The Business Plan :The Business Plan :
Creating and StartingCreating and Starting
The VentureThe Venture
Why develop a Business Plan?
• “All the work you do in thinking up your idea,
testing it, studying it, and producing it, has
been for nothing if you can’t sell it. Whether
you start your own business to produce and
sell your invention, subcontract out the
manufacturing part, or sell your rights in
return for a percentage of the proceeds, you
need a business plan.”
Who Reads The Plans?
• The business plan may be read by
employees, investors, bankers, venture
capitalists, suppliers, customers, advisors,
• There are 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.
• In this typical forum the entrepreneur
would be expected to provide a short
(perhaps 20-minutes or half-hour)
presentation of the business plan.
What is a Business Plan ?
• “A business plan is vital for enterprises needing investment,
grant funding or significant borrowing; more so for innovation
ventures, as the greater number of ‘unknowns’ makes it even
harder to attract backing. But don’t make the mistake of
thinking that only other people need your business plan. It’s
primarily a tool to reveal possibly awkward truths about your
business to you.”
• It is a means of communicating your vision to the outside
world to help you attract talent and money to your enterprise
• The quality of a business plan is measured by its ability to
hire employees, gain contracts from potential customers and
negotiate monetary investment from an investor who’s
interest is solely to make profit
A business plan is a written document
prepared by the entrepreneur that describes
all the relevant internal and external
elements and strategies for starting a new
It is a integration of functional plans such as
marketing, finance, manufacturing, sales and
Business Plan ?
•Explain how you make money
•Who pays you?
•How do you collect?
•What are your channels of distribution?
•How do you integrate suppliers?
•Define your primary, secondary, and other audiences
•Show some numbers
•How will you find, sell, and retain customers?
•Advertising and promotion budget
•Provide a complete view of the competitors
•Direct and indirect competitors
•Current and anticipated competitors
•Competitor strengths and weaknesses
•Your competitive advantages
Describe your key players
•Board of Directors
•Board of Advisors
•Who are you missing?
•Cash Flow Projections
Plan for the Future while being
• Understand the Components of a Business Plan
• Develop Goals and Objectives to get your Business
on a Path to Success
• Improve both the Short-Term and Long-Term
Vision of your Business
• Find New Business Opportunities
• Attract Investors
• Grow your Business
• Gain a better Understanding of your Market
Start Planning Your Success Today
Who should write the plan?
• The business plan should be prepared
by the entrepreneur.
• The entrepreneur may consult with
many other sources in its
preparation, such as lawyers,
accountants, marketing consultants,
Qualities of a good Business Plan
• Well thought out and can be visualized
• •Articulates the strengths and the
vision of your business
• •Clearly outline the risks associated
• •Present clear evidence of the
viability of the venture
• •Should compel action and get
Business Plan Components
• Business summary
• Market analysis
• Business Team
• Strategy Information
• An overview of the product/service
• Financial information
• Describe your business and how it’s
different from the other businesses
• An overview of the team and relevant
skills/experiences they bring to the biz
• Define the customer and how you business
will reach her/him
• Who are your potential competitors?
• How much money do you need to raise and
how much profit should investors expect?
• How did your company identify the opportunity?
• What is the market size in Selling's ?
• What resources does the company have that
allows it to fulfill the needs?
• How will you enter the market?
• How will you expand?
• Where do you see the company in the future?
• What value does your company create?
• Who is your competition and what edge do you
• What are the backgrounds of the
management team and directors?
• What does each team member bring to the
• What are the team’s previous successes in
• How does the management team form a
cohesive unit which can work efficiently
Business Team Qualities
• Opportunity cost: Does the team have
any highly skilled professionals?
• Can the team work together as a
• What management and leadership
principles will the team employ?
• Does the team reflect that it has
very good knowledge of the market?
Strategy Information (Battle Plan)
• Describe the customer’s demographics
• How will the customer realize value from your
product or service?
• How does the company intend to reach the
customer and keep her/him?
• How will the company safeguard the customer
from the competition?
• How does the company intend to keep
customers and enter new markets?
• Describe your product in as much
detail as you can.
• If possible, have a prototype of your
product or service
• Show how the product/service would
be used by the consumer
• Explain the requirements for
producing your product
• In this part you show a budget for your
• Explain how much you intend to raise to get
• What are your projected expenses and
• In what period do you expect to be profitable
and show a return to your investors?
• 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 a any possible barriers to
• Internet can be a valuable resource.
Outline of a Business Plan
• Introductory Page
– Name and address of business
– Name(s) and address(es) of principal(s)
– Nature of business
– Statement of financing needed
– Statement of confidentially of report
• Executive Summary – Three to four pages
summarizing the complete business plan
– What is the business concept or model?
– How is this business concept or model unique?
– Who are the individuals starting this business?
– How will they make money and how much?
• Environmental and Industry Analysis
– Future outlook and trends
– Analysis of competitors
– Market segmentation
– Industry and market forecasts
• Description of Venture
– Size of business
– Office equipment and personnel
– Background of entrepreneurs
• Production Plan
– Manufacturing process (amount subcontracted)
– Physical plant
– Machinery and equipment
– Names of suppliers of raw materials
• Operational Plan
– Description of company’s operations
– Flow of orders for goods and/or services
– Technology utilization
• Marketing Plan
– Product forecasts
• Organizational Plan
– Form of ownership
– Identification of partners or principal shareholders
– Authority of principals
– Management-team background
– Roles and responsibilities of members of organization
• Assessment of Risk
– Evaluate weakness of business
– New technologies
– Contingency Plans
• Financial Plan
– Pro forma income statement
– Cash flow projections
– Pro forma balance sheet
– Break-even analysis
– Sources and applications of funds
• Appendix (contains backup material)
– Market research data
– Leases or contracts
– Price lists from suppliers.
Using and Implementing The
• 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
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
– Inventory control
– Production control
– Quality control
– Sales control
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
Why Some Business 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
• The entrepreneur has no sense of potential
threats or weaknesses to the business.
• No customer need was established for the
proposed product or service.