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Business Plan and Presentation

III. Financials – Growth and Risk

By: Sohan Babu KhatriCEOThree H Management

Sohan Babu Khatri - Introduction

Professional Engagements: • CEO – Three H Management Pvt. Ltd• Director of Board – Grand Bank Nepal Ltd , Just-One-Nepal, SCDRR-Nepal

Resource Person:

• Ace Insititute of Management• Kathmandu College of Management• HVAP – MoAD (SNV)

Educational Background: • Bachelor’s of Civil Engineering (BE Civil) - Pulchowk Campus, Institute of

Engineering, Nepal• Masters of Business Administration (MBA - Finance and Marketing), Bangalore

University, India• Certified Financial Manager (CFM), Centre of Financial Management, Bangalore• Licensed International Financial Analyst (LIFA) - Charter Holder – International

Research Association, Cambridge, Massachusetts

Agenda for three sessions

Day 1 - Business Idea and Concept Presentation

Day 2 - Marketing Plan and Presentation

Day 2 - Operational Plan and Presentation

Day 3 - Financial Plan and Presentation

Day 3 – Growth/Sustainability/Risk Management Plan and Presentation

The whole aim of this part is

Capital and Investment

• Capital Plan– Equity– Debt

• Long Term• Short Term

• Investment Plan– Assets

• Fixed Assets• Current Assets (Working Capital)

Revenue Projection

• Sales Projection • For each revenue model• Should match with your pricing strategy• Should matching with your target market

projection and your target segment growth• Show projection at least for 3 years• Justify your claims with proper data related to

your opportunity, target market and competition

• Be Realistic

Cost Projection

• Cost of Goods Sold– All materials– All labors– All direct overheads

• Add Operating Expenses– Add administration and general overheads

• Categorize them

– Add marketing and promotional costs• Categorize them

Profit

• Revenue minus all costs

• Project Realistically

• Deduct all interest costs and taxes to arrive at Net Profit

Three Important Financial Statements

• Income Statement– Statement of Profit and Loss

• Cash Flow Statement– Statement of Cash Inflow and Outflow

• Balance Sheet– Statement of Assets and Liabilities/Capital

Critical Performance Ratios

Total Asset TurnoverSales

Total Assets

Debt to EquityTotal Liabilities

Total Equity

TotalSales

ofitNetNPM

Pr

yTotalEquit

ofitNetROE

Pr

sTotalAsset

ofitNetROA

Pr

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Growth Plan

Growth Plan

• Do you have growth plan ?• How are you going to achieve it ?• Will it be supported by the available and

potential market ?• Will market also be growing ?• Do you have plans to add features ?

Diversify ? Expand ?• How are you going to manage resources

with your growth plan ?

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Risk Analysis and Contingency Plan

Principle

• Find out the sources of risk on each estimation and projection you did so far

• Expose the potential risks and ways of tackling them

• Do you have Plan B if your estimations/projections/assumptions goes wrong ?

…..

• Can you adjust this business model to have alternative value proposition ?

• Is there possibility of Changing the whole business model to a profitable one ?

• Justify everything with objective and realistic data and information.

Order of Presentation

• Sales Projection• Income Statement• Key Financial Ratios• Investment / Capital Plan• Growth Plan• Risk Analysis and Contingency Plan

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Best of Luck !!

By: Sohan Babu KhatriCEOThree H Management