entrep

Business planning
Principles of planning
• 1. planning must be realistic
• 2. planning must be based on felt needs.
• 3. Planning must be flexible .
• 4. planning must start with simple projects.
Stages of business planning
• Unplanned stage. At the start of the business, the owner-manager is
busy looking for funds, customer, materials, and equipment.
• Budgeting system stage: the owner-manager realizes the need to
develop and use a budgeting system.
• Annual planning stage. Owner- manager drafts an annual plan. He can
use either the top-down planning or bottom-up planning.
• Strategic planning stage . Business enterprise becomes bigger, a long-
range planning is needed.
Criteria of effective planning
• The plan should state clearly its objectives. Such clear statement is necessary so that
those who will be involved in the execution of the plan will understand, accept and
support.
• The plan should provide measures for a satisfactory accomplishment of the objectives
in terms of quantity, quality, time and cost.
• The plan should state the policies, which should guide people in attaining the
objectives.
• The plan should indicate what department or unit would be involved in accomplishing
the objectives. It may or may not spell out the procedures for performing the required
work.
• The plan should indicate the time, which should be allowed for each activity.
• The plan should specify the required resources and their corresponding costs.
Components of business planning
• Swot: strength, weakness, opportunity, and threat. Planning should
include the improvement of the products/ service in order to survive
competition.
• Objectives: specific and realistic. Ex. Objectives can be daily, weekly,
monthly, and yearly.
• Strategies: ways of accomplishing the objectives. Financial production,
marketing , and organizational plan of the enterprise.
• Time frame: time is gold. Entrepreneur must be efficient in time
management.
Characteristics of a sound business plan
• Objective
• Clear
• Logical and simple
• Flexible
• Stable
• Complete and integrated
Why do we need a business plan?
• To project general picture of the business project
• To serve as a guide in implementing the business or project
• To serve as a major input to investment decisions or major expenditures.
• To serve as reference or guide to policy formulation and development
• To serve as guide for operational matters
• To serve as a reference for a bank loan or financing purposes
• To determine/estimate the detailed technical and financial requirements
• To serve as an overall guide for the proponent or entrepreneur.
David gumpert believed that business plan is
a selling point.
• To sell yourself as a business
• To obtain a bank financing
• To obtain investment funds
• To arrange strategic alliance
• To obtain large contracts
• To attract key employees
• To complete mergers and acquisition;
• To motivate and focus your management team
Outline of a business plan
• The business plan format should have at least four major
components:
1. The marketing plan
2. Technical plan
3. Financial plan
4. The organizational plan
Marketing plan
• A marketing plan is a business document outlining your marketing strategy and
tactics. It's often focused on a specific period of time (i.e. over the next 12 months)
and covers a variety of marketing-related details, such as costs, goals, and action
steps.
• How to Create Your Marketing Plan
A typical small business marketing plan covers many elements including a description
of competitors,  demand for the product or service you offer, and strengths and
weaknesses from a market standpoint of both the business and its competitors.
• A marketing plan is a business document outlining your marketing strategy and
tactics. It's often focused on a specific period of time (i.e. over the next 12 months)
and covers a variety of marketing-related details, such as costs, goals, and action
steps.
• A business plan is a written document that describes your business. It
covers objectives, strategies, sales, marketing and financial forecasts.
Abusiness plan helps you to: clarify your businessidea. spot potential
problems.
• Entrepreneurship has been described as the "capacity and willingness
to develop, organize and manage a business venture along with any of
its risks in order to make a profit".
• 1. Details about your business' current situation. What is your product or
service? What's working and what challenges are you currently having in 
generating new clients and customers? 
• 2. Who is your target market?  Who is the most likely buyer of what you're
offering? The answer should never be "everyone." 
• 3. What are your goals for the time period of the plan? Be specific in your
goals, such as increase email list by x amount over the next year or find x
number of new clients.
• 4. What marketing tactics will you use to reach your market and goals? Let
your target market be your guide in deciding what marketing strategies
you'll use. 
• 5. How much will it cost? This is where you make a budget for your
marketing plan. There are many free marketing strategies, although
they require time, which is a type of expense. 
• 6. How will you execute your marketing plan? Planning is fairly easy.
Carrying out a plan is more of a challenge. 
Technical plan

• technical Plan. A Technical Plan should be provided for all

applications where digital outputs or digital technologies are an
essential part of the planned research outcomes. A digital output or
digital technology is defined as an activity which involves the.
Financial plan

• In general usage, a financial plan is a comprehensive evaluation of an

individual's current pay and future financial state by using current
known variables to predict future income, asset values and
withdrawal plans.
The organizational plan

• Organisational planning refers to the process of

identifyingorganization's objectives and formulating and monitoring
specific strategies to achieve them. It also entails staffing and
resource allocation and is one of the important responsibilities of a
management team.
Outline of a business plan
• Cover sheet: name of business, name of principals, addresses, and
phone numbers.
• Business goals
• Strategies
• Table of contents
The business
• Description of business
• Product/service
• Market
• Location of business
• Competition
• Management
• Personnel
• Application and expected effect of loan ( if needed)
• summary
Financial data
• Sources and application of funding
• Capital equipment list
• Balance sheet
• Break-even analysis
• Income projections ( profit and loss statements )
a. five-year summary
b. Detail by month for first year
c. Detail by quarter for second, third, fourth, and fifth years
d. Notes of explanation
• Cash flow projection
• Deviation analysis
• Historical financial reports for existing business
Supporting documents
• Personal resumes
• Personal balance sheets
• Cost of living budget
• Credit reports
• Letters of reference
• Job description
• Letter of intent
• Copies of leases
• Contracts
• Legal documents
Evaluate your personal resources and
interests and resources of the community
• Do you have the necessary funds?
• Do you have a skills or management experience?
• Are raw materials available?
• Are you interested in such business?
• Do you have good human relations?
Analyze your market
• Is there a good demand for your product?
• How many competitors are there in the market?
• What is your estimated share in the market?
• Who are your customers?
• Are they interested in existing products or services?
• Is it possible for you to offer better quality or a lower price?
• Is there a reasonable profit?
Choose a proper business location
• Is it near your perspective customer?
• Are there facilities like electricity, water, transportation, and
communications?
• Is the place clean, decent, and peaceful?
• Do you have a good alternative in case the best location is expensive?
• Is it accessible to raw materials and other suppliers?
Prepare a financial plan
• What are your objectives?
• How much money do you need?
• How will you spend the money?
• Where will you get the money?
• What are your expenses?
• How soon can you recover your money or investment?
Prepare a production plan
• Is it economical to rent or buy production equipment?
• Can you ensure or improve the product design or quality?
• Can your production facilities meet demand?
• Do you have inventory control?
• Do you have proper scheduling of production?
Prepare an organizational plan
• What type of business organization is most suitable?
• Do you know the corresponding laws, policies and requirements of
your business organization?
• Who will be the officers and employees of your enterprise?
• What are their duties and responsibilities?
Prepare a management plan
• What are your goals and objectives?
• What are your strategies?
• Do you have business policies for your customers?
• Do you have human resources development for your employees?
• What is your program for social responsibility?
Importance of business planning
1. Planning can eliminate business risk.
2. Planning can minimize cost of production
3. Planning can detect the weakness of the business operations.
Some rules to observe
• Make it neat. Appearance is important and it can reflect the personality
of the maker.
• Make it grammatically correct. Be sure to have a final version of the
write up corrected or edited by professional or qualified editors.
• Make it honest. Do not exaggerate or lie. Tell or write exactly it is.
• Write in layman’s language. Communicate in simple language and not
in technical jargon, unless it is really called for.
• Do not over emphasize your product or your business. Product or
service is just part of the business itself, and it requires a lot of other
resources that are dependent on one another.
Planning and organizing the enterprise
• Why prepare a plan
1 . To minimize, if not eliminate, the risk of losing money on a poor
business idea.
2. save on costly mistakes.
3. Determine your financial requirements.
4.Program your activities in advance.
5. Evaluate actual performance against set targets, especially in terms
of sales, costs, and profits.
• The Intricacies of enterprise planning.
Planning is a mental process that requires you to consider all the
factors or elements that can affect what you are planning for- in this
case, the enterprise.

• Step 1. idea generation and opportunity identification. Which is called

the BRAINSTORMING.
• Step 2. informal screening:
• Step 3 . Analysis of the situation
Matching the entrepreneur with the project
• Marketing plan.
The person first has to study the existing situation in the market, what
the competitors are doing in terms of service plan or service lines, their
promotional activities , the middlemen who are handling their
products, and their pricing schemes.
• After seeing the opportunities to go into business, he should now
prepare a detailed marketing plan. This plan will show the target
market or the specific group of customers the firm wishes to serve.
Knowing the type of customers and the situation in the environment,
the proponent will now describe the product features, the promotional
activities , the channels of distribution.
Production plan
• Production specification A product design specification is a statement
of how a design is made, what it is intended to do, and how far it
complies with the requirements. Requirements may be gathered in
the Product Requirement Specification
• Production process: The production process is a component
appearing under the operating plan of the overall business plan.
The production process is the process a product or service takes in
order for it to become ready for customers to buy. Production will
certainly depend on the type and nature of your proposed business.
• Production machinery and equipment: materials and equipment used
in for your operation or products.
• Raw materials and other supplies: all raw materials use for making
and producing your products.
• Production schedule. It’s the time for designated for every products
your gonna make.
• Manpower requirements. Your company need man power to support
your back operation.
Organizational plan
• Organisational planning refers to the process of
identifyingorganization's objectives and formulating and monitoring
specific strategies to achieve them. It also entails staffing and
resource allocation and is one of the important responsibilities of a
management team.
Financial plan
• a financial plan is a comprehensive evaluation of an individual's
current pay and future financial state by using current known
variables to predict future income, asset values and withdrawal plans.
• Total project cost:
• Source of financing:
Financial statements
• Financial statements is a formal record of the financial activities and
position of a business, person, or other entity. Relevant financial
information is presented in a structured manner and in a form easy to
understand.
1. Profit and loss statement (P&L) presents details regarding sales and
expenses incurred or will be incurred by the business as of a given date.
2. Balance sheet: presents details of what the business owns ( assets ) and
its value.
3. Cash flow statement- presents in detail the projected cash expenses and
disbursement for a given period.
Financial analysis
• Financial analysis is the process of evaluating businesses, projects,
budgets and other finance-related entities to determine their
performance and suitability. Typically, financial analysis is used to
analyze whether an entity is stable, solvent, liquid or profitable
enough to warrant a monetary investment.
• Financial analysis refers to an assessment of the viability, stability and
profitability of a business, sub-business or project. It is performed by
professionals who prepare reports using ratios that make use of
information taken from financial statements and other reports.