Business Plan

What is Business Plan

A business plan is a formal statement of
a set of new business idea or goal, the
reasons why they are believed attainable,
and the plan for reaching those goals. It
may also contain background information
about the organization or team attempting
to reach those goals.
 Objectives of the Business Plan
• To define and convince banks, investors, family,
friends, potential customers and suppliers) that
your plans have substance for success.
• To have clear goals and milestone to achieve
which will enable your team to function without
confusion.
• To build a solid basis for your business, based on
factual data
• To bring up a habit of professionalism
 Remember its readers
The perfect business plan is the one which wins its readers
hence it is very important to keep its readers in mind while
developing or compiling the business plan. They should be
able to get easily and be impressed with the idea. They make
a decision based on the information you have supplied:

• Your Bank Manager

• Alternative providers of finance
• Business advisory organizations.
• Friends and colleagues who will invest in your business
 Business Plan Ingredients
• Cover page and table of contents
• Executive Summary
• Business description
• Business environment analysis
• Market & competitors Analysis
• Marketing Plan
• Operations plan
• Management summary
• Financial plan
• Attachments and milestones
 Executive Summary
• Most important component, especially for the
marginally involved
• A brief and precise picture of your future that:
– Doesn’t tell too much, but just enough
– Shows you are knowledgeable and prepared
– Entices the reader to turn the page
• The LAST part of the BP to be completed (not
started)!
 Executive Summary cont….
The Executive summary should describe:
• A description of your company, including your products
and/or services
• Your mission statement
• Your business’s management
• The market and your customer
• Marketing and sales
• Your competition
• Your business’s operations
• Financial projections and plans
 Executive Summary cont…
• It should crisp and concise.
• Keep the language strong and positive
• Put yourself in your readers’ place…. Does this
executive summary generate interest or
excitement in the reader? If not, why?
• The executive summary will end with a summary
statement, a “last kick at the can” sentence or
two designed to persuade the readers of your
business plan that your business is a winner.
 Business Description
• The purpose of the business description is to
give your reader an overview of your company,
including the company structure, current
status, future plans and any other information
they may need to know.
 Business Description cont…
Followings are the heads to be covered in Business
description:
• Describe the Industry with facts & figures
• Describe your business in details
• Give your mission Statement
• Describe Your Company's History -- Even If It's
Short
• Include Your Company's Current and Future Goals
 Business Environment Analysis
There are a number of environmental factors that can influence
the behavior of the market place affecting the consumers or the
competition just as much as you:

• Economical
• Cultural
• Social
• Legal
• Demographical
• Political
• Technical
 Market & Competitors Analysis
• Describe industry characteristics, market segments, trends,
projected growth, target market and customers, customer
behavior, complementary products/ services, barriers of
entry, etc.
• Focus in on gaps in your product/service area.
• Who do you expect will buy/use your product/service?
Why them?
• Know your customer
• Explain your strength & weakness relative to your
competitors and how you will use them and overcome
• Explain total demand & supply curve in that industry
 Marketing Plan
The Marketing Plan section explains how you're going
to get your customers to buy your products and/or
services. This will include the following details:

• Products and/or Services and your Unique Selling

Proposition
• Pricing Strategy
• Sales/Distribution Plan
• Advertising and Promotions Plan
 Financial Plan
• Includes sales forecasts, profit-and-loss
statements, cash flow projections, balance
sheets, standard business ratios.

• Even if you have a qualified accountant, you

MUST be able to respond intelligently to
questions in all of these areas!
 Exit Strategy
• Provides investors with a sense of security,
that you won’t always be dependent and that
this is a potential $ maker for him/her.

• Usually describes plans for 3-10 years in the

future
 Appendices
• Verification of education, experience, etc.
• Technical drawings, computer renditions of
product
• Independent assessments of the
product/services
• Reports drafted in your planning stages (e.g. from
accountants, market researchers, etc)
• Throw out any documents that are not highly
relevant!
 Tips
• Know your audience!

• Be dramatic, creative…but careful!

• Explain the WHY (the product, the market, the

pricing, the partners, the location…)

• Take advantage of your research background! Don’t

make unfounded claims or guesses…
 Tips cont…
• Include possible barriers, drawbacks, potential
weaknesses, risks…as well as your plans for managing
these!

• Stress your USP (unique selling proposition)

• Be realistic (higher quality for lower price won’t fool

anyone!)

• Remember to proofread and spell check! Then do it

again! Then have some one else do it!