Starting a business

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Business plan
Plan defined v A business plan is a written description about the future of a business goal, organization, market , finance, strategies etc.
v

A business plan is a formal statement of a set of business goals the reasons why they are believed attainable, and the plan for reaching those goals, it Click to edit Master subtitle style may also contain background information about the organization or team attempting to reach those goals.

Goals : v Financial goals v Service goals .

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Business plan
Externally focused plans target goals that are important to external stakeholders particularly financial stakeholders . They typically have detailed information about the organization or team attempting to reach the goals. Internally focused business plans target intermediate goals required to reach the external goals they may cover the development or a new product , a new service a new it system the to edit Master subtitle style structuringClick of finance the refurnishing of a factory or a restructuring of the organization.

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Importance of Business Plan:

Business plan

vFirst and foremost it will define and focus business objective using appropriate information and analysis. vIt can be used as a swelling tool in dealing with important relationships including lenders , investors and banks. vIt can also uncover omissions and /or weaknesses in planning process. vIt can be used to solicit opinions and advice from people. vFirst and foremost it is a process a process that enables an individual and more importantly a team to come together and commit to a business adventure of significant personal and professional risk. Click to edit Master subtitle style vThe Business plan is a process that evaluates the opportunity quantifies the resources required and lays out a road map for implementation. vThe business plan integrates all the functional elements marketing sales operations and finance into a single cohesive force.

vThe plan is the most important communication tool through which and entrepreneurial team has to secure resources. 3/19/13

Business plan
Writing a winning Business plan

General Rules

vPlan should be concise (generally 30 to 40 single spaced pages at must not counting appendices). vPlan should be easy to read and understand without typing or grammatical errors. vPlan should convert large and profitable market opportunities for the business. Click to edit Master subtitle style vPlan should convey the strength and depth of management team.

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Business plan
A comprehensive business plan should include a title page and the following sections 1. Executive Summary : Effective summaries generally cover: q The companys origins q The product or service and its uniqueness or competitive advantage q The goals and objectives of business q The market potential for the product or service. 2. Company Description : This section tells the reader in more detail what the business is all about its location function function history size etc. q Describe the nature of the business is it manufacturing? Retail? Service? 3. Description of Product or Service : Thisstyle section provides a clear explanation of Click to edit Master subtitle the product or service and its function. q Photos and diagrams may be used. 4. Market Analysis : This section describes the conditions and trends within the industry generally and the specific market and demand for product in particular. (i) Explain who will buy the product and why. (ii) Identify major competitors their strengths and weaknesses and how much of the market they control 3/19/13

Business plan
A comprehensive business plan -sections 5. Management Team : This section identifies the key people in the organization and explains how and why based on their past experience they will contribute to the success of the business. If business has an advisory team also identify its members. Outline the responsibilities of each of the key positions. 6. Financing Strategy : Funds Required and Expected Uses : q Calculate one-time start up costs, operating costs and projected revenues q Be precise about the purposes of fund is it for purchase of equipment? Working capital ? Funds for renovation or expansion? q Include the projected potential of the business and proposed return on Click to edit Master subtitle investment i,e, how much the lenderstyle will get back as interest or as an owner if the business grows. q Describe plan for repaying the loan and present a contingency plan in case things do not go as planed. 7. Appendices & Exhibits: Distribution agreements, Contracts for the purchase of product, documentation of the property one will use to secure the loan, etc.

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Business plan
Business Planning Pitfalls & Precautions:
Create a vision : Its possible to get so caught up in the process of planning a business that one loses sight of what he is planning for. v.A budget isnt the same thing as a plan : One cant create a solid business plan without a budget and a financial forecast But a budget should be the product of all the other elements in the plan. v.Dont forget what makes you unique : Youre in business to beat the competition learn from your competitors strengths but also learn how to spot their weaknesses and use them to improve your own business plan. v.What s Click the point : When you set goals style in your business plan include some to edit Master subtitle concrete motivation that goes beyond the satisfaction of a job well done. v.Dont skip the plant : Of course the biggest mistake of all is failing to create a business plan in the first place a good plan is still the best way to turn your vision into a realistic coherent business. v.You can delegate : Never ignore customers: One should take the time to learn about the customers and build business plan around their needs and desires. 3/19/13

Business Planning Pitfalls & Precautions Never ignore customers: One should take the time to learn about the customers and build business plan around their needs and desires. Dont Shortchange the competition : His competitors can be a great source of information about what works and what doesnt Be prepared to take risks : Creating a business plan isnt about avoiding risk its about understanding and managing risk Thats why a good business plan anticipates possible challenges and includes a variety of scenarios for meeting those challenges. Click to edit Master subtitle style Get a second (or third) opinion : If one is the only person involved in the business he should find out someone who can study the plan objectively and point out possible weaknesses the might have missed. Expect the unexpected : Every business plan needs some wiggle room to allow for unexpected changes.

Business plan

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Acts Governing Business in Bangladesh

Objectives of Regulatory & Supervisory laws : q Ensuring smooth operation.

q

Averting misuse of power. Curbing illegal business.

Click to edit Master subtitle style& interest. Ensuring employee welfare

Helping business to recover bad debt. Regulating Financing .

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Acts Governing Business in Bangladesh A) General laws governing business in general

1.

2.

3.

4.

5.

Law of contract Contract Act, 1872 : The Act provides definition of contract elements of contract, void, voidable and unenforceable contract, remedies for violation of contract, execution of contract etc. The Negotiable instrument Act 1881 : A negotiable instrument according to the Act are promissory notes bill of exchange or cheque payable to order or bearer. Law relating to carriage :As person other than the Government engaged in the business for transporting for the hire property from place to place by land or inland navigation for all persons indiscriminately. to edit Master subtitle style : The Act defines purchaser LawClick Relating to sale of Goods Act,1830 seller price goods rights & deals with character tics of sale. Trade Mark Act. 1940 : The objective of the Act is to protect the consumers from using the product of his choice and protect the interest of the producer of the goods from misuse of the competitors who can deceive customers by name only.

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Acts Governing Business in Bangladesh A) General laws governing business in general

1.

2.

The Arbitration Act, 1940: Characteristics of arbitration agreement , Arbitrator & Award, effect of arbitration, scope of arbitration, methods, intervention of the court.. The Shops & Establishment Act 1956: Relevant to trade organizations Customer Act, 1969: list of custom authorities, phohi9bited goods, dutiable goods, imposition of duty, counter vailing and Anti dumping penalty etc. Foreign Investment protection Act, 1980: Provides for fair and Click to edit Master subtitle equitable treatment to foreign privatestyle investment. It ensures legal protection to foreign investment in Bangladesh against nationalization and expropriation. q Investment treaties for promotion q Avoidance of double Taxation , Bilateral Agreements. q Guarantees through Multilateral Agencies q Abolition of Restrictions on Equity

1.

2.

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Acts Governing Business in Bangladesh B) Law governing sepecific type of Business houses
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Partnership Act, 1932 Companies Act, 1994 The Bangladesh Industrial Enterprise ( Nationalization) Order , 1972 (P O 27). Securities & Exchange Order, 1969: Click to edit Master subtitle style Banking Company Act, 1991 Law of Insurance (1938, 1972)_ The Co-operative societies ordinance, 1984

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Acts Governing Business in Bangladesh C) Labor Laws

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Factories Act, 1965 : Facilities, working hours, employment- adult, minor, woman. Payment of Wages Act, 1936: Payment of wages, time , deduction of allowance, fine & penalties. Workmen Compensation Act, 1923: Accident, disablement, procedure of claim etc. Click to edit MasterStanding subtitle style Employment of Laboure Order 1965 : Conditions of employment, leave, dismissal. Industrial Relation Order , 1969 : Trade Union, industrial dispute etc.

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Acts Governing Business in Bangladesh D) Acts Relavant to Consumer Interest

q

Essential Commodity Control Act, 1956 Pure Food Ordinance, 1959 Essential Commodity Price & Distribution Ordinance, 1970 Drug Control Ordinance 1982 Standards of Weights & Measurement Ordinance, 1982 Click to edit Master subtitle style Breast Feed Substitute ( Distribution Control) Ordinance 1984 Tobacco Marketing ( Control) Act, 1988 Code of Criminal Procedure (CCP), 1860

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Acts Governing Business in Bangladesh E) Some Financial Acts

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Income Tax Ordinance, 1984 : list of income subject to Tax, heads of income, exemptions, taxing authorities, assessment produces, payment of taxes, appeal etc. VAT : List of goods & services subjects to VAT, goods & services exempted from VAT, procedure of computation & payment , records to be kept, authorities, appeals etc. Click to edit Master subtitle style

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Registration, License & Certificates

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Registration, License & Certificates

Objectives of Regulation: The objectives of regulation

through license etc. are:
1. 2.

3. 4.

5.

To bring the business under regulatory frame work To encourage enterprises in complying legal formalities & motivate them to work within legal environment To guide enterprises to follow rules & regulations. To help control to be exercised by controlling & supervising agencies To motivate enterprise to work for greater social interest.

Against these backdrop now we shall examine some important licenses & certificates necessary for business to be run in Bangladesh.
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Registration, License & Certificates Trade license

A trade license can be said to be a written permission authorizing particular business to carry on business, issued by authorized agency. In Bangladesh Trade license is issued by local Government.

General Information & Documents Applicable for all v File on application in prescribed form v Three copies of passport size photos (attested) v Name v Fathers & Mothers Name v Address v Registered address/Business address v Name of enterprise & form of organization v No objection certificate from v TIN (Tax identification number) if he is a tax payer)
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Registration, License & Certificates

Fire license
Obtaining a fire license is mandatory for an industrial enterprise. If has to be collected after having a trade license.
I.

II. III. IV. V. VI.

Specification of fire extinguisher and 2 sets of layout plan of the factory. Bank solvency Certificate Trade license. Statement of fire fighting instruments and spare parts. TIN (tax identification number) Payment of prescribed fees

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Registration, License & Certificates

TIN (Tax Identification Number)
National board of Revenue (NBR) Under section 184 A A notifies in which documents and in which cases assessed shall have to state tax identification number.
I.

II. III. IV.

Application in the prescribed form (as designed by Government) if contains particulars of the applicant. Two copies of attested passport size photos Trade license (for Businessman) Registration certificate & Memorandum (for companies)

When a businessman applies for VAT (value added tax) registration they are provided BIN (business identification number or income tax purpose thus under section 184 BBA, these business enterprises are provided UTIN (United Tax identification Number).
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Registration, License & Certificates

VAT Registration Certificate
VAT is to be paid by manufacturer, imporer, Exporter, Traders at different stages working as middleman, service providers who come under the orbit of value added Tax Act states who are to be registered compulsorily. They are:
i.

ii.

iii. iv.

Suppler of taxable goods (it annual turn over is at least 20 lakh taka) Providers of taxable services (if annual turnover is at least 20 lakh taka) Importer of any goods. Exporter of any goods.

Besides some firms like construction firm, C & F agent, leaseholders, seller of land as professions, provider of L/C etc. are also compulsorily be registered.
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Registration, License & Certificates

Certificate from Department of Environment Permission from Environment department is necessary for industrial undertakings production in manufacturing firm can affect environment in different form either directly or indirectly. If may result in air pollution through noise or otherwise, cause water pollution through factory wastage & the like. Moreover, disposal of wastage may also cause environmental pollution. Bonded Warehouse License This license is issued by custom authority to 100% export oriented industry. Some importer can also get it. For example (a) if an enterprise is 100% export oriented industry, then it take license from custom for duty free import of raw materials and can reduce its cost. The condition here is that if must export 100% of the product.
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Registration, License & Certificates

Membership Certificate of Chamber or Trade Association
It is voluntary but registration with such associations can bring many benefits. For example if one wants to get import or export registration certificate, this membership is a condition.

Import Registration Certificate (IRC)

Import may be made by manufacturer or trader v IRC for commercial purpose v IRC for industry.

Export Registration certificate (ERC)

For commercial exporters & manufacturing enterprise exporting their products need to take export registration license from concerned authority i.e. CCI & E.

Registration with Export Promotion Bureau (EPB)

Garments, Textiles & Other cencered parties are to register themselves with EPB.
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Registration, License & Certificates

Bangladesh Standard & Testing Institute License
Government of Bangladesh has setup standard & Testing Institute (BSTI) & wants to safeguard the interest of consumer especially for essential products, BSTI issues such license after conducting test as to quality & conducts inspection time to time in the market whether the concerned manufacturer ensure quality as perceived & tested & certified by it.

Patent & Trade Mark Registration

Registration provides safety of manufacturer from dishonest traders who can copy it leading to unholy competition in one hand. at present BSTI provides some of these certificate.

Utility: Water, Gas & Electricity Connection

For business houses, specially for industrial enterprises some utilities like water, gas & electricity are essential.

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Registration, License & Certificates

Opening Bank Account

A business need to submit bank certificate for getting some of the essential certificates or licenses.

Registration with Board of Investment (BOI)

v

Self financed local investment proposals including industries sanctioned/ financed by financial institutions or commercial banks. Permission for setting up industrial units with the public sector corporations. Joint venture and 100% foreign investment proposals in the private sector.

Obtaining Industrial Plot:

RAJUK in Dhaka CDA in Chittagong and KDA in Khulna, Besides, a few

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Registration, License & Certificates

Approval of Foreign Loan

Entrepreneurs in the private industrial sector arranging foreign credit in the form of loan suppliers credit, PAYE scheme etc. are required to obtain prior approval from the Scrutiny Committee headed by the governor of Bangladesh Bank.

Registration of Firm

Registration of partnership is not compulsory. But it is better to register a firm to help settlement of future dispute under the safety of law, under section 58 of the partnership Act, 1932.

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