3. -- Executive summary points out the overall highlights of the business plan as
well as a bird’s-eye view of its sections. It must be written in simple language
that can be easily understood and at the same time attract the attention and
influence the decision of the reader.
-- Investor, creditors, and other significant parties usually proceed to the
details of the business plan once they find the executive summary interesting,
convincing , and worthy of further reading.
-- Although there is no standard format as to its sections and contents, the
executive summary must include the following sections:
1. Vision, mission, goals, and objectives of the business
2. Business model
3. Business and product position
4. Wealth improvement approaches
5. Parties supporting the business
II. EXECUTIVE SUMMARY
4. Vision, Mission, Goals, and Objectives
-- The business plan must depict the fundamental characteristics, nature,
philosophical values, identity, and image of the business. These
important concerns are embodied in the vision, mission, goals, and
objectives (VMGO) of the business.
-- The VMGO must be clearly stated and easily understood. They must be
reviewed and revisited at least every three years to determine whether
they are still reasonable and achievable in view of the rapid changes in
the business community.
5. VISION
An organization’s vision is what it wants to be known for at some point in the
future (5-10+ years). Visions do not need to be long documents. They just need
to be a simple statement that describes the future.
MISSION
The mission describes the day-to-day work that, if the organization keeps
doing it and doing it well, will eventually make the vision become a reality. A
mission is always supported by one or more goals
GOALS
Goals are the key efforts that must happen for the organization to accomplish
the mission. They provide a detailed description of the services, products and
activities the organization undertakes.
OBJECTIVES
Objectives are the smaller steps, activities and milestones that must be
completed in order to achieve a goal. This is where the day-to-day tasks,
services, and projects fall in the overall scheme of things.
6. Business Model
-- Business model defines the perspective of the business in terms of its
structure, production, operation, and financial activities that will lead to
the achievement of the VMGO.
-- There is no standard model that will exactly fit all types of business
because they have different strengths and weaknesses, infrastructure,
networks, and value propositions.
-- The business model must basically reflect certain innovations that will
indicate the competitiveness of the business in the industry. It must
define how the business gives importance to its relations with
customers, creditors, suppliers, and internal human resources.
7.
8. Business and Product Position
-- Business and product position will help determine how the business
defines its course and the process of accumulating wealth.
-- It tells the size of the market and the target market share of the
business and product.
-- The business and product position must be able to convince the
readers that the proposed business has a competitive advantage in the
market.
9. Wealth Improvement Approaches
-- This section describes the methodologies or approaches that will be
taken by the business in order to
1. maintain a competitive advantage,
2. position the business in the market,
3. improve the market share, and
4. maximize the utilization of resources.
-- This section also includes a brief discussion of the marketing policies
and financial operations of the business, and the profitability level of the
industry and of the business.
10. Parties Supporting the Business
-- The last section is a description of the parties that strongly support the
business. The parties that have a direct relationship with the business
are as follows:
1. Consumers
2. Creditors
3. Suppliers
4. Employees and staff
-- Relevant information about individuals and parties that support the
business is important since the proposed business may conduct
transactions with them later.
The executive summary must cover at least three pages but must not
go beyond five pages. An executive summary that is either too short or too long
may discourage the reader to continue reading.
11.
12. -- Environmental analysis is a strategic tool that helps determine the external
and internal factor affecting the performance of the business.
-- The environmental analysis may consist of at least 20 pages including
the graphical representations, tables, and computations. The environmental
analysis section is considered the heart of the business plan.
-- In today’s competitive business environment, an environmental analysis
is already a necessity. It is perceived as the basic element for business
survival. It may consist of:
1. Global analysis,
2. Societal analysis, and
3. Industry analysis
III. ENVIRONMENTAL ANALYSIS
13. Global Analysis
-- The environmental analysis section may begin with description of the
global business situation to provide enough knowledge about the
global perspective or horizon of the business.
-- Remember that it is not the business trend that has the most
significant bearing on the global analysis but rather the possible
business opportunities or ideas the global business trend offers.
-- The global trend simply acts as an indicator of any favorable sign for
a business idea. However, there is a direct relationship between these
two concepts. Once the world market is properly described, the
business opportunities that the global trend provides must also be
described.
-- The reader, therefore, must be convinced that it is worth to exploit the
business idea or opportunity based on the global trend.
14. Societal Analysis
-- After describing and possibly convincing the reader of the bright
business prospect in the world market, the next step is to present the
societal analysis and determine the different variables affecting the
societal environment. These variables include
1. Political forces,
2. Economic forces,
3. Sociocultural forces,
4. Technological forces,
5. Ecological forces, and
6. Legal forces.
-- The societal analysis must tell how the environmental forces affect the
proposed business and how great their effects are.
15. Industry Analysis
-- The third level of environmental analysis is the industry analysis. The
industry analysis basically involves three important related tasks as
follows:
1.Conducting a critical evaluation of the forces in the industry that affect
the proposed business
2. Evaluating the probable position of the business in the industry
3. Determining the most appropriate strategy that may be adopted by
the proposed business
16. Conducting a Critical Evaluation
-- Conducting a critical evaluation is the most delicate, tedious, and difficult
task in industry analysis. Only those forces that are deemed to have
substantial effects, either positive or negative, to the proposed business
must be critically analyzed and properly described.
-- The industry analysis in all instances must not fail to evaluate and
describe the target consumers and the competitors. The gap between the
consumer demand and the competitor supply represents the unsatisfied
demand.
-- Research work on the target consumers applies the concepts of market
segmentation, market targeting, and market positioning to determine the
total demand of the industry. Research work on the competitors identifies
the total expected supply.
17. Conducting a Critical Evaluation
-- The unsatisfied demand may be considered the market share of the
proposed business under the following conditions:
1. The proposed business has the capability to produce the product.
2. There are no expected ne entrants to the industry other than the
proposed business.
-- The demand and supply analysis, also called the consumer and
competitor analysis, is the backbone or the foundation of all other analyses.
Where there are no consumers or buyers of the product, the business will
never be created. The presence of the consumers is the ultimate reason for
the existence of any business endeavor.
18. Market segmentation is an entrepreneurial marketing strategy designed
primarily to divide the market into small segments with distinct needs,
characteristics, or behavior.
Market targeting aims to determine the set of buyers with common need and
characteristics. They are the market segment that the entrepreneurial venture
intends to serve.
Market Positioning refers to the process of arranging a product to occupy a
clear, distinct, and desirable place in relation to other competing products in
the mindset of target consumers.
19. Evaluating the Business Position
--The next step is to evaluate the possible business position in the industry.
This deals with market share and growth.
-- Market share is the share of each player in the market at any point of
time. Market growth rate is the overall growth of the market over time.
-- Entrepreneurs may use a perceptual map, also called positioning map, to
them understand their position against their competitors in the market. It
how the consumers respond to their products and services.
20. Evaluating the Business Position
The sample perceptual map shows a comparison among competing
products in the market, their attributes, and the age gender of their target
consumers.
21. Determining the Most Appropriate Business Strategy
--The last important task in the industry analysis is to describe the most
appropriate strategy that may be adopted by the business.
-- The strategy is highly influenced by the analysis of the business strengths,
weaknesses, opportunities, and threats.
-- The reason for the selection of the strategy must likewise be cleary
indicated.
22.
23. -- The business description section presents the nature and form of the
business to be undertaken, and may cover two to three pages. The
description must include the innovative features of the business and the
reason/s for the selection of the form must also be indicated.
-- Incase the study is about an already existing business, the present status
of the business must be provided, including the intended innovation.
-- In addition, the business description also includes the following
information:
1. Product or service that it plans to produces or serve
2. Various plant and office equipment
3. Size of the proposed business
4. Future parties with whom contracts may be necessary
5. Personnel requirement
6. Administrative operation
IV. BUSINESS DESCRIPTION
