BUSINESS PLAN DEVELOPMENT

In this lecture, we shall discuss the structure of business plain which entails business description,
product/ service description, definition of the product or service, marketing plan, organizational
and management plan, financial statement (personal), executive summary and appendices.
General Objectives
By the end of the course the learner should be able to develop a business plan.
Specifically, the learner should:

i. Explain the motives for capital expenditure and the steps followed in the capital
budgeting process.

ii. Define business plan

iii. Explain the importance of business plan;

iv. Explain the components of a business plan

Planning for the Business Venture

Planning is a predetermine cause of action. It is a statement outlining an organizational mission

and future direction, short and long term performance, targets and strategies

Planning as a formal document contain a mission statement description of the firm’s goods and
services, a market analysis, financial projections and description of management strategies
together with policies for attain the goals.

Planning is a process of determining the goals and objectives of the enterprises for a future
period of time developing the strategies guiding the firms operational and utilizing the available
resources towards achieving the set goals and objectives.
Planning involves;
o Predicting into the future by defining the enterprise mission statement
o Determining the organizational goals and objectives
o Formulating strategies towards achieving and objectives.
o Assigning of responsibilities and functions

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o Allocating resources
o Monitoring and evaluation
o Taking corrective action or re-designing the original.

Need for Planning

 Planning is the cornerstone and backbone of management.

 It covers all the functional levels and activities of the entrepreneurs/ enterprise.

 It involves predicting and projecting the future and making adequate arrangements on
how to reach there.

 Planning helps entrepreneurs in the following ways:

o to develop the most effective way of achieving maximum growth.

o to properly informed about the competitors and the able to predict their next cause of
action
o to meet up with the consumers’ needs and income
o to meet up with the frequent changes in the market
o to be acquitted with the market forces of fluctuations.
o to have adequate knowledge of the financial requirements of the business.

The planning function

The planning function covers all activities of the business i.e finance, sales, marketing, personnel
management, research and development.
Planning functions involve formulation of the enterprise goals, objectives, strategies, policies
standards, budgets, procedures and programmes to be embarked upon towards fulfilling the
business mission statement.
The components of planning function
a) Objective - is the measurable, verifiable, specific and attainable
- The objective gives focus and direction to a business mission statement.

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b) Strategies - are a scheme & methods which an entrepreneur hopes to deploy in order to move
the enterprises from its present position to arrive at its targeted goals
c) Policies
- are overall guides to action which must be followed consistently for the achievement of
organization goals
-they act as rules & regulations which an entrepreneur imposes on the enterprise in order to
achieve the major objectives.
d) Standards
- are a planning function that permit an entrepreneur to use values as forms (acceptable
standards) when certain things have been adopted as norms in the entrepreneur, they act as
control measures for evaluation of performance.
e) Budgets – are quantitative expressions of future cause of action. They usually show cash flow
of an organization and act as a guide especially for the entrepreneurial spending i.e
o sales budgets
o purchases
o experiences
o cash

f) Procedures
- help and entrepreneur to chart the sequence or related tasks to be performed for the
accomplishment of the enterprises objectives
- it enables the entrepreneurship determine how a particular task will be performed and when it
should be done.
g) Methods reveal the manner of performing specific tasks. It mainly prescribes how one step of
a procedure should be carried out.
h) Programme - are a set of activities undertaken to accomplish objectives e.g. a Production
programme may specify a production objective, Production standard or even production policies.