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Full & final report

  1. 1. Entrepreneurship & Business Project DevelopmentCourse Code: F--306 EXECUTIVE SUMMARY Bangladesh in one of the least developed countries in the world. In such a country like ours where people strive to maintain a minimum living standard, the price of fuel is mounting. Present government of the Bangladesh is now in a great challenging position for the regular increase in the power and fuel price. It is fully dependent on the imported power and fuel to meet the ever increasing demand of its citizen. As a result, Bangladesh government is spending millions everyday as subsidy in the petroleum sector. In search of a way to help the government in these situations whether through a giant or a small initiative, we the business students of University of Dhaka came up with a new idea to start a medium sized (in capital) fuel business in the petroleum industry. We have named our business “Green Energy” because we will be both generating the fuel and making it available to people in an easy way. We are dealing with the sole product of our business named “bio-fuel” generated from renewable sources like sea algae. Fuel generated from any nature friendly source means that it will emit lower amount of hazardous particles in the environment, will be low-priced, good for the engines and will definitely provide a better mileage than conventional fuel which is endangering our lives and also the next generation. In that sense, we call our fuel as a green fuel also. Our product bio-fuel can bring revolutionary change in the power and fuel industry of Bangladesh, as a new product. At the same time it will be less costly and environment friendly energy. Our product analysis discloses that it will be a perfect product in the context of our country.Our business is Bangladesh based and we are targeting only consumers such as manufacturing organizations, private car owners, public transports, necessary goods carrier and also the agricultural sector in our country. The marketing plan specifies that it can be possible to target potential customers and to distribute our product to them. So, in near future, we want to see ourselves as one of the promising businesses of bio-fuel in the petroleum sector of Bangladesh. We are planning for being a private Page | 1
  2. 2. Entrepreneurship & Business Project DevelopmentCourse Code: F--306 limited company and the possible time to start the business is 1st May, 2014. Initially, we will need 11 office employees and 30 factory workers later as our production capacity will increase, the number of workers will increase. Initially we will invest 10,000,000 taka in our business. 60% of this investment will be collected as financial leverage (debt) and remaining 40% will equity capital. We will invest 6,500,000 taka in fixed asset;2,800,000 taka in the initial current asset and the remaining 700,000 taka as startup cost. From the financial plan, we are suggested that it will be a profitable company in the future. At the end, we want to conclude that our bio-fuel is able to save subsidy of Bangladesh government in petroleum sector and increase the purchasing power of general mass indirectly by reducing the transportation cost of daily necessary goods. Page | 2
  3. 3. Entrepreneurship & Business Project DevelopmentCourse Code: F--306 Brief Description of the Business Page | 3
  4. 4. Entrepreneurship & Business Project DevelopmentCourse Code: F--306 Brief Description of the Business Name of the Business:Green Energy Pvt. Ltd. Nature of Business:Green Energy Pvt. Ltd. is an Algae Bio-fuel manufacturing company. Sector/ Industry:Power and Fuel Industry. Objectives:The objectives of our business are as follows: I. Habituating people to use an alternative source of Bio-fuel from Algae. II. Serving the country with a low priced fuel. III. Rescuing the world and our country from the severe fuel crisis. IV. Improving the economy of our country by creating a new dimension for employment opportunity and reducing the inflation rate. V.Developing the new fuel industry in our country to keep pace with the modern developed country and properly utilizing our ample algae resources. Type of Company:Private limited Company. Core concept of the Business: The energy crisis that hit the world in the recent decades has triggered off the race for invention of effective as well as cheap bio-fuels. As we know, Bangladesh is a developing country and it is also not out of this severe energy crisis. Present government of the Bangladesh is now in a great challenging position for the regular increase in the power and fuel price. It is fully dependent on the imported power and fuel to meet the ever increasing demand of its citizen. Lack of technology and sufficient fund to use our natural resource properly, unawareness and less eagerness to use alternative energy sources, higher cost of using the solar energy encourage us to participate in the race for the invention and utilization of the cheap and effective Bio-fuels from the Algae with the developed county over the world. Algae petroleum is one of the 3rd generation bio-fuel that has been derived from algae. The concept of algae culture or algae farming has been derived as a result, and many forms of algae fuels like cooking oil, biodiesel, bio-ethanol, bio-gasoline, etc. are in the process of development. Algae are one of the best examples of putting eco-friendly resources to use, as none of the products derived from algae are considered to be Page | 4
  5. 5. Entrepreneurship & Business Project DevelopmentCourse Code: F--306 pollutants. In many industries, algae bioreactors are used to curb the emission of carbon and carbon compounds. Nowadays many countries are giving emphasis to produce bio-fuel from algae at a commercial level. A recent research in the New Yorkcity shows that the innovative process of producing Algae Bio-fuel is at least 40 percent cheaper than that of others now being used. Supply will not be a problem: There is a limitless amount of algae growing in oceans, lakes, and rivers, throughout the world. That’s why we decide to make our business plan on the production and commercialization of the Algae bio-fuel. Total Investment Investment Fixed Assets Current Start-up Total Assets cost 10,000,000 6,500,000 2,800,000 700,000 10,000,000 Loan and Equity loan Equity Total 6,000,000 4,000,000 10,000,000 Potential Market Local Market International Market During the first 3 years of our business of Our product has the potential for export Algae Bio-fuel, we will target only in almost every country of the world Dhaka metropolitan city to serve. Then because fuel crisis is a burning problem we will target entire Bangladesh from all over the world. Although there is huge district to district, as our production demand of our product but due to our capacity, skill and competency will be small capacity at the beginning years of increased by that time. We will sale our our company we can’t go for international product through local dealers and factory market. But we have plan for global sales will also be encouraged. expansion in the upcoming future. Page | 5
  6. 6. Entrepreneurship & Business Project DevelopmentCourse Code: F--306 Description of the Product Page | 6
  7. 7. Entrepreneurship & Business Project DevelopmentCourse Code: F--306 Description of the Product The world energy demand is expected to rise 60% by 2030; oil consumption has increased by 20% since 1994, while the European Union import dependency has reached almost 54% of its energy requirements in 2006. Land filling of bio waste is one of the major sources of methane emissions. Additionally attention is being focused on the treatment of bio waste to address difficulties in their direct utilization, cost-efficiency and its output product pollution. Moreover, the need to focus on ‘non-food’ energy crops for the production of 2nd generation bio-fuels and develop cost-efficient solutions has been revealed and underlined in the recent report of the Food and Agriculture Organization. In fact, currently, the production of biogas is principally carried out through anaerobic fermentation of (mixed) cereal crops. So, one promising source of bio-fuels has been identified as marine algae grown in large open ponds. The algae would be harvested and turned into a carbon neutral fuel source. Product An alternative low-priced, environment friendly fuel named “algae-Fuel”. It will be produced from sea algae. The existing large-scale natural sources are of algae are: bogs, marshes and swamps - salt marshes and salt lakes. Micro-algae contain lipids and fatty acids as membrane components, storage products, metabolites and sources of energy. Algae contain anything between 2% and 40% of lipids/oils by weight. Features of the product It is a scientifically proven and renewable natural resource of bio-fuel. Normally, maximum diesel engines do not require any modification to use bio fuel. So it will not face any problem in that case. It can cover a huge market demand efficiently and economically. It will also provide an acceptable margin for sellers and can still be cheaper for buyers of conventional fuel. It will provide high safety and better mileage for car engines especially. Lastly, it will stand in line with the need of a country like ours through reducing the transportation cost of daily necessities ultimately lowering price of those goods. Page | 7
  8. 8. Entrepreneurship & Business Project DevelopmentCourse Code: F--306 Comparative Advantages It will be less expensive than “Normal Fuel”. Its production process is less costly and less complicated. Moreover, it is very unique fuel for all types of engines. It is more environment friendly product. Algae and aquatic biomass has the potential to provide a new range of third generation bio-fuels, even including jet fuels. Their high oil and biomass yields, widespread availability, absent (or very reduced) competition with agricultural land, high quality and versatility of the by-products, their efficient use as a mean to capture CO2 and their suitability for wastewater treatments and other industrial plants make algae and aquatic biomass one of the most promising and attractive renewable sources for a fully sustainable and low-carbon economy portfolio. Producing biodiesel from algae has been touted as the most efficient way to make biodiesel fuel. The main advantages of deriving biodiesel from algae oil include: Rapid growth rates, A high per-acre yield (7 to 31 times greater than the next best crop – palm oil), Certain species of algae can be harvested daily, Algae bio-fuel contains no sulphur, Algae bio-fuel is non-toxic, Algae bio-fuel is highly bio-degradable, and Algae consume carbon dioxide as they grow, so they could be used to capture CO2 from power stations and other industrial plant that would otherwise go into the atmosphere. Comparative disadvantages Normal Fuel is more familiar to the consumers than algae-Fuel. Acceptance of this fuel may take time. Its Viscosity may vary which needs more inspection during the production time. It will be more costly than CNG in some extent which can bring a massive competition for our product. Marketing or advertising of this new product is the most problematic than other factors. It totally depends on the consumers’ view of acceptance. Another disadvantage is in case of expanding the idea; it cost a lot in the research and development sector. Page | 8
  9. 9. Entrepreneurship & Business Project DevelopmentCourse Code: F--306 Research and Development Currently most research into efficient algal oil production is being done in the private sector in some countries over the world but if predictions from small scale production experiments bear out then using algae to produce biodiesel may be the only viable method by which to produce enough automotive fuel to replace current world gasoline usage, according to U.S. Department of Energy. Research into algae for the mass-production of oil is mainly focused on micro-algae. The preference towards micro-algae is due largely to its less complex structure, fast growth rate, and high oil content. Some species of algae are ideally suited to biodiesel production due to their high oil content – sometimes topping out near 50%. Some commercial interests into large scale algal-cultivation systems are looking to tie in to existing infrastructures, such as coal-fired power plants or sewage treatment facilities. This approach not only provides the raw materials for the system, such as CO2 and nutrients; but it changes those wastes into resources. Page | 9
  10. 10. Entrepreneurship & Business Project DevelopmentCourse Code: F--306 Marketing Plan Page | 10
  11. 11. Entrepreneurship & Business Project DevelopmentCourse Code: F--306 Marketing Plan Analysis of Competitors In the power and fuel industry of Bangladesh, all types of fuel are imported by Bangladesh Petroleum Corporation. They are the sole distributor in Bangladesh in case of petroleum. Bangladesh government gave all types of authority to handle petroleum product through Bangladesh Petroleum Corporation ordinance 1976. Padma, Meghna and Jamuna ltd are three subsidiary companies of BPC who distribute fuel all over the country on behalf of Petroleum Corporation. Other multinational companies like Shell, Chevron are mainly working to produce Gas in our country. So, in that sense, we don’t have any direct competitor in the market. We can consider the international company from which BPC is importing fuel is our soul competitor. Beside that use of will also bring competition for our product. SL Competitor Position 1 Companies from which BPC is importing First petroleum currently 2 CNG Second Comparison of product with customer Strength Weakness Opportunity Threat Renewable More costly than Huge market Foreign source of fuel. CNG Demand companies can enter Simple Less familiarity. Introduction into the production Of a new source fuel. market. like Page | 11
  12. 12. Entrepreneurship & Business Project DevelopmentCourse Code: F--306 process. Chevron, Future govt. support. Shell Green Energy Less costly product. Immense scope of Engine competition modification is not necessary. Ability to meet High price They can also supply After huge demand their bio-fuel product introducing Differ product eco-fuel International Most familiar for different govt. may Competitor fuel product engine not be interested to No specific import these promotional product activities for the product Ability to Engine Market acceptance. Price of gas supply at a low modification is is gradually price. necessary to use increasing. Local Competitor it. Can be used as an Gas used to alternative of oil in produce it is not different purposes. unlimited Page | 12
  13. 13. Entrepreneurship & Business Project DevelopmentCourse Code: F--306 Pricing Strategy The pricing strategy for our product will be based on the cost. That means we shall use the ‘cost plus pricing method‟ to price our product Algae-Fuel. It must be lower than the existing fuel market price. year Product category price(TK) 2013-14 Algae Bio-Fuel 43 2014-15 Algae Bio-Fuel 43 2015-16 Algae Bio-Fuel 43 2016-17 Algae Bio-Fuel 45 2017-18 Algae Bio-Fuel 45 Distribution StrategyDistribution Strategy: We will sell our product to Bangladesh Petroleum Corporation, a sole distributor of petroleum in Bangladesh. They will sell our product all over the country through different filling stations. Besides this, we will sell some of our product through dealers and in our factory as factory sales. For the first 3 years of our business we will distribute our algae fuel only in the Dhaka Metropolitan area and we will try to expand our business in the whole country with the pace of time advances. We are thinking to distribute our product in free of cost to the different tourist organizations for the special promotional activities. Promotional Strategy Print Media: We will contact with the different newspaper and magazines to make an Advertising Contract with them. Television Media: We will make a contract with ad agencies to make an advertisement showing different aspects of our product. Page | 13
  14. 14. Entrepreneurship & Business Project DevelopmentCourse Code: F--306 Banners and Billboards: We will use our banners and billboards in different busy highway for the publicity for our product beside that in different filling stations, we also use our banners to provide knowledge to the consumers about our product. TAC (Tourist Awareness campaign): We will distribute our product free of cost to different travel agency of our country. In return, they will use our banners and stickers in their car. Through this way, we can do branding of our product to the foreign people who will visit our country. In this way, our company will get recognition all over the world. Green Energy Forecasted Sales (1% of yearly BPC Sales) (BPC Yearly Sales are shown in the Appendix) Year Quantity Unit Price Total taka 3,000,000 43 129,000,000 2014 3,000,000 43 129,000,000 2015 3,000,000 43 129,000,000 2016 4,500,000 45 202,500,000 2017 2018 4,500,000 45 202,500,000 Page | 14
  15. 15. Entrepreneurship & Business Project DevelopmentCourse Code: F--306 Projected Sales Yearly projected sales 25000000 20000000 yearly 15000000 projected sales 10000000 50000000 0 1 2 3 4 5 Year Figure 1: Yearly projected sales Market Segmentation As per the rule regarding petroleum in Bangladesh, Bangladesh Petroleum Corporation (BPC) is the sole distributor of petroleum in Bangladesh. Companies exporting petroleum in our country trade under BPC. We shall do the same. After extracting our fuel, we will go for distribution through BPC. So the customers served by BPC are our customers also. Farmers Bangladesh being an agro based country needs a high level of irrigation when cultivating the lands. To irrigate our lands, farmers use machines which are operated by using diesel. This diesel is very costly to the farmers and on the other hand pollutes our environment. For this reason, we have decided to provide our bio-fuel to the farmers also to operate their machines. The result we acquired from them is: Characteristics: The farmers of our country live below the poverty line. So, it is very obvious that almost all of them are price conscious rather than considering quality. To know more about the characteristics of the farmers, they were asked about whether they prefer saving the environment over financial consideration. It led us to conclude that they are also in a neutral state regarding such matter. Page | 15
  16. 16. Entrepreneurship & Business Project DevelopmentCourse Code: F--306 Factors considered when buying: According to the farmers, the fuel should be available to them through selling agents because it is easier for the farmers to interact with the agents rather than going to the filling stations. Another fact about the farmers that we came across through the survey was that they want our fuel not just because of the low price, also because our fuel comes from a renewable source. Manufacturing organizations Manufacturing organizations were surveyed because most of the organizations have their own transport to distribute their products to the consumers. If they were provided the low priced Green Energy fuel, it is obvious that the price of such products will be lowered. The results are: Characteristics: Most of the organizations prefer the quality of the fuel, rather than considering the price. They said that they are quality conscious to a great extent because they want their car engines to be working smoother. Coming to the dilemma of choosing between saving the environment and financial expenditure, most of them were agreed to save the environment from dangerous particles emitting fuel. Factors considered when buying: When they were asked about how they want to avail our product, they expressed their desire to get it from the filling stations which is another factor to them whenever buying the fuel. They also concluded that other than the cost, the reason to switch to bio-fuel was that it was saving our environment. Public Transport The last group of consumers who were surveyed by us for their valued opinion was the public sector. Whatever they think of our algae-fuel was very important to us to project the future of our business. Page | 16
  17. 17. Entrepreneurship & Business Project DevelopmentCourse Code: F--306 Characteristics: Most of them preferred a quality fuel for their engines, rather than focusing on the price only. When they were asked to make judgment on the matter that saving our environment is much more important than the financial expenditure, they were totally agreed with us. Factors considered when buying: 100% of the owners said that they want to take the fuel for their engines from the filling stations nearby. The owners were considering a high mileage with the fuel as a reason to switch to bio-fuel other than cost. Marketing Budget Items 2013-14 2014-15 2015-16 2016-17 2017-18 Promotion cost 900,000 900,000 750,000 750,000 720,000 Distribution cost 200,000 150,000 100,000 100,000 100,000 Total 1,100,000 1,050,000 850,000 850,000 820,000 Page | 17
  18. 18. Entrepreneurship & Business Project DevelopmentCourse Code: F--306 Implementation Plan Page | 18
  19. 19. Entrepreneurship & Business Project DevelopmentCourse Code: F--306 Implementation Plan To implement the plan, at first it is needed to register the business as a private limited company under the company act. That will require at least 1 month. Then it will be needed to apply for the loan to meet up capital expenditure. And at least 1 month and 15 days require fulfilling this activity. In the mean time, the required resources are needed to be acquired for the proper start up of the business. And at least 1 month and 15 days require rent a space for office. Besides these, 3 months are needed to connect the utilities. For the recruitment of personnel it is required 2 months. For the completion of other activities, at least 1 month is needed. This start up activities can be described as following table: Business Start-up Activities Time Cost Business Plan Preparation 1 month 60,000 Registration 5 months 100,000 Application for loan 1 months and 15 days 40,000 Leased Land/Office rent 1 month and 15days 300,000 Connection Of Utilities 3 months 70,000 Recruitment 2 months 50,000 Others 1 month 80,000 Total 16months 700,000 Table: Business Start-up Activities and Cost Page | 19
  20. 20. Entrepreneurship & Business Project DevelopmentCourse Code: F--306 Operational Plan Page | 20
  21. 21. Entrepreneurship & Business Project DevelopmentCourse Code: F--306 Operational plan Basic Production Process of Algae fuel Step-1: Choosing the Right Algae Our bio-fuel production will start with the choice of right algae from which we can produce high quality bio-fuel. It is the first step in bio-fuel production. General Aspects to Consider: There are many aspects to consider when choosing the right algae for biodiesel production. In order to achieve the highest possible production rate of oil, oil content has to be balanced against growth kinetics. Furthermore there are many advantages in having a healthy species of alga since the system will be less sensitive to variations in parameters like temperature, pH and salinity. Size and oil composition are also important in order to achieve a simple separation and post processing. Last but not least, it is important that the alga strain is well known and that sufficient research and information exists. Step-2: Choosing an Algae Strain Algae with high oil content from the list in Micro- and Macro- Algae: Utility for industrial applications by Anders S Carlsson et al 2007 (14) were investigated. When considering important parameters it resulted in further evaluation of the following three algae: Phaeodactylumtricornutum, Chlorella ProtothecoidesandBotryococcusbraunii. After a conversation with the commercial company Algae Link the algae Nannochloropsissalinawas also investigated. B.brauniiis is one of the most known hydrocarbon producing algae. This fact that it’s well known and thoroughly researched is one of its strengths. If an unknown alga strain is chosen, expert knowledge and extensive research are required to produce necessary data concerning oil composition and to properly dimension the equipment. So, after this stage we select B. brauniialgae to produce bio-fuel. Step-3: Algae grown for production Page | 21
  22. 22. Entrepreneurship & Business Project DevelopmentCourse Code: F--306 We have to grow algae for our bio-fuel production. We will follow closed system to grow algae. Closed system A method for growing algae is a vertical growth or closed loop production system. This process actually came about as bio-fuel companies sought to produce algae quicker and more efficiently than what was possible utilizing open pond growth. The closed photo bioreactor system consists of a number of transparent reactors. The reactors are designed to maximize the absorption of the incoming light and to minimize negative effects such as oxygen oversaturation. And unlike the open pond method where algae are exposed to contamination, the vertical growth method isolates algae from this concern. Type of reactor The preferred reactor will be the closed photo bioreactor, since the open ponds suffer from contamination risks together with high evaporative losses of water and diffusion losses of CO2. This means that the investment cost will be significantly higher, but also that the separation step will be easier, due to dense cell cultures. Land area unsuitable for agricultural activities are generally sparse on fresh water, why the loss of water should be minimized, this supports the closed reactor. Of the different kinds of closed reactors, tubular, flat and in polyethylene bags, the tubular reactor is chosen. The research on polyethylene bags is not sufficient for the bags to be an alternative. The tubular reactor has a better photo efficiency than the flat reactors, and will be the preferred choice. Step-4: Extracting oil from algae Once the algae are harvested, the lipids, or oils, are extracted from the walls of the algae cells. There are a few different ways to extract the oil from algae. But we will use the mostly use method Oil Press to extract oil from algae. Oil press This is the simplest and most popular method. It can extract up to 75 percent of the oil from the algae being pressed. Page | 22
  23. 23. Entrepreneurship & Business Project DevelopmentCourse Code: F--306 Oil press process First the algae are ground into an algae paste using large milestones. The algae paste generally stays under the stones for 30-40 minutes After grinding, the algae paste is spread on fiber disks, which are stacked on top of each other, then placed into the press. Traditionally the disks were made of hemp or coconut fiber, but in modern times they are made of synthetic fibers which are easier to clean and maintain. These disks are then put on a hydraulic piston, forming a pile. Pressure is applied on the disks, thus compacting the solid phase of the algae paste and percolating the liquid phases (oil and vegetation water). The applied hydraulic pressure can go to 400 atm. To facilitate separation of the liquid phases, water is run down the sides of the disks to increase the speed of percolation. The liquids are then separated either by a standard process of decantation or by means of a faster vertical centrifuge. Step-5: Transesterification Once the oils extracted, its refined using fatty acid chains in a process called transesterification. Here, a catalyst such as sodium hydroxide is mixed in with an alcohol such as methanol. This creates a biodiesel fuel combined with a glycerol. The mixture is refined to remove the glycerol. The final product is algae biodiesel fuel. Production capacity For the 1st three years 3000,000 liters of bio-fuel will be produced at unit price of tk.43 making a total of tk. 129, 000,000. In the fourth and fifth year 4,500,000 liters of bio-fuel is planning to be produced at unit price of tk.45 making a total of tk. 202,500,000. We will try our level best to fulfill our production capacity planning. This planning is based on the resources what we will need for our production. It is fully analyzed in Appendix 1. Resource requirements For initiating our business operations we will definitely need some resources including fixed assets, current assets, and start-up costs. Page | 23
  24. 24. Entrepreneurship & Business Project DevelopmentCourse Code: F--306 Fixed assets Fixed assets are those assets which are tangible and must needed for our business which cannot be converted to cash easily. We need a patent for our bio-fuel which will cost tk.350,000 We need a machine for our production of bio-fuel which will cost tk. 2,050,000 Warehouse is must for a better inventory management which costs tk.1,000,000 Our main business factory with storage facilities will cost tk.1,500,000 Vehicle is needed for better sales and marketing system will cost tk.800,000 Furniture needed for our administrative office will cost tk.200,000 Air cooler and computer needed for proper business management will cost tk.200,000 respectively. Furniture needed for factory arrangements will cost tk.200,000. For proper management we will use computers that cost tk. 200,000. So, Total cost of fixed assets will be approximately tk. 6,500,000. Current assets Current assets are all assets that a person can readily convert to cash to pay outstanding debts and cover liabilities without having to sell fixed assets. Raw material needed for bio-fuel production will cost tk.600000 Wages of the workers will show a total of tk.400000 Manufacturing overhead will cost tk.400000 Administrative expenses will cost tk.400000 The most significant part of our business, marketing segment will incur expense of tk.10,00,000 Start-up costs Every business incurs start-up costs at the beginning of their business which is not avoidable. We make a list of the start-up activities of our business and their costs. Page | 24
  25. 25. Entrepreneurship & Business Project DevelopmentCourse Code: F--306 At first the business plan preparation will cost tk.60,000 Legal registration of our business will cost tk.100,000 Application for a business loan costs tk.40,000 Land leased and Office rent will cost tk.300,000 Connection fee of utilities will cost tk.70,000 Beginning recruitment costs tk.50,000 Others will cost tk.80,000 Workforce Engaged in Production Yearly direct and indirect wage for the first 3 years are: Designation Number Salary/person Time Total Factory 1 15,000 12 months 180,000 Manager Chemist 2 15,000 12 months 360,000 Assistant. 2 10,000 12 months 240,000 Chemist Direct labor 10 2,900 12 months 348,000 (permanent ) Indirect labor 3 975 12 months 34,750 (permanent ) Supervisor 1 3,500 12 months 42,000 Guard 2 2,500 12 months 60,000 Total 21 1,263,750 Page | 25
  26. 26. Entrepreneurship & Business Project DevelopmentCourse Code: F--306 Inventory Management In our inventory, there will be two types of inventory. One is raw material and another one is finished product that is Bio-Fuel. It will be our policy to complete our production fully within a year that will help us to have zero wok-in-process inventories. In case raw material, we will determine the order size by using Economic Order Quantity which will minimize the total raw material cost (ordering cost, carrying cost) for our company. Timing of placing an order will be determined by calculating the reorder point after considering the safety stock. In case of finished goods, we will determine how much we should produce in each production Run on the basis of Economic Production Size that will help us to minimize the cost for finished product. For the purpose of inventory control, we will use ABC analysis. It means, we will divide our inventory in three sections depending on their value. A category includes highest valued inventories and it will be under tightest control. B category includes second highest valued inventories and it will be under moderate control. C category includes inventory having minimum value which will be under simple control. The storage section or warehouse will be owned by the company. Our product is one kind of fuel so we have high risk of fire. For security purposes, we will build our warehouse and storage in such a way that will help to adjust the temperature for our product time to time. Page | 26
  27. 27. Entrepreneurship & Business Project DevelopmentCourse Code: F--306 Organizational & Management Plan Page | 27
  28. 28. Entrepreneurship & Business Project DevelopmentCourse Code: F--306 Organizational and Management Plan Organizational Structure The organizational structure of Green Energy Pvt. Ltd is divided into 3 levels. Top level management, mid-level and operational level are the three levels of management. Top level management Top level is responsible for strategic decision making. Mainly the board of directors and CEO will be included in this stage. Their main purpose is to create the mission, vision for the organization and long term goals for organization. Mid-level management Mid-level management is mainly responsible to implement the plan created by the top level. All the departmental heads are included in this level like CFO, Head of the Human Resource department etc. They are responsible for plan. Operational Level Operational level managers are the lowest level of the management hierarchy. They work with the operational level employees and labors to implement the plan of mid-level which will ultimately fulfill the goals of top management. Goals set by the top management are in the strategic level. It is very important to interpret those goals to all levels of employees. After understanding that they can realize what they need to accomplish from their position to achieve the overall goal of the organization. Page | 28
  29. 29. Entrepreneurship & Business Project DevelopmentCourse Code: F--306 Management Team SI Name Designation Experience Qualification 1 Not Recruited Director, Finance 5 years Chartered Accountant yet &Accounts minimum 2 Not Recruited Director, HR 5 Years MBA, Major in HRM yet minimum 3 Not Recruited Director, Production 5 years MBA, CMA yet minimum 4 Not Recruited Director, Marketing 5 years MBA, Major in yet minimum Marketing Page | 29
  30. 30. Entrepreneurship & Business Project DevelopmentCourse Code: F--306 Organogram Top Management (CEO) Manager Manager Manager Manager (Finance & Accounts) (Production) (HRM) (Marketing) Treasurer Controller Factory Manager Sales Officer Officer Worker Officer Officer Figure 2: The organogram of the organization Page | 30
  31. 31. Entrepreneurship & Business Project DevelopmentCourse Code: F--306 Succession Plan Green Energy is a private limited company. All of its shares are equally distributed among the entrepreneurs. In the absence of these entrepreneurs, their selected persons will continue the business on behalf of them. If shares are sold, new shareholders will run the business. If any emergency arrives the company will be dismantled according to the Company Act 1994. Office Equipment Fixed Assets Quantity Per Unit Cost Total Cost Depreciation Furniture 150,000 5,250 Computer 5 40,000 200,000 5,000 Air cooler 4 50,000 200,000 5,000 Total 550,000 15,250 Salary of the Employee For the first 3 year the salary will be same after that it will change. SI Designation Number Salary per person Total Salary Yearly Salary 1 CEO 1 30,000 30,000 360,000 2 Manager 6 15,000 90,000 1,080,000 3 Officers 4 10,000 40,000 480,000 4 Clerk 2 5,000 10,000 120,000 5 Cleaner 2 2,500 5,000 60,000 Total 2,100,000 Page | 31
  32. 32. Entrepreneurship & Business Project DevelopmentCourse Code: F--306 Administrative Expenses Items Amount Salaries & Wages 3,363,750 Utilities expense 120,000 Office rent 110,000 Audit fee 75,000 Depreciation 417,750 Printing and stationary 50,000 Insurance 120,000 Recruitment and training 120,000 Research and development 300,000 Amortization of preliminary expenses 17,500 Convenience 80,000 Legal and other professional expenses 112,000 Total 47,66,000 Monitoring and Evaluation Organization’s strategic goals will be determined by the top executives .Those goals will be interpreted to each level of management and guidelines will be sat for every level like what their responsibility is to fulfill the goals, how they can contribute from their own position to add value. Every employee must be clear about their authority and responsibility in the company. So, periodically their performance will be evaluated with the standard sat by the top management for example whether they are contributing properly to attain the goals of the organization or not. If there is any deviation, corrective action will be taken to increase efficiency. Reward system will be implemented to appreciate employee for their good performance. For performance evaluation, we will divide our all segment as different centers. Like cost center, profit center and investment center. Cost and profit center will be evaluated depending on the periodical segment report and investment center will be evaluated depending on the return on investment ratio and residual income. Page | 32
  33. 33. Entrepreneurship & Business Project DevelopmentCourse Code: F--306 Corporate Social Responsibility First and most important social activity of our business is to serve our society by providing our high quality product with a minimum price. By habituating people to use eco fuel, we will help to build a pollution free green environment in our country. It will be a subconscious process of developing pollution free environment. Research and Development Since, it is bio fuel manufacturing company, we need to do a lot of research and development activities to improve the quality of our product and at the same time we need to find out new renewable source of fuel. Our research and development works will focus on the following areas: Improving quality of the fuel. More cost efficient way of production. Finding new source from which more oil can be extracted. Making more environment friendly product. Training and Development For continuous performance development, we will implement some training program in our organization for the employees. Training program will focus on the skill development of the employees, adaptability in difficult situation, innovative thinking development, ethical learning Page | 33
  34. 34. Entrepreneurship & Business Project DevelopmentCourse Code: F--306 Risk Assessment Page | 34
  35. 35. Entrepreneurship & Business Project DevelopmentCourse Code: F--306 Risk Assessment Risks Inherent to the Business Businesses are not free of risk. A business without risk is impossible to conduct. Some risks can be controlled and some cannot be. Our business of bio-fuel production from algae also faces some risks. We have classified the risks mainly in two types. These are: Unavoidable Risk Avoidable Risk Unavoidable Risk Unavoidable risks are mainly natural calamities and change in weather. Some risks are inherent in the type of the business, so these are unavoidable too. Some of these unavoidable risks are discussed below: Fire: in our fuel production process many highly flammable materials are used. Sometimes produced oil is stored in the factory for some time before distribution. If the flammable materials are not kept in safe place or the produced oil is not stored with adequate caution it may cause explosion or any other accident the result of which will be very acute. Temperature and sunlight: We will mainly useBotryococcusbraunii algae in our oil production. A research on one strain of this algae has found that it grows best at a temperature of 23°C, a light intensity of 60 W/M², with a light period of 12 hours per day, and a salinity of 0.15 Molar NaCl.In different seasons the temperature and sunlight may vary. It can create problems in algae production and growth. Page | 35
  36. 36. Entrepreneurship & Business Project DevelopmentCourse Code: F--306 Ways to reduce the risks The risks to which our business is exposed are unavoidable due to their nature. Still some steps can be taken to mitigate those risks. They are as follows: Fire and property insurance policy will be taken. There will be availability of fire extinguisher in the factory premises. Employees will be properly trained to handle any hazardous uncertain event. Fire safety regulations will be strictly maintained. Highly flammable materials will be kept in a safe place. There will be safe arrangement for oil storage. There will be facility of artificial temperature and light in case of unsuitable weather. Avoidable risk There are many risk factors inherent in the business, which are avoidable. The risk factors, related risks and ways to minimize risks are shown in a table format below: Risk factors Risk Ways to minimize risk The process of producing algae fuel 1. Customer oriented marketing. is quite easy and the cost of the fuel will be cheaper than much other 2. Making unique contract with BPC Competitors existing oil, so we may face the risk so that new entrance in this sector of new entrance. will be difficult and expensive. If the production cost of other 1. Creating an eco-friendly different biodiesels gets lower their appearance of algae fuel to people. Demand Risk cost will be lower for the consumers 2. Giving emphasis on less emission too. It can shiver the demand of of CO₂ by algae fuel. algae fuel. Page | 36
  37. 37. Entrepreneurship & Business Project DevelopmentCourse Code: F--306 Operational Risk The equipment may go out of The machineries are locally made service and easy to repair. This may affect production. Socio- Algae fuel is a new product in Focusing on lower cost, safe psychological people’s lifestyle so it may cause environment and high mileage risks setback. during promotion. Contingency plans Considering future risk of more competitors entering in this business sector we have made some plans which can increase our production capacity in a good figure. In our current production process we use oil press method as it is easy and traditional. Low cost of production process is also one main reason. But after 2 or 3 years when our company will be in a good financial position we can go for more efficient methods. These methods will surely be costlier than the oil press method but their production will be larger also. Using oil press method we can extract maximum 75% oil. The alternative methods can extract up to 90% oil even 100% also. Besides the financial problem the labor problem is one of the main reasons of our not using these efficient methods at the beginning of our business. It is not possible for us to get a large manpower at the very first beginning. But after few years the success of the company will lead to the necessary man power very easily. Here we have two alternative methods of oil pressing. These are discussed briefly below: Hexane solvent method This process extracts up to 95 percent of oil from algae. First, the press squeezes out the oil. Page | 37
  38. 38. Entrepreneurship & Business Project DevelopmentCourse Code: F--306 Then, leftover algae is mixed with hexane, filtered and cleaned so theres no chemical left in the oil. Supercritical fluids methods It extracts up to 100 percent of the oil from algae. Carbon dioxide acts as the supercritical fluid -- when a substance is pressurized and heated to change its composition into a liquid as well as a gas. At this point, carbon dioxide is mixed with the algae. When theyre combined, the carbon dioxide turns the algae completely into oil. The additional equipment and work make this method a less popular option. So these methods should always be in our consideration for long term risk assessment. We cannot stop new entrance fully. If new companies come we can maintain our share in the fuel market by using any of these methods, because it will be difficult for the new companies to use these methods at the beginning of their business. Page | 38
  39. 39. Entrepreneurship & Business Project DevelopmentCourse Code: F--306 SWOT Analysis Page | 39
  40. 40. Entrepreneurship & Business Project DevelopmentCourse Code: F--306 SWOT Analysis Strengths: 1. Algae produce cellular oils that can be refined into different bio-fuels, including jet and diesel fuels that can be used without engine modifications. 2. Bio-fuels are organic sources of energy that replenish naturally and quickly. 3. Algae consume large amounts of carbon dioxide, a major greenhouse gas and contributor to Global warming. 4. Algae based bio-fuel being an oxygenated fuel (enriched with oxygen), biodiesel from algae makes fuel combustion more complete and results in carbon emission much lower than conventional diesel. 5. Algae as bio-fuel can be used on all aircraft and engines dont need to be modified for this usages. 6. Lower cost & Easy production process than other fuels. 7. Import dependency minimization. 8. Sound marketing & Distribution plan. 9. Lower cost of labor. 10. Raw materials are local & available in our country. 11. Non toxic& highly bio degradable fuel. 12. Eco friendly fuel production. Weaknesses: 1. The algae bio-fuel production is highly dependent on availability of suitable climatic condition, substantial quantity of water, flat land, and carbon dioxide feed --all in one location 2. Whether people will use this fuel is a question. 3. Continuance of Supply of high growth algae. 4. Behavioral changes needed to adapt using new form of Fuel. 5. Lack of Government support, needed to succeed the venture. Opportunities: 1. Some strains are capable of producing at least 10 times as much fuel per acre than corn or soybeans. Page | 40
  41. 41. Entrepreneurship & Business Project DevelopmentCourse Code: F--306 2. The greatest advantage of algae for producing biodiesel over other plants is that this plant is not used for any food products. This gives benefit of lower price volatility to algae . 3. Demand of fuel is increasing day by day. 4. Expansion is easy and effective in this venture. 5. Using this fuel also serves social responsibility. 6. International Fuel crisis will have less effect in our country. 7. After meeting local demand we can export the excess Fuel in international market. 8. Ample opportunity of research and development. 9. We can also cultivate our raw materials in future. 10. High price of other fuels will aggravate the need of algae fuel. Threats: 1. Competitors are heavyweights in our country. 2. The environmental effects of extracting oil from algae are also quite controversial topic because some environmentalists do not think they are environmentally friendly source of energy 3. Proper funding is necessary. 4. Level of acceptance by People is not certain. 5. Huge amounts of water needed to produce enough algae in future. 6. If improperly managed it can contaminate water. 7. Threat from CNG as a substitute. 8. Several pressure groups can create problems in implementing this venture. Page | 41
  42. 42. Entrepreneurship & Business Project DevelopmentCourse Code: F--306 Financial Plan Page | 42
  43. 43. Entrepreneurship & Business Project DevelopmentCourse Code: F--306 Financial Plan 1. Fixed Assets Items Amount Patent 350,000 Machine 2,050,000 Warehouse 1,000,000 Factory Building with storage facilities 1,500,000 Vehicle 800,000 Furniture(Office) 150,000 Air cooler 200,000 Furniture(Factory) 250,000 Computer 200,000 Total invest in fixed assets 6,500,000 2. Current Assets Items Amount Raw material 600,000 Wages 400,000 Manufacturing overhead 400,000 Administrative expenses 400,000 Marketing expenses 1,000,000 Total 2,800,000 3. Start-up costsTotal start-up costs is 700,000 Page | 43
  44. 44. Entrepreneurship & Business Project DevelopmentCourse Code: F--306 .4. Total investmentFixed assets +Current assets+ Start-up cost = 6,500,000+2,800,000+ 700,000 =10,000,000 5. Sources of Fund Description Loan Equity Total Machine 1,150,000 900,000 2,050,000 Warehouse 600,000 400,000 1,000,000 Factory Building with storage facilities 1,000,000 500,000 1,500,000 Vehicle 550,000 250,000 800,000 Furniture(Office) 150,000 0 150,000 Air cooler 200,000 0 200,000 Furniture(Factory) 250,000 0 250,000 Computer 0 200,000 200,000 Business start-up costs 0 700,000 700,000 Current Assets 2,100,000 700,000 2,800,000 Other Office assets 350,000 350,000 Total 6,000,000 4,000,000 10,000,000 Page | 44
  45. 45. Entrepreneurship & Business Project DevelopmentCourse Code: F--306 6. Loan repayment Schedule Loan will be taken from United Commercial Bank Ltd. From Kawranbazar Branch with 20% interest Year Installment Principal Interest Total Payment Remaining 0 - - - 6,000,000 1 2,006,278 806,278 1,200,000 5,193,722 2 2,006,278 967,533 1,038,744 4,226,188 3 2,006,278 1,161,040 845,238 3,065,147 4 2,006,278 1,393,248 613,029 1,671,898 5 2,006,278 1,671,898 334,379 0 7. Pro forma Income Statement Items 2013-14 2014-15 2015-16 2016-17 2017-18 Sales 129,000,000 131,150,000 131,150,000 202,500,000 202,500,000 (-)COGS 123,360,000 123,360,000 123,360,000 188,500,000 188,500,000 G.P 5,640,000 7,790,000 7,790,000 14,000,000 14,000,000 (-) Administrative expenses Salaries & 3,363,750 3,363,750 3,363,750 4,567,750 4,567,750 wages Utility 120,000 120,000 120,000 160,000 160,000 expenses Office rent 110,000 110,000 110,000 140,000 140,000 Audit Fee 75,000 75,000 75,000 90,000 90,000 Depreciation 417,750 417,750 417,750 626,625 626,625 Printing and 50,000 50,000 50,000 60,000 60,000 stationary Page | 45
  46. 46. Entrepreneurship & Business Project DevelopmentCourse Code: F--306 Insurance 120,000 120,000 120,000 160,000 160,000 Entertainment 80,000 80,000 80,000 100,000 100,000 Recruitment 120,000 120,000 120,000 160,000 160,000 and training R& D 300,000 300,000 300,000 400,000 400,000 Amortization 17,500 17,500 17,500 17,500 17,500 of preliminary expenses Convenience 80,000 80,000 80,000 95,000 95,000 Legal and 112,000 112,000 112,000 140,000 140,000 other professional expenses Total 4,766,000 4,766,000 4,766,000 6,716,875 6,716,875 Administrative expenses Marketing expenses: Promotion cost 900,000 900,000 750,000 750,000 720,000 Distribution 200,000 150,000 100,000 100,000 100,000 cost Total 1,100,000 1,050,000 850,000 850,000 820,000 Marketing cost Net Operating (226,000) 1,974,000 2,174,000 6,433,125 6,463,125 income Interest 1,200,000 1,038,744 845,238 613,029 334,379 expenses Net income (1,426,000) 935,256 1,328,762 5,820,096 6,128,746 before tax Income Tax 0 0 0 0 0 Net income (1,426,000) 935,256 1,328,762 5,820,096 6,128,746 after tax Page | 46
  47. 47. Entrepreneurship & Business Project DevelopmentCourse Code: F--306 Gross Profit Projection Net Profit projection 25000000 7,000,000 6,000,000 20000000 5,000,000 Sales, COGS & Gross profit 4,000,000 15000000 Net Profit sales 3,000,000 COGS N.P 10000000 2,000,000 G.P 1,000,000 50000000 0 1 2 3 4 5 -1,000,000 0 1 2 Year3 4 5 -2,000,000 Year Figure 2: Gross profit Projection and Net Profit Projection 8. Owner’s equity statement Items 2013-14 2014-15 2015-16 2016-17 2017-18 Initial 4,000,000 4,000,000 4,000,000 4,000,000 4,000,000 capital Retained 0 (1,426,000) (490,744) 838,018 6,658,114 Earnings Net income (1,426,000) 935,256 1,328,762 5,820,096 6,128,746 after tax Dividend 0 0 0 1,000,000 1,200,000 Page | 47
  48. 48. Entrepreneurship & Business Project DevelopmentCourse Code: F--306 Ending (1,426,000) (490,000) 838,018 5,658,114 retained Earnings Owner’s 2,574,000 3,510,000 4,838,018 9,658,114 11,586,860 equity 9. Breakeven Point For Year 2013-2014 Description Fixed cost Variable cost Variable cost Material cost Factory wages Factory utilities Indirect labor Total variable cost 123,360,000 Per unit variable cost 41.12 Fixed cost Factory wages 1,000,000 Insurance 120,000 Depreciation 417,750 Page | 48
  49. 49. Entrepreneurship & Business Project DevelopmentCourse Code: F--306 Amortization of patent 17,500 Repair and maintenance 400,000 All administration 4,766,000 expenses All marketing expense 1,100,000 Total fixed cost 7,821,250 10. Pro Forma Balance Sheet Items 2013-14 2014-15 2015-16 2016-17 2017-18 Current assets Cash 2,909,250 3,312,966 3,915,193 7,777,290 8,469,388 Intangible assets Patent 350,000 350,000 350,000 350,000 350,000 Property ,equipment Machine 2,050,000 2,050,000 2,050,000 2,050,000 2,050,000 Warehouse 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 Factory building 1,500,000 1,500,000 1,500,000 1,500,000 1,500,000 Vehicle 800,000 800,000 800,000 800,000 800,000 Furniture(office) 150,000 150,000 150,000 150,000 150,000 Air cooler 200,000 200,000 200,000 200,000 200,000 Furniture (factory) 250,000 250,000 250,000 250,000 250,000 Computer 200,000 200,000 200,000 200,000 200,000 Start up cost 800,000 800,000 800,000 800,000 800,000 Total assets 10,209,250 10,612,966 11,215,193 15,077,290 15,769,388 Liabilities and equities Page | 49
  50. 50. Entrepreneurship & Business Project DevelopmentCourse Code: F--306 Current liabilities Accounts payable 1,200,000 1,038,745 845,238 613,030 343,380 Accumulated 17,500 35,000 52,500 70,000 87,500 amortization(preliminary expense) Accumulated 417,750 835,500 1,253,250 1,671,000 2,088,750 depreciation(plant) Bank loan(current 806,278 967,533 1,161,040 1,393,248 1,671,898 portion) Long term liabilities Bank loan 5,193,722 4,226,188 3,065,147 1,671,898 0 Owners equity Owners equity 2,574,000 3,510,000 4,838,018 9,658,114 11,586,860 Total liabilities and 10,209,250 10,612,966 11,215,193 15,077,290 15,769,388 equities 11. Pro Forma Cash Flow Statement Items 2013-14 2014-15 2015-16 2016-17 2017-18 Sales 129,000,000 131,150,000 131,150,000 202,500,000 202,500,000 (-)COGS in (121,503,800) (123,239,173) (123,160,745) (189,708,876) (192,908,875) cash Gross profit 7,496,200 7,910,827 7,989,255 12,791,124 9,591,125 (-)Salaries& (3,363,750) (3,363,750) (3,363,750) (4,567,750) (4,567,750) wages (-)utility (120,000) (120,000) (120,000) (160,000) (160,000) expense (-)Office rent (110,000) (110,000) (110,000) (140,000) (140,000) (-)Printing and (50,000) (50,000) (50,000) (60,000) (60,000) stationary (-)Audit Fee (75,000) (75,000) (75,000) (90,000) (90,000) Page | 50
  51. 51. Entrepreneurship & Business Project DevelopmentCourse Code: F--306 (-)Insurance (120,000) (120,000) (120,000) (160,000) (160,000) (- (80,000) (80,000) (80,000) (100,000) (100,000) )Entertainment (-)Recruitment (120,000) (120,000) (120,000) (160,000) (160,000) (-)R&D (300,000) (300,000) (300,000) (400,000) (400,000) (-)Connivance (80,000) (80,000) (80,000) (95,000) (95,000) Legal expenses (112,000) (112,000) (112,000) (140,000) (140,000) (-)Promotion (900,000) (900,000) (750,000) (750,000) (720,000) cost Distribution (200,000) (1,50,000) (100,000) (100,000) (100,000) cost Interest (1,200,000) (10,38,744) (845,238) (613,029) (334,379) expenses Net cash flow 665,450 1,371,249 1,763,267 5,255,345 2,363,996 from operating activities Cash flow from investing activities (-)Patent (350,000) (-)Machine (2,050,000) (-)Warehouse (1,000,000) (-)Factory (1,500,000) building (-)Vehicle (800,000) (-)furniture (250,000) (-)computer (200,000) Start up cost (800,000) Net cash flow (6,950,000) from investing activities Cash flow from Page | 51
  52. 52. Entrepreneurship & Business Project DevelopmentCourse Code: F--306 financing activities Capital 4,000,000 Loan 6,000,000 (-)Loan (806,200) (967,533) (1,161,040) (1,393,248) (1,671,898) repayment Net cash flow 9,193,800 (967,533) (1,161,040) (1,393,248) (1,671,898) from financing activities Cash change 2,909,250 403,716 602,227 3,862,097 692,098 during the year Beginning 2,909,250 3,312,966 3,915,193 7,777,290 balance Ending balance 2,909,250 3,312,966 3,915,193 7,777,290 8,469,388 Ratio Analysis Ratio Ref. 2013-14 SQuick Ratio Quick Asset 1.45 Current Liabilities Current ratio Current Asset 1.45 Current Liabilities Net working capital Total current Asset 9,02,972 -Current Liabilities Debt equity ratio Total debt 2.8:1 Total equity Liverage ratio Total Liabilities 1.08 Net worth Return on Asset Net profit after tax -.14 Total assets Gross Profit Gross Profit .043 ratio Net sales Operating profit ratio EBIT -.0018 Sales Net profit ratio EAT -.011 Sales Interest coverage ratio EBIT -.188 Interest Page | 52
  53. 53. Entrepreneurship & Business Project DevelopmentCourse Code: F--306 Other Courses of Actions Page | 53
  54. 54. Entrepreneurship & Business Project DevelopmentCourse Code: F--306 Other Courses of Actions Environmental Issues Our product is totally an environment friendly product that will reduce CO₂ by consuming it at their growing period. It does not contain sulphur or any other toxic elements. Ethical Issues We will ensure the supply of the best quality product to our customers. We will employ certain quality control procedures in our company to maintain certain standard of our product. We will maintain complete books of accounts and reasonable accounting policies and estimates that will ensure fair presentation of financial statements and free of material misstatement in all material respect. There will be independent audit every year. Certain code of ethics will be developed for the employees of the organization that will help them to understand what is right and what is wrong in different circumstances. Legal Issues Each and every rules and regulations related to our business must be taken into consideration at the time of taking any operational or financial decision. Internal regulation like Article of Association and entity’s constitution that is Memorandum of Association will be designed by considering the existing legal issues related to the entity. Intellectual Property issues In each and every new business, protection of the business is a vital issue. New ideas can be duplicated. Our business of bio-fuel generated from algae is the first and a complete new Page | 54
  55. 55. Entrepreneurship & Business Project DevelopmentCourse Code: F--306 business in Bangladesh. So, all the legal rights of the business and bio-fuel production lie with us. So we will strictly focus on our protection issues from other businesses in the energy area. In this regard, we shall apply for the patent for our business from the government. Patents which are a kind of intellectual property are a governments way of giving an inventor, in this case us, ownership of our creation for a specified period of time. For that certain period of time, we, the patent holders shall be allowed to control how our inventions are used, what process to be selected etc. Another protection for the name of our business will be our ‘Green Energy’ trademark. After getting the right of trademark, no business will be allowed to duplicate the name of our business. If anyone breached the rule we shall enjoy the right to file a legal suit against them as the trademark holders. Working environment To be an effective organization and to keep pace with the outer world, right working environment at the right time is a great factor for the employees. We know that upper management only plan the functions in an organization but employees execute those plans. So a working environment with peace and harmony must be ensured. Promoting peace and harmony in the business is not an easy task. Several initiatives must be taken which are as follows: (1) A semi-democratic environment: In our business we will maintain a semi-democratic environment not an autocratic one. People here will be free to provide any advice they think to be useful for the business. It will not be always the situation that managers are doing whatever they say. This may lead to the situation for employees to rule over upper management. (2) Consultancy: There will be continuous consultation with the employees in the business, both with the factory workers and with the administrative employees regarding ways to develop the business more. It helps the employees to feel that they are an important part of the organization. (3) Discussion: There will be discussion held twice a month with the representatives of the employees and the management. In this session, the representatives discuss all of their problems regarding their jobs, their working environment, their pay, job security. Page | 55
  56. 56. Entrepreneurship & Business Project DevelopmentCourse Code: F--306 (4) Solution of conflicts: Sometimes it may happen that one employee is not comfortable to work with other employee. There may be differences in opinion which may lead to conflict. Any such disputes among the employees will be resolved as early as possible by upper management. If above steps are taken and maintained on a regular basis, peace and harmony in the working environment can be ensured. Safety and security issues Employees hold a large portion of an organization. A manufacturing organization’s smooth work, efficient and effective production depends largely on how the employees of that organization are motivated, directed, what they feel towards their organization. Employees get enthusiasm to work efficiently only when they feel that their inputs and efforts won’t go priceless. They want security of their job, security of their families, and safety in the workenvironment. In our organization, we will try our utmost to ensure all of the safety and security issues of the employees. The following measures will be implemented: Factory workers:- (1) Safe working environment: We will ensure that the factory environment of our business remains safe all the time. The supervisors will inspect the processes, machines on a continuing basis. Records will be kept regarding the inspections to be reviewed further by middle management. (2) Proper maintenance:Any kind of defect detected in the machines will be repaired immediately so that they will cause no harm for our employees. (3) Training of the employees: Before the workers start formal production works, they will be properly trained by the supervisors and others who are specialized in this area so that workers can handle the machines smoothly. Page | 56
  57. 57. Entrepreneurship & Business Project DevelopmentCourse Code: F--306 (4) Providing precautionary toolsfor workers:Workers in the factory will be given some tools like metal gloves, masks etc. For administrative employees: (1) Insurance:Employees will be under the protection of group insurance which will help the employees feel protected. (2) Medical allowance:Medical allowance of a particular percentage of the basic salary will be provided to the employees each month for themselves and for their families too. (3) Overtime premium:Employees working overtime will be provided an overtime premium. It helps them feel that they are getting adequate return of their efforts towards the organization. Use of ICT ICT has become the most cost effective medium that helps managing business activities in today’s world. I.C.T. is very useful as it provides a faster way of doing many tasks and ultimately saving the business time and money. It is more efficient when works are done through a computer with an internet connection. Having an internet connection helps doing researches and competitor analysis as computers can quickly handle data and convert it to a better form like a graph and a pie chart. Documents can be typed and reports can be compiled with the added advantages that back - ups can be made and they can be edited and are easier to read. Interaction with the customers becomes very easy. There are thousands of other advantages of having ICT in a business other than the above. Each of our employees with a computer will be given an internet connection. Moreover, for making our accounts easier to record, analyze, summarize and interpret, we will have specialized accounting software embedded in each of the computers in the office. The software is named Tally which is renowned for accounting in the world. Using this software will enable us to produce our financial statements in a shorter time period putting in less effort by the employees. This will be just a matter of a click to the employees. Page | 57
  58. 58. Entrepreneurship & Business Project DevelopmentCourse Code: F--306 Conclusion Page | 58
  59. 59. Entrepreneurship & Business Project DevelopmentCourse Code: F--306 Conclusion A business is a part of a society and serving the society by making reasonable profit is the main purpose of business. From this point of view, we want to introduce our new business Green Energy Pvt. Ltd which will be an exclusive solution of the fuel problem of Bangladesh. Our product bio-fuel can bring revolutionary change in the power and fuel industry of Bangladesh. As a new product, at the same time it will be less costly and environment friendly energy. Our product analysis discloses that it will be a perfect product in the context of our country; our financial plan indicates that it will be a profitable company in the future and the marketing plan specifies that it can be possible to target potential customers and to distribute our product to them. It can be summarized that this business has an immense opportunity to serve the people of Bangladesh. It will save government from the hand of subsidy loss; it will help to reduce the inflation rate indirectly by reducing the transportation cost of daily necessary goods and it will provide us a green society by reducing the CO2. So at the end, to save ourselves as well as the planet, it is needed to use bio-fuel. Page | 59
  60. 60. Entrepreneurship & Business Project DevelopmentCourse Code: F--306 Appendix Page | 60