THE BUSINESS PLAN

SESSION OBJECTIVES

At the end of the session, students should be

able to:

 understand the importance of a business

plan, and
 prepare a business plan

MEDEC 2
RS
 What Is a Business Plan?

A business plan is a written document which

described the proposed business or project
to be undertaken in a comprehensive
manner.

It is also known as a working paper, business

proposal, project paper or prospectus.

MEDEC 3
RS
 Audiences of the Business Plan:

1. Entrepreneurs
2. Investors
3. Bankers
4. Financial Assistance Providers
5. Suppliers
6. Customers
7. Employees

MEDEC 4
RS
 Reasons For Preparing a
Business Plan:

1. Opportunity for entrepreneur to assess the business

venture objectively, critically and practically.
2. To study and evaluate the feasibility of the business.
3. To convince venture capitalists, investors and
bankers in order to raise capital and obtain support
for the venture.
4. As a guideline for day-to-day management of the
business.
5. To plan for effective and efficient distribution of
business resources

MEDEC 5
RS
 Business Plan Format

1. Cover Letter
2. Title Page
* Title of the business plan
* Name and address of the business
* Name of writers
* Date
3. Table of Contents
4. Executive Summary
5. Main Body of the Business Plan
6. Appendices

MEDEC 6
RS
 Main Body of the Business Plan

1. Introduction
2. Purpose
3. Background of the Business
4. Background of Partners/Shareholders
5. Location of Project
6. The Organization Plan
7. The Marketing Plan
8. The Production/Operation Plan
9. The Financial Plan
10. Justification
11. Appendices
MEDEC 7
RS
 Body of the Business Plan

1. Introduction

a. Name of the business

b. Type of business
c. Industry overview
d. Location of the business
e. Date of commencement
f. Factors influencing choice of business
g. Business potential

MEDEC 8
RS
2. Purpose
Each business plan is prepared for
a specific purpose. The
entrepreneur should clearly and
specifically state the purpose for
preparing the particular business
plan .

MEDEC 9
RS
2. Purpose: Examples

a. This business plan is prepared by Fair

One Sdn. Bhd. to obtain a term loan for
the amount of RM50,000 from the SME
Bank.
b. This business plan is prepared by
Syarikat Fair One Sdn. Bhd. as a
guideline in managing the business.
MEDEC 10
RS
3. Background of the Business
a. Name of the business
b. Business address
c. Correspondence address
d. Telephone number
e. Form of business
f. Main activity
g. Date of commencement of business
h. Date of business registration
i. Business registration number
j. Name of bank
k. Bank account number
l. Equity contribution
MEDEC 11
RS
4. Background of Partners/Shareholder
a. Name in full h. Marital status
b. Identity card number i. Academic qualification
c. Permanent address j. Courses attended
d. Correspondence k. Skills
address l. Experiences
e. Telephone number m. Current job/position
f. Date of birth n. Other/Previous
g. Age business experiences

MEDEC 12
RS
5. Location of project

a. Physical location of project and proximity

to roads, highways etc.
(Provide road map for exact location)
b. Building (type, structure, size and value)
c. Infrastructure (water, electricity,
telephone)

MEDEC 13
RS
 Main Content the Business Plan
6. The Organization Plan
a. General business description
b. Organizational chart
c. Table of job designation and number of
workers
d. Job description
e. Remuneration table
f. List of office furniture, fixtures and
fittings
g. The administrative budget
MEDEC 14
RS
7. The Marketing Plan
a. Introduction to the product/service
b. Target market
c. Market size
d. Competition
e. Market share
f. Sales forecast
g. Marketing strategies
h. The marketing budget
MEDEC 15
RS
 8. The Production/Operation Plan

a. Process Flow Chart

b. Unit Output/Hours of Operation
c. Material Requirement
d. List of Direct Workers
* designation
* remuneration
e. List of Machines and Equipment
f. Plant/Office Layout
g. Location
h. Operation Overhead
h. The Production Budget
MEDEC 16
RS
 9. The Financial Plan

a. Project Implementation Cost

b. Sources of Financing
c. Table of Depreciation
d. Loan Amortization Schedule
e. Hire Purchase Repayment Scheme
f. Cash Flow Proforma
g. Profit and Loss Proforma
h. Balance Sheet Proforma

MEDEC 17
RS
 PROJECT IMPLEMENTATION
COSTS:

ADMINISTRATION BUDGET Capital Expenditure

Working Capital
Other Expenditure
Contingency Allowance
MARKETINGBUDGET

OPERATION BUDGET
=
SOURCES OF FINANCING:

OTHER COSTS Equity Financing

Debt Financing

MEDEC 18
RS
 PROJECT IMPLEMENTATION
COSTS:

DEPRECIATION TABLE Capital Expenditure

Working Capital
Other Expenditure
PROFORMA Contingency Allowance
CASH FLOW

LOAN AMORTIZATION
=
SOURCES OF FINANCING:
HIRE PURCHASE REPAYMENT
SCHEDULE Equity Financing
Debt Financing

MEDEC 19
RS
MANUFACTURING ACCOUNT: PROFORMA
INCOME STATEMENT
To Calculate Cost of Goods
manufactured

PROFORMA
BALANCE SHEET

TRADING ACCOUNT:

To Calculate Cost of Goods FINANCIAL ANALYSIS :

Sold
Breakeven Analysis
Profitability Analysis

MEDEC 20
RS
 10. Justification

Justify why the project should be undertaken or

is worthy of finance

Focus on:
profit potential, sustainability, growth potential,
credential/strength of management team,
market assurance & other factors that add
credit to the proposed business

MEDEC 21
RS
 11. Appendices

Attach documents or data to support your claim

in the proposal.

Example:

Letter of undertaking
Previous successful projects
Experience of management team
Licenses & Agreements
MEDEC 22
RS