business guide an easy to understand

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Hilfswerk Austria International “Elaina Consulting” S.R.L. an easy to understand BUSINESS GUIDE by Elena Catisev and Diana Jumiga A study produced within the “Remittances Developing Moldovan Communities” Project, implemented by Hilfswerk Austria International in partnership with the National Assistance and Information Centre of NGOs in the Republic of Moldova - CONTACT, with the financial support of the European Union Opinions expressed in this study exclusively belong to the authors and do not necessarily reflect the point of view of the European Union. This project is funded by the European Union Delegation of the European Union to the Republic of Moldova 12, Kogalniceanu Str, Chisinau, MD-2001, Republic of Moldova Tel: (+373 22) 50 52 10 Fax: (+373 22) 27 26 22 Project implemented by Hilfswerk Austria International 85, Alexandru cel Bun Str., Chisinau, MD-2012 Republic of Moldova Tel: (+ 373 22) 21 25 41 Fax: (+ 373 22) 21 25 54

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Publication produced within the project "Remittances Developing Moldovan Communities" implemented by Hilfswerk Austria International in partnership with the National Assistance and Information Centre for NGOs in Moldova – CONTACT with financial support of European Union. The views expressed in this publication belong exclusively to authors and do not necessarily reflect the views of the European Commission.

TRANSCRIPT

Hilfswerk Austria International

“Elaina Consulting” S.R.L.

an easy to understand

BUSINESS GUIDE

by Elena Catisev and Diana Jumiga

A study produced within the “Remittances Developing Moldovan Communities” Project,implemented by Hilfswerk Austria Internationalin partnership with the National Assistance and

Information Centre of NGOs in the Republic of Moldova - CONTACT, with the financial support of the European Union

Opinions expressed in this study exclusively belong to the authors and do not necessarily reflect the point of view of the European Union.

This project is funded by the European Union

Delegation of the European Union to the Republic of Moldova12, Kogalniceanu Str, Chisinau, MD-2001, Republic of MoldovaTel: (+373 22) 50 52 10Fax: (+373 22) 27 26 22

Project implemented by Hilfswerk Austria International

85, Alexandru cel Bun Str.,Chisinau, MD-2012Republic of MoldovaTel: (+ 373 22) 21 25 41Fax: (+ 373 22) 21 25 54

ABBREVIATIONS:

AGEPI – Agenţia de Stat pentru Proprietatea Intelectuală

Art - Article

CAEM – Classification of Economic Activities in Moldova

NPHC – National Public Health Centre

IEC – Individual Employment Contract

CIS – State Chamber of Registration

LC – Labour Code

CNAM – National Health Insurance Company

CNAS – National Office of Social Insurance

BNM – National Bank of Moldova

BNS – National Bureau of Statistics

IFS – State Tax Inspectorate

SMEs – Small- and Medium-sized enterprises

IE – Individual Enterprise

K - capital

Max – maxim

CCM – cash control machine

Min – minim

No – number

JS – Joint Stock Company

LP – Limited Partnership

GP – General Partnership

NAS – National Accounting Standards

LLC – Limited Liability Company

CONTENTS:

1. What does business mean?

2. Is entrepreneurship for you? 4

3. When do you launch your business? 6

4. What field do you choose for your business? 8

5. How can you get into the business world? 10

6. How do you identify a business idea? 13

7. What legal form of organization is appropriate for your firm? 16

8. What is the registration procedure of a firm? 19

9. What do you do after your firm is registered? 21

10. What mandatory payments, taxes and fees will you have to pay? 23

11. What reports, statements and basic forms will you have to submit? 25

12. What documents and software will you need for accounting? 25

13. What is the authorization procedure? 29

14. What is the licensing procedure? 31

15. What is the trademark registration procedure? 31

16. How do you manage human resources? 32

17. How to promote and sell your product/service? 47

18. How to develop a financial plan? 54

19. What to write a business plan? 61

20. Where to find money for your business? 63

21. Ethics and social responsibility in business. 86

22. Success and failure in business. 87

ANNEXES:

1. Capacity assessment test for entrepreneurs 90

2. Territorial offices of the State Fiscal Inspectorate 91

3. Territorial Agencies of the National Health Insurance Company 92

4. Territorial Agencies of the National Office of Social Insurance 92

5. BNS (National Bureau of Statistics) 96

6. Financial Indicators 97

7. Normative framework for entrepreneurs 97

8. Business plan notebook 99

9. Business plan model 107

10. Useful links 133

BIBLIOGRAFIE 134

CD cu mostre de acte, formulare, legi etc.

1

An easy to understand BUSINESS GUIDE

What do you choose?

1. To spend the money you receive from your relatives abroad in order to buy current consumption products, bringing you momentary satisfaction only?

or

2. To invest remittances in your business and earn more money, create new jobs, contribute to the welfare of citizens, hence, develop Moldova’s economy?

Dear reader,

This guide has been developed within the “Remittances Developing Moldovan Communities” Project, with the financial support of the European Union.

Why?

To motivate you, a beneficiary of remittances, to invest in business the money sent by your relatives from abroad.

Did you know that?

Approximately half a million of Moldovans (25-30% of the population) work abroad.According to the World Bank Report, Moldova is one of the leaders as concerning the share of remittances to the GDP (23.2%), ranking second after Tadjikistan.According to data by the National Bank of Moldova, in the first trimester of this year, the amount of money remitted to Moldova from abroad via banks stood at USD 288.72 million.

ÎIn the rural area, the share of remittances to the total product is even higher, being an important and stable income source for more than 25% of localities and an essential poverty prevention factor.

As you notice, Moldova’s economy strongly depends on remittances, but unfortunately, only 7% (officially) of

the money of our fellow countrymen working abroad is invested in business to generate new incomes

and to contribute to the country’s development.

Use of remittances in Moldova

Business 7%

Savings 21%

Current consum.72%

Remi ances, billion USD Remi ances, % in GDP

1,66

1,181,24

1,45

27,40% 21,70% 21,40% 23,20%

Evolu on of remi ances in Moldova

2

2009 20102008 2011 2009 20102008 2011

What do we intend by this guide?

1. To help you understand whether business is for you2. To show you that it is not difficult at all to launch a business in Moldova3. To offer you the maximum of useful information, so that you save money for consultancy services4. To show you where you can access money when you start your business5. To give you business ideas where you could invest remittances6. To develop your entrepreneurship skills7. To give you in the annexed CD the templates of documents you will have to work with

What can you learn from this guide?

1. that money should not be spent, but invested in a business to generate more money2. that launching a business in Moldova is interesting, accessible and profitable

3. that there are many opportunities to invest in Moldova4. that state-run and international organizations in Moldova assist you through various domestic business funding and support programmes5. that your business can provide you with material and spiritual satisfaction6. that your business provides you with a job and stability in the future

5 reasons making this guide worth to be read:

1. You will get concrete answers to questions you might have at the start of your business2. Minimum theory, maximum practical information3. Few words, plenty of schemes and graphic presentations4. Accessible and easy to understand language5. The information we give you in a schematic way will be useful for you in the future and will help you save money, time and energy.

Should you have any questions in the future, please do not hesitate to contact the team of experts from

“Elaina Consulting” S.R.L. Chisinau, 71, A. Mateevici Str., office 8a, Republic of Moldova, MD-2009Tel. 022 24 00 26, 07988098 www.elaina-consulting.com

And last but not least, author Elena Catisev and co-author Diana Jumiga, together with the team “Elaina Consult-ing” SRL, the Public Association Hilfswerk Austria in Moldova and the European Commission wish you good luck and success with your business

Remember: The most terrible thought you must be afraid of is to not be wrong. Only a person, who does nothing, is never wrong. You should rather be afraid that after 10, 20, 30 years of work in a company you might wake up pointing your finger at the TV and saying: “that was my idea.”

Read this guide, invest remittances in your idea and make money!Be a good example for the others, help yourself and help your country.

3

An easy to understand BUSINESS GUIDE

1. What does business mean?

The word “business” in English means “the condition of being busy,” that is business = to make money on your own from the fact of being busy.

Entrepreneur = a person who undertakes the risk in the context of organizing a new enterprise, creating a new product/ service, is an innovator, shows initiative, invests means, applies skills and undertakes responsi-bilities for possible failure, in order to make money and satisfy his/her own interest, by observing the law.

Law on entrepreneurship and enterprises No 845 of 03.01.1992

2. Is entrepreneurship for you?

We cannot classify the pros and cons for entering the business world. At the end, all depends on WHAT

YOU LIKE the most. We can offer you a check list to help you make a reasonable decision. Tick off all phrases describing you and count how many of YES and NO you get.

You do not go to work, you do

not do what you are being told

to and you do not wait for somebody to pay the salary

established for this

You decide on your own what

needs to be done, you work as much as needed, to be able to

make your own salary that you

want to get.

Own business YES NO

I WANT TO

Work for myself.Work when I want, the way I want and with whom I want. I create new jobs and feel myself useful in society.Unlimited earnings (MDL 0, MDL 1 million, etc.). Take my salary when I want.Have employees reporting to me on the assigned tasks. Create by myself my working conditions.

Take my salary only when my firm has profit (I bring money to the firm – I take my salary, I do not bring money to the firm – I do not take my salary).Work as much as needed.Risk investing time and money, although the result is not guaranteed.Have no guaranteed vacation, trimestral bonuses.Have no stable schedule.Sometimes, have no time for my family duties.Search for clients on my own.Work in stressful conditions, be open for big physical and psychical efforts.

Work for the others. Avoid risks.Have a stable schedule, vacation, salary, trimestral bonuses.Have time for all family responsibilities.Serve clients found by others.

Have a limited earning (e.g., MDL 3,000 / month),even if you have worked more than stipulated in the contract. Report to the boss and write reportsTake the money on a certain date only. Do not take advance money from my salary.Work when, in the way and with whom others tell me.Be subordinated to my boss and report to him when he asks.Work under the work conditions created by others.

I AM

READY TO

but

4

If No<Yes, then the time for you to open your own business has not come yet. Come back to this list when you will feel you can get more than you do at your current work place.

If Yes>No, then business is for you. But in order to be fully sure about this, see whether you have the following qualities:

As you have noticed, natural qualities are not sufficient to be an entrepreneur. If you want to have your own business, you will have to develop your skills and learn many new things.

„In business, three things are necessary: knowledge, temper and time.” (Owen Felltham)

I AM OFTEN

TELLING TO

MYSELF

Usually, I manage to do what I intend to. I am confident in my own capabilities.I am ready to start from the beginning in case of failure.My family supports me.I have successful people I can learn from and who can encourage me.I want to make my salary on my own.I have a lot of initiatives; I am an adventurer and innovator.I am healthy; I can cope with the stress for a longer period.I can control myself.I have a passion for business, for an active and risky living.

mobilising financial, material and human resources.Making decisions.being creative.being mobile.developing myself.knowing all my weaknesses and strengths.Being the director, the person everybody listens to.ă.

I do not believe in my capacities of being an entrepreneur. I let my hands down at the first failure. Family duties are a priority for me.I am surrounded by people who have never done business, but they give me advice demotivating me.I want somebody to pay my salary.I get ill frequently, I have a heartache, I am stressed, and I fall into depression.

being provided with material, financial and human resources to carry out my activity.fulfilling somebody’s indications.avoiding the responsibility of making decisions.Be an expert in one field only.

I LIKE

TOTAL YES NO

YOU

ARE

YOU

LEARN

Brave, optimist, active, assiduous, stress-resistant, responsible, realist, moderate, communicative, inventive, resourceful, indepen-dent, empathic, practical persuasive, economic, punctual, flexible to changes and innovations, with leadership and communication skills, with work experience, you can impose a competitive spirit in the team, you can learn from mistakes

To efficiently plan and manage your time and resources (financial, human, informational)To be able to apply your management, market-ing, bookkeeping, etc. knowledge (at least to be able to control the others to make sure they do a good job).

Business people are those who apart from

their natural talent, WORK to CONTINOUSLY

develop their personal and professional

qualities, with the aim TO MAKE MONEY and

TO GIVE MONEY to those helping them.

Individual features can lead to success

only if oriented towards client’s interests.

Researchers confirm that only 5-10% of the population has an entrepreneurial talent.

Own business YES NO

5

An easy to understand BUSINESS GUIDE

3. When do you launch your business?

As soon as possible, as the older you get, the harder it is to assume risks. You get to have stricter family duties, more complicated responsibilities. At the same time, you need some time to accommodate yourself to the business environment and to get to have some profit.

"In the business world, everyone is paid in two coins: cash and experience. Take the experience first;

the cash will come later.” (Harold Geneen)

All these stages fit within a cyclic process. The start point depends on your aspirations and circumstances of your own development.

You can choose your own scenario, by analysing advantages and disadvantages of each start point.

1. You learn You work for others You launch a business

6

Here is a frequent scenario

1. You learn a speciality, graduate from a faculty (3-5 years).

2. You work for a company, apply your knowledge from the university, and learn new things (2-4 years).

3. You launch your own business and apply the knowledge from your previous work place.

4. You learn from your own mistakes, you accumu-late a valuable experience and new knowledge (5 years).

5. You sell your knowledge at a good price through the services provided by your company.

6. When you get bored of your own business, you can work for other companies for a much higher salary, or you can work as an independent expert.

7. You learn what you strictly need.

Advantages Disadvantages

You waste about 10 years by sitting at the desk and investing your potential in the success of another company.You become more reasonable, hence it is getting harder for you to undertake risks and cope with failure.You start your business when you already have to create a family and you have many respon-sibilities related to it.

You already have a theoretical and practical basis: you have accumulated knowledge at the university and at your previous work place.You already know the mistakes You save time when planning and managing the business.

You learnYou work for others

You launch your own business

2. You work for others You launch a business You learn

7

Advantages Disadvantages

You feel embarrassed for not having an education degree/diploma. Salary is lower compared to the other qualified employees.Insufficiency of theoretical knowledge.Insufficient quality of provided services. You need more time and consultancy to perform your tasks, and all these cost. You work for others (by providing services).

You accumulate practical knowledge to maximum in a given field.It’s easier for you to identify the speciality to learn and that is useful to you. You develop faster your skills.You make money while others are learning, you accumulate capital for your own business.

3. You launch the business You learn You work for others (by providing services)While others learn theory and invest their potential in the development of already existing companies, people choosing this scenario dedicate 5-10 years of their career directly to their own business, invest these years in experience, in studying the market, in adjusting themselves to the market, in developing the product/service, concurrently learning what they need for the moment (from training courses, consultancy provided by specialists, etc.). Their success depends to a great extent on their self-discipline, continuing information, intuition and search for advice from specialists. The paradox is that these adventurers (usually aged between 18 and 25 years old) rely on their enthusiasm rather than on knowledge, therefore for them it’s easier to cope with some eventual failure and to try again without any hesitation. They are more coura-geous in implementing innovative plans, as they are less interested in risks and are more attracted by challenges and the will to earn more money and to be directors, to be admired for their spirit of initiative and for their capacity to mobilize all available resources.

Hence, given that the third scenario has sufficient advantages, we encourage you to not waste your time and to make a decision regarding the launch of your business as soon as possible.

And do not forget: “Time is the measure of business.” (Francis Bacon)

Advantages Disadvantages

The risk to make mistakes because of the lack of theoretical and practical knowledge.Lack of trust from the others, they do not always take you seriously.You do not have sufficient financial resources.

The earlier you start, the farther you will get and will obtain the wanted results.You have the occasion to learn from your own mistakes.You are more inclined to take your chance.You mobilize yourself better in case of failure, as you take it as a challenge.You learn as you work, from experience, while others have theoretical knowledge only.You have more time to dedicate yourself to your business, to develop it and make it profitable. You subscribe to courses already knowing what exactly you need and you benefit to the maxi-mum from this.

An easy to understand BUSINESS GUIDE

8

4. What field do you choose for your business?

Part of the success in business is due to the fact that you like what you do and you can do what you like. It is important to choose the field that would match your capacities and aspirations, a field you would see yourself in, you feel confident about and enjoy it.

This is the graphical representation of the essential factors in choosing a career, respectively, an activity field.

Source: http://www.la-psiholog.ro/info/alegerea-carierei

Also, personality psychology tests and career guidance tests will help you. Here are a few tests you can do online and will get an immediate interpretation of results:

Leadership skillsOrganisation

Team work Initiative

Relocation capacity

Close to home

Parents Friends

Reflexive

Affective Sensorial Intuitive

Introvert / extravertSafety

(of the future)

Independence

Helping the others

Prestige

Nature

Art

SociaBusiness

Science Technologye

material benefits

IT skills

Communication

Negotiation

YOUR SKILLS AND CAPACITIES

YOUR TALENTS AND

WILLS

YOUR VALUES AND

MOTIVATIONYOUR PERSONALITY

CONTACTE

QUALIFICATION+EXPERIENCE

YOUR LOCATION FACTORS IN

CHOSING THE CAREER

MBTI person-ality test (Jung)

http://www.la- psiholog.ro/teste- psihologice/test- personalitate-mbti- jung-16-tipuri

Professional interests test

http://www.la- psiholog.ro/teste- psihologice/test- interes-profesional

EQ Emotional intelligence test

http://www.la- psiholog.ro/teste- psihologice/test-eq- inteligenta-emotionala

Capacity assessment test

Intelligence, logic, numerical reasoning, verbal reasoning, artistic talent, etc.

ANNEX 1: Entrepreneurial capacity assessment test

9

And last but not least, assess your values, because although people speak about ethics and social responsibility in business, the business world is tough and does not always coincide with your values. For example, a doctor who is ready to help even a patient without money, a teacher who spends time over his schedule to check students’ homework, does not correspond to the business format, where you do nothing if you have no interest or financial benefit from the activity. In business, you will have to give up the free of charge work, refuse clients who have no money and forget about everything that consumes your time without bringing any income. In business, you will have to sue those who do not honour their payment duties, even if they have children and will cry when coming to you, because business is not you, it is a separate entity, a legal

entity/private person, with its own commitments to employees, suppliers, who in their turn wait for their

salaries, payments, etc. In business, you cannot rely on trust, kindness, friendship, but on concrete contracts, even with the members of your own family or with your business partners.

“A friendship founded on business is better than a business founded on friendship.” (John Davison Rockefeller)

What are the SMEs?

SME = abbreviation for small- and medium-sized enterprises

This notion is related to the classification of enterprises following certain criteria.

SMEs are the most frequently used form of business (in Moldova and the EU); they create the largest share of jobs and produce the largest amount of products and services

In order to get inspired of what’s “in fashion” and profitable in terms of fields of activity among the small- and medium-sized enterprises (SMEs), see bellow some statistics for 2011, provided by the National Bureau of Statistics.

Fields of activity SME structure Income from sales

Number of employeesAnnual amount of sales (turnover) and annual amount of assets balance sheet (social capital)

Share in the total of registered enterprises

Share in the amount of sales by all enterprisesNumber of employees (jobs) of the total number of employees in the private sector

mediumsmallmicroCriteria for Moldova / Enterprises big

1-9 10-49 50-249 250...

< 3 mln lei < 25 mln lei < 50 mln lei > 50 mln lei

97,5% (47,3 thousand)34,6% (71887,6 mln lei)

57,7% (294,2 thousand)

Trade

Processing industry

Real estate transactions, rentals, services provided to enterprises

Other activities

Transports and communications

Agriculture, hunting, economy and forestry

Constructions

Hotels and restaurants

Power, gas and water

Of these fields of activity, only the last two positions registered losses (did not have any profit).

41%10,2%16,6%11,3%6,8%5,1%5,5%3,2% 0,4%

49,1%13%7,1%4,4%9 %7,8%7,7%1,6%0,4%

“No nation was ever ruined by trade.” (Benjamin Franklin)

Recommendation: Choose that field of activity where your first clients would be your friends, relatives, contacts, colleagues, as well as the fields where you have “relations”, somebody you can rely on, where your friends could give your recommendations and offer you a valuable advice.

An easy to understand BUSINESS GUIDE

10

In order to know the exact name of the field of activity you want for your business, access the CAEM Classification.

CAEM Classification.

When you choose your activities, try to avoid fields with a high degree of risk, which can cause you losses rather than incomes and eventually could be rejected by banks, should you need a loan. Here are a few of these activities, following the classification by the Forbes Magazine (famous in the whole world for its annual lists, like the list of the largest 2,000 companies in the world and the list of the 100 richest people on the planet):

1. Transports. This includes the taxi, limousine and ambulance businesses. You have to pay high insurance fees, there are losses due to the increase in fuel prices and competition in this area is tough.

2. Clothes stores. Risks here are due to the saturation of the market and fluctuation of sales depending on the season. Small firms may be eclipsed by the giants of the industry; besides, the change in tastes as the time goes endangers the business.

3. Restaurants and bars. This niche suffers the most because the cooked food industry is disappointing, it may suddenly reduce the number of clients due to competition.

4. Communications. This is considered to be a risky field for an independent supplier, because of the presence on the market of big companies, supplying the same services with attractive offers.

5. Tourism agencies and operators. PTo attract clients, agencies have to offer exotic destinations, where the on-line tourism firms are not that efficient. It is more difficult to defeat the scepticism of those clients who believe that travelling on their own is more convenient.

6. Food stores. This is about supermarkets, the sale of fruits and vegetables, where the same problem intervenes: the big chains, already well set up on the market and the risk of the fast spoilage of products.

7. Personal services: cleaning, laundry, shoemaking workshops, etc. Location is essential. Nobody will travel several kilometres to clean up/repair his staff. In this field you can work on attracting clients with low prices, but in this case, the amortization of your investment will be extremely difficult.

8. Car services. All vehicles have insurance, and insurance companies pay the repair costs, but they do not pay too high sums. Besides, most of the local and national dealers have extended their service offer and can cope with a very high number of vehicles, a luxury that small firms cannot afford.

9. Transportation of goods. Fuel price fluctuations make this business a risky one. At the same time, the more and more drastic rules imposed on transporters make this investment even more difficult.

10. Financial services, like currency exchanges, ATMs, money transfers. The multiple frauds make this business a risky one. Also, the increasingly tough legislation makes even some banks to stay away from it.

5. How can you get into the business world?

Possibilities to enter into the business world

A description of each possibility to enter the business world is presented in the table below.

Create a new business

Buy an existing business

Associate into an existing business

Buy a franchise

11

Possibilities to enter the business world

Options Advantages Disadvantages

• innovations• possibility to choose the types of activity• freedom of decision-making• independence• own management (you employ/discharge whom you want)• you do not have to correct somebody else’s faults• you improve your self-respect, you get to be admired by the others challenge

• smaller risk• already existing clients• You join at an already profitable or developing stage• saving time, by joining directly in the development stage

• you do what you like and what you did not have enough courage to do by yourself• The business is well established already• You have a clear vision over the firm’s weaknesses and strengths• you learn from your partner• you share responsibilities and tasks• you can rely on your partner in case of emergency (he works when you cannot and the opposite)• in a partnership you can have more ideas, common interests, an efficient exchange of opinions• Possibility to come with new proposals regarding the types of activity

• bigger own investments (financial, time)• higher responsibility• more effort• many market researches• lack of experience

• need to repair somebody else’s faults• detailed financial analysis• the risk of not knowing the real reasons that made the former owner sell the business• already established types of activity

• decision is made together with the partner, even if this is not convenient to you• You have to share the profit• Difficulties in case of conflict with your partners• Financial analysis takes time• types of activity are already established• a business partner may leave a lot of respon- sibilities on you, relying on your friendship

In business, sir, one has no friends, only

correspondents. (Alexander Dumas)

Create a new business

Buy an existing business or

associate in an existing business

Association in an existing

business

• The right to copy a profitable and successful business• You get the know-how, the verified knowledge• already created high image• exclusive distribution rights (territorial protection)• low possibility of becoming bankrupt• Partial financing from the franchiser• assistance provided by the franchiser (e.g., in marketing, design, training, management consultancy, research, advertising, etc.)

E.g., service provision field (catering, remedial centres, business services, training and education, computers, domestic and social services, tourism, sport, entertain-ment, car services), retail

• a too high price sometimes• some decision-making restrictions (e.g., related to employment, planning, location, sale of franchise, etc.)• strict observance of some standardised operations• many reports, time consumed• quite costly lawyer’s consultation• this type requires negotiation skills (e.g., to negotiate the contract)

Buy a franchise

An easy to understand BUSINESS GUIDE

12

In brief about franchise

Franchise is a system of contractual relationships between enterprises, in which the party called franchiser provides the party called franchisee with the right to produce and/or sell certain products (goods), to provide certain services, in the name of and with the brand of the franchiser, as well as the right to benefit from its technical and organizational assistance.

The one who buys a franchise is called franchisee, and the one who sells the franchise is called franchiser.

The franchising partners have individual accounts and balances in banks, provide an independent bookkeep-ing and statistical reporting in line with the legislation of their residence country.

In Moldova, a franchise for a restaurant can be purchased for EUR 10,000. Apart from the franchise registra-tion fees, you have to monthly pay 6% of the turnover and 1% for advertising.

Types of franchising

In Moldova, the most appropriate is to buy a franchise.

10 reasons to buy a franchise

Civil Code (art. 1171-1178) – Franchising contract Law of the Republic of Moldova on franchising 1335-XIII of 01.10.1997

Corporate franchising (industrial, manufacturing) Commercial franchising (distribution, services)

It provides for the participation of the franchisee in the whole production cycle of the franchiser

It provides for the marketing of the finished production (goods) or provision of services by the franchisee

a) permanent contacts between the franchiser and the franchisee;b) permanent exchange of information;c) detailed regulation of the activity and high level of responsibility of the franchisee.

Examples: CAMPARI, SCHWEPPES, COCA-COLA, PEPSI-COLA etc.

a) narrow specialization of the franchisee in marketing a certain type of products (goods) or in providing a certain type of services;b) payment of royalties to the franchiser from the total amount of sales;c) franchisee’s risk related to the marketing of products (goods) or provision of services;d) low level of regulation of franchisee’s obligations.

Examples: SANTAL, VERITAS, YVES ROCHER, MC DONALD’S, PIZZA HUT, HERTZ, AVIS, HILTON, HOLIDAY INN

1. Turnkey business. You exclude all the hard work related to finding the location, negotiating the rent, and employing reliable contractors.2. Already tested system. By having an already tested system, you exclude all mistakes you may commit.3. High chances to succeed. If you follow the way set up by the franchiser, you are on the right way to running a successful business4. Corporate image and recognised brand. Consumers buy already known products, people prefer working in already known companies.5. It will be easier to get the funding. Bankers pay attention to successful franchise chains (lower risks, in-house

6. Training. The franchiser will teach you how to run the franchise in exactly the same way as the other franchises are managed.7. Continuous support. You will always enjoy the support from your franchiser and you can ask for assistance the other franchisees any time.8. Marketing. The franchiser can deal with everything related to marketing or it can give you a model to follow.

9. Exclusive territory. Together with the franchise, you also get the exclusive territory to conduct your business on.

10. You get multiple locations. Owners holding more than one franchise come to administrate more and more locations.

Franchise-based businesses in Moldova

(franchisee)

Domestic businesses selling franchises

(franchiser)Mango, Celio, Mexx, Olsen, Sele, McDonald`s, Fornetti, Buon Giorno, Zara, Hugo Boss, Petrom, Xerox, DHL, 1C

Andy’s Pizza, Fornetti, Alina Electronic, Neuron Grup, Shell, Pepsi-Cola, Coca-Cola

13

6. How to identify a business idea?

Business ideas can be inspired from:

,,All riches have their origin in mind. Wealth is in ideas - not money.” (Robert Collier)

If you are a less creative person, there are techniques helping you to identify business ideas. Here are some of them:

Yours and your friends’

hobbies and passions

Your work experience,other people’s

businesses

Your values, or values of the firm,

of your fiends

Progress in society, new preferences

of consumers

Local economy, daily problems, low-quality products

New legislation, government initiatives

Visiting exhibitions, tîrgurilor, fairs, travels

Mass-media, business literature

Discussions with experts, entrepreneurs, applying creativity techniques

Brainstorming (every person in the group generates as many ideas as possible, regardless of their quality, nobody is criticising them, let your imagination loose. Subsequently, the best ideas are selected to be applied in practice. This method can also be applied individually).

Create and exploit the idea bank (put down the ideas, dreams you have for the moment, all you see and like or you find interesting, and then come back to this folder to inspire yourself)

Philips 6-6 (6 persons, each has 1 minute to generate an idea, all say their ideas in turn, it takes 6 minutes)

List of consecutive questions (ask yourself why do you want a business, and depending on the answer, formulate another question, so that at the end you come to the business idea)

PRES (somebody is proposing ideas, which are rationalized in the group, with good examples given, each participant comes with suggestions)

„The rule of my life is to make business a pleasure, and pleasure my business.” (Aaron Burr)

“111 business ideas in crisis times” Eduard Rosca

An easy to understand BUSINESS GUIDE

14

What business ideas would function in the rural area?

When starting up a business in the rural area, one has to first of all analyse competition in the area he intends to work, the infrastructure, along with the market potential and possibilities to access grants, etc.

Here are a few suggestions for business ideas that could function at the rural level:On-line handicraft shop;Mobile vulcanisation services;Car wash;Grow ecological vegetables;Grow seedling;Produce natural juice;Create greenhouses (for flowers, decorative plants, vegetables);Agricultural production storages (with controlled climate); Fruits and vegetables washing services;Artificial football or golf field, to be rented for money;Interior arrangements and open space designs (gardens, parks);Sport hall; Modern tailory;Private kindergarten;Construction and repairs of houses;Mounting and reparation of utility communications (interior power networks, sewerage and water supply, heating systems, etc.);Manufacturing of products and constructions from metal, welding services;Fixing household appliances, radio, TV, video devices;Shoe repair shop;Furniture repair shop;Washing and cleaning services;Hairdresser’s; Pheasants, ostriches breeding;Quails, ostriches, snails, vipers, etc. breeding;Veterinary services;Manufacturing wood products (carpentry);Rural tourism.

EXAMPLE:

A viper produces 1,5 grams of venom a year, and a gram of venom is sold for 1,000 euro.

Vipers grow in glass terrariums and have to be fed twice a month with mice. The optimal temperature in terrariums is between 22-25°C, and a viper brings about 12 broods a year. Venom can be collected a few times per month. Your clients will be representatives of pharmaceutical companies all around the world; therefore it is good to contact companies from various countries to sign pre-contracts. The conclusion of pre-contracts will help you obtain financing, in case you have no funds. Although this is a dangerous business and requires a lot of attention, it could generate high profits

Once you have identified the business ideas that you like and meet your personal (family, social, sport, health, personal and professional, etc.) objectives, make a comparative analysis and choose what is more convenient for you.

15

Evaluation criteria

Are you interested in dealing with this type of business?

Do you have the necessary knowledge and qualities?

Do you have a big potential in marketing?

Does the market you want to work on have a fast growing pace?

Are the materials you need easy to access?

Does your idea require high expenditures for advertising?

Does your idea have any advantages compared to your competitors?

Do you know the technological process?

Do you have conditions and the equipment needed for the activity?

Is it legal to implement this idea?

Can the idea be adjusted?

Is the risk related to opening this business high?

Is it easy to launch this business?

Are the initial expenditures acceptable?

Are there financial sources for this business?

Is the initial investment recovering period short?

Sum of accumulated points

Every idea can accumulate 80 points maximum. Choose the idea that has accumulated the most points.

Recommendations:

Make the decision on your business idea independently; Do not avoid fields with competition;Do not fully copy an already existing business;Do not focus on revolutionary ideas only. You should better try to improve a service or a product that already exists. Apply your creativity to promote a banal idea in an original way; Check if the idea is viable (if you manage to collect the necessary resources to start up the business and to cover the primary investment costs).Read success stories, communicate with people who can inspire you, who are good advisers and reliable allies.

“Community delivers creativity”. (Michael Card)

“Creativity is thinking up new things. Innovation is doing new things.” (Theodore Levit)

How do you protect your business idea?

You have a business idea and you have to meet some potential investors. How can you protect your idea, avoid ending up in a situation when the latter implement your idea by themselves (steal it)?

In Moldova, there are no laws protecting business ideas. In exchange, we can suggest you some advice you can take into account at your first meeting with the investor:

• Do not unveil all the details of your business idea;• Ask an expert or a lawyer to draft for you a contract with exact clauses on confidential data and exclusive intellectual property right;• Identify the elements without which your business could not function, i.e., the “know-how,” and present your idea without unveiling this “know-how.”

However, if you want to protect your idea, you could patent it in Russia or Romania, because the Moldovan law does not stipulate this possibility.

Idea 1 Idea 2 Idea 3

5 4 3 2 1 5 4 3 2 1 5 4 3 2 1

Personal qualities

Market requirements

Competition

Technology

Risk

Durability

Mark every idea: 5 – for certain, 4 – yes, 3 – don’t know, 2 – don’t think, 1 – no way

An easy to understand BUSINESS GUIDE

16

7. What legal form of organization is appropriate for your firm?

Ai 2 opţiuni de bază, să faci afaceri în calitate de persoană fizică sau juridică.

Law on entrepreneurship and enterprises No 845 of 03.01.1992

Individual Entrepreneur – legally competent natural person, practicing the entrepreneurial activity on his/her own name and risk, without being a legal entity, and is registered in line with the law.Law of the Republic of Moldova on the state registration of legal persons and individual entrepreneurs, No 220-XVI of 19.10.2007

Entrepreneurial Patent – this is a state normative certificate, certifying the right to carry out the type of entrepre-neurial activity indicated in it for a certain period of time. Law on entrepreneurial patent No 93-XIV of 15.07.1998

In this law you will find information on the issuance of patents, their validity, as well as the fee and the payment mode for the entrepreneurial patent

Peasant Farm – an individual enterprise, based on private property over farmland and other assets, on personal work of the members of a family (members of a peasant farm), with the goal to obtain agricultural products, carry out their primary processing, prevailingly selling own agricultural production.Law on peasant (farmer) farms No 1353-XIV of 03.11.2000

Limited Liability Company – a legal entity, with social capital divided in social parts according to the establish-ment act and with obligations guaranteed with its patrimony.Law on limited liability companies No 135 of 14.06.2007

Civil Code (art. 145-155)

Joint Stock Company is a company with social capital entirely divided into shares and with obligations guaran-teed with its patrimony.Law on joint stock companies No 1134 of 02.04.1997

Civil Code (art. 156-170)

General Partnership is a company, whose members are practicing entrepreneurship, under the articles of incorpora-tion, in the name of the society and are responsible for the company’s obligations in a solidary and unlimited manner. Civil Code (art. 121-135)

Limited Partnership is a company which, in addition to the members who practice entrepreneurship in the name of the society and who are responsible for its obligations in a solidary and unlimited manner (acting partners), also has several funding members (limited partners) who do not participate in the company’s entrepreneurial activity and bear the risk of losses resulting from the company’s activity, within the limit of their input.Civil Code (art. 136-144)

Cooperative is the voluntary association of private persons and legal entities, organised on corporate principles in order to favour and guarantee, through the joint actions of its members, their economic, as well as other legal interests.Civil Code (art. 171-178)

Natural person (Civil Code, chapter I) Legal person (Civil Code, chapter II)

Individual Enterprise

Peasant Farm

Entrepreneurial Patent

LLC – Limited Liability Company

JS – Joint Stock Societyi

GP – General Partnership

LP – Limited Partnership

Cooperative

17

Lega

l for

ms

Indi

vidu

al e

ntre

pren

eur

Lim

ited

Liab

ility

Com

pany

Join

t Sto

ck C

ompa

nyGe

nera

l Par

tner

ship

Lim

ited

Part

ners

hip

Co

oper

ativ

e

Nam

e

Sect

or

Regi

ster

ed ca

pita

l

Stru

ctur

e

Resp

onsib

ility

for b

onds

IE +

the n

ame o

f 1

foun

der a

t lea

st

Fam

ily b

usin

ess

Agric

ultu

re, c

raft

indu

stry

, edu

catio

n

Prop

erty

mad

e up

of th

e

foun

der’s

ow

n go

ods

Sing

le fo

unde

r or a

gro

up o

f

peop

le(e

x. fa

mily

mem

bers

)

The f

ound

ers a

re n

ot o

blig

ed

to p

artic

ipat

e in

the s

ocie

ty’s

activ

ities

.

Thro

ugh

the f

ound

er’s

prop

erty

LLC

+ n

ame

The m

ost w

idel

y spr

ead

amon

g sm

all a

nd m

ediu

m-s

ized

ente

r-

prise

s, in

the f

arm

ing

sect

or,

tour

ism, s

ocio

logi

cal r

esea

rch,

se

rvice

s

5400

lei

Sing

le fo

unde

r or

a n

umbe

r of

asso

ciate

s (50

at t

he m

ost)

Thro

ugh

the p

rope

rty o

f the

socie

ty, w

ithin

the l

imits

of t

he

part

icipa

tion

shar

e

JSC

+ n

ame

Big

ente

rpris

es, i

n th

e ban

king

sect

or, t

elec

omm

unica

tions

,.

Trad

e, in

sura

nces

, fur

nitu

re

prod

uctio

n.

20,0

00 le

i

Regi

ster

ed ca

pita

l div

ided

into

shar

es

SMor

e ext

ende

d an

d le

ss fl

exib

le

stru

ctur

e tha

n th

e LLC

.

Foun

ded

by o

ne o

r mor

e priv

ate

pers

ons o

r leg

al en

titie

s.

Clos

ed JS

C –

not

mor

e tha

n 50

shar

ehol

ders

, a li

mite

d nu

mbe

r of

peop

le ca

n bu

y sha

res.

Open

JSC

– th

e rig

htto

estra

nge

shar

es w

ithou

t any

rest

rictio

ns.

Addi

tiona

l rig

hts f

or th

e sha

reho

lder

s

owni

ng n

o le

ss th

an 5

% a

nd 1

0%

Of S

hare

s (Ci

vil C

ode,

Art

. 167

, 168

)

Thro

ugh

the p

rope

rty o

f the

socie

ty,

with

in th

e lim

its o

f the

par

ticip

atio

n

shar

e. Th

e soc

iety

bea

rs n

o

resp

onsib

ility

for t

he a

ssoc

iate

s’

bond

s. Th

e fou

nder

s of t

he so

ciety

are r

espo

nsib

le fo

r the

ir bo

nds.

GP +

nam

e/s o

f ass

ocia

tes

In sm

all b

usin

esse

s, in

whi

ch th

e

asso

ciate

s ope

rate

join

tly

Varia

ble,

from

the p

artic

ipat

ion

shar

ee

2-20

priv

ate p

erso

ns o

r leg

al en

titie

s.

A pr

ivat

e per

son

or le

gal e

ntity

can

asso

ciate

in o

nly o

ne G

P.

Ever

y par

ticip

ant c

an re

pres

ent t

he

socie

ty in

rela

tions

with

third

par

ties.

The l

eade

rshi

p m

ay b

e hel

d by

1

pers

on (o

n a

prox

y bas

is) o

r in

a

colle

gial

man

ner.

Ever

y mem

ber =

1 vo

te, u

nles

s it i

s

stip

ulat

ed o

ther

wise

.

Subs

idia

ry so

lidar

y and

unl

imite

d

resp

onsib

ility

of t

he a

ctin

g pa

rtne

rs

for t

he so

ciety

’s bo

nds.

The i

nact

ive p

artn

ers a

re re

spon

sible

for l

osse

s with

in th

e lim

it of

thei

r

cont

ribut

ion.

The s

ocie

ty b

ears

no

resp

onsib

ility

for t

he a

ssoc

iate

s’

bond

s tha

t are

not

rela

ted

to it

s

activ

ity.

LC +

the n

ame/

s of

actin

g pa

rtne

rs

In sm

all e

nter

prise

s.

Low

am

ount

of s

ervi

ces p

rovi

ded

or

prod

uced

. Clo

se re

latio

ns b

etw

een

the f

ound

ers

VVar

iabl

e, fr

om th

e par

ticip

atio

n

shar

e

Not l

ess t

han

1 in

activ

e par

tner

and

1 ac

ting

part

ner.

20 p

eopl

e at t

he

mos

t.

The a

ctin

g pa

rtne

rs le

ad.

The i

nact

ive p

artn

ers (

mem

bers

finan

cing

the b

usin

ess)

do

not

invo

lve i

n th

e ent

erpr

ise’s

activ

ity.

One a

nd th

e sam

e per

son

can

be

actin

g pa

rtne

r in

only

one

LC a

nd ca

nnot

be a

mem

ber o

f GP.

.

The a

ctin

g pa

rtne

rs d

ispla

y sol

idar

y

and

unlim

ited

acco

unta

bilit

y for

the

bond

s of t

he a

ssoc

iate

s who

are

not

dire

ctly

link

ed to

its a

ctiv

ity.

Co-o

p +

the m

ain

goal

of t

he a

ctiv

ity

To fa

vour

and

gua

rant

ee th

e con

omic

and

lega

l int

eres

ts o

f the

mem

bers

thro

ugh

thei

r joi

nt a

ctio

ns.

Varia

ble,

from

the p

artic

ipat

ion

shar

e

Not l

ess t

han

5 m

embe

rs, p

rivat

e

pers

on o

r leg

al en

tity (

min

imum

age 1

6)

Subs

idia

ry so

lidar

y res

pons

ibili

ty

thro

ugh

the p

rope

rty o

f the

socie

ty.

Two

mon

ths a

fter t

he a

ppro

val o

f

the a

nnua

l acc

ount

ing

repo

rt, t

he

mem

bers

are

obl

iged

to re

coup

loss

es th

roug

h ad

ditio

nal

cont

ribut

ions

.

Org

an

iza

tio

na

l a

nd

le

ga

l fo

rms

An easy to understand BUSINESS GUIDE

18

Individual Enterprise or LLC?

IE LLC- Minimum initial capital of MDL 5,400 is needed.- The way money and goods can be used as regis-tered capital is established by law.- It is mandatory to form reserve capital (accounting for 10% of the registered capital) through annual amounts payable of not less than 5% of the net profit of the LLC. - It is more complicated to manage it because there may be several associates, holding various shares in the registered capital; complex legal and financial regulations must be respected (more bureaucracy). Consultancy services are more expensive. + The enterprise is responsible for bonds, with its property only being at stake. The associates bear responsibility for the society's bonds only within the limit of the shares that belong to them. This means minimum risk for the founders. + Banks and creditors find them more trustworthy.

+ No minimum initial capital is needed.+ There are no restrictions as regards the goods that lay the foundation of the business.+ It is not requested to create reserve capital.

+ It is simpler to manage because the founder can manage it on his/her own, or hire a manager (it takes fewer specialists to manage a business), there is less bureaucracy.

- The founder is responsible for the enterprise's bonds, with his/her whole property being at stake, excepting goods which, according to legislation, cannot be followed up. Higher financial risks. The founder may lose the family's goods in case of failure.- It is limited in terms of financing; as a rule banks do not take such enterprises seriously.

+ (advantages), - (disadvantages)

SME role:

Creates new jobs, thus decreasing the unemployment rate. Contributes to the country's economic development. Diversifies the range of goods and services on the market, thus promoting innovations. Encourages competition among big enterprises. Promotes rational use of local resources. Facilitates the operation of big enterprises by producing goods and providing services. Enhances the qualification of the staff and trains them for holding posts in big enterprises.

SME advantages SME disadvantages

Relatively more easy business management (less bureaucracy, quicker spread of information, fast decision-making process);More efficient control (less staff, closer interaction with employees, quicker integration of the employees into the team);Quicker integration of the company into the regional network;Enhanced adaptability to economic fluctuations, early compliance with changes in the production process;Quick launch of innovation products/services;Management's promptitude to the need to settle local issues;Production of high-quality goods or provision of high-quality personal-ized services, the company's uniqueness;Closer cooperation between clients and goods producer/service provider;Lower capital needs, simple production technologies;Quicker capital rotation;Possibility of limiting micro crediting if your own capital is insufficient;Possibility of extending the SME into a big business (for instance, Bill Gates started his business when he was 16, worked out software with some classmates, subsequently he became the founder of Microsoft);tate backs small businesses more often.

The enterprise is dependent on one or more people;Lack of staff having comprehensive management knowledge because of the low number of personnel;The unofficial nature of relations within the SME may tell on the positive development of the business. The owner is busy with urgent daily problems instead of planning the enterprise's activity for a long run;Enhanced competition on the part of bigger companies; More difficult access to big loans, poor financial and technical basis;The need to launch a large-scale advertising campaign in order to remain on the market;Increased risk level (dependence on external factors and not on decision-makers);Drawbacks in the small business legislation.

Advantages and disadvantages of small and medium-sized enterprises (SME)

19

Registration costs:

What do you need to have with you? What do you need to know?

iIdentity cards of the founders and administrator (if he/she is different from the founder)

A list of possible names for the enterprise

Documents on the company’s headquarters, which could be:

founder’s residence

imobilhouse provided by a non-founder physical person (document confirming the property right and notarized decision, by which the founder allows using this house for performing the legal activity);

real estate legally rented from a legal entity (notarized rental contract and letter of guarantee of the owner)

Legal form of your firm;

The term you want your firm to be opened for.

The CIS registers an enterprise within maximum 5 working days (3 working days in the case of an IE) from the date of submitting the whole set of documents. The firm can be also registered in 4 and 24 h), as well as on days off or holidays.

Types of activities you want to perform (maximum 5 will be included in the establish-ment act). Consult the Classification of Economic Activities in Moldova (CAEM)

Fees approved by the Government for the paid services provided by the CIS.

8. How do you register a firm?

STAGE 1: Get ready

Registration fee

Issue of documentsReservation of the name Abstract from the RegisterPublication in the CIS bulletinApproval of the name at the Terminology CentreStamp

24 hNormal regimeRegistration costs 4 h

MDL 250 (in 5 days)MDL 54 (IE in 3 days)

MDL 108 (5 days)39 lei

MDL 189

MDL 500 MDL 216MDL 216

78 MDL 252

MDL 54 leiMDL 40 lei

MDL 1000 MDL 432 MDL 432 MDL 156

MDL 239

STAGE 2: Act

There is also a possibility to register the firm through a representative with power of attorney, as well as the individual entrepreneur can do it on the internet.

“Procedure and conditions for the on-line provision of services” http://cis.md/content/60

Go to the territorial office of the State Chamber of Registrationwith the set of documents

For addresses, telephones go to http://cis/gov/md/content/68Telephone for information: 022 274 406

State fees for registration and amendment http://cis.md/content/61

GHIDUL ANTREPRENORULUI pe înţelesul tuturor

STAGE: WaitSTAGE: WaitThe CIS checks if you have any debts to the national public budget and whether you have previously registered any enterprises, which are no longer operating and have not been liquidated in the way established by law.

The CIS verifies the name of the legal entity.

You have to fill in a registration request according to the provided template.

You have to pay the registration fee to the bank and submit the payment note to the CIS.

The CIS acceps documents for registration.

The CIS checks whether the administrator (another one but the founder) works part time for another unit as an administrator.

The CIS issues a certificate allowing you to open a provi-sional account in a bank and to deposit the social capital.

The CIS orders the production of the stamp.

The CIS indicates the exact date and hour, the office and the registrar’s name, for you to collect the establishment acts.

The CIS registers your enterprise and issues the registration papers

Go to the CIS on the estab-lished date and time, without delays, with the bank certificate as a proof you have submitted the social capital

You have to choose the bank you want to work with and you con-sign your social capital (minimum 40% for a LLC + the remaining 60% in maximum 6 months from the registration date, the sole shareholder integrally pays 100%).

Individual entrepreneurs are denied state registration in the following situations:

1. The physical person is already registered as an individual entrepreneur;2. The person is deprived, by court ruling, of the right to practice entrepreneurial activities.

STAGE 4: Check the registration acts

• Decision of the State Chamber of Registration on the registration (coincides with the registration date of the legal person);• Registration Certificate (with a unique identification number IDNO, which matches the fiscal code);• Abstract from the State Register;• Articles of incorporation (Decision on the Establishment, Statute);• Stamp and certificate on the stam manufacturing;• Notice on the registration for tax, statistical, medical and social purposes.

20

21

Articles of incorporation will be issued to the administrator, because according to the Civil Code (art.61), the legal entity exercises, from the incorporation date, its rights and fulfils its duties through the administrator. While the individual entrepreneur as the sole founder is also the administrator

In the future, you will have to go to the CIS in the following situations:

1. To order an Abstract from the State Register;2. To register any amendments to articles of incorporation or to data introduced in the State Register (within maximum 30 days after the approval of the amendment decision);3. Temporary suspension of the activity (maximum 3 years).

When changing the headquarters:

• You have to inform the CIS and the (territorial) Fiscal Inspectorate about the change in maximum 7 days;• Publish a notification in the Official Monitor.

9. What do you do after your firm is registered?

STEP 1: Analyse bank offers in order to open a current account

What shall you pay attention to?

1. Bank’s reputation2. Bank’s location (to be in the area of your work, close to the territorial IFS, CNAS, CNAM)3. Service fees4. Products/services provided to legal entities (service of accounts, salary cards, web-client, credits, exchange rates, etc.)5. Efficiency6. Customer loyalty programmes

STEP 2: Open a current account

1. Go with your articles of incorporation to the bank where you will fill in an application for opening a current account;2. Return to the bank in about 5 days (after it receives the notification from the Fiscal Inspectorate);3. Sign the specimen signature forms;4. Read carefully the contract on opening a current account, sign it;5. You will be provided with your account’s data.

STEP 3: Register your firm with the fiscal, statistical, medical and social authorities

Take the originals and copies of the documents mentioned in the scheme on the next page to the following territorial offices:

1. IFS (State Fiscal Inspectorate) – Annex 22. CNAM (National Health Insurance Company) – Annex 33. CNAS (National Office of Social Insurance) – Annex 44. BNS (National Bureau of Statistics) – Annex 5

GHIDUL ANTREPRENORULUI pe înţelesul tuturor

IFS

CNAM

CNAS

BNS

For the fiscal visit act

Registration CertificateAbstract from the State RegisterDecision on the registration of the enterpriseStatute / Articles of incorporation Identity card of the founderIdentity card of the administratorEmployment order of the bookkeeperRental agreement of the subdivision, offices, branchesCodes of activities from the Notification on the Fiscal, Statistical; Medical and Social Registration2 plastic fastener folders

Identity cardRental agreementRegistration certificateAbstract from the state registerFilled in form

Identity cardRegistration certificateFilled in form

Registration certificateAbstract from the State RegisterDecision on establishmentNotification on the fiscal, statistical, medical and social registrationBank account detailsCertificate on the stamp productionIdentity card of the founder/foundersTaxpayer’s form to the social insurance budget (filled in)Copies must have the firm’s stamp applied on them

Notification on the fiscal, statistical, medical and social registrationRegistration certificateAbstract from the state register

22

For the subdivision’s registration certificate (original+copy):

After you have registered your firm with the CNAM, CNAS and the BNS:

Within maximum 10 days after the issue of the registration certificate:

Within maximum 10 days after the issue of the registration certificate:

Within maximum one month after the issue of the registration certificate:

23

10. What mandatory payments, taxes and fees do you have to pay?

Taxpayer, subject to taxation = the person who is obliged to pay taxes and fees

Compulsory payments

The shares of compulsory payments are established on a yearly basis by Government Decision and are stipulated in:

Tax Code of the Republic of Moldova (2012)

Law on state social insurance budget for 2012 No 270 of 23.12.2011

Law on compulsory medical insurance funds for 2012 No 271 of 23.12.2011

Taxes and fees

Tax Code of the Republic of Moldova (2012)

Law on state social insurance budget for 201

Law on compulsory medical insurance funds

23% of the labour remuneration fund for each employee, calcu-lated monthly, paid by the employee on a monthly or quarterly basis up to the 10th of the month following the reporting period

6% retained from the employee’s salary.

Individual entrepreneurs and patent holders – 4,704 lei per year, pay every month not less than 1/12 of the amount, up to the 10th of each reporting month

For what? Allowances, aids, pensions, for preventing diseases and for the recovery of labour capacities, death allowances.

Compulsory social insurance contributions

Taxes

Tax Code of the Republic of Moldova (2012

For the insured persons – 7% (3.5% paid by the employer, 3.5% - by the employee), monthly, when the salary is paid.

Individual entrepreneurs and patent holders – 2,982 lei per year, payment is performed on a yearly basis, within 3 months after the day when the law on compulsory medical insurance fund for the respective year enters into effect).

For what? To cover costs related to the treatment of diseases and affections of the insured persons

Compulsory medical insurance premiums

state local

Income tax

VAT (Value Added Tax)

Excises

Tax on immovable property

Territory development tax

Tax for commercial units and social service provision units

Tax for passengers of motor transportation service on localities’ routes

Tax for the use of natural resources, market tax, parking tax, resort tax, advertising placement tax, on local symbology, etc

Private tax

Customs, road, etc. tax

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Taxes and fees ( www.fisc.md )

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7% of the ATI for peasant farms12% of the ATI for legal entities

SMEs, non-payers of VAT:-up to 100,000 of profits – 3% of the operational activity-100,000 / 600,000 – can chose the 3% taxation regime

For physical persons: 7% of the ATI <= 25,200 lei18% of the ATI > 25,200 lei

Legal entities shall submit the declaration up to the last day of the month following the payment, based on the IRV09 report, to the IFS branches. Physical persons have to submit the declaration up to March 31 of the following year (in case he/she had 2 or more jobs in different enterprises over the year).

ATI (annual taxable income)ATI = gross income – deductions – exemptions

Deductions = ordinary and necessary expendi-tures by taxpayers for the activity of the enterprise.

Exemptions: 8,640 lei/year personal exemption for physical person ( Tax Code, art.33 FC)

1,920 lei per year/each dependent( Tax Code, art.35)

8,640 lei/year exemption for spouse who works, but does not benefit from exemptions.

Income tax

The share established on an annual basis by the LPA ( Tax Code, art. 280)0.05% - 0.3% of the taxable basis (estimated value of assets on January 1 of the fiscal year)

Payment in 2 equal shares (up to August 15 and October 15 of the fiscal year).Those who integrally pay the tax by June 30, are entitled to a 15% discount from the tax.

Tax on immovable property

(for agricultural or industrial land plots,

buildings, constructions apartments)

1% of the sale value of assets subject to privatisation. 5% of payments are retained at transfer, to cover costs related to the restructuring or privatisation of the object.

To be paid to the state budget or to the budget of the administrative-territorial unit before the conclusion of the buy-sell agreement of public property assets.

Private tax

10-30 lei for each 100m2, plus other categories of owners in other localities are paying other taxes.

The exact amount of the land tax and tax on immovable property are established on an annual basis by the repre-sentative authorities of the local public administration.

Land tax

The share of excises ( Tax Code, art. 122):-in lei per meas.un. in natural expression (e.g., 1.85 lei per 1 litter of malt-made beer).-in % from the value in lei of the goods, without taking into account excises and the VAT (e.g., 25% of the value of a fur clothing)

Registration as excise payer: before starting the activity, it is necessary to get the excise certificate by filling in an application at the State Tax Service ( Tax Code, art.126 – list of necessary documents)To be paid on a monthly basis.

Excises (for certain

consumption goods)

Standard among: 20% of the value of goods imported and/or supplied in Moldova.Compulsory: supplies >600,000 lei (in the fiscal period)Optional: supplies 100,000 lei – 600,000 leiVAT exemption: Tax Code art. 103 Reduced rates: 88% bread, breadstuffs, diary, certain medicines6% natural, liquefied gas0% goods and services for export, power and thermal energy for the population, others can be found in Tax Code, art.104

Registration as VAT payer:Fill in the application to the IFS before the last day of the month when the amount of 600,000 lei was exceeded. To be paid before the last day of the following month.

Value Added Tax

(VAT)

Annexes 1-6, title IX of the Tax Code Paid on an annual basis, up to April 30 or when the vehicle is purchased or rented.

Customs tax,road tax

Average quarterly number of the staff list and founders that are not included in the staff list – 20 lei / person.

Quarterly payment before the 25th of the month following the reported trimester.

Territory development tax

Share for towns, villages.It is different from town to town.

Depending on the occupied area, location, type of goods.

Tax on trading and/or social services units

500 lei / vehicles with maximum 8 seats1,000 lei / 9/16 seats, 1,500 lei / 17-24 seats, 1,900 / 25-35 seats, 2,100 lei / 36 … seats

Depending on the transportation unit and depending on the number of seats.

Tax for providing public motor transportation services on localities’

routes

1 leu / 1 c.m. of water extracted from the water fund16 lei / 1 c.m. of mineral water extracted for bottling0.06 lei / 10 c.m. of water used by hydropower plants

A relevant report shall be submitted to the territorial IFS, and payments have to be made to the administrative-territorial units’ budget before the last day of the month following the reporting period.

Natural resources tax, market tax, car parking

tax, etc.

1% of the total income of the enterprise. Paid on a trimestral/annual basis up to the last day of the following month.

Tax on advertising activity

12. What documents and software do you need for accounting?

Go to the State Enterprise Editura de Imprimare Statistica and buy:

• Certification sheets • Standard type forms of primary documents with special regime• Production forms

Address: MD-2001, Chisinau, 34, Bucuresti Str.,Tel: 022 275 391 (production department) or tel: 022 270 789 (administrator Vitalie Pavlov)E-mail: [email protected]

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Territorial off. Type of declarations/reports Submission term

Nominal registration list (2 copies) for each person employed/discharged apart

The REV1 + REV 2 declaration (1 copy) for each employee/founder who does not have the CPAS code

Before the 7th of the month following the employment/discharge

Within 10 days after the employment date + copy of the identity card of the insured person.The REV2 form is made up of 2 parts, after filling it in, one goes to the business, another one – to the CNAS territorial subdivision.

4 BASS Declaration Quarterly, before the 15th of the first month

of the following trimester. Individual entrepreneurs and patent holders have to submit the 4 BASS Declaration on an annual basis, before 10 January of the following year.

REV5 + REV2 Declaration (1 copy) for each employee apart, on paper format (up to 10 employees), and on electronic format as well (compulsory) for more than 10 employees.

On a yearly basis, before 25 February (for up to 25 employees), or before 25 April (for over 20 employees). The verso of the REV2 form shall be filled in only in case of the packs containing the REV5 forms.

Annual financial report SNC5 (balance sheet) On a yearly basis before 31 March of the following year. It has to be submitted by companies with over 49 employees and a revenue of over 15 mln lei.

TAT 07 (territory development tax)MED 08 (deductions for the medical insurance premiums)

IRV 09 IAL 09 (lease payments, payments made to physical persons)IAS 09 (employees)VEN 08 (income tax by legal entities)

VAT declaration and the TVA FACT Form annex

On a quarterly basis, before the last day of the

following month.

On a monthly basis, before the last day of the

following month.

On a yearly basis, before 31 January of the following year (if the IRV 09 was submitted).

On a yearly basis, before 31 March of the following year. It is developed in parallel with the financial report.

Simplified financial report SNC4 On a yearly basis, before 31 March of the following year. It has to be submitted by companies with over 49 employees and a revenue of over 15 mln lei.

Report 1M (labour remuneration) On a monthly basis, before the 10th of the

following month.

Raportul 5C (consumurile şi cheltuielile întreprinderii) On a quarterly basis, before the 25th of the

following month.

CNAM

CNAS

BNS

IFS

Templates of declarations, forms, reports

11. What reports, declarations, basic forms do you have to submit?

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Documents you have to submit to the publishing house when placing the order:

1. Registration certificate (original and copy)2. Abstract from the register (original and copy)3. Identity card (original and copy)4. Stamp

You can also order these forms electronically, on the following website: www.stat.hq.md

In case you place an electronic order, you will be asked for the following information:• Personal data: full name, telephone number, e-mail, Skype, messenger,• Data on the company: legal name, fiscal code, telephone number, the address on which the order is made, e-mail, website;• Delivery time, or the exact date and hour for the delivery address.

ATTENTION!:

All forms are numbered and you have to use them strictly in order. In case of a mistake, you have to cancel it, by writing CANCELLED, and keep both copies.

What do you have to buy at the initial stage?

• Shipping invoices (in case you are not a VAT payer, it is issued when making a delivery of goods or services);• Vehicle log book (to write off the fuel, in case you have vehicles being used by your firm);• Document on the purchase of goods (when you buy something for your firm from a legal entity);• Document on the purchase of lease services and associated costs;• Commissions (to mandate others to sign on your behalf, without giving them the stamp).• Payment notes (when you do not have a cash register and your activity implies that you have the right to make cash settlements without having a cash register, or when the cash register is out of order and you have stated this to the IFS);• Copying paper (2) – to fill in invoices, etc.

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Types of activities where you can make cash settlements without cash registersMarketing of agricultural products cultivated by economic agents on their own or rented land – in markets, fairs and other places authorised by the local public administration.

Marketing by peasant (farmer) farms of agricultural products to other economic agents, as well as agricultural services provided by these, with the issue of payment notes.

Marketing of cult objects and religious literature, rituals and ceremonies carried out by religious organizations in places of worship.

Marketing of newspapers, magazines, lottery tickets.

Services provided by the urban (communal) transportation based on travel tickets and/or subscriptions (at a fixed price, printed).

Veterinary services, services for the urgent repair of dwelling space, engineering installations, furniture, home appliances, provided by economic agents to the population, at client’s location, with the issue of payment notes.

Pharmaceutical activity in medical units in rural settlements without pharmacies, with the issue of payment notes.

Activities carried out by patent holders on the basis of the patent of entrepreneur

Activities for which the computerised control and administration system assures the issue of fiscal invoices on special paper with protection signs, printing the series and number of the fiscal invoice from the diapason assigned by the Main State Fiscal Inspectorate, which are also fulfilling the function of payment notes (payment in cash).

Activity of financial institutions, licensed and regulated through the normative acts of the National Bank of Moldova, except for the currency exchange operations to physical persons

Reception (collection) of compulsory fiscal payments, as well as of non-fiscal payments by fiscal bodies and/or mayoralties, with the issue of the strict registration documents of the State Fiscal Inspectorate.

Provision of services by advocates. Notarial activity.

Reception of payments for services through self-service ATMs issuing cash payment receipts

Providing meals to pupils and staff in the general primary and secondary educational institutions during the academic year. At the end of the daily management, the special regime primary document shall be filled in – the payment note, containing the totality of performed commercial transactions.

Marketing to the population of food service related products and services during fairs, exhibitions, festivals and various cultural-sports events – in parks and streets, as well as in other public places, authorized by the local and/or central public authorities with the notification of the respective fiscal body. At the end of the daily management, the special regime primary document shall be filled in – the payment note, containing the totality of performed commercial transactions

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As for the rest, for cash settlements, you must have a cash register (CCM – cash control machine). For this:

To register the cash register with the territorial IFS, you will need the following documents:• Template application• Copy of the registration certificate / copy of fiscal code assignment• Copy of the abstract from the state register• Copy of the Licence on the activity profile of the enterprise• Copy of the document on the CCM purchase• Copy of the Contract on the CCM technical maintenance• CCM register• Technical register (technical passport) of the CCM• CCM user’s manual

The firm you have purchased the cash register has to provide you with the following documents:• Technical register• CCM user’s manual• Contract on the technical maintenance of the cash register• Invoice

ATTENTION!:

1. You have to keep the cash book during the whole period of operation of the cash register and 3 years after its deregistration.2. At the beginning of the fiscal year you must submit the cash book for the previous year to the IFS (even if it has not been completed yet) and to register a new cash book, for the current year. The same you have to do when the cash book is completed before the end of the year. 3. You have to produce the Z report on a day-to-day basis if fiscal receipts have been issued.4. The Main State Fiscal Inspectorate, the Financial Guard and their territorial subdivisions are verifying the use of the CCMs

Removal and application of the seal on the CCM is performed in the following situations:- When the CCM is registered with the territorial IFS;- When mandated persons are carrying out controls, if necessary; - If a repair or technical maintenance is required, with the opening of the CCM.

Regulation on the registration and control over the use of cash control machines.

Specialised software for accounting records

As a rule, there are specialised software keeping accounting records, like “1 C: Contabilitatea 8.” This software is for the automation of the accounting and fiscal records, including the compulsory production of reports at the enterprise, in line with the Moldovan legislation in effect.

This software is a licenced one and must be purchased from authorized persons

Step 1. Buy from firm X the following:1. Cash register (2 000 – 5 700 lei)2. CCM Register3. Technical register

Step 2. Firm X registers the cash register with the territorial

IFS, based on the documents listed below.

Step 3. Firm X gives you the documents from the IFS within maximum one week and will train you how to use the cash register and to fill in the registers.

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Advantages of “1C: Contabilitatea 8”:

• All records are made in one software;• Automation of the organizational and economic activity;• Possibility to keep records of various types of commercial activities in one data base;• Performs calculation of wages and staff administration;• Wide opportunities for administrative recording and structure of analytical reports, supports multi- currency recording.

IImplementation of 1C is performed with the support of the instructor from the authorized company. The software will cost you between 300 and 700 US dollars, depending on the complexity of operations you have to perform.

To work with this software, you need to attend a training course (minimum one month, 40 academic hours, average cost – 400 lei).

ATTENTION!:

Accounting must be kept permanently, from the very first day your enterprise is registered and during the entire period of its existence, even in periods of economic inactivity, because you need to produce fiscal, statistical, social and medical insurance reports, as well as other reports.

Employing a bookkeeper or contracting bookkeeping services?

In the case of SMEs, the bookkeeper may be employed part-time and paid according to the number of worked hours, based on a service contract. This would cost you about 500 - 1,000 lei/month, depending on the amount of work performed by your firm.

The bookkeeper must be a reliable and qualified person with rich experience. This is the type of person you should not make savings from his/her salary, in order to avoid paying later penalties and fines. The average salary of a qualified bookkeeper is 300 euro

What is better, to employ a bookkeeper or to contract outsourced bookkeeping services?

Employing a bookkeeper Contracting bookkeeping services

Confidentiality of data;

Permanent presence in the office;

Better knowledge of the firm’s situation;

Promptness in solving urgent problems;

The bookkeeper deals with your firm only or/and has an established work programme.

Permanent expenditures – bookkeeper’s salary;

You have to provide him/her with working space;

You have to set up his/her working space.

Responsibilities are transferred to the contracted company (certain bookkeeping operations, for example, primary bookkeeping, calculation and transfer of income taxes);

Specialized bookkeeping solutions

“Outsourcing” firms have advanced technologies or software packages able to immediately improve some outdated bookkeeping computer-ised processes;

Good quality/price ratio.

Costs related to the digitalization of book-keeping documents (costs of a large capacity scanner, of software packages may exceed the costs of the outsourcing service);

A third firm might discover irregularities in the activity of your firm.

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13. What is the authorization procedure?

After the state registration, the enterprise has to obtain various special authorizations in order to start up and run a business.

Authorization – licences, permits, certificates, notifications, approvals, coordinations.

According to the Moldovan legislation, certain activities are subject to licensing and/or authorization.

There are several types of authorizations, for confirming certain technical requirements, separate norms under a certain aspect, for example: sanitary authorization, veterinary sanitary authorization, activity and import/export authorization, retransmission authorization, etc.:

Sanitary authorization – for all trade, public catering and social service units.Veterinary sanitary authorization for functioning – issued to agro-food markets, eggs selling booths, veterinary pharmacies, units marketing cut meat and fish, products of animal origin.

The most frequently met is the sanitary authorization.

Who is subject to the state sanitary-epidemiological supervision?

Any economic unit or parts of it, regardless of its ownership form, for which sanitary-hygienic and anti-epidemical requirements are established and which requires the supervision of their observance, except for those objects where there are no people working, and the labour and environmental factors (air, water, soil, food products) do not have a negative influence over the population’s living environment and health

What is subjected to sanitary authorization?

Entrepreneurship activities representing risks for the health of the population and which do not run counter the sanitary legislation in effect.

List of authorizations, approved by the Government Decision No 920 of 30.08.2005. Types of activities subjected to sanitary authorisation.

Who requests the sanitary authorization?

The administration of economic units, to which the object(s) subjected to the state sanitary-epidemiological supervision is subordinated, according to requirements mentioned in the “Sanitary authorization for function-ing.” When applying for an authorization, the administration has to specify the type of activity the authorization is sought for.

Economic agents bear personal responsibility, according to the legislation in effect, for creating optimal working and health and safety conditions for their employees, and for the quality of food and products they produce or sell (store) to the population.

What is the procedure for obtaining a sanitary authorization?

The economic agent has to submit a request according to the template to the territorial preventive medicine institutions.

The sanitary authorization procedure by the institutions of the State Sanitary-Epidemiological Service is conducted within 10 working days from the submission of the application and of the necessary documents. When ready, the authorization for functioning is signed by the chief state sanitary doctor of the territory (of by his deputies).

Supervision materials, results of laboratory investigations and previous measurements (not older than 12 months) can be used for the purpose of the authorization process.

Authorization = an act of authority of the local public administration, granting the right to carry out a certain activity, based on certain documents specific for each type of application apart.

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PFor the newly built, reconstructed, reprofiled, upgraded (primarily) the authorization shall be issued at the commissioning acceptance stage,with the following documents submitted:

a) Copy of the registration certificate of the economic unit;b) Copy of the property deed or space lease agreement;c) List of groups of products/goods, that have to be manufactured, stored, marketed (to be included in the application).

To extend the sanitary authorization for functioning, in the case when no amendments to the activity type were performed during the reference period, the application shall be accompanied by the report on the attestation results of the work places.

In case of changing or extending the activity, the respective economic unit shall apply to the territorial preven-tive medicine institutions for a new sanitary authorization.

If the economic unit does not meet the sanitary-epidemiological functioning conditions it has been authorized for, and the administrator did not suspend the functioning of the object on his/her own initiative, the chief state sanitary doctor of the territory shall withdraw the sanitary authorization by issuing a decision on suspending the activity of the enterprise. The activity shall also be suspended if the unit is functioning with an expired sanitary authorization.

Economic agents are obliged to inform institutions of the State Sanitary-Epidemiological Service about amend-ments in the unit’s structure and exceptional circumstances (breakdown of backbone aqueducts, water intakes, water treatment stations, sewerage network, ventilation system, intoxication and professional diseases cases, etc.).

Economic agents may contest decisions of the chief state sanitary doctors (their deputies) on the sanitary autho-rization (approval) of objects according to provisions of the Law No 1513 of 16.06.1993 on the sanitary and epidemiological support to the population (art.44).

The location and functioning of the itinerant trade network is allowed only with the approval by the territorial hygiene and epidemiological centres and based on the sanitary authorizations for such type of activity

DECISION OF THE MOLDOVAN GOVERNMENT on the approval of the Regulations on the functioning of itinerant trade network and trade Regulations in markets in the Republic of Moldova, No 517 of 18.09.96.

Authorizations for functioning issued by the Local Public Administration

To conduct certain trade activities, you will also need the authorization from the local public administration. The trade and public food service directorates of the municipal mayoralties and district executive committees issue authorizations for the location of trade units.

In Chisinau, the City Hall issues the following authorizations to trade units and/or service provision units:

The authorization for functioning is issued within maximum 15 working days after the submission of the appli-cation and documents.

Period For trade units and/or service provision units:

Up to 5 years

Not more than 5 years

Up to 3 years

Up to 1 year

Located on private property areas

Located in rented areas

Stands and pavilions

Stalls, stands, trailers, vehicles and other iterant – temporary trade units

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14. What is the licensing procedure?

In order to be issued a license, legal entities have to submit an application to the Licensing Chamber, with the following data indicated:

• Full name of the enterprise;• Legal address; • Fiscal code;• Type of activity subject to licensing;• Address of branches; • List of documents attached to the application confirming the competence to carry out the type of activity the license is sought for.

Documents to be attached:

• Copy of the registration certificate of the enterprise;• Certificate confirming the enterprise has no debts to the state consolidated social insurance budget;• Other documents depending on the licensing conditions of one or another type of activity.

The Chamber will consider the submitted documents and will approve the decision on issuing the license or on

rejecting the application within a maximum term of 15 working days, from the day the application is received. The notification on the decision approved will be sent to the applicant in written form, within a maximum of 3 working days from the date the decision is made.

Licensing authorities:

- Licensing Chamber (issues licenses for the majority of activities);- National Bank of Moldova;- National Commission of Financial Market;- National Energy Regulatory Agency;- National Regulatory Agency for Electronic Communications and Information Technology;- Coordinating Council of Audiovisual.

Contact details for the Licensing Chamber

Address: Republic of Moldova, MD-2001, Mun. of Chisinau, 124, Stefan cel Mare BlvdContact information: tel. (+373) 22 54 21 14, hot line (+373) 22 27 22 21Web: http://www.licentiere.gov.md/

Types of activities governed by licensing: Law 451/30.07.2001 on licensing some types of activities.

Types of activities proposed to be entirely removed from the fields governed by licensing. http://www.licentiere.gov.md/public/files/Ghid/Taxe_genuri_16.02.11.pdf

15. What is the trademark registration procedure?

Trademark – any sign or combination of signs that can be represented graphically, serving to differentiate products or services of certain physical persons /legal entities from others’.

The most frequently met types of trademarks are: verbal, representational, combined, tridimensional, and of

other type.

The competent body authorized to register trademarks in Moldova is the State Agency for Intellectual Property of

the Republic of Moldova (AGEPI).

www.agepi.md

How do you register a trademark?

To register a trademark, you have to fill in the template application for trademark registration îand submit it to the AGEPI. The application must refer to one trademark only. Cererea trebuie să se refere la o singură marcă.

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The application shall contain:• formularul cererii, prin care se solicită înregistrarea mărcii;• reprezentările grafice ale mărcii.

The template application requesting the trademark registration; Graphic representations of the trademark. A number of other documents, according to the Regulations on the trademark submission, examina-

tion and registration procedure, might be also submitted upon request.

Trademark registration stages:

• Submission of the application;• Examination of the observance of conditions for submitting the trademark registration application;• Publication of the submitted application data;• Examination of the application;• Trademark registration and issue of the protection title.

Each stage is performed over a certain period of time. Any physical person or legal entity is entitled to submit a trade-mark registration application both in Moldova and abroad. The holder of the registered trademark has the exclusive right to own the trademark, to use it and to ban the unauthorised use of it. The validity term of the trademark’s

registration is 10 years; it can be renewed for another 10 years whenever it’s necessary.

Fees for the trademark registration service

Templates from AGEPI (http://www.agepi.md/md/trademarks/form.php

AGEPI contact information:

Tel. (+373-22) 400607, 400608; Antechamber: (+373-22) 400500; Fax: (+373-22) 44011924, Andrei Doga Str., Block 1,Chisinau, MD-2024, Republic of Moldova

16. How do you manage human resources?

For your company to operate efficiently, you need high-skilled, sufficient and motivated staff. To this end, you will have to undergo the following stages:

Labour Code of the Republic of Moldova

1. PLANNING

“People are definitely a company's greatest asset. It doesn't make any difference whether the company's

product is cars or cosmetics. A company is only as good as the people it keeps.” (Mary Kay Ash)

1. Planning 2. Recruitment 3. Selection 4. Employment

5. Training 6. Motivation 7. Control 8. Appraisal

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How many people do you need to start a business?

When starting a business, you have to save as much money as possible on salaries and to prepare yourself morally to do the job of several people. At the initial stage, you will have to learn to be:

1. manager2. office manager3. accountant, courier4. marketing and sales manager5. human resources manager

Being in charge of several fields in the company will give you the advantage of drafting the job description, as you will know precisely what the assignments of vacancies are and, last but not least, you will be able to better keep under control your employees, because you will already know what they will have to do and how much time every task takes.

However, if you feel that you are unable to assume all the above-mentioned roles, you will have to resort to services provided by specialists (accountant, sales manager) and you may need to employ a personal assistant (who should carry out the duties of office manager, courier and help you with daily tasks).

You may pay the accountant per hours, and the sales manager may be remunerated on the basis of a commission from contracts signed for the firm (thus you will take minimum risks and make minimum investments).

The planning of staff should be directly proportionate to:- workload- complexity of tasks- the incomes of the enterprise- your qualification

Your main goal is to form a strong team with good personal and professional qualities. Try not to hire relatives, friends and acquaintances only because they are looking for a job and would like you to help them. You should think first of all of the real capacity of your enterprise and of its ability to meet payments. The staff planning should be worked out in a strategic manner and coordinated with the financial forecasts

What is the organizational structure of an enterprise?

Organizational structure = all people, organizational subdivisions and relations between them, established in such a way as to meet the planned objectives.

An organizational structure should:• point out the objectives and action plan• showcase the authority able to manage the enterprise;• highlight the framework within which activities are held.

The organizational structure can be:1. of leadership or functional form2. of production or operational form.

Here are some examples of organizational structures:

RESEARCH AND DEVELOPMENT DIRECTOR

PRODUCTION MANAGER

DIRECTOR-GENERAL

HEAD OF EXPORT SERVICE

ECONOMIC DIRECTOR

COMMERCIAL ANDMARKETING DIRECTOR

HUMAN RESOURCES DIRECTOR

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SECRETAR BIROU JURIDIC ACCOUNTANT

RELAȚII CLIENȚI

SUPERVISORS INSTRUCTORS PERSONAL CURĂȚENIE

MANAGER

DIRECTOR

DIRECTOR-GENERAL

A PROJECT MANAGER B PROJECT MANAGER C PROJECT MANAGER D PROJECT MANAGER

EMPLOYEE 1

EMPLOYEE 2

EMPLOYEE 3

EMPLOYEE 1

EMPLOYEE 2

EMPLOYEE 3

EMPLOYEE1

EMPLOYEE 2

EMPLOYEE 3

EMPLOYEE 1

EMPLOYEE 2

EMPLOYEE 3

These parts include the following components:position – all objectives, tasks, competences and responsibilities assigned to every employee of the company for certain periods of time;assignments – leadership and executive assignments;department – the totality of some similar posts and assignments, in which people specialized in a certain sector operate, and which are located in a certain area and are subordinated to a single person;organizational relations – links between the component parts of the structure: authority, cooperation, control and representation relations;hierarchic weight – the number of people headed by management personnel;hierarchic level – all organizational subdivisions. The number of hierarchic levels depends on the size of the company, the diversity of activities and the complexity of production.

2. RECRUITMENT

Personnel recruitment = the process of ensuring a sufficiently high number of high-skilled candidates in order to select those who meet the best the requirements of the posts that your enterprise needs.

What to pay attention to when recruiting your staff?

When a vacancy appears, first of all make sure that this post is still needed or perhaps you may reassign its tasks to already existing positions;Identify and attract the highest possible number of candidates in order to ensure the needed number of employ-ees in terms of both quantity and quality;Recruit in the shortest time possible and make the lowest spending possible.

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When recruiting, you must have all information about the features of the position, as well as the qualities of its future holder.

A basic job description must include:

1. The name of the post2. The place of the post in the organizational structure3. Main assignments4. Responsibility5. Requirements (Technical Knowledge, Experience, Abilities)6. Success criteria7. Role of the position

Sample job description

How to recruit staff?

1. Advertising – you post an advertisement describing the position. It should be worded as precisely and politely as possible. It should be distributed on the largest possible area in order to get a maximum number of people meet-ing the criteria specified in the description. 2. Ask your acquaintances for recommendations – ask your colleagues, associates, acquaintances to provide information about people interested in the vacancy. 3. Go to higher education institutions – and talk directly to graduates, find a person whom you would “grow up” (in whom you will invest time and money), but who will be loyal to you for a longer period. 4. Use headhunting agencies which persuade high-skilled people from other companies to come to you. In this case, you will have to pay for the agency’s services, to offer a higher wage and better working conditions.

RECRUITMENT SOURCES

Advantages: - you get to know better the strengths and weaknesses of the candidate;- you attract candidates more easily- recruitment takes place faster and is less expensive- employees feel that you trust them and take into conside- ration their recommendations.

Disadvantages:

- you don’t benefit from new ideas that new employees may bring in;- conflicts may erupt between employees;- employees that were not promoted may be disheartened.

Advantages:

- you may attract a higher number of possible candidates;- new employees = new sources of ideas and new knowledge;- less spending on staff training.

Disadvantages:

- risk of employing people who will fail to cope with the position;- staff recruitment cost is much higher;- it will take longer for the new employees to find their way about and to integrate into the team.

Sample job description

Advantages: - you get to know better the strengths and w the candidate;

Sources inside the company

present employeestheir friends and relativesprevious applicants

TMENT SOURCES

Advantages:

- you may attract a higher number of possi- new employees = new sources of ideas and

Sources outside the

company

colleges and universitiesvocational schoolsspecialized agenciesemployment agencies, labour marketother enterprises

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Useful tips:

• Do not hurry to employ;• Say NO to nepotism;• Pay attention to young people who have the potential and willingness to work;• Do not avoid hiring aged people – they may have excellent experience in the field;• Pay specific attention to personal qualities of potential employees;• Call the phone numbers mentioned in CVs to check the truthfulness of the provided info.

Recruitment websites:

www.angajare.md

www.anofm.md

www.bestjobs.md

www.cariera.md

www.hr.md

3. PERSONNEL SELECTION

Personnel selection = choosing the most competitive or appropriate candidate for a certain vacancy in line with certain criteria

Process of selecting Human Resources

As a rule, interviews have two to three stages, so that you get to know as much as possible about potential employees.

Tips for interviews:

• Let the interviewee speak more;• Analyse the candidates’ strengths and weaknesses, their previous career;• Do not ask questions implying the answer;• Be polite and listen carefully to the candidates’ personal presentation; • Give some easy task to potential employees to see how they cope with it;• Give no feedback during the interview.

After the interview, make an objective analysis of the gathered information and select the person who meets the job description the best and who would integrate better into the current working team.

It is very important that the job requirements match the employee’s skills. Holding an inappropriate position may demand additional efforts and time from the employee. So, you need “the right person for the right post”.

www.jobinfo.md

www.joblist.md

www.jobmoldova.md

www.joburi.md

www.locurimunca.info

www.makler.md

www.moldovajob.md

www.munka.md

www.rabota.md

www.topjobs.md

1. Employment application, submitting a CV and a cover letter2. Pre-selection interview3. Selection test4. Comprehensive selection interview5. Checking references (recommendations)6. Medical test7. Employment decision, assigning the post

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4. EMPLOYMENT

A.) Persons selected in the previous stage submit their employment application to the employer.

B.) The employer, by the order (instruction, decision) of the employer, informs, under signature, the employee within 3 working days after the signing of the Individual Employment Contract (IEC) by the parties.

C.) The employer must inform the employee about:

Sample of Interior Order Regulation Anti-fire rules Labour Code, Articles 222-244

D.) Employer and employee agree on the Individual Employment Contract (IEC)

While signing the IEC, the employee shall present the following documents:

• Identity card or another ID paper;• Work record book, excepting cases when the person is being employed for the first time or if this is his/her second office;• Military record documents – for recruited and reserve servicemen;• Education diploma, a certificate attesting his/herspecial training – for jobs requiring special knowledge or qualities;• Medical certificate, in cases provided for by the legislation in force.

The enterprise must have medical records for every employee, comprising annual results of fluorography, of family physician and gynaecologist consultations, as well as a picture of the employee. Documents may be demanded during inspections by the National Public Health Centre.

http://www.cnsp.md Labour Code, Article 57

Employers do not have the right to request other documents from employees.

E.) The Job Description is attached to the IEC. It comprises the job's responsibilities, qualifications of the employee and other useful data. The more comprehensive and precise the job description is, the more easily it will be for the employee to understand what is expected from him, what success in the company implies, and more easily for the manager to monitor and appraise the employee's activity.

A party shall be informed in written form about the grounded refusal of the other party to formalize the IEC during 5

working days.

F.) The employer shall make the necessary records in the employee's work record book.

within 3 working days after the signing of the Individual Employment Contract (IEC) by the parties.

C.) The employer must inform the employee about:

Sample of Interior Order RegulationAnti-fire rules

The job entrusted to him/her, labour conditions, his/her rights and obligations

Internal regulations and collective labour contract

Safety arrangements, labour hygiene, anti-fire security measures and other labour security and health rules

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You can buy the following items at TehnoDesign & K Ltd in the Chisinau municipality:

1. Work record books (for those employees who do not have one or for those who are employed for the first time)2. Register for keeping records of the work record books circulation (in which all work record books are registered, even those that have not been issued by your company, when employed or dismissed)3. Register for keeping record of forms (all work record books that you bought for your employees).

What do you need to have with you?

1. identity card (a copy)2. registration certificate3. registration number of the VAT payer4. bank requisites5. stamp

Contact data: tel. 241284, fax 234929, Chisinau, 29, Mateevici Street

Work record books: Labour Code, Article 66• are processed for employees working in the company for more than 5 working days;• are bought only for employees who are employed for the first time;• must be recorded in the Register of the work record books;• are kept by the employer as along as the IEC is valid;• are handed to the employee on the resignation day.

The government establishes how the work record books are filled in, kept recorded.

Disciplinary sanctions are not written down in the work record book. The reasons for terminating the IEC must be recorded, along with the article, paragraph, point and letter of the legislation.

The employer is obliged to issue a a labour certificate to the employee within 3 working days, , upon the letter’s written request, which should specify his/her job in the enterprise, specialty, qualification, position, length of work and the wage amount.

Individual employment contract

Individual employment contract (IEC) = an agreement between the employee and the employer, by which the employee commits to work in a certain specialty, qualification or post, to respect the internal regulation of the entity, whereas the employer commits to ensure the working conditions provided for in the Labour Code, in normative documents comprising provisions of the labour legislation, in the collective labour contract, as well as to pay the full wage in time. CLabour Code, Art. 45

IEC parties: citizens of the Republic of Moldova, foreign citizens and stateless people.

When signing the IEC, it is prohibited to limit directly or indirectly the rights dependin on the gender, race,

ethnic origin, religion, address, political options or social origin.

Employee Employer

• private persons, at least 16 years old• 15-year-old private people (only with their parents’ written consent)

• private person able to work• legal entity

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Optional IEC provisions: Labour Code, Art. 51• mobility clause;• confidentiality clause (the sides agree not to disclose any data or information they were familiarized with while the IEC was in force all along the working period and for a year at the most after the IEC expired, in line with the enterprise’s internal regulation, collective labour contract and individual employment contract);• other provisions that do not run counter to the legislation in force;• provisions regarding the compensation for transport spending, utilities and dwelling.

Probation period: Once the candidate/candidates are selected, you may suggest a probation period of up to 90 days to make sure that the selected people cope with the job offered, that they like what they do and that they integrated well into the work team. Labour Code, Art. 60

The probation period does not include sick leaves or grounded and documented absence and can be

set only once.

Probation periods are prohibited for the following employees: Labour Code, Art. 62a) young specialists;b) people under 18;c) people employed on a contest basis;d) people transferred from another enterprise;e) pregnant women;f ) disabled people;g) people elected in elective offices;h) people employed on the basis of an individual employment contract of less than 3 months.

Employees Maximum probation period

Unqualified workers and employees having signed a limited IEC of 3 to 6 monthsEmployees having signed a limited IEC of more than 6 monthsQualified employeesDecision makers

15 calendar days30 calendar days3 months6 months

Mandatory content of IEC (Labour Code, Article 49)

Name and first name of the employeeIdentification data of the employerContract duration The date when the contract enters into forceSpecialty, profession, qualification, positionAssignments of the postJob-related risksRights and obligations of the employeeRights and obligations of the employerLabour payment terms, including base wage, supplements, bonuses and material aidCompensations and allowances, including for working in difficult, unhealthy and/or dangerous conditionsWorkplaceWorking days and days-offProbation period on a case-by-case basisDuration of annual leave and conditions of granting itProvisions of the enterprise’s collective labour contract and internal regulation as regards the employee’s working conditions Social insurance termsHealth insurance terms

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Should the result of the probation period be unsatisfactory, this must be attested to in an order (instruction, decision) on the dismissal of the employee, which is issued by the employer before the completion of the probation period, without the severance payment. Labour Code, Art. 63 (2)

The employer has no rights to demand the employee to perform any activities tha are not stipulated in

the individual employment contract, except for the cases provided for in this code.

IEC duration: Labour Code, Art. 541. on an indefinite term, as a rule (if it is not stipulated in the IEC).2. on fixed term, of maximum 5 years, to carry out seasonal work, in the following cases: (Article 55, Labour Code)

The fixed-term IEC is signed with: Labour Code, Art. 55a) managers of enterprises, deputy managers and chief accountantsb) people carrying out temporary (maximum 2 months) or seasonal work c) retired peopled) people whose IEC is suspended or who are on leavee) people transferred to temporarily work outside the Republic of Moldovaf ) people who are on probation, undergo vocational training, day-time courses at educational institutionsg) people dealing with arts and cultureh) scientists from research and development institutions, teaching staff and rectors of universities, etc.

The employee has the right to concurrently sign IEC with other employers (holds more than one office).The IEC is drafted in two copies in written, which are signed by the parties, are assigned a number from the register of the enterprise, and have the seal of the enterprise.

One copy of the individual employment contract is handed out to the worker; the other stays with the employer.

The employee benefits from all the rights and fulfils all the obligations stipulated in the labour legislation, the internal regulation of the enterprise, the collective labour contract and the individual employment contract.

The IEC is amended only on the basis of an additional agreement signed by the parties, which is annexed to the contract and is a component part of it. Labour Code, Art. 68

Suspension of the individual employment contract

Labour Code, Art. 75-79

IEC suspension = the suspension of the work carried out by the employee and of the payment of compensa-tions (wages, bonuses, and other payments) by the employer. The employee is informed, under signature, about the order (instruction, decision) of the employer, on the suspension date at the latest (excepting circumstances that go beyond the parties’ will).

Business trips Temporary transfer

60 working days at the most (Labour Code, articles 174-176)

Only on the basis of the employee’s written consentCarried out on the basis of a separate IEC1 year and may be extended for 1 more year at the most

The employee is entitled to compensations for transport and accommodation spending, as well as to a special allowance in line with the legislation in force, with the collective labour contract and the individual employment contract.

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Circumstances of IEC suspension: Labour Code, Art. 75-79 1. on the agreement of the parties2. at the initiative of one of the parties3. in circumstances that go beyond the will of the parties

Technical unemployment = the temporary impossibility of the enterprise or of one of its subdivisions to continue its production activity due to objective economic reasons. Maximum length of technical unemployment = 6 months per one calendar year. During this period, the employees are at the disposal of the employer and benefit from a minimum allowance of 75% of the base

wage (on the basis of the employer’s order), excepting cases when the IEC was suspended in line with Article 77, letter c).

The articles 82-90 of the Labour Code stipulate all reasons for terminating the individual employment

contract:

The day when the individual employment contract is terminated is regarded as the last working day

The IEC is terminated pursuant to the order (instruction, decision) of the employer. The employee is informed about it, under signature, not later than the date he/she is relieved of his/her duties.

circumstances that go beyond the will of the parties on the agreement of the parties

a) maternity leave;b) disease or trauma;c) quarantine;e) joining the military service or civil service;f ) force major circumstances;g) the employee is taken to court for a crime incompatible with his/her work; the IEC is suspended until the court delivers its final ruling;h) the medical examination deadline is defied on the fault of the employee;i) medical conclusion ascertains contraindications that do not allow the employee to carry out the work stipulated in the individual employment contract;j) a request by inspection or law-enforcement bodies in line with the legislation in force;k) coming to work under alcoholic, narcotic or toxic intoxication, attested to by a certificate issued by relevant medical institutionsor by a document issued by a commission formed of an equalnumber of representatives of the employer and employees;l) participation in a strike in line with the Labour Code;m) establishment for a fixed term of the degree of physical disability due to a work accident or to a job-caused disease; n) other cases provided for by the legislation in force.

a) granting a non-paid leave for more than one month;b) taking a vocational training or probation, which impose a leave of more than 60 calendar days;c) technical unemployment;d) taking care of a sick child aged under 10;e) taking care of a disabled child;f ) other cases stipulated in the legislation.

a) child care leave –children up to 6 years old;b) sick leave granted on the basis of a medical certificate in order to take care of a sick family member up to one year;c) taking a vocational training outside the enterprise, according to Article 214 paragraph (3);d) holding an elective office in the public administration bodies, trade unions or employers’ associations;e) unsatisfactory working conditions from the point of view of labour and health safety;f ) other reasons stipulated in the legislation;g) during an internal investigation in line with the Labour Code.

at the initiative of one of the parties

Art. 82 Termination of the individual employment contract in circumstances that go beyond the will of the parties.

Art. 84 Voidness of the individual employment contract

Art. 83 Termination of the individual employment contract for a fixed period

Art. 86 Dismissal

Art. 85 Resignation

Art. 88 Procedure of dismissal in the event of the enterprise’s liquidation and of staff cuts

Art. 87 Prohibition of dismissal without the consent of the trade union

Art. 90 Employer’s responsibility for unlawful transfer to another job or dismissal

Art. 89 Reinstatement to office

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Resignation

The employee has the right to resign (the individual employment contract is terminated at his/her own initiative), by announcing the employer about that in written form 14 calendar days before. Labour Code, Art. 85

Should the employee resign in connection with his/her retirement, the assignment of a degree of physical disability, leave for taking care of a child aged under 14 or a disabled child, enrolment to an education institution, change of the residence visa, election in an elective office, employment at another enterprise on a contest basis, the violation by the employer of the individual employment contract and/or the collective labour contract and of the labour legislation in force, the employer is obliged to accept the resignation in the period indicated in the submitted

and registered request, to which the document confirming his/her right is attached.

The head of the enterprise, deputy heads and the chief accountant have the right to resign before the termination of the individual employment contract in the cases stipulated by the contract, after announcing the employer about that in written form one month before resigning.

Dismissal

Dismissal = cancellation of the individual employment contract signed for an indefinite period, and the fixed-term individual employment contract at the initiative of the employer. Labour Code, Art. 86

unsatisfactory results during the probation period liquidation of the enterprise or the termination of the activity of the employer as legal entitystaff cutsthe worker does not cope with his/her post or cannot carry out his/her job because of health problems which are confirmed by a medical certificate the change of the owner (concerning the head of the enterprises, deputy heads and chief accountant)repeated violations of labour duties during one year, provided that disciplinary sanctions were applied beforeungrounded absence from work for more than four hours in a row in a working daysigning in under alcoholic, narcotic or toxic intoxication established as stipulated in Article 7 letter kstealing material or financial goods from the enterprise (including in small amounts), this should be established by a court ruling or by the decision of a relevant bodyculpable actions taken by the employee who deals directly with money or material means, if the employer loses trust in the employee because of these actionsrepeated serious violation of the statute of the educational institution by a an employee of the education sector during one year (Article 301) immoral offence committed by an employee of the educational sector, which is incompatible with his/her positionuse of physical or mental violence against pupils by an employee of the educational sector even once (Article 301)the signing by the head of the enterprise, deputy head or chief accountant of some groundless legal document that inflicted material damage to the enterpriseserious violation of the work duties by the head of the enterprise, deputy head or chief accountant, even if this happened only oncefake documents submitted by the employee to the employer while signing the individual employment contract (Article 57, paragraph (1)), provided that this fact is confirmed as stipulated. employees holding several offices are dismissed if the employer signs an individual employment contract with a person who will have his/her main job at the enterprise and will carry out the same tasks (Article 273)reinstatement to office by court ruling of a person who held the job before, if it is impossible to transfer the employee to another post in line with the code in forcetransfer of the employee to another enterprise with the consent of the employee and both employersthe employee's refusal to continue working because of the change of the owner of the enterprise or its reorganization and subordination to another bodythe employee's refusal to be transferred to another job for health reasons ascertained by a medical certificate (article 74, paragraph (2))the employee's refusal to be transferred in another populated area where the new headquarters of the enterprise is located (article 74, paragraph (1))other reasons stipulated in the code in force and other legislative documents.

Dismissal is allowed for the following reasons:

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It is prohibited to dismiss employees in the following cases:

• they are on sick leave,• they are on annual leave,• they are on study leave,• they are on maternity leave,• they are on partly-paid leave meant to take care of children aged under 3,• they are on additional unpaid leave to take care of children aged from 3 to 6, if they are fulfilling state or public obligations, and if they are temporarily transferred to another job, except for cases when the enterprise is liquidated Labour Code, art. 88

For reinstatement to office please see Labour Code, art. 89

Wages

Wages are paid on a regular basis, but not less often than once a month for the employees remunerated on the basis of monthly base wages. Wages may be transferred on the employees' card account.

The amount of the wage must be directly proportionate to the employee's performance, his/her contribution to the development of the enterprise, knowledge, experience, efforts and competence.

The amount of the wage and bonuses and the way of payment should be stipulated in the individual employment contract

Types of wagesTypes of wages

Minimum wage Average wage1,300 lei per month 3,550 lei per month

Batch wage Direct wage= depends on the workload or output

= depends on the time worked

Emphasis on quantity Emphasis on quality

When the job is risky or the workload is too big

Other rewards:

Supplements to the wage For noxious working conditions, overtime work, etc.

Bonuses For special achievements

Commissions As % from sales or cash receipts

Profit-sharing As % from profit from contribution to the company’s results

“I don’t pay good salaries because I have much money. I have much money because I pay good salaries.”

(Robert Jan Amos Komensky)

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Working hours. The normal length of the employees’ working time shall not exceed 40 hours a week. For certain categories of employees, listed by legislation, the length of the working time shall not exceed 35 hours a week. As a rule, the working time per week is uniformly divided, being of 8 hours a day during 5 days and two days-off or 6 working days and one day-off.

Normal daily length of the working time is 8 hours. The maximum daily length of the working time shall not exceed 10 hours within the limits of the normal working time of 40 hours a week. For certain types of activities, enterprises or jobs, the daily length of the working time may be of 12 hours with a break period of 24 hours at least.

Night work. Work carried out between 22:00 and 6:00 is regarded as night work. The length of the working time (shift) is reduced by one hour. It is prohibited to involve certain categories of employees in night work (young people aged under 18, pregnant women, etc.). Night work is remunerated with a supplement of at least 0.5 of the base wage per time unit established for the employee.

Additional work (overtime work) may be demanded by the employer and is carried out only with the employee's written consent. The employee may be demanded to work overtime without his/her consent only in exceptional cases stipulated by law and within the limit of 240 hours during a calendar year. The first two extra hours shall be paid no less than 1.5 base wages set for time unit, and the next extra hours shall be paid no less than twice the rate of pay.

Weekly rest. The employees are entitled to 2 days-off in a row, usually, on Saturday and Sunday. In any case, the uninterrupted weekly rest shall not be shorter than 42 hours, excepting cases when the workweek lasts 6 days.

Work on rest days. It is prohibited to work on rest days, excepting cases of additional work.

Public holidays.

The following are the public holidays in the Republic of Moldova, during which the average wages are preserved:

Working on public holidays are only employees of enterprises that cannot stop their operation because of technical conditions and production process (continuous flow companies), utility services and those where urgent works are carried out.

Length of annual leave - the paid annual leave lasts no less than 28 calendar days, excepting public holidays.

1st of January New Year

8 March International Women's Day

7 and 8 January Christmas

The Monday a week after Easter Day of Rejoicing

First and second days of Easter According to church calendar

9 May Victory Day and commemoration of heroes who died for the independence of Motherland

1 May International Workers' Day

31 August Our Language holiday

27 August Day of the Republic

Dedication Day of the populated area where the enterprise is based

Declared by the local council of the municipality, city, town and village as stipulated by law

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How to calculate wages?

The net wage (as received by the employee) = Gross wage –taxes imposed on the employee

The income tax is calculated from the income liable to tax.

Income tax = 7% of the income liable to tax (if the income liable to tax does not exceed 2,100 lei per month) + 18% of the income that exceeds 2,100 lei.

Example:

Income liable to tax=4,000 lei2,100 lei*7%=147 lei(4000-2100)*18%=342 leiOverall income tax=147+342=489

Income liable to tax = Gross wage - monthly exemption - taxes withheld from the employee's wageTaxes withheld from the employee's wage = health insurance (3.5%)+ pension fund (6%)+ income tax

Example X = 7400 leiSo,

Thus,

5. Training

Training and vocational development = activity allowing your employees to acquire new knowledge and skills, thus contributing to:

• ensuring the enterprise's competitiveness• ensuring the degree of vocational performance of the employees;• fulfilling efficiently the work tasks and responsibilities;• improving the quality of services;• increasing the degree of motivating the employees.

Training methods:1. lat the workplace: training, rotation, doubling.2. outside the workplace: seminars/refresher courses, studies in various education institutions, probation periods, etc.

It is recommendable to draw an annual training plan, for instance, according to the following box:

Training plan

It is also very important to assess the efficiency of training the staff usually one month after the training.

Taxes withheld from the employee's wageTaxes paid by the enterprise Exemptions from which the employee benefits

Health insurance 3.5 per centPension fund 6%Income tax

Health insurance 3.5%Social fund 23%

Personal exemption 720 lei

TrainerTraining subject Period Length, hours Trainees

259 leiHealth insurance paid by the employer 3.5%

259 leiMandatory medical insurance premium paid by the employee 3.5%

1, 702 leiSocial fund 23%

844.86 leiIncome tax withheld from the wage [(7,400-259-444-720)-2,100] *18% + (2,100 *7% )

444 leiPension fund 6%

1961 lei Paid by the enterprise

Net wage (7,400-1,547.86=5,852.14 lei)1547.86 leiPaid by the employee (withheld from the gross wage)

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6. Motivation

“In the company you have one resource; it’s people and the management of those people. It is motivation that makes the difference between mediocrity and excellence. It is the glue that holds together the objectives and strategies of the organization.” (Cadbury Schweppes personnel director Adrian Gozzard)

Why is it necessary to motivate your employees?

Because a motivated employee is a productive employee, and a productive employee is profitable!

Motivation strategies:• using rewards to motivate the staff: money and verbal rewards• ensuring equity: the employees expect that what they give to the organization should be equivalent to what they receive from it;• involving the employees – increasing the degree of participation of the employees in the process of taking organizational decisions;• efficient management – specific and consistent tasks, efficient use of the employees’ skills and time;• creating good working conditions.

“Good management is the art of making problems so interesting and their solutions so constructive

that everyone wants to get to work and deal with them.” (Paul Hawken)

7. Control

You need to monitor the employees’ activity to ensure a harmonious development of the enterprise. Control over staff will help you avoid unpleasant situations related to possible conflicts, financial losses, output capacity, etc.

The following are several efficient control techniques:

1. Control through rules and formal regulations2. Financial control (budget spent for working hours, raw material, etc.)3. Control with the help of machines and devices4. Control through the assessment of performances5. Meetings with employees

8. Staff appraisali

Staff appraisal = establishing how well every employee fulfils his/her job duties. The appraisal is carried out in order to decide on rewards, incentives, promotion, measures to train and develop the employees, improve the content of positions, etc

Evaluation types

(a) Performance appraisal, analyses the past achievements and failures of employees in order to improve their future activity. (b) Potential appraisal, cassesses the degree to which the employees are ready for promotion and/or future training(c) Reward appraisal, in order to decide on a salary increase.

Staff appraisal methods:

1. Critical incident method (recording delays, ungrounded absences)2. Essay method (the employees draft brief written reports on their performance)3. Quantitative index method (example, output, goods’ quality, number of complaints etc.)4. Appraisal questionnaire (ticking a list of qualities and knowledge to qualitatively fulfil the job)5. Bottom-up appraisal (the employees are not appraised by their leaders but by their followers)

“One machine can do the work of fifty ordinary men. No machine can do the work of one extraordinary man.”

(Elbert Hubbard)

r

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17. How do you promote and sell your products/services?

Marketing = the art of selling; a process of persuading possible clients to buy.

While dealing with marketing, one should focus on meeting the clients’ needs and on gaining profit.

Marketing objectives:

1. Maximize consumption 3. Maximize the consumers’ possibilities of choosing

2. Maximize the consumers’ degree of satisfaction 4. Maximize quality

So, once you have a good marketing strategy, you will get to know what is demanded on the market, you will be more receptive to its needs, will display creativity and will maximize efficiency.

Marketing mix = forecasting and drafting strategies for the following aspects:

Every component of the marketing mix is depicted in the box on the next page.

ing

q a ity

egy, you will get to know what is demanded on the market, you will beneeds, will display creativity and will maximize efficiency.

Marketing mix f

eting mix is depicted in the box o

and drafting strategies for the fol

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PRICE

MARKETING MIX(4P)

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PROMOTION

MENT,ution

If you don’t have a competitive advantage, don’t compete. (Warren Buffett)

Clients Competitors Product Service

Study

Marketing mix(strategies)

PlanProduct/serviceCompany Brand Sales

Promote Client relations(periodic surveys)

SELL

Evaluate

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-sal

e ser

vice

s

Clie

nts’

need

s, op

inio

ns

Comp

etito

rs

Cata

logu

e pric

e

Disc

ount

s

Priv

ilege

s

Paym

ent p

erio

d

Loan

term

s

Wor

king

out

offe

rs

Mec

hani

sms f

or p

rom

otin

g sa

les,

bran

ds, a

nd th

e

com

pany

Prom

otio

n ac

tions

Sale

s met

hods

Clie

nt re

latio

ns

Sale

s tea

m

Dist

ribut

ion

chan

nels

Cove

rage

Ran

ge o

f goo

ds S

tock

s

War

ehou

se

Supp

ly

Loca

tion(

map

) Tra

nspo

rtat

ion

Ques

tions

Wha

t is y

our t

arge

t gro

up(c

onsu

mer

s)?

Wha

t is

thei

r ag

e, g

ende

r, jo

b, ed

ucat

ion?

Who

are

your

pre

sent

clie

nts?

Who

are

your

pot

entia

l clie

nts?

Wha

t do

cons

umer

s wan

t, ho

w d

o th

ey b

ehav

e? W

hat i

s the

ir lif

e sty

le, w

hat

are t

heir

pref

eren

ces?

Wha

t do

they

do

for a

livi

ng?

Wha

t are

thei

r nee

ds?

Who

influ

ence

s the

ir pu

rcha

se d

ecisi

ons?

Wha

t is t

he cu

rrent

dem

and

for y

our g

oods

/ser

vice

s on

the m

arke

t?

Wha

t is t

he d

eman

d fo

reca

st?

Wha

t are

the f

eatu

res o

f you

r pro

duct

s/se

rvice

s?

Wha

t are

the b

enefi

ts o

f you

r pro

duct

s/se

rvice

s?

Wha

t do

cons

umer

s thi

nk o

f you

r pro

duct

?

Who

are

your

com

petit

ors?

Wha

t mar

ket s

egm

ent d

o th

ey co

ver?

Wha

t pro

duct

s do

your

com

petit

ors h

ave o

n th

e loc

al m

arke

t and

wha

t are

thei

r

feat

ures

?

Wha

t mak

es yo

ur p

rodu

ct/s

ervi

ce b

ette

r or w

orse

?

Wha

t are

your

com

petit

ors’

price

s?

Wha

t com

petit

or h

as th

e hig

hest

/low

est p

rice

for a

sim

ilar p

rodu

ct?

Wha

t is t

he sh

are o

f you

r sal

es o

n th

e mar

ket

(mar

ket s

hare

)?

Wha

t is t

he sa

le fo

reca

st?

Wha

t do

you

have

to d

o to

incr

ease

your

mar

ket s

hare

?

Wha

t is t

he m

axim

um p

oten

tial?

Wha

t is t

he m

arke

t sha

re o

f you

r com

petit

ors?

Who

has

the l

arge

st m

arke

t sha

re a

nd w

hy?

How

do

your

com

petit

ors s

ell t

heir

good

s? W

hat t

eam

do th

ey h

ave?

How

will

you

attra

ct n

ew cl

ient

s?

How

will

you

dist

ribut

e you

r pro

duct

s?

Who

will

be i

n ch

arge

of p

rom

otin

g an

d se

lling

the

good

s?

Wha

t mes

sage

do

you

wan

t to

exte

nd to

pos

sible

clien

ts?

Wha

t wou

ld yo

u te

ll a

cust

omer

in 3

0 se

cond

s to

pers

uade

him

/her

to b

uy yo

ur p

rodu

ct/s

ervi

ce?

Wha

t sal

es m

etho

ds d

o yo

u ch

ose:

dire

ct o

r via

mid

dlem

en?

Whe

re w

ill yo

ur b

usin

ess b

e loc

ated

?

Whe

re a

re th

e clie

nts?

Wha

t is t

heir

purc

hase

pow

er?

How

far a

way

from

the s

ale m

arke

t are

you?

Wha

t are

your

pos

sibili

ties o

f em

ploy

ing

high

-ski

lled

labo

ur fo

rce?

Wha

t com

petit

ors o

pera

tes n

earb

y?

Are t

he g

oods

acc

essib

le to

the c

lient

s?

Do yo

u ha

ve a

cces

s to

raw

mat

eria

l, ele

ctric

ener

gy,

sew

erag

e net

wor

k, w

ater

supp

ly, co

mm

unica

tions

(pos

t ser

vice

s, te

leph

one,

Inte

rnet

etc.)

,road

s?

Wha

t is t

he st

ate o

f roa

ds?

Is th

e pub

lic tr

ansp

ort a

cces

sible

? Do

you

have

finan

cial s

ervi

ces (

bank

s, lo

an a

ssoc

iatio

ns) i

n th

e

neig

hbou

rhoo

d?

Ma

rke

tin

g m

ix s

tra

teg

ies

- "T

he

pu

rpo

se o

f b

usi

ne

ss i

s to

cre

ate

an

d k

ee

p a

cu

sto

me

r." (

Pe

ter

Dru

cke

r)

Example of comparative analysis of the competitors:

Rate every factor (5 – excellent, 4 – good, 3 – medium, 2 - poor)Sum up the points.The higher the rating, the better the competitive position is.The bigger the difference in the rating of your company and the one of your competitors, the higher the competitive advantage of your company is.

The following are several stages that you need to pass to make sure your product/service will sell well:

Range of goodsQualityPromotionLocationServing clientsOthersTOTAL Points

Rival firm A Rival firm B Rival firm CYour firmSuccess factors

Factorii succesuluiCarry out a market survey

(focused on clients,

competitors, prices etc.)

Get to know your clients

Get to know what you

compete with

Invest in branding

Primary sources

You gather information yourself. You discuss directly with clients (meetings, by phone, e-mail, questionnaires); you ask them what their needs and wishes are when they buy some product. You discuss the price with them and ask them whether it suits them.

Define your target group. Find out what their needs and wishes are. Perhaps they want better quality or lower prices; perhaps they want a more comprehensive offer, or a prompt reply. It is crucial to know what your clients expect from a product or service that you want to launch on the market.A new product becomes successful only if it is better or cheaper than the one of your competitors. Adults do not give up their purchase habits so easily. To try a new product, they should be either unhappy about what they are presently supplied or to be very attracted by the image or features of the new product.When it comes to youths and children, their reaction is slightly different. You stand big chances to have them want to try the new product if it carries the inscription “NEW!”. But even in such a case, you should not expect too much loyalty from this segment. Competi-tion has the advantage of being already present on the market and in the consumers’ mind. What you need to do is to differentiate yourself and to inform your possible consumers about some relevant benefits.

You have one single chance to make a first good impression. The name, the logo, the slogan, the business cards and even the wrapping, depending on the case, represent the first contact between the product and client. It is easier to promote a name that associates the product with the sector of activity. Slogans are a sales instrument as they may persuade people to act, they may point out the benefits or may define the category of which the product is part.The logo should have a visual impact on clients and help them remember and recog-nize the product.Invest in their promotion so that your target group gets to know them. People buy benefits. Turn the features of your products into benefits for your clients. As a matter of fact nobody is interested in the technical features of devices. The customers want to buy advantages offered by the technology.When you launch a new product and are at the beginning of a business adventure, I assume that you do not have a huge promotion budget.

Data collected by other organizations (the National Statistics Bureau, for instance). Specialized magazines, the Chamber of Commerce and Industry, etc.

Secondary sources

Who do you turn to when you carry out a market survey?

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How do you plan the price?

Price strategies

Competitive prices Set the price depending on your competitors’ prices. Requirements are determined by the clients’ incomes and wishes, but also by the competi-tors’ offers.

Costs plus trade markup Producers add 15% to production costs, distributors add 20% and sellers add 40% to the price of the sold goods.

Sales Setting prices equal to or lower than the ones of your rivals in order to attract clients. It is efficient for a short term

Promotions When the product does not enjoy high demand and your stocks are large, you focus on the diminution of losses and not on profit.

Discounts Offer special prices for certain products or for a certain amount of goods. This way you may promote new products too.

Versions Offer samples for a lower price and the product itself for a higher price, if the same product/service is sold in several versions.

Breaking in The lowest price possible in order to attract as many customers as possible in the shortest time possible so as to conquer the market.

Price manipulation Initially, when the product is launched, you may offer a higher price. Subsequently, as the offers get less numerous, and the product gets increasingly known, you may want to decrease the price.

A small price, a big deal Go for a smaller price than the ones of your rivals in order to win confidence and clients. But it shall not be so small as to arise suspicions about the product’s quality. Offer promotions, lower prices, discounts etc. You may specify what the initial price of the product was.

Factorii succesuluiPromote

P.R. (Public Relations)

Set the price correctly

Send a letter to your possible clients to inform them about the launch of the new product, its benefits and how they can get it. The advantage of the online communica-tion resides in the fact that you can address a wider public interested in what you want to announce. In this respect, such social networks as Facebook are very useful. Adver-tise your product through the media, TV channels, radio stations, billboards, advertis-ing in busses and minibuses, promotion campaigns, degustation, presentations, etc

Allot time to write to your clients, to answer questions and to try and win a good reputation for you and your product. Build an image of an expert for yourself. Prove through your results that people have important things to learn from you and it will be much easier for you to sound trustworthy during business meetings. The clients who read your works will easily recognise you in a business environment and certainly you will have to take fewer efforts to prove your professional authority.

If the product’s sale price is too low, you will fail to cover your spending, if it is too high, it will have a negative impact on sales. You will have no profit or will have a minimum profit in both cases. Price formation implies the idea of profit, therefore price-related strategies should be a priority. A correct price may reduce stocking or distribution prices and thus will have a positive impact on the amount of sales and respectively on profit. The price should be competitive (for instance, lower than the one of your rivals), but it should generate the wanted profit (and not a survival profit).Make sure that your sales income covers all the spending. Make a sales forecast. You cannot post low prices for high-quality products.You must plan your budget.

But avoid competition based on price only, lay the emphasis on: personalization, orienta-tion towards the client, specialization, quality, values, services, comfort, safety, delivery, guarantees, cleanness, and attractive financial options.

Advices Relations with clients

Check the content of the offer The info you provide must be clear and trustworthy. Check on your friends whether it is clear or still vague. Consider constructive criticism.

Reply to messages in the shortest

time possible

You should answer in 48 hours at the latest; otherwise you will lose possible clients. If you do not have a specific answer, at least tell them that you received the message and will give them an answer as soon as possible. At the same time, persuade the client that it is worth getting back to you and placing an order.

Clients erase them Thank the client, display maximum interest. If you get the client’s personal telephone number, you won, because you can call them periodically to ask them whether they are satisfied with the product/service and to suggest something new. You may send birthday congratulatory messages.

Display a positive, friendly, profes-

sional attitude

You should cope with your clients’ requirements, discontent and questions in a decent manner. Be patient, understanding and useful. You should always have answers to any question, for instance “I know exactly what you need”.

Be careful and make sure that

products reach the clients on time

Supply the goods in the shortest time possible and deliver on your promises.

Be responsible and do not ignore

your client’s problems. Answer both

questions and discontent.

Show that you care and find a quick solution. The client will appreciate that. Take into account any discontent and thank the client for every suggestion and try to put it into practice provided that it is objective.

Premium prices High but short-term profit. Clients believe that a higher price means better quality, image, a better location of the shop, home delivery, a nice bag. Some people buy the brand and not the product. The name sells the product..

Approximate prices Generate a positive psychological effect. It is not by accident that quite often you can see prices like 9.99 instead of 10.

Effect of the digits 0

and 9

People associate the digit 9 with value and the digit 0 with quality. Food in restaurants costs 50 lei, but 5.99 lei in fast-food. The strategy does not pursue the profit but the way in which the product is perceived. Is it valuable or of quality?

Encourage people to use

the product for a long time

People pay for quarterly aerobics subscription, but in a month they give up as they take it for free. Others who pay monthly will attend aerobics classes on a regular basis.

Premium prices Luxury companies are a perfect example for this strategy. The image, the wrapping and the delivery of the product may justify its high price.

Reference prices For instance, in supermarkets, cheaper products are placed near more expensive products and, as a rule, their prices are 15% lower.

Big and small losses Give people the instalment payment option. It does not matter that they will pay more after settling all instalments; what matters is the psychological effect on clients.

Enhance the product’s value Go for TV advertising and provide new details every time it is broadcast. Price and quantity Offer more for the same price.

Useful advices given to your clients (whose implementation practically costs you nothing)

Award your clients’ loyalty Offer stable clients bonuses, presents, discounts, something special to which you contributed yourself (such as a hand-made greeting card or a hand-embroidered cap bearing the symbols of the company).

Show you are always available Assure your clients that they may contact some of the company’s representatives at any time. If you cannot provide 24/24 services, at least let your clients know when they can get an answer. (set a phone machine, post a message on the door, etc.)

Give quality A satisfied person will get back to you and will bring other clients. Offer free-of-charge samples If clients like the product, even when they do not have money, they will be

motivated to find some and come and buy the product.

Organize lotteries This way you will keep in touch with your clients until the winner is announced. The present must be connected with the promoted product.

Profit in business comes from repeat customers, customers that boast about your project or service

and that bring friends with them. (W. Edwards Deming)

51

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How do you locate your business?

The first question you need to answer is whether you need an office at all. Why?

Because there are many activities that you can initially carry out at home. Which ones? 1. Providing marketing services, call centre (in particular online)2. Journalism3. Translations4. Consultancy services5. Tailoring-crocheting6. Repairing electrical devices7. Baby-sitting 8. Housekeeping9. Arts (drawing, craftsmanship)10. Fashion design/architecture/interior design11. Writing/assessing projects12. Editing books/textbooks

As an alternative option, you may resort to legal addresses put up for sale, such as the Intelligent Office.

Intelligent Office = the service of taking over and redirecting e-mail messages and letters sent by post, telephone calls, fax messages, answering phone calls, providing access to additional business-support services. So, you have all the benefits of a modern, furnished and well equipped office, but without being burdened by the concern to rent offices and hire staff.

Advantages and services of an Intelligent Office:

• Your company is headquartered in a modern building;• You have the possibility of having a prestigious legal address for your company and on your business card; • You don’t have to pay rent fees or maintenance fees, utility services and other additional taxes; • The Intelligent Office is your reception service;• Telephone calls, fax messages, letters are received in a professional manner and on behalf of your company, and, at your instructions, will be redirected to your telephone number, at home, in your office or wherever you are;• You have access to a wide number of offices which you can pay per hour and which can be used for business meetings, seminars, presentations, training, and conferences. The halls are provided with telephone lines, individual phone numbers and Wi-Fi.

g projectsxtbooks

Working from home

Advantages Disadvantages

• you work whenever and however you want• you don’t need to spend money on transport• you can work even wearing your pyjamas, it does not matter what you ware• you have a flexible working schedule• you don’t need to pay any rent• you are in a familiar and comfortable environment

• no socialization• you cannot directly monitor your employees (unless you bring them home)• you get fatter (you move less)• you have no privacy in your own house, you start taking it as an office• your family members may divert your attention from work• you have limited space

Who can benefit from Intelligent Office services?

• Those who are initiating a business or who are in a transition period, working from home and are not ready yet to cover the spending for a new office. • Those who do not want to work without office staff or who do not have this need on a permanent basis.• Those who want to check the market before using a permanent office. • Companies that need offices of the highest quality for the sake of their good image.• Those who need a prestigious address in order to ensure good relations with their clients.• Those who have business trips very often.

When you decided that you do need an office, you should answer the following questions

1. How close is your office to your clients and competitors?2. To what extent is the office accessible in terms of transport means? What is the state of the roads?3. Is the office visible, accessible to your clients? Is the entrance from the street?4. Is the office spacious enough? Are its rooms well divided?5. How much is the rent? Is the price advantageous compared with market prices?6. Is there a parking lot there?7. Has it been renewed? When did the last renovation take place? 8. What facilities does it offer? For instance, Internet connection, access to utility services.9. Is the WC visible from the hall where the clients are received?10. Is the illumination system good enough?11. Are there enough plugs?12. Does the WC operate all right?13. Do the rooms have separate entrances?14. Can the reception hall be viewed from the entrance door?15. Is there a smoking place?16. Who are your neighbours?17. How close are your rivals?18. Is there any possibility of placing outdoor billboards?19. What is the office meant for? (if you rent an apartment, you will have to change its destination to get a licence.)

How much space do you need?

These are the four basic compartments for the service sphere.These are the four basic compartments for the service s

for the director,

accountant,

manager

refreshing area,

with possibility

to make a tea

for the secretary and

customer relation-

ship manager

for materials,

boxes, chairs, etc

Administrative office

Sanitary block, kitchen

Customer service office

Closet/room for storing materials

53

An easy to understand BUSINESS GUIDE

54

Determine

the amount

of the investment

Forecast

incomes and

expenditures

Determine

the profitability

Borrowed

capital

(ex. bank

credits)Equity

ed

al

nk

s)

Cash entries

(money earned

from activity)

leiForecast of investments (food market)

10 00030 0005 0001 500

20 00080 00040 000 40 000

Start up the businessPurchase commercial equipmentAdvertisingRent of the marketPurchase the first lot of merchandiseTOTAL INVESTMENTSFunded from own sources2-year loan with 30% interest rate

18. How to draft a financial plan?

You need to develop a financial plan in order to see whether your investments will be rewarding, will bring you profits in a reasonable period of time.At the same time, the information included in your financial plan will help you to easier explain the concept of your business and argument the investment to a potential funder.

Unfortunately, when you are at the very beginning of your business, you have not yet results to help you making a credible and sound proposal to your creditor. Therefore, you have to resort to estimative indicators. But these must be as clear and realist as possible, to be consistent with sales and not the opposite.

Financial plan development stages

1. Determine the amount of the investment2. Forecast incomes and expenditures for the first years of activity3. Establish the proceeds and payments schedule4. Identify the investment recovery term5. Establish the needed funding from own sources and from other sources6. Determine the cost of external funding (commission, interest, pledge, etc.)7. Draft the reimbursement plan of attracted credits8. Verify whether the business is/will be profitable

The investment can be performed from 3 sources:

Determine the amount of the investment

To know how much money you need to invest, you have to calculate the initial needed expenditures.

These are the categories of expenditures, you can also see in THE CHART OF ACCOUNTS OF THE FINANCIAL-ECONOMIC ACTIVITY OF ENTERPRISES No 174 of 25.12.97. The Chart of Accounts developed based on National Accounting Standards (S.N.C.), taking into account require-ments for producing financial reports and management accounting. Therefore, in practice, you will meet this very often.

TYPES OF EXPENDITURES

Cost of sales General and administrative expendituresCost of sold merchandiseCost of provided servicesCost of assembling-construction worksCost of leasing services

OPERATIONAL ACTIVITY EXPENDI-

TURES

Investment activity expenditures

Expenditures related to the immaterial assets outputExpenditures related to the long-term tangible assetsExpenditures related to the long-term financial assets outputExpenditures from the reassessment of long-term assets at their outputExpenditures associated with shareholding in other enterprisesExpenditures related to operations with related partiesOther expenditures related to the investment activity

Financial activity expenditures

Expenditures related to the payment of royaltiesExpenditures related to the financed lease of long-term tangible assetsExpenditures related to exchange rate differencesOther expenditures related to the financial activityExceptional lossesLosses due to natural disastersLosses due to political disturbancesLosses due to amendments in the country's legislation

NON-OPERATIONAL ACTIVITY EXPENDITURES

EXPENDITURES (SAVINGS) RELATED TO INCOME TAX

Commercial costs Expenditures related to marketing operationsExpenditures related to packages and packing of products and goodsExpenditures related to the delivery transportationExpenditures related to publicityExpenditures related to warranty reparation and serviceExpenditures related to doubtful debtsExpenditures related to the reimbursement and price reduction for the sold goodsOther commercial expenditures

General and administrative expenditures

Expenditures related to the wear, reparation and maintenance of general usage fixed assetsExpenditures related to the depreciation of non-material assetsExpenditures related to wages paid to the administrative and management staffTaxes, fees and payments, except for the income taxExpenditures related to charity and sponsorshipLabour safety related expendituresRepresentation expendituresTravel expendituresOther general and administrative expenditures

Other operational expenditures

Expenditures related to the sale of other current assetsExpenditures related to the current leaseExpenditures related to fines, penalties, amendsExpenditures for amending the current assets assessment methodsExpenditures related to interest rates for credits and loansUndistributed indirect production expendituresShortages and losses from the damage of valuesExpenditures associated with the scrap productionOther operational expenditures

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An easy to understand BUSINESS GUIDE

56

Be balanced with your expenditures. You need to know to make the difference between useless, needed and useful expenditures; you need to see what exactly you can give up and what you cannot.

To plan cash inputs, you need to make calculations on several categories of incomes. According to the Chart of Accounts, these are the following:

Once you have done forecasts on cash entries, you will see whether part of it is sufficient to cover expenditures related to the investment activity, after all other expenditures are covered. If the enterprise has no sufficient means for the investment and you do not have own capital available for the moment, then you can appeal to funders and ask for a credit/grant.

EXAMPLE

CATEGORIES OF INCOMES

Incomes from sales Incomes from the sale of productsIncomes from the sale of goodsIncomes from the provision of servicesIncomes from construction contractsIncomes from leasing

INCOMES FROM OPERATIONAL

ACTIVITY

INCOMES FROM NON-OPERATIONAL

ACTIVITY

Exceptional incomes Damages paid to recover losses due to natural disastersOther exceptional incomes

Other operational incomes Incomes from the sale of other current assetsIncomes from current leaseIncomes from fines, penalties, amendsIncomes from amending the current assets assessment methodsIncomes from the recovery of material damageOther operational incomes

Incomes from the investment activity

Incomes from the immaterial assets outputIncomes from the long-term tangible assetsIncomes from the long-term financial assets outputsIncomes from equitiesIncomes from interest ratesIncomes from the reassessment gap of out long-term assetsIncomes from shareholding in other enterprisesIncomes from operations with related partiesOther incomes from investment activity

Incomes from financial activity Incomes from royaltiesIncomes from the financed lease of long-term tangible assetsIncomes from exchange rate differencesIncomes from free of charge in assetsIncomes from state subsidies, bonuses, awards and sponsored amountsIncomes from non-competition contractsOther incomes from the financial activity

600000450000150000

500060000150006000

1200098000480001200036000

Incomes from sales

Cost of the sold merchandise

Gross profit

Commercial expenditures Expenditures related to the staff remuneration Rent of the market Amortization of equipment Other expendituresTotal operational expenditures

Operational profit

Interests on loanProfit before taxation

Often, in order to determine whether a credit is indeed required, the percent of sales method is applied.

EXAMPLE

1. To be performed on a management date:

Balance sheet of the enterprise (lei )

Situation of incomes of the enterprise

2. Calculate the percent (%) of sales of balance sheet positions, but only those having a direct relation with sales:

3. The forecasted level of sales shall be estimated as follows:a) According to the information from the “Incomes of the Enterprise” table, the enterprise, on the management date, has achieved sales in the amount of 85,000 leib) Following the market investigations, the enterprise noticed that the demand for the product/service offered by it is much higher than the amount available so far;c) The enterprise decides to increase its sales from 85,000 lei to 130,000 lei.

4. The amount of the funding needed to ensure the respective growth of sales, shall be determined by performingthe following calculation stages:

a) Make the difference between "total assets” and „total liabilities”: 140,9% - 23,5%=117%

b) Increase in forecasted sales = = forecasted level of sales (130,000 lei) - sales performed in the reporting month (85,000 lei):

130 000 lei – 85 000 lei = 45 000 lei;c) Total of funding needed to increase sales by 45,000 lei:

45 000 lei x 117% = 52 650 lei.

5. Calculate the net profit and dividends, estimated for the new level of sales:a) Estimated net profit: 130 000 lei x 10 % = 13 000 lei, where:

130 000 lei – amount of forecasted sales;10% (net profit to sales on the management date);

b) Estimated dividends: 130 000 lei x 7 %= 9 100 lei, where:7% (dividends to sales on the management date);

c) Non-distributed forecasted profit will be the difference between the forecasted net profit (13,000 lei) and forecasted dividends (9,100 lei):

13 000 lei – 9 100 lei = 3 900 lei.

Long-term assetsAvailable cashDebtor’s debtsStock of goods and materialsTotal assets

Statutory capitalStatutory profit Financial creditor debtsCommercial creditor debtsTotal liabilities

56 0002 000

15 35046 650

120 000

55 00045 0008 000

12 000120 000

LIABILITIES ValueValueASSETS

Long-term assets * 100%Sales

Cash available * 100%Sales

Debtor’s debts *100%Sales

Stocks *100%Sales

Total assets

Share capital

Non-distributed profit

Creditor debtsSales

Creditor debtsSales

Total liabilities

65,8%

2,3%

18,0%

54,8%

140,9%

-

-

9,4%

14,1%

23,5%

LIABILITIES %%ASSETS

SalesNet profit Paid dividends

100107

85 0008 1005 800

% of salesValue (lei)Name

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An easy to understand BUSINESS GUIDE

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6. Determine:Net borrowing

A useful list of financial indicators is shown in Ann ex 6.

Here are the aspects that funders are primarily interested in:

1. Balance sheet2. Report on financial results3. Report on cash flow4. Liquidity, solvency, return, feasibility5. Financial stability, developing dynamics (in time)6. Long-term tangible assets7. Rationale of forecasts8. Investment recovery term9. Risk assessment

Start up a business that does not require large infusions of capital at the beginning. You need to focus on business ideas generating profit, because the funder will only give you a credit if your financial plans show that investment is profitable.

Liquidity – capacity of the enterprise to honour its short-term liabilities, including the interest rate which is usually paid on a monthly basis.

Solvency – capacity of an economic agent to pay its debt to the creditor, on the preliminarily established payment term.

Feasibility – complex analysis, preceding the decision on investments, aiming at establishing the opportunity and performance of some objectives on investments.

Return – capacity of the enterprise to generate profit (credit reimbursement source),

This is the return calculation formula:

Leverage = increase of decrease in equity return following the use of a credit

L = (Re – Interest rate) * K borrowed / K ownFinancial return = Economic return +/- Leverage

Breakeven (critical amount) = minimum amount of provided services ensuring a non-loss activity of the enterprise, the level at which the income of the business covers all expenditures only.

The breakeven shall be calculated in order to know whether the activity will start bringing profits.

Suppose the investment accounted for 40,000 lei and has a length of 4 management periods (years/trimesters/month).

Total funding needed to increase sales(see item 4. c.) minus

Forecasted non-distributed profit=

minus=

Net borrowing

48 750 lei 52 650 lei 3 900 lei

Profitability =

Avetage profit level *100 %yearly

quarerlymonthly

volume of investment

Breakeven= Fixed costsVariable

Sales Costs1 -

Average profit: 30,200 lei/ 4= 7,550 leiRate of return on investment (ROI): ( 7 550 lei/40 000 lei ) x 100% = 18.8%Whether to accept or not the return of the project is on the investor’s decision.

If ROI>= 25%-30% then the project is considered profitable, because the investor has the capacity to cover other eventual expenditures, at the same time having profits and recovering its investment.

Recovery period of the investment amount (regardless of its origin) = number of years/trimesters/months needed to recover the initial investment from the net cash available, generated by the operations specific to the project. The recovery term of the investment reveals the liquidity amount of a project and the speed by which the invested money is recovered.

Example

Net cash flows, forecasted for four management periods:

225 000 (total amount of investment) = 75,000 (cash flow, period I) + 95,000 (cash flow, period II)+55, 000 (part of the cash flow, period III-a).55,000 : 98,000= 0.6 of period III-aHence, the investment recovery period is 2.6 years/trimesters/months.

For your financial forecasts to be more trustworthy and conclusive, you may produce your financial plan in two versions (optimist and pessimist), because the reality is usually somewhere in the middle. You must be always prepared for the worst case scenario. And do not forget to periodically update your plan, since the financial environment is a quite flexible one, bringing changes at the level of figures as well.

Think what you should do in case things do not develop as expected. Make three scenarios for each decision, in this way you will be prepared for any situation.

Planning is usually performed for 3-7 years (e.g., in case of services, the forecasting period is shorter, in agriculture - longer).

Cash flows (in and out cash) show where does the money come and go, show the solvency (capacity of an economic agent to pay its debt to the creditor, on the preliminarily established payment term)

1234

TOTAL

5 5006 7008 4009 600

30 200

Profit (lei)Management period ( years/ trimester/months)

IIIIIIIV

TOTAL

75 0009500098 000

130 000398 000

Forecasted net cash flow (lei)Management period (years/trimesters/months)

Cash flowFinancial results (profit/losses)Balance sheet

monthlyquarterlyquarterly

Year 1

quarterlyquarterlyquarterly

Year 2

yearlyyearlyyearly

Year 3Financial planning basic components

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Financial result shall be calculated as follows:

Revenue income – Cost of sales = Gross Profit Gross Profit – Expenditures per period = Taxable ProfitTaxable Profit – Tax on income = Net Profit

The balance sheet shows the financial situation and presents the image of assets (economic goods), liabili-ties (equity, debts) of a commercial society, at a certain moment. It represents the value of economic goods in correlation with funding sources.

ANNEX 6 : Financial indicators

When developing your own financial plan, you can inspire yourself from the Business Plan Model

included in Annex 9 B

Risks assessment

Risk = the incapacity of the enterprise to adjust itself in time and at the lowest cost to variations of the environment it activates.

TYPES OF RISKS

In Out

Sales in cashCredits and loansEntries of debts from debtorsSales of non-used fixed assetsProceeds from interests or dividendsIssue of sharesOther fees, royalties, incomes etc.

Purchases in cashPayments to creditorsPayment of wages and bonusesPurchase of fixed assetsReimbursement of credits and loansPayment of dividends, interests and taxesOther payments

Risk = the incapacity of the enterprise to adjust i

operational, commercial risk

changes in consumers' preferences

increase in product’s prices

new competitors

operational, commercial risk increa

new c

financial risk

failure to fulfil financial liabilities

national currency rates fluctuations

evolution of bank interests

failure to pay debts

contractual penalties

failurfailur

contr

innovational risksecurity leak on business

wrong product design

failure to reach planned technical parameters

overcome of cost estimate

innovational riskfailur

overcoverc

political, social,legislative risk

accidents at work

unfavourable amendments of legislation, increase in taxes

political instability

introduction of restrictions

plegislative risk politi

introdintrod

natural risc unfavourable climatic conditions

earthquakes, volcanic erruption

drought, floods, storms, landslides

epidemics

natural risc earth

droug

epideepide

ownership riskcomplete or partial deterioration of assets (buildings, equipment, values

in merchandise and materials, etc

storms

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ownership risk in me

storm

risk of manufacturing

marketing of a lower amount of production than planned

increase in material expenditures

accidents and deteriorations of equipment

obtaining inconsistent production, rejections by consumers

accidents at work

When you know the risks, you can prevent them by developing strategies on combating them. These

strategies must include risk reduction and avoidance measures.

19. What to write in a business plan?

Business plan (BP) = a confidential document, containing the objectives and goals of the enterprise, indicating in details how to achieve them

Pentru ce?What for?1. To describe your business2. To get to know what resources you need3. To plan the activity so that to make it profitable4. To establish a goal and the objectives to achieve it5. To show that the effort-effect ratio justifies the investment6. To get the business funding agreement

BP = an entrepreneurship management tool (an action plan), a document, based on which you can get a bank credit or attract investments

Types of business plans

Risk avoidance

Risk limitation

Risk diversification

Risk transmission

Risk insurance

ExamplesRisk reduction organizational measures

By depositing money in the bank on a daily basis, you eliminate losses caused by possible thefts

Establish a maximum amount of expenditures, a certain share of products that can be sold on credit.

Distribution of resources per projects which are not interrelated.

Contracts on keeping and transport of shipments, sale, service and supply contracts etc. (when for the party transmitting the risk, losses are much more significant)

Transmission of some risks to insurance companies (e.g., Casco, insurance of enterprise’s goods, harvest, livestock insurance, insurance against accidents, theft insurance, professional liability insurance)

10-15 pages

Basic information about the business

When the amount of the required financial means is smallWhen the business environment is being tested

>40 pagesDetailed business plan, with the detailed description of tasks for each subdivision

20-40 pages

Detailed description of the business

When the required amount is relatively high (e.g. 20,000 euro)

Operational BPFull BPSummary BP

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BP structure

Title page

Contents

Full name of the firmLegal addressContactsDirector’s full name, signatureDate when plan is draftedReference to the confidentiality of the informationOptional: business plan outlining goalBasic compartments (indicating the pages)

Summary

Background of the firm

(Introduction)

Brief description of the businessReflects the essence of the BP, the goal of developing itBrief information on the market, product, staffFinancial resources necessary to achieve the planExpected economic-financial resultsTo wake up investor’s, creditor’s interestTo be written after finishing the BPData on the registration of the firmLegal form of the enterpriseFoundersArea of activity

Description of the

business (summary)

Description of products

or services

Goal and objectives of the businessLocationFoundersPartnersPossible investorsOfficesSWOT analysisWhat is the SWOT analysis:

The SWOT analysis = a strategic method, used to evaluate factors and phenomena affecting a project or an enterprise. This method allows to establish the project’s goals and to identify internal and external factors facilitating or stagnating their achievement.

Technological, quality featuresAssortment, nomenclatureNeeds satisfied by thesePacking, designCatalogues, pictures, draftsWhy clients will prefer this product namely

Internal factors

External factors

Negative influencePositive influenceSWOT analysis

Strengths (qualities of the project or staff, offering advantages as compared to the others involved in the process)Opportunities (possible external factors offering secondary opportunities in achieving the goal)

Weaknesses (aspects that are weakening the project)

Threats (possible external factors that can create obstacles in achieving the goal)

StrengthsWhat are you doing well?What are your resources?What are your advantages in front of competitors?OpportunitiesE.g., result of the market growing, change in the lifestyle, solution of problems associated with current situations, a positive perception of your business from the market, or the capacity to offer a better value, leading to a growing demand for the offered services.

WeaknessesE.g., lack of experience, limited resources, lack of access to technology or capacity, low service offer, or a weak location of your business.ThreatsE.g., competition, intolerable increase in process by suppliers, governmental regulations, economy failures, negative effect of the media, change in consumers’ behaviours that could reduce the amount of your sales, or the introduction of a more advanced technology outdating your products, services or equipment.

Components

Market and marketing

strategy

Organization and

management

Market characteristics, structure and size Market evolutionYour firm’s market shareActual and prospective clientsAnalysis of consumers’ needsPrice policyLocationDistribution channelsProduct/service promotionCompetitors (strengths and weaknesses) about 3-4Comparative advantagesSales strategies

Management team and its featuresNeeded staffOrganizational structure

Financial plan

Loan proposal

Bookkeeping information and reportsPeriodic cash flows (quarterly, monthly, yearly, etc.)Estimation of quarterly, monthly or yearly sales, incomes or expenditures, depending on the requirements of investors or of the credit societies

Credit form

Conclusions

Annexes and references

The BP is developed by the head and is passed on to be added up by the heads of departments

Each department develops its proposal, and the entrepreneur integrates them into a plan

The BP is developed by external consultants-experts

Hoard (your own savings)Money sent from abroad (remittances)

Money of your associates, business partnersMoney paid in advance by your clients, suppliers

Loans from banks, microfunding companiesLoans from your acquaintances, friends

g pLoans from your acquaintances, friends

Grants (non-reimbursable money) from state programmes, national and international funds, through NGOs, etc.

Ways of developing a Business Plan:

ANNEX 8 Business plan notebook – is a draft business plan, where you only write in square brackets your

information.

ANNEX 9 Business plan model of an individual entrepreneur in the rural sector.

20. Where to find money for the business?

Here are a few sources for money for your business:

1

2

3

4

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To access the rest of the money from funders, usually, you have to invest from your own resources (savings, remit-tances) at least 20% of the sum needed to start up the business.

A credit or a loan is an important small business funding source. In Moldova, as a rule, loans can be taken from commer-cial banks, business funding societies, foundations, NGOs, etc.

The loan granting process varies from one bank to another, depending on the credit type and purpose. Usually, the procedure is the following:

1. Preparing for and carrying out the first meeting with the creditor. Useful tips:

• Explain the essence of the project, do not lay emphasis on guaranteeing the credit;• Show that you are ready, you have the potential and the necessary experience to implement the project;• Be informed/well prepared with documents, you must have the financial documents and contracts concluded with your business partners;• You need to have the verbal and written explanation of your project;• Prepare the business plan according to the model requested by each bank apart;• It is recommended to independently develop the business plan, because after the first meeting with the creditor, you will have to amend it.

2. Submitting the crediting application by the small business enterprise, with the following information mentioned:• Credit amount;• Utilization term;• Utilization goals;• Offered guarantees.

The following information, documents, also has to be submitted: • Business plan;• Authorizations, licenses,• Balance sheet of the enterprise,• Report on financial outcomes,• Sell-buy contracts,• Documents confirming commitments to reimburse the credit,• Other documents, as required.

The applicant who is not a client of the bank shall also submit the the registration certificate of the enterprise, the

abstract from the State Register and the statute.

What to pay attention to before submitting a credit application?

a) The interest rate included in the credit contract man be:• Fixed – does not change during the validity period of the contract;• Floating – can be modified by the creditor;• Yearly, monthly, weekly, daily;• Single – calculated from the amount of the credit from the contract for the entire validity period, regardless of the credit reimbursement scheme;• Effective – annual interest rate calculated based on the interest and on all commissions made;• Real effective interest rate = effective interest rate, minus inflation rate.

The interest rate can be calculated automatically on almost all Moldovan banks’ websites.

Calculation of the monthly interest rate is made according to the formula:

Credit balance = credit amount at the end of the previous month

Interest rate =(Credit balance * annual interest rate * no of days in the month)

365

b) Credit utilization period – Civil Code, art. 263

c) Interest rate paying frequency – monthly, quarterly, at the final date from the credit contract, on fixed dates, etc. Civil Code, art. 869 and art. 1237

3. Once all documents have been submitted, the application is analysed by the bank’s credit board.

The creditor performs an informal assessment of the potential debtor, by applying the 5 C method:1. Character - competence of the managerial team, creditor’s confidence;2. Capacity – project’s feasibility, capacity to reimburse the credit by the due date;3. Capital – reasonable amount personally invested by the debtor along with the credit;4. Conditions – quality of the debtor’s marketing, market demand and supply;5. Collateral (guarantees) – decision whether the credit has to be guaranteed and by what.

The table below describes one of the informal assessment methods of the potential debtor.

ScoreASSESSMENTCRITERIONNr criteria

Mortgage liquidity, administrative-territorial area

1 - Owned villa- Owned apartment- Housing stock rent- Individual dwelling house

Residence time on the same address

2 - 0 to 6 months- 7 months to 1 year- 1 year to 3 years- 3 years to 5 years- More than 5 years

Profession 3 - Higher education- Secondary education- Dealer- Specialized worker- Pensioner- Worker- Activity sector: budgetary/private- Labour contract type - Size of the employer (small/big company)

Period of service at the last work place

4 - Less than one year- 1 to 2 years- 2 to 5 years- 5 to 8 years- More than 8 years

Credit history5 - None- Demand deposit or savings- Committed appropriations (credits)

The BIC (“Biroul Istoriilor de Credit” SRL – Credit History Bureau) collects from all commercial banks informa-tion on debtors (physical/legal persons) and informa-tion on the credit’s status and sends this information to the BNM. The bank can get information from the BIC with your written agreement only. If you refuse to give your consent, you risk to be refused the credit.

Civil status6 - Single- Married- Divorced- Widower/widow

Number of dependants7 - 0 persons- 1 person- 2 persons- 3 or more persons

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Note: An applicant scoring less than 14 points cannot be accepted for crediting.

Commercial banks have an internal credit policy (which is being changed and supplemented annually) and is devel-oped in line with the credit policy established by the BNM, but in a more specified way. For example, credits are automatically REFUSED to applicants who:

• Live on rent• Apply for a credit in another administrative-territorial unit• Have a period of service at the last work place of less than one year• Have a net income of less than 1000 lei• Are aged <21 years and > retirement age according to the legislation in effect

4. 4. If the applicant meets all bank’s requirements, a Credit or Loan Contract will be concluded.

What are the types of credits?

As a rule, banks classify credits in the following categories:

Monthly net income (lei) 8 - 200-500- 501-1000- 1001-1500- 1501-2000- 2001-3000- over3000

Guarantees9 - Irrevocable bank guarantees received from the first rank domestic and foreign banks- Bank deposit- Insurance of credits and interest rates at an approved insurance-reinsurance society- Mortgage- Pledge with dispossession- Pledge without dispossession- Debt assignment- Surety bonds - General pledge

TOTAL SCORE10 Up to 7 inclusively

8-13 14-25 26-30 Over 30

Categories of applicants11 E D C B A

Standard Payment on timeObservance of all credit conditions

Supervised Problems related to the maturity reimbursement of credit and interest ratesDiminution of the probability to reimburse the credit, if no measurements to solve the problem are undertaken

Substandard Impossibility to fully recover the creditProbability that the bank will register losses, if deficiencies are not solved

Losses can be caused by:Unfavourable or worsening financial situation of the debtorCredit insurance is insufficient or is worseningOther unfavourable factors leading to the impossibility of reimbursing the credit according to the existent reimbursement conditions

Doubtful Reimbursement or liquidation of the credit based on the existent conditions, values and guarantees is uncertainProbability of losses is extremely high, but there are certain factors that could contrib-ute to improving the reimbursement situation

Compromised Credits that cannot be reimbursed to the bank, which means that their further registra-tion as bank assets is not guaranteed.

Credits/Loans

Physical personsLegal persons

For legal economic activities, included based on patent.For legal economic activities.

Debtor

Short termMedium term Long term

Up to one year1-5 yearsMore than 5 years

Period

Agriculture/food industryIndustry/trade

Energy industry

Constructions, purchase of real estateFor consumption

Harvesting, livestock, fishing, forestry

Wholesale or retail, service provision

Electricity, petrol, coal, other fuel, etc.

Purchase, construction, reconstruction

Household, family, personal expenditures

Activity field

In MDLIn foreign currency

Use in MoldovaFor import activities

Currency

In cashNo cash

CashMoney transferred to the account

Providing means

Pledge

Surety bonds

Bank guarantee

Insurance policy

Real right, on the basis of which the creditor (pledgee) can pretend the satisfaction of his claims Civil Code, art. 454

Through a suretyship contract, a party (trustee) commits himself to the other party (creditor) to fully or partially, free or onerously execute debtor’s obligation. Civil Code, art. 1146

Written commitment, undertaken by a bank or by another financial institution (guarantee), to the request of another person (credit release authority), to pay to the authorising officer (beneficiary) a sum of money on the basis of the written demand from the beneficiary. Civil Code, art. 1246

A certificate by which the insurance company commits itself to pay to the creditor the insurance premiums for the credit in case the insured risk is produced. Civil Code, art. 1308-1309

Credit insurance

Ordinary credit

Credit line

Revolving

Overdraft

Factoring

Credit provision and

reimbursement

67

Paid integrally. Reimbursed according to the reimbursement schedule. In case of early integral payment, the credit shall be considered fully paid on that day. Paid in rates. Reimbursed according to the agreement of parties, in rates, or according to the reimbursement schedule. In case of early integral payment, the credit shall be considered fully paid on that day.Similar to the credit line. The advantage of the revolving credit is the debtor’s possibility during the entire period of the credit contract to reimburse partially or integrally the credit amount and to borrow again, partially or integrally, every time he needs. Short-term credit, even up to a month, intended for the execution of current payments. Mainly offered to disciplined clients with a bank service positive history.Based on the Contract of factoring, the provider of goods and services (adhering entity) undertakes to transfer debts that appeared at present or would appear in future from contracts on sale of goods, providing of services and performing of works for third parties of a factoring enterprise (factor), and the last-mentioned undertakes at least two of the following obligations:a) finance the adhering entity, including loans and advance payments;b) bookkeeping of debts;c) ensure carrying out of debts-call-and-cashing procedures;d) assumption of risk for debtor's insolvency for assumed debts (del credere). Civil Code, art. 1290

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What is a tax credit?

The state offers tax credits – temporary exemption from the payment to the budget of the income tax.

Tax credit amount – amount of the taxable income.

Who benefits from the tax credit?

• Enterprises with maximum 19 employees and an amount of annual net sales of own products and/or services provided of maximum 3 million lei;• Peasant farms.

This exemption is granted for maximum 3 years (tax holiday), provided that 80% of the exemption amount is invested in the development of own production and services, and new jobs.

What shall you do to benefit from a tax credit?

The enterprise shall submit to the Territorial State Tax Inspectorate a request to conclude a Credit Agreement. The IFS will take 3 days to consider the application, and in case of a positive answer it will invite the administrator of the enterprise to sign the agreement, and in case of refusal, it will inform in written the enterprise about the reasons Scanned template of credit request form

Here are a few types of credits you could access.

Types of creditsC.B., Contact details Necessary documents

www.microfinance.md

•Documents on the credit request and utilization:-Credit request (template form)

-Economic motivation for the credit (template form)

-Applicant’s statement (template form) or other

documents on credit utilization and need for

funding*.

*Intentions/Investments/acquisition contract,

construction permit, construction authorisation,

design, payment order, invoices, customs declara-

tions that need to be paid or any other document.

•Applicant’s identity document:

-Identity card (copy)

•Documents confirming the revenue sources: -Wage certificate (template form)

-or Income statement for the last 2 years

-or Documents on holding shares in registered

businesses*

-or lease agreements of owned objects, works

contracts and others

-Contracts or Abstracts from bank accounts

(with turnovers)

-International transfers receipt confirmations

(release order)

-Certificate on incomes and expenditures

(template form)

*In case business is the main revenue source, you

shall submit financial documents certifying the

business performance, according to requirements

mentioned in the “legal entities” column

•Documents on assets proposed as guarantee:Immovable assets:-Abstract from the State Register of Immovable

Assets, issued by the Territorial Cadastral

Office*. (original)

-Documents certifying the ownership right

over the immovable asset. (copy)

-Certificate from the State Fiscal Inspectorate

on the absence or existence of debts to the

budget*. (original)

-Assessment report of the immovable asset

(assessment performed by an independent

evaluator)* (copy)

INVESTITIONAL Loan (including from the RISP and IFAD project sources)

FERMIER Loan

MIJLOACE CIRCULANTE Loan (Current Assets Loan)

S.A. “Corporatia de Finantare Rurala”

ChisinauMD-2069, 10/5, Ion Creanga Str

Tel: 59-55-59

Fax: 59 56 59

E-mail: [email protected]

Balti5, 1 Mai Str, ap.3a

Tel:+373 231 94273

Fax:+373 231 66 154

E-mail: [email protected]

Orhei21/2, Renasterii National Str.,

Tel:+373 235 32131

Fax:+373 235 32131

E-mail: [email protected]

Calarasi19, M.Eminescu Str.

Tel: +373 244 20088

Fax: +373 244 20088

E-mail: [email protected]

Edinet67, Independentei Str.

Tel:+37324623320

Fax:+37324623320

E-mail: [email protected]

Hincești 146, Mihalcea Hincu Str.

Tel:+37326925870

Fax:+37326925870

E-mail: [email protected]

Soroca12, Mihai Malamud Str.

Tel:+37323030314

Fax:+37323030314

E-mail: [email protected]

Stefan Voda4a, 31 August Str.

Tel:+37324222148

Fax:+37324222148

E-mail: [email protected]

Eligible beneficiariesLoan destinationLoan amountMaximum termLoan grace periodInterest rate

Loan reimbursementInterest rate paymentPledgeCommission

Legal entitiesInvestments in businessMinimum 30 000 MDL, maximum 2 000 000 MDL7 years (84 months)Individual, maximum 12 months14% variable (in case of immovable pledge insurance),15% variable (in case of mixed pledge insurance (immovable + movable), 16% variable, in case of movable pledge insurance) Individual scheduleMonthly or quarterly100% - 130%From 2% to 3% (depending on the term and approved amount)

Eligible beneficiaries

Loan destinationLoan amountMaximum termLoan grace periodInterest rate

Loan reimbursementInterest rate paymentPledgeCommission

Enterprises and peasant farms with activities in the agricultural fieldCurrent assets in agricultureMinimum 100 000 MDL, maximum 300 000 MDL18 monthsIndividual, maximum 12 months12% fixed, if the term is up to 12 months, variable, if the term is over 12 monthsIndividual scheduleMonthly or quarterly100% - 130%3% of the approved amount

Eligible beneficiariesLoan destinationLoan amountMaximum term

Legal entitiesCurrent assets for businessMinimum 30 000 MDL, maximum 2 000 000 MDL3 years (36 months)

-Owner’s permission to pledge the right of use/

lease of the related to the immovable assets*.

**It can be submitted after the loan’s approval,

but before the loan is released.

Movable assets, equipment:

-Documents confirming the ownership right

over the assets proposed as guarantee: invoice,

customs statements, payment orders,

contracts, etc. (copy)

Transport/Agricultural machinery:

-Registration certificate (copy)

-Compulsory civil liability insurance for car

owners (copy)

-Certificate on the means of transport from the

State Register of transports (original)

Shares:-Certificate of state registration of securities

(original)

Abstract from the Register of Shareholders,

from the state independent registrar on the

absence of interdictions applied to securities

(original)

-Abstract from the Register of Shareholders on

the structure of shareholders and their shares

(original)

Documents required for physical persons:• Identity card (passport)

• Patent/enterprise state registration certificate

Documents required for legal entities:• Identity card (passport) of the manager and

founders

• Enterprise state registration certificate

Loan (No Pledge Loan)

Cahul22/7, Republicii Str.

Tel:+37329933074

Fax:+37329933074

E-mail: [email protected]

ProCredit Bank65, Stefan tel Mare Bld, office 901,

Chisinau

Tel.: (+373 22) 279351

Fax: (+373 22) 273488

E-mail: [email protected]

Loan grace periodInterest rate

Loan reimbursementInterest rate paymentPledgeCommission

Individual, maximum 12 months14% variable (in case of immovable pledge insurance), 15% variable (in case of mixed pledge insurance (immovable + movable), 16% variable, in case of movable pledge insurance) Individual scheduleMonthly or quarterly100% - 130%From 2% to 3% (depending on the approved amount)

1.Credits for current and fixed assets

Issued to entrepreneurs (legal entities – firms, private entrepreneurs and physical persons), performing their activity in Moldova. Conditions:

To get the credit, you need to have a stable business, without interruption when submitting the request. Debtor’s minimum activity period: trade/services – 3 months, production – 3 months, agriculture – 12 months.Fees:

*Interest rate is floating and is modified twice a year TDA 9M (interest rate for the 9-month deposit) = 10%

*Interest rate is floating and is modified twice a year LIBOR (LIBOR for 6 months) = 0.8085%

Eligible beneficiaries

Loan destinationLoan amount

Maximum term

Loan grace periodInterest rate

Loan reimbursementInterest rate paymentPledgeCommission

Legal entities with loan balance at the Corporation, insuredInvestments or current assets in businessUp to 20% from the total balance of active loans on the day the request is made, but not exceeding 200,000 MDLÎWithin the existing loan maturity, but not longer than 2 years (24 months)Without grace period+2% to the interest rate of the existing loan, variableMonthlyMonthlyWithout pledge3%

CurrencyPurposeAmountTermInterest rate*

Loan disbursement commission

MDLFor current assets For fixed assets

From 32,000 MDLUp to 36 months Up to 60 monthsFrom TDA 9m+5% From TDA 9M+5%to TDA 9M+11/5% to TDA 9M+12%

2-3%, non-recurring

CurrencyPurposeAmountTermInterest rate*

Loan disbursement commission

USDFor current assets For fixed assets

From 2,500 USDUp to 36 months Up to 120 monthsFrom LIBOR+6.5% From LIBOR+6.5%up to LIBOR+14.5% Up to LIBOR+17.5%

1-3%, non-recurring

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*Interest rate is floating and is modified twice a year EURIBOR (EURIBOR for 6 months) = 1.617%

2. Credits for the purchase of real estate

The loan is intended for legal entities (small entrepreneurs, companies) that want to purchase real estate for their business.Conditions:

In order to receive the loan, you have to have a stable business, operating for at least 6 months (trade / services / production). Fees:

*The interest rate is floating and changes twice a year LIBOR (LIBOR for 6 months) = 0.8085%EURIBOR (EURIBOR for 6 months) = 1.617%

3. Credits for agriculture

Loans for your investments in agriculture, with which you can:1. Purchase agricultural machinery, equipment, combines, tractors, materials and equipment for irrigation systems2. Build and maintain greenhouses or warehouses3. Purchase arable land, etc.

Advantages:

- advantageous interest rates for loans in lei (from 7%) for the purchase of machinery and equipment from the bank’s partners:MGM, Agropiese TGR and AgroSera-Prim

- convenient loan reimbursement schedule, depending on the specific character and seasonality of your business.-Grace period up to 12 months-Minimum term of application analysis-Without hidden commissions-Possibility to get subventions from the state.Fees:

*Interest rate is floating and changes twice a yearTDA 9m (interest rate for 9-month deposit) = 10%

CurrencyPurposeAmountTermInterest rate*

Loan disbursement fee

MDLFor current assets For fixed assets

From 26 000 MDLUp to 36 months Up to 60 monthsFrom TDA 9M+5% From TDA 9m+5%Up to TDA 9M+11.5% Up to TDA 9m+12% 2-3%, non-recurring

CurrencyPurposeAmountTermInterest rate*

Loan disbursement commission

EURpentru mijloace circulante pentru mijloace fixe

de la 2 500 EURpînă la 36 luni pînă la 120 luni de la LIBOR+5% de la LIBOR+5%pînă la LIBOR+13% pînă la LIBOR+16.75%

1-3%, non-recurring

CurrencyPurposeAmountTermInterest rate*Loan disbursement commission

USD EURFor current assets For fixed assets

From 2 500 EURFrom 120 months to 144 months

LIBOR+12% From LIBOR+10.25%2%, non-recurring

Documents required for physical persons:• Identity card (passport)

• Patent/enterprise state registration certificate

Documents required for legal entities:• Identity card (passport) of the manager and

founders

• Enterprise state registration certificate

ProCredit Bank65, Stefan tel Mare Bld, office 901,

Chisinau

Tel.: (+373 22) 279351

Fax: (+373 22) 273488

E-mail: [email protected]

Types of creditsC.B., Contact details Necessary documents

Documents required for physical persons:• Identity card (passport)

• Patent/enterprise state registration certificate

Documents required for legal entities:• Identity card (passport) of the manager and

founders

• Enterprise state registration certificate

ProCredit BankBd. Ştefan сel Mare 65,

of. 901, Chişinău

Tel.: (+373 22) 279351

Fax: (+373 22) 273488

E-mail:[email protected]

71

List of documents to be annexed to the credit application:http://www.mobiasbanca.md/diles/ro/docs/li

sta%20documentelor.pdf

http://www.mobiasbanca.md/files/ro/docs/ce

rere%20de%20acordare%credit%20PJ.pdf

Credit application template

List of documents to be annexed to the credit application:

http://www.mobiasbanca.md/diles/ro/docs/li

sta%20documentelor.pdf

List of documents to be annexed to the credit application:

http://www.mobiasbanca.md/diles/ro/docs/li

sta%20documentelor.pdf

Mobiasbancă– Groupe Societe

Generale

81A, Stefan cel Mare si Sfant Bld.

Chisinau, MD-2012

Tel/fax: 54-19-74

[email protected]

256-456, 256-555

[email protected]

*Interest rate is floating and changes twice a yearLIBOR (LIBOR for 6 months) = 0.8085%

*RInterest rate is floating and changes twice a yearEURIBOR (EURIBOR for 6 months) = 1.617%

1. ORDINARY LOANS

Classic loans allow you to benefit from traditional financing for a well-defined term and purpose, by reimbursing the loan in rates according to the approved schedule, depending on your company’s cash flow.Maximum term: 36 months

Advantages:

• Possibility to benefit from a grace period when reimbursing the credit• For investment funding, the loan disbursement can be done by instal-ments, according to your needs. The interest rate will be calculated from the actually disbursed loan. • You have the possibility to contract a loan or up to 30 000 lei without pledge!

2. SETUP LOAN

Do you need to buy new and competitive equipment for your activity?We offer you a dedicated financing product, combining advantages of the bank crediting and commercial service, resulting from the bank’s partnership with a wide network of economic agents trading the needed equipment.Advantages:

• Possibility to purchase the needed product under advantageous and safe conditions.• Large number of partners with a wide offer of products of equipment, transports and tractors.• Limited term for the examination of loan applications and immediate access to the financed product.

3. MICROLOANS

If you want to develop your business, but you do not have sufficient financial resources, Mobiasbanca offers you fast and affordable financing solutions, both for current needs, investments and for financing any other expenses – Microloans.

CurrencyPurposeAmountTermInterest rate*

Loan disbursement commission

EURFor current assets For fixed assets

From 2 000 EURUp to 36 months Up to 120 monthsFrom LIBOR+5% From LIBOR+5%Up to LIBOR+13% Up to LIBPR+16.75%

1-3%, non-recurring

CurrencyPurposeAmount Term Interest rate*

Loan disbursement commission

USDFor current assets For fixed assets

From 2 000 USDUp to 36 months Up to 120 monthsFrom LIBOR+6.5% From LIBOR+6.5%Up to LIBOR+14.5% Up to LIBOR+17.5%

1-3%, non-recurring

An easy to understand BUSINESS GUIDE

Types of creditsC.B., Contact details Necessary documents

Mobiasbancă– Groupe Societe

Generale

81A, Stefan cel Mare si Sfant Bld.

Chisinau, MD-2012

Tel/fax: 54-19-74

[email protected]

256-456, 256-555

[email protected]

List of documents to be annexed to the credit application:

http://www.mobiasbanca.md/diles/ro/docs/li

sta%20documentelor.pdf

72

a) Credit Rapid – ideal for emergency needs!

• minimum experience of the applicant – 3 months• currency – MDL, USD, EUR• Loan amount – between 20 000 MDL and 75 000 MDL or equivalent in USD/EUR

• Potential beneficiaries:

- Authorised individuals and those engaged in the entrepreneurial activity- Individual enterprises- Peasant farms- Self-employed- Companies

• Reimbursement term:

- maximum 24 months (working capital loans)- maximum 36 months (investment loans)

• Guarantees: No collateral securities/Real guarantees

Advantages:

• You do not need real guarantees for loans up to MDL 75 000 for a period of up to 36 months;• Your request will be answered quickly;• Minimal package of documents required.

b) MicroCredit – perfect to ensure a good continuity of your activity!

• Minimum experience of the applicant: 3-12 months• Currency – MDL, USD, EUR• Loan amount – between MDL 75 001 and MDL 200 000 or equivalent in USD/EUR

• Potential beneficiaries:

- authorized individuals and those engaged in the entrepreneurial activity- individual enterprises- peasant farms- self-employed- companies

• Reimbursement term:

- maximum 24 months (working capital loans)- maximum 48 months (investment loans)

• Guarantees: immovable and/or immovable

Advantages:

• No pledges are needed for loans up to MDL 100,000 for a period of up to 48 months• This is a loan you can use for working capital financing and/or other overheads, equipment purchase• Flexible approach to collateral• You get expert advice on choosing credit solutions tailored to customer’s needs.

c) Small Credit – the best for a safe and profitable investment!

• Minimum experience of the applicant: 6-12 months• Currency: MDL, USA, EUR• Loan amount: between MDL 200 001 and MDL 1,500,000 or equivalent in USD/EUR

• Potential beneficiaries:

- Authorized individuals or those engaged in the entrepreneurial activity- Individual enterprises- peasant farms- self-employed- companies

Types of creditsC.B., Contact details Necessary documents

73

Set of documents available on:

http://www.mobiasbanca.md/easy_go

CurrencyPurposePeriodAmountInterest rateReimbursementGuarantee

Insurance

EASY GO in EUR/USD EASY GO in MDLEUR/ USD MDLImport activity financing Working capital financing

Maximum: 18 monthsMaximum: MDL 500,000 or equivalent in currency

VariableEqual monthly rates or individual schedule

Real guarantees:• Real estate – min.50%• Stocks – max.20%• Movable property – max 30%

Personal guarantees (suretyship, cession of receivables, etc.);Loan coverage with real guarantees must be at least 120%.The real estate pledge is compulsorily insured in the favour of the bank.

• Reimbursement term:

- maximum 24 months (working capital loans)- maximum 60 months (credits for investments)

• Guarantees — movable and immovable assets

Advantages:

• Efficient administration of all financial needs of your business with one credit• This is a credit you can use to fund your working capital and/or other overheads, purchase equipment• Flexible approach to collateral• You get expert advice on choosing credit solutions tailored to customer’s needs.

d) ImoPro Credit – for commercial real estate

• Minimum experience of the applicant: 3-12 months;• Currency: MD or USD• Loan amount: up to 2 000 000 or equivalent in USD;

• Potential beneficiaries

- Authorized individuals or those engaged in the entrepreneurial activity- Individual enterprises- peasant farms- self-employed- companies

• Reimbursement term: — maximum 120 months

• Guarantees — movable and immovable assetsThe ImoPro Credit is intended for growing economic agents, looking for new or larger space for their business and intending to purchase, build and finish the construc-tion of a building, purchase land for commercial construction or agricultural use.

4. EASY GO LOAN

The EASY GO Loan is the most reliable financing of your import activity and working capital, intended for legal entities.The fastest grant decision: only 1 banking day, based on a minimum package of documents.

Mobiasbancă– Groupe Societe

Generale

81A, Stefan cel Mare si Sfant Bld.

Chisinau, MD-2012

Tel/fax: 54-19-74

[email protected]

256-456, 256-555

[email protected]

List of documents to be annexed to the credit application:

http://www.mobiasbanca.md/diles/ro/docs/li

sta%20documentelor.pdf

An easy to understand BUSINESS GUIDE

Types of creditsC.B., Contact details Necessary documents

74

List of documents to be annexed to the credit application:

http://www.mobiasbanca.md/diles/ro/docs/li

sta%20documentelor.pdf

http://www.mobiasbanca.md/credite_eib

Eligible beneficiariesCurrencyTerm Amount of EIB financing

Total cost for each project

Investment loans Independent SMEsEUR/USDMin.2 years, max 10 years**Up to 100% of the loan, but maximum the equivalent of EUR 12.500.000 Up to EUR 25.000.000

Eligible beneficiaries

CurrencyTerm Eligible expenses may include

Working capital loan Enterprises with less than 500 employees

EUR/USDMin.2 yearsRaw material, workforce, stocks, trace receivables, etc.

5. Revolving credit line

Beneficiaries:legal and physical persons, engaged in entrepreneurship, registered in line with the legislation in effect of Moldova, with any legal form and with an experience of work of minimum 6 months.Loans are granted in MDL, USD, EURCrediting period: maximum 36 monthsMinimum limit: MDL 100,000 or USD/EUR 10 000 Maximum limit: the equivalent of EUR 500,000The limit is revised on a yearly basis.

6. Loans from IFO sources (International Financing Organizations)

In this regard, the bank benefits from lending lines directed to the develop-ment of certain economic sector, loans being granted in cooperation with:• EBRD – European Bank for Reconstruction and Development• IFC – International Finance Corporation• BSTDB – Black Sea Trade and Development Bank• EFSE – European Fund for Southeast Europe• IDA – International development Association and FIDA – International Fund for Agricultural Development through the Directorate of credit lines within the Finance Ministry.Loans for investments and working capital

Credits for financing of agriculture and rural business

Financing of foreign trade

Special for young people

7. EIB funding sources (European Investment Bank)

Beneficiaries: Small and Medium Enterprises* (SMEs) in particular, located in Moldova, as well as “Medium Enterprises” and public entities for their energy and environmental projects. Advantages:

The SMEs accessing loans from the EIB sources benefit from more favourable interest rates in comparison with standard interest rates for similar credits from other sources. Eligible purposes:

The EIB aims at financing all investments and expenses incurred in the SMEs development through eligible projects.

http://www.mobiasbanca.md/credite_ofi

Mobiasbancă– Groupe Societe

Generale

81A, Stefan cel Mare si Sfant Bld.

Chisinau, MD-2012

Tel/fax: 54-19-74

[email protected]

256-456, 256-555

[email protected]

Types of creditsC.B., Contact details Necessary documents

75

Types of creditsContacts, C.B Necessary documents

- Articles of incorporation and other

documents, depending on the organizational

legal form of the client

- Credit application

- Financial reports

- Documents confirming the ownership right

over the assets proposed as pledge to the Bank

- Credit application

- Articles of incorporation

- Enterprises that have performed activities

have to submit financial reports for the activity

period

- List of assets proposed as pledge and

documents confirming the ownership right on

them

http://maib.md/ro/overdraft-intMici/

Articles of incorporation and other documents

depending on the organizational legal form of

the client

• Credit application

• Financial reports

• Documents conforming the ownership right on

the goods proposed as pledge to the Bank

MOLDOVA-AGROINDBANK

Central office:

MD-2005 Republic of Moldova

mun. of Chisinau, 9,

Cosmonautilor Str., Telex: 163263

AGRO MD SWIFT: AGRNMD2X

Fax:/ +373 22/ 22 80 58

Email: [email protected]

InfoTel service (24/24)

Tel:/ +373 22/ 85 65 55

Email:[email protected]

Cards assistance service:

Tel:/+373 22/ 45 06 03

1. Credits for Small Enterprises

The maximum amount of the loan is 65% of the debtor’s amount of annual sales (but not exceeding 15.250 thousand lei)Term:

It is established individually for each debtor, resulting from the average rotation period (in days) of debtor’s means and possibilities to reimburse the credit.Maximum term – 18 months. In some cases, the term can be 24 months, provided that this needs results from the specific nature of debtor’s activity.

The loan is granted in national currency (MDL), US Dollars (USD) and EURO (EUR)Minimum requirements for potential clients:

• Loans are offered to enterprises working for at least 12 months.• Liquid balance sheet and no losses registered for the current year.• Lack of outstanding debts to the bank and budget at the moment of submitting the credit application. • Good credit history (if credits were used in the past)• Beneficiary must be a client of the bank.

2. Credits for microenterprises and small enterprises, recently created

and/or starting their activity from “zero”

The credit amount is from USD 1,000 to USD 30,000 (equivalent in lei) for small enterprises, and from USD 1,000 to USD 5,000 (equivalent in lei) for microenter-prises.

Credits are offered in Moldovan lei for a period of:- 18 months – to increase the working capital- 36 months – for investmentsThe applied interest rate depends on the term of the loan and varies from 18.5% to 22% per year.

Loans are guaranteed with liquid assets, the value of which at the moment the credit is offered can be equal with or less than the credit amount.

3. Overdraft

This credit is offered in national currency (MDL) for a term of up to one year. The applied interest rate depends on the term of the loan and varies from 13.75% to 14.75% per year.

Main insurance – cession of Beneficiary’s cash flows. An additional insurance can be the pledge of land plots, immovable objects, other asset, guarantees and suretyships of third persons.

Requirements to the Beneficiary:

The Beneficiary must correspond to the “bank’s client” definition and to receive stable cash proceeds on his accounts, in the amount needed for the debt service and for his current activities.

4. Credits for working capital

The maximum amount of the loan is 50% of the debtor’s amount of annual sales (but not exceeding 1.500 thousand lei)Maximum term: 18 monthIn some cases, the term can be 24 months, provided that this needs results from the specific nature of debtor’s activity and this term is clearly reasoned.The loan is granted in national currency (MDL), US Dollars (USD) and EURO (EUR)Grace period: maximum 2 months

ÎInsurance: pledge / pawn pledge of assets, suretyship and guarantee.Minimum requirements to potential clients:

• Loans are offered to enterprises working for at least 12 months.• Liquid balance sheet and no losses registered for the current year.• Lack of outstanding debts to the bank and budget at the moment of submit-ting the credit application. • Good credit history (if credits were used in the past)• Beneficiary must be a client of the bank.

An easy to understand BUSINESS GUIDE

76

How does the SMEs benefit from support from the state?

The state provides support to the SMEs by creating favourable conditions for starting up and developing businesses, by creating a convenient normative and legislative framework, ensuring the necessary climate, etc.

The state supports the SME sector in a differentiated way, depending on the type of activity, the functioning period and size of economic agents, subjects of the small and medium size enterprises sector, by applying different supporting forms and methods and financing sources.

The SME developing and facilitating the SME’s access to finances are the basic priorities of the Ministry of Economy within the Strategic Development Programme. In order to achieve them, over 2012-2014, the Ministry of Economy set up the “Small and Medium Enterprises” Programme, which is divided into sub-programmes.

Strategic objectives for implementing the “Small and Medium-sized Enterprises” Programme

for the period 2012-2014

State structures supporting the development

of small and medium size enterprises

Entities benefiting from the state support

provided to the development of SME sector

• Micro enterprises• Small enterprises• Medium enterprises

• Ministries• Central public administration authorities • Local public administration authorities• Other authorized bodies

Objectives Funding remarks

Budget of the Ministry of Economy (ME) (wages).Harmonize the legislative framework in the SME field with the European recommendations and implement regional and European programmes supporting this sector

Sub-programme Purpose

Access to finances

Support infrastructure in business

Entrepreneurial culture

Dialogue between the public sector and the SME sector

To facilitate the access of SMEs to financing resources and stimulate the conversion of savings into investment means by diversifying and developing government programmesTo stimulate the SME sector competitiveness enhancement by ensuring the development of the business support infrastructure, including high production capacities, improvement of the SMEs’ products quality, according to international standards, improvement of marketing capacities, as well as of other promotion and development instruments. To promote the entrepreneurial culture and managerial performances of the SMEs, as well as stimulate the creation of new enterprises. To intensify the dialogue between the government and the SME sector, by applying similar dialogue instruments and forms in the community of states with good collaborations practices between the business environment and authorities.

Sub-programme: Access to finances

Sectoral support programme “Economic Stimulation in Rural Areas,” funded by the EU.

Foreign assistance (Rural Investment and Services Project – RISP1, funded by the World Bank; Rural Finance and Small Enterprise Development Project (IFAD 1); European Commission Grant, International Organization for Migration. State Budget, Sectoral Support Programme “Economic Stimula-tion in Rural Areas,” funded by the EU, International Organiza-tion for Migration.State Budget, Sectoral Support Programme “Economic Stimula-tion in Rural Areas,” funded by the EU

State Budget

Support the producing SMEs in the rural sector, by attracting financial assistance – grants – for the development of its producing capacities. Facilitate the access of young entrepreneurs in rural areas to financial resources, by implementing Component II of the Youth Economic Empowerment Programme.

Stimulate investment of savings in business development by implementing the Programme for Attraction of Remittances into Economy “PARE 1+1”.Increase access of small entrepreneurs to bank credits by administrating the Credit Guarantee Fund for SMEs and its capitalization. Facilitate the access of SMEs to public acquisition contracts by consolidating the access to information about acquisition opportunities and stimulating contracting public authorities to split contracts into lots.

77

The Government, through the Ministry of Economy and Trade, develops, coordinates, monitors and evaluates policies and actions aiming at providing state support to the SME sector development. The Organization for the Small and Medium Enterprises Sector Development (ODIMM) within the Ministry of Economy and Trade is the structure in charge with the implementation of the state policy on supporting the SME development.

The ODIMM promotes the creation of small businesses, particularly in rural areas, , and supports the development of existing enterprises. This organization facilitates the the access of SMEs to financial and informational resources. Also, the ODIMM provides guarantees for loans granted by commercial banks, as well as provides various informa-tion on SME financing opportunities.

It is important to mention that funds are allocated from the state budget on a yearly basis for the implementation of certain actions supporting the SME sector development

The table below describes the on-going projects in the SME sector, through which you can access loans.

Implementation

period

ProjectNo

On-going crediting and financing projects in the SME sector

2010-2012

15 February – 15 March

(collection of applications

for non-reimbursable

financing)

PARE 1+1

Programme on Attracting

Remittances in Economy

1. Stimulate the creation and development of SMEs by migrant workers and beneficiaries of remittances. The programme functions based on the “1+1” rule, hence one leu invested from remittances is supplemented with one leu offered as a grant within the pilot programme. Entrepreneurship training, informative

materials, free assistance to start up a business,

financing through grants of up to 200,000 lei,

monitoring.

- lmigrant workers

- beneficiaries of

remittances

Address: 48,. Serghei Lazo Str,

office 303, Chisinau

Telefon: (+373 22) 22 50 01

Fax: (+373 22) 29 57 97

E-mail: [email protected]

Web: www.odimm.md

www.businessportal.md

Contact person:

Viorica Cerbusca

2012-2013PNAET

National Youth Economic

Empowerment

Programme

2. Develop entrepreneurship skills of the youth, based on the optimal knowledge and management of resources and facilitate the access of young entrepreneurs to financial resources needed to start up and develop own business.

- entrepreneurial training and consultancy;

- preferential loans of up to 300,000 lei

(reimbursement period – max.5 years) with

non-reimbursable grant (40%);

- post-financing monitoring.

- young persons,

18-30 years, who

want to develop

their own

business in rural

areas and/or to

extend their own

business in rural

areas, creating

new jobs.

Adresa: 48, Serghei Lazo Str.,

office 311, Chisinau

Telefon: (+373 22) 22 53 84,

22 57 99

Fax: (+373 22) 29 57 97

E-mail: [email protected]

Web: www.odimm.md

www.businessportal.md

Contact person:

Carolina Tapordei

On-goingFGC

Special Credit Guarantee

Fund

3.Facilitate the access to financial resources for micro and small enterprises.Provide loan guarantees for traders without

sufficient forfeit. For:

1. active businesses:

- up to 50%, but not more than 700,000 lei;

- 5 years.

2. Start-ups:

- max.70%, but not more than 300,000 lei;

-3 years

- Micro and small

enterprises

operating all

across Moldova.

Adresa: 48, Serghei Lazo Str.,

Office 303, Chisinau

Telefon: (+373 22) 22 50 79

Fax: (+373 22) 29 57 97

E-mail: [email protected]

Web: www.odimm.md

www.fgc.odimm.md

Contact person:

Tatiana Chiriac

Goal / Activities Target group Contacts

Sub-programme: Business support infrastructure

State Budget, Sectoral Support Programme “Economic Stimula-tion in Rural Areas,” funded by the EUME’s budget (wages).Foreign assistance.

IIntegrate the SMEs into business-incubators, by creating new busi-ness incubators and developing the network of business incubators.Strengthen the institutional structure of the ODIMM.Develop the business support infrastructure by creating a National Business Excellence Centre within the ODIMM.

An easy to understand BUSINESS GUIDE

78

Implementation

period

ProjectNo

On-goingTAM/BAS

Business Advisory Service

4. Partial financial coverage of costs for consulting services.

Maximum subsidy offered to eligible companies

amounts to EUR 10,000, but not more than 70%

(excluding taxes) of the project amount.

- SMEs (from 10 to 250 employees, max.500 employees), working in: production, trade and services, operating on the market for at least 2 years.

Address: Moldova, MD-2012,

Chisinau, 63, Vlaicu Parcalab Str., floor 10

Tel: (+373 22) 21 16 14

(+373 22) 23 52 24

Fax: (+373 22) 21 15 85

E-mail: [email protected]

Web: http://www.bas.md

ValidJNPGA

Programme for SNEs Sector

Support and Development

5. Facilitate the purchase by SMEs of a large variety of production equipment.

Leasing for a period of one year, providing a 40%

grant. The purchase value varies from MDL 500

000 to MDL 2.5 million.

- SMEs all across

Moldova

(excluding

Chisinau and Balti)

Address: 180, Stefan cel Mare

Bld, office 812, Chisinau

Telefon: (+373 22) 29 67 18

Fax: (+373 22) 29 67 19

E-mail: [email protected]

Web: http://www.jnpga.md

Contact person: Alexandru

Ceban

On-going2KR

Increasing Food

Production Project

6. Develop agriculture and increase food production in Moldova.

Purchase of agricultural technology by instalments.(initially, beneficiaries get 50% of the total cost,

the rest – by instalments in 2 years). VAT is not

included.

- private legal

entities;

-farmers;

-physical persons.

(provision of services

for mechanized

farming)

Addess:18, Calea Basarabiei Str.,

Chisinau

Telefon: (+373 22) 27 84 63

(+373 22) 54 98 81

E-mail: [email protected]

Web: www.2kr.moldnet.md

Contact person:

Vasile Condrea

March 2006 – June 2012RISP II

Rural Investment and

Services Project

7. Facilitate the access of rural entrepreneurs to knowledge and funding.- consultancy services;

- preferential credits of up to USD 150,000 on

medium and long terms to initiate and/or develop

businesses in rural areas and providing post-

creation assistance during the first year of activity;

- preferential credits of up to USD 100,000, with

a 20% grant, for the installation or improvement

of irrigation systems to the eligible beneficiaries.

- any person

interested in

starting a

business (based on

patent, peasant

farm, individual

enterprise or SRL);

- enterprises and

entrepreneurs

(rural area)

Addess: 9, Cosmonautilor Str.,

office 544, Chisina

Telefon:(+373 22) 22 24 65

(+373 22) 22 24 67

Fax:(+373 22) 24 44 69

E-mail:[email protected]

Web: www.capmu.md

Contact person:

Olga Sainciuc

Until 30 June 2012PAC

Competitiveness

Improvement Project

8. Provide long-term resources, intended for improving capacities of enterprises to increase exports.

Maximum – 1 EUR mln

Financing of investments – EUR 800 000,

Term – 8 years

- enterprises with

at least 75% of

private property

(generating revenues

from exports)

Participating Financial

Institutions (where credit

applications shall be submitted):- CB„Moldova-Agroindbank” JS.;- CB„Mobiasbanca” JS.;- CB„Energbank” JS.;- CB„Victoriabank”JS

Project Implementation Unit

Telefon: (+373 22) 29 67 23

Fax: (+373 22) 29 67 24

E-mail: [email protected]

Adresa: 57/1 Banulescu-

Bodoni Str., Chisinau

Until March 2013IFAD II

Agricultural Revitalization

Project

9. Contribute by participative action to implement strategic development plans of localities, and namely in the agricultural field.

Preferential loans of up to USD 200,000 for up to

15 years. 20-30% of the loan value is offered as

conditioned non-reimbursable grant.

- SMEs Addess: 162, Stefan cel Mare

Bld., office 1303, Chisinau

Telefon: (+373 22) 21 05 42

Fax: (+373 22) 22 52 57

E-mail: [email protected]

Web: www.ifad.md

Contact person:

Ion Russu

Goal / Activities Target group Contacts

79

Implementation

period

ProjectNo

Until 2016IFAD IV

Rural Financial Services

and Marketing

10. Increased access to financial services for the small

owners, women with non-agricultural activity and

young farmers, as well as entrepreneurs and

enterprises with non-agricultural processing.

Provide preferential credits.Provide competitive grants for investments in public infrastructure.

- Rural enterprises Address: 162, Stefan cel Mare

Bld., office 1303, Chisinau

Telefon: (+373 22) 21 05 42

Fax: (+373 22) 22 52 57

E-mail: [email protected]

Web: www.ifad.md

Contact person:

Victor Rosca

On-goingFund for Enterprises

from Moldova and

Ukraine

11. Consolidation of privatised enterprises.

Invest in shares and transactions, including by

providing direct loans to entrepreneurs and

funding the leasing for equipment and/or

assets.

- Entrepreneurs

and companies

who demonstrate

serious prospects

and a high rate of

profit.

Address: 12, Petru Movila Str,

ap. 4, Chisinau

Telefon: (+373 22) 88 72 01

+31 88 602 8101

E-mail: [email protected]

Contact person:

Cristina Harea

[email protected]

Contact person:

Arco Vanwessel

Web: http://www.horizoncapital.com.ua

2007-2013Seventh Framework

Programme

12. Provide financial support to increase innovation capacity and competitiveness of SMEs.- Organise initial training of researches;

- Co-financing of regional, national and

international programmes;

- Offer scholarships for researchers who go outside

Europe;

- Offer international reintegration grants.

- SMEs

- Associations/

groups of SMEs

- Research groups

within universities

and research

institutes, etc

Address: 1, Stefan cel Mare si

Sfant Bld., office 334,

Telefon: (+373 22) 27 22 54

(+373 22) 57 77 07

E-mail: [email protected]

[email protected]

Web: http://fp7.asm.md

Contact person:

Lidia Romanciuc

On-goingSubsidiary for Farmers13. Ensure sustainable development of the agro-food sector and rural communities.

- SMEs Address: 162, Stefan cel Mare

si Sfant Bld, Chisinau

Telefon: (+373 22) 21 01 94

(+373 22) 22 38 80

E-mail: [email protected]

Web: www.aipa.md

Contact person: Petru Maleru

On-goingGTZ

Modernising the

Agricultural Sector in the

Republic of Moldova

14. Develop the agricultural and food-industry sectors

in the districts of Ungheni and Calarasi.

- Consultancy services

- Seminars

- Grants for the acquisition of the needed

equipment and materials, with a mandatory

contribution from the beneficiary

- Study visits;

- Promoting connection between farmers,

processing companies and delivery market.

- Farmers from the

districts of Calarasi

and Ungheni

- Groups of producers

and processors

registered as peasant

farms, which would

include 3 members

at least

- Women

- Young farmers.

Address: 31a Bulgara Str.,

Chisinau

Telefon: (+373 22) 22 72 92

Fax: (+373 22) 22 83 19

E-mail:[email protected]

Web: www.gtz.de

Contact person:

Andrei Zapanovici

Until March 2012MoSEFF

Financing Line for Energy

Efficiency in Moldova

15. Stimulate the application of advanced technology in companies from Moldova in order to improve energy systems.- Loans with a grant portion (5-20%), from EUR

25,000 up to EUR 2 mln; term: up to 6 years; (for the

funding of renewable energy and energy efficiency

projects).

- Free technical assistance

- Any company with

at least 51% private

capital (except for

companies dealing

with production and

distribution of tobacco

products, alcoholic

beverages, gambling

games and arms).

Address: str. Vlaicu Pîrcălab

29/1, Chişinău

Telefon: (+373 22) 22 34 99

Mob: (+373) 601 34 669

E-mail: [email protected]

Web: http://www.moseff.org

Contact person:

Corina Guţu-Chetruşca

Goal / Activities Target group Contacts

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80

Implementation

period

ProjectNo

Up to the end of March

2012

Competitiveness

Improvement Project

16. Consolidate the competitiveness of companies in Moldova by improving the quality of their products and services.

- Promotional grants for implementing the

Quality Management System for the following

two wide fields:

1) consultation services for the development of

feasibility studies, business plans, etc.,

2) training services.

- Economic agents

from the

production and

service sectors

Address: 151, Stefan cel Mare

Bld, floor 1, office 4, Chisinau

Telefon: (+373 22) 24 51 48

(+373 22) 22 33 10

E-mail: [email protected]

Web:

http://chamber.md/index.php?id=412

Contact person:

Harea Sergiu

On-goingSIDA

Innovations Against

Poverty

17. Develop products, services and market systems for the benefit of people from underdeveloped countries.- Small grants of up to EUR 20,000, but which

exceed 50% of the investment;

- Large grants of up to EUR 200,000, but not more

that 59% for development projects.

- SMEs from

underdeveloped

countries.

E-mail:

[email protected]

Web:

www.innovationsagainstpoverty.org

sau

www.sida.se

2012Programme for

stimulating the

creation and develop-

ment of microenter-

prises by young

entrepreneurs.

The Agency for Projects

and Programmes

Implementation for the

SMEs

18. Develop entrepreneurial skills among the youth and stimulate the creation and development of start-ups by facilitating the access to financial sources.Budget allocated for the Programme in 2012 is of

MDL 21,000,000.

- grants, worth up to 30,000 Euros of eligible

expenses

- guarantees for loans for development of

business plans, as well as exemption from fees for

registration and registering and social security

contributions for up to 4 employees.

- Young

entrepreneurs

Address: 22, Puskin Str., office 312

Chisinau

Telefon: (+373 22) 23 22 13

(+373 22) 69984441

E-mail: [email protected]

[email protected]

Web: www.sfaturi.biz

2012

15 project submission

sessions

National Rural

Development Center

(II PAC pylon)

19. Total financial allocation for the programme:

- EUR 1.41 billion

-Farmers

-Enterprises in the

rural sector

Address: 22, Puskin Str., office 312

Chisinau

Telefon: (+373 22) 23 22 13

(+373 22) 69984441

E-mail: [email protected]

[email protected]

Web: www.sfaturi.biz

2012The Start 2012

Programme brings 10

million lei to young

entrepreneurs

20. Develop entrepreneurial skills among the youth and facilitate their access to financing. - Encourage and stimulate the creation of new

SMEs, as well as enrichment of economic

performances of the existing ones.

- Non-reimbursable financial allocation -

max.70% of the value of eligible costs, but not

exceeding 100,000 lei per beneficiary.

Budget for 2012:

- MDL 10,000,000, of which:

stage I – 800,000 lei for entrepreneurial training

workshops

Stage II – MDL 9,200,000 to fund the implementa-

tion of the best business plans.

- Stage I:

Individuals who

a) are Moldovan citizens;

b) did not benefit

from funding within

this Programme;

c) have secondary or

higher education.

- Stage II:

Commercial societies

(microenterprises,

SMEs).

Address: 22, Puskin Str., office 312

Chisinau

Telefon: (+373 22) 23 22 13

(+373 22) 69984441

E-mail: [email protected]

[email protected]

Web: www.sfaturi.biz

Goal / Activities Target group Contacts

81

2012

Session 1: 1-30 March

Session 2: 2-31 May

Session 3: 16 August – a4

September

Session 4: 15 November –

14 December

The First Forestation of

Agricultural Land Plots

Payments Agency for Rural

Development and Fishing

(APDRP)

21. Improve environment conditions in the rural area by using and sustainable management of agricultural land plots.

Over EUR 176 million available for the first

forestation of agricultural land plots.

- Funds are covered in the amount of 100% from

public money (co-financing is not mandatory)

- These funds will be offered as direct payments

per year and per hectare calculated depending on

the relief (field, elevation, mountain).

- For the forestation of one hectare of agricultural

land, on a field, the beneficiary gets EUR 1,330.

- Individuals;- Legal entities;- Groups of associations of physical and legal persons;- Local public authorities, owners of agricultural land plots.

Eligible beneficiaries must have agricultural land plots with an area of over 0.5 hectares (5,000 s.m).

Address: 22, Puskin Str.,, office

312, Chisinau

Telefon: (+373 22) 23 22 13

(+373 22) 69984441

E-mail:

[email protected]

[email protected]

Web: www.sfaturi.biz

Implementation

period

ProjectNo Goal / Activities Target group Contacts

Remittances Developing

Moldovan Communities

1. The project aims at contributing to connecting the migration process with the economic development of Moldova and to efficiently use

the positive effects / consequences of migrants in

order to develop rural communities in the target

area.

Families of the

young recipients of

remittances,

population of 100

rural localities in the

4 target districts

(Orhei, Soldanesti,

Rezina, Telenesti)

in the Centre region

of Moldova.

Address: Orhei, 50,.

M.Sadoveanu Str.,

Telefon: (+373) 235 32945

(+373) 79700751

(+373) 68924154

E-mail: [email protected]

Rural Development Agency – Center (ADR-Center

Registration in the context

is opened by March 22

Contest organised every

year, beginning with 2002

Junior Chamber

International Moldova

(JCI Moldova) and

National Association of

Young Managers (ANTiM)

National Youth Business

Plan Competition

2. The purpose of this contest is to support and promote

ideas of the young people who want to open their

own business.

The contest is divided in 5 stages, and at the end, out

of the 50 finalists, the board selects only 19, winners

of amounts of money between EUR 3,000 and

10,000.

- Young persons

aged between 18

and 35 years

Registration to the CBP2012 is

performed via the website

www.cbp.antim.org

http://www.moldcell.md/rom/

private/node/15117

http://unimedia.md/?mod=ne

ws&id=44775

Valid

Until March 2013

ASA Business

Business Support and

Assistance Agency

3. Provide financial services to farmers and entrepreneurs at favourable conditions, thus contributing to the rural development.The SME crediting in the rural area, particularly the

newly created SMEs, or those without crediting history.

- investments in production means;-agricultural and non-agricultural production activities;-agricultural and industrial processing activities;-increase in current assets;-collection and commerce activities.

- Peasant farms;

- Individual

enterprises;

- Cooperatives of

entrepreneur;

- LLC;

- Joint stock

societies.

Address: 22, Puskin Str., office

312, Chisinau

Telefon: (+373 22) 23 22 13

(+373 22) 69984441

E-mail:

[email protected]

[email protected]

Web: www.sfaturi.biz

Apart from the state SME funding projects, there is a number of projects implemented by NGOs, offering possibilities to access grants in the small- and medium-size enterprises development field. “Remittances Developing Moldo-van Communities” is one of these projects.

Eligibility criteria differ from founder to founder, depending on the project’s objectives.

For example, to access the “Remittances Developing Moldovan Communities” Grant Programme, the applicant has to meet the following eligibility criteria:• To be a migrant from Moldova or first, second degree relative – beneficiary of remittances;• To be a citizen of the Republic of Moldova;• Is aged between 20 and 45 years when applying to the programme;• Wants to launch his own business in Moldova or to develop the existing business;• Can confirm, with the supporting documents that he is or was a labour migrant or is or was a beneficiary of remittances.

Implementation

period

ProjectNo Goal / Activities Target group Contacts

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82

Valid GEA

Efficient Business

Administration

Programme, funded from

the State Budget

1. Improve the qualification in the entrepreneur-ial field to ensure an efficient administration of the own business.

Free courses on 8 training modules at choice.

- Future

entrepreneurs and

active entrepre-

neurs practicing

economic activities

under any

organizational legal

form.

Address: 48, Serghei Lazo Str.,

office 311, Chisinau

Telefon: (+373 22) 22 57 99

Fax: (+373 22) 29 57 97

E-mail: [email protected]

Web: www.odimm.md

www.businessportal.md

Contact person:

Cornelia Zelinschi

July 2012 – June 2012BCI

Stimulate the innovation

use of remittances in

productive rural

investments

2. Develop managerial capacities of beneficiaries of remittances. Increase investments from remittances. Prevent the brain drain from Moldova.- Free entrepreneurial training courses;

- Assist enterprises to initiate businesses and

post-creation, including the development of

business plans;

- Develop and distribute the “Introductory Guide to

Business” brochure;

- Develop and distribute the “Successful

Entrepreneurial Practices” brochure;

- Organize study visits to companies in Romania.

Beneficiaries of

remittances and

emigrants back to

Moldova from the

following districts:

Ungheni, Hancesti,

Anenii Noi, Ialoveni,

Straseni, Calarasi,

Nisporeni, Telenesti,

Criuleni, Rezina,

Soldanesti and

Dubasari

Address: 27, Mihai Eminescu

Str., Chisinau

Telefon: (+373 22) 85 50 80,

(+373 22) 85 50 77,

E-mail: [email protected]

Web: www.bci.md

Contact person:

Artur Macovei

February 2012 – October

2014

Modular staff

development training

within the enterprise

3. Develop staff within Moldovan enterprises by elaborating staff development modular trainings.

- 10 companies

from Moldova will

be selected.

Continuous Training Centre

of the Chamber of

Commerce and Industry of

the Republic of Moldova

Telefon: (+373 22) 23-52-94

e-mail: [email protected]

Contact person:

Aurelia Slanina, consultant CFC

ValidSES

Consultancy by Experts

from Germany

4. Facilitate the access of SMEs to international innovative knowledge.

Organize thematic seminars in the beneficiary’s

country.

- SMEs;

- Public institutions;

- Local authorities;

- Education

institutions;

- International

institutions.

Address: 48, Serghei Lazo Str.,

office 303, Chisinau

Telefon: (+373 22) 22 53 80

Fax: (+373 22) 29 57 97

E-mail: [email protected]

Web: www.ses-bonn.de

Contact person:

Olga Melniciuc

ValidPUM

Consultancy by Experts

from Netherlands

5. Facilitate the access of SMEs to international innovative knowledge.- Consultancy by foreign experts;- Seminars in the beneficiary’s country and in the Netherlands;Traineeships from 2 to 3 weeks in the Netherlands;

Identify business partners in other countries

- SME Telefon: (+373 22) 77 59 71

Gsm: (+373 22) 69 37 36 85

E-mail: [email protected]

Web: www.pum.nl

Contact person:

Ala Panov

2009-2013CNFA

Farmer to Farmer Program

6. Free consultancy services by US experts to

improve performances through a professional

approach of technical and financial issues.

- Agricultural

enterprises;

- Groups of farmers

from Moldova.

Address: 57/1, Banulescu-

Bodoni Str., office 312, Chisinau

Telefon: (+373 22) 24 03 12

Fax: (+373 22) 24 03 13

E-mail: [email protected]

Web: www.cnfa.org

Contact person:

Eugenia Iurcu, Diana Rotaru

Implementation

period

ProjectNo Goal / Activities Target group Contacts

83

What are business incubators?

Business incubators = are efficient SME and new jobs creating mechanisms. They increase the success rate of start-ups, from 45 up to 85%, working based on the best established and tested practices.

They are created to support the development of enterprises at the beginning of their activity, which have ideas, but do not have the know-how, do not know how to draft a business plan and do not have financial resources to rent, at the market process, an appropriate location for their business. This is where the incubator intervenes: apart from providing the necessary logistic support, it also organizes training courses, helps to develop business plans, and teaches how to draft a project to attract the funds made available by internal or external financers; in a nutshell, beneficiaries learn here to take the first steps towards launching a business. Once the company is developed, it leaves the incubator it was born in and starts functioning on its own account.

On-goingFarmer’s school for

agriculture and

development

7. Support private entrepreneurs, with innovative ideas, by promoting the access to knowledge in order to increase their competitiveness.

- Entrepreneurial training courses;

Training courses in various fields of agriculture.

Courses are free and are held in the autumn –

winter period.

- SMEs from the

villages of the

Drochia, Riscani,

Singerei and

Glodeni districts.

Address: 81, Mircea cel Batrin

Str., Balti

Telefon: 231-92544

Fax: 231-92546

E-mail: [email protected]

Web:http://www.procore.md/?

pagina=noutati&id=8

Contact person:

Sergiu Mihalov

Until 2014CEED II

Competitiveness

Enhancement and

Enterprise Development

8. Enhance competitiveness of Moldovan companies on the world market by increasing

and extending the key growth areas and

investment sales.

- Entrepreneurs

(fields: textiles and

machinery;

informational

technologies and

computing; wine

production

Address: 29, Sfatul Tarii Str, „Le

Roi”, floor 5, MD-2012, Chisinau

Telefon: (+373 22) 83 99 00

Fax: (+373 22) 83 99 20

E-mail: [email protected]

Web:http://moldova.usaid.gov/

moldova_economic.shtml

Contact person:

Tatiana Dumbrava

2011-2013ENTRANSE 2 Your

Business

9. Support the development of SMEs, increase the employment level of entrepreneurs and, hence, increase the number of new jobs, by reducing poverty and supporting the SME sector development in Moldova.

- Create and develop the pilot business incubator

in the town of Soroca;

- Provide support to existing business incubators;

- Develop and promote the informational portal for

SMEs and entrepreneurs www.businessportal.md;

- Develop the training programme for business

incubator’s residents

- Start-ups;

- Entrepreneurs

with feasible

business ideas

from the town of

Soroca.

Address: 48, Serghei Lazo Str.,

office 307, 309, MD-2004,

Chisinau

Telefon: (+373 22) 83 83 45

Fax: (+373 22) 83 83 44

E-mail: [email protected]

Web: www.businessportal.md

Contact person:

Lucia Usurelu

Advantages of business incubators Disadvantages of business incubators

• Space for carrying out the activity• Necessary facilities for the activity• Assistance by consultants specialised in business manage-ment• Cooperation between investors within the incubator• Costs are mainly covered by the state or international organizations

• When the firm is developed (already has a number of employees), it will have to cede the space to another applicant• The network of business incubators is quite small and poorly disseminated

Implementation

period

ProjectNo Goal / Activities Target group Contacts

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In the Republic of Moldova, the setting up of a network of business incubators is an efficient instrument to promote entrepreneurship and public-private partnership, also being an important modality for reutilizing buildings of enter-prises from the public sector that are not functioning. At the same time, business incubators are a method to control the utilization of funds for human development and poverty reduction.

The following Business Incubators are functioning across Moldova:

Apart from the business incubators, in Moldova there are also.

3 Scientific-Technological Parks and 1 innovation incubator.

Ungheni

Soroca

Chisinău

Chisinău

Balti

Hincesti

Cimislia

DescriptionTownName

Offers 32 office rooms to help local potential or current entrepreneurs to start up or develop their business. At the moment, 90% of the available office rooms are being usedThis is the first incubator with mixed profile created in Moldova, providing small entrepreneurs with production space and office rooms. Currently, 17 companies are incubated, of which, 50% are start-ups.Founded in 2000. Co-founders are the ELIRI Institute, Chisinau City Hall, Technical University of Moldova, State Agency for Industrial Property Protection (AGEPI) and a commercial bank.Officially opened on 23 September 2005. Its mission is to support students-entrepreneurs from the ASEM, by providing them with professional, technical, administrative and consultancy assistance in the business field.Founded in 2001, with the support of the German Company “Sudzucker.” The project represents the joint efforts of the Chamber of Industry and Commerce and the German Economic Service. This incubator is a public association, founded in 2001. The main objective of the incubator is to provide assistance to entrepreneurs to open a business and to support the existent business. Proposed to be funded from the National Fund for Rural Development. Project’s applicant is the Cimislia District Council.

BI “Casa Antreprenoriatului”

BI Soroca

BI “ELIRI-INC”

BI ASEM

BI “Impuls”

BI “ProAgroIndPrivat”

“Incubatorul de Afaceri Regional Cimislia” (Regional Business Incubator Cimislia)

Scientific-Technological Park = a complex hosting scientific research centres, technological and innovation nests. Continuous training offers, forecasting, all facilities needed to organize fairs, exhibitions and market development. They are closely connected with the higher education structures, business and government structures.

Name Contacts

Address:

5, Miorita Str., Chisinau, Republic of MoldovaTel: +373 22 88 25 60 Fax: +373 22 88 25 60Address:

58, Dacia Str., Chisinau, Republic of MoldovaTel: +373(22)93-06-50 Fax: +373 (22) 66-42-79Webpage: www.inagro.mdE-mail: [email protected]:

5, Miorita Str., Chisinau, Republic of MoldovaTel: +373 22 88 25 60 Fax: +373 22 88 25 60Address:

5, Miorita Str., Chisinau, Republic of MoldovaTel: +373 22 88 25 60 Fax: +373 22 88 25 60

Scientific-Economic Park “Academica” • 27 residents

Scientific-Technological Park “Inagro”• 8 residents• Specialised in intensive and ecological agriculture

Scientific-Technological Park “Micronanoteh”• Specialized in microelectronics and nanotechnologies

Innovation incubator “Inovatorul”• 4 residents• Universal specialization

85

It is also recognised that the organization of small and medium enterprises as clusters increases their competitive-ness, as this represents an important framework for the development and growth of private companies. In this context, the Government will do its best to create a legislative framework stimulating the development of clusters.

Cluster = a group of producers, users and/or beneficiaries, whose goal is to implement the best practices from the EU in order to improve the competitiveness of economic operators.

What are the benefits of a company from belonging to a cluster?• Increase of competitiveness and in the employment rate, through the interconnection of people, skills, competences and knowledge;• Increase in the efficiency, as it is easier to work in a network with clients and suppliers;• Stimulate innovations, because interaction with clients creates new ideas and a strong pressure over innovation;• Increase in chances for the internationalisation of SMEs;• Successful opportunities for start-ups and spin-offs;• Ensure the capacity to influence education profiles, in order to align them to the requirements of company’s requirements for qualified human resources.

The Fund of Entrepreneurship Support and Small Business Development

The Fund of Entrepreneurship Support and Small Business Development is a state organization, acting in accor-dance with the Moldovan legislation. It was created to fund actions oriented towards the development of entrepre-neurship, small business, based on private propriety, including farmers and competition. The fund is subordinated to the Moldovan Government and ensures the funding of national state programmes supporting the small business, its development projects and measures, participates in the funding of local small business support programmes. The fund supports, first of all, small business agents, working in the production area, and is entitled to set up for them other priority activity types and to stimulate them within the limits of the available means. The fund’s is created from the following resources:

• Up to 0.5% from the state budget revenue;• Revenue from own activity;• Means allocated within the international technical and financial assistance;• Other sources that do not run counter the legislation in effect.

The fund is actively collaborating with non-government associations of the small business agents and provides them with legal assistance.

State subsidies in agriculture

The Moldovan Government grants subsidies to agricultural producers, in the amount of MDL 400 million in the following fields:1. Stimulate the crediting of agricultural producers by financial institutions;2. Stimulate the insurance of production risks in agriculture;3. Stimulate investments in setting up multiannual plantations and promoting wine sector products;4. Stimulate investments in the growing of vegetables on protected land plots (winter greenhouses, glasshouses, tunnels);5. Stimulate investments in the acquisition of agricultural outfit, machinery and equipment for the irrigation systems, frost protection systems and anti-hail systems;6. Stimulate investments for the technological outfit and renovation of livestock farms; 7. Stimulate the acquisition of breeders and maintenance of their genetic fund;8. Stimulate investments for the development of post-harvesting and processing infrastructure.

The monthly distribution of the subsidising fund of agricultural producers is the task of the Ministry of Agriculture and Food Industry, in coordination with the Ministry of Finance.

DECISION on approving methods for use of subsidizing fund for agricultural producers for 2012,

No 57, of 31.01.2012.

Fiscal initiatives

The State Fiscal Service of the Republic of Moldova has initiated a series of reforms and reorganizations, aiming at aligning to the best international fiscal practices. Reform’s objectives consist in increasing the voluntary conformation of taxpayers by providing best quality services and reducing costs and the time needed to honour their duties to the national public budget. In order to achieve the mentioned objectives, the SFS has drafted a Strategic Development Plan for 2011-2015.

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21. Business ethics and social responsibility

Business ethics = the promotion of adequate behaviour among both managers and their subordinates, based on moral principles and norms developed over time in relations between enterprises. These principles are used to deter-mine correctness or incorrectness in business relations.

Several basic principles of the business ethics:

Economic and social responsibility of the company: “The goal of business is not only to bring welfare upon stores and factory's, but upon the entire society. The company has the obligation of making a profit because part of this profit was allocated to society by the payment of taxes and duties," Panasonic brand creator Konosuke Matsushita said. Thus, the duty of business people as citizens is to make a reasonable profit. The company is regarded as respon-sible not only towards the owner, but also towards clients, providers, NGOs, creditors, local communities etc.

Trust between participants in the economic life: a) trust in relations with providers – both sides shall respect their obligations and avoid surprises of any kind;b) trust in relations with consumers – provide services of the promised quality, and true-to-life information;c) trust in relations with employees – ensure a better communication environment, more loyalty among the employees, less work conflicts.

Honest communication and fair treatment:a) towards the company's clients;b) towards the employees;c) towards donors;d) towards the community.

"For you to gain, those you will deal with should gain as well." (Alan Greenspan)

You need to follow some ethic principles if you want to enjoy success in business in the long run:• treat all employees as unique, valuable people;• back the growth and development of every employee;• respect the employees' families;• be honest to your business partners;• create a sexual harassment-free working environment;• create a safe working environment;• promote fair recruitment, marketing and sales practices;• deliver on your promise, respect your contractual obligations and the assumed commitments;• treat other people just like you would like them to treat you;• negotiate from a win-win position;• respect confidential data;• call your employees by their names and talk to them respectfully;• encourage a balanced working and rest schedule;• be fair and equitable when it comes to financial matters;• never mischaracterize people, products or services;• display a positive attitude towards the people from your business environment;• do not take or give bribes.

A business following healthy moral principles is a prosperous business.

Lately, an increasing number of companies have been assuming social responsibilities, which, albeit not stipulated in legislation, bring huge benefits to both society and to the corporate reputation:

• improvement of the employees' living and working conditions (in terms of health, education, recruitment and working conditions; vocational training, retirement, equal and non-discriminatory chances of employment, promotion and dismissal);• involvement in environmental protection activities;• consumers' protection;• sponsorship for education, arts and sports;• charitable actions.

87

22. Business success and failures

Beginners need to realize that they are not the first to start their own businesses and that to err is human. Here are the first and most frequent errors made by beginners:

Business errors Advices

Make no assumptions of what your clients would like, without asking them first.Avoid direct confrontation with already operating businesses.Do not confine to a single kind of business.Decide exactly what you need to do and what you do not. Follow your commitments step by step. Avoid the "Chinese tea" syndrome (it's good at any time and everywhere). Choose the market segment accurately. Before planning your spending, you should evaluate your possible clients and deadlines for the first sales. Set as realistic timeframes as possible. SSet reasonable prices. Find out the market's reaction. Low prices do not necessarily mean increased sales. Good quality does not match low prices, just like poor quality does not match high prices. The market will accept high prices provided that your products are of better quality, more sparing, more sustainable, operate better and need less service investment than the ones of your competitors.

The launch of the business will cost more and will take longer than planned in the budget. Include spending for unexpected situations in the budget.Keep the capital. Have a global view of all spending. Do not take wishes for needs.Draft the forecast of cash flow carefully and thoroughly. Analyse the forecast daily and update it on a regular basis. Nobody knows or can understand your business better than you. Start by doing what you know and like doing better. Use your acquaintances. Pay due attention to the clients that are part of your market segment. Study the market very carefully. Use promo tests and analyse results carefully.

Extend your circle of clients. When you make a major investment decision, do not rely on the income coming from one client only. Work out a reserve plan for the situation when your most important client quits.Try to understand what motivates people, communicate efficiently with your employees, make sure that all tasks and responsibilities are assigned in the best way possible. Create your own management style.Monitor key indexes carefully in order to reduce losses.Hire the appropriate employees and learn to assign responsibilities. Hire a business expert or counsellor. It is easier to break verbal agreements than the written ones. Make sure all your contracts are concluded in written form. Allocate time for self-education. Read no less than one specialized book and take courses monthly. Pay special attention to the following aspects:- business card (mini promotion);- your look (appearance);- attitude (self-confidence);- the language of gestures and behaviour;- smile (pleasant presence);- expression of your eyes (displaying attention and interest);- vocabulary (the language used);- oratory (tone, intensity, rhythm and intonation)- car (personal image);- venues visited (point out your style and nature).The company should be located as close to your target group as possible and should be as accessible as possible.

Inadequate and wrong market surveyWrong assessment of competitorsLack of innovationLack of consistency and focusingSimplistic assumptions

Unrealistic projects

Inadequately set prices

Insufficient initial capital

Too much superfluous spendingLack of attention towards cash flow

Assigning the sales task to an employee

Not knowing your clients

Elaboration of an inappropriate marketing programme, which does not match the product or service.Counting only on two or three clients

Incorrect attitude towards the employees

Ignoring obvious things

Tendency to act alone

Verbally agreeing on contracts

Lack of commitment towards self-educationNeglecting your own image

Inadequate location of your business

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Although the business world is not always easy and you will go through troubles and failures, you have to find internal resources to move forward and win. Do not forget you are not alone in the business, you are the person on whom many other people and whole processes depend.

“Keep on going, and the chances are that you will stumble on something, perhaps when you are

least expecting it. I never heard of anyone ever stumbling on something sitting down.” (Charles

F. Kettering)

It doesn’t hurt to try. One cannot succeed without running a risk (of course, within admissible and thought–out risks).

To succeed in business, take into account the following advices:Do not reckon that all good ideas are opportunities and will be successful.Do not allow others to teach you what kind of business to launch.Do not take the lack of competition for an extraordinary opportunity.Do not look for business concepts that will change the world.Avoid your friends’ and family’s opinions about your business idea.Do not start “me too” businesses – an exact copy of other businesses. Do not initiate a business that does not coincide with your personal goals.Do not start a business without drafting a business plan. Avoid counsellors offering to work out a business plan for you at a reasonable price.

“The success combination in business is: Do what you do better... and: do more of what you do

…” (Jack Welch)

“The most successful businessman is the man who holds onto the old just as long as it is good,

and grabs the new just as soon as it is better.” (Lee Iacocca)

“Drive your business, let not your business drive you.” (Benjamin Franklin)

“Management is doing things right; leadership is doing the right things.” (Peter Drucker

Success stories

Ostrich farm

Cleopatra Dumitrescu, residing in central Moldova, has launched an ostrich farm. She launched her business in 1996 being inspired by what she had seen in the USA. She relied on her experience of poultry breeding. Initially she opened a small farm of 7 adult ostriches and 12 baby ostriches she had bought from various farms in Western Europe in order to avoid inbred mating. She bought some 18 eggs for incubation, an incubator and a baby ostriches nursery. The farm was based in a building that belonged to a kolkhoz once. Thus, the problem of fitting up the farm was quickly solved as the buildings already existed and all they needed to do was to build the separating fences and shelters. Presently, Cleopatra Dumitrescu has 24 adult ostriches, laying eggs, each of them enjoys an area of 700 to 800 square metres in the external fold, which is much above the European norms, which provide for not less than 250 square metres for a bird.

Before turning 1, an ostrich costs from 60 to 65 euros. At the age of 1, when one ostrich weighs 90-100 kg, butcheries buy them at 2.5 euros per kg, thus you have a profit of over 100 euros per bird. An egg for incubation costs from 180 to 700 lei, depending on how many you buy. An egg for consumption costs from 160 to 400 lei.

When slaughtered, at the age of 10-14 months, one ostrich gives 35 kg of tender lean meat, over 1 square metre of leather and about 1.5 kg of feathers. If the ostriches are not slaughtered, they are kept for reproduction: a male reaches sexual maturity at the age of 30 months and females at the age of 20 months. When delivered, a baby ostrich is 25 cm tall and weighs about 1 kg. They grow 25-30 cm a month. The adults are 2.5 m tall and weigh over 150 kg. They live over 50 years.

89

Rat farm

Mike Hannam, a house painter from Canada’s Ottawa, has never thought that one day he would do …. rat business. He started breeding these animals to have food for his menag-erie made up of a python and several lizards. But the rats were propagating their kind so quickly that very soon the cages were overpopulated. It was then that he thought of selling surplus to other reptile owners, discovering that there was an insufficiently exploited market segment.

The business took shape in the following several weeks. First of all, Mike got in touch with the lab of an Ottawa-based university, which provided him with complete information about breeding rodents, as well as competent advices from experts. Subsequently, Mike laid the basis of the firm Pied Piper Rats farm, leased equipped halls of a former mink farm and set to work.

Initially, Mike Hannam had two females and one male. Unlike other businesses, the production issue was not a matter of concern: pregnancy at female rats lasts three months and one male rat may couple with 1,200 females a month. Due to this huge reproduction capacity, the farm now has 6,000 rats. To sell them, Hannam posts advertising in magazines meant for animal owners, but he also participates in all sorts of shows of exotic animals. Zoo parks are among his best clients as they have a large number of “consumers”: snakes, lizards, eagles, hen hawks and owls, who eat mainly rats. Owners of livestock order up to 100 rats at a time (with the price varying from 35 cents to 1.8 dollars), whereas zoo parks order several thousands.

Like many other entrepreneurs, Mike Hannam had troubles with the fiscal inspectorate. His activity was not assimi-lated to the one of agricultural producers (in this case taxes would have been lower) for reason that he was trading livestock. But when Mike explained that he was selling dead and frozen rats, which are rather unattractive as livestock, the inspectors changed their mind.

Private dustman

The young entrepreneur Gotz Klein found a very simple niche on the market of services in Tubingen. As there was not enough room on the city’s streets for big garbage vehicles, he offered his services of dustman to the residents and companies from the area.

His idea produced results. Presently, his garbage van carries over 10 tons of garbage per month to the city’s garbage pit. His clients are owners of beer houses, boutiques, sausage factories, as well as private people. He levies monthly 6,000 euros, of which about two thirds are profit.

There are similar areas in Moldova, hence the business may be successful here too. To launch it, you need an authoriza-tion from the city hall, an old van and a mobile phone. Target mainly residential zones, in particular private houses with bumpy roads, from where it is difficult to promptly ship and stock the garbage.

“To be successful, you have to have your heart in your business, and your business in your heart.”

(Thomas Watson)

An easy to understand BUSINESS GUIDE

90

ANNEX 1Capacity assessment test for entrepreneurs

This test will help the future entrepreneur to understand how well he can organize and run a business. Each question has three optional answers. Choose the closest answer, by ticking the corresponding letter.

A. Do you often start doing something from your own initiative?a) I do everything by myself. I do not need anybody to push me.b) If somebody helps me at the beginning, everything will go well after this.c) One minute of patience, ten years of peace. If possible, I try to do nothing.

B. What is your attitude towards people?a) I like people. I can get on well with anybody. b) I have plenty of friends. I do not need anybody else.c) Most of the people are irritating me.

C. Could you be a leader?a) I can attract many people, when I start doing something.b) I can give orders, if somebody tells me what to do.c) I can work together with others, if I want so.

D. Are you able to assume responsibilities and to complete any activity you begin?a) I like undertaking responsibilities and finalizing any activity I start. b) I can undertake responsibilities, if necessary, but I prefer to leave the responsibility with somebody else.c) There will always be an active person who would like to be the leader. I will offer him/her this responsibility with pleasure.

E. Are you a good organiser? a) Before I start any work, I prefer to make a plan. Usually, I am the one who establishes the sequence of actions, when the team is getting ready for the activity. b) All jobs are going well in ordinary situations. In case of problems, I might abandon the job I have started. c) If everything is already organized and a problem arises, I leave things to work themselves out.

F. Are you a good worker?a) I can work as much as required. I work a lot, if this is in my best interest.b) I can work well for a certain time. If I am getting bored, I abandon the job.c) I do not see the point in working a lot.

G. Are you capable of making decisions?a) When necessary, I can make prompt decisions, which usually, are the correct ones.b) Yes, if I have sufficient time to think about. When I make quick decisions, usually they turn out to be inadequate. d) I do not like situations when I have to make decisions.

H. Can people believe in what you are saying?a) Certainly. I only say what I really believe. b) I tend to always be the right level. But sometimes, I say what is more appropriate for that moment. c) Why to be worried about, the interlocutor does not know anyway whether I do or not say the truth.

I. Do you keep your promises?a) If I have the possibility to do something, nothing can stop me.b) Usually, I tend to complete the job I have started, if things are going well.c) If I am not successful from the first time, I abandon. Why to waste time?

J. What is your health condition?a) I never get tired! b) I have sufficient energy for almost everything I want to do.c) I feel I am getting tired faster than most of my colleagues.

Count how many answers of type a)_________b)________c)________ you have.

Majority Interpretation of results

a

b

c

It is likely that you have the very qualities needed to efficiently manage an enterprise.

You might face difficulties, therefore it would be good for you to find a reliable partner to compensate your drawbacks.

Even a good partner could not help you. Think well whether it is worth the effort or urgently start a serious training!

91

ANNEX 2Territorial Offices of the State Fiscal Inspectorate

IFS teritoriale Address

Chisinau Municipality

DAF* Centru DAF BuiucaniDAF CiocanaDAF BotanicaDAF RiscaniBaltiAnenii-NoiBasarabeascaBriceniCahulCantemirCalarasiCauseniCimisliaCriuleniDonduseniDrochiaDubasariEdinetFalestiFlorestiGlodeniHincestiIaloveniLeovaNisporeniOcnitaOrheiRezinaRascaniSingereiSorocaStraseniSoldanestiStefan-VodaTaracliaTelenestiUngheniUTA GagauziaComratCeadir-LungaVulcanesti

9, Cosmonautilor Str.

2012, 65. Mitr. Varlaam Str.2004, 2, Mihai Viteazul Str. 2042, 24/1, M. Sadoveanu Str.2043, 7/2, Teilor Str.2068, 3a, Kiev Str.3101, 128, Ştefan cel Mare Str.6501, 1, Sciusev Str.6702, 55, Karl Marx Str.4701, 28, Independentei Str.3901, 2, Tolstoi Str.7301, 2, Trandafirilor Str.4401, 130, Alex. cel Bun Str.4301, 14, Pacii Str.4101, 10, Stefan cel Mare Bld.4801, 108, 31 August Str.5101, 4, Feroviarilor Str.5201, 15, Independentei Str.4571, village of Cocieri, 28, V. Lupu Str.4601, 101, Independentei Str.5901, 20, Moldovei Str.5001, 2, Victoriei Str.4901, 2, Suveranitatii Str.3401, 123, Mihalcea Hincu Str.6801, 57, Alexandru cel Bun Str.6301, 3, Dosoftei Str.6401, 2, Suveranitatii Str.7101, 72, M. Viteazul Str.3501, bul. M. Eminescu Str.5401, 5, 27 August Str.5601, 44, Independentei Str.6201, 115, Independentei Str.3001, 10, Stan Poetaj Str.3701, 31, M. Eminescu Str.7201, 2 A, Boris Glavan Str.4201, 1, Libertatii Str.7401, 3, Valeriu Cebanov Str.5801, 69, Renasterii Str.3601, 17, Nationala Str.3801, 24, Comsomolului Str.3801, 24, Comsomolului Str.6101, 33, Lomonosov Str.5301, 60, Gagarin Str.

0 22 823302 Fax: 0 22 226180 0 22 823185 0 22 823021 0 22 823074 0 22 823241 0 22 823132 0 231 23502 0 265 24744 0 297 23040 0 247 22248 0 299 29813 0 273 22287 0 244 22848 0 243 22248 0 41 22174 0 248 20413 0 251 24900 0 252 23595 0 248 52188 0 246 24782 0 259 23979 0 250 22682 0 249 23873 0 69 23573 0 268 22136 0 263 22437 0 264 23535 0 271 21146 0 235 20522 0 254 21870 0 256.23287 0 262 22690 0 230 23006 0 237 22061 0 272 22287 0 242 22350 0 294 23640 0 258 22248 0 236 27302 0 298 23150 0 298 25363 0 291 92539 0 293 21613

Telephone/Fax

*Fiscal Administration Department

An easy to understand BUSINESS GUIDE

92

ANNEX 3Territorial Agencies of the National Health Insurance Centre

ANNNEX 4Territorial Offices of the National House of Social Insurance

Address

Anenii-Noi

Balti

Briceni

Cahul

Anenii-Noi, 4, 31 August Str.

Balti 3100, 47, 31 August Str.

Briceni 4700, 44, Independentei Str.

Cahul 3209, 6, Piata Independentei Str.

0 265 210760 265 235430 265 21078Fax: 0 265 246460 231 225480 231 290520 231 220780 231 92311Fax: 0 231 225480 247 235360 247 256850 247 258030 247 24977Fax: 0 247 235360 299 328580 299 217350 299 335740 299 36172Fax: 0 299 32858

Territorial agencies Address E-mail, web

Balti

BenderCahul

Causeni

Chisinau

Comrat

Edinet

HincestiOrhei

Soroca

Taraclia

Ungheni

MD 3100, Balti Municipality, 5A, Sf. Nicolae Str.District of Anenii Noi, village of Varnita, 64, Tighina Str.MD 3900, Cahul, 16, Stefan cel Mare Str.

MD 4300, Causeni, 54, Gagarin Str.

Chisinau Mun., 18, Vasile Lupu Str.

MD 3800, Comrat, 44, Pobedy Str., polyclinic, floor 5MD 7100, Ocnita, 63, 50 ani ai Biruintei Str.,

Hincesti, 238, Mihalcea Hincu Str.MD 3401, Orhei, 81, Negruzzi Str.

MD 3000, Soroca, 19, Alexandru cel Bun Str.

MD 7400, Taraclia, 5a, Cotovschi Str,

MD 3600, Ungheni, 17, Nationala Str.

[email protected] http://atbalti.cnam.md [email protected] [email protected]

[email protected]

[email protected] www.atchisinau.com.md [email protected]

[email protected]

[email protected] [email protected] [email protected]

[email protected]

[email protected]

0 231 63399

0 265 462560 299 22371Fax:0 299 22371 0 243 26122Fax: 0 243 26503 0 22 593791

0 298 26997Fax: 0 298 269970 271 23854Fax: 0 271 22203 0 269 22939 0 235 20265Fax: 0 235 202650 230 26418Fax: 0 230 264180 294 24142Fax: 0 294 241420 236 22758Fax: 0 236 22758

Telephone/Fax

Territorial offices Telephone/Fax

93

Address

Cantemir

Calarasi

Causeni

Chisinau

Cimislia

Comrat

Criuleni

Donduseni

Drochia

Edinet

Cantemir 7301, 2, St. Voda Str.

Calarasi 4400, 19, M. Eminescu Str.

Causeni 4300, 9, A. Mateevici Str.

Botanica Sector, 2032, 108, Burebista Str.

Cimislia 4100, 7, Sfinta Maria Str.

Comrat 3805, 42/1, Tretiacova Str.

Criuleni 4801, 12, Biruinta Str.

Donduseni 5100, 12, Comarov Str.

Drochia 5202, 15, Independentei Bld.

Edinet 4601, 101, Independentei Str.

0 273 225690 273 232160 273 222830 273 23216Fax: 0 273 225690 244 237240 244 237010 244 232250 244 21884Fax: 0 244 237240 243 220710 243 229620 243 241400 243 23176Fax: 0 243 220710 22 5320830 22 5530030 22 5076080 22 559860Fax: 0 2235880 241 227390 241 210340 241 241850 241 21033Fax: 0 241 227390 298 225480 298 291320 298 232580 298 22975Fax: 0 298 225480 248 217230 248 227880 248 209730 248 20973Fax: 0 248 217230 251 211350 251 244210 251 254590 251 24411Fax: 0 251 211350 252 269390 252 269400 252 248310 252 26740Fax: 0 252 269390 246 258950 246 226860 246 224840 246 22479Fax: 0 246 21053

Telephone/FaxTerritorial offices

An easy to understand BUSINESS GUIDE

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Floresti

Glodeni

Hincesti

Ialoveni

Leova

Nisporeni

Ocnita

Orhei

Rezina

Riscani

Floresti 5000, 2, Victoriei Str.

Glodeni 4900, 21a, Tricolorului Str.

Hincesti 3400, 123, M. Hincu Str.

Ialoveni 6800, 18, Alexandru cel Bun Str.

Leova 6300, 35, Unirii Str.

Nisporeni 640, 10, Suveranitatii Str.

Ocnita 7101, 47, Independentei Str.

Orhei 3505, 113, Vasile Lupu Str.

Rezina, 1, 27 August Str.

Riscani 5600, 2, Ion Neculce Str.

0 250 242030 250 263920 250 204410 250 26389Fax: 0 250 242030 249 225480 249 256290 249 250440 249 25700Fax: 0 249 225480 269 258010 269 246450 269 231060 269 25480Fax: 0 269 253140 268 215050 268 241740 268 225400 268 22548Fax: 0 268 23750 263 232730 263 245810 263 236090 263 22249Fax: 0 263 245810 264 237980 264 220510 264 225380 264 23779Fax: 0 264 237980 271 225480 271 242330 271 213890 271 22205Fax: 0 271 225480 235 225480 235 323600 235 202760 235 23757Fax: 0 254 22990 254 229910 254 21537 0 254 21693 Fax: 0 254 229910 256 225480 256 240430 256 234390 256 22895Fax: 0 256 22548

Address Telephone/FaxTerritorial offices

95

Singerei

Soroca

Straseni

Soldanesti

Stefan-Voda

Taraclia

Telenesti

Ungheni

Vulcanesti

Singerei 6200, 2A, Vinitchi Str.

Soroca 3000, 20, Stefan cel Mare Str.

Straseni 3701, 31, M. Eminescu Str.

Soldanesti 2770, 5, 31 August Str.

Stefan-Voda 4201, 3, 31 August Str.

Taraclia 7400, 46, Sovetscaia Str.

Telenesti 5801, 87, Renasterii Str.

Ungheni 3600, 8, Gh. Meniuc Str.

Vulcanesti 5300, 103, Lenin Str.

0 262 243500 262 247400 262 243480 262 24244Fax: 0 262 225480 230 301640 230 224370 230 223760 230 22427Fax: 0 230 301640 237 220390 237 227250 237 230210 237 20035Fax: 0 237 200350 272 238920 272 257120 272 258390 272 255360 272 25671Fax: 0 272 256330 242 235020 242 251190 242 24496Fax: 0 242 235020 294 230280 294 230540 294 234650 294 23025Fax: 0 294 230280 258 249710 258 250130 258 221970 258 24972Fax: 0 258 249710 236 269920 236 226830 236 232300 236 26898Fax: 0 236 269920 293 225480 293 232870 293 232870 293 22165Fax: 0 293 22548

An easy to understand BUSINESS GUIDE

Address Telephone/FaxTerritorial offices

96

ANNEX 5Territorial Offices of the National Bureau of Statistics

Post addressDirectorate(section)

MD-2028, Chisinau, 53 “a”, Hincesti Highway

MD-3114, Balti, 96 "a", Victoriei Str.

MD-6501, Anenii Noi, 6, 31 August Str.

MD-6702, Basarabeasca, 55, C. Marx, Str.

MD-4700, Briceni, 6, Prieteniei Str.

MD-3901, Cahul, 63, M. Funze Str.

MD-4403, Calarasi, 1, P. Halipa Str.

MD-7301, Cantemir, 11, Trandafirilor Str.

MD-4304, Causeni, 31, Eminescu Str.

MD-6101, Ceadar-Lunga, 10, Lunaciarski Str.

MD-4101, Cimislia, 10, Stefan cel Mare Str.

MD-4801, Criuleni, 90, 31 August, Str.0

MD-5102, Donduseni, 29, A. Donici Str.

MD-5202, Drochia,1 “b”, 31 August Str.

MD-4571, Cocieri, 63, Renasterii Str.

MD-4601, Edinet, 24, M. Eminescu Str.

MD-5902, Falesti, 27, Moldovei Str.

MD-5001, Floresti, 42, Victoriei Bld.

MD-4901, Glodeni, 1, L. Tolstoi Str.

MD-3401, Hincesti, 1, M. Cibotaru Str.

MD-6800, Ialoveni, 17, Alexandru cel Bun Str.

MD-6301, Leova, 37, Unirii Str.

MD-6000, Nisporeni, 61, Alexandru cel Bun Str.

MD-7101. Ocnita, 47, Independentei Str.

MD-3501, Orhei, 153, V. Lupu Str.

MD-5400, Rezina, 63 "a", Pacii Str.

MD-7101, Riscani, 16, 31 August Str.

MD-6200, Singerei, 136, Independentei Str.

MD-7201, Soldanesti, 11, N. Testemitanu Str.

MD-3005, Soroca, 128, Stefan cel Mare Str.

MD-4201, Stefan Voda, 1, Libertatii Str.

MD-3700, Straseni, 56, M. Eminescu Str,

MD-7400, Taraclia, 7, Pacii Str.

MD-5801, Telenesti, 18, Vasile Alecsandri Str.

MD-3600, Ungheni, 21, Decebal Str.

MD-5300, Vulcanesti 86, Lenin Str.

MD-3800, Comrat, 36, Tretiakov Str.

Chisinau Mun.

Balti Mun.

Anenii Noi

Basarabeasca

Briceni

Cahul

Calarasi

Cantemir

Causeni

Ceadir-Lunga

Cimislia

Criuleni

Donduseni

Drochia

Dubasari (Cocieri)

Edinet

Falesti

Floresti

Glodeni

Hincesti

Ialoveni

Leova

Nisporeni

Ocnita

Orhei

Rezina

Riscani

Singerei

Soldanesti

Soroca

Stefan-Vodă

Straseni

Taraclia

Telenesti

Ungheni

Vulcanesti

U.T.A. Gagauzia(Comrat)

Savva Janeta

Tertea Ion

Gavriluta Valentina

Vlad Valentina

Traista Vasile

Condrasova Natalia

Stratan Zinaida

Tabureanu Victoria

Sirghi Victoria

Butcus Veaceslav

Girnaja Maria

RotaruTatiana

Briceag Tamara

Sandiuc Dina

Ceban Eugenia

Greciuhin Silvia

Sinica Constantin

Bujac Valentin

Ceban Tamara

Petcu Valentina

Covas Ludmila

Gasan Nina

Presecaru Zinovia

Patica Ludmila

Lungu Natalia

Budurin Ala

Zorila Ludmila

Locoman Tatiana

Sempered Tatiana

Zeru Igor

Bognibov Dmitrii

Croitor Vladislav

Celarscaia Nina

Esanu Ion

Mutu Denis

Gaidarji Maria

Topal Ivan

0 22 739581

0 231-32021

0 265 22961

0 297 22360

0 247 23231

0 299 25547

0 244 20780

0 273 22059

0 243 22146

0 291 23885

0 241 22642

0 248 22295

0 251 22007

0 252 22600

0 248 52474

0 246 22680

0 259 22430

0 250 22308

0 249 23250

0 269 24978

0 268 23995

0 263 22947

0 264 23151

0 271 22565

0 235 31047

0 254 22588

0 256 22296

0 262 29193

0 272 22044

0 230 22527

0 242 22799

0 237 27651

0 294 25569

0 258 22335

0 236 23100

0 253 24396

0 298 22559

[email protected]

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[email protected]

[email protected]

[email protected]

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[email protected]

[email protected]

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[email protected]

[email protected]

[email protected]

[email protected]

[email protected]

[email protected]

[email protected]

[email protected]

[email protected]

[email protected]

[email protected]

[email protected]

[email protected]

[email protected]

[email protected]

[email protected]

[email protected]

[email protected]

[email protected]

[email protected]

[email protected]

[email protected]

[email protected]

[email protected]

[email protected]

Head of Directorate

(section)Telephone E-mail

97

ANNEX 6Financial Indicators

Liquidity Indexes

Profitability indicators

Long-term solvency indicators

MeaningCalculation methodIndicator

Net working capital

General liquidity

Immediate liquidity

Accounts receivable turnover ratio

Days sales outstanding

Inventory turnover ratio

Current assets – ST Debts

Current assets /Short-term debts

Cash /Short-term debts

Net sales/Average receivables balance

One year/Accounts receivables turnover ratio

Cost of sold production /Inventory average balance

It shows the part of current assets that exceed current debts and

represents the capacity of net current assets to change into cash in order

to maintain the financial balance and to comply with maturing bonds of

the enterprise

Indicator of the short-term debts reimbursement capacity

Indicator of the short-term liquidity

Indicator of the relative amount of the receivables balance and of the credit policy efficiency

Indicator of the average period receivables are collected

Indicator of the relative inventory size

Gross profit margin

Assets turnover ration

Economic rentability

Return on equity

Gross profit Net sales

Net sales /Average balance of total assets

Net profit /Average balance of total assets

Net profit /Average balance of equity

It is used to determine the contribution of each leu from sales to obtain

the net profit

Indicator of the efficient utilization degree of economic resources in sales

Indicator of the profitability degree of each leu invested in the utilized

economic resources

Indicator of the profitability degree of owners’ investments

Degree of debt

Degree of solvency

Total debts /Total assets

Long-term debts /Equity

Indicators showing the ration to which the total asset is funded from

other sources but the own ones

Financing degree from equity

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ANNEX 7Normative Framework for Entrepreneurs

Laws of the Republic of Moldova

• Civil Code of the Republic of Moldova• Fiscal Code of the Republic of Moldova• Labour Code of the Republic of Moldova• LAW on State Social Insurance Budget for 2012, No 270 of 23.12.2011• LAW on accounting No 113-XVI of 27.04.2007, Official Monitor No 90-93/399 of 29.06.2007• LAW on pharmaceutical activity No 1456 of 25.05.1993• LAW on rent in agriculture No 198-XV of 15.05.2003• LAW on savings and credit associations No 139-XVI of 21.06.2007• LAW on internal trade No 749-XII of 23.02.1996• LAW on evaluation of conformity of products No 186-XV of 24.04.2003• LAW on franchising No 1335-XIII of 01.10.1997• LAW on pledge No 449-XV of 30.07.2001• LAW on investments in entrepreneurial activity No 81-XV of 18.03.2004• LAW on state registration of enterprises and organizations No 1265-XIV of 05.10.2000• LAW on leasing No 59-XVI of 28.04.2005• LAW on the import and export of goods from the Republic of Moldova by natural persons No 1569-XV of 20.12.2002• LAW on industrial parks No 164-XVI of 13.07.2007• LAW on scientific-technological parks and innovation incubators No 138-XVI of 21.06.2007• LAW on entrepreneurial patent No 93-XIV of 15.07.1998• LAW on basic principles regulating entrepreneurial activity No 235-XVI of 20.07.2006• LAW on protection of competition No 1103-XIV of 30.06.2000• LAW on labour protection No 625-XII of 02.07.1991• LAW on advertising No 1227-XIII of 27.06.1997• LAW on wages No 847-XV din 14.02.2002• LAW on protection and support of small business No 112-XIII of 20.05.1994• LAW on sales of goods 134-XIII of 03.06.1994• LAW on compulsory insurance fund for medical assistance for 2012, No 271 of 23.12.2011• LAW of financial institutions No 550-XIII of 21.07.1995• LAW on public acquisitions No 96 of 13.04.2007• LAW on granting long-term preferential loans to certain categories of young students No 1142 of 14.07.2000• LAW on sanitary-epidemiologic security of the population No 1513 of 16.06.1993• LAW on savings and loans associations No 1505-XIII of 18.02.1998• LAW on business cooperatives No 73-XV of 12.04.2001• LAW on peasant (farmer) farms No 1353-XIV o 03.1 1.2000• LAW on state registration of legal persons and individual entrepreneurs No 220-XVI of 19.10.2007• LAW trademarks and appellations of origin of products No 588-XIII of 22.09.1995• LAW on trademarks protection No 38-XVI of 29.02.2008• LAW on regulating entrepreneurial activity through licencing No 451-XV of 30.07.2001• LAW on general security of products No 422-XVI of 22.12.2006• LAW on Limited Liability Companies No 135 of 14.06.2007• LAW on Joint Stock Companies No 1134-XIII of 02.04.1997• LAW on supporting small and medium enterprises sector No 206 of 07.07.2006

ANNEX 8 BUSINESS PLAN NOTEBOOK

BUSINESS PLAN

Example of front page:Within crotchets you will have to fill in the business plan with information referring to your companyInserting a coloured picture with your product right at the beginning is a good idea. Include the following information:

[Your company’s name][Month, Year when the plan is developed]Business plan – copy No [x]This is a confidential document. It cannot be distributed.

[Name of the person][Title][Legal address [Town, Post code][Telephone][E-mail][Webpage]

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Contents

Here is an example of contents. When you finish the plan, make sure you have changed the page numbering

Business summary

1. Mission

2. Description of the company (Data on the firm’s registration. Organizational legal form. Founders. Field of activity.)

3. The Business (Goal and objectives of the business. Location. Offices. Partners.)

4. Product of service (Technological characteristics, quality. Assortment, nomenclature. Packing, design. Catalogues, pictures, drawings.)

5. Market and marketing strategy (Market’s characteristics, structure and size. Market evolution. Company’s market share. Current and potential clients. Analysis of consumers’ needs. Price policy. Distribution channels. Product/service promotion. Sales strategies.)

6. Competition (Competitors. Comparative advantages.)

7. Risks/Opportunities (SWOT Analysis)

8. Administrative team (Managerial team and its characteristics. Required staff. Organiza-tional structure.)

9. Required capital (Debts paying strategy.)

10. Financial plan (Accounting information and reports. Periodic cash flows (trimestral, monthly, annual, etc.). Estimates of quarterly, monthly or yearly sales, revenues of expendtures, depending on requirements of investors or credit societies.)

Conclusions

Annexes and references

Business summary

If this presentation if not successful, your business plan will never be bought by investors. We recommend you to formulate this brief presentation after you finish drafting the business plan. Given that the purpose of this brief presentation is to capture investor’s attention, it has to be brief, clear and concise.

• MissionOur company’s mission is [describe the main purpose of your company, or simply state the mission].

• Company’s presentation[The Company] was initiated on [date] and [describe what is it dealing with, e.g., manufacturing products for children, distribution of pencils, provision of medical services]. This is a [organizational legal form, for example LLC, JS, etc]. Company’s headquarters are on [main address, as well as the address of other facilities].

• BusinessWe produce [description of the product you manufacture or the service you provide]. Our company is under the [project stage, set-up stage,growing], and just has [designed the first product, employed the first sales executive, registered the first national order].Over the last [period], our company reached a turnover of [x] and registered a [profit, loss, breakeven]. By further direct funding, our company is expecting to increase its turnover from [x] and gross profit up to [x] in [xxxx] and to reach a turnover of [x], as well as a raw profit of [x] for year [xxxx+1]. We can get all these, because the respective funds will allow us to [describe how you are going to use the funds, for example: a) marketing for the new product, b) build or extend the facilities, to cope with a largest supply, c) add a new location of retail sale or of new distribution methods, d) intensify researches and development of new products, or improve the existing ones].

• Product or serviceDescribe the product or service in easy to understand terms.[The Company] produces the following: [brief list of the provided products, classified by the amount of sales they generate of by their importance in the production line]. Alternatively, [the Company] provides the following services: [brief list of provided services, classified by the amount of sales they generate of by their importance in the production line].At present, our [service or product] is at the [inception, growing, maturity] stage. We have planned to continue with this [product of service], with the following modifications to extend the line: [x, y and z].Determinants in [our product manufacturing or service provision] are [x and y]. Our [Product or service] is unique, because [x, y or z] and/or we have an advantage on the market given our [licence, promptness, brand name].

• Market and marketing strategyWe define our market as [manufacturing and sale of...]. Who are your clients? Where are they and how will you reach them? How will you educate clients to buy from you?

• CompetitionWe compete directly with [name of competitor] - or – We do not have any direct competitors, but there are substitutes for our [products or services] on the market. Our [product of service] is unique because [x] and/or we have a competitive advantage given [promptness, brand name, low production costs].

• Risks/Opportunities (SWOT Analysis)The most important risks for our business for the moment are [market risk, price risk, producer risk, management risk]. We consider we can eliminate these risks, because [x]. Our opportunities are significant; we have the possibility to [dominate a market niche, become a strong company in the industry] if [x].

• Administrative teamManagerial team and its characteristics. Required staff.Our team is made up of the following members, who can implement the plan: [x] men and women, covering [x] years of experience; [y] years in marketing, [y] years in product development and [y] years in [others].

• Financial planWe need [x], which would allow us to [describe why we need funds and why this opportunity is worth to be taken into account]. We can guarantee and reimburse this [loan, investments] in [x] years, by [dividend from the excess profit, re-capitalizations, sale of the company or public offer].

• Plan financiarFinancial resources required for the implementation of the plan. Expected economic-financial results.By this moment, the investor must have a clear idea about the current stage of the business. If you bore him/her or if he/she has difficulties in finding the information he/she needs, he/she will not talk to you. You must give him/her a full picture, even if brief, about the financial situation and situation of sales. Last year This year Next Year In two yearsSales:Gross profit:Income tax:

Balance Sheet SummaryAssets:Liabilities:Nominal value:

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Relaţia cu clienţiiFurther on, describe in details all items included in your business plan.

1. MissionOur target is to become [describe the major objective of the company; for example: leader in the manufacturing and trade of brand tyres, or the first name in the light cheeses industry].We aspire to get a reputation on the market as a manufacturer and distributor of [products saving time, which are better, sold at a fair price on the market {x}]. We can come to this point by [the prompt development of products, clear understanding of the market trends and needs, etc.].To achieve our objective, [company’s name] needs [capital, larger and more efficient facilities]. For this purpose, we want to treat the interested parties, clients, as well as the society with [description of the reputation the company wants to have]. These groups see our company as [describe the benefits that each of this groups would have if associating with this company].

2. Company’s presentationData on the firm’s registration. Organizational legal form. Founders. Field of activity.[The Company] was founded on [date] and [describe what is it dealing with, for example, manufacturing products for children, distribution of pencils, and provision of medical services]. This is a [organizational legal form, for example LLC, JS, etc.]. Company’s headquarters are on [main address, as well as the address of other facilities]. We have approximately [x] s.m. of office space and [x] s.m. of [production or storage space]. Current capacity is of [x] units per month. If we exceed [x] units per month, we will need additional space. We expect the current facilities to remain in line with requirements of the company for another [2 years, on year, one week] after funding.

[Company’s name] activates in the industry [with toxic environment, ammunition and weapons, genetic engineering, explosive] or [uses substances controlled in the manufacturing or service provision process] and falls under the jurisdiction [name of the governmental agency].

[Company’s name] holds all the necessary functioning authorisations and has all inspections up-to-date. These authorizations include: [brief list and their description].

Explain how you work in cooperation with other companies in order to improve performances of your company.

[Company’s name] has developed strategic important and profitable alliances with the following bigger and stronger companies:

[Describe each company, position on the market, details about the partnership and involved risks]. For example, we have cooperation contracts on marketing with [x], which is [the market leader for...], and this will allow us to sell together with them [e.g., our pencils for children].The mutual support in the en-detail sales, as well as the possibility to cooperate for the wholesale with their base of customers, can help us penetrate much faster on our market. The risk in this partnership is that they could [also decide to sell these pencils] and thus eliminate us from the process.

Another kind of strategic relationship our company benefits from is our development as a joint stock company, together with [x]. Alone we would never be able to fund researches for the new type of [Swiss degrease cheese, melting smoothly], but having access to their earlier researches [related to melting] we will be able to reduce by half the time required for the development of the new product. By using their [equipment, people], which were not used to their maximum potential, we could avoid costs related to [capital, additional wages]. We agreed to pay a fee of [x] to this partner for its role in the final success of the product.

We have a strategic relationship with a series of suppliers. In the exchange of a commitment to purchase [over 80% of the needed raw material from them], they agreed to [no supply the market for a maximum period of six month, or to offer us a preferential price]. [Company’s name] also has strategic relations of [e. g., manufacturing of original equipment] with a series of clients. This allows us to sell a large and constant amount of [e.g., wheels for roller-skates] to [e.g., shoemakers, who use them to sell full sets of roller-skates]. By this, a lot of products reach the market, although it does not ensure the brand recognition.

3. BusinessScopul şi obiectivele afacerii. Amplasarea. Sedii. Parteneri. Eventuali investitori.

[Company’s name] is a [manufacturer, distributer, trader, service provider] of [description of the product you manufacture or the service you provide]. The company is under the [project stage, set-up stage, growing], when it has just [developed a new product, employed the first sales executive, registered the first national order].

4. Product or serviceExplain how your product functions, or how is the service you provide used. Technological characteristics, quality. Assortment, nomenclature. Packing, design. Catalogues, pictures, drawings.What are the stringent needs of the market satisfied by your products? What do you bring new to the market?

[The Company] manufactures the following products: [list of products to be inserted here, classified by the amount of sales they generate of by their importance in the production line]. Make sure the readers will be able to refer to pictures of the product, diagrams, licences or other descriptive materials.Or:[The Company] provides the following services: [list of services provided to be inserted here, classified by the amount of sales they generate of by their importance in the production line].

Currently, our [product or service] is at the [inception, growing, maturity] stage. The [products or service] was designed for the first time in [xxxx] and since then, it has been improved or redesigned [x] times.Provide a brief background of the product development, introductions or improvements that led you product to what it is today. A tabular format is the most indicated for this description.

Product’s aspects or characteristics that are unique This is an extremely important paragraph. Investors must notice something which is unique, in the ownership or under the protection of your company, related to the product or service.

Our products are unique because of the [secret ingredient, our production licence, our manufacturing process].

There are also other companies that can offer [products or services] somehow similar, but we are capable to differentiate ourselves on the market, given [ x ].We have [applied or obtained] licence for [x], presented in annex [x]. Our main product, [x], is intended for the following needs of customers: [x], and brings them the following benefits: [x].Tell us about the unique features that increase the value or the production line or of the process for consumers and the way you intend to transform these characteristics into a competitive advantage for the company.

Research and developmentResearch and development within the company is based on [name of the person or company contracted], whose major objective is to use what is available on the market to [design the products solving certain problems, or that bring superior benefits to customers]. Over the last [period], the research and development activities resulted in the following products and innovations: [list of products and innovations]. [Company’s name] spent [% of revenue] last year for research and development and intends to spend [%] in the following [period].Sometimes, our research and development activity brings innovations without using data from the market or from customers. Our selection criterion of products in this case is the following: [relatively low investment requirements, positive outcomes from the investment, compatibility with current strategy, feasibility in development and production, relatively low risk, common buyer].

Our research and development activity will require additional sources for the future. These will include [people, capital] to [speed up the development process, test results in a more efficient manner].

New products and secondary products.To answer to the needs of the market, we intend to enrich the [product or service] by extending the spectrum to include [x, y and z]. We intend to introduce on the market these products in the period of [ ... ], which corresponds to [a big commercial exhibition, industrial event]. Apart from this, we intend to introduce the following new products in the next season: [x, y and z].

ProductionOur [products, service] is [manufactured by us, assembled by us from component parts acquired from various suppliers, (the service) is provided by our employees, or is subcontracted to field consultants]. [The raw materials, components] used for our products are available directly from several suppliers, meeting our quality standards. Determinants in [manufacturing our products or providing our service] are [x and y].List and explain requirements related to equipment, materials and labour. Are the elements from above to hand? Do you have different variants of suppliers? Make a list with requirements for inventory, technical quality and value, as well as dangerous materials.

UniquenessOur [product or service] is unique, because [x, y or z] and/or we have an advantage on the market thanks to our [licence, promptness, brand].

5. MarketCharacteristics of the market, its structure and size. Market evolution. Market share of your firm. Current and potential clients. Analysis of consumers’ needs. Price policy. Distribution channels. Product/service promotion. Sales strategies. Unfortunately, this is the most important section and the most poorly presented one in the majority of business plans. Do your best to describe as fully as possible the market you compete on and what are your advantages on the market.

Defining the market[We expect to compete, We compete] within [define the niche] from [define the industry]. This market was of about [x] in [en-gross, en-detail] over the last [period available], according to [quoted source]. We consider that the major trend for the future in this sector will be focused on [environment, enhanced quality, value-oriented], as concerning the provided products. The market research carried out by [quote the source] suggest that this market will [increase/decrease] up/down to [x] by [xxxx]. We expect that the niche we compete on to [grow, decrease, stay at its current level] in this period of time. The major forces that can affect this are [decrease in costs of computers, explosion of domestic businesses, trend of big families to have less children – and to dandle pets]. The area with the largest growth in industry will be of [x]. Identify sources of this information, as well as how updated they are.

Market segmentWe define our market segment as [segment for writing and drawing tools in the industry of products intended for schools/families/offices, segment of degreased products in the food industry]. This segment was a [changing, stable] one of over the last years. Experts in the industry [name them] estimate that [x] will be characteristic for the following years. The big market segments are [segment a, segment b, segment c].

Make a general list with types of clients you could reachSegment [a] on the market is based on [product type], sold for retail prices between [x and y]. The largest share of sales from this segment is with delivery, performed with the help of [catalogues, retailers, manufacturer agents, etc.]. A typical consumer of our product is a person who, maybe, at present, is using [an alternative product or service] for [a certain purpose]. They are motivated to buy our product because [it is valuable, of high quality and useful]. We know this from [the answers by consumers, information collected at exhibitions, advertising researches] and we consider that our products are perceived by consumers as being [appreciated, with superior performances, with an extraordinary taste].However, our product has the following drawbacks: [higher price than the majority of cheese products available, weak identification of the brand on the consumption goods market]. We are trying to position our product on place [x], in order to reduce this vulnerability.

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Marketing. Sales strategiesOur marketing plan is based on the following fundamentals:We expect to penetrate segment [x] on the market/markets. We will succeed in doing it by using [retail sales, order by post, multidimensional market, Internet] as primary distribution channel(s). In time, we plan to capture [%] of the market share

PositioningWe will position our product as [having a higher value compared with the price, of a superior quality, cheap and attractive], representing points that have not been attacked yet by competitors. A demographic group [the old age people, generation X] particularly needs this product namely. We will adjust the positioning of our product in line with this..

PriceOur price strategy is [describe the strategy or at least the philosophy]. We came to this price strategy through [costs, grow profit objectives, market prices, perceived value]. We revise our price strategy on a [monthly, quarterly, yearly] basis, to make sure we do not lose any potential profit. Clients seem to be ready to pay up to [x], because [explain the reasons why]..

Distribution channelsCThe distribution channels we use for our product are [wholesales, catalogues, retail sales, etc.]. This is the best way for our product to reach consumers because [consumer’s profile, geography, seasonal fluctuations].

Our competitors use [wholesales, catalogues, retail sales, etc.]. Our distribution channel will come in being the most advantageous, because [x]..

Our current and the most important clients are: [the first five, each described in one-two phrases]. The attached graphic [see annex z] describes the way our product reaches the consumer

Advertising, promotion, exhibitions with salesYour goal is to introduce, promote and support your products on the market. Although it costs, a well-planned and executed advertising company is in fact an investment.[Company’s name] has developed a full advertising and promotion strategy, which will be implemented by the best company in the field, once the necessary funds are received. We will be present in a few national magazines, as well as in the commer-cial press. We will design by ourselves the ads and we will get involved in the advertising campaigns of our partners. Our advertising plan is to permanently be in touch with editors and writers [of commercial magazines, serving our industrial sector]. We will identify subjects that would [enhance our reputation, disclose us to consumers]. We intend to promote the product in various ways [spot sampling, demonstrations on the occasion of some special events, donations by fund raisers], as well as through other events with a high commit-ment degree. The objective of the entire promotion campaign is to [extend the audience, position our product on the top from the brand’s point of view, strengthen our relations with the community.

[Company’s name] participates in the following exhibitions with sales: [... ]Present a list describing in brief the organisations sponsoring or participating in exhibitions, as well as your presence in these events.We benefit from a [stand of x meters, allowing us to present the existing products and introduce the new ones, or we prefer to participate in exhibition fairs as visitors, to walk around, while presenting the products to qualified buyers only, who will come to our office nearby]. The following factors are taken into consideration once we decide to participate or not in an exhibition fair: will this event help up to convey the message of our company to the target audience? Is the location of the fair important? Is the period good? Is this a “not to be missed” event?

6. CompetitionTell us about our competitors from the point of view of your product, price, localization, promotion, management and financial position. Fake or incomplete information are here translated into dishonesty and neglect towards investors, bankers, etc. Do not cheat yourself and your competitors (and to not cheat your investors) about competition. Consult industrial files from the local library. Search in the on-line databases, where you can find the competitive profiles of other companies. Read industrial magazines and search in advertising agencies.

We do not have any direct competitors, but on the market there are alternative [products or services] or our direct competitors are [a, b and c].Give an example for each [for example, Acme Inc. is a manufacturer and distributor of pencils in the north region, with sales of up to 3 million dollars. Acme Inc. is a branch of Acme Corp, a public company, with a turnover of 800 million dollars. The branch sells pencils, pens and other writing and drawing tools. The recent trend for the branch was stationing, as the mother company did not make available the capital needed to upgrade the equipment. Acme Inc. is run by a Deputy Chairman, who is there for six months. The former manager worked for Acme Inc. 11 months]

Competitors [use/do not use the same distribution channels as us, they place their ads in the same as we/in other commercial newspapers]. If advertising is on a regular basis, we assume it is efficient!

Our [product or service] is unique because [x] and/or we have a competitive advantage, due to [promptness, brand name, low production costsi].

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Internal factors

External factors

Negative influencePositive influenceSWOT analysis

Strengths

(qualities of the project or staff, offering you an advan-tage in from of the others involved in the process)Opportunities

(possible external factors that offer you secondary opportunities in achieving the goal)

StrengthsWhat are you doing well? What resources do you have?What are your advantages compared to your competitors?OpportunitiesE.g., the result of the market’s growth, change in the life style, and settlement of problems associated with the current situation, a positive perception of your business from the market, or capacity to offer a higher value, which will lead to an increased demand for your services.

WeaknessesE.g., lack of experience, limited resources, lack of access to technology or capacity, inferior offer of services or a weak localization of your business. ThreatsEE.g., competition, intolerable increase in prices by suppli-ers, government regulations, economic fails, negative effect of the media, changes in consumers’ behaviour, reducing your sales, or the introduction of a new much more advanced technology, making your products, services or equipment out of date.

Weaknesses

(aspects weakening the project)

Threats

((possible external factors that can hinder implementation of the goal)

7. Risks/Opportunities. SWOT AnalysisThere is also another important part of our business plan. Knowing the risks and drafting a strategy is mandatory in order to attract an investor. There are several types of risks, particularly among the prosperous, enterprising businesses. Make sure you take into account these things and find for each of them an appropriate strategy.

SWOT analysis = strategic planning method, used to assess factors and phenomena affecting a project or an enterprise.

This method allows to establish the project’s goals and to identify internal and external factors facilitating or stagnating their achievement.

If we are able to overcome these risks, our company will have the possibility to [dominate a niche in the market, become a power in the industry]. We consider that our brand can become known as [the place where entrepreneurs find funding, place where people find the good taste]. We believe we can achieve this objective in the following [x] years

In particular, our basic product [x] has the possibility to [change the industry, affect many lives, and improve performances in field [x]. This would also offer us the possibility to try markets we have not approached yet, like [international sales, ethnic market, gen X].

8. Administrative teamThe managerial team and its characteristics. Staff required. Organizational structure.

Our team is made up of the following members, who can implement the plan: [x] men and women, covering [x] years of experience; [y] years in marketing, [y] years in product development and [y] years in [others].

If you have more than a few people to occupy these positions, then you are lucky. Tell us whom do you rely on, their age and how much do they hold of company’s shares.

Managers and basic employees Age Shares[A], President[B], Vice president of marketing[C], Vice president of sales[D], Vice president for finance[E], Vice president for research and development[F], Vice president of manufacturing[G], Supervisor[H], Company of lawyers

OwnershipThe Company has [x] authorized shares for social capital, of which [x] issued. The following persons or organizations are important owners of the company:

Name No of shares held % Ownership[A. B. Founders] 52 [52%][C. R. Inventors] 22 [22%]Administration team 10 [10%]Other investors 10 [10%]

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Professional supportWe have brought together a team of specialists, including [Company of Lawyers] [Accounting Company] [Other Consultants]Also, we have ensured the assistance and support of the following experts in industry and business, to help to the decision-making, strategic process, as well as to define opportunities

Highlight the members of the board of directors, providing details about their experience, as well as what important persons or institutions they can get in touch with.

9. Required capitalWrite about the capital you need and about your debts reimbursing strategy.

We need [x], to ensure our growth for the following [two years, one year, one month]. At the same time, we will need another [x] to come to a positive cash flow.

The initial phase of the funding will be used to [complement the development, purchase equipment, introduce and trade our new/next line of product, fund the working capital, buy a competitor).

We can cover this [loan, investment] in [x] years, by [dividends from the excess profits, recapitalization, sale of the company, public officer].

Define how much time you need to reimburse the credit, or give a profit to your investors. And tell us how you will do the reimbursements, as well as the strategy to be used to cover the loan.

10. Financial planAccounting information and reports. Periodic cash flows (trimestral, monthly, annual, etc.). Estimates of quarterly, monthly or yearly sales, revenues of expenditures, depending on requirements of investors or credit societies. We recommend you to modify financial reports on a monthly basis for the first or two years, then on a quarterly basis. Include also the year for data, if available.Introduction of [a new line, improved line]. We have planned to introduce these products strictly according to the following programme: [include the detailed programme]. At the same time, we expect to be able to sell a rate of [x] units per month.Sales will grow in [x] month from the introduction.The cost of sold goods will [decrease in per cent], as we buy more efficiently from the market and use the new equipment to produce units at lower costs.The gross profit will remain the same, because [the newly introduced products will register a higher profit rate, while the profit rate for the old lines is expected to decrease].

Sales and administration costs will grow in absolute value, but will decrease as percentage value, because while expendi-tures are growing, [mention the most significant elements or elements that will change significantly], sales will grow faster. The research and development activity, which appears as a high per cent of sales, will be reduced as percentage in time. The number of employees will increase after the funding by [x], which includes [xxx].

Take into account the fact that those estimates to not represent anything if taken alone. The ration by which you have calculated the figures – and how realistic you were when making them – is important for investors. Make the connection between discus-sions about the size of the market, time needed for marketing, acceptance on the market and competitors’ pressure to make sure these figures are correct. Speak about very high figures, as well as about those changing significantly from a period to another. Also include discussions about the rationality of increase in sales, increase in costs, etc.

Monetary flow and analysis of the breakevenThese are reports of capital importance, even more important than the Balance Sheet and Profit and Loss Account. The monetary flow and analysis of the breakeven represents everything for investors. We have assumed that our investors will accept a term of [x] until the monthly acquisition of [x]. At the same time, we have assumed that the term will shorten to [x] days.Also, we have assumed we can receive [x] from clients in [x] days, given the [special programmes with clients, production arrangements, credit cards etc.].We assume that the first share of the [loan, investment] will be made in [month], and the remaining in [month].We can reach the breakeven by month [x]. Sales are estimated to be at [x] by that date.

ConclusionsBased on our estimations, we consider that a [loan, investment] to our company is a justified investment. To move forward, we need a [loan, investment] of [x] by [date].

Annexes and referencesAn often met error is the one when the content of the business plan is charged with too many details. For this, there are other useful documents. This will provide an investor with a better picture about the company, out of figures. Make sure you have included visual materials, like:Literature and brochures about the productFolders with salesCoverage by mediaAbstracts from industrial publicationsRelevant licencesData on market researchesOrganized advertising campaignsUseful pictures of facilities, warehouses, etc

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ANNEX 9Business plan model of individual entrepreneurs in the rural area

INDIVIDUAL ENTERPRISE “BULMAGA VLADISLAV”

BUSINESS PLAN

LAUNCHING MARKETING ACTIVITIES OF CONSTRUCTION MATERIALS

BENEFICIARY: IE “Bulmaga Vladislav” DIRECTOR: BULMAGA VladislavLEGAL ADDRESS: MD-5813, village of Brinzenii-Vechi, district of Telenesti, Republic of Moldova CONTACT TELEPHONE: 0-258-70-915; 069-27-22-65 E-MAIL: [email protected]

May, 2010

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Contents:

I. Business summary

II. Business plan

2.1. Defining the business

2.2. Business and service

2.3. Market and clients

2.4. Marketing

2.5. Competition

2.6. Risks/Opportunities

2.7. Management and staff

2.8. Required capital

2.9. Financial plan

2.9.1. Planning revenues from the sale of construction materials

2.9.2. Planning revenues from the sale of manufactured goods

2.9.3. Planning revenues from the activity of the food market

2.9.4. Planning annual expenditures

2.9.5. Credit reimbursement schedule

2.9.6. Breakeven

2.10. Financial outcomes planned for 2010-2013

III. Annexes

Annex 1 Copy of the registration certificate of the enterprise

Annex 2 Abstract from the State Register

Annex 3 Authorizations

3.1. Sanitary-veterinary authorization

3.2. Sanitary authorization for functioning

Annex 4 Offer of construction materials

Annex 5 Certificates of Merit

Annex 6 Pictures of yard pavement

Annex 7 Pictures

I. Business summary

The Individual Enterprise “Bulmaga Vladislav” was created on 12.08.2002 and is administrated by Bulmaga Vladislav.

The main activities of the enterprise are the retail of food products, wholesale of construction materials and production of fortan and yard paving. Apart from the wholesale of construction materials, the IE “Bulmaga Vladislav” is selling food products.

Also, the enterprise produces on demand yard paving, offering to its clients also the borders needed for these paving. These products are of a high quality and are on high demand on the market.

The mission of the IE “Bulmaga Vladislav” is to fully and timely satisfy the demand of businesses and population for qualitative products. The IE “Bulmaga Vladislav” plans to reach by 2013 a market share of 50% and to increase its turnover by 48.81% compared with 2009. At the same time, the enterprise intends to create new jobs and to become the strongest supplier of construction materials in the district of Telenesti.

To achieve its objectives, the IE “Bulmaga Vladislav” intends to purchase in May 2010 construction materi-als (cement, rotband, amserglob, fugenfuller, roof slate, bricks, timber, plasterboard, pressboard, nails, screws, wire net, vineyard poles, etc.) worth MDL 600,600 (EUR 36,400), and over the period May 2010 - May 2013 to distribute them on the local market. In order to reach qualitatively and quantitatively to the level of its competitor in the district, the enterprise will invest in this business EUR 3,600 (MDL 59,400 MDL) and for

this it requires a credit of EUR 36,400 (MDL 600,600). The credit will be reimbursed on a quarterly basis, over a period of three years, from the revenues of the enterprise from the marketing of the purchased and manufactured construction materials, as well as from the activity of the food market and will be guaranteed through a pledge.

For this year, the IE “Bulmaga Vladislav” already has an order for the production of 3,000 m2 of yard paving, and for 200 m3 of fortan. The demand for these products can grow significantly by the end of 2010 and Bulmaga Vladislav has to extend his production capacity and to quickly adjust his supply to the market’s needs.

The IE “Bulmaga Vladislav” is selling its goods on the internal market, its clients being so far natural persons, but following the extension of the business, the enterprise will also capture legal persons as clients. As a rule, 70% of costs of a construction are the construction materials. Hence, with the help of the IE “Bulmaga Vladislav”, natural and legal persons in the district of Telenesti will save time and money in constructions, since they will have access to all this spectrum of materials they need, at a low price.

To influence the client to buy construction materials, the enterprise will focus on the quality of the supplied goods, convenient price, and exactitude in delivery, efficiency in service, wide assortment and modern solutions in constructions in line with international trends. In parallel, a customer loyalty system, by offering them preferential prices, delivery bonuses and customized approach, will be developed.

And last but not least, the IE “Bulmaga Vladislav” intends to make donations to churches and to sponsor social and cultural events. In 2009, the enterprise donated MDL 10,000 for the reconstruction of the stairs of the church in the village of Brinzenii-Vechi, district of Telenesti.

II. Business plan

2.1. Defining the business

The Individual Enterprise “Bulmaga Vladislav” was created on 12.08.2002. The main activities of the enterprise are as follows:

• Retail on non-specialised markets, with predominant sale of food products and soft drinks;

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• Wholesale of wooden materials, construction materials and sanitary outfit;• Wholesale of hardware, paints and glass;• Manufacture of concrete, plaster and cement elements (see Annex 1, Annex 2).

The enterprise is administrated by Bulmaga Vladislav, who has an experience in the field of 11 years. The headquarters of the IE “Bulmaga Vladislav” are in the centre of the village of Brinzenii-Vechi, in sector 215, and are made up of:

- 1 market with the area of 105 s.m., intended for the wholesale of construction materials;- 1 good market with the area of 100 sm The enterprise has 4 warehouses with a total area of s.m., one is used for the storage of food products,

and the other three for the storage of construction materials.At present, the main activities of the enterprise are the retail of food products, wholesale of construction

materials, (cement, rotband, amserglob, fugenfuller, roof slate, bricks, timber, plasterboard, pressboard, nails, screws, wire net, vineyard poles, etc.) and manufacture of yard paving and fortan.

The mission of the IE “Bulmaga Vladislav” is to fully and timely satisfy the demand of businesses and population for qualitative products.

The main objectives of the IE “Bulmaga Vladislav” are:

2.2. Business and service

The IE “Bulmaga Vladislav" is one of the largest suppliers of construction materials in the district of Telenesti, Republic of Moldova. As a rule, 70% of costs of a construction are the construction materials. Hence, with the help of the IE “Bulmaga Vladislav”, natural and legal persons in the district of Telenesti will save time and money in constructions, since they will have access to all this spectrum of materials they needs, at a low price.

The supply of construction materials by the IE “Bulmaga Vladislav," full and diversified, meets both the current technical requirements and diverse economic options of its clients. The logistics of the enterprise supplies its clients with all materials in due time.

As the last years show, the local demand for construction materials is continuously growing and the enterprise does not have the capacity to satisfy it. In this regard, the IE “Bulmaga Vladislav", by obtaining the credit of EUR 36,400 (MDL 600,600) intends to make an advantageous investment in construction materials and to increase its offer of qualitative materials on the domestic constructions market. In this way, the IE “Bulmaga Vladislav" could become by 2013 a leader in the marketing of construction materials and fortan and yard paving manufacture in the district of Telenesti, Republic of Moldova, as its production capacity will grow, the demand will be fully satisfied, new clients will be contracted, new jobs will be created, the amount of sales will grow, as well as the market share of the enterprise. At the same time, the IE “Bulmaga Vladislav" will have better chances in tenders, and clients could access the requested assortment in due time, avoiding searching for construction materials at other suppliers in the region

Long termShort term

- to extend its portfolio of construction materials- to increase market share by 10%;- to increase turnover by 48.81 % in 2013, compared with 2009;- to create new jobs;- to extend the delivery market by attracting new clients from villages in the Telenesti district;- to increase the rhythm of sales and dynamic of the amount of sales;- to keep prices for materials and delivery services at an accessible level;-to become the strongest supplier of construction materials in the district of Telenesti

- to sell construction materials at affordable prices and lower compared to competitors in order to faster attract clients;- to stabilize the amount of supply of construction materials;- to have a permanent supplier of construction materials, in order to benefit from discounts and a preferential relation-ship;- to have a portfolio of materials corresponding to and satisfying a wide spectrum of consumers’ needs;- to make its clients loyal;- to fully satisfy the market demand

By funding the acquisition of construction materials and raw material for the manufacture of fortan and yard paving, the IE “Bulmaga Vladislav" is expecting to increase its turnover by 48.81% by 2013.

To achieve its short-term and long-term objectives, the IE “Bulmaga Vladislav” intends to purchase in May 2010 construction materials (cement, rotband, amserglob, fugenfuller, roof slate, bricks, timber, plasterboard, pressboard, nails, screws, wire net, vineyard poles, etc.) from supplier IE “Petica Gheorghe" in the village of Sarateni (district of Telenesti) worth MDL 600,600 (EUR 36,400), and over the period May 2010 - May 2013 to distribute them on the local market. Following this, the enterprise will be able to reach qualitatively and quantitatively to the level of its only competitor in the district.

Apart from the wholesale of construction materials, the IE “Bulmaga Vladislav" is trading food products. These businesses are located in the premises, the owner of which is Bulmaga Vladislav (see Annex 7). Also, the enterprise produces on demand yard paving, offering to its clients the borders needed for these paving. These products are of a high quality and are on high demand on the market.

The enterprises observes the veterinary requirements according to the Law in effect on the acquisition, storage and marketing of products of animal origin (see Annex 3, 3.1.). The IE “Bulmaga Vladislav" also holds the sanitary authorization for functioning for the manufacture and marketing of construction materials, valid until 6 May 2014 (see Annex 3, 3.2.).

The service provided by the IE “Bulmaga Vladislav," and namely the trading of construction materials, was structured in 2005-2010 as follows:

As for the manufacture of fortan and yard paving, the amount of this production is growing every year, due to the increasing demand for these materials on the market. Hence, for this year, up to now, the IE “Bulmaga Vladislav" already has an order for the production of 3,000 m2 of yard paving, and for 200 m3 of fortan. The demand for these products can grow significantly by the end of 2010 and Bulmaga Vladislav has to extend its production capacity and to quickly adjust its supply to the market’s needs.

The IE “Bulmaga Vladislav" has established commercial relations with legal persons at the local and district level, has an impeccable reputation and is moving forward with slow steps, enjoying the appreciation from the local public administration (see Annex 5).

Although the product IE “Bulmaga Vladislav" is not unique on the market, the competitive advantage of the IE “Bulmaga Vladislav" is the promptness by which it reacts to its clients’ demands, delivers the goods and sells the wholesale products. The brand IE “Bulmaga Vladislav" becomes a widely recognised one and on increasing demand on the market.

123456789

101112131415

CementRotbandAmserglobFugenfullerGypsumRoof slateBricksTimberPlasterboardPressboardNailsWire net Vineyard polesYard pavingFortanTotal MDLTotal EUR

150 tons

210 00012 727

200 tons

280 00016 969

250 tons

350 00021 212

270 tons

1800 m2200 m3648 00039 273

180 tons3 tons5000 sacks80 sacks35 sacks2500 units13000 units180 m|3160 m3150 m3250 kg500 m.l.1400 units2700 m2250 m31 878 488113 847

1050 tons3 tons5000 sacks80 sacks35 sacks2500 units13000 units180 m3160 m3150 m3250 kg500 m.l.1400 units4500 m2450 m33 366 488204 029

Product Quantity

sold

2005

Quantity

sold

2006

Quantity

sold

2007

Quantity

sold

2008

Quantity

sold

2009

Total

Quantity sold

2005-2010

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112

2.3. Market and clients

The IE “Bulmaga Vladislav" is selling its goods on the internal market, its clients being so far natural persons, but following the extension of the business, the enterprise will also capture legal persons as clients.

The enterprise is located in a well-developed sector of the commune. If revenues increase, the adminis-tration will consider the opening of new branches in other villages of the Telenesti district.

The following are a few of the permanent clients of the IE “Bulmaga Vladislav":

Construction materials offered by the IE “Bulmaga Vladislav" are intended for persons aged 18-60 years. According to the 2005 census, the population of the Brinzenii-Vechi/Brinzenii-Noi commune accounted for 3,100 residents. Of them, 1,760 persons are aged 18-60 years. Hence, about 56.7% of the population can become the potential clientele of the IE “Bulmaga Vladislav".

1

23

456

78

910

11

12

13

1415

16

17

1819 20

Banari Serghei

Banari MariaBolocan Mihai

Bulmaga SavaBulmaga IonCirlan Viorel

Chiriac ViorelComerzan Veaceslav

Coroi VadimDamascan Alexandru

Damascan Vasile

Darii Valerii

Gritarovschi Valeriu

Muntean SergiuMusteata Viorel

Sirbu Pavel

Sirbu Vasile

Teslari ViorelTirsina LeonidTcaciuc Veaceslav

TOTAL

Vineyard polesWire netCement

BricksCementCementCementTimber

Roof slateCementCementCement

Iron fenceFence hats

BricksCement

Concrete fenceBricks

Fence hatsCement

Fence hatsCement

Plaster MP75Plasterboard

Wire netVineyard poles

CementYard paving

BordersCement

Yard pavingBordersCementCement

Roof slateTimber

Vineyard polesCement

Roof SlateTimber

PlasterboardPlaster MP75

25 units4 m.

10 sacks2000 units

3 tons4 tons

20 tons3 m3

50 units4 tons

10 sacks40 tons30 units50 units

5000 units15 sacks40 units

5000 units45 units4 tons

15 units1 ton2 tons

15 units10 m.l.

110 units2 tons

100 m230 units

1 ton200 m|220 units3 tons

10 tons150 units

6 m|325 units6 tons

30 units4 m3

10 units20 sacks

6532570

3,501400140014002400

641400

70140028545

3,5070

1403,5045

140045

1400160010532565

140010024

140010024

14001400

642400

651400

64240010576

16251300700

700042005600

28000720032005600700

5600085502250

1750010505600

1750020255600675

140032001575325071502800

10000720

140020000

4804200

140009600

14400162584001920960010501520

300165 MDL 18192 EUR

Name Product Quantity purchased /2009 Price/m.u. MDL Total MDL

The IE “Bulmaga Vladislav" intends to increase its market share from 40% to 50% by 2012. To keep and extend its position on the market, the enterprise will adopt the following strategy:

• Seasonal discounts;• Improvement of the fortan and yard paving manufacturing technology;• Production of new construction materials;• Permanent extension of the assortment of construction materials;• Establish a price fair for all social categories;• Raise the clients servicing level.To influence the client to buy construction materials, the enterprise will focus on the quality of the

supplied goods, convenient price, and exactitude in delivery, efficiency in service, wide assortment and modern solutions in constructions in line with international trends.

The sale of construction materials will have a seasonable character. Maximum sales will be reached in the summer-autumn season and will decrease in the winter-spring period.

The IE “Bulmaga Vladislav" ensures the delivery of materials within the Telenestri district and the down-loading with a specialized vehicle. At request, the enterprise can rent the vehicles and machinery the client needs. Depending on the value of the purchased goods, the client can get the delivery free or charge or with discount.

The IE “Bulmaga Vladislav" will tend further to position itself on an imposing place on the market by construction materials which are attractive from the price and quality point of view.

2.4. Marketing

One of the marketing objectives of the IE “Bulmaga Vladislav" is to become a strong supplier of construc-tion materials on the local and national market, through “diversity-quality-price-quality” and by the principle “Minimum profit, maximum beneficiary.” Due to its growing amount of construction materials, the market price will be widely accessible, the demand will increase and, thus, the profit will constantly grow.

The IE “Bulmaga Vladislav" will focus on a direct approach of its potential clients at the national level, on the mouth-to-mouth advertising (through its clients satisfied with the quality of service). At the same time, the enterprise will participate in exhibitions of construction materials and specialized national events. The IE “Bulmaga Vladislav" will permanently study the dynamic of the market demand, consumer’s behaviour, price and sales policy of competitors, adjusting its offer. In parallel, a customer loyalty system, by offering them preferential prices, delivery bonuses and customized approach, will be set up. The IE “Bulmaga Vladislav" will focus on keeping natural persons as clients and subsequently capturing legal persons as potential clients. The “loyalty-capturing” strategy will contribute to the slow, but stable growing of the enterprise. At any inter-actions with consumers, the agents of the IE “Bulmaga Vladislav” will ask them for feedback and will continu-ously improve its performance.

Even if clients of the IE “Bulmaga Vladislav” are preponderantly from the wholesale market, the retail clients will not be neglected either. The “Bulmaga Vladislav” enterprise plans to make donations to churches and to sponsor social and cultural events. In 2009, the enterprise donated MDL 10,000 for the reconstruction of the stairs of the church in the village of Brinzenii-Vechi, district of Telenesti

2.5. Competition

The IE “Bulmaga Vladislav” does not have competitors at the village level. As for the district level, there is only one competitor (LLC “Iurie Daraban”), with a longer period of activity, a more varied assortment of products and in larger quantities. Hence, to reach a market share similar to the one of its competitor, the LLC “Iurie Daraban,” the enterprise needs to extend its offer of construction materials, in order to qualitatively and quantitatively satisfy the market demand. By 2013, the enterprise intends to increase its market share from 40% to 50%, and in 2010, it intends to participate in several public auctions, competing by quality, diversity, affordable prices and punctuality in the delivery of goods.

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Benefits of the investment requested for the purchased of the needed materials are as follows:- - Clients satisfied with the presence of the construction materials supplier in their locality;- Clients satisfied with the high quality of construction materials and their diversity;- Clients satisfied with the good price-quality ratio;- Growing profit of the enterprise;- Enhancement of the competitive capacity;- Enhancement of the charity capacity of the enterprise (reconstruction of the church).

2.6. Risks/Opportunities

SWOT Analysis:

Market share Market share

LLC "Iurie Daraban"60%

IE. "Bulmaga Veaceslav"40%

Analysis of strengths and weakness of the competitor:

LLC“Iurie Daraban”

WeaknessesStrengthsCompetitor

• long experience;• varied assortment;• popularity.

• long time for the delivery of goods;• quality of products sometimes low;• unfavourable location;• high prices.

AssortmentPriceQualityLocation of enterpriseDistribution of productImage of enterpriseTotal score

E. “Bulmaga Vladislav” LLC “Iurie Daraban”Max. no of points (1-5)Indicators

555555

30

355554

27

544435

25

CompetitorComparative analysis of competitors:

WeaknessesStrengths

• affordable and stable prices;• wide assortment of construction materials;• favourable location, closer to the client, compared to its unique competitor;• delivery of construction materials to the destination;• investments in marketing;• high potential of the market.

• reduced stock of construction materials at the moment|;• shortage of investment resources for increasing the stock of construction materials.

Threats/risksOpportunities

• high demand for the supplied construction materials;• extension of the activity;• taking of new segments of market;• development of competitiveness;• development of reputation;• obtaining the recognition of the brand.

• natural risks (natural disasters);• technical risks (failure of the transportation means deliver-ing the goods);• risk to loose loyalty relationships with suppliers;• risk of unstable clients;• economic crisis;• financial risk;• risk of new competitors;• quality risk.

2.7. Management and staff

The administration staff of the IE “Bulmaga Vladislav” is made up of two people:- Bulmaga Vladislav - administrator, experience in the area - 11 years;- Bulmaga Tatiana - chief accountant, experience in the area - 9 years.

As a result of obtaining this credit to invest in construction materials, the enterprise will increase the amount of its production and activity, hence it will offer new 6 jobs.

Employees of the enterprise

2.8. Required capital

The IE “Bulmaga Vladislav” needs to invest in the business EUR 40,000 (MDL 660,000), of which, EUR

3,600 (MDL 59,400) own capital and EUR 36,400 (MDL 600,600) borrowed capital.

The investment will ensure the increase in the turnover of the enterprise in the following 3 years. The credited amount will be used exclusively to purchase construction materials. To benefit from preferential prices for construction materials and to be able to satisfy the high demand on the market, the IE “Bulmaga Vladislav” has to purchase these materials in May. The demand for these products is high, as the construction season starts and the largest amounts of sales can be registered in the summer-autumn period namely.

Business programme:

Wage, lei TasksPersonsPositionStaff

Administrator

Chief accountant

Sales manager

Driver

Workers

Bulmaga Vladislav

Bulmaga Tatiana

Bulmaga Iurie

Morari Pavel

Rotari Anatol,Sirbu Igor,Cecan RaduBulmaga Nicolae

1

1

1

1

4

3000

2200

1900

1900

1500

- plan and organize the production process;- certification and documentation of production;- control the production process;- commercialize the production;- monitor the work process;- keep books of the company;- control the collection of financial sources from clients;- budget payments;- manage credit reimbursement.- marketing;- commercialize the production;- organize the delivery of construction materials to destination.- deliver construction materials from the supplier;- deliver construction materials to clients.- manufacture the fortan;- manufacture the yard paving;- execute goods loading/unloading works.

Total monthly wages MDL 15000

Total annual wages MDL 180000

Investment

d EUR 36,400 (MDL 600,600) borr

increase in the turnover of the ensively to purchase construction m

Investment

Own capital EUR 3,600 / 9% Borrowed capital EUR 36,400 / 91%

Date, periodActivity

April 2010May 2010May 2010From June 2010September 2013

Order the construction materials Access the credit Purchase the construction materials Commercialize the construction materialsFinal reimbursement of the credit

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The credit will be reimbursed on a quarterly basis, during 3 years, from revenues obtained from the sale of construction materials.

To reimburse the credit, approximately EUR 44,000 will be needed (of which, EUR 36,400 – for the credit, EUR 5,460 – interest rate, EUR 1,340 – difference of the currency rate, EUR 800 – bank commissions and other fees).

Also, the credit reimbursement can be guaranteed with the properties of the IE “Bulmaga Vladislav” (see Annex 7):

• Food market 100 s.m. – MDL 300,000 = EUR 18,180 • Construction materials market 105 s.m. – MDL 100,000 = EUR 6,060• Warehouse (fortan and yard paving are manufactured) 60 s.m. – MDL 80,000 = EUR 4,850 • Own house 170 s.m. in the village of Brinzenii-Vechi, district of Telenesti – MDL 500,000 = EUR 30,300 • Track MAN 12152 F – MDL 170,000 = EUR 10,300• Vehicle Mercedes Benz 124 – MDL 80,000 = EUR 4,850 • Excavator MTZ 80 – MDL 55,000 = EUR 3,350

2.9. Financial plan

The following exchange rate has been taken as a basis for calculations: 1 EUR=16,5 lei

2.9.1. Planning revenues from the commercialization of construction materials

During one reporting year, the stocks of goods will be fully sold and part of the obtained revenue will be directed to honour the credit service bonds (credit+interest rate), the other will be reinvested in working capital, as the following tables show: general table and annual tables

General table

Year 2010

2012 (MDL) 2013 (MDL)2011 (MDL)2010 (MDL)Year

687.320,0050.050,007.507,50629.762,50

Annual salesCredit reimbursementInterest rate reimbursementCapital for reinvestment

736.537,00200.200,0030.030,00506.307,00

591.927,00200.200,0030.030,00361.697,00

421.956,00150.150,0022.522,50249.283,50

Price MDL 2010 purchased 2010 sales

Product

Purchase

price Quantity m.u.

total

invested

Sale

price

Sold

quantity

Revenue

from sales

1.200,00 30 1 ton 36.000,00 1.400,00 30 1 ton 42.000,00 90,00 80 1 sack 7.200,00 98,00 80 1 sack 7.840,00 52,00 70 1 sack 3.640,00 64,00 70 1 sack 4.480,00 66,00 100 1 sack 6.600,00 80,00 100 1 sack 8.000,00 70,00 150 1 sack 10.500,00 76,00 150 1 sack 11.400,00

63,00 50 1 sack 3.150,00 70,00 50 1 sack 3.500,00 70,00 30 5 kg 2.100,00 75,00 30 5 kg 2.250,00

130,00 70 5 kg 9.100,00 135,00 70 5 kg 9.450,00 23,00 100 1 kg 2.300,00 27,00 100 1 kg 2.700,00 20,00 200 1 unit 4.000,00 24,00 200 1 unit 4.800,00 10,00 300 1 unit 3.000,00 14,00 300 1 unit 4.200,00 70,00 700 1 unit 49.000,00 75,00 700 1 unit 52.500,00

2,90 10000 1 unit 29.000,00 3,50 10000 1 unit 35.000,00 2.200,00 100 1 m3 220.000,00 2.450,00 100 1 m3 245.000,00

95,00 100 1 unit 9.500,00 105,00 100 1 unit 10.500,00 235,00 50 1 unit 11.750,00 255,00 50 1 unit 12.750,00 210,00 50 1 unit 10.500,00 235,00 50 1 unit 11.750,00 320,00 50 1 unit 16.000,00 355,00 50 1 unit 17.750,00

14,00 200 1 kg 2.800,00 20,00 200 1 kg 4.000,00

m.u.

CementRotbandAmserglobFugenfullerPlaster MP 75Gypsum-based adhesive EurofinPrimersWater soluble paintsEnamel paintsColer paintsBrushesRoof slateBricksTimberPlasterboard 12,5 mmPressboard DSPPressboard DVPPressboard OSBScrew plugs and screws

In the following two years, the revenue obtained from the sale of construction materials and after the reimbursement of the respective tranches of the credit, the same construction materials will be purchased, but in other quantities.

28,00 100 1 m 2.800,00 34,00 100 1 m 3.400,00 38,00 200 1 m 7.600,00 42,00 200 1 m 8.400,00

1,50 200 1 m 300,00 2,70 200 1 m 540,00 25,00 100 1 m 2.500,00 32,00 100 1 m 3.200,00 12,00 250 1 m 3.000,00 14,00 250 1 m 3.500,00

210,00 300 1 m.l. 63.000,00 250,00 300 1 m.l. 75.000,00 55,00 700 1 unit 38.500,00 65,00 700 1 unit 45.500,00

320,00 50 1 unit 16.000,00 365,00 50 1 unit 18.250,00 120,00 50 1 unit 6.000,00 145,00 50 1 unit 7.250,00

18,00 400 1 m 7.200,00 22,00 400 1 m 8.800,00 8,00 100 1 unit 800,00 10,00 100 1 unit 1.000,00 9,00 100 1 unit 900,00 11,00 100 1 unit 1.100,00

110,00 30 1 unit 3.300,00 135,00 30 1 unit 4.050,00 25,00 150 1 unit 3.750,00 28,00 150 1 unit 4.200,00

8,00 200 1 m 1.600,00 12,00 200 1 m 2.400,00 70,00 15 1 unit 1.050,00 90,00 15 1 unit 1.350,00 40,00 20 1 unit 800,00 60,00 20 1 unit 1.200,00 28,00 20 1 unit 560,00 48,00 20 1 unit 960,00 28,00 30 1 unit 840,00 48,00 30 1 unit 1.440,00 27,00 30 1 unit 810,00 47,00 30 1 unit 1.410,00 45,00 30 1 unit 1.350,00 65,00 30 1 unit 1.950,00 12,00 150 1 kg 1.800,00 17,00 150 1 kg 2.550,00

Total 600.600,00 687.320,00

Credit reimbursement,

interest rate

57557.50

Reinvested capital 629.760,00

Plastic pipeMetal pipeMetal wireAnglesFittingWire netVineyard polesIron fenceConcrete fenceCablePlugsBreakersCoversVita One lampsWater flexible pipesHummerSaw fileTongsShovelSpadeForkNails

1.200,00 35 1 ton 42.000,00 1.500,00 35 1 ton 52.500,00 90,00 85 1 sack 7.650,00 100,00 85 1 sack 8.500,00 52,00 80 1 sack 4.160,00 65,00 80 1 sack 5.200,00 66,00 100 1 sack 6.600,00 80,00 100 1 sack 8.000,00 70,00 150 1 sack 10.500,00 80,00 150 1 sack 12.000,00

63,00 50 1 sack 3.150,00 70,00 50 1 sack 3.500,00 70,00 30 5 kg 2.100,00 78,00 30 5 kg 2.340,00

130,00 70 5 kg 9.100,00 135,00 70 5 kg 9.450,00 23,00 100 1 kg 2.300,00 28,00 100 1 kg 2.800,00 20,00 200 1 unit 4.000,00 25,00 200 1 unit 5.000,00 10,00 300 1 unit 3.000,00 15,00 300 1 unit 4.500,00 70,00 700 1 unit 49.000,00 75,00 700 1 unit 52.500,00

2,90 10500 1 unit 30.450,00 3,50 10500 1 unit 36.750,00 2.200,00 100 1 m3 220.000,00 2.500,00 100 1 m3 250.000,00

95,00 100 1 unit 9.500,00 110,00 100 1 unit 11.000,00 235,00 75 1 unit 17.625,00 255,00 75 1 unit 19.125,00 210,00 75 1 unit 15.750,00 240,00 75 1 unit 18.000,00 320,00 75 1 unit 24.000,00 360,00 75 1 unit 27.000,00

14,00 200 1 kg 2.800,00 20,00 200 1 kg 4.000,00 28,00 110 1 m 3.080,00 36,00 110 1 m 3.960,00 38,00 230 1 m 8.740,00 44,00 230 1 m 10.120,00

1,50 330 1 m 495,00 2,90 330 1 m 957,00

Year 2011

Price MDL 2011 purchased 2011 sales

Product

Purchase

price Quantity

total

invested

Sale

price

Sold

quantity

m.u. m.u.

Revenue

from sales

CementRotbandAmserglobFugenfullerPlaster MP 75Gypsum-based adhesive EurofinPrimersWater solution paintsEnamel paintsColour paintsBrushesSlateBricksTimberPlasterboard 12,5 mmPressboard DSPPressboard DVPPressboard OSBScrew plugs and screwsPlastic pipeMetal pipeMetal wire

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25,00 100 1 m 2.500,00 32,00 100 1 m 3.200,00 12,00 250 1 m 3.000,00 16,00 250 1 m 4.000,00

210,00 300 1 m.l. 63.000,00 250,00 300 1 m.l. 75.000,00 55,00 700 1 unit 38.500,00 68,00 700 1 unit 47.600,00

320,00 50 1 unit 16.000,00 370,00 50 1 unit 18.500,00 120,00 50 1 unit 6.000,00 150,00 50 1 unit 7.500,00

18,00 400 1 m 7.200,00 23,00 400 1 m 9.200,00 8,00 100 1 unit 800,00 10,00 100 1 unit 1.000,00

9,00 100 1 unit 900,00 11,00 100 1 unit 1.100,00 110,00 30 1 unit 3.300,00 135,00 30 1 unit 4.050,00

25,00 150 1 unit 3.750,00 28,00 150 1 unit 4.200,00 8,00 200 1 m 1.600,00 14,00 200 1 m 2.800,00

70,00 15 1 unit 1.050,00 93,00 15 1 unit 1.395,00 40,00 20 1 unit 800,00 60,00 20 1 unit 1.200,00

28,00 20 1 unit 560,00 50,00 20 1 unit 1.000,00 28,00 30 1 unit 840,00 50,00 30 1 unit 1.500,00 27,00 30 1 unit 810,00 50,00 30 1 unit 1.500,00 45,00 30 1 unit 1.350,00 68,00 30 1 unit 2.040,00

12,00 150 1 kg 1.800,00 17,00 150 1 kg 2.550,00 Total 629.760,00 736.537,00

230.230,00

506.310,00

1.200,00 30 1 ton 36.000,00 1.500,00 30 1 ton 45.000,00 90,00 75 1 sack 6.750,00 100,00 75 1 sack 7.500,00 52,00 75 1 sack 3.900,00 65,00 75 1 sack 4.875,00 66,00 85 1 sack 5.610,00 80,00 85 1 sack 6.800,00 70,00 115 1 sack 8.050,00 80,00 115 1 sack 9.200,00

63,00 40 1 sack 2.520,00 70,00 40 1 sack 2.800,00 70,00 30 5 kg 2.100,00 78,00 30 5 kg 2.340,00

130,00 70 5 kg 9.100,00 135,00 70 5 kg 9.450,00 23,00 90 1 kg 2.070,00 28,00 90 1 kg 2.520,00 20,00 150 1 unit 3.000,00 25,00 150 1 unit 3.750,00 10,00 200 1 unit 2.000,00 15,00 200 1 unit 3.000,00 70,00 600 1 unit 42.000,00 75,00 600 1 unit 45.000,00

2,90 9000 1 unit 26.100,00 3,50 9000 1 unit 31.500,00 2.200,00 80 1 m3 176.000,00 2.500,00 80 1 m3 200.000,00

95,00 75 1 unit 7.125,00 110,00 75 1 unit 8.250,00 235,00 60 1 unit 14.100,00 255,00 60 1 unit 15.300,00 210,00 60 1 unit 12.600,00 240,00 60 1 unit 14.400,00 320,00 60 1 unit 19.200,00 360,00 60 1 unit 21.600,00

14,00 150 1 kg 2.100,00 20,00 150 1 kg 3.000,00 28,00 80 1 m 2.240,00 36,00 80 1 m 2.880,00 38,00 150 1 m 5.700,00 44,00 150 1 m 6.600,00

1,50 130 1 m 195,00 2,90 130 1 m 377,00 25,00 100 1 m 2.500,00 32,00 100 1 m 3.200,00

AnglesFittingWire netVineyard polesIron fenceConcrete fenceCablePlugsBreakersCoversVita One lampsWater flexible pipesHummerSaw fileTongsShovelSpadeForkNails

Credit reimbursement,

interest rate

Reinvested capital

Year 2012

Price MDL 2012 purchased 2012 sales

Product

Purchase

price Quantity

total

invested

Sale

price

Sold

quantity

m.u. m.u.

Revenue

from sales

CementRotbandAmserglobFugenfullerPlaster MP 75Gypsum-based paintEurofinPrimersWater solution paints Enamel paintsColour paintsBrushesRoof slateBricksTimberPlasterboard 12,5 mmPressboard DSPPressboard DVPPressboard OSBScrew plugs and screwsPlastic pipeMetal pipeMetal wireAngles

1.200,00 20 1 ton 24.000,00 1.500,00 20 1 ton 30000 90,00 65 1 sack 5.850,00 100,00 65 1 sack 6500 52,00 65 1 sack 3.380,00 65,00 65 1 sack 4225 66,00 65 1 sack 4.290,00 80,00 65 1 sack 5200 70,00 65 1 sack 4.550,00 80,00 65 1 sack 5200

63,00 45 1 sack 2.835,00 70,00 45 1 sack 3150 70,00 45 5 kg 3.150,00 78,00 45 5 kg 3510

130,00 45 5 kg 5.850,00 135,00 45 5 kg 6075 23,00 45 1 kg 1.035,00 28,00 45 1 kg 1260 20,00 65 1 unit 1.300,00 25,00 65 1 unit 1625 10,00 75 750,00 15,00 75 1 unit 1125 70,00 220 1 unit 15.400,00 75,00 220 1 unit 16500

2,90 6500 1 unit 18.850,00 3,50 6500 1 unit 22750 2.200,00 70 1 m3 154.000,00 2.500,00 70 1 m3 175000

95,00 40 1 unit 3.800,00 110,00 40 1 unit 4400 235,00 40 1 unit 9.400,00 255,00 40 1 unit 10200 210,00 40 1 unit 8.400,00 240,00 40 1 unit 9600 320,00 40 1 unit 12.800,00 360,00 40 1 unit 14400

14,00 100 1 kg 1.400,00 20,00 100 1 kg 2000 28,00 70 1 m 1.960,00 36,00 70 1 m 2520 38,00 90 1 m 3.420,00 44,00 90 1 m 3960

1,50 90 1 m 135,00 2,90 90 1 m 261 25,00 80 1 m 2.000,00 32,00 80 1 m 2560

12,00 200 1 m 2.400,00 16,00 200 1 m 3.200,00 210,00 200 1 m.l. 42.000,00 250,00 200 1 m.l. 50.000,00

55,00 500 1 buc 27.500,00 68,00 500 1 buc 34.000,00 320,00 50 1 buc 16.000,00 370,00 50 1 buc 18.500,00

120,00 50 1 buc 6.000,00 150,00 50 1 buc 7.500,00 18,00 250 1 m 4.500,00 23,00 250 1 m 5.750,00

8,00 80 1 buc 640,00 10,00 80 1 buc 800,00 9,00 80 1 buc 720,00 11,00 80 1 buc 880,00

110,00 25 1 buc 2.750,00 135,00 25 1 buc 3.375,00 25,00 150 1 buc 3.750,00 28,00 150 1 buc 4.200,00

8,00 150 1 m 1.200,00 14,00 150 1 m 2.100,00 70,00 15 1 buc 1.050,00 93,00 15 1 buc 1.395,00

40,00 20 1 buc 800,00 60,00 20 1 buc 1.200,00 28,00 20 1 buc 560,00 50,00 20 1 buc 1.000,00 28,00 35 1 buc 980,00 50,00 35 1 buc 1.750,00

27,00 35 1 buc 945,00 50,00 35 1 buc 1.750,00 45,00 35 1 buc 1.575,00 68,00 35 1 buc 2.380,00

12,00 165 1 kg 1.980,00 17,00 165 1 kg 2.805,00 506.310,00 591.927,00

230.230,00

361.695,00

FittingWire netVineyard polesIron fenceConcrete fenceCablePlugsBreakersCoversVita One lampsWater flexible pipeHummerSaw fileTongsShovelSpadeForkNails

Price MDL 2013 purchased 2013 sales

Product

Purchase

price Quantity

total

invested

Sale

price

Sold

quantity m.u. m.u.

Revenue

from sales

Total

Credit reimbursement,

interest rate

Reinvested capital

Year 2013

CementRotbandAmserglobFugenfullerPlaster MP 75Gypsum-based adhesive EurofinPrimersWater solution paintsEnamel paintsColour paintsBrushesRoof slateBricksTimberPlasterboard 12,5 mmPressboard DSPPressboard DVPPressboard OSBScrew plugs and screwsPlastic pipeMetal pipeMetal wireAngles

1 unit

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120

Price plan (MDL)

2.9.2. Planning of revenues from the sale of fortan and yard paving, including poles for this:

The IE “Bulmaga Vladislav" has already received the order for the manufacturing of 200 m3 of fortan and 3,000 m2 of yard paving, worth MDL 390,000, for this year. In the following years, the demand for these products will increase and, according to the calculations below, the enterprise plans to increase its sales up to MDL 1,605,000 by 2013.

12,00 90 1 m 1.080,00 16,00 90 1 m 1440 210,00 90 1 m.l. 18.900,00 250,00 90 1 m.l. 22500

55,00 250 1 unit 13.750,00 68,00 250 1 unit 17000 320,00 60 1 unit 19.200,00 370,00 60 1 unit 22200

120,00 60 1 unit 7.200,00 150,00 60 1 unit 9000 18,00 90 1 m 1.620,00 23,00 90 1 m 2070

8,00 80 1 unit 640,00 10,00 80 1 unit 800 9,00 65 1 unit 585,00 11,00 65 1 unit 715

110,00 25 1 unit 2.750,00 135,00 25 1 unit 3375 25,00 65 1 unit 1.625,00 28,00 65 1 unit 1820

8,00 65 1 m 520,00 14,00 65 1 m 910 70,00 15 1 unit 1.050,00 93,00 15 1 unit 1395

40,00 15 1 unit 600,00 60,00 15 1 unit 900 28,00 15 1 unit 420,00 50,00 15 1 unit 750 28,00 20 1 unit 560,00 50,00 20 1 unit 1000

27,00 20 1 unit 540,00 50,00 20 1 unit 1000 45,00 20 1 unit 900,00 68,00 20 1 unit 1360

12,00 100 1 kg 1.200,00 17,00 100 1 kg 1700 361.695,00 421.956,00

172.672,5

249.283,50

Indicators Current Expected

Product m. u. 2008

2009

2010

2011

2012

2013

(min-max

price)

(min-max

price)

(min-max

price)

(min-max

price)

(min-max

price)

(min-max

price)

1 sack 80-82 68-70 70-75 75-78 75-80 75-80 1 sack 97-100 104-106 96-98 98-100 100-105 100-105 1 sack 63-65 64-68 64-68 68-70 70-75 70-75

1 sack 78-80 76-78 78-80 78-82 82-85 82-85 1 sack - 65-80 80-90 90-100 95-103 95-103 1 unit 82-84 65-70 70-78 75-80 75-82 75-82 1 unit 3,20-3,50 3,30-3,50 3.30-3,60 3,30-3,80 3,40-3,90 3,40-3,90 1 m3 3500-3600 2300-2400 2450-2475 2450-2500 2475-2550 2475-2550 1 unit - 100-105 105-110 105-112 107-115 107-115 1 unit - 225-355 265-360 265-365 268-367 268-367 1 kg - 15-25 15-25 18-30 20-30 20-30 1 m.l. - 250-300 250-320 265-320 270-330 270-330 1 unit - 63-65 65-68 65-70 68-73 68-73 1 m3 - 420-450 420-450 425-455 430-460 430-460 1 m2 - 95-100 95-110 95-120 100-120 100-120

FittingWire netVineyard polesIron fenceConcrete fenceCablePlugsBreakersCoversVita One lampsWater flexible pipeHummerSaw fileTongsShovelSpadeForkNails

Total

Credit reimbursement,

interest rate

Reinvested capital

Cement

Rotband

Amserglob

Gypsum

Fugenfuller

Roof slate

Bricks

Timber

Plasterboard

Pressboard

Nails

Wire net

Vineyard poles

Fortan

Yard paving

2.9.3. Planning revenues from the activity of the food market

For the crediting period, the company plans to have the following incomes from annual sales: MDL 37'442 for the period May this year - 31.01.2010, NDL 54'733 in 2011, MDL 63'817 in 2012 and MDL 74'008 in 2013.

2.9.4. Annual expenditure planning

2.9.5. Credit reimbursement schedule:

Year Quantity fortan

(a)

Price (b)

Quantity of yard

paving (c)

Price (d)

Total revenue

(a*b+c*d)

2010 200 m3 450 MDL 3000 m2 100 MDL 390000 MDL 2011 210 m3 450 MDL 3055 m2 100 MDL 400000 MDL 2012 210 m3 450 MDL 3105 m2 100 MDL 405000 MDL 2013 220 m3 450 MDL 3110 m2 100 MDL 410000 MDL Total 1’605’000 MDL

YEAR 2010 (MDL) 2011 (MDL) 2012 (MDL) 2013 (MDL)

Cost of food products sales 32 558 55 814 54 566 57 062

Cost of construction

materials sales600 600 629 760 506 310 361 695

Cost of sales - fortan and

yard paving

own contribution

own contribution

own contribution

own contribution

Total cost of sales 633 158 685 574 560 876 418 757

Commercial expenditures 14 651 25 117 25 116 25 116

Wages 105 000 180 000 180 000 180 000

Other general and

administrative expenditures

18 721 32 093 32 093 32 093

Total general and

administrative expenditures 123 721 212 093 212 093 212 093

Operational expenditures 7 508 30 030 30 030 22 522

Financial activity

expenditures 5 748 9 854 9 854 9 854

TOTAL Expenditures 784 786 MDL 962 668 MDL 837 969 MDL 688 342 MDL

Period and amount of credit reimbursement and associated interest rate

Reimbursement trimester Income from sales MDL Reimbursed amount

MDL sau EUR

1.114.762 57.557,50 3.488,33 297.818 57.557,50 3.488,33

297.818 57.557,50 3.488,33 297.818 57.557,50 3.488,33

297.818 57.557,50 3.488,33 265.186 57.557,50 3.488,33

265.186 57.557,50 3.488,33 2 265.186 57.557,50 3.488,33 265.186 57.557,50 3.488,33

226.491 57.557,50 3.488,33 226.491 57.557,50 3.488,33

226.491 57.557,50 3.488,33 TOTAL 4.046.249 690.690,00 41.860,00

December 2010March 2011June 2011September 2011December 2011March 2012June 2012September 2012December 2012March 2013June 2013September 2013

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2.9.6. Break-even

For the crediting period, the IE “Bulmaga Vladislav” has planned the following financial results:

In 2009, the Company’s turnover registered the following values:• Net sales – MDL 1’943’555 • Gross profit – MDL 281’960 • Net profit – MDL 150’277

Gross and net profit dynamics:

In 2009, the Company’s net profit was of 7.73%, and plans to increase it up to 24% following the business development. Hence, the Company aims at increasing the gross profit by about MDL 205,000, and the net profit by about MDL 67,000, i.e., the IE “Bulmaga Vladislav” will increase its turnover by 48.81%.

2.10. Financial results planned for 2010-2013

Hence, expectation for the end of 2013, are cumulatively, the following:Investment in 2010 in the acquisition of construction materials: MDL 660 000 (EUR 40 000 )Gross profit: 4 272 740-2 298 365 = MDL 1 974 375 (EUR 119 659)

Indirect expenses: MDL 3 273 765 ( EUR 198 410)Net profit: 4 272 740-3 273 765 = MDL 998 975 (EUR 60 544)

Year/Financial results 2010 2011 2012 2013

Net sales 1114762 1191270 1060744 905964

Cost of sales 633158 685574 560876 418757

Gross profit 481604 505696 499868 487207

Indirect expenses 151628 277094 277093 269585

Net profit 329976 228602 222775 217622

Indicators 2009 MDL 2013 MDL Absolute deviation Relative deviation

Gross profit 281’960 487’207 205’247 72.80%

Net profit 150’277 217’622 67’345 48.81%

Net profit rate 14.50% 53.77% Rata profitului net

7.73% 24.02%

Expenses MDL Revenue MDL

Cost of sales 2’298’365 Revenue income, of which:: Trade expenses, of which: 90000 From the sale of construction

materials

2437740

Transportation 60 000 From the sale of fortan and

yard paving

1 605000

Marketing and advertising 30 000 From the activity of the food market 230000

Overheads and administrative expenses of which:

760000

Wear and tear of fixed assets 30 000 Repair of fixed assets 30 000 Wage expenses

645 000

Donations and charity 35 000 Other overheads and

administrative expenses 20000

Other operational expenditure, of which: 90 090 Rent - Associated with payment of interest

rate for credits and loans 90 090

Financial activity expenses,

of which:35 310

Exchange differences 22110 Other financial activity expenses 13200 TOTAL Expenses 3 273 765 Total Income 4 272 740

Following the implementation of this business plan, the IE “Bulmaga Vladislav” will register a total gross profit for the period of the crediting years of minimum EUR 60,000. Hence, investing further in the business – own capital already – the enterprise will be on the first place of the local market as a supplier of construction materials, and having its own capital already, the enterprise could open markets for the sale of construction materials in other localities of the Telenesti district.

Trends of the IE “Bulmaga Vladislav” are positive, ascending and profitable!

III. Annexes

Annex 1 Copy of the registration certificate of the enterprise

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124

Annex 2 Extract from State Register

Annex 3 Authorizations

3.1. Sanitary-veterinary authorization

125

An easy to understand BUSINESS GUIDE

126

3.2. Sanitary authorization

Annex 4 Construction materials pricelist

127

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128

Annex 5 Certifications of merit

Annex 6 Pictures of yard paving

129

An easy to understand BUSINESS GUIDE

130

Annex 7 Pictures

Food market and construction materials market

131

Annex 8

Warehouse (where also the fortan and yard paving is manufactured) and own house

An easy to understand BUSINESS GUIDE

132

Annex 9

Track MAN 12152F and Mercedes Benz 124 vehicle

(own transportation means)

ANNEX 10 Useful links

Agency for Payments and Intervention in Agriculture www.aipa.mdState Agency on Intellectual Property www.agepi.md National Employment Agency www.anofm.mdNational Agency for Rural Development www.acsa.md National Bureau of Statistics www.statistica.md Business Advisory Services Programme Moldova (BAS Programme) www.bas.md Business Portal www.businessportal.mdChamber of Commerce and Industry www.chamber.md Licensing Chamber www.licentiere.gov.mdState Chamber of Registration www.cis.md National House of Social Insurance www.cnas.md National Exhibitions Centre www.moldexpo.md National Centre for Public Health www.cnsp.mdCentre for Fighting Against Economic Crimes and Corruption www.cccec.md National Health Insurance Company www.cnam.md International Fund for Agricultural Development www.ifad.md Labour Inspection www.inspectiamuncii.mdNational Institute of Standardization and Metrology www.standard.md Moldovan Investment and Export Promotion Organization www.miepo.md Organization for SME Development (Ministry of Economy) www.odimm.mdFarmer to Farmer Program www.cnfa.mcJoint Operational Programme Romania-Ukraine-Republic of Moldova 2007-2013 www.ro-ua-md.net State Register of Legal Acts www.justice.md State Fiscal Service www.fisc.mdOthers www.24h.md www.business24.ro www.businessportal.md www.mybusiness.md

For staff recruitment and publication of vacancies:

www.jobinfo.md

www.joblist.md

www.jobmoldova.md

www.joburi.md

www.locurimunca.info

www.makler.md

www.moldovajob.md

www.munka.md

www.rabota.md

www.topjobs.md

www.angajare.md

www.anofm.md

www.bestjobs.md

www.cariera.md

www.hr.md

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Bibliography:

1. Birca Alic, “Human Resources Management,” ASEM, Chisinau, 2005

2. Bugaian L., Roscovan M., Solcan A., Todirascu Ș., “How to Start-up a Business,” Practical guide for entrepreneurs, Chisinau, 2010

3 Guide for entrepreneurs, instructors and consultants, ”Business Planning” BIZPRO, Chisinau, 2003

4 Guide for entrepreneurs, instructors and consultants, “Legal Aspects of Entrepreneurship,” BIZPRO, Chisinau, 2003

5 Guide for entrepreneurs, “How to get a credit from bank and non-bank institutions in the Republic of Moldova,” BIZPRO, Chisinau, 2003

6 Guide for entrepreneurs, instructors and consultants, “From the Start with Optimal Business Ideas,” BIZPRO, Chisinau, 2003

7 Practical Guide for Migrants, “How To Make Business In Moldova?”, volume 3, Chisinau, 2007

8 Organization for SME Sector Development, “Legislative Guide to Entrepreneurial Activity,” Chisinau, 2007

9 Organization for SME Sector Development, “I Want To Launch My Own Business,” Guide for starting entrepreneurs and business service providers, Chisinau, 2007

10 Suleanschi S., Veverita V., “First Steps in Business,” Guide for starting entrepreneurs, Chisinau, 2009

• www.24h.md • www.bizcity.ro/stiri/cum-promovezi-eficient-un-produs-nou-lansat.html?id=32033 • www.business24.ro • www.businessportal.md • www.caam.utm.md/files/docs/ANTREPRENORIAT_c2.pdf• www.contabilus.wordpress.com• www.flux.md/editii/20105/articole/8734/ • www.mybusiness.md • www.profituri.ro/curs/ideioptime.pdf • www.startafaceri.blogspot.com