Chapter 6

BUSINESS
PLAN
LESSON 1

INTRODUCTION TO
BUSINESS PLAN
PREPARATION
WHAT IS BUSINESS PLAN?
•It defined as a detailed and integrated written
document that describes the various activities involved
in opening and operating a new entrepreneurial venture
•It is prepared using a scientific approach in determining
possible business situations considering the different
perspective of people who are interested in the
business.
MAJOR SECTIONS OF
THE BUSINESS PLAN
ARE AS FOLLOWS:
a) Introduction h) Marketing plan
b) Executive summary i) Financial plan
c) Environmental analysis j) Appendix
d) Business description
e) Organizational plan
f) Production plan
g) Operation plan
 THE INTRODUCTION CONSIST OF THE
FOLLOWING:
a) Proposed name of the business
b) Address of the business
c) Name of the owner/s
d) Description of the business
e) Location of the business
f) Funding requirement and services
 LESSON 2
EXCUTIVE SUMMARY,
ENVIRONMENTAL ANALYSIS
AND BUSINESS DESCRIPTION
Executive summary
•Commonly the last section to be written after all other
major pats have been completed, it is the next major
part of the business plan after the introduction
•It points out the overall highlights of the business plan
as well as the bird’s-eye view of its section
•It provide a summary of the different major sections of
the business plan
EXECUTIVE UMMARY MUST INCLUDE THE FOLLOWING SECTIONS

Vision, mission, goals and objective of the business

Business model
Wealth improvement
Parties supporting the business
ENVIRONMENTAL ANALYSIS
•The next major parts or section of business plan after the
executive summary is the environmental analysis.
•It is a strategic tool that helps determine the external and
internal factors affecting the performance of the business
• these factor may be political, economic, social or
technological in nature
•It may consist of at least 20 pages including the graphical
representation, tables, and computations
•It is considered as the heart of the business plan
The major areas included in the environmental
analysis are as follows:

1. Global Analysis
2.Societal Analysis
3.Industry Analysis
IMPORTANT AREAS USUALLY INCLUDED IN THE
BUSINESS DESCRIPTION ARE THE FOLLOWING:
a) Nature and form of the business
b) Present status of the business
c) Product and service that it plans to produce or serve
d) Various plant and office equipment
e) Size of the proposed business
f) Further parties with whom contracts may be necessary
g) Personal equipment
h) Administrative operation
LESSON 3

ORGANIZATION PLAN,
PRODUCTION PLAN AND
OPERAGTIONAL PLAN
1. ORGANIZATION PLAN COVERS THE
FOLLOWING IMPORTANT AREAS
a)Form of business organization
b)Liability of the owner or owners
c) Organizational structure
d)Roles and responsibilities
e)Salary requirement
2. THE PRODUCTION PLAN INCLUDES
THE FOLLOWING AREAS:
a)Production schedule
b)Production process
c) Processing plant and equipment
d)Sources of materials
e) Production cost
3. THE OPERATION PLANS TALKS
ABOUT THE FOLLOWING AREAS:
a) Evaluating of suppliers
b) Materials requisition and receiving procedures
c) Storage and inventory control system
d) Shipment system and control
e) Functions of support services
LESSON 4
MARKETING PLAN
AND
FINANCIAL PLAN
1. THE IMPORTANT SECTIONS PRESCRIBES
AND DISCUSSED IN THE MARKETING PLAN
ARE THE FOLLOWING;
a) Product
b) Places
c) Price
d) Promotion
e) People
f) Packaging
g) positioning
2. THE FINANCIAL PLAN COVERS THE
FOLLOWING IMPORTANT AREAS
a) Major assumptions
b) Projected statement of comprehensive income
c) Project statement of cash flows
d) Projected statement of changes in equity
e) Projected statement of financial position
f) Financial statement analysis