Downloaded from www.binodpandey.wordpress.com Background Clean energy is the need of todays world.

The world is suffering from the energy crisis and the existing source of energy is too expensive. Fossil fuels are at its end stage and these fuels creating environmental problems like global warming, climate change, etc. The whole world is moving towards renewable energy sources which is cheaper and effective source of energy and solar power has stood in front as the solution to it. New technology has been developed to trap the alternative sources of energy of which solar PV technology is being mostly used worldwide to solve the present solution. The increase in the load shedding in the context of our country Nepal is a major problem at present. There is uncertain to solve this problem until we depend on the existing source i.e. hydroelectricity. So the time has arisen to go for alternative like solar power. Most of the works in the government as well as private offices, banks, hospitals, hotels, etc are stopped due to this growing load shedding. There is a need of backup systems for them. At the household level, people are bound to stay in the darkness, apart from news, television, radio, water pumping problem in the valley and so on. In the next 10 years there is no chance of getting rid of load shedding in Nepal. Similarly, most of the western part and hilly region of Nepal is not linked to the electricity grid. People living in those part are under hardship life. Some sectors like vaccines refrigeration, hospitals instruments and equipments etc essentially require electricity power for their operation. The people are afraid of investing in Nepal in the industrial and manufacturing sector due to insecurity, political instability, energy problems. They want quick return of their investment. Investment in the hydropower, factories, projects, etc is a long term return. Realizing all of these problem, establishment of more Solar Companies is essential in Nepal. The market is growing up as well. At present Solar business in Nepal is like a hot cake. More number of solar companies providing efficient solar PV system is to be established to solve the present problems. So with these objective, this venture is proposed.

Page | 1

Downloaded from www.binodpandey.wordpress.com Introduction Solar Energy Company Pvt. Ltd. is a form of organization which deals with the installation and operation of various systems to solve the problems of energy crisis in the present situation. It provides back up system in the present load shedding problems with minimum investment and long run benefit. It is situated at pulchowk, Lalitpur. The company will start its business from installation of Solar home system and expand its business to total solar solution in future. A. Company name, address and phone number Company name: Solar Energy Company Private Limited Address: Pulchowk, Lalitpur Contact no: 015573456 Email: solarenergy_pvtltd@yahoo,com www.solarenergy.com B. Management Team SEC will have six key personals in the company who are the co-owners and also designated officers of the company.They are: 1. Miss Nisha Jaishwal Address: Temporary: Chakupat, Lalitpur Permanent: Malangwa, Sarlahi Mobile: 9841517907 Email: nisha_728@yahoo.com Designation: Director 2. Miss Sabina Uprety Address: Temporary:New Baneshwor,ktm Permanent: NewBaneshwor,ktm Mobile: 9841695194 Email:sabi_roz2004@yahoo.com Designation: Sales and Marketing Manager 3. Mr. Santosh Mandal Address: Temporary: Patandhoka, Lalitpur Permanent: Janakpur, Dhanusha Mobile: 9803594998 Email: santosh.mandal.25@yahoo.com Designation: Finance Manager

Page | 2

Downloaded from www.binodpandey.wordpress.com

4. Mr. Sanjog Kayastha Address: Temporary: Ason Permanent: Ason Mobile: 9841422203 Email: mikey_san@hotmail.com Designation: Accountant

5. Mr. Narayan KC Address: Temporary: Lokanthali Permanent: Lamachaour, Kaski Mobile: 9849123943 Email: detoritate@yahoo.com Designation: Opearation and Installation Manager

6. Mr. Surya Kiran Koirala Address: Temporary: New Baneshwor Permanent: Kawasoti, Nawalparasi Mobile: 9841861294 Email: Designation: R & D Manager

All the team members are young, energetic and educationally sound. They are from different location with their own culture environmental and religious backgrounds which will enhance our team work.

Page | 3

Downloaded from www.binodpandey.wordpress.com

I Executive Summary A. Solar energy companys Business, Services and solutions Solar Energy Company Private Limited presents the market with reliable, cheap and convenient solar solutions for the people suffering from load shedding problems. Our company deals with all parts of solar components and we basically serve solar facilities from survey to installation. SEC focuses on present load shedding crisis and promotion of green energy in our country. Our service will work out on installation and maintenance of solar energy mainly on urban area. Promoting renewable energy our company will limit the uses of non renewable energy which will be environmental friendly. B. Solar Energy Companys Market Initially SEC has targeted the Kathmandu Valley residents as primary customers. Offices and apartments are also among our customers. Kathmandu valley uses most of the electrical energy in Nepal. Due to load shedding problem, people are rundown from their social and professional life. This problem will be solved by our product and services. Our targeted customers have knowledge about solar energy and its benefits. Besides Kathmandu valley, we intended to expand our services outside the valley in near future. C. Competition and marketing Strategy There are around 60 companies which are directly and indirectly related to our business. Among them 30 companies focus toward rural areas and associated with government, so they are not head to head competitors. The remaining are companies which focuses on large organization and residents in the urban. Since our company will be in large scale, we will adopt cost leadership marketing strategy. To promote our company different media like Advertisement media, newspapers, Business magazines and Internet will be used. Besides well be focusing on increasing the publicity of our business through activities like: sponsoring in public Medias, organizing campaign, supporting green energy program. Our company will provide flexible service to our customers in financial context by providing installment facilities. Since our company will provide small to large scale solar power installation, it will attract more customers with different potential. Our companys web page will provide guidance and instruction to customer regarding our product and services which will make easy access to our company. D. Financial forecast SEC company requires capital of NRs. 2500000 for the startup of its business. The amount includes administration, overhead, marketing costs and also meet short term working capital needs. The capital will be generated by equity of each of partners. The breakeven point is obtained at 177 units for the starting year.

Page | 4

Downloaded from www.binodpandey.wordpress.com II. VISION AND MISSION STATEMENTS A. Vision statement to change Nepal Into a nation where solar energy provides power to everyday needs. B. Mission statement The mission of Solar Energy Company Private Limited is to increase the quality of life of people of urban areas by eliminating the problems created by load shedding. For this, SEC provides high tech, high quality green energy alternative to home or office use. . Values and Principles on which business stands Load shedding should not be a problem to any person. Solar energy is a precious gift and we should take maximum benefit from it. D. Competitive Advantage SEC Company possesses significant competitive advantages over its competitors because of the following reasons: Installment facility is provided so that everyone can afford solar electricity. Run by electrical engineers so that each customers energy needs is precisely calculated to gain maximum efficiency. Proper customer care is provided by warranty and repair facility. III. BUSINESS AND INDUSTRY PROFILE A. Stage of growth : The solar electrification companies of Nepal at present are at an infant stage. It is in introductory stage but consciousness as well as needs of people is increasing at a good rate and the existing companies are getting popular among upper class of residents. We think at this rate, the popularity and the use of renewable energy will increase. Our Company SEC is in the start up phase of business. As initial market well serve the residential customer and offices. Then we will proceed to large organizations and apartments after getting publicity. After covering our initial market, we are likely to attract the customers outside the valley. Besides we are planning to expand our firm that deals only with parts of solar products.

B. Company Goals and Objectives Goal: Our goal is to become the number one company in solar electricity business. Objectives: To reach a target of installing 80 solar panels within the first 5 months. To spread our service out of valley within second year Page | 5

Downloaded from www.binodpandey.wordpress.com C.Registration of the Company According to the Company Act 2063: This company is a partnership form of organization consisting of six members as partners. All the rules and regulations according to the general partnership organization are strictly followed. The company will be registered under the act of Small Scale Industry and is dedicated to fulfill all the rules, regulation and norms of the governing laws and rules. The documents required for registration process are as follows; a) b) c) d) e) f) Registration Form Duplicate of the citizenship certificate of all members Two pieces of passport size photos of all members In case of rented building, the legal contract with the owner of the building Legal contract among the parties to follow the act as per the general partnership Plans, policies, act, rules and regulations of the company to be followed by the owners and the employees and articles of the company As the companys total initial investment is about Rs.2500000. Hence, the registration fees that should be deposited is Rs 16000. Apart from registration, the company is bounded by various other laws and regulations under the Company Act 2063 in terms of operation too. The company vows to abide by these laws and ensure that operation is in accordance to them and no breach occurs. D. Industry analysis 1) Industry background and overview The first commercial renewable energy company of Nepal was lotus energy founded on 1993.Till now there are about 60 companies which deal with solar energy. But among them, about 30 companies work to provide energy to rural areas only and they are prequalified by Alternative Energy promotion centre (AEPC), Khumaltar, Lalitpur. They are NGOs and are funded by various rural development projects. The remaining also take rural areas as their primary target but they deal with urban areas as well. We are the company to take the urban areas as the primary consumers and this can be a real opportunity. The demand for green alternative energy in urban is constantly increasing as people are having a hard time coping with the problems caused by load shedding crisis. To tackle the load shedding crisis, there are companies which are providing other forms of solutions such as generator services and inverter services. For these solutions, the consumer must spend constantly on running costs such as cost for fuels and maintenance. Due to this high running cost, people in urban areas want something that is hassle free, and cheaper in long term. So they will be attracted to our services.

Page | 6

Downloaded from www.binodpandey.wordpress.com 2) Significant trends The trend of existing renewable energy companies is to collect money from different rural development projects. None of the existing companies focuses on urban areas and hence they are untapped opportunities.

3) Growth rate Currently lotus energy installs 15-20 systems per month in urban areas and this number is increasing even though lotus has no advertisement campaigns. This shows that this rate will increase once people are aware of the availability of such systems. Moreover, the main reason for people not being attracted to solar systems is due to the initial high cost. From our installment provision, people will not be burdened by initial high cost and hence sales will increase. 4) Key success factors In the industry Load shedding: It has become a huge burden on the life style of urban people. People need other sources of energy to do their jobs as well as for recreation. Also, load shedding problem is forecasted to continue and grow till the next 10 years. So sooner or later, people will search for alternative sources. Renewable source of energy: Solar energy is renewable source of energy and due to this reason customers are not burdened by any running cost. Once they install the system, they get energy for their lifetime without having to pay any penny. Pollution free energy: Photovoltaic (PV) modules (Solar Panels) gives free and environment friendly electricpower whenever we want it. PV modules generate electricity directly from sunlight and their operation is completely noise and pollution free. Because they have no moving parts to wear and tear, they will provide reliable power for decades. 5) Outlook for the future Presently in many developed countries, there are laws which enable people to sell excessive electricity generated from solar home systems to their regional electricity company. Similarly, such types of laws are being discussed to be applied in Nepal. This process might be completed in the coming few years. So after few years, demand for our products will increase rapidly.

Page | 7

Downloaded from www.binodpandey.wordpress.com

IV. BUSINESS STRATEGY A. Desired Image and Position in the Market We would like to stand out in the solar market through our service and product reliability. We want to be the customers first choice by creating positive public image through different media. We want to create an image of a company which provides green energy at cheap and easy installment facility. B. SWOT Analysis SWOT Analysis for SEC is done as follows: 1. Strength Good quality of service Strong public relationship Highly skilled manpower Understanding and Unity among the partners Strong relation with the manufacturers 2. Weakness Inexperience Inadequate information about customers needs 3. Opportunities Load shedding Target customer are unsatisfied with current available services Promotion of renewable energy from government level Subsidies and tax credit on the solar products 4. Threats Political instability Existing competitors C. Competitive Strategy The type of strategy we employ to create a market share for our company is focus strategy. We will focus on the class of people who need electricity for their daily works, the class of people who are having a really hard time to deal with the current load shedding problems. By the time competition grows, we will have enough market shares and a distinct brand image. To attract such customers we will engage in advertisement campaigns which will educate people to use green solar energy, campaigns which will explain the long term benefits of using our systems than using generators.

Page | 8

Downloaded from www.binodpandey.wordpress.com

V. Company product and services A. Description 1. Product or Service features Complete solar home system customized to customers demands. For this category of products, we will first survey the site and then calculate the required power and its cost. The requirement of different customers may vary. It will include the following components: Photovoltaic cells (PV): it is the source of energy, it will convert solar energy into electrical energy. We will provide PV cells from Shell-Solar, the largest manufacturer of solar panels in the world. The rating of such panels will vary from 20watts-peak to 200watts-peak. Charge controller: it will be used to control overcharge and over discharge of battery which will increase battery life. Heat shrink: helps to overcome overheat of problem of battery Battery isolator: it will help to run system directly from solar panel after battery is fully charged. Cable Battery: it is deep cyclic sealed lead acid battery from Kulyan , Volta which is also deep cycle tubular solar battery. Installment of solar panels only (for customers) From our survey, we have found that about five percent of total population in valley has been using inverters. Customer with this category would need solar panel only. Hence we will install particular solar panel that will match with their system. 2.Customer benefits First of all the customers are facilitated by services that are customized regarding their needs and perspectives. Installment facility will make them comfortable with financial context. 3.Warranties and Guarantees For the first two years following your PV system installation, Solar energy provides you a full installation warranty. During the period, Solar Energy will provide regular site visits for cleaning and maintenance of the system, and also field any other support issues. The company shall provide its customers with guaranties and warranties for every component. Failure of any guaranteed component will be repaired or replaced immediately on request (any physical hampers will not be repaired). 4. Uniqueness Customized system with respect to customers perspective is first key point of our company which will satisfy variable needs of our customer. Page | 9

Downloaded from www.binodpandey.wordpress.com 5. Free Energy Audit Our process begins with a free energy audit of your building, whether it is a small residential home, or a large commercial complex. A member of our engineering staff will evaluate each and every electricity consuming device in your building and also go through your past electricity bills to determine how much electricity you need on average during a given day. We will also ask you to prioritize the appliance usage in terms of how critically do you need them during load-shedding hours

B. Patent or trademark protection SEC will be register under the Ministry of Industry and Commerce as a service oriented business. It will be a registered as a partnership company in Lalitpur Municipality. SEC will be legally approved after its registration and imitation of our trademark will be punishable as per the Ministry of Industry and Commerce. C. Description of Service process SPL believes in promoting green energy as well as increasing solar users. SEC creates opportunities for customer to get benefits of solar energy in appropriate costs. Ordering & Payment Procedures: What are the ordering procedures? 1. Contact In order to get our service, one needs to contact in our office. Our advertisement means shall help our customers to get details of offices. 2. Selection of services Our web page, www.sunpowersolution.com features various products available and our services. The customers can also search the product description and warranty we provide. They can be updated with services we provide through our web page. The customers can select the types of the service they want. 3. Pricing Pricing of the services will be mentioned in both in Nepalese as well as US Dollar in our webpage. For convenience customer can directly contact in our office.

Payment methods: The payment is divided into full payment and installment basis: Full payment: customer has to pay immediately after the installation of system. Installment basis: This payment method is valid for all customers. Customer have to make fifty percent down payment at first after installation then customer shall pay in installment basis with interest to finance company. Page | 10

Downloaded from www.binodpandey.wordpress.com

D. Future Service offerings: We are planning for adding the services which will target offices and small hotels. SPL has plan to deploy this service after two years of establishment of company

VI MARKET STRATEGY A. Target Market 1)Complete Demographic Profile: The idea of SEC came due to the emerging market solar energy in Nepal. Every year thousands of Nepalese are attracted toward particularly solar energy in the middle of alternatives energy sources. They want to serve by solar energy to get relieve from load shedding and electricity crisis. Table: total population and targeted customer YEAR 2007 2008 2009 POPULATION 39,51,423 41,01,817 45.67.565 % POPULATION 5.2% 5.7% 6.5%

2) Electronics equipments List of Mostly used electronics equipments S.N. 1. 2. 3. 4. 5. Lists of Electronics Equipments CFLs (Tube Lights) Computer Laptops Mobile Chargers Television

Page | 11

Downloaded from www.binodpandey.wordpress.com

Our Solar Home Systems and Costings

S.N.

20 Wp System Particulars 1 Panel 2 Battery Charge 3 Controller DC/AC 4 Converter 5 Structure 6 Installation 7 Miscellaneous Total

Capacity Quantity Cost(Rs) Selling Price(Rs) Remarks 20wp 1 3200 6000 2 CFL of 5 watt each( 4 35Ah 1 4000 5250 hours) 1 CFL of 3 watt( 4 8Amp 1 1400 1500 hours) 20w 1 1 1400 800 1500 12300 1500 1 LED light( 4 hours) 1500 Mobile charge 3000 2000 20750

S.N.

60 Wp System Particulars 1 Panel 2 Battery Charge 3 Controller DC/AC 4 Converter 5 Structure 6 Installation 7 Miscellaneous Total

Capacity Quantity Cost(Rs) Selling Price(Rs) Remarks 60wp 1 9600 18000 2 CFL of 7 watt each( 5 57Ah 1 7500 8550 hours) 3 CFL of 5 watt( 5 8Amp 1 2000 2250 hours) 60w 1 1 1700 800 2000 23600 1800 3 LED light( 5 hours) 1500 Mobile charge 3000 Internet Router 2850 37950

Page | 12

Downloaded from www.binodpandey.wordpress.com

80Wp System Hybrid S.N. Particulars 1 Panel 2 Battery Charge 3 Controller Capacity 80wp 150Ah 10Amp Quantity Cost (Rs) 1 1 1 1 1 12800 21000 2000 12000 800 2500 51100 Selling Price(Rs) 24000 1 CFL of 11 watt each( 5 25500 hours) 2250 3 CFL of 8 watt( 5 hours) 3 LED light 1 watt ( 5 14843 hours) 1500 2 CFL of 3 watt (5 hours) 3500 Router & Mobile Charge 71593 Remarks

4 Inverter 600 VA 5 Structure 7 Miscellaneous Total

80Wp System S.N. Particulars 1 Panel 2 Battery Charge 3 Controller 4 DC/AC converter 5 Structure 6 Installation 7 Miscellaneous Total Discount 5% Grand Total Capacity 80wp 100Ah 10Amp 60 watt selling Quantity Cost(Rs) price(Rs) Remarks 1 12800 24000 1 CFL of 11 watt each( 1 14000 16750 5 hours) 3 CFL of 8 watt( 5 1 2000 2250 hours) 3 LED light 1 watt ( 5 1 1700 1800 hours) 2 CFL of 3 watt (5 1 800 1500 hours) Mobile charge (2 3000 hours) 2000 3000 Router (2hours) 33300 52300 2615 49685

Page | 13

Downloaded from www.binodpandey.wordpress.com

100Wp System S.N. Particulars 1 Panel Capacity 100wp Cost Selling Quantity (Rs) Price(Rs) Remarks 1 16000 30000 2 CFL of 11 watt each( 5 1 26000 30150 hours) 1 1 1 2000 15000 1200 2500 62700 2250 17316 2000 3000 3500 88216 4410.8 83805.2 2 CFL of 7 watt( 5 hours) 3 LED light 1 watt ( 5 hours) 1 CFL of 5 watt (5 hours) TV/Computer (3 hours)

2 Battery 200Ah Charge 3 Controller 10Amp 4 Inverter 800 VA 5 Structure 6 Installation 7 Miscellaneous Total Discount 5% Grand Total

200 Wp System S.N. Particulars 1 Panel 2 Battery Charge 3 Controller 4 5 6 7 Capacity 200wp 300Ah 20Amp Selling Quantity Cost (Rs) Price(Rs) Remarks 100*2 32000 60000 6 CFL of 11 watt each( 150*2 45000 51000 5 hours) 1 1 1 9000 28000 2400 3000 119400 9750 TV (3 hours) Laptop charge (2 30000 hours) 3000 Computer (2 hours) 3500 4000 161250 11287.5 149962.5

Inverter 1400 VA Structure Installation Miscellaneous Total Discount 7% Grand Total

Page | 14

Downloaded from www.binodpandey.wordpress.com

B. Customers Motivational Factors The concept of solar energy is not new among the Nepali customers. According to our market survey, most of our targeted customers are familiar with solar power installation and their benefits. Majority of customers have positive thinking towards our business idea. We have summarized some factors which help to motivate the customers to use our services. The significant customers motivational factors are: 1. Better alternative source of energy In the long run, solar electricity is cheaper than buying it from the power company. There is a start up cost, but then it starts paying for itself. Once you break even, everything after that is profit. 2. Giving customer what they want There is a huge variety of solar panel systems available. Some can cost tens of thousands of dollars, and some cost just a couple hundred. This means customer can get into solar, with their respective financial effort. 3. Environmental aspects: Solar Energy is clean, renewable (unlike gas, oil and coal) and sustainable, helping to protect our environment. Its not affected by the supply and demand of fuel and is therefore not subjected to the ever-increasing price of gasoline. B. Market Size and Trends 1)How large is the market? Solar energy market in Nepal is in growing stage. The location of the company is in Pulchowk, Lalitpur which shares major part of population. Since it is capital city, most of the people are familiar with benefits of solar energy. This location shares major targeted customer which will be beneficial for our service. Targeted customers have started to use these types of services in Kathmandu valley. Since this type of service is in developing and progressive stage, SEC will catch the present trend customizing the service with customers needs. 2) Is it growing or shrinking? There are few companies who are directly related to our services. We are the competitors in this market. Customers preferring solar energy are increasing day by day. Due to its advantages, people are more likely to have solar energy in their house and offices. Since our targeted customers are familiar with solar energy and its merits, it is more liable to increase in market. Hence our targeted market is in growing stage.

Page | 15

Downloaded from www.binodpandey.wordpress.com D. Advertising and Promotion The advertisement is depending upon the target customers; where are they? How should we communicate with them? SEC is going to answer these questions with the effective advertisement and promotion techniques. This section includes a description of all advertising means and medium we are planning to use as well as public relations program and promotional materials (such as brochures). As we have focused in Kathmandu valleys customer in initial stage, we will use following media for advertisement: 1. Media to be used We are planning to use two types of Advertisement; viz. Offline and Online advertisement. We mainly focused on offline than online advertisement. i. Offline Promotion: Newspaper: News paper is a good source of communicating with the potential customers, especially of age group 20- 40 years. Our targeted customers prefer the English newspapers like The Himalayan Times, The Kathmandu Post, and Nepal Times. We will advertise our company service, contacts, features and website in those papers. As our allocation of cost for offline advertisement is high, the advertisement will be weekly or may be monthly. Magazines: Another effective means of advertising for our company is magazines which has wide reach to the target customer. Magazines offer long life span resulting in good chance of being seen several times. Magazines ads are usually of high quality, resulting in strong visual appeal. We will use business magazine like The Times Nepal, which are more preferred by our customer. Brochure: Our company publishes a brochure annually including all the activities of the company. Brochure helps to make customer up to date about income and expenses of the company. The report of seminars and interaction programs held in the year is published in it. A strong brochure can be the back bone to reflect the positive feedback from customer for an institution. So we are planning to invest enough capital to publish own brochure. Public Relation: To increase public relation, we will organize program to create awareness about alternative energy. This type of program will help to raise our company status in public perspective and different media covering the program will help recognition of our company existence. This will also help to make relationship with different professional and expertise of different fields.

Page | 16

Downloaded from www.binodpandey.wordpress.com ii. Promotion through internet: Since our targeted costumers are use to with internet, SEC shall be focusing in advertisement through internet. We will use web page of our company that are cost effective but reach the large number of customer. 2. Frequency of usage We are mainly focusing in offline advertisement so our company will be updated in news and magazines regularly. News paper will be used weekly and magazines fort nightly. Costs for newspaper and magazines are noted in table below. Our web page will be updated time to time. Desired Image in the market We will like to see SEC next to leading companies like Lotus in national market and next to some international companies like Solar Shell in few years. We will like to establish a strong brand image by the consistent quality services. As our vision we will always try to deliver value to our customers, employees and to our nation as well. VII. COMPETITORS ANALYSIS A. Existing Competitors 1. Competitive Profile Matrix Major competitors: These competitors are the giants of online shopping in Nepal. They are: 1.Kevin solar solution 2.Swogun Energy PVT. LT Swogun Energy PVT. LT Business type: manufacturer, retail sales, wholesale supplier, importer Product types: Solar Home System, Portable Power Pack solar system system, solar batteries, charge controller and others. Service types: consulting, installation, project development services, research services, site survey and assessment services, contractor services, maintenance and repair services Kevin Solar Solution: Business type: manufacturer, exporter Product types: backup power systems, DC to AC power Inverters sine wave, Batteries Deep Cycle, SMF Batteries, Solar Water Heating Systems, Solar Lighting Systems, Online UPS, Automatic Lift Backup System, IGBT Based Home UPS, CFL Lights, Cyber H-UPS, Sine Wave Inverter, Sine Wave UPS, DSP Sine Wave H-UPS, DSP Sine Wave Inverter, DSP Sine Wave Online UPS, DSP Sine Wave Static UPS. We have constructed the CPM of Kevin Solar solution, Swogun Energy PVT.LTD and SEC as following:

Page | 17

Downloaded from www.binodpandey.wordpress.com Table: Competitive Profile Matrix (CPM) Kevin Key Success Factors Solution Weight Rating Innovative Services 0.1 4 Price Competitiveness 0.2 1 Financial Strength 0.1 4 Service Quality 0.4 4 Customer Trust 0.2 3 Total

Solar Swogun PVT Score Rating 0.4 2 0.2 2 0.4 2 1.6 3 0.6 3 3.2

Energy Score 0.2 0.4 0.2 0.6 1.2 2.6 SEC OUR Rating 4 3 3 4 2 Score 0.4 0.6 0.3 1.6 0.4 3.3

2. Strengths and Weakness of competitors The major competitors are the established companies. They have established their service image and they have good technology and financial strengths. Kevin Solar solution Strength Strong brand name They are manufacturer Weakness Expensive delivery charge Slow delivery process Swogun Energy PVT. LT Strength Strong brand name Unique R&D deparment Weakness location low interaction with customers B. Potential competitors Solar home installation company is medium scale company. So, there will always be possibility of new competitors. Our potential competitors will be those who will focus on installation service only in particularly in Kathmandu valley. Some of the potential customers are: Kinetic Energy Pvt. Ltd. Business type: wholesale supplier Product types: solar lighting systems, batteries lead acid deep-cycle, solar charge controllers, DC lighting, solar water pumping systems, batteries lead acid flooded, retails sales, wholesale supplier, design. Service types: consulting, contractor services, research and development

Page | 18

Downloaded from www.binodpandey.wordpress.com Nepal Energy Development Company (Pvt.) Ltd. (NEDCO) Business type: retail sales, wholesale supplier Product types: appliances, custom batteries, water heating systems, sun concentrating photovoltaic systems, photovoltaic modules, compact fluorescent lighting, Compact Flourecent Lamps (CFL), Complete Solar Home Systems, Complete Solar Water Heating Systems. Service types: consulting, installation Address: Bharatpur-10, Chaubiskothi, Chitwan, Narayangarh, Narayani Nepal 26,Bharatpur Lotus Energy Pvt. Ltd. Business type: Manufacturer, Wholesale, Supplier, Retail Sales, Service, Installer Product types: Complete Solar Energy Systems, photovoltaic modules, rechargeable batteries, Power backup systems, Solar charge controller, Solar pumps, Solar Tukis(alternate to kerosene lamp), Solar LEDs, Solar prayer wheels, Solar ozone water purification systems, etc. . Address: P. O. Box 9219, 1679 Thirbam Sadak 3, Bhatbhateni, Kathmandu, Bagmati Nepal Telephone: +977 (1) 441 8203 FAX: +977 (1) 441 2924 Impact on our business: They are potential competitors with similar services we provide. If they plan to target in our customer and location under these circumstances we will lose our potential customer. As well as, market will saturate before than we estimated.

VIII. DESCRIPTION OF MANAGEMENT TEAM SEC is partnership business organization which will be owned and manage by its three partners. The three partners will jointly share the ownership of the business and they will have equal amount of equity, profitability and all of these members hold equal decision making authority. SEC will operate with four departmentsResearch and Development Department ,Installation and Operation Department , Sales and Marketing Department and Finance Department , at the office which is based in Pulchowk, Lalitpur. The partners are responsible for one department and they will make the decisions on their respective department and the major decisions of the company will be jointly discussed.

Page | 19

Downloaded from www.binodpandey.wordpress.com 3.Salary Structure of staffs: no of staff salary per month

Director 1 25000 sales and marketing manager 1 20000 operation & Installation manager 1 20000 R & D manager 1 20000 Finance 1 20000 Marketing & Sales officer 1 10000 Office management 1 10000 Repair and maintence 1 10000 Engineer 1 20000 Techinician 1 15000 helper 1 6000 Accoutant 1 10000 receptionist 1 6000 total 13 192000 We designated the salary structure such that the employees do not have to make any compromise in their self-esteem.the salary scale is equally divided from top to bottom level of management. At the end of the year profit is shared among the three owners of SEC. IX. PLAN OF OPERATION A. Form of ownership SEC will be operating as a partnership firm. All the six partners will jointly share the ownership of the business and they will have equal amount of equity, profitability and all of these members hold equal decision making authority. All the partners will be actively involved in the day to day operations of the business. The partners have the responsibilities in three departments. The main reason for operating as Partnership business is to establish such a business that is strong in financing and management. Six partner viz. Miss Nisha Jaishwal, Miss Sabina Uprety, Mr. Santosh Mandal, Mr. Sanjog Kayastha, Mr. Narayan KC, Mr. Surya Kiran Koirala will jointly invest the equity capital of Rs.1500000 . The sources of equity financing of the partners will be personal savings and their friends and family members.

Page | 20

Downloaded from www.binodpandey.wordpress.com B. Structure of the Company

Director

Sales & Marketing Manager

Installation and operation Manager Technician

R&D Manager

Finance Manager

Marketing and sales Officer

Research Engineer Helper

Accountant

Receptionist Repair & maintenance Officer

C. Decision Making Authority All the six partners of the SEC will have equal authority to make decisions. The partners are responsible for one department and they will make the decisions on their respective department and the major decisions of the company will be jointly discussed. All the major decisions of the company must require the consent of each member. D. Compensation and Benefits Packages As our mission Solar energy is a precious gift and we should take maximum benefit from it., we will never compromise in the quality of our service. The customers can check the condition of the service installed and they can complain if unsatisfied with our work. We will always remember the customers satisfaction is our motto during our business.

Page | 21

Downloaded from www.binodpandey.wordpress.com FINANCIAL FORCASTS A. Financial statement

1.Fixed Assets
S.N. 1 2 3 4 5 6 Particulars furnishing and decoration computers telephone printer and fax scooter water filter Qty 1 3 2 1 2 1 cost per unit total cost 100000 100000 30000 90000 4000 8000 40000 40000 150000 300000 4500 4500 542500

total 2. Pre operating costs

cost 30000 30000 40000 16000 100000 5000 221000

1 market survey Awarness 2 Programme 3 Training company 4 registration 5 R &D 6 Miscellaneous total 3.Operating Costs

Particulars
Rent Salaries Telephone Electricity cost Transportation Internet charges Advertisment Stationary Auditing Other miscellaneous

First year per month 25000 192000 2500 2000 7000 1017 80000 2000 1000 300000 2304000 30000 24000 84000 12204 960000 24000 10000 12000 3760204

Second year

Third Year

per month Per Year Per month Per Year 30000 360000 30000 360000 218000 2616000 218000 2616000 2650 31800 2650 31800 2200 26400 2200 26400 8000 96000 8000 96000 1017 12204 1017 12204 70000 840000 60000 720000 2000 24000 2000 24000 10000 10000 18000 18000 4034404 3914404 Page | 22

Total operating costs

Downloaded from www.binodpandey.wordpress.com

1. Pro forma Income Statement

Income Statement of Solar Energy Company Private Limited (in Rupees)

Net Sales Revenue Cost per installation last year inventory First Year 22673306.04 17042520 5630786.04 0 5630786.04 300000 2304000 30000 24000 84000 12204 960000 24000 10000 12000 3760204 1870582.04 9000 10000 3000 1500 7000 30500 1840082.04 875900 964182.04 125343.6652 Second Year 25765120.5 19366500 6398620.5 875900 7274520.5 360000 2616000 31800 26400 96000 12204 840000 24000 10000 18000 4034404 3240116.5 8100 9000 2700 1350 6000 27150 3212966.5 875900 2337066.5 303818.645 Third Year 28856934.96 21690480 7166454.96 875900 8042354.96 360000 2616000 31800 26400 96000 12204 720000 24000 10000 18000 3914404 4127950.96 7290 8100 2430 1215 5000 24035 4103915.96 900000 3203915.96 416509.0748

Operating Expenses
rent salaries telephone electricity cost Transportation internet advertisment stationary Auditing other miscellaneous

Total Operating Expenses Depreciation

Computer Furniture Fax & Printer Electronic applainces scooter

Total Depreciation
Inventory Tax (13%)

Net Income

838838.375

2033247.855

2787406.885

Page | 23

Downloaded from www.binodpandey.wordpress.com Sales and profit statement Sales 1st year 2nd year 3rd year Profit 22673306.04 838838.3748 25765120.5 2033247.855 28856934.96 2787406.885

Forecasts profits of first three years

Page | 24

Downloaded from www.binodpandey.wordpress.com C. Pro forma Balance Sheet(at the end of first fiscal year)

Assets
Current Assets Cash Account receivable Prepaid expenses Inventory Total Current Assets Fixed Assets Furniture Less accumulated depreciation Computer Less accumulated depreciation Fax & printer Less accumulated depreciation Electronic appliances Less accumulated depreciation Scooter Less accumulated depreciation Total Fixed Assets Total Assets at the end of the year 100000 10000 90000 9000 40000 3000 12500 1500 300000 14000 90000 838838.4 0 0 875900 1714738

81000

37000

11000

286000 505000 2219738

LIABILITIES
Current Liabilities Account Payable Salaries Payable Advertisement Payables First Asset Preoperating cost Partners capital Total Current Liabilities 0 0 0 542500 221000 1456238 2219738

Page | 25

Downloaded from www.binodpandey.wordpress.com Cash Flow Statement: Preoperating 1456238.37 0 22673306. 22673306. 875900 25765120.5 26641020.5 875900 28856934. 29732834.9

Particular Cash Inflow Equity last year inventory Sales Total Cash Inflow Cash Outflow Pre=operating expenses (Purchase of fixed assets) Cost per installation operating expenses Inventory tax depriciation Total Cash Outflows Net Cash Flows Cash Balance in the beginning Borrowing/Repayment Cash Balance at the end

First Year

Second Year

Third Year

1456238.37

221000 542500 17042520 3760204 875900 125343.66 30500 21834467. 19366500 4034404 875900 303818.645 27510 24608132.6 21690480 3914404 900000 416509.074 24035 26945428.

763500

692738.375

838838.37

2032887.85

2787406.88

692738.37 692738.375

1531576.75

3564464.6 6351871.49

1531576.75 3564464.605

Breakeven Analysis: First Year Fixed cost Cost price per unit Selling price per unit Breakeven point in unit 3760204 64555 85883.725 176.2976455 Second year Third year 4034404 3914404 64555 64555 85883.725 85883.725 189.1535476 183.5273323

Breakeven point=fixed cost selling price per unit-variable cost per unit Hence after sales of 177 units, we will go into profit. Page | 26

Downloaded from www.binodpandey.wordpress.com B. Ratio Analysis: 1. Net profit on Sales ratio: Net profit on Sales ratio = Net profit net sales Net profit 838838.3748 net sales 22673306.04 Profit sales ratio 4% Conclusion After deducting all the expenses, 4% of each sales rupees remains as a profit for us in the first year. Then in second year due increase in expenses in addition of rooms and human resources, it is decrease to 8% of each sales rupees. After third year, it will increase to 10% of each sales rupees as no more additional expenses will be added. In other hand advertisement expenses will be deducted after second fiscal year. 2. Net profit to equity (Return on Investment Ratio) Net profit to equity Ratio= net profits before tax / shareholders equity First year profit 964182.04 Equity 1456238.375 IRR 66%

2032887.855 25765120.5 8%

2787406.886 28856934.96 10%

Conclusion: The earning of SEC is 66% on the money the partners have invested in SEC for first year. 3. Times interest earned ratio: Times interest earned ratio= (earnings before interest and taxes)/ (total interest expense) Earnings before tax tax paid Profit tax ratio 964182.04 125343.6652 13%

Conclusion: SEC earned 13 times more than its tax expenses.

Page | 27

Downloaded from www.binodpandey.wordpress.com Net Present value Year 0 1 2 3 Pay back period cash outflow 763500 21834467.67 2032887.855 2787406.886 cash inflow 0 22673306.04 26641020.5 29732834.96 Less than 1 year Net flow -763500 838838.3748 24608132.65 26945428.07 NPV -763500 75338.3748 24683471.02 51628899.09

Conclusion Hence the payback period of SEC is less than one year i.e 10 months 25 days.

Page | 28

Downloaded from www.binodpandey.wordpress.com

Appendices Appendix no. 1 Business plan survey We have done a survey in the locality area of correspondimg management teams of Kathmandu Valley altogether about 30 houses , each contributing 5 houses by distributing a questionnaire and make them free to express anything on the topic. Here is the result and model of questions QN1. How often load shedding is becoming an obstacles in your routine life? A. Not so often b. Is curse c. Loving it QN2.What may the best alternatives to solve present load shedding? a. Inverters b. Diesel generator c. Solar plant d. Anything you suggest Among the participants two of them suggested that bio fuel can be used to stop load shedding. QN3. Do you know about green energy? a. Yes b. No QN4. What you use to read during night for study? a. Solar lamps b. Emergency lights c. Candles d. Dont read when load shedding QN5. Do you think solar plant is costly? a. Yes b. No c. Do not know QN6. What is the main reason behind present energy crisis? a. Political instability b. Not enough hydropower plant c. Leakage and theft of electricity QN7.What you suggest about to reduce present load shedding and promoting use of solar energy? Participant expressed their views on the use of solar plants some expressed about high cost of it, So we need to search other alternatives but many of them wrote that sun is this is natures gift for us so we must make benefits from it by using solar plants and promoting green energy. Page | 29

Downloaded from www.binodpandey.wordpress.com

Appendix no. 2 Result of survey conducted among 30 persons S.N. 1. 2. Payment type Full Payment Installment Type No. of Persons 18 12

Appendix no. 3 Glossary Competitive advantage The aggregation of factors that sets a small business apart from its competitors and gives it a unique position in the market. Equity: In property, the difference between the propertys current market value and the claims against the property. In a firm the shareholders equity is the ownership interest in the firm. Depreciation Decrease in the value of equipment from wear and tear and the passage of time. Partnership An association of two or more people who co-own a business for the purpose of making a profit.

Guerrilla Marketing Strategy Unconventional, low cost, creative marketing strategies designed to give small companies an edge over their large, richer more powerful rivals. Innovation The ability to apply creative solutions to problems and opportunities to enhance. Revenue The entire amounts of income before any deductions are made. Assets: Accounting term for everything a company owns and which has a monetary value listed in the balance sheet. Budget: A plan of future income and expenses during a specified period, such as one year. In an operating budget the planned costs and revenues, expenditures and incomes are compared. Variable Cost Any costs that change significantly with the level of output. Page | 30

Downloaded from www.binodpandey.wordpress.com

Fixed Cost Any cost of production that does not vary significantly with the volume of output.

System(Wp)

weightage

Costing price

Marginal Cost price

Selling price

Selling price per unit

Inco me State ment

A financial statement that represents a moving picture of a business, comparing its expenses against its revenue over a period of time to show its net profit. Balance Sheet A financial statement, that provides a snapshot of a businesss financial position. Current Assets Assets such as cash and other items to be converted into cash within one year. Fixed Assets Assets acquired for long-term use in a business. Liabilities Creditors claims against a companys assets. Current Liabilities Those debts that must be paid within one year. Cash Inflow Cash flowing into the business from all sources over a period of time. Cash Outflow Cash flowing out of the business from all sources over a period of time. Expense Amounts paid for goods and services that may be currently tax deductible.

Return on Investment The amount of profit (return) based on the amount of resources (funds) used to produce it. Profit Profit is the excess of income over expenses. Differentiation Strategy A strategy in which a company seeks to build customer loyalty by positioning its goods or services in a unique or different fashion.

Page | 31

Downloaded from www.binodpandey.wordpress.com

20 60 80 Hybrid 80 100 200 Total

0.08 0.1 0.2 0.07 0.3 0.25 1

12300 23600 51100 33300 62700 119400

984 2360 10220 2331 18810 29850 64555

20750 37950 71593 49685 83805.2 149962.5

1660 3795 14318.6 3477.95 25141.56 37490.625 85883.735

Syst em Rati ng

Inventory Costs Inventory

System Wp 20 60 80 hybrid 100 200 Quantity 2 3 4 4 3 Cost(Rs) 12300 23600 51100 62700 119400 Total Cost(Rs) 24600 70800 204400 250800 358200

Page | 32

Downloaded from www.binodpandey.wordpress.com

Total Deducting miscellaneous costs Total Inventory Cost

908800 32900 875900

Conclusion
The business plan of Solar Energy Company Pvt. Ltd. can be implemented in the Kathmandu valley. We are very confident that our business will reap lots of benefits economically as well as socially in the country. The market area of SEC will keep on rising day by day within short period of its establishment. The company will provide lots of facilities and services regarding solar technology. It will mainly focus on the customer satisfaction and need. We are sure that it will solve the problems of energy crisis, load shedding and backup systems in the various sectors like banks, offices, hospitals, houses, etc. The company will achieve its pay back within a year as we have calculated. The company has its breakeven units as 15 per months. After this unit the company will be enjoying profits. Similarly it will enjoy its internal rate of return of 66%. The SWOT analysis and Strength and Weakness analysis of competitors has been properly done to mitigate the risk.

Page | 33