BUSINESS PLANBUSINESS PLAN

ASST PROF. JONLEN ASST PROF. JONLEN DESADESA

MEANING OF BUSINESS PLANMEANING OF BUSINESS PLAN

A business plan is a formal statement of a set of business goals and the plan for reaching those goals.

It may also contain background information about the organization or team attempting to reach those goals.

It is a written document that describes in detail how a new business is going to achieve its goals.

A business plan includes a description of a company or small business, its services and/or products and how the business will achieve its goals.

In a business plan, a business owner projects revenues and expenses for a certain period of time and describes operational activity and costs related to the business.

A Business plan is a written document that describes all the relevant internal and external elements involved in starting up a new venture.

It is the integration of various functional plans like marketing, financial, production, human resource etc.

It addresses both short term and long term decisions.The contents of a business plan is very important as it acts

as a guide to the owner starting up the new venture, it provides him the necessary direction as to how to go about with the business and achieve goals.

Business Plan is similar to a road map and it answers questions like:

Where am I now?

Where am I going?

How will I get there?The business plan provides important information

to various other parties who are interested in the firm, specially venture capital firms and banks.

The business plan is prepared by the entrepreneur in consultation with accountants, marketing consultants, advocates, financial analysts and engineers.

FEATURES OF A BUSINESS PLANFEATURES OF A BUSINESS PLANA business plan is a document outlining the goals of a

business and the strategies to achieve these goals. It is mainly prepared by new businesses.

Planning for business should be a process not an event. A business plan should always be well thought of.A business plan is prepared keeping the future in mind. It takes into consideration various internal and external

elements.The business plan may be used as a point of reference in

making crucial decisions. The business plan integrates a number of functional plans

of a firm.

ADVANTAGES OF A BUSINESS PLANADVANTAGES OF A BUSINESS PLAN

Helps an organization clearly define its goals and objectives.

Provides the right direction or course of action.Helps a firm meet its goals and objectives.Prepares the firm to face contingencies.Provides necessary information to interested

parties.Helps the firm find funding.Benefits of conducting SWOT analysis.

OUTLINE OF A BUSINESS PLANOUTLINE OF A BUSINESS PLAN

I. INTRODUCTORY PAGE

II. EXECUTIVE SUMMARY

III. INDUSTRY ANALYSIS

IV. DESCRIPTION OF THE VENTURE

V. PRODUCTION PLAN

VI. MARKETING PLAN

VII. ORGANIZATIONAL PLAN

VIII. ASSESSMENT OF RISK

IX. FINANCIAL PLAN

X. APPENDIX

I. INTRODUCTORY PAGEI. INTRODUCTORY PAGE

Name & Address of businessNames and Addresses of principalsNature of businessStatement of financing neededStatement of confidentiality of report.

II. EXECUTIVE SUMMARYII. EXECUTIVE SUMMARY

This part summarizes the entire business plan.

It is usually around 3-4 pages.This section is prepared once the entire

plan is prepared.

III. INDUSTRY ANALYSISIII. INDUSTRY ANALYSIS

Future outlook & trendsAnalysis of competitorsMarket segmentationIndustry forecasts

IV. DESCRIPTION OF VENTUREIV. DESCRIPTION OF VENTURE

ProductsServicesSize of businessOffice equipment and personnel

V. PRODUCTION PLANV. PRODUCTION PLAN

Manufacturing processPhysical plantMachinery & EquipmentNames of suppliers of raw materials

VI. MARKETING PLANVI. MARKETING PLAN

PricingDistributionPromotionProduct ForecastsControls

VII. ORGANIZATIONAL PLANVII. ORGANIZATIONAL PLAN

Form of ownershipIdentification of partnersAuthority of principalsManagement-team backgroundRole & Responsibilities of members of

organization

VIII. ASSESSMENT OF RISKVIII. ASSESSMENT OF RISK

Evaluate weakness of businessNew technologiesContingency plans

IX. FINANCIAL PLANIX. FINANCIAL PLAN

Break-even analysisIncome StatementBalance SheetCash flow projectionsSources and applications of funds

X. APPENDIXX. APPENDIX

LettersMarket Research DataLeases or contractsPrice list from suppliers

ESSENTIALS OF A GOOD BUSINESS PLANESSENTIALS OF A GOOD BUSINESS PLAN

SimplicityClear ObjectivesSuitabilityFlexibilityContinuityUnity of purpose and directionComprehensive and completeFull Utilization of resources and opportunitiesBeneficial to all concernedRealistic and acceptable

STEPS IN FORMULATING A BUSINESS PLANSTEPS IN FORMULATING A BUSINESS PLAN