9851548484848484448484448126889794661494949.ppt

business notes

1. The Business Plan :The Business Plan :
Creating and Starting Creating and Starting
The VentureThe Venture

2. Planning as Part of The
Business Operation
•Planning is a process than never ends
for a business.
•As the venture grow up to mature
business, planning will continue …

3. What is a Business Plan?
•A business plan is a written document
prepared by the entrepreneur that
describes all the relevant internal and
external elements and strategies for
starting a new venture.
•It is a integration of functional plans such
as marketing, finance, manufacturing, sales
and human resources.

4. Who should write the plan?
•The business plan should be prepared
by the entrepreneur.
•The entrepreneur may consult with
many other sources in its
preparation, such as lawyers,
accountants, marketing consultants,
and engineers.

5. Who Reads The Plans?
•The business plan may be read by
employees, investors, bankers, venture
capitalists, suppliers, customers, advisors,
and consultants.
•There are three perspectives should be
considered in preparing the plan :
–Perspective of the entrepreneur
–Marketing perspective
–Investor’s perspective

6. Why Have a Business Plan?
•The business plan is valuable to the entrepreneur,
potential investors, or even new personnel, who
are trying to familiarize themselves with the
venture, it goals, and objectives.
–It helps determine the viability of the venture in a
designated market
–It provides guidance to the entrepreneur in organizing
his or her planning activities
–It serves as an important tool in helping to obtain
financing.

7. Presenting The Plan
•It is often necessary for an entrepreneur
to orally present the business plan before
an audience of potential investors.
•In this typical forum the entrepreneur
would be expected to provide a short
(perhaps 20-minutes or half-hour)
presentation of the business plan.

8. Outline of a Business
Plan
•Introductory Page
–Name and address of business
–Name(s) and address(es) of principal(s)
–Nature of business
–Statement of financing needed
–Statement of confidentially of report

9. Outline …
•Executive Summary – Three to four pages
summarizing the complete business plan
–What is the business concept or model?
–How is this business concept or model unique?
–Who are the individuals starting this business?
–How will they make money and how much?

10. Outline …
•Environmental and Industry Analysis-Assessment of
external uncontrollable variables that may impact the
business plan and Review of industry trends and competitive
strategies
–Future outlook and trends
–Analysis of competitors
–Market segmentation
–Industry and market forecasts
•Description of Venture-Provides complete overview of the
product(s), service(s), and operations of a new venture
–Product(s)
–Service(s)
–Size of business
–Office equipment and personnel
–Background of entrepreneurs

11. Outline …
•Production Plan-Details how the product(s) will be
manufactured
–Manufacturing process (amount subcontracted)
–Physical plant
–Machinery and equipment
–Names of suppliers of raw materials
•Operational Plan- describes the flow of goods
and services from production to the customer
–Description of company’s operations
–Flow of orders for goods and/or services
–Technology utilization

12. Outline …
•Marketing Plan: Describes market conditions and strategy
related to how the product(s) and service(s) will be
distributed, priced, and promoted.
–Pricing
–Distribution
–Promotion
–Product forecasts
–Controls

13. 8-13
Steps in Preparing the Marketing
Plan
Defining the Business Situation
Situation analysis - Describes past and present
business achievements of new venture.
In case of a new venture, information should
relate to how and why the product or service
was developed.
After a new venture has started up information
should relate to:
Present market conditions.
Performance of the company’s goods and services.
Future opportunities or prospects.

14. 8-14
Defining the Target Market/ Opportunities
and Threats
The target market is specific group of potential
customers toward which the venture aims its
marketing plan.
Market segmentation - Dividing a market into
definable and measurable groups for purposes of
targeting marketing strategy.
Steps in Preparing the Marketing Plan
(cont.)

15. 8-15
Process of segmenting and targeting customers
Decide on general market or industry to pursue.
Divide market into smaller groups based on:
Characteristics of the customer – Geographic,
demographic, and psychographic.
Buying situation – Desired benefits, usage, buying
conditions, and awareness of buying intention.
Select segment or segments to target.
Develop a marketing plan integrating product, price,
distribution, and promotion.
Consider the strengths and weaknesses in the
target market.
Steps in Preparing the Marketing Plan
(cont.)

16. 8-16
Establishing Goals and Objectives
These are statements of level of performance
desired by new venture.
Realistic and specific marketing goals and
objectives respond to the question: “Where do
we want to go?”.
Not all goals are quantifiable.
Limit the number of goals or objectives to
between six and eight.
Goals should represent key areas to ensure
marketing success.
Steps in Preparing the Marketing Plan
(cont.)

17. 8-17
Defining Marketing Strategy and Action
Programs
Product or service
May consider more than the physical characteristics.
Involves packaging, brand name, price, warranty, image,
service, delivery time, features, style, and even the Web
site.
Pricing
Costs - Material costs, labor costs, cost of goods from
suppliers, labor and overhead expenses, etc.
Margins or markups - Expected to cover overhead costs
and some profit.
Competition.
Steps in Preparing the Marketing Plan
(cont.)

18. 8-18
Distribution
Provides utility to the consumer.
Must also be consistent with other marketing mix
variables.
Promotion
To inform potential consumers about the product’s
availability or to educate the consumer.
Methods include print, radio, or television advertising,
Internet, direct mail, trade magazines, or newspapers.
The entrepreneur should considering both costs and
effectiveness of the medium in meeting the market
objectives.
Steps in Preparing the Marketing Plan
(cont.)

19. 8-19
Budgeting and Implementation
Budgeting
Costs should be reasonably clear.
Assumptions, if necessary, should be clearly stated.
Useful in preparing the financial plan.
Implementation
The plan is meant to be a commitment by the
entrepreneur to a specific strategy.
Entrepreneur should ensure coordination and
implementation of the plan.
Steps in Preparing the Marketing Plan
(cont.)

20. 8-20
Monitoring the Progress of Marketing
Actions
Involves tracking results of the marketing effort.
Entrepreneur should prepare for contingencies.
Minor adjustments in the plan are normal;
significant changes indicate a poorly prepared
plan.
Weaknesses in market planning may be due to:
Poor analysis of the market and competitive strategy.
Unrealistic goals and objectives.
Poor implementation of the outlined plan actions.
Unforeseen hazards like weather or war.
Steps in Preparing the Marketing Plan
(cont.)

21. Outline …
•Organizational Plan-Describes form of ownership and lines
of authority and responsibility of members of new venture.
–Form of ownership
–Identification of partners or principal shareholders
–Authority of principals
–Management-team background
–Roles and responsibilities of members of organization

22. Outline …
•Assessment of Risk-Identifies potential hazards and
alternative strategies to meet business plan goals and
objectives
–Evaluate weakness of business
–New technologies
–Contingency Plans
•Financial Plan-Projections of key financial data that
determine economic feasibility and necessary financial
investment commitment
–Pro forma income statement
–Cash flow projections
–Pro forma balance sheet
–Break-even analysis
–Sources and applications of funds

23. Outline …
•Appendix (contains backup material)
–Letters
–Market research data
–Leases or contracts
–Price lists from suppliers.

24. Why Some
Business Plans Fail
•Goals set by the entrepreneur are unreasonable.
•Goals are not measurable
•The entrepreneur has not made a total commitment to
the business or to the family.
•The entrepreneur has no experience in the planned
business.
•The entrepreneur has no sense of potential threats or
weaknesses to the business.
•No customer need was established for the proposed
product or service.

25. The EndThe End