BUSINESS PLAN

 Defining the Business plan

 Scope and value of the Business plan
 Writing the Business plan
 The Marketing plan
 Marketing research for a new venture
 Characteristics of a Marketing plan
 Steps in preparing a marketing plan
 Planning is the process that never ends for a
business.
 It is extremely important in the early stages
of any new venture when the entrepreneur
will need to prepare a preliminary business
plan.
 As the venture grows up to mature business,
planning will continue
 Plan may be short term or long term,
strategic or operational.
 Written summary of various elements involved in
starting a new enterprise of how business will
organize its resources to meet its goal and how it
will measure its progress.
 A business plan is a document that describes a
new business, its products or services, how it will
earn money, leadership and staffing, financing,
operations model, and other details that are
essential to both operation and success.
 It is the integration of functional plans such as
 Marketing
 Finance
 Manufacturing
 Sales
 Human Resource
 Definition
 Document that can convince the reader that the
business can produce enough revenue to make a
satisfactory profit and therefore attractive as an
investment opportunity.
 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 and Engineers.
 Self
 Investor/Venture Capitalist
 Debt
 Equity
 Key Employees
 Significant Others or stakeholders (Suppliers,
Bankers….)
 The business plan may be read by
 Employees
 Investor, venture capitalist
 Bankers, Suppliers
 Customers, advisors and consultants
 Entrepreneur
 Thereare three prospective that should be
considered in preparing the plan:
 Prospective of Entrepreneur
 Marketing prospective
 Investor’s prospective
 The business plan is valuable to the
entrepreneur, potential investors or even
new personnel, who are trying to familiarize
themselves with the venture. Its goal and
objectives are:
 It helps determine the viability of the venture in
the designated Market.
 It provides guidance to the entrepreneur in
organizing his or her planning activities.
 It servers as an important tool in helping to
obtain financing.
 Four C’s of Credit  Another
 Characters  Marketable
 Cash Flows  Payback Period
 Collateral  Risk
 Contribution of Equity  Feasibility etc.
 It is often necessary for an entrepreneur to
orally present the business plan before an
audience of potential investors.
 In this typical forum, entrepreneur is
expected to provide the short presentation
of the business plan.
 Beforecommitting time and energy to
preparing a business plan
 The entrepreneur should do a quick feasibility
study of the business concept
 Theinformation obtainable from many
sources should focus on
 Marketing ( Segmenting, Targeting and Positioning)
 Finance ( list of all possible expenditure, demand
forecast, revenue etc)
 Production (location, manufacturing operations, raw
materials, equipment, labor skills, space, overhead)
 Internet can be a valuable resources
 Introductory page
 Name and address of Business
 Nature of Business
 Statement of Financing Need
 Statement of Confidentiality of report.
 Executive Summary
 A page or two summarizing the complete
business plan
 What is the business concept or model?
 How is business concept or model is unique?
 Who are the individuals starting the business?
 How will they make money and how much?
 Environment and industry Analysis
 Future outlook and trends
 Analysis of competitors
 Industry and market forecasts
 Description of Venture
 Product(s)
 Service(s)
 Size of Business
 Office equipment and Personnel
 Background of Entrepreneurs
 Production Plan
 Manufacturing Process
 Physical Plant
 Machinery and Equipment
 List of Suppliers of raw materials.
 Operational Plan
 Description of Company’s operation.
 Flow of order for goods/ services.
 Technology utilization
 Marketing Plan  Organizational Plan
 Pricing  Form of ownership
 Distribution  Identification of
 Promotion Partners or
 Product forecast shareholders
 controls  Authority of principals
 Management- team
background
 Roles and responsibility
of member of the
organization
 Assessment of Risk
 Evaluate weakness of the business
 New Technologies
 Contingencies Plan
 Financial Plan
 Pro forma income statement
 Cash flow projection
 Pro forma balance sheet
 Break even analysis
 Source and application of funds
 IRR and NPV Projections.
 Budget
 Appendix (contents backup materials)
 Letters
 Market research data
 Leases or contracts
 Price list from suppliers
 The business plan is designed to guide the
entrepreneur through the first year of
operations.
 Implementation of strategy contains
 Control points to ascertain progress and
 To initiate contingency plan if necessary.
 Entrepreneur should check
 Profit and loss statement
 Cash flow projections
 Information on inventory, production, quality,
sales, collection of accounts receivable and
disbursement for the previous months.
 Inventory Control
 Production Control
 Quality Control
 Sales Control
 Disbursements
 The most effective business plan can be out
of date if condition changes.
 If the changes are likely to affect the
business plan, the entrepreneur should
determine what revisions are needed.
 In this matter, the entrepreneur can maintain
reasonable targets and goals and keep the
new venture on a course that will increase
the probability of success.
 Marketing deals with identifying & meeting
human and social needs.
 Marketing is “an organizational function and
a set of processes for creating,
communicating & delivering value for
customers & for managing relationships in
the ways that benefit the organization and
its stakeholders.
Marketing plan is the
written statement of
marketing objectives,
strategies and to be
followed in business plan
 Marketing research involves the gathering of
data in order to determine such information
as
 Who will buy the product or services?
 What is the size of potential market?
 What price should be charged?
 What is the most appropriate distribution
channel?
 What is the most effective promotion strategy to
inform and reach potential customers?
 Marketing research can be done with
following 4 steps:
1. Defining the Purpose or objectives
2. Gathering data from secondary source
3. Gathering information from primary source
4. Analyzing and interpreting the result
 Some important characteristics that must be
incorporated in an effective marketing plan are
as follows:
 It should provide a strategy for accomplishing the
company mission or goal.
 Should be based on facts and valid assumptions.
 Should provide for continuity so that each annual
marketing plan be build on it, successfully meeting
longer term goals and objectives.
 Should be simple and short.
 Success of plan may depend on its flexibility.
Changes, if necessary can be incorporated in the
plan.
 Should specify performance criteria that will be
monitored and controlled.
 The steps required to prepare marketing plan can be
explained as:
1. Defining the business Situation
2. Defining the Target Market/ Opportunities and Threats
3. Considering Strengths and Weaknesses
4. Establishing Goals and Objectives
5. Defining Marketing Strategy and Action Program
1. Product or services
2. Pricing
3. Distribution
4. Promotion
6. Budgeting the marketing strategies
7. Implementation of the Market Plan
8. Monitoring Progress of Marketing Actions
9. Contingency Planning