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The Business Plan: Creating and Starting The Venture

The document provides an overview of creating and implementing an effective business plan. It discusses that a business plan should be prepared by the entrepreneur and read by potential investors, employees and advisors. The business plan helps determine a venture's viability and provides guidance. It also serves as a tool to obtain financing. The document outlines the typical sections of a business plan and stresses the importance of measuring progress, updating the plan based on changes, and committing to implementing the strategy.

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Krishnamohan
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81 views20 pages

The Business Plan: Creating and Starting The Venture

The document provides an overview of creating and implementing an effective business plan. It discusses that a business plan should be prepared by the entrepreneur and read by potential investors, employees and advisors. The business plan helps determine a venture's viability and provides guidance. It also serves as a tool to obtain financing. The document outlines the typical sections of a business plan and stresses the importance of measuring progress, updating the plan based on changes, and committing to implementing the strategy.

Uploaded by

Krishnamohan
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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The Business Plan :

Creating and Starting The


Venture
Planning as Part of The Business
Operation

Planning is a process than never ends for a


business.
As the venture grow up to mature business,
planning will continue …
What is a Business Plan?
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 venture.
It is a integration of functional plans such as
marketing, finance, manufacturing, sales and
human resources.
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, and engineers.
Who Reads The Plans?
The business plan may be read by employees,
investors, bankers, venture capitalists, suppliers,
customers, advisors, and consultants.
There are three perspectives should be
considered in preparing the plan :
◦ Perspective of the entrepreneur
◦ Marketing perspective
◦ Investor’s perspective
Why Have a Business Plan?
 The business plan is valuable to the entrepreneur,
potential investors, or even new personnel, who are
trying to familiarize themselves with the venture, it
goals, and objectives.
◦ It helps determine the viability of the venture in a designated
market
◦ It provides guidance to the entrepreneur in organizing his or her
planning activities
◦ It serves as an important tool in helping to obtain financing.
Presenting The Plan
Itis 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.
Information Needs

 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 success.
 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
Outline …
ExecutiveSummary – 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?
Outline …
 Environmental and Industry Analysis
◦ Future outlook and trends
◦ Analysis of competitors
◦ Market segmentation
◦ Industry and market forecasts
 Description of Venture
◦ Product(s)
◦ Service(s)
◦ Size of business
◦ Office equipment and personnel
◦ Background of entrepreneurs
Outline …
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
Outline …
 Marketing Plan
◦ Pricing
◦ Distribution
◦ Promotion
◦ Product forecasts
◦ Controls
 Organizational Plan
◦ Form of ownership
◦ Identification of partners or principal shareholders
◦ Authority of principals
◦ Management-team background
◦ Roles and responsibilities of members of organization
Outline …
 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
Outline …
Appendix (contains backup material)
◦ Letters
◦ Market research data
◦ Leases or contracts
◦ Price lists from suppliers.
Using and Implementing The
Business Plan
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
business launched.
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 previous month.
◦ Inventory control
◦ Production control
◦ Quality control
◦ Sales control
◦ Disbursements
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
of success.
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 planned business.
 The entrepreneur has no sense of potential threats or
weaknesses to the business.
 No customer need was established for the proposed product or
service.
The End

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