What this is about?

Hello! Good day my dear students! We see each other again. I hope
that you find this module interesting. This module will guide you to learn
about the business plan.

In this module, you will find that developing a business is not just an
easy way. It will enhance your knowledge why we need a business plan.

What you expected to learn?

In this module you are expected to:

1. Define what is business plan

2. Discuss on how to develop a business plan

3. Enumerate the reasons why we need business plan

How to learn from this module?

I’d like you to read intently about business plans of different
companies. Know on how they develop a business plan and why we to have
a business paln.

I hope that you’ll enjoy learning with this module and you learn more
knowledge.

PRETEST
 I. Direction: Write TRUE if the statement is correct and FALSE if
wrong.

____________ 1. The business plan is the blueprint for your business.

____________ 2. Many small businesses succeed because of fundamental

shortcomings in their business planning.

____________ 3. The finished business plan provides the basis for your
financing proposal.

____________ 4. A marketing plan is a bind summary of those disciplinary

plans.

____________ 5. Consultants can be hired to assist you in the process of

formulating a business plan, but in reality you must do a majority of the
work.

____________ 6. One of the key benefits of planning is that it helps you

understand what you need to prioritise.

____________ 7. To assess the feasibility of your venture is one reason why

need a business plan.

____________ 8. Writing a good business plan can’t guarantee success, but it

can go a long way toward reducing the odds of failure.

____________ 9. An informal business plan is the basis for financing proposals.

____________ 10. Business plan is very important in every business.

II. Direction: Choose the correct answer on the box below and write
it on the space provided.
_______________ 1. Business plans are _________________tools.

________________ 2. The one who should write the business plan.

_______________ 3. This is the blueprint for your business.

________________ 4. They also want to see a business plan, in order to

determine whether it is worth partnering with your business.

_______________ 5. The ______________ of constructing a business plan can be a

strong reality check.

Consultant plan goal developing

Decision-making manager function

Partners business plan Owner process

BUSINESS PLAN

"A good business plan can help to make a good business

credible, understandable, and attractive to someone who is
unfamiliar with the business. Writing a good business plan can’t
guarantee success, but it can go a long way toward reducing the
odds of failure."

A business plan is any plan that

works for a business to look ahead,
allocate resources, focus on key
points, and prepare for problems
and opportunities. Unfortunately,
many people think of business
plans only for starting a new
business or applying for business
loans. But they are also vital for
running a business, whether or not
the business needs new loans or
new investments. Businesses need
plans to optimize growth and
development according to
priorities.

A business plan is a formal statement of a set of business goals, the reasons

why they are believed attainable, and the plan for reaching those goals. It
may also contain background information about the organization or team
attempting to reach those goals.

Business plans may also target changes in perception and branding by the
customer, client, tax-payer, or larger community. When managing a
business, a business plan, or B-Plan, is often confused with the term
Marketing Plan. When the existing business is to assume a major change or
when planning a new venture - a 3 to 5 year business plan is essential.
Business plans are decision-making tools. There is no fixed content for a
business plan. Rather the content and format of the business plan is
determined by the goals and audience. A business plan represents all
aspects of business planning process; declaring vision and strategy
alongside sub-plans to cover marketing, finance, operations, human
resources as well as a legal plan, when required. A business plan is a bind
summary of those disciplinary plans.

The business plan is the blueprint for your business. You wouldn't walk over
to an empty lot and just start nailing boards together if you wanted to build a
house. Starting a business without a business plan is just as foolish.

Yet unlike a house, a business isn't static. We often make the mistake of
thinking of a business plan as a single, static document that you just put
together when you're first starting out and then set aside.

In actuality, the business plan for any business will change over time as the
business develops, and any particular business may have multiple business
plans as its objectives change.

DEVELOPING

PLAN
The importance of planning should never be overlooked. For a business to be
successful and profitable, the owners and the managing directors must have
a clear understanding of the firm's customers, strengths and competition.
They must also have the foresight to plan for future expansion. Whether
yours is a new business or an existing business in the process of expanding,
money is often an issue. Taking time to create an extensive business plan
provides you with insight into your business. A business plan is very specific
to each particular business. However, while each business needs a unique
plan, the basic elements are the same in all business plans. To complete an
effective business plan you must dedicate time to complete the plan. It
requires you to be objective, critical and focused. The finished project is an
operating tool to help manage your business and enable you to achieve
greater success. The plan also serves as an effective communication tool for
financing proposals.

Why write a business plan?

Why should a business go through the trouble of constructing a business

plan? There are five major reasons:

1. The process of putting a business plan together forces the person

preparing the plan to look at the business in an objective and critical
manner.

2. It helps to focus ideas and serves as a feasibility study of the

business's chances for success and growth.
 3. The finished report serves as an operational tool to define the
company's present status and future possibilities.

4. It can help you manage the business and prepare you for success.

5. It is a strong communication tool for

your business. It defines your purpose,
your competition, your management
and personnel. The process of
constructing a business plan can be a
strong reality check.

6. The finished business plan provides the

basis for your financing proposal.

Who Should Write the

Business Plan?

You, the owner of the business, should

write the plan. It doesn't matter if you are
using the business plan to seek financial
resources or to evaluate future growth, define
a mission, or provide guidance for running
your business -- you are the one that knows
the most about the business.
 Consultants can be hired to assist you in the process of formulating a
business plan, but in reality you must do a majority of the work. Only you can
come up with the financial data, the purpose of your business, the key
employees, and management styles to mention a few items. You may still
choose to use a consultant, but realize that you will still need to do most of
the work, so why not tackle the plan yourself? If you need further help in one
area, then seek the assistance of the consultant.

Why we need a business plan?

Do you run a business but believe that a business plan is just for
starting up? Or are you one of those people who believe they just don’t have
the time to plan? Well, I have news for you. Business planning is not just for
start-ups; it is an essential element of running any successful business,
particularly given the growing uncertainty we face and the unyielding shifts
in consumer behaviour.

If you think time is the problem, think again and make time to plan. One of
the key benefits of planning is that it helps you understand what you need to
prioritise.

A business plan is not just a document. It is a holistic analysis of your

company, the environment it operates in, and a route map to achieving
success based on the resources available. Unfortunately, the image most of
us have is of a 30-page bound document. The focus is on the output when
the real value in a business plan is the business-planning process itself.
Reasons why we need a BUSINESS PLAN

1. To prove that you’re serious about your business. A

formal business plan is necessary to show all interested parties --
employees, investors, partners and yourself -- that you are committed
to building the business.

2. To establish business milestones. The business plan should

clearly lay out the long-term milestones that are most important to the
success of your business. To paraphrase Guy Kawasaki, a milestone is
something significant enough to come home and tell your spouse
about (without boring him or her to death). Would you tell your spouse
that you tweaked the company brochure? Probably not. But you'd
certainly share the news that you launched your new website or
reached $1M in annual revenues.

3. To better understand your competition. Creating the

business plan forces you to analyze the competition. All companies
have competition in the form of either direct or indirect competitors,
and it is critical to understand your company's competitive
 advantages.

4. To better understand your customer. Why do they buy

when they buy? Why don’t they when they don't? An in-depth
customer analysis is essential to an effective business plan and to a
successful business.

5. To enunciate previously unstated assumptions. The

process of actually writing the business plan helps to bring previously
"hidden" assumptions to the foreground. By writing them down and
assessing them, you can test them and analyze their validity.

6. To assess the feasibility of your venture. How good is this

opportunity? The business plan process involves researching your
target market, as well as the competitive landscape, and serves as a
feasibility study for the success of your venture.

7. To document your revenue model. How exactly will your

business make money? This is a critical question to answer in writing,
for yourself and your investors. Documenting the revenue model helps
to address challenges and assumptions associated with the model.

8. To determine your financial needs. Does your business

need to raise capital? How much? The business plan creation process
helps you to determine exactly how much capital you need and what
you will use it for. This process is essential for raising capital for
business and for effectively employing the capital.
9. To attract investors. A formal business plan is the basis for
financing proposals. The business plan answers investors' questions
such as: Is there a need for this product/service? What are the financial
projections? What is the company's exit strategy?

10. To reduce the risk of pursuing the wrong

opportunity. The process of creating the business plan helps to
minimize opportunity costs. Writing the business plan helps you assess
the attractiveness of this particular opportunity, versus other
opportunities.

11. To force you to research and really know your

market. What are the most important trends in your industry? What
are the greatest threats to your industry? Is the market growing or
shrinking? What is the size of the target market for your
product/service? Creating the business plan will help you to gain a
wider, deeper, and more nuanced understanding of your marketplace.

12. To attract employees and a management team.

To attract and retain top quality talent, a business plan is necessary.
The business plan inspires employees and management that the idea
is sound and that the business is poised to achieve its strategic goals.

13. To plot your course and focus your efforts. The

business plan provides a roadmap from which to operate, and to look
to for direction in times of doubt. Without a business plan, you may
 shift your short-term strategies constantly without a view to your long-
term milestones.

14. To attract partners. Partners also want to see a business

plan, in order to determine whether it is worth partnering with your
business. Establishing partnerships often requires time and capital, and
companies will be more likely to partner with your venture if they can
read a detailed explanation of your company.

15. To position your brand. Creating the business plan helps

to define your company's role in the marketplace. This definition allows
you to succinctly describe the business and position the brand to
customers, investors, and partners.

16. To judge the success of your business. A formal

business plan allows you to compare actual operational results versus
the business plan itself. In this way, it allows you to clearly see whether
you have achieved your strategic, financing, and operational goals
(and why you have or have not).

17. To reposition your business to deal with

changing conditions. For example, during difficult economic
conditions, if your current sales and operational models aren’t working,
you can rewrite your business plan to define, try, and validate new
ideas and strategies.

18. To document your marketing plan. How are you going

to reach your customers? How will you retain them? What is your
 advertising budget? What price will you charge? A well-documented
marketing plan is essential to the growth of a business.

19. To understand and forecast your company’s

staffing needs. After completing your business plan, you will not
be surprised when you are suddenly short-handed. Rather, your
business plan provides a roadmap for your staffing needs, and thus
helps to ensure smoother expansion.

20. To uncover new opportunities. Through the process of

brainstorming, white-boarding and creative interviewing, you will likely
see your business in a different light. As a result, you will often come
up with new ideas for marketing your product/service and running your
business.

Sample of a Business Plan

Sample Business Plan

Picture Perfect, Inc.
900 Remington Road
Philadelphia, PA

Phone: (215) 976-4000 Fax: (215) 976-4001

E-mail: [email protected] Website: www.ppi.com

Business Description:
Picture Perfect, Inc. (the “Company”) was founded by an experienced management team to
develop and market new types of consumer products in the picture frame, photography products
and photo album markets. The Company has applied for patents on several of its new innovative
products.

Industry and Market Description:

The picture frame, photography products and photo album markets have annual sales in excess
of $15 billion, expected to grow to $20 billion by 2001. The picture frame industry is dominated
by three large players (Burnes, Fetco and Carr) and smaller niche players (Malden, Advent).
Photo albums are made and distributed by many of the same companies. Large retail chains as
well as specialty boutique stores are the primary purchasers of picture frame and photo albums.

The photography products industry consists of numerous companies large and small (Kodak,
Fuji, Arrelle). The Company, however, will be focussing on photography products for general
consumer orientation (as opposed to professional photographers).

The Company plans to develop and market comprehensive innovative product lines to
intelligently compete in all three areas, with the goal of obtaining significant and profitable
market share.

Company History:
The Company was formed in August 1997 by four individuals with significant experience and
contacts in the various relevant industries. Since that time, the Company has (1) designed four
new picture frame products, (2) designed two new photo album products, (3) lined up several
distributors, (4) made product demonstrations to Macy’s, Nordstroms, Wal-Mart, JC Penney, and
other major retailers, and (5) implemented manufacturing contracts.

The Company’s Products:

The Company’s products are intended to be innovative and interesting. The Company has
designed a new series of frames, the DateFrame™ picture frames, which incorporate a feature
that displays the date when the picture was taken on a built-in mechanism in the frame. The
Company has a patent pending on this product line. The Company has also designed picture
frames and photo albums, samples of which are available on request. The Company plans to
develop a broad based product line to penetrate the market.

Marketing:
The Company intends to use a combination of employees and distributors for marketing its
products. The Company founders have extensive relationships with major prospective chain
stores and distributors, which should facilitate marketing. The Company has also been
developing distinctive packaging and logos to achieve brand recognition for its products.
Projections:
The Company projects that sales and profits will be as follows, all as further detailed in more
extensive projections and underlying assumptions available upon request:

1999 2000 2001

Revenues $450,000 $1,625,000 $3,000,00

0

Cost of Sales 225,000 700,000 1,100,000

Gross Profit 225,000 925,000 1,900,000

Operating Expenses 452,000 707,000 1,210,000

New Income (loss) Before (277,000) 218,000 690,000

Taxes

Management Team:
President: Tim Sanders: Previously Head of Product Development at
Burnes of Boston (the largest picture frame company in the
United States); formerly Marketing Manager at Eastman Kodak.
20 years of industry experience.

Vice President of Terry Davis: Previously Office Manager at PhotoExpress, Inc.;

Operations: 10 years of operations experience with Carr Frames, Inc. and
Fetco International. 15 years of industry experience.

Vice President of Joe Bledsoe: Previously Chief Product Designer of Arrelle

Development: (consumer photography products) and Product Manager at
Macy’s; 10 years of industry experience.

Chief Financial Confidential Candidate: CPA, Big 6 Accounting experience;

Officer: Controller and CFO for consumer products companies; 15 years
 of industry experience.

Vice President of Jill Buckley: MBA from Penn State; Marketing Manager at
Marketing: Digital Albums, Inc. and Burnes of Boston. 12 years of industry
experience.

Funding:
Amount Needed: $3-$5 million of funding is needed over the next two years for
development, marketing, manufacture, sales and personnel.

Funding History: Over $400,000 has been raised from the founders of the
company and angel investors.

SELF-CHECK

I. Identification: Write the correct answer on the space provided.

______________ 1. You can be hired to assist you in the process of

formulating a business plan, but in reality you must do a majority of the
work.

______________ 2. Any plan that works for a business to look ahead,

allocate resources, focus on key points, and prepare for problems and
opportunities.

_______________ 3. The one who should write the business plan.

________________ 4. This is a tool for business plan.

 ________________ 5. They also want to see a business plan, in order to
determine whether it is worth partnering with your business.

II. Give atleast 5 reasons why we need a business plan.

1. __________________________________________________

2. __________________________________________________

3. __________________________________________________

4. __________________________________________________

5. __________________________________________________

Activity

The activity will be called “PICK-PACK-BOOM”

Instructions:

1. The class will be divided into 6 groups, each group should have their 4
representative to play the activity.
We are the

representati
ve. . ! !
2. Each groups will have corresponding word, group 1 is BUSINESS, group
2 is PLAN, group 3 is FEASIBILITY, group 4 is GOAL, group 5 is DEVELOP
and group 6 is OWNER.

GROUP 1 = BUSINESS

GROUP 2 = PLAN

GROUP 3 = FEASIBILITY

GROUP 4 = GOAL
 GROUP 5 = DEVELOP

GROUP 6 = OWNER

3. The game will start by the teacher; he/she will say “PICK-PACK-BOOM”
then the word he wants to say. Then the group will be called will do the
same and give another word to continous play.

GOA
PICK! PAC BOOM! L!
K!

4. The group will last until the end of the game, will be the winning group.
 POST- TEST
I. Direction: Write TRUE if the statement is correct and FALSE if wrong.

____________ 1. The business plan is the blueprint for your business.

____________ 2. Many small businesses succeed because of fundamental

shortcomings in their business planning.

____________ 3. The finished business plan provides the basis for your
financing proposal.

____________ 4. A marketing plan is a bind summary of those disciplinary

plans.

____________ 5. Consultants can be hired to assist you in the process of

formulating a business plan, but in reality you must do a majority of the
work.

____________ 6. One of the key benefits of planning is that it helps you

understand what you need to prioritise.

____________ 7. To assess the feasibility of your venture is one reason why

need a business plan.

____________ 8. Writing a good business plan can’t guarantee success, but it

can go a long way toward reducing the odds of failure.

____________ 9. An informal business plan is the basis for financing proposals.

____________ 10. Business plan is very important in every business.

II. Direction: Choose the correct answer on the box below and write it on
the space provided.

_______________ 1. Business plans are _________________tools.

________________ 2. The one who should write the business plan.

_______________ 3. This is the blueprint for your business.

________________ 4. They also want to see a business plan, in order to

determine whether it is worth partnering with your business.

_______________ 5. The ______________ of constructing a business plan can be a

strong reality check.

Consultant plan goal developing

Decision-making manager function

Partners business plan Owner process

 KEY TO CORRECTION

For Pretest and Post Test

I.

1. True 6. True

2. False 7. True

3. True 8. True

4. False 9. False

5. True 10. True

II.

1. Decision-making

2. Owner

3. Business plan

4. Partners

5. Process
 For Self-check

I.

1. Consultants

2. Business plan

3. Owner

4. Decision-making

5. Partners

II.

1. To prove that you’re serious about your business.

2. To establish business milestones.

3. To better understand your competition.

4. To better understand your customer.

5. To better understand your customer.