Unit-4-Business Plan-Done

Unit-4-Business Plan

Meaning of BP

A business plan is a document which precisely defines the business which an entrepreneur intends to take up.

Business plan serves as the road map to reach the destination

Importance of business plan

• Action Plan

• Road Map

• Sales tool

• Business plan acts as a blueprint

• Helps identify potential weakness

• Raising capital

• To communicate your ideas with stakeholders

Action plan

A business plan can help to move an entrepreneur to action.

 So writing a business plan can help an entrepreneur to move from concept to action.

Road Map

After starting the business, a business plan can be invaluable tool for an entrepreneur to be on track and to move in the desired direction.

A business plan can also serve to help others to understand the vision of the entrepreneur, including supplier, customers, employees, friends and family

Sales Tool

An entrepreneur will probably need outside financing to start his business, and a business plan is the tool he needs to convince investors

Business plan acts as a blueprint

The business plan will provide a detailed outline of the business which can attract investors etc..

Helps identify potential weakness

Business plans can also locate inherent and unrealized loopholes. Further, through a business plan, one can also receive potential opinions and feedbacks.

Raising capital

Having a business plan will make it easier to raise funds as it will become very easy to communicate with the investor

To communicate your ideas with stakeholders

It can also be used to convince people to work for your enterprise, to secure credit from suppliers, and to attract potential customers.

Creating a business plan involves a lot of thought.

your plan should identify where you are now, where you want your business to go, and how you will get there.

Multiple Choice

The business plan will provide a detailed outline of the business which can attract capital

• Action plan

• Road Map

• Sales tool

• Business plan acts as a blueprint

Multiple Choice

A business plan, one can also receive potential opinions and feedbacks

• Business plan acts as a blueprint

• Sales Tool

• Helps identify potential weakness

• Road Map

Multiple Choice

It is an invaluable tool for an entrepreneur to be on track and to move in the desired direction.

• Road Map

• Sales tool

• Action Plan

• Raising capita

Multiple Choice

It can also be used to convince people to work for your enterprise, to secure credit from suppliers

• Business plan acts as a blueprint

• To communicate your ideas with stakeholders

• Action Plan

• Road Map

Multiple Choice

So writing a business plan can help an entrepreneur to move from concept to action.

• Road Map

• Action Plan

• Sales Tool

• Business plan acts as a blueprint

Multiple Choice

An entrepreneur will probably need outside financing to start his business, and a business plan is the tool he needs to convince investors

• Road Map

• Sales Tool

• Action Plan

• Helps identify potential weakness

Preparation of business plan

• Your business plan should be a carefully thought-out document

• Your business plan can help you deal with problems

• Your business plan lets you set out your vision 

• With your main goals , it's much easier to set targets and budgets

• The business plan should be an interesting -3 to 5 pages

Typical Business Plan format

• Executive Summary

• Description of the business

• Product/Service

• Management

• Financial requirements

• Organization Description

• The product, Service or Product Line

• Description of the industry

• Description of Major Customers

• Description of your overall marketing strategy

• Production Plan

• Ownership Pattern

• Key personnel

• Accounting and Record keeping

• Financial Backup Information

• Appendices

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Executive Summary

The executive summary appears at the beginning of the business plan and gives the reader a quick, but informative overview of who you are as a person, what your business is all about

Executive summary should not be longer than two pages. One page is preferable.

Description of the business

Name of business,Location,Facility Description

Three or four top goals

Atleast one strategy to go with each goal

Product/Service

Briefly describe what you will offer and why it is unique

Target market

Customer demand situation

Competitive situation

Sales and marketing

Management

Who are the people in charge?

Financial requirements

For what purpose is external financing required

Financial history of the business

Organization Description

Division of responsibility,authority of each person.

Organization chart

Historical development

General description of the business

The product, Service or Product Line

Relevant importance of various products

Comparison of competitor’s products

Current demand situation and the factors that affect demand

Product life cycle analysis

Plan for new products or services in future

Description of the industry

• Industry outlook overall

• Major factors that affect this industry

• Market share analysis

• Where and to whom products will be sold

• Customer requirements and how you plan to meet those requirements

• Buying habits of customers and how will you meet them

• Description of the competition

What do you do better?

How do you win customers?

What are your major competitive plans?

Chart showing competitor strength and weaknesses

Description of Major Customers

Duration and terms of major contracts

Description of your overall marketing strategy

Pricing policy

Method of selling, distributing and servicing your products

Advertising, Promotion, Public Relations

Any technology advantages your product has over competitors

Patent ,Trademarks,Copyrights,Trade Secrets

Production Plan

Explain how will you produce,process and deliver your product or services

Physical facilities-own or lease? Is expansion possible?

Key suppliers

Manufacturing process

Ownership Pattern

Forms of ownership chosen

Authority, Responsibility & decision making power

Key personnel

Responsibilities

Brief job description

Planned staff additions

Accounting and Record keeping

Preparation of income & balance sheet

Cash & Fund flow statement

Record Keeping system and who is responsible

Financial Backup Information

Historical-balance sheet, income statements of cash flow, including balance sheet and cash flow history.

Future projections-sales plan, break even analysis

Capital investment plan

Source and uses of funds

Appendices

Background financial information

Resumes of principal

Sales brochures,

Newspaper article about your business

Current customers list if any

Market research data

Photographs of your facilities

Customer feedback

Common Pitfalls to be avoided in preparation of a business plan

1.Capacity utilization

2.Understanding of market

3.Over estimation of demand

4.Selection of appropriate machineries

5.Lack of understanding of appropriate technology

6.Project planning and implementation strategies

7.Wrongful selection of business location

8.Unrealistic pricing strategy

9.Unrealistic cash flow estimates

10.Lack of understanding of trading channels