Writing a business plan

By
Group – 3 & 4
 • Explain the purpose of a business
plan
• Describe who reads a business plan
and what they are looking for
• Discuss the guidelines to follow to
Learning write an effective business plan
objectives • Identify and describe a suggested
outline of a business plan
• Explain how to effectively present a
business plan to potential investors
 • Business plan is narrative typically 25 to 30
pages
Purpose of • What intends to accomplish and how
• For new ventures, it is dual purpose document
Business Plan • Inside the firm
• Outside the firm
 Two primary reasons:

Reason of
Internal: founding team to
writing a systematically
business plan
External: new venture to
outsiders
 • Firm’s employees: Clearly well written business
Who reads the plan states affirms vision and future which helps
employees to operate In Sync and move forward
plan and what in a consistent and purposeful manner
are they looking • investors and external stakeholders : a business
for plan should be accurate and realistic highlighting
merits of the venture that offers potential
investors financial returns greater than lower risk
investment alternatives.
Content and types of a business plan
• Style and Format: avoid using different font styles and sizes and clip
art from making the business plan look amateurish.
Outline
• An executive summary is a short overview of the
plan that should highlight all the points in order so
that an investor would know everything related to
the business and its venture.
Industry Analysis
Describe the industry in which the firm
intends to compete by focusing on
market size, growth rate and sales
projections.
Research if the industry has a fragmented
or a concentrated structure. If the
structure is concentrated, convey
whether major players are innovative or
slow to react to industrial trends.
Company description

A general description includes: a brief history to show how

the idea to form a company came about and its origin.

A mission statement to show why it exists and what it

aspires to become.

Tagline to reinforce its position in the market by gaining

attention

A milestone to appeal to the customers and investors

about accomplishing significant events.
 Market analysis
• Breaking market into segments based on
geographical factors (city, state, country),
Demographic Factors (age, gender, income),
psychographic variables (personality,
lifestyle, values) to focus on a specific
industry which the firm will try to appeal.
 Financial plan
• Analysing how profits are
earned in the business and
how many units of a
business’s product or service
must be sold for the business
to “break even” and then
start earning a profit.
• Differentiate variable and
fixed costs.
Marketing plan

The best way to describe a company’s marketing plan is to

start by articulating its marketing strategy, positioning, and
points of differentiation, and then talk about how these
overall aspects of the plan will be supported by price,
promotional mix and sales process, and distribution
strategy.

An effective strategy helps a firm to distinguish itself from

its competitors
This Photo by Unknown Author is licensed under CC BY-SA
 • A better prepared management team help investors to determine the
Company strength of the people starting the firm.
structure and • The most effective way to illustrate how a company will be
management structured and the lines of authority and accountability that will be in
place is to include an organizational chart in the plan. An
team organizational chart is a representation of how authority and
responsibility are distributed within the company. The organizational
chart should be presented in graphical format if possible.
 • A schedule should be prepared that shows
the major events required to launch the
business. The schedule should be in the
format of milestones critical to the
business’s success, such as incorporating
the venture, completion of prototypes,
Overall rental of facilities, obtaining critical
financing, starting the production of
schedule operations, obtaining the first sale, and so
forth. An effectively prepared and
presented schedule can be extremely
valuable in convincing potential investors
that the management team is aware of
what needs to take place to launch the
venture and has a plan in place to get there
Putting it all together

Determine if the most viable

question are answered or not.
REPRESENTING THE BUSINESS PLAN TO
INVESTORS
The Oral Presentation of the Business Plan :
• Title Slide
• Problem
• Solution
• Opportunity and Target Market
• Technology
• Competition
• Marketing and Sales
• Management Team
• Financial Projections
• Current Status
• Financing Sought
• Summary
Quick Knowledge
Test

• How many pages is the business plan?

• What is the external reason of writing a
business plan?
• What is an executive summary?
• What factors should we focus on when
breaking into an industry?