BUSINESS IDEA TO PLAN UNIT II SEARCHING NEW BUSINESS IDEAS Starting to Get New Business Ideas The location

on and development of viable business ideas is as much an art, or matter of systematic techniques. The right background, being in the right place at the right time, and working hard

Before Searching for Business Ideas The starting point for developing new business ideas lies inside the prospective entrepreneur rather than in the marketplace, laboratory, business plan etc. You should build on your strengths and surmount or work around your weaknesses, and possibly cut your cloth to meet your main limitations

What angle are you coming from? Are you An inventor who has a product/service idea? An innovator who has developed a new product/service? Out of work and want to create a job for yourself? An entrepreneur who wishes to create a business? A manager who wishes to develop a business? Looking for New Business Ideas A manufactured product where you buy materials or parts and make up the product(s) yourself. A distributed product where you buy product from a wholesaler/ retailer, or manufacturer. A service which you provide.

Assessing the Business Ideas Discuss products/services with prospective customers Assess the market using desk & field research Analyze your competition

Consider possible start-up strategies: Set ball-park targets and prepare first-cut financial projections

Prepare a simple action plan

Prepare a simple action plan Select a company or business name, logo etc. Decide how you will start trading - limited company, sole trader etc. Enquire into any licenses which might be needed, or regulations to be complied with.

Introducing PlanWare Papers on cashflow, financial, strategic and business planning topics. Advice on getting new business ideas, managing working capital, devising business strategies and much more. Pages devoted to famous business quotations and examples of bad business advice and mistakes.

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Business plan z Project ideas formulated are screened on the basis of technical, economic and financial soundness. After screening the ideas, they are translated into business plan. A business plan is a brief of a project report.

z z

It contains such detail as Economic size , Status of industry , Raw material availability , Cost of production , Capital cost , Utility requirement , Infrastructure facility , Profitability , Govt. policy Its gives an idea of project. z z The prospective entrepreneurs can go through business plan in order to identify project ideas. Its also useful for getting an idea about project formulation

Desk research and techno-economic survey z Its important techniques of project identification

Desk research z Its implies the collection and use of information readily available from published source like journals, magazines, reports etc.

Techno-economic survey z z Its method of identifying the potential for economic development of an area by a team of experts. This type of investigation or studies are conducted by central and state level promotional agencies like SIDO, State Industrial Development Corporation, State Government etc

Environmental scanning z z Its done by collecting information from various sources. Informal sources family, customers, friends, social contacts, employees, etc. z Formal sources banks, business councilors, journals, books, news papers SWOT Analysis Its examines Organizational Strength , Weakness and Environmental Opportunity , Threat Project formulation z Project formulation is the process of examining technical, economic, financial and commercial aspects of project.

Feasibility study report z z z z Its considerate the economic, financial and technical aspects, The entrepreneur has to prepare a report which is called feasibility report Its a preliminary project report Its converted into finally project report

COMPONENTS OF BUSINESS PLAN INTRODUCTION Business plan have a well defined form that shouldn't be changed by anyone. Business plans include several elements that shouldn't be modified, because otherwise they won't have the expected results. COMPONENTS OF BUSINESS PLAN Executive Summary This should be a short, self-explanatory piece which covers the key points of the plan. Statement of Purpose for the Plan It is concerned with the team and structure that will be used to put the plan into action Objective and Academic /Training Rationale This section will cover a description of the programmes in the plan. it will contain the kind of information that a validation document usually comprises. Market This section should describe the target market. should cover: location, age, gender, profession, income, lifestyle, etc Competition and feasibility study To identify competitors in the market and study feasibility of funding and programme that fits the needs of target market: Marketing mechanisms In this section deals with how plan to market the programme so that it will come to the attention of specific target audience. Selling and Pricing it deals with What fees will charge and how set the fee and Is it competitive in the marketplace. This fee fit all potential clients and it can differentiate between market segments Resources

This is an important part of quantifying the real costs of developing and delivering the programme. This section should show how institutional input will be used. Timescales

It show side as about how long the development part of the project might need. This section should also draw on the financial predictions to show at what point the programme will break even or begin to make a profit. Costing and Cash Flow This should make it clear what cash will be required and what costs will be 'in kind' by virtue of the institution putting in the resources noted under that heading earlier. FINANCIAL PLAN Financial plan is a series of steps which are carried out, or goals that are accomplished, which relate to an individual's or a business's financial affairs. Financial analysis is the essence of financial plan Financial analysis refers to an assessment of the viability, stability and profitability of a business sub-business or project. It is also called financial statement analysis or accounting analysis. The preliminary steps involved in the financial analysis 1. 2. 3. Estimation of total capital outlay Estimation of operating cost Estimation of operating revenue

1. Estimation of total capital outlay The project capital cost refers to the sum total of the expenditure which is expected to be incurred till the date of starting the commercial production of the project. Statement of capital cost estimates includes advance expenditure, cost of land, cost of building, plant and machinery cost etc 2. Estimation of operating cost Operating cost are those which have to be incurred once the project commence s production the main components of operating cost raw material cost, labour cost, power and fuel cost, supervision cost ,administraction cost etc 3. Estimation of operating revenue In promoting new ventures one of te most difficult task is the estimation of the potential sales. It is necessasary to asess the demand potential and the anticipated salels price of the goods. Time lag between production and sales must also be taken in to consideration