Business Plan

Total Quality Management

The Business (Project)

Feasibility Plan

Prof Bharat Nadkarni

 Business Plan

The business plan, although often criticised for being

dreams of glory is probably the single most important
document to the entrepreneur at the start-up stage.
Potential investors are not likely to consider investing in a
new venture until the business plan has been completed. In
addition, the business plan helps maintain a perspective for
the entrepreneur of what needs to be accomplished.
Business plan
Written document describing all relevant internal and
external elements and strategies for starting a new
venture.It is often an integration of functional plans such as
marketing, finance, manufacturing and human resources.It
also addresses both short term and long term decision
making for the first 3 years of operation.
 Business Plan

Reasons for a Business Plan

The reason for compiling a business plan will be different for
each situation:
• If you are starting a new business you will require a plan to
clearly assess every aspect of the business and show how it
will succeed.
• If you are buying an already established business you will
need to identify the strengths and weaknesses of the
business to decide if you will be able to make it a success.
• If you are already up and running and in need of extra
finance you will need a plan to convince those putting
capital into your business that you can and will succeed.
• If you are applying for one of the many grants available.
 Business Plan
Writing the Business Plan
The business plan could take more than 200 hours to
prepare, depending on the experience and knowledge of
the entrepreneur as well as the purpose it is intended to
serve. It should be comprehensive enough to give any
potential investor a complete picture and understanding of
the new venture and will help the entrepreneur clarify his or
her thinking about the business.
Many entrepreneurs incorrectly estimate the length of time
that an effective plan will take to prepare. Once the process
has begun, however, the entrepreneur will realise that it is
invaluable in sorting out the business functions of a new
venture.
The outline of a business plan is covered in next few slides.
 Business Plan

I Introductory Page
• Name & address of the business
• Name(s) & address(es) of principals
• Nature of business
• Statement of financing needed
• Statement of confidentiality of report

II Executive Summary
• Three to four pages summarising the complete business
plan
 Business Plan

III Industry Analysis

• Future outlook and trends
• Analysis of competitors
• Market segmentation
• Industry forecasts

IV Description of the venture

• Product(s)
• Service(s)
• Size of business
• Office equipment and personnel
• Background of entrepreneurs
 Business Plan

V Production Plan
• Manufacturing process (incl subcontracting, if any)
• Physical plant
• Machinery and equipment
• List of suppliers of raw materials

VI Marketing Plan
• Pricing
• Distribution
• Promotion
• Product forecasts
• Controls
 Business Plan

VII Organisational Plan

• Form of ownership
• Identification of partners and principal shareholders
• Authority of principals
• Management-team background
• Roles and responsibilities of members of organisation

VIII Assessment of Risk

• Evaluate weakness of business
• New technologies
• Contingency plans
 Business Plan

IX Financial Plan
• Proforma income statement
• Cash flow projections
• Proforma balance sheet
• Break-even analysis
• Sources and applications of funds

X Appendix (mainly contains back up material)

• Letters
• Market research data
• Leases or contracts
• Price lists from suppliers
 Business Plan

Implementation and Review of the plan

The business plan is designed to guide the entrepreneur
through the first year of operations. It is important that the
implementation of the strategy contain control points to
ascertain progress and to initiate contingency plans if
necessary.
Most important to the entrepreneur is that the business plan
not end up in a drawer somewhere once the financing has
been attained and the business launched.
The progress of the venture should be reviewed periodically
with the goals and objectives set in the business plan. Due
actions for course corrections must be taken which
eventually will lead to the success of the venture.
 Business Plan

Reasons why some businesses fail

1. The Marketing aspect
a. Ignoring competition
b. Ineffective customer service
c. Customer driven approach
d. Internal marketing
2. The Financial aspect
a. Lack of foresight
b. Cash flow problem
3. The Inappropriate team
4. The Technological aspect
5. The Planning flaws
6. The Personal issues
 Business Plan

Thank you