Entrep.Lesson-1.4 - The Business Plan (1)

Business Plan

A document that describes the various external and internal elements involved in starting or expanding a business, integrating different functional plans such as marketing, manufacturing, finance, and human resource management.

Learning Objectives

Goals set for students to define a business plan, explain its importance, describe necessary information, and prepare a business plan for their desired business.

Executive Summary

A brief overview of the business plan that stimulates interest, especially for potential investors, prepared after the total plan is written.

Market Information Needs

Data required to determine the size of the market, including primary and secondary markets, demographic profiles, and market potential.

Operations Information Needs

Information related to the cost of sourcing and manufacturing products or providing services, including labor and raw materials.

Financial Information Needs

A list of all sources of revenue and possible expenditures necessary for the business plan.

Major Sections of the Business Plan

Key components including the introductory page, executive summary, environmental and industry analysis, description of the business, production plan, operation plan, marketing plan, organizational plan, financial plan, assessment of risk, timetable/milestones, and appendices.

Environmental and Industry Analysis

An assessment of sociocultural, technological, economic, and political-legal conditions affecting the business environment.

Production Plan

Details regarding the manufacturing process, physical plant, machinery, equipment, suppliers, and future capital needs.

Organizational Plan

Documentation of the venture’s form of ownership, including an organizational chart, skills, abilities, roles, and responsibilities.

Financial Plan

A section that includes assumptions, pro forma balance sheets, income statements, cash flow projections, sources and uses of funds, and breakeven analysis.

Assessment of Risk

Identification of potential internal or external risks, strategies for prevention or minimization, and responses to risks if they occur.

Appendices

Supplementary materials such as market research data, financial projections, management team CVs, supplier price lists, competitor profiles, and sample licenses.

Reasons for Writing a Business Plan

To determine the viability of a business venture, guide resource mobilization, and assist in obtaining financing.

Common Reasons Business Plans Fail

Issues such as unprofessional presentation, incoherent executive summaries, unrealistic sales projections, inadequate management descriptions, and insufficient risk assessments.