s s P lan

Bus ine
 Learning Objectives
End of this lesson you would know:

 What is Business plan.

 Purpose of Business Plan

 Features of Business plan

 Limitations of Business plan

 Business Plan

 Business plan – a written document detailing all

aspects of a business idea.

 A business plan is a written document which

contains detailed information on different
aspects of a business idea.
 Business Plan

 It is a formal report used by the entrepreneur for their

own planning and also to support applications for
finance for the business idea

 A business plan completed with care and diligence is

likely to take construct because of the need to carry out
market research and to prepare financial information
 Business Plan

 Business planning – the process of carrying out

market research and thinking through a business idea
in order to construct a business plan.
Purpose of Business Plan

To gain
finance

To reduce
The To give
the risk of
failure
purpose of focus and
direc on
planning
To
support
montoring
and
evalua on
Class Participation: Points possible : 3 to 6

1. Define business plan ? Explain the purpose of

business plan.
 Features of a Business Plan
 There is no one format which must be followed in
writing a business plan.

 Whatever approach is taken, there are certain

information that will typically be included
 Features of a Business Plan

 Product or service to be produced – detailed

drawings, descriptions and images are needed to
show what the business will produce and sell

 Marketing plan – shows how the business will be

marketed including the pricing strategy, how and
where it will be sold and advertising or promotional
activities to be undertaken.
 Features of a Business Plan
 Production plan – saying how the product will be
produced or the service delivered. This should be
detailed, identifying sources of added value and of
competitive advantage

 Premises and equipment needed – this is the list of

all the capital items as well as the consumables used
in producing and delivering the product or service
 Features of a Business Plan
 Human resource plan – an outline of staff needed
including numbers, working hours and training
necessary. Personal details of staff are not necessary,
although it is common to identify the specific skills
and experience the key staff will need, where these
will contribute to the success of the business
 Features of a Business Plan
 Sources of finance – how the costs of the business
will be financed, at start-up and once the business is
in operation.
 Features of a Business Plan
 Profit and loss forecast – providing a prediction of the
profits or loss generated by the business in the first few
years of operation. This should be based on detailed
research and should include the different measures of
profit. It is good practise to compare predicted profit
margins to typical margins for businesses in the chosen
industry
 Features of a Business Plan

 Cash flow forecast – this is a summary of how cash is

predicted to flow into and out of the business. It is
important because without adequate cash to cover
costs, the business may not survive, even though it
could be profitable in the long run
Class Participation:

1. Explain any 3 features of a business plan.

 Limitations of a Business Plan

A business plan is not a guarantee of success

 The process of writing the plan should help to identify
key issues which can be addressed and it also depends
on the entrepreneur’s skills in carrying out and
interpretation market research. Ttherefore making it
more accurate and useful
 Limitations of a Business Plan
 A business plan does nothing in its own – although it
gives focus and direction, it will only happen if
entrepreneurs makes time to return to the plan
regularly, reflecting on progress and making changes to
the business where necessary.

 Apart from that the business plan cannot make up for

mistakes like failing to keep close contact with the
suppliers or to communicate effectively with
employees.
 Limitations of a Business Plan

 A business plan needs to be updated regularly –

updating it regularly will reflect changes in the market

and the business, as the best business plans are flexible
and working documents and increases the chances of
business being successful.
Thank you !