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UNIT-3
BUSINESS PLAN PREPARATION

BUSINESS PLAN:

 Is a written document prepared by the entrepreneur that describes all the

relvant external & internal elements involved in starting a new
 Integration of functional plans such as marketing, finance, manufacturing
& human resources.

SOURCES OF PRODUCT FOR BUSINESS:

 Knowledge of potential customer needs.

 Watching emerging trends for certain products.
 Scope for producing substitute products.
 Professional journals and magazines.
 Success stories of known entrepreneurs/friends.
 Visting trade fairs, exhibitions displaying new product and services.
 Government agencies.
 Ideas given by knowledge precious professionals.
 Resewed items for SSI, Government policy, concesion and incentives.
 Competitors new product.
 Global needs through internet.
 Opportunity scaning and identification a product/project.
 Project/product selection.

NEW IDEAS:

 Consumers
 Existing products & services.
 Distribution channels.
 Federal government.
 Research and development.

METHODS OF GENERATING IDEAS:

 Focus group.
 Brain storming.
 Problem investing analysis.

OPPURTRENTING RECOGNITION:
Those entrepreneurs who have the to recognize meaning full business
opportunity are in a strategic position to successfully complete the product planning
& development process & successfully

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PREFEASIBILITY STUDY:

Before committing time & energy to prepare a business plan, the

entrepreneur should do a guide feasibility study of the business comept to see whether
there are any possible barriers to success.
Before studying the feasibility, the entrepreneur should clearly define the goals and
objectives of business. Goals & objectives that are too generd by that are not feasible
make the business plan difficult

Information for feasibility study:

o Market information needs.
o Operations information needs.
o Financial information needs.

MARKET INFOMEATION NEEDS:

 First define the market.
 Gather information on industry & market.
Five stage process:
 First two stages focused on national market.
 Second two stages consider trends in local market.
 Final stage is the analysis of local competitive.

OPERATIONS INFORMATION NEEDS:

 Feasibility study of manufacturing operations depends on the nature of the
business.
 The entrepreneur may need information on the following,
 Location
 Manufacturing operations.
 Raw materials
 Equipment
 Labour skill.
 Space
 Overhead

FINANICAL INFORMATION NEEDS:

 Before the financial plans, the entrepreneur needs to prepare a budget(includes

expenditure and incomes)
 The budget include,
 Capital expenditures.
 Direct operating expenditures.
 Cash expenditures.
 The revenues of sale must be forecasted.
 Identify benchmarks in the industry.
 Trade associations and trade magazines may also publish valuable data.

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INTERNET- POWERFUL RESOURCE TOOL:

 Able to access in jouration for many business activities effectively,

expendiently and at very low cost.
 Important aspect in prepares of business
 Industry analysis.
 Competitor analysis.
 Measurement of market potentials.

 Entrepreneurs – valuable tool in

 Later and tag planning.
 Decision making.
 Entrepreneurs also investigators groups from
 Experts.
 Customers.
 Small investment in hardware & software – written continuous
improvement and modification.

PROJCT/PRODUCT SELCTION:

Meaning:
I. “an idea or plan that is intended to be carried”
II. “a project can be defined as a scientifically evolve work plan desrised to
achieve a specific objective within a specified period of time”.

Attributes:
 A course of action.
 Specific objectives.
 Definite time prespective.

Classification:
 Quantifiable & non-quantifiable projects.
 Sector projects.
 Techno- economic projects.

 QUANTIFIABLE & NON-QUANTIFIABLE PROJECTS:

 “Projects with quantitative assessment of benefits can be made are
quantifiable projects”.
 Concerned with power generation, industrial development mineral
development fall in this category.
 Projects with quantitative assessment cannot be made are “non-
quantifiable projects”.
 Involving health, education & defeuse.

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 SECTOR PROJECTS:
 Fall under the categories of
o Agriculture & allied sector.
o Irrijation & power sector.
o Industry & mining sector.
o Transport & communication sector.
o Social services sector.
o Miscellaneous sector.

 TECHNO- ECONOMIC PROJECTS:

 Factor intensity – oriented classification.

 Causation – oriented classification.
 Maguitude – oriented classification.

i. FACTOR INTENSITY – ORIENTED CLASSIFICATION:

o Capital oriented.
o Labour oriented.

ii. CAUSATION – ORIENTED CLASSIFICATION:

o Demand oriented.
o raw material oriented.

iii. MAGUITUDE – ORIENTED CLASSIFICATION:

o Large scale industry.
o Small scale industry.

SELECTION OF PROJECT/PRODUCT:

Two main steps,

 Project/product identification.
 Project/product selection.

PROJECT/PRODUCT IDENTIFICATION:

“A project having a good market”.

With out choosing the project market analysis in not possible.

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Idea generation:
Idea generated form,
I. Internal sources.
II. External sources.

This process is all becomes as opportunity scanning and identification.

PROJECT/PRODUCT SELECTION:
 After getting ideas they are analysed in the light of existing.
o Economic conditions.
o Government policy and
o Soon.

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