Business plan

1. PLANNING ENTERPRISE
LESSON 2

2. BUSINESS PLAN
• a guide for the entrepreneur throughout the
business process
• Can be written prior to setting up enterprise w/c are
similar to a prefeasibility and a feasibility study
• It serves many masters : the entrepreneur, investors
and cautious financiers, managers and staff of the
organization

3. FORMAT OF A BUSINESS PLAN

4. 1.2 CONTENTS OF A BUSINESS
PLAN
A. BUSINESS CONCEPT AND THE BUSINESS
MODEL
- contains the essence of the enterprise in a concise
but powerful manner
- stresses the value of the product offering to the
target customers who would most likely to buy it

5. FOUR AREAS OF MONEY MAKING
1. How will the business raise revenues? What critical
factors will cause the revenues to materialize?
2. What will be the costs of the enterprise products
and other costs of doing business? How will these
costs be managed to ensure comfortable profits?
What critical factors will drive the costs? How can
these factors be controlled?

6. FOUR AREAS OF MONEY MAKING
3. What will be the major investments of the
enterprise? Why will these investments give the
enterprise a competitive edge?
4. How will the enterprise finance the investments?
How will the enterprise fund its growth?

7. 1.2 CONTENTS OF A BUSINESS PLAN
B. THE BUSINESS GOALS: VISION, MISSION, OBJECTIVES,
AND PERFORMANCE TARGETS
- show the future and long –term prospects of
the enterprise
- composed of the vision, mission, objectives, key
result areas, and performance indicators of the
enterprise

8. 1.2 CONTENTS OF A BUSINESS PLAN
II. EXECUTIVE SUMMARY
- contains everything that is relevant and important to
the business audience
- synthesis of the entire plan
- must contain the major argumentations of the
business proponent on why the business will work and
succeed
- should describe the products and services of the
enterprise, their features and attributes, and why they are
the right ones to deliver to the customers

9. EXECUTIVE SUMMARY SHOULD HIGHLIGHT
THE GOOD QUALITIES OF:
1. The business proponents and their partners;
2. The enterprise organization and its capabilities;
3. The technology providers and their expertise and
experience; and
4. The suppliers and all the major service providers

10. ENTERPRISE STRATEGY
– builds and develops the game plan for attaining
competitiveness
ENTERPRISE DELIVERY SYSTEM
– the entire process of converting input
( resources ) into output and these outputs into
outcome

11. EXECUTIVE SUMMARY
- should render all the major institutional, market,
operations, and organizational strategies previously cited
into financial strategies and forecasts
- investment requirements should be presented also
- should contain a section on the environmental and
regulatory compliance of the proposed business, as well
as the more proactive programs
- should present the capital structure of the proposed
business and show how this structure will respond to the
investment programs and financial forecasts of the
enterprise

12. EXECUTIVE SUMMARY
- should be written last in order to capture the
findings and insights of other parts, but for
presentation purposes , it is placed in the first part of
the business plan

13. 1.2 CONTENTS OF A BUSINESS PLAN
III. BUSINESS PROPONENTS
FOUR TYPES OF STAKEHOLDERS
1. Resource mobilizers and financial backers – who else
are to share the burden of raising money
2. Technology providers and applicators – sufficient fund
to pay technology
3. Governance and top management – strategies and
performance indicators are proposed
4. Operating and support team – programs, activities,
tasks, and resources would be in place

14. 1.2 CONTENTS OF A BUSINESS PLAN
IV
. THE TARGET CUSTOMERS AND THE
MAIN VALUE PROPOSITION
TARGET CUSTOMERS – must be of sufficient size,
sufficient paying capacity, and have sufficient interest
to purchase the products being offered by the
enterprise
MAIN VALUE PROPOSITION – the unique selling
proposition of the enterprise

15. 1.2 CONTENTS OF A BUSINESS PLAN
V
. MARKET DEMAND AND SUPPLY,
INDUSTRY DYNAMICS, AND MACRO
ENVIRONMENTAL FACTORS
- business proponent should examine all the
opportunities in this bigger market in order to
determine what exactly influences the bigger market
- it should estimate the total market supply and
demand for the product offerings of the enterprise

16. MACRO ENVIRONMENT WHICH AFFECT THE
MARKET AND INDUSTRY
SOCIAL ENVIRONMENT – includes demographics
and cultural dimensions that govern the relevant
entrepreneurial behavior
POLITICAL ENVVIRONMENT – defines the
governance system of the country or the local area of
the business
ECONOMIC ENVIRONMENT – mainly driven by
supply and demand forces

17. MACRO ENVIRONMENT WHICH AFFECT
THE MARKET AND INDUSTRY
ECOLOGICAL ENVIRONMENT – includes all
natural resources and ecosystem that defines
habitat of man, animals, plants and minerals
TECHNOLOGICAL ENVIRONMENT –
makes or breaks competing participants in any
industry

18. 1.2 CONTENTS OF A BUSINESS PLAN
VI. PRODUCT/SERVICE OFFERING:
DESCRIPTION, EVOLUTION, AND
JUSTIFICATION
- must be described by highlighting the features and
attributes that would most appeal to the target
customers

19. 1.2 CONTENTS OF A BUSINESS PLAN
VII. ENTERPRISE STRATEGY AND
ENTERPRISE DELIVERY SYSTEM
- the Enterprise Delivery System starts from input
(resources mobilized), proceeds to the Throughput
(the transformation process) and produces the Output
(products and services)
- the output are then marketed to customers or
experienced by customers

21. BUSINESS OUTCOMES SHOULD INCLUDE:
• High customer satisfaction level;
• High sales volume, market share, and market reach;
• High financial returns; and
• High people performance, productivity, and morale
values

22. 1.2 CONTENTS OF A BUSINESS PLAN
VIII. FINANCIAL FORECASTS: EXOECTED
RETURNS, RISKS, AND CONTINGENCIES
IMPORTANT RETURN CALCULATIONS
1. Expected return on sales
2. Expected return on assets or investments; and
3. Expected return on stockholders’ equity

23. The business plan should also calculate the long –
term returns, using the time value of money. This
means estimating the internal rate of return and the
expected net present value.
The business plan should then evaluate both the
business risks and the financial risks available.

24. 1.2 CONTENTS OF A BUSINESS PLAN
IX. ENVIRONMENTAL AND REGULATORY
COMPLIANCE
- business plan must articulate laws, rules, and
regulations governing the business, and the industry
that the enterprise is in.
- it should also assure the reader that all
necessary local government ordinances and barangay
ethics would be followed by the enterprise

25. 1.2 CONTENTS OF A BUSINESS PLAN
X. CAPITAL STRUCTURE AND
FINANCIAL OFFERING: RETURNS
AND BENEFITS TO INVESTORS,
FINANCIERS, AND PARTNERS
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