The Business Plan

Accountancy, Business & Management

Agusan National High School – Senior High School
At the end of the lesson, the learners should be able to:
1. Define what a business plan
2. Explain why business plans are important to its users
3. Identify the information needed in preparing a business plan
4. Describe the major sections of a business plan
5. Deliver an elevator pitch, using the content of an existing business
plan
Accountancy, Business & Management
Agusan National High School – Senior High School
The Business Plan
Accountancy, Business & Management
Agusan National High School – Senior High School
What is a Business Plan?
• Prepared by the entrepreneurs.
• It is a document that describes the various external and
internal elements involved in starting a business or in
expanding an existing venture, amidst a dynamic business
environment.
• This serves as a guide for short-term and medium-term
decision-making and managerial action.
• It directs the entrepreneur to his desired destination.

Accountancy, Business & Management

Agusan National High School – Senior High School
What is a Business Plan?
It answers the following questions:
1. Where am I now?

2. Where am I going?

3. How will I get there?

Accountancy, Business & Management
Agusan National High School – Senior High School
Why write a business plan?
Business plans are important because of the following reasons:
a. It helps determine whether a proposed or existing business
venture is viable given its target market;
b. It guides the entrepreneur in mobilizing the resources needed
by the business
c. It serves as a tool in helping get financing for the business.

Accountancy, Business & Management

Agusan National High School – Senior High School
Who reads it?
• The business plan may be read by different people, including
employees, suppliers, customers, bankers and potential
investors.

“Therefore, the business plan must be written to meet the

information needs of these different stakeholder”

Accountancy, Business & Management

Agusan National High School – Senior High School
Who reads it?
Value of BUSINESS PLAN to selected users
User of the Business Plan Why the business Plan is Important to this user?
Entrepreneur • Serves as a road map for managing the business
• Identifies the resources needed to operate and grow the business
• Allows the entrepreneur to anticipate potential business risks.
Lender • Allows the lender to assess whether the entrepreneur will be able to
meet debt and interest payments.
• Provides information about collateral or tangible assets that can be
secured for the loan.

Investor • Allows the investor to gauge whether projected returns are

acceptable.
• Provides information about the character of the entrepreneur and
about the capability of the venture’s management team.

Accountancy, Business & Management

Agusan National High School – Senior High School
What information is needed for the major sections of the
business plan?
Information Needs for Major Sections of the Business Plan
Market Information Needs Operations Information Needs Financial Information Needs
• General environmental • Location • Rental rates
trends • Manufacturing or Service • Cost of equipment
• Specific industry trends operations • Cost of utilities
• Local Market conditions • Equipment and /or furniture • Personnel costs
• Market potential ( e.g. market required • Distribution costs
size, untapped or underserved • Space requirements • Costs of insurance
markets) • Labor requirements • Registration and license fees
• Demographic and/or • Raw materials needed and
psychographic profile of the potential suppliers
target market. • Utilities (e.g. water and energy)

Accountancy, Business & Management

Agusan National High School – Senior High School
Major sections of a Business Plan
Typical Content of Major Sections of the Business Plan
Major Sections Type of Contents
1. Introductory Section • Business name and address
• Names and addresses of business owners
• Nature of the business
• Statement of financing needed
• Statement of confidentiality of the report (optional)

2. Executive Summary • Highlights of the business plan summarized in two or three pages
3. Environmental and • Conditions of the general environment (i.e., sociocultural,
industry analysis technological, economic, and politicolegal conditions)
• Conditions of the specific environment (i.e., supply and demand
conditions, competition)

Accountancy, Business & Management

Agusan National High School – Senior High School
Major sections of a Business Plan
Typical Content of Major Sections of the Business Plan
Major Sections Type of Contents
4. Description of the • Products and/or services
business • Size of the business
• Mission statement and core values
• Location of the business and its major physical assets
• Background of the business owners/entrepreneurs

5. Production Plan • Manufacturing process

• Physical plant
• Machinery and equipment
• Suppliers of raw materials
• Future capital equipment needs

6. Operational Plan • Description of the company’s operations

• Flow of orders for goods and services

Accountancy, Business & Management

Agusan National High School – Senior High School
Major sections of a Business Plan
Typical Content of Major Sections of the Business Plan
Major Sections Type of Contents
7. Marketing Plan • Pricing
• Distribution
• Promotion
• Sales forecasts

8. Organizational Plan • Form of ownership

• Principal shareholders or partners
• Organizational chart/lines of authority
• Background of the management team
• Roles and responsibilities of management team

9. Financial Plan • Assumptions

• Pro forma balance sheet
• Pro forma income statement
• Cash flow projections
• Sources and uses of funds
• Breakeven analysis

Accountancy, Business & Management

Agusan National High School – Senior High School
Why do some Business Plan Fail?

• The chances of failure, though, are higher if the business plan

is poorly prepared.
• These are some of the problems of business plans:
a) Documents is sloppy and looks unprofessional
b) Executive summary is not coherent and is too long
c) Unclear on why people would want to buy the product or
service
d) Unclear on whether the product can be readily produced

Accountancy, Business & Management

Agusan National High School – Senior High School
How to present a business plan?
Some guidelines that will help the entrepreneur when making
the presentation are as follows:
1. Tell a compelling story
2. Exhibit confidence and professionalism
3. Cover the basics
4. Adopt a cooperative attitude when answering questions

Accountancy, Business & Management

Agusan National High School – Senior High School
 Generalization
Answer the questions orally
1. Given the uncertainty and dynamic nature of the
business environment, is a business plan necessary?
Cite the reasons for your answers.
2. Given the outline of the business plan , which parts do
you think ought to be given priority? Explain your
answer.
Accountancy, Business & Management
Agusan National High School – Senior High School
 Long Quiz
Let us check what you have learned. Answer the
questions in the long quiz activity sheet.

Accountancy, Business & Management

Agusan National High School – Senior High School
 Assignment
Look for me!
Look for an entrepreneur who has prepared a business
plan, and another one who did not. For the one who has a
business plan, ask for what purpose it had been used, and
whether it has been kept up-to-date. For the one who did
not prepare a business plan, ask why this was the case.
What insights did you get from these two entrepreneurs?

Accountancy, Business & Management

Agusan National High School – Senior High School