Strategic Business Unit

BUDGET GUIDLINES
EXECUTIVE SUMMARY
1.Business Description
2.Products
3.The Market
4.Competition
5.The operations
6.Management Team
7.Risks/ Opportunities
8.Financial Summary
9.Capital Requirement
1.Business Description:
Industry overview-
Should begin with the current position of the Industry and
future of the industry including positive and negative effect of
new product and development will have on your particular
business.
Company Description:
State whether the business is a new business, expanding
business ,diversification or a takeover of an existing business .
Next ,explain the actual business you are in , this will include
describing the manufacturing of the product at own factory with
location orjobwork , extension and /or sales office of the
manufacturing unit and /or Subsidiary of the parent company.
3Mission Statement:
Your mission statement is a short inspirational statement
of the vision and goals you have for your company /group.
Your mission statement should address , but is not
limited to the following elements:
 Nature and philosophy of the company
 Quality , price ,service customer relationships,
management style ,employee relationship.
 Corporate culture ,image
 Social and community image
 Growth and profitability goals
4.History and Current Status: Summarize the current status of your company .
Discuss significant past issues/ problems and how you survived them
5.Goals and Objective: Express your Company `objective by answering the following
questions:
 What are your plans for the future of the business?
 What are your ambitions for the Company?
 Are you developing growth strategy? If so , how fast do you think you will
grow?
 Explain your short term and long term plans
 What are your time frame for reaching different goals?
6.Critical Success Factors :Question to address are :
• What factors will make this business a success?
• What are your major strengths?

• Last Year Achievement vs budgets and variance analysis.

2.Product: Answer Following questions:
What exactly is your product?
What market place
Who will purchase
What proprietary rights
Pricing strategy
Profit margin for each product line
3The Market:
To properly write this section of the business plan , conducting and gathering market research is very
important .Primary / Secondary research—Internet , Govt. Dept etc . And address the following questions:
•Industry Analysis: Current trends and important development, largest and important industry players,
national and international events influencing this industry , growth forecast, estimated industry sales ,
5years / 10 years outlook. Size, growth rate , trends and drivers of the industry.
•Sensitivity to economic cycles and seasonality
•Political and economic factors
•Marketing Strategies and Sales: Marketing and sales section of your plan will make or break the prospect .
A great idea is meaningless if you don’t get customer .Begin with the fundamentals of your marketing
plan. State target market segments you wish to penetrate , how you plan to achieve this and the period
for capturing a specific percentage of the market share . Answer the following:
 Market Segmentation Strategy
 Targeting Strategy
 Positioning Strategy
 Corporate Message
 Product Strategy
 Pricing Strategy
 Distribution Channel
 Promotion and Advertising Startegy
 Promotional Budget
 Sales Startegy
 Sales Forecast
o Best Case
o Expected Case
o Worst Case
4Competition:
Its important to know your competitors ,what they have accomplished and the
challenge you have before you. Your competitor have preceded you in the market ,
in terms of position, distribution, market exposure and a customer base .The success
of your business depends on your ability to take market share away from the
indentified competitors or to address a segment of the market that is not being
currently captured. If you are anticipating taking market share , you need to explain
how you are going to do it. Answer following issues:
•Identify Competitors , their strength , strategy and factors that give power (
Marketing Strategy , superior product, established company , strong financial
backing , expertise , relationship and R & D)
•Analyze own weakness, be honest in analyzing own weakness and can be a real eye
opener.
•Do Some Analysis as per following table and estimate how important
each factor is to a customer . 1=critical , 5 = not very important

FACTOR COMPANY Strength weakness CompetitorA Comp-B Comp-C Importance to

Customer

Product
Price
Quality
Appearance

Sales Method

Credit Policy

Advertising

After doing above analysis matrix above , write a short note stating competitive
advantage and disadvantage for both you and your competitors.
5. Operations:
How you will run your business and deliver value to customers. Operation is defined to as the
processes used to produce the product and deliver them to the market place .and can include
procurement , storage, manufacturing , transportation, logistics , travel , after sale service and so
on . So most important is make proper alignment of operations with marketing plan. Suppose if
high quality will be one of your comparative advantages in the market place / marketing plan ,
then design your operations to deliver high quality , not low cost. So one have to trade off with
operations . Its impossible to have lowest cost and high quality , often high quality means high
cost. So one has to trade offs , so the product is as per marketing plan.
So answer the followings carefully:
Operations Strategy: Alignment with marketing plan, where to stress more and less
Scope of operations : Make vs buy , what type of vendors , partners , associates and people you
need.
Location: Built around your customer
Personnel: Right mix and tight person on right job
Operation Expenses
Cost Controls
Legal environment –Compliances , licenses etc
Inventory Management
Suppliers Terms
Credit policy
Accounts Receivables Management
Accounts Payable Management
EHS AND QUALITY POLICY
6.Organization Chart:
The chart will state who will run
your business, stating who are key
managers : their duties and
responsibilities, unique skill they
bring to the business and
compensation.
Insert your org Chart -------
7Risk/ Opportunity :
Risks are part of any business, especially new one. Illustrate
the risk like : market , pricing , product , regulatory , and
management risk etc.
Describe and quantify the opportunity . Explain why you are
in business along with the reasons why you will be able to
take advantage of this opportunity . Be sure to answer the
following questions :
•Have you considered all potential risks
•Does your business have a contingency plan in place for all
the risks known and /or highlighted by you.
•What makes this opportunity unique?
•What are the financial risks associated with your
business?How these will be minimized?
•What is the worse case scenario? How your business will
handle this?
Financial Summary: Prepare financial summary , the
formats already given and should have
additional information as under:
Financial History and Ratio
Projections
BEP
Balance Sheet
Cash Flow Statement
Market research data
Product literature
Assumptions, trends and comparisons
Best Case, Most likely and worse case
9.Capital Requirement:
Clearly state the capital /funds needed
to start or expand your business.
Summarize , how much invested till date
and how it is being used. Describe why
you need the funds and the benefits from
the opportunities. And also explain how
and when business will repay the
investment.
Thank You