________________________ Why do you think you should receive the loan? ___________________________

BYLAWS

To answer this section please refer to page 11 to 18 of YOUR BUSINESS PLAN HANDBOOK (This section is only relevant to groups and not to individuals.) PURPOSE OF THE BUSINESS GROUP. A) The purpose of the group is to: _______________________________________________________________ _______________________________________________________________ MEMBERSHIP OF THE GROUP. A) The requirements for membership are:

_______________________________________________________________ _______________________________________________________________ _______________________________________________________________ B) To remain a member in good standing, members must: _______________________________________________________________ _______________________________________________________________ _______________________________________________________________ C) The following action will be taken when members: Do not attend meetings: _______________________________________________________________ _______________________________________________________________ _______________________________________________________________ Misuse money: _______________________________________________________________ _______________________________________________________________ _______________________________________________________________

Do not contribute money: _______________________________________________________________ _______________________________________________________________ _______________________________________________________________ Neglect group work: _______________________________________________________________ ______________________________________________________________

D) The following is a list of members of the group: ______________________________________________________________ ______________________________________________________________ ______________________________________________________________ LEADERSHIP OF THE GROUP A) The officers will be Chairman, Vice - chairman, Secretary and Treasurer. They must be members of the group in good standing. _______________________________________________________________ _______________________________________________________________ B) The officers will serve a term of _________________ (months). C) The officers will be elected by the members of the meeting on _______________ (date). The actions of all officers shall be fully transparent. They shall account to the members upon request. D) The duties of the officers are as follows: Chairman be the spokesman for the group, preside at meetings, maintain order at meetings, direct the activities of the group between meetings. _______________________________________________________________ _______________________________________________________________

Vice Chairman -- acts in place of the chairman when the chairman is unable to act. Carries out other activities as designated by the chairman.

_______________________________________________________________ _______________________________________________________________ Secretary -- records minutes of meetings, keeps the list of all group members, keeps record of all group activities and meetings. _______________________________________________________________ ______________________________________________________________ E) If an office is vacant for any reason, the members shall elect a replacement at

the next regular meeting.

F) Records will be taken of all proceedings of meetings conducted. FINANCES A) The treasurer shall be responsible to keep the following records of the group. _______________________________________________________________ _______________________________________________________________ B) All records of the group shall be available for inspection by group members who

give at least __________________ (time) notice of their desire to inspect. C) Any expenditure of group money over _______________ shall require the approval of two officers. D) The treasurer shall keep no more than ______________ (amount) of the group's funds in cash and the rest shall be deposited in the bank account. E) If an official of the group carries out the theft, or other illegal actions, disciplinary actions and/or criminal proceedings shall be taken against that official. F) The profits of the group will be distributed ________________ (when). G) The profits of the group will be divided among members by: _______________________________________________________________ _______________________________________________________________ Treasurer -- keep the financial records of the group, be ready to report the financial status at meetings, collect money due to the group, open and maintain a bank account for the group. The treasurer shall be personally responsible for the funds of the group. _______________________________________________________________ _______________________________________________________________ THE EXECUTIVE COMMITTEE A) The executive committee shall be composed of the officers of the group. B) The executive committee may act on behalf of the group on day to day matters

between meetings. The executive committee may act in emergency situations on behalf of the group. Major decisions should be presented at meetings of the entire group if possible. Any decisions of the executive committee shall be ratified by the next regular or special meeting of the group.

MEETINGS A) The regular meetings of the group will be held: _______________________________________________________________ _______________________________________________________________ B) The executive committee may act on behalf of the group on day-to-day matters

between meetings. The executive committee may act in emergency situations on behalf of the group. Major decisions should be presented at meetings of the entire group if possible. Any decisions of the executive committee shall be ratified by the next regular or special meeting of the group.

MEETINGS A) The regular meetings of the group will be held: _______________________________________________________________ _______________________________________________________________ B) Special meetings of the group can be called by two of the officers. They shall notify members at least ____________ before the special meeting except in emergencies. HOW THE GROUP WILL SOLVE CONFLICT The group will handle conflict in the following ways: ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ The group will reduce chances of conflict by: ______________________________________________________________________ ________________________________________________________________________ ______________________________________________________________________ The group will maintain trust by:

______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ VOTING A) Officers can be removed from office by a vote of _____________ of all the members of the group, at a meeting of the group. B) The bylaws can be changed by a vote of a ______________ of all the members of the group at a meeting of the group. C) The group shall be dissolved under the following circumstances: On completion of tasks for which the group was formed by a vote of ___________ % of the membership. ASSETS A) When the group dissolves, the assets of the group will be: _______________________________________________________________ _______________________________________________________________ B) The bylaws were adopted by the group on ___________________ (Date).

GOALS FOR THE BUSINESS

To answer this section please refer to page 21 and 22 of YOUR BUSINESS PLAN HANDBOOK GOALS FOR THE BUSINESS THE REASONS FOR THE BUSINESS. A) Products or services to be produced are: _______________________________________________________________

_______________________________________________________________ B) Personal reasons for starting a business: _______________________________________________________________

_______________________________________________________________ C) Group reasons for starting a business: _______________________________________________________________

_______________________________________________________________ D) Benefits of the business to the community: _______________________________________________________________ _______________________________________________________________

THE ACHIEVEMENTS AS A BUSINESS OR BUSINESS GROUP. A) What the business has been able to do since it began: _______________________________________________________________ _______________________________________________________________ _______________________________________________________________ B) Grants received by the business: _______________________________________________________________ _______________________________________________________________ _______________________________________________________________ C) Loans received by the business and repayment history: _______________________________________________________________

_______________________________________________________________ D) Other sources of funds received by the business: _______________________________________________________________ _______________________________________________________________ E) Problems faced by the business: _______________________________________________________________ _____________________ __________________________________________ _______________________________________________________________ GOALS A) Intended accomplishments of the business in the next:

Six months: _______________________________________________________________ _______________________________________________________________ One year: _______________________________________________________________ _______________________________________________________________ Three years: _______________________________________________________________ _______________________________________________________________

MANAGEMENT AND ORGANIZATION

To answer this section please refer to page 25 and 27 of YOUR BUSINESS PLAN HANDBOOK MANAGEMENT AND ORGANIZATION OF THE BUSINESS EMPLOYEES REQUIRED FOR EACH ACTIVITY A) ACTIVITY NUMBER OF LABORERS ___________________________________ _______________________ ___________________________________ _______________________ ___________________________________ _______________________ ________________________________ _____________________ ________________________________ _____________________ ________________________________ _____________________ B) Number of hired employees: _______________________________ C) Number of family or group members: _______________________ D) Total number of laborers in the business: ___________________ EMPLOYEE PAYMENT AND MOTIVATION How much staff will be paid: A) Management: _____________________________ B) Hired labor: _____________________________ C) Family or group labor: ____________________ D) Labor will be motivated to work hard by: __________________________________________________________ __________________________________________________________

__________________________________________________________

MARKETING PLAN To answer this section please refer to page 33 and 40 of YOUR BUSINESS PLAN HANDBOOK

PRODUCT A) Product or service produced by the business: _______________________________________________________________

_______________________________________________________________ _______________________________________________________________ B) Need or want that the product or service meets: _______________________________________________________________ _______________________________________________________________

_______________________________________________________________ C) Customers: _______________________________________________________________

_______________________________________________________________ _______________________________________________________________ D) Difference with other similar goods or services: _______________________________________________________________

_______________________________________________________________ _______________________________________________________________ E) Why customers buy from us: _______________________________________________________________ _______________________________________________________________ _______________________________________________________________ PRICE.

A) Cost of product or service:

_______________________________________________________________

_______________________________________________________________ _______________________________________________________________ B) Amount customers are willing and able to pay: ______________________________________________________________ _______________________________________________________________ _______________________________________________________________ C) Price that other businesses charge for providing similar products or services: _______________________________________________________________

_______________________________________________________________

_______________________________________________________________ D) Price charged by our business:

_______________________________________________________________

_______________________________________________________________ _______________________________________________________________ E) Reason for prices: _______________________________________________________________ _______________________________________________________________ __________________________________________________________ PLACE. A) Location of the business and how it operates:

_______________________________________________________________ _______________________________________________________________ _______________________________________________________________ B) Distance from suppliers: _______________________________________________________________ _______________________________________________________________ _______________________________________________________________ C) Location of customers: _______________________________________________________________ _______________________________________________________________ _______________________________________________________________ D) How will the business get new customers: _______________________________________________________________ _______________________________________________________________ _______________________________________________________________ PROMOTION. A) How we will promote about the business to attract people to buy. _______________________________________________________________ _______________________________________________________________ _______________________________________________________________ CUSTOMERS. A) Sex of the people who buy from the business:

_______________________________________________________________

_______________________________________________________________

_______________________________________________________________ B) Age group of customers: Below 16 yrs. 16 - 25yrs. 26 - 35yrs. 36 - 40yrs. over 40yrs. C) How customers are treated in the business: _______________________________________________________________ _______________________________________________________________ _______________________________________________________________ YOUR COMPETITION. A) Others in the area providing the same goods and services as our business: _______________________________________________________________

_______________________________________________________________ _______________________________________________________________ B) Number of customers going to our major competitor ________________ C) Our major competitor is getting bigger/smaller. D) How will we attract additional customers: _______________________________________________________________ _______________________________________________________________ _______________________________________________________________ E) Comparison of our business with our major competitors:

Better Same Worse ____________________________________________________________________ Quality of your goods or services ____________________________________________________________________

Easy for customers to reach your business ____________________________________________________________________ Price of your goods and services ____________________________________________________________________ Appearance of your business ____________________________________________________________________ What customers say about your business

____________________________________________________________________ F) The following changes will be made to our business so that more people buy from us: _______________________________________________________________ _______________________________________________________________

THE WORK PLAN To answer this section please refer to your answer to step 6 on page 45 of YOUR BUSINESS PLAN HANDBOOK Seasonal Requirements Work Plan for Seasonal Activity Duration of Activity Estimated Start Date Labor Requirements Period - Weeks, Months or Acres

Task & (Period) No. of Laborers No. of Periods Rate Per Period

Total Cost

Total Labor Cost =

Seasonal Requirements Work Plan for Seasonal Activity Duration of Activity Estimated Start Date Material Requirements Material & (Period)

Units per Period

No. of Periods Cost Per Period Total Cost

Total Material Cost =

Total Activity Cost (Labour + Materials) =

START-UP CAPITAL To answer this section please refer to your answer on the table on page 52 of YOUR BUSINESS PLAN HANDBOOK START-UP CAPITAL START -UP CAPITAL SHS.

A) INVESTMENT

1. TOTAL MONEY FOR LAND AND BUILDINGS 2. TOTAL MONEY FOR EQUIPMENT, TOOLS AND FURNITURE etc.

+

TOTAL INVESTMENTS

B) WORKING CAPITAL

1. TOTAL MONEY FOR RAW MATERIALS OR FINISHED GOODS 2. TOTAL MONEY FOR WAGES 3. TOTAL MONEY FOR RENT

4.TOTAL MONEY FOR OTHER COSTS

+ + +

TOTAL WORKING CAPITAL

TOTAL START-UP CAPITAL

PROJECTED INCOME STATEMENT

To answer this section please refer to your answer to the table on page 66 and 67 of YOUR BUSINESS PLAN HANDBOOK PROJECTED INCOME STATEMENT FOR....................................................... Details Months

Jan

.

Feb. Mar. Apr. May June Sub

Total

Sales

Less DIRECT

MATERIAL

COSTS

Less DIRECT

LABOR

COSTS

GROSS

PROFIT

INDIRECT

COSTS

Rent for land

Rent of

Building

Electricity

Water

Worker’s

salary

Owner’s salary

Stationary

Furniture

Loan Interest

Tax

Depreciation

Others

Total Indirect

Costs

NET PROFIT

(Gross profit

minus Total

Indirect Costs

PROJECTED INCOME STATEMENT FOR....................................................... Details Months

Jan

.

Feb. Mar. Apr. May June Sub

Total

Sales

Less DIRECT

MATERIAL

COSTS

Less DIRECT

LABOR

COSTS

GROSS

PROFIT

INDIRECT

COSTS

Rent for land

Rent of

Building

Electricity

Water

Worker’s

salary

Owner’s salary

Stationary

Furniture

Loan Interest

Tax

Depreciation

Others

Total Indirect

Costs

NET PROFIT

(Gross profit

minus Total

Indirect Costs

CASH FLOW PLAN

To answer this section please refer to your answer to the table on page 75 of

YOUR BUSINESS PLAN HANDBOOK

YOUR CASH FLOW PLAN.

CASH FLOW PLAN MONTHS

JAN FEB MAR APRIL MAY JUNE

SOURCES OF CASH

1. CASH AT THE START

OF THE MONTH

2. CASH IN FROM SALES

3. CASH FROM MEMBERS

4. MONEY RECEIVED

FROM DEBTORS

5. CASH LOAN RECEIVED

6. CASH GRANT

RECEIVED

7. ANY OTHER CASH IN

8. TOTAL CASH IN (SUM OF

NO.2 THROUGH NO.7)

USES OF CASH

9. CASH OUT FOR DIRECT

MATERIAL COSTS

10. CASH OUT FOR

DIRECT LABOR COSTS

11. CASH OUT FOR

INDIRECT COSTS

12. CASH OUT FOR

PLANNED INVESTMENT IN

EQUIPMENT

13. CASH OUT TO

MEMBERS

14. LOAN PRINCIPAL

REPAID

15. LOAN INTEREST PAID

16. ANY OTHER CASH

OUT

17. TOTAL CASH OUT

18. MONTHLY NET (No. 8 -

N0. 17)

19. CASH AT THE END OF

THE MONTH (No. 1 - No.

18)

YOUR CASH FLOW PLAN.

CASH FLOW PLAN MONTHS

JAN FEB MAR APRIL MAY JUNE

SOURCES OF CASH

1. CASH AT THE START

OF THE MONTH

2. CASH IN FROM SALES

3. CASH FROM MEMBERS

4. MONEY RECEIVED

FROM DEBTORS

5. CASH LOAN RECEIVED

6. CASH GRANT

RECEIVED

7. ANY OTHER CASH IN

8. TOTAL CASH IN (SUM OF

NO.2 THROUGH NO.7)

USES OF CASH

9. CASH OUT FOR DIRECT

MATERIAL COSTS

10. CASH OUT FOR

DIRECT LABOR COSTS

11. CASH OUT FOR

INDIRECT COSTS

12. CASH OUT FOR

PLANNED INVESTMENT IN

EQUIPMENT

13. CASH OUT TO

MEMBERS

14. LOAN PRINCIPAL

REPAID

15. LOAN INTEREST PAID

16. ANY OTHER CASH

OUT

17. TOTAL CASH OUT

18. MONTHLY NET (No. 8 -

N0. 17)

19. CASH AT THE END OF

THE MONTH (No. 1 - No.

18)

BREAK EVEN ANALYSIS

To answer this section please refer to your answer to the table on page 83, if you are, providing many products or service's or page 85 if your are providing one product or service in YOUR BUSINESS PLAN HANDBOOK BREAK EVEN POINT SALES LEVEL I. CALCULATE GROSS PROFIT

TOTAL SALES IN YOUR BUSINESS SHS. /=

Less TOTAL DIRECT COSTS (DIRECT MATERIAL COSTS AND DIRECT LABOR COSTS) GROSS PROFITS

SHS SHS

II. CALCULATE GROSS MARGIN

GROSS MARGIN = GROSS PROFIT TOTAL SALES ---------------------GROSS MARGIN

0

---------------------

III. CALCULATE TOTAL INDIRECT COST INDIRECT COSTS Rent for land Rent of building Electricity Water Workers' salary Stationery Furniture Loan interest Tax Depreciation

TOTAL INDIRECT COST

IV. BREAK EVEN POINT SALES LEVEL TOTAL INDIRECT COSTS GROSS MARGIN

BREAK EVEN POINT SALES LEVEL

BREAK EVEN POINT PRICE LEVEL FOR _________________________________ I. CALCULATE TOTAL COST TOTAL COST

= DIRECT COST + INDIRECT COST

TOTAL COST

II. CALCULATE TOTAL YIELD TOTAL YIELD

= NUMBER OF PRODUCTS PRODUCED IN THEIR UNITS OF MEASUREMENT e.g. Kg.

TOTAL YIELD

=

III. CALCULATE BREAK EVEN POINT PRICE LEVEL

BREAK EVEN POINT PRICE LEVEL (TOTAL COST OF MANUFACTURING A GOOD _______________________________

TOTAL YIELD OR TOTAL PRODUCTION OF THE GOOD)

____________________________

THE BALANCE SHEET

BALANCE SHEET FOR ......................................................... ASSETS CURRENT ASSETS 1. Cash 2. Items in the store 3. Money other people owe to your business

SHILLINGS + + +

TOTAL CURRENT ASSETS

FIXED ASSETS 1. Land 2. Buildings 3. Machinery 4. Tools 5. Equipment 6. Furniture

+ + + + +

TOTAL FIXED ASSETS

TOTAL ASSETS (TOTAL CURRENT + TOTAL FIXED)

LIABILITIES

SHILLINGS

CURRENT LIABILITIES 1. Interest on short term loans, long term loans 2. Taxes 3. Wages and salaries earned but not paid 4. Money owed to other businesses for goods

purchased on credit

+ + + +

TOTAL CURRENT LIABILITIES LONG TERM LIABILITY 1. Loans incurred to buy land 2. Loans incurred to buy buildings 3. Loans incurred to buy equipment 4. Loans incurred to start a business

+ + + +

TOTAL LONG TERM LIABILITY TOTAL LIABILITY (TOTAL CURRENT + TOTAL LONG TERM)

OWNERS EQUITY (TOTAL ASSETS - TOTAL LIABILITY)

SHILLINGS +

TOTAL LIABILITY PLUS OWNERS EQUITY

PROFIT AND LOSS STATEMENT

To answer this section please refer to your answer to the table on page 95 of YOUR BUSINESS PLAN HANDBOOK PROFIT AND LOSS STATEMENT ................................................... TOTAL SALES

Less MATERIAL COSTS

Less DIRECT LABOR COSTS

GROSS PROFIT

Less INDIRECT COSTS

Rent for land

Rent of building

Electricity

Water

Workers salary

Stationary

Furniture

Loan interest

Tax

Depreciation

Others

TOTAL INDIRECT COSTS

NET PROFIT