Business Planning

Process

Meaning

A business plan is a formal statement of a set of

business goals.

It may also contain background information about the

organization or team attempting to reach those goals.

A written document that details a proposed or

existing venture.

It explains the vision, current status, expected needs,

defined markets, and projected results of the
business.

Guide for managing the start-up and or operations of

a co operative, including:

1. Estimate of amount and sources of start-up and

operating capital;

2. Projection of revenue and expenditures for defined

period of time; and

3. Identification of all requirements for the future

operations

Functions of business plan

1. A business plan offers a path to follow in making

crucial startup decisions.
It is a management and financial "blueprint."
It is an important guide for starting, building and
managing a successful business.

2. The plan clarifies your ideas and establishes a plan of

action.
It explains how the business will function in the
marketplace.
It describes what you are selling, your background
and qualifications, who your prospective customers
are, where they can be found, what is needed to build
the business, how you plan to promote and determine
the viability of the venture in a designated market.

Business plan helps in attracting lenders.

Employees and managers get proper direction .

Measuring actual performance against targets.

The plan should prove that the venture will be able to

repay loan amount.

3. It is an operational tool.
The business plan is a tool that clearly depicts
characteristics which, when properly used, will help
you manage your business and work toward its
success.
It is a means for communicating your ideas to
others by measuring operational progress.

4. Business plan is a financial tool.

By determining how much money will be needed for
start-up costs, it details how the business will be
financed.
And, as a prospectus for potential investors, it is an
important tool to help obtain financing by
anticipating ongoing capital and cash requirements
to reassure lenders or backers.

5. It is a benchmark for good operational

management.
The finished plan will be an operational tool that
provides guidance to the entrepreneur in organizing
planning activities to help move the business
forward.
6. Finally, a business plan provides for future growth.
An explanation of how you plan to keep your
business growing -- a detailed guide of what you
are going to do, and how you are going to increase
your profits.
These plans should outline your specific goals for
the coming one, two and three years.

Elements of Business Plan

Executive Summary: The purpose and nature of the

business, location, founders.

Company Description: Legal establishment, history,

start-up plans, etc.

Product or Service: Describe the products to be sold.

Focus on customer benefits.

Market Analysis: To know your market, customer needs,

where they are, how to reach them, etc.

Strategy and Implementation: Includes management

responsibilities with dates and budgets.

Management Team: Describe the organization and the

key management team members.

Financial Analysis: An income statement is required to

show revenue, cost of goods sold, net income. A projected
balance sheet .

Format of Business Plan

1.0 Executive Summary
1.1 Fundamentals of the proposed business
1.2 Objectives
1.3 Keys to Success
1.4 Sources of Funding

2.0 Company Summary

2.1 Company History (for ongoing companies) or Start-up Plan (for new companies)

2.2 Mission Statement

2.2.1Company Goals & Objectives
2.2.2 Business philosophy
2.3 Company Locations and Facilities
2.4 Industry Description
2.5 Strengths & core competencies
2.6 Legal form of Ownership

3.0 Products and Services

3.1 Product and Service Description

3.2 Features & Benefits
3.3 Customers
3.4 Competitive Comparison
3.5 Niche Area
3.6 Sales Literature
3.7 Sourcing and Fulfillment
3.8 Technology
3.9 Future Products and Services

4.0 Market Analysis Summary

4.1 Market Segmentation

4.2 Target Market Segment Strategy
4.2.1 Market Needs
4.2.2 Market Trends
4.2.3 Market Growth
4.3 Industry Analysis
4.3.1Industry Participants
4.3.2 Competition and Buying Patterns
4.3.3 Main Competitors
4.4 Distribution Channels

5.0 Operational Plan

5.1 Production
5.2 Location
5.3 Access
5.4 Legal Environment
5.5 Personnel
5.6 Inventory
5.7 Suppliers
5.8 Credit Policies

6.0 Strategy and Implementation Summary

6.1 Strategy Pyramids

6.2 Value Proposition
6.3 Competitive Edge
6.4 Marketing Strategy
6.4.1 Positioning Statements
6.4.2 Pricing Strategy
6.4.3 Promotion Strategy
6.4.4 Distribution Patterns
6.4.5 Marketing Programs

6.5 Sales Strategy

6.5.1 Sales Forecast
6.5.2 Sales Programs
6.6 Strategic Alliances
6.7 Milestones

7.0 Web Plan Summary

7.1 Website Marketing Strategy

7.2 Development Requirements

8.0 Management Summary

8.1 Organizational Structure

8.2 Management Team
8.3 Management Team Gaps
8.4 Personnel Financial Plan

9.0 Start-up Expenses And Capitalization

10.0 Financial Plan

10.1 Important Assumptions

10.2 Key Financial Indicators
10.3 Break-even Analysis
10.4 Projected Profit and Loss
10.5 Projected Cash Flow
10.6 Projected Balance Sheet
10.7 Business Ratios
10.8 Long-term Plan

Tools of Business Plan

Mission

Vision

Objectives

Goals

Strategy

Policies

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