DEVELOPMENT OF A

BUSINESS PLAN
OBJECTIVES:
• Define business plan;
• Identify the elements of a business plan;
• Identify the different parts of a business plan;
• Identify the different kinds of business plan; and
• Write a sample business plan.
MOTIVATIONAL ACTIVITY:
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SBNEISUS
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MOTIVATIONAL ACTIVITY:
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BUSINESS
PLAN
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TNIRTIUOCNDO
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INTRODUCTION
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PLANNING
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AGRNEIKMT
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MARKETING
PLAN
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LINNAAICF
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FINANCIAL
PLAN
 EXPLORE

 In establishing a business, it is important that

everything must be done systematically.

 There is no room for guessing.

 Careful planning is needed in order to be successful.

 THE BUSINESS PLAN
 Planning is very crucial in business because it will keep you
from trouble in the future.

 You can foresee difficulties when you plan.

 Having a business plan shows how serious an entrepreneur is

in his business engagement.

 Serious entrepreneurs take some time to write their plans in

order to make sure that their businesses will be successful
 THE BUSINESS PLAN

 A business plan is defined as a detailed and integrated

written document that describes the various activities
involved in opening and operating a new entrepreneurial
venture.

 Is the blueprint of individuals, organizations or groups who

would like to engage in business.

 It is considered as their bible.

 Purpose of Business Plan

 Presents a general picture of the enterprise

 It serves a guide in business policy formulation
 Provides guidance for investment decisions and capital expenditures.
 Serves as guide in the implementation of the plan for the business
including the marketing, production, organizational, and financial aspects
of the enterprise
 Serves as selling tool for encouraging investment and financing.
 It provides a clear direction to any uncertain business endeavor.
 It is used to determine whether the proposed business is feasible or not in
all areas.
 Essential questions that have to be
answered when making a business plan

 What product does the product or service solve?

 What niche will it address?
 Who are the customers of the enterprise?
 How will the enterprise sell its products or
service to them?
 What is the size of the market to be served?
 How will the business make money (Revenue-
Cost= Profit)?
 Essential questions that have to be
answered when making a business plan

 What other products pose competition to the business and

how will the enterprise maintain its competitive advantage?
 How will the enterprise adjust its systems of management as
the business grows?
 Who will run the company and what are their capabilities to
manage the business plan?
 What are the risks and threats confronting the business and
what are the resources needed?
 What will be the future financial requirement of your
business?
 MAJOR PARTS OF THE BUSINESS PLAN

1. Executive Summary
2. Introduction
3. Product or service description
4. Industry Analysis
5. Market Analysis
6. Marketing Plan
7. Production of Operational Plan
8. Organizational Plan
9. Financial Plan
10. Appendices
 MAJOR PARTS OF THE BUSINESS PLAN

I. Executive Summary- This contains a brief description of each

part of the business plan.

- Despite being short, the whole picture of the proposed business must be
clear enough to catch the interest of a potential venture capitalist or any
interested individual who will finance the business.
- All the parts of the business plan which should be presented in the
summary in at least one or two paragraphs each.
- It should be written last but must be placed at the beginning of the
business plan.
 I. EXECUTIVE SUMMARY

How to write an executive summary

- The executive summary is the doorway to your business plan- this is the part where
you grab your reader’s attention and let him know what it is you that you intend to
do and why your reader should read the rest of your business plan or proposal.

- The first paragraph should generally include your business name, its location, what
product or service you sell, and the purpose of your plan.

- Another paragraph should highlight important point such as projected sales and
profits, unit sales, profitability and keys to success.
 II. INTRODUCTION

- It covers the compelling reason for selecting a particular

project being proposed.

- It direct the reader to the main contents of the business plan.

- This include the idea, the rationale for the business, the
problems being addressed, the value proposition, and the
potential benefits to would be financiers who may be interested
to commit their money to this particular undertaking.
 II. INTRODUCTION

The introduction presents the general perspective of the business.

It may consist of one to two pages. It includes, among others, the
following sections:
a. Proposed name of the business
b. Address of the business
c. Name of the owner or owners
d. Description of the business
e. Location of the business
f. Funding requirement and source
 Proposed Name of the Business

The formulation and drafting of the proposed business name is not as

simple as it sounds. It is a delicate and important entrepreneurial task.
The proposed business name must:
1. Reflect the business identity and image;
2. Promote philosophical values and culture that the business values the
most,
3. Profess the brand identity of the product; and
4. Attract or influence the target consumers.
 Address of the Business

• It is important that the address of the business is

correctly written because all business correspondence
are mailed to the business address.

• Nowadays, it is also necessary for the business to have

an email address to facilitate electronic communication
between the business and the customers, suppliers,
creditors and other significant parties.
 Name of the Owner

• The name of the owner must be properly

stated. In sole proprietorship, there is only
one owner. In case the venture is a
partnership, the names of the partners,
including the extent of their liabilities, must
be indicated.
 Description of the Business

- A brief description of the business must include

information about the type of product or service
that the business intends to produce or provide.

- It may include a brief information about the

ultimate mission, vision and objectives of the
business.
 Location of the Business

The following should be considered when deciding on the location of

the proposed business.
1. Proximity to the target consumers
2. Distance from the source of raw materials, labor and utilities
3. Availability and cost of transportation
4. Peace and order situation
5. Presence of direct competitors
6. The geographic and climatic conditions
 Funding Requirement and Source

- The estimated total initial cost of the business

venture must be clearly indicated.

- It should include the projected breakdown or

allocation of the total cost, e.g., how much will
be for building, fixtures, equipment, supplies
and working capital.
 III. PRODUCT OR SERVICE DESCRIPTION

- This segments tackles the characteristics and the details of the proposed idea.
- The name of the product or service should be described first.
- A complete picture of the product or service being proposed must be fully
described
- A clear understanding of the product must be settled first before the other details
are to be identified
- Details of the product such as properties, features, characteristics, possible
sources of raw materials or ingredients, potential market or customers and other
details should be included
 Iv. Industry analysis
- An industry is a group of firms producing similar products or offering
similar services.

- This part of the business plan shows a situational presentation, at least

three to five years current data, trends and latest updates of the industry
where the proposed business idea belongs.

- This will include the group of businesses in the same orientation, target
market, understanding the gap or the need of the industry, the size,
growth, structure, and other factors that may contribute to the success of
the industry.
 v. market analysis

- A market analysis involves the search for, and

analysis of, data that can be used to identify
isolate, describe, and quantify a given market or
group of customers.

- The size, characteristics, and direction of market

movement are the basic areas of interest.
 STEPs OF THE market analysis

1. Define the objective of the study- to justify the conduct of a market

analysis, it is imperative that an objective should be set in detailed manner
- Who is your target market?
- What is the size of the market and your production capacity?
- What will be the nature of the operation and industry orientation
- How much sales is being projected?
- What is the price of the product or service being offered?
- How will the product reach the customers in the most efficient manner?
 STEPs OF THE market analysis

2. Conduct a situational analysis of the market- this step seeks the background
information on the relationship between the product or service and the market it
wishes to serve.

3. Collect secondary data if necessary – secondary data are published materials

that also rely on primary data such as surveys, indices, rates and other data for
authority.
 vi. Marketing plan

Marketing plan- It is a comprehensive document or

blueprint that outlines a business’ advertising and marketing
efforts for the coming year.
- For your project, you are to describe how will you
advertise your product.
- Will you use flyers? Will it be a house-to-house
information dissemination? Will you let your relatives help
you?
 vi. Marketing plan

- A marketing plan describes the business activities involved in

accomplishing specific marketing objectives within a set time
frame.
- A marketing plan identifies almost all you need to know about
your target customers, how your product will reach them and how
you will maintain their loyalty so you can expect a repeat
purchase.
- A marketing plan is guided by the so-called P’s of marketing mix: product,
place, price, promotion, people, packaging and positioning.
 VII. PRODUCTION OR OPERATION PLAN

The production or operational plan lays down the

specifics of operating or running the business, and
if the marketing plan has the P’s that make up the
marketing mix, the production or operational plan
has the four M’s that comprise the production or
operation of a business: Materials, Machines, Men
(and women), and Money.
 VIIi. Organizational PLAN

Organizational plan- This details the human

resource complement of the business.
- It is also describes the legal form that the
business will take: sole proprietorship,
partnership or corporation.
 ix. financial PLAN

Financial plan- Lastly, the financial plan shows the financial or

funding requirement of the business.
- Will the business be financed 100% by the owner?
- Will some of the funds come from the bank or an investor?

- The financial plan also shows the financial projections of the

business from its startup stage up to the time it registers
positive income.
 x. appendices

Appendices- This portion is intended for

miscellaneous items which may not be
put in the main part of the business plan
such as photos, contracts, forms,
certificates, permits, and others papers
related to the business.
 Without a plan, even the most brilliant
business can get lost. You need to have
goals, create milestones and have a strategy
in place to set yourself up for success.
- Yogi Berra-