BusinessPlan

Business Plan

A detailed and integrated written document describing all activities involved in opening and operating a new entrepreneurial venture.

Planning as Part of Business Operations

Planning is an ongoing process.

It continues as the business grows and matures.

Feasibility Study

A quick assessment done by the entrepreneur to identify possible barriers to success before preparing a business plan.

Information Needs

Before committing time and energy to preparing a business plan, the entrepreneur should do a quick feasibility study of the business concept to see whether there any possible barriers to success.

Entrepreneur

The business plan should be prepared by?

employees, investors, bankers, venture capitalists, suppliers, customers, advisors, and consultants

who reads business plans? business plan may be read by?

three perspectives should be considered in preparing the plan

-Perspective of the entrepreneur

-Marketing perspective

-Investor’s perspective

Presenting The Plan

It is often necessary for an entrepreneur to orally present the business plan before an audience of potential investors.

PART I. Introduction or the Cover Page

Your cover page should say the words "Business Plan,"

PART II. Table of Contents

All pages of your business plan should be numbered and the table of contents should include page numbers.

Executive Summary

A brief section of the business plan that summarizes the entire plan, often the first thing readers look at.

Business Description

An overview of the Business

Customer

This description defines the characteristics of the people you want to sell to and should indicate, among other things, whether your customers are cost or quality conscious, under what circumstances they buy, and what types of concerns they have.

Needs and Description

always focuses on customer needs. Why do they need your product or service? What is going to make them buy?

Market Analysis

An analysis of customer profiles, market size, trends, competition, and other key factors impacting business operations.

Market Size/Trends

defines the total market size as well as the slice of the market your business will target.

Competition

indicates where your products or services fit in the competitive environment. Present a short discussion of each of your primary competitors.

Labor Requirement

provides details of other labor you will need to start up and run your business.

Estimated Sales

based on your assessment of the advantages of your product or service, your customers, the size of your market, and your competition. Use a one-paragraph summary to justify your projections.

strategy

action plan for how you will get customers to buy your products.

Methods of Sales

Describe available distribution channels and how you plan to use them.

Production Schedule

presents the total number of goods to be produced, and the expected time to produce them. (demand for the product, availability of resources, capacity of the plant)

Organizational Structure

Organizational chart. Defines the hierarchy of the different positions in the organization.

Roles and Responsibilities

must be defined clearly in order to minimize and avoid misunderstanding and overlapping of functions

Profit and Loss Sharing

How the profit and losses be divided?

Appendix

contains backup material

Using and Implementing The Business Plan

-The business plan is designed to guide the entrepreneur through the first year of operations.

-Implementation of the strategy contain control point to ascertain progress and to initiate contingency plan if necessary.

-Business plan not end up in a drawer somewhere once the financing has been attained and the business launched.

Measuring Plan Progress

Entrepreneur should check the profit and loss statement, cash flow projections, and information on inventory, production, quality, sales, collection of accounts receivable, and disbursements for the previous month.

-Inventory control

-Production control

-Quality control

-Sales control

-Disbursements

Updating the Plan

-The most effective business plan can become out-of-date if condition change.

-If the change are likely to affect the business plan, the entrepreneur should determine what revisions are needed.

-In this manner, the entrepreneur can maintain reasonable targets and goals and keep the new venture on a course that will increase probability of success.

Why SomeBusiness Plans Fail

-Goals set by the entrepreneur are unreasonable.

-Goals are not measurable

-The entrepreneur has not made a total commitment to the business or to the family.

-The entrepreneur has no experience in the planned business.

-The entrepreneur has no sense of potential threats or weaknesses to the business.

-No customer need was established for the proposed product or service.

Expenses and Capital Requirements

pull together the expenses incurred in running your business and the amount of money you will need to procure the equipment used to start up and continue operations of your business.

Sources of Funds

How will the business be funded?

Financial Plan

A section of the business plan that outlines projected financial statements, including income and cash flows.

Management Plan

A section detailing the organizational structure, roles, responsibilities, and profit-sharing methods within the business.

Marketing Strategy

Plans for reaching target customers through sales methods and promotional efforts.

Implementation Plan

A strategy designed to guide the entrepreneur through the first year of business operations.

Updating the Plan

The process of reviewing and revising the business plan to align with changing conditions and maintaining relevant goals.

Common Reasons for Business Plan Failure

Unreasonable goals, lack of commitment, inexperience, unclear customer needs, and ignoring potential threats.