Entrepreneurship – The Business Plan

• Venturing into a new business or doing any form of innovation in a business organization
demands or necessitates a plan.

• A business plan that is well – researched and well – done is by itself an insurance against
the illusive success that every entrepreneur is looking forward to.

• Preparing a business plan is not easy. It is a well-written, honest-to-goodness document

prepared by the entrepreneur that will convince the investor to invest, or it is a tool to
sell your business story to financial resources and should be recognized.

• It is the direction and guide of the entrepreneur as to what is to be done and how to do it. It
details out what is to be achieved over a certain period of time.
• Planning and organizing enterprise demands proper evaluation of the resources, skills,
interests and attitudes together with the needs of the community and degree of competition.

Organizing the enterprise, planning the enterprise

• CONCEPT OF A BUSINESS PLAN

A well – written business plan is one that contains all information necessary for the financing source to make a
decision even without taking the entrepreneur”

- Anonymous

Authors hisrich and peter’s definition of a business plan

• It is a written document prepared by the entrepreneur that describes all the relevant external and internal elements
involved in starting a new venture.

• It is an integration of functional plans such as marketing, finance, manufacturing, and human resources.

• It also addresses both short-term and long-term decision – making for the first three years of operation.

• The business plan also takes care of the concerns of the potential investors in the business project, the suppliers, the
funding requirements, all of required to commence the business and hopefully make it as a successful business
venture.
 David e. gumpert’s concept and definition of a business plan
• A business plan is a document that convincingly demonstrates the ability of a business to sell its products or services to
make satisfactory profit and be attractive to potential backers.

• A better definition: A business plan is a selling document that conveys the excitement and promise of your business to
any potential backers or stakeholders.

Other definition of a business plan from the books of entrepreneurship

• It is thinking ahead of objectives, strategies, financing, production, marketing, profit prospects, and growth
possibilities. However, business planning should be realistic. This means planning is based on the available
resources and is responsive to the needs of the community. It is also:
• PLANNING What to do
How to do it
When to do it
What to expect in the future
• Business Planning involves the attainment of goals and the ways to accomplish such goals.

Principles of planning
• Here are some principles of planning which have general application, particularly for micro and small business:
• 1. Planning must be realistic. It must be based on the available resources: human, financial, and physical
resources.
• 2. Planning must be based on felt needs. The objectives of an entrepreneur should fit the needs of the people in

a community. It can be known through observation, personal interviews, and questionnaires.

• 3. Planning must be flexible. Resources needs and economic conditions change. Planning should be adjusted to

such changes to be effective and relevant.

• 4. Planning must start with simple projects.

Stages of business planning (by professor philip kotler)

• 1. Unplanned stage. At the start of the business, the owner – manager is busy looking for funds, customers,

materials, and equipments. He/she has no time for planning. His/her entire attention is devoted to the daily
operations of his/her business in his/her intense desire to survive.
• 2. Budgeting system stage. Eventually, the owner – manager realizes the need to develop and use a budgeting
system. Estimated income is made to facilitate the orderly function of the growing enterprise.
Components of business planning
• 1. SWOT. The chances of a product or service can be evaluated through the SWOT analysis. Every product or
service has its own strength, weakness, opportunity, and threat. Planning should include the improvement of the
product/service in order to survive competition.
• 2. Objectives. These should be specific and realistic. Such objectives can be daily, weekly, monthly, and yearly.
• 3.Strategies. These are ways of accomplishing the objectives. Such ways are stated in the financial, production,
marketing, and organizational plans of the enterprise.
• 4.Time Frame. In business, time is gold. For this reason, an entrepreneur must be efficient in time management.

Characteristics of a sound business plan

• 1. Objectives
• 2. Clear
• 3. Logical and Simple
• 4. Flexible
• 5. Stable
• 6. Complete and integrated

Why do we need a business plan?

1. To project general picture of the business project;
2. To serve as a guide in implementing the business or project;
3. To serve as a major input to investment decisions or major expenditures;
4. To serve as reference or guide to policy formulation and development;
5. To serve a guide for operational matters;
6. To serve as reference for a bank loan or financing purposes;
7. To determine/estimate the detailed technical and financial requirements; and
8. To serve as an overall guide for the proponent or entrepreneur.

Obtaining the facts for a business plan

• Here are questionnaires to get necessary data:

1. What is unique about my product/service?
2. Who are my competitors?
3. How will my customers buy?
4. What is my share in the market?
5. What is the market potential?
6. Who are my customers and where are they located?
7. Where will I put my business?
8. How big should be my plant or place of business?
9. What equipment will I need and what size?
10. How will I treat customers?

11. What personnel do I need?

12. How will I organize my enterprise?
13. What kind of records do I need?
14. How much capital do I need?
15. How profitable will the business be?
16. How financially healthy will I be?
17. What is my break – even point?