BUSINESS PLAN

GROUP II
 CONTENT
01
HIGHLIGHTS
CONCEPT OF A BUSINESS
PLAN
02 WHY THE NEED FOR A BUSINESS
PLAN?
03 SAMPLE BUSINESS PLAN FORMAT

04 THE PRINCIPLE OF DUE DILIGENCE

05 INVESTIGATING A BUSINESS
 CONCEPT OF A BUSINESS PLAN
Authors Hisrich and Peters defined Business Plan as:

• Written document prepared by the entrepreneur that describes all the relevant external
and internal elements involved in starting a new venture.
• It addresses both short-term and long term decision making for the first three years of
operation of the business.
• When the business is self- financed, a formal or written business plan is ser aside, and
the absence of the well written business plan itself could in part be a reason why some
business project fails or how far of the businessman is on course or off-course in his
business projects.
 CONCEPT OF A BUSINESS PLAN
The business plan is a tool to sell your business story to financial sources and
should be recognized as such. As one author puts it, the business plan is Guerilla
marketing weapon created to sell a business proposition to a lender or investor.

David E. Gumpert has the following concept and definition of a business plan:

A business plan is a document that convincingly demonstrated the ability of a

business to sell its products or services to make satisfactory profit and be attractive
to potential backers.

A business plan is a selling document that conveys the excitement and promise of your business
to any potential backers or stakeholders.
 WHY THE NEED FOR A BUSINESS
PLAN?
A written business plan or feasibility study is necessary or needed for the following
reasons:

• To project a general picture of the business project

• To serve as a guide in implementing the business or project
• To serve as major input to investment decisions or major expenditures
• To serve as references or guise to policy formulation and development
• To serve as a guide for operational matters
• To serve as a references for bank loan or financing purposes
• To determine/estimate the detailed technical and financial acquirements
• To serve as an overall guide for the proponent or entrepreneur
 WHY THE NEED FOR A BUSINESS
PLAN?
According to DavidGampert, a business plan is a selling point. With a business
plan, you sell the entire company as a package. Gampert cited the following reason of
doing a business plan as follows:

• To sell yourself on the 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
 SAMPLE BUSINESS PLAN FORMAT
I. HISTORY AND BACKGROUND III. Descriptions of the business

a. Business Name, address and Phone Number e. Products and services

b. Nature of business d. Office equipment and personnel
c. Organization structure h. Benefit and Size of business
d. Company history in brief

II. Executive Summary

a. Objectives
b. Mission and vision statement
c. Descriptions of products or services
d. Financial budget
 SAMPLE BUSINESS PLAN FORMAT
IV. Production of plan VI. Financial Data

• Machinery and equipment • Pro forma income statements (two to three years)
• Name of suppliers of raw materials • Pro forma cash flow analysis (first year/months)
• Pro forma balance sheets
V. Marketing Plan • Break even analysis
• Source and application of funds
• Target market/area
• Promotion
• Pricing and control of product
• Product forecasts
 SAMPLE BUSINESS PLAN FORMAT
VII. Appendixes

• Narrative history of firm in detail

• Brochures describing products
• Details of:
* Products and services
* Research and development
* Marketing
* Administration
* finance
 THE PRINCIPLE OF DUE DILIGENCE

Due diligence is the homework investors or financiers complete before a final investment decision is

reached. The due diligence process typically includes background checks on the management team,

industry studies, analysis of competition, identification of major risks and other reasons, often intangible,

why the investment should or should not be made. In essence, due diligence is a detailed evaluation of your

business plan.
INVESTIGATING A BUSINESS
To conduct due diligence you'll need to carefully review:
• income statements
• records of accounts receivable and payable
• balance sheets and tax returns including business activity statements (last 3-5 years)
• profit and loss records (last 2-3 years)
• cash deposit and payment records, as reconciled with the accounts
• utility accounts
• bank loans and lines or letters of credit
 INVESTIGATING A BUSINESS
To conduct due diligence you'll need to carefully review:

• minutes of directors' meetings/management meetings

• audit work paper files (if available)
• the seller's claims about their business (e.g. their reasons for selling, the business's
reputation)
• privacy details (e.g. of employees, trading partners, customers)
• stock
• details about plant, equipment, fixtures, vehicles (are they in good working order and
licensed?)
• intellectual assets of the business (e.g. intellectual property, trademarks, patents)
 INVESTIGATING A BUSINESS
To conduct due diligence you'll need to carefully review:

• existing contracts with clients/staff

• partnership agreements
• lease arrangements
• details of the business's automated financial systems
• details of credit and historical searches related to the business.
Thank you!
Members:

De Castro, Cyrus
de Leon, Nona Ioseliani
De Robles, Krizzalyn
Eugenio, Desiree
Fandialan, Sherlyn
Funa, Nenors Hersey
Ignacio, Jeddahlyn
Kamatoy, Kimberly
Lapitan, Lorraine
Loria, Shiela May
Luna, Alliah Cyre