BUSINESS PLAN

A business plan is “a formal statement of a set of business goals, the reasons why they are believed to be attainable, and the plan for reaching
those goals. It may also contain background information about the organization or team attempting to reach those goals.”

FOCUS OF A BUSINESS PLAN

Externally focused plans target goals that are important to external stakeholders, particularly financial stakeholders. They are typically having
detailed information about the organization or team attempting to reach the goals.

Internally focused business plan targets intermediate goals required to reach the external goals. They may cover the development of a new
product, a new service, a new IT system, a restructuring of finance, or the refurbishing of a factory.

Categories of a Business Plan

1. Business Plan for Profit – Typically focuses on financial goals.

2. Marketing Plan – Targets changes in perception and branding as its primary goals.

3. Project Plan – Describes the goals of a particular project.

4. Business Plan for Non-profit and Government Agency – Tends to focus on service goals.

5. Operational Plans – Describes the goals of an internal organization, working group or department.

Contents of a Business Plan

1. Executive Summary – summarizes the major highlights and findings of each major aspect of the study.

2. Project Background and History – projects conceptualization, and details the events that led to the study. It also

presents the project proponents, the proposed name of the project, the type of business proposal/project, and the

project location.

3. Management and Personnel Feasibility – presents a summary of sales projections of the project study’s entire

duration and the project’s marketing system and forms design.

4. Production Feasibility – the manufacturing aspect of the product.

5. Financial Feasibility – identifies the financial soundness of the business plan with presentation of some

assumptions to the financial projections as well as the projected financial statements and financial analysis

including rations, break-even point, sensitivity analysis, project rate of return, and payback period to prove the

financial feasibility of the project.

6. Socio Economic Feasibility – presents the project’s feasibility as to how it will be beneficial to other people and

entities.

7. Project Implementation and Timetable – These include the details of all activities to be considered during the

project’s pre-investment and pre-operating phase and also the timetable of each of these activities.

Feasibility study is a major formation source in making a critical decision whether to go or not to go into the

Business.

Comparison between a Feasibility study and a Business Plan

a. A feasibility study is conducted before a decision to proceed.

b. A business plan is prepared after a decision to proceed.

c. A feasibility study provides an investigative function.

d. A business plan provides a planning function.

Sources of New Product/Service

1. Consumer – Monitor potential ideas and needs from customers and formally arrange for consumers to express

their opinions.

2. Existing Products and Services – Analysis of products and services uncovers ways to improve offerings that

may result in a new product or service.

3. Distribution Channels – Channel members can help suggest and market new products.

4. Government (Patent Office) – Files of the Patent Office can suggest new product possibilities. New product

ideas that come in response to government regulations.

5. Research and Development – Conduct research on your market and your customer needs. This results to the

development and identification of new and improved product and services.

Methods of Generating New Products/Services

1. Focus Group. A moderator leads a group of 8 to 14 participants through an open, in-depth discussion in a directive and nondirective manner. This
is an excellent method for generating and screening ideas and concepts. It allows people to be stimulated to greater creativity.

2. Brainstorming. Good ideas emerge when the brainstorming the effort focuses on a specific product or market Area.

3. Problem Inventory Analysis. Consumers are provided with a list of problems and are asked to identify products that have those problems. Results
must be carefully evaluated as they may not actually reflect a new business opportunity.

Market surveys and the calculation of market size and value are important to find out whether the demand for a product really exists. It is
therefore important from the outset, to estimate the proportion of the total market that a new business could reasonably expect to have. This is
referred to as the market share.

Competition- very important to the success or failure of a new business. The entrepreneur should recognize that there are different types of
competitors.

M3

The 7Ps in Business Opportunities

1. Product

To begin with, develop the habit of looking at the product as an outside marketing consultant brought in to help the company decide whether or
not it’s in the right business at this time.

2. Price

The second P in the formula is price. Develop the habit of continually examining and re-examining the prices of the products and services to sell for
making sure they’re still appropriate to the realities of the current market.

3. Promotion

The third habit in marketing and sales is to think in terms of promotion all the time. Promotion includes all the ways to tell customers about the
products or services and how to market and to sell.

4. Place

The fourth P in the marketing mix is the place where the product or service is actually sold.

5. Packaging

The fifth element in the marketing mix is the packaging. Develop the habit of standing back and looking at every visual element in the packaging of
the product or service through the eyes of a critical prospect.

6. Positioning

The next P is positioning. Positioning develops the habit of thinking continually about how the products are positioned in the hearts and minds of
your customers.
7. People

The final P of the marketing mix is people. Develop the habit of thinking in terms of the people inside and outside of the business who are
responsible for every element of the sales, marketing strategies, and activities.