Business Plan Background

1. BACKGROUND

2. Learning Objectives
At the end of this chapter, students must be able to;
• Understand why and when to develop a business
plan
• Know how to tell the business plan story
• Learn the major sections of the classic business
plan
• Focus business plan sections to meet specific
needs
• Identify the major risks to business plan success
• Master presenting business plan to others

3. What is a Business Plan?
• A business plan is a summary document that
outlines how and why a new business is being
created.

4. Why use a Business Plan?
• Owing to the following benefits of a well-
researched and comprehensive business plan,
preparing one is highly recommended, but not
a mandate.
1. Feasibility
2. Focusing device
3. Foresight
4. Raising Capital

5. Features of a good Business Plan
1. Executive Summary
2. Business Description Fundamental questions to be
answered include:
• Who are you?
• What is the product or service, and what are its
differentiating characteristics?
• Where is the opportunity located?
• When will you start implementing your plan and
expects cash flows or profits?
• Why should customers choose your company?
• How do you plan to run the business in terms of
structure and regulatory compliance?
3. Market Strategies

6. Features of a good Business Plan
4. Competitive analysis
aims to understand the entry barriers one
could face due to other companies in the
same or complementary sectors.
5. Design and development plan
it outlines the technical details of the product
and its development cycle within a realm of
production.

7. Features of a good Business Plan
6. Operation and management plan
describe the cycle of business functions needed
for survival and growth. It includes management
functions such as task, hierarchy, employee
recruitment, and operational function such as
7. Financial factors
include the company balance sheet and cash flow
projections. Financial data is imperative to
provide credibility to any assertions or claims
made about the future profitability of the
business.

8. Common Mistakes to Avoid While
Writing a Business Plan
• The plan must not begin by stressing the
superiority of one’s product or service, but instead
by identifying a genuine problem faced by the
consumer.
• A team’s expertise is displayed not by listing their
academic achievements and employment history,
but by stressing how the team’s experience is best
suited for a particular industry sector or product.
• The most common mistake is to offer an
excessively optimistic view of the opportunity.

9. PARTS OF A BUSINESS PLAN
• Business plans typically follow a traditional
format or structure. They may also include
charts and graphs along with a detailed set of
financial statements. Executive Summary:

10. PARTS OF A BUSINESS PLAN
• Highlights the key points of your plan
•Answer the general questions about your
business concept, team, needs filled, market
advantages, financial viability, and overall
likelihood of success and profitability.

11. Business Description
• The basic facts and everyday details of your
business
• Include the company’s formal name as well as
any DBA’s (fictitious business names), and
subsidiaries, as well as URLs (domain names)
you have secured.

12. Market Analysis
• You need to know your target audience
• Identifies your customers, or how a diverse
population of customers breaks down
geographically or in other ways.

13. Marketing Plan
• You should have at least an outline and relatively clear vision of
how you will reach your target market and/or sell your product
or services.
• Be sure that somewhere in your business plan documents you
include a realistic budget for advertising, promotion, social
media, etc.
• Spelling out a plan to promote your business, determine how
you wish to be positioned in the marketplace re: corporate
values, reputation, slogan, etc.

14. Operation and Management Strategy
• Operation plan lays out how your business will
function to day-to-day and how you will
compete in the marketplace.

15. Competitive Analysis
• Taking into the account of the other business
that are competing or will compete, with yours,
and their current share of the market.

16. Development Plan
• Setting out a milestone you expect your
business to reach within a set number of year, in
multi-year increments.

17. Financial Statement
• This something you’ll need for your own tax
and references, and where you will include
statement of how much money you are seeking,
from which sources.

18. THE PARTS OF THE PLAN
• TITLE PAGE
The title, or heading, of the plan, and very brief
description of the business.
The date
The name of the owner
The company name and location
A copyright or confidentiality notice

19. THE PARTS OF THE PLAN
• TABLE OF CONTENTS
A list of the individual sections and their page
numbers, starting with the Title Page and ending
with a section for Special Materials

20. THE PARTS OF THE PLAN
• SUMMARY/OVERVIEW
A brief, but focused statement (a few sentences
or paragraphs) stating why the business will be
successful. This is the most important piece of a
Business Plan because it brings everything
together.

21. THE PARTS OF THE PLAN
• MARKET ANALYSIS
Identifies specific knowledge about the business
and its industry, and the market (or customers)
it serves.
An analysis that identifies and assesses the
competition.

22. THE PARTS OF THE PLAN
• DESCRIPTION OF THE COMPANY
A close look at how the different components of
the business fit together, such as: o Information
about the nature of the business and the factors
that should make it successful . To Special
business skills and talents that provide the
business with a competitive advantage, such as
a unique ability to satisfy specific customer
needs, special methods of delivering a product
or service, and so on.

23. THE PARTS OF THE PLAN
• ORGANIZATION & MANAGEMENT
The company’s organizational and legal
structure, Is it a sole proprietorship? A
partnership? A corporation?
Profiles of the ownership and management
team: What is their background, experience and
responsibilities?

24. THE PARTS OF THE PLAN
• MARKETING & SALES
The company’s process of identifying and
creating a customer base.

25. THE PARTS OF THE PLAN
• DESCRIPTION OF PRODUCT OR SERVICE
A detailed description of the product or service
from the customer’s point of view:

26. THE PARTS OF THE PLAN
• FUNDING
The amount of current and future funding
needed to start or expand the business. Includes
the time period that each amount will cover, the
type of funding for each (i.e., equity, debt), and
the proposed or requested repayment terms.

27. THE PARTS OF THE PLAN
• FINANCIALS
Explains or projects how the company is
expected to perform financially over the next
several years. (Sometimes called a “pro-forma
projection.”) Because investors and lenders look
closely at this projection as a measure of your
company’s growth potential, professional input
is strongly recommended.

28. THE PARTS OF THE PLAN
• APPENDIX
Provides specific information that certain
individuals (such as creditors) may want review.
It allows the addition and/or deletion of
information as needed, such as:

29. SIX STEPS FOR DOING A BUSINESS PLAN
1. Obtain leads and referrals.
• Find names, addresses and phone numbers of
the type of investors you wish to target.
2. Research your target.
• Learn as much as possible about how much
money people have to invest, industries
they’re interested in and other requirements.

30. SIX STEPS FOR DOING A BUSINESS PLAN
3. Make your pitch
• First, email or mail an introductory letter to your target letting them
know you have a plan you'd like to send. Sending unsolicited,
unanticipated business plans with a mere cover letter won't typically get
your plan read.
• A letter of introduction is your way of asking them if they'd be interested
in reading your business plan. You should also explain generally what
you’re looking for.
• Finally, in the letter of introduction, you may want to detail the terms
under which you're presenting your plan. For instance, you may say that
you're not submitting the plan to any other investor. Or you may
explicitly point out that you're currently seeking financing from a number
of sources, including this one.
• If you don't hear from them within a week or so, send a follow-up email,
and try once more about two weeks later (in case they were out of town
or swamped with other work). If this doesn’t produce a meeting, look
elsewhere.

31. SIX STEPS FOR DOING A BUSINESS PLAN
4. TRY TO MEET PEOPLE IN PERSON
• Aside from having mails or calls, you should still try to
meet your recipient personally, especially if you're seeking
any type of funding.
5.DEFUSE OBJECTIONS
• Although you may think you've answered everything in
your plan, still prepare a list of possible objections,
assumptions and the likes that your investors may raise.
6.GET A COMMITMENT
• You won't get an investment unless you ask for it. When all
objections have been answered, be ready to offer one last
concession “If I give your representative a board seat, can
we do this today?” and go for the close.

32. Group 7
Marina Rosario
Winnie Rose Rosario
Ericka Ashlyn Rulloda
Mary Rose Sanchez
Rosalyn Serrano
Marjorie Tamayo
Maureen Joyce Ursua
Anjeanette Verceles
Arvie Verzosa
Kharen Joy Vinoya