Business Plan

It is a roadmap of launching a business initiative based on a thorough analysis of

external environment & need and a thorough scheme for execution of the initiative. It
covers both operational (marketing & processing) & financial dimensions.
Definition

Business Plan : Audiences

• Entrepreneurs themselves: for achieving clarity about the direction & steps

• Key executives: as above

• Investors & Lenders: for raising funding for the project

Contents of the Business Plan

• Table of Contents
• Executive Summary
• General Company Description
• Products & Services
• Marketing Plan
• Operations Plan
• Management & Organization
• Personal Financial Statement
• Start-up Expenses and Capitalization
• Financial Plan

1. Table of contents
• Enables reader to focus on the information they are most interested in.
• It should be easy enough to help navigate the document
• Could be immediately before the executive summary
• List of all major sections & sub-sections
Executive Summary
• Most important section of business plan
• First to be read, could be last
• Brief description of company, the product or service, and the unique opportunity
your company
• Key management team members
• Outline of the investment sought & returns

 What an executive summary is not

• Not an abstract of the business plan
• Not an introduction to the business plan
• It is not a preface
• It is not a random collection of highlights

 What is an executive summary

• It is a business plan in miniature.
• It should be able to stand alone
• Logical, clear, interesting - and exciting.
• Reader should be able to go through it in four or five minutes
• Limit the length of your executive summary to no more than 2 to 3 pages and
stick to the facts.

Environmental and Industry Analysis

Description of Venture
• What Business are you in? What will you do?

• The mission and vision define the path

• They tell the reader what you and your business are all about - what your
company stands for, what you believe in, and what you intend to achieve.

• Vision: Defines your long-term dream. It should be slightly out of reach.

• Mission: Defines what you intend to become or accomplish. It should be
challenging but achievable

• Your Industry Description-Industry Analysis

• Your company strengths and core competencies
• Legal details such as incorporation, location
• Achievements and significant milestones

Products & Services

• Section that discusses product/service features & the needs or problems they
address in the market
• Products:
– Pictures
– Size, shape, colour
– Cost
– Design, capabilities, technological life-span
– Patent protection
– Components
• Services Overview

Operational Plan
• Location : Size of the area, number of locations, type of space: Office,
warehouse, manufacturing, advantages, layout of the facility
• Legal Environment: Licensing, Permits, Zoning, Special regulations for your
industry.
• Equipment: Description, cost. Capacity, purchase or lease, include vehicles,
computers, and office equipment.
• People: No. of employees, classification by function, shift working, salary levels

• Manufacturing & Service Process: Description of the processes including

procurement, quality, storage etc

• Other Issues to Consider: Insurance, inventory handling, quality

Marketing Plan
• Target market and Marketing Programme two important component
• Target Market
– Targeted customers
– Characteristics
– Research based on primary and secondary sources.
• Marketing Programme
– Defines how to reach the customers
– Steps necessary to reach potential customers
– Specific marketing media to reach the customer
– How often, why
– Costs of marketing material
Target Market
• Identification of current and prospective buyers
• How the products meet the need of the market place
– Size
Both in terms of value as well as number of customers
– Demographics
Consumer- Income, Occupation, Gender, etc.
Business- Industry, Product/ Service, Revenue, Private/Public

– Geographic
Location spread

Organizational Plan
• What is the form of the ownership of the organization.
• If partnership, who are the partners?
• Who are the members of the board of directors?
• Who are the principal share holders?
• Who has check signing authority or control?
• Who are the members of the management team?
• What are the roles and responsibilities of each member of the management team?

Management Team
• Investors expect a well-rounded team of professionals
• Founder/s & their credentials
• Specific Team Members
– Key 3 to 5 people
– Background & intended contribution of each
– Title of this position, duties and responsibilities of this position
– Previous industry and related experience
– Previous Successes, educational background

• Board of Directors
– People on the Board
– Their backgrounds, and contributions

• Consultants
Accountants, lawyers and experts such as technology advisors
Assessment of Risks
• Potential risks to the new venture.
• What might happen if the risks become reality?
• Strategy that will be employed to either prevent, minimize, or respond to the risks.
Competitiveness Analysis
• An objective overview and comparison between your company and your
competitors

• Identify competitors

• Analysis of their strengths & weaknesses

.
• How is the market penetration proposed to be achieved

• Present comprehensive information and point out how your unique strengths and
tight market niche will result in your success
Financial Projections
• Financial plan invites highest scrutiny

• All operational plans culminate into financial numbers

• Follow the accounting standards & norms

• Financial projections for 3 to 5 years

• Income Statements
– Year 1 - Monthly Projections
– Years 2 thru 5 - Quarterly or Yearly Projections
– Existing businesses for last 3 years

• Balance Sheets
– Year 1 - Quarterly Projections
– Years 2 thru 5 - Yearly Projections
– Existing business for last 3 years

• Cash Flows
– Year 1 - Monthly Projections
– Years 2 thru 5 - Quarterly or Yearly Projections

• Sources and Application of Funds

• Break-Even Analysis
Graphs could be included

Appendix