QDB SOW Business Plan with Technical and Financial Feasibility Version: 28/04/2015 Sections QDB Business Plan Minimum Requirements M NM

Transcription

1 Version: 28/04/2015 Objective: To determine whether the Client s business plan / business idea is practically implementable To determine if the proposed project/business is feasible/commercially viable and whether the Client should invest in the project development To determine the size of the investment To provide additional recommendations Assignment Duration Max. 12 weeks Manufacturing Other EXECUTIVE SUMMARY (ES) The ES should be maximum 2 pages PROJECT / COMPANY OVERVIEW & BUSINESS MODEL MARKET ASSESSMENT Market Overview Project concept Reasons and rationale for selecting particular business concept/ idea Project initiator name Key revenue streams (% composition) Target market Results of the market analysis Total investment cost Competitive advantage of the product/service when compared to the existing players Financial results key indicators Brief conclusion and recommendations Project concept in detail Client(s) name(s) Client background and relevant competencies Covering capabilities and educational/vocational qualifications, and the experience as an entrepreneur including the proposed line of business Ownership structure (including nationality) Promoters /Shareholders involvement in operations Financial strength and personal net worth of the promoters (to be provided on best effort basis) Key revenue streams in detail Distribution channels in detail Operating process in detail For production or service offering. For manufacturing projects, the production process should be included as part of the operating model Industry overview and trends Key growth drivers and deterrents for the industry selected Industry characteristics encompassing seasonality, industry lifecycle, etc. Analysis of macroeconomic factors applicable to the project and their impact on the sustainability/viability Including the impact of foreign exchange regulation, interest rates, threat of imports, Product/service applications in detail Target market segments in detail SOW FEAS - JADWA-QDB V Page 1 of 6

2 TECHNICAL ASSESSMENT Market Demand Market Supply Demand Supply GAP Market demand assumptions with justification Assessment of export potential (e.g. export markets, offtake Y N agreements, ), where applicable Export competitiveness of the firm, where applicable Y N Market size Expected market growth over a 5-year horizon Based on realistic/grounded estimates Supply assessment in detail Local and imports if applicable (covering make or buy analysis ) Import and export quantitative details of the product, if applicable Competitors comparative analysis Covering capacity, offerings, quality, revenue stream, pricing, market share, direct/indirect competitor, etc. New project/company positioning in detail Competitive advantages /disadvantages Demand Supply GAP analysis in detail Market share assumptions and justifications SWOT Analysis SWOT chart SWOT analysis Brief SWOT conclusion Porter s 5 Porter s model Forces Analysis Porter s analysis Covering the analysis of each subcomponent, in order to assess each factor as high, medium or low Porter s conclusion Covering the attractiveness of the market Marketing Plan Recommended marketing tools with rationale Marketing and promotional strategies Customer retention policy Technical and Resources Analysis Alternative technologies Covering different technologies and the proposition on used or brand new equipment/machinery Comparative analysis of equipment and technologies The Service Provider is required to provide quotations from multiple suppliers where needed (at least 3 different suppliers for projects with an investment greater or equal to QAR10,000,000) and to be attached to the report). For projects with an investment size of less than QAR10,000,000 only 2 quotes are required The comparative analysis should cover cost, sources/manufacturer, quality, life, after sales service, specifications, technology provider classification (e.g. global leader, local, Chinese,...), etc. Technology proposed and recommended by the Service Provider with justifications Technology changes and risk of technology getting obsolete high level analysis where applicable Risk of inventory obsolescence Equipment, machinery and tools (list, quantity and price) SOW FEAS - JADWA-QDB V Page 2 of 6

3 Manpower Assessment Location Assessment Plan for technical maintenance and upgrading (e.g. SLA s and Y N degree of support available from technology collaborator) where applicable If there is a technical partner, high level information need to be provided Capacity For manufacturing projects the capacity shall be in-line with the machines quotations Scalability analysis Raw material and other input products needs and sources Analysis of availability and access to raw material and other input products Organizational structure Competencies and skills requirements of key staff Analysis of the availability (local or overseas and scarcity or abundance) and access to critical and key skilled personnel (depending on the business model) Salaries and allowances breakdown Service Provider s assessment of the acceptability of staff positions, numbers, and salary and allowances structure Annual additions to staff Space allocation in sqm (land area and built-up area) Covering office, operational and production space Location assumptions Whether the property shall be leased or purchased Y Y Licensing Requirements BUSINESS STRATEGY Comparative analysis: Potential locations (areas) minimum 3 options where applicable Rates (rent or purchase) Special lease/sales conditions Location attributes and conditions Proposed location and recommendations of the Service Provider with justifications Licensing, permits and other regulatory requirements for setup/expansion Issuing authorities Expected timeframe Challenges Environment issues, if applicable Incentives provided by regulators, if applicable Including lease, water, electricity, etc. Strategic goals of the business Strategic action plan and timeframe Key resources (high level) required to achieve the goals KPI s (measurement criteria only) SOW FEAS - JADWA-QDB V Page 3 of 6

4 FINANCIAL ASSESSMENT Investment CapEx details Cost Civil works, equipment, IT equipment, Furniture, vehicles, etc. Pre-operating expenses assumptions and details Including hiring costs, rent, salaries, cost of trial runs, etc. Working Capital assumptions and details Including inventory, debtors, A/C payables, salaries, rent, direct costs, etc. Contingencies Service Provider s assessment of the acceptability of all key components of the investment cost Financing Financing mix Details regarding sources of shareholders capital Financing needs and sources over the study period Including external sources and shareholders obligations Sources of financing for potential cost overruns Key Financial Parameters of the Group if applicable Assumptions Income Statement Assumptions and Justifications and Including sales quantities, unit prices, annual growth, cost Justifications components (including Material and RM cost and volume, power and utilities, stores, spares, maintenance, transport ) and growth, rent, general expenses, interest, fixed assets additions and depreciation, taxes, break up of cash sales versus credit sales, other Balance Sheet Assumptions and Justifications Including A/R, A/P*, inventory, legal reserve, long and short-term loans terms, other Dividend Policy Financial Statements Financial Study Period Min. 2 years exceeding loan tenure Breakdown of key direct costs Breakdown of key general expenses Income statement Balance sheet Cash-flow statement The SP shall distribute dividends to keep cash at acceptable levels Debt repayment schedule Detailed analysis of financial results Ratio Analysis Profitability analysis* *For projects with multiple key revenue streams, a cost-to-benefit analysis should be conducted Debt analysis (including DSCR, ICR, ) Liquidity analysis (including Cash Conversion Cycle, Quick Ratio, Current Ratio, ) Cash-flow analysis and gaps Other ratios analysis** ( Asset Turnover Ratio, ROI, ROE, Total Liabilities to Net Worth, Interest Bearing Debt to Net Worth,...) **Manufacturing projects should provide further analysis covering shifts, nominal and actual capacities, efficiency, down-time, Breakeven levels (by QR and Sales Units) SOW FEAS - JADWA-QDB V Page 4 of 6

5 Breakeven Analysis Sensitivity Analysis FRANCHISE MODEL If applicable RISK ANALYSIS The Risk Analysis is ideally provided in Table format CRITICAL SUCCESS FACTORS (CSF) IMPLEMENTATION ACTION PLAN Ideally one page including timeline Analysis and recommendations Suitable scenarios to be provided based on changes in indicative parameters Financial implications on gross profit ratio, net profit ratio, NPV, IRR, ROI, payback period, end of year cash, etc. Analysis and recommendations In the event of cash shortfalls, the Service Provider should highlight in the Sensitivity Analysis, Conclusion and Executive Summary sections the needs for additional cash in the worst case scenario of the sensitivity The source of raising such additional cash should be discussed or recommended Applicable franchising fees Including upfront fees and royalty Level of support from franchisor Including (1) setup equipment, infrastructure, staff, capacity planning (2) training, (3) marketing and sales support and (4) quality control Identification of risks Covering management, market, financial, operational, compliance, setup/commissioning and start-up risk Risk probability (High, Medium, Low) Risk intensity (High, Medium, Low) Impact Practical mitigation actions Critical Success Factors Basis for selection Impact if CSF is not met Components to be covered where applicable: Licensing and permits Building and construction Commissioning Key marketing activities Additions to staff Additions to key assets Negotiations with banks Negotiations with suppliers Negotiations with buyers Financial injections (debt, equity, other) Changes in working hours (e.g. shifts) Other (as deemed needed by the Service Provider) The plan must show both, the pre-operational and operational periods. The plan should have defined in built contingencies and should show key linkages and dependencies of different implementation steps CONCLUSION Conclusion covering key findings from each main area Risks and critical conditions Sensitivity analysis impact SOW FEAS - JADWA-QDB V Page 5 of 6

6 The Conclusion should be maximum 2 pages Recommendations Pages Maximum 100 (including annexures but excluding quotations) General Considerations The sequence of the report could follow the same order as per the headings of the sections above; however, the sequence may vary from a project to another and the Service Provider s discretion could be used for the same A Table of Abbreviations is required for feasibility studies Sub-conclusions including key-takeaways should be provided at the end of key sections (e.g. Market Assessment, Technical Assessment, Financial Assessment, ) All sources of information used for data and information presented within the report should be referenced adequately including the source name, report name, date, etc The provision of information and data without proper analysis and recommendations is not sufficient or acceptable; all assumptions made need to be justified by the Service Provider with acceptable and practical rationale Inputs provided by the Client should be assessed for adequacy and acceptability by the Service Provider prior to using them for assumptions Relevant financial tables and the corresponding analysis should be included within the report and not as annexures When a project is assessed as feasible by the Service Provider, the latter should highlight the conditional requirements to achieve the projected results When a project is assessed as infeasible by the Service Provider, the latter should propose alternative options and recommendations that would result in a more viable option / business model The above constitutes the minimum requirements for feasibility studies The Service Provider is required to use their discretion, where necessary, to provide all other value additions to make the reports practically useful for the Client and financiers In the event of any additions requested by the Client or QDB in the RFP, such scope as per the submitted proposals should be addressed in addition to all the above minimum requirements SOW FEAS - JADWA-QDB V Page 6 of 6