how to write a business plan-asokumar

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The Elements of A Business Plan

The Road Map To Your SuccessPresented by

Dr. D. ASHOK

VIT BUSINESS SCHOOL

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Why Do I Need A Business Plan?

A business plan enables you to clearly evaluate whether your business can be successful.

It forces you to carefully plan your growth, financing, cost of sales and potential market share.

It can help you attract investors, enable financers such as banks, venture capitalists and other funding agents like factors, evaluate your potential for success and loan worthiness.

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The Elements of a Business Plan

I. The Executive Summarya. Mission Statementb. General Description of the business and its purpose

c. Location d. Ownership e. Likelihood of business

profitability

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The Road to Success Basic Idea of your business Mission, Vision, Outlook …

Business development Business plan

Financing Family and friends, Angel,

Private placement ?? Public offering

http://www.bplans.com/http://www.sb.gov.bc.ca/smallbus/workshop/sample.html

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Basic components of your executive summary are:

How unique your business and product / service. How you are planning to organize your business. Who are all the people associate with your business. How much money require to formulate your business. (Budget) What ‘source of finance’ you are planning to use. How much money possibly to earn ( profitability) What technology you are opting to use, where it is available and what training required. Prepare a prototype model of your product/service Review the other Closer substitutes available in nearer market. Explain about your product and its features. Who is your target group (s) and where they are available. How to reach them and who are all your nearest competitor. How much demand you are expecting and how long. What asserts require to purchase, lease out etc., & Source of availability. What are all the Governmental Regulation needed to follow. What patent rights applicable to their business. What level of quantified risk and uncertainty applicable to that.

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The Elements of a Business PlanII. Business Description Includes:a. Name and Location of Businessb. Principal Ownersc. Legal Structured. Status and Type

1. New start up, expansion, acquisition?2. Retail, wholesale, manufacturing, service?

e. Definition of Products & Services 1. Narrative2. Illustrations3. Competitive Comparison

f. Major strengths and “challenges”g. Strategic goals and objectives

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III. Operations Plan

A. Location

1. Does the location have an impact on the business’ ability to reach customers?

2. What are the physical characteristics of the current or proposed location?

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III. Operations Plan (Conti..)B. Physical FacilityDiscuss the existing facilities & required changes

1. Vehicle access for clients & vendors

2. Inventory storage3. Equipment, furniture & fixtures4. Utilities and access to same5. Merchandise display6. Customer seating and/or service facilities7. Product preparation space8. Compliance with current environmental regulations9. Capability for expansion

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III. Operations Plan (Conti…)

C. Supply What are your sources of supply?

Do you depend on a single supplier?

Discuss supply alternatives, pricing or other factors that could affect your ability to provide your product or service to customers.

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III. Operations Plan

D. Labor

What skills and experience are required to operate this business, and, how are you qualified?

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IV. Market Analysis

A. Industry Trends 1. Projections or trends for your

industry or business field

2. At what stage of the product/service cycle will your business be entering the market?

(Introduction, growth, maturity, saturation or decline)

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The Elements of a Business PlanIV. Market Analysis (Conti..)B. Description of Total Market

In order to generate a consistent & increasing sales flow, the entrepreneur must become knowledgeable about the consumers, businesses or government entities that might buy his product or service. One way to define the total market is to use information from the internet, census, Chamber of Commerce, public libraries, trade associations, etc. 1. What is the size of the entire market?2. What is your market’s growth potential?3. Discuss the economic, social, demographic characteristics of the market and the impact on your business?

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IV. Market Analysis (Conti..)The target market is that which is comprised of likely customers. A clear understanding of the demographics and psychographics of your “best customer” should help you define your strategy for success.1. What is the size of your target market?2. What percentage of the target market do you anticipate attracting as customers?3. What is the profile of your best customer?4. How will you attract and keep customers?5. How can you expand your market?

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IV. Documentation of Demand For Your Product or Service

Provide proof from a 3rd party for credibility.

1. Signed contracts, letters of interest/commitment

2. Market research (data you have found thru research or purchased from a professional market research firm)

3. Industry Statistics

4. Previous sales history from your existing operation

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IV. Market AnalysisE. Analysis of Competition

1. Identify your primary and secondary competitors2. How do they compare to your business?

(Sales volume, # of employees, locations, customers)

3. 3. Is your competitor’s business steady, increasing, or decreasing?4. What are your competitors’ strengths and

weaknesses?5. What have you learned from observing them?

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IV. Market Analysis (Conti..)

F. Product/Service Differentiation

1. What unique niche of the market will this business fill? Has anyone attempted to fill this niche? Why not? Is there a patent, trademark, copyright or trade secret that will give you a head start on the competition?

2. Where do you believe you have a business advantage? (Higher quality product, lower price, superior service, quicker delivery, more convenient locations, other?)

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V. Sales StrategyA. Pricing Policy

1. What is the relationship between the price you will charge and the image you are trying to create?

2. How will you price?(Competition, mark- ups, discounts, labor/materials + profit)

B. Distribution1. Describe the channel of distribution

you will use to reach your target market.2. How does the competition get its

products to the market?

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V. Sales Strategy

C. Promotional Efforts

1. Advertising

2. Personal Selling

3. Publicity

4. Sales Promotions

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VI. Management Profile

A. Personal History of Key Participants

1. Business Background

2. Management Experience

3. Education

4. Industry Experience

5. Relate past experience to future success potential

B. Duties/Responsibilities of Key Participants

C. Compensation

D. Available Resources

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VII. Financial Analysis & The Ten Year Pro FormaA. Project costsB. Source and Use of FundsC. Capital Equipment ListD. Pro Forma Profit and Loss StatementE. Pro Forma Cash Flow StatementF. Pro Forma Balance SheetG. Budget AssumptionsH. Personal Financial StatementI. Personal Income Tax Returns

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VIII. The Feasibility Study Adds credibility Shows your willingness to

use experts May often uncover facts

about your industry that you may not know, allowing you to plan for future endeavors.

how to write a business plan-asokumar

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