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A business plan is a formal statement of a set of business goals, the reasons they are believed attainable, and the plan for reaching those goals. It may also contain background information about the organization or team attempting to reach those goals. Business plans may also target changes in perception and branding by the customer, client, taxpayer, or larger community. When the existing business is to assume a major change or when planning a new venture, a 3 to 5 year business plan is required, since investors will look for their annual return in that timeframe.
The business plan is a written document prepared by the entreprenur that describes all the relavent extarnal and internal elements involved in starting a new venture.It is often an integrasion of fountional plan such as marketing,finance,manufacturing and human resources.As in the case of Belinda Guadarrama,it addresses the integration and coordination of efective business objectives and strategies when the venture contains a varity of product and service.It also addresses both shot-term and long-term decision making for the first three years of oparation.thus,the business plan or as it is sometimes referred to,the game plan or road map answer s the questions where am I now ?Where am I going?How will I get there? potential investors suppliers and even customers will request or require a business plan. A business plan is a written description of your business's future. That's all there is to it--a document that desribes what you plan to do and how you plan to do it. If you jot down a paragraph on the back of an envelope describing your business strategy, you've written a plan, or at least the germ of a plan. Business plans can help perform a number of tasks for those who write and read them. They're used by investment-seeking entrepreneurs to convey their vision to potential investors. They may also be used by firms that are trying to attract key employees, prospect for new business, deal with suppliers or simply to understand how to manage their companies better. So what's included in a business plan, and how do you put one together? Simply stated, a business plan conveys your business goals, the strategies you'll use to meet them, potential problems that may confront your business and ways to solve them, the organizational structure of your business (including titles and responsibilities), and finally, the amount of capital required to finance your venture and keep it going until it breaks even.
Potential investors are very particular about wat should be included in the business plan. Even if some of the information is based on assumptions, the thinking process required to complete the plan is a valuable experience for the entrepreneur sice it forces him or heer to assess such things as cash flow and cash requirements. In addition, the thinking process takes the entrepreneru into the future, leading him or her to consider important issues that could impede the road to success.
Potential suppliers of capital will vary in their needs and requirements in the business plan. Lenders are primarily interested in the ability of the new venture to pay back the debt and focus on the four C's of credit: 1. The entrepreneur's credit history or character. 2. Their ability to meet debt and interest payments (cash flow.) 3. The collateral or tangible assets being secured. 4. Equity contribution or the amount of personal equity that has been invested by the entrepreneur. Investors provide large sums of capital for ownership (equity) and expect to cash out within 5 to 7 years. They will often place more emphasis on the entrepreneur's character than lenders. The venture capitalist will play an important role in management of the business and wants the entrepreneurs to be pliable and willing to accept this involvement. These investors will also demand high rates of return and will thus focus on the market and financial projections. If the entrepreneur does not consider the needs of these sources, the plan may be an internalized document without consideration of the feasibility of meeting market goals. Most external advisors and potential investors are bound by a professional code of ethics regarding disclosure.
Information Needs
Before committing time and energy to preparing a business plan the entrepreneur should do a quick feasibility study of the business concept to see whether there are any possible barriers to success.The information obtainable from many sources should focus on marketing ,finance and production.The internet discussed below,can be a valuable resource for the entrepreneur.Before beginning the feasibility study,the entrepreneur should clearly define the goals and objectives also provide framework for the business plan,marketing plan and financial plan.
Market Information
One of the initial pieces of information needed by the entrepreneur is the market potential for the product or service. In order to ascertain the size of the market, It is first necessary for the entrepreneur to define the market, For example, is the product most likely to be purchased by men or women? People of high income or low income? Rural or urban dwellers? To project market siz and subsequent market goals for the4 new venture.
Introduction Page Name and address of business Name(s) and address (es) of Nature of business Statement of financing needed Statement of confidentiality of
Industry Analysis
Company Ownership
Future outlook and trends Analysis of competitors Market segmentation Industry and market forecasts
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Descripiton of
Market Analysis Summary Market Segmentation Target Market Segment Strategy Service Business Analysis Competition and Buying Patterns
Production Plan Manufacturing Process Physical Plant Machinery and equipment Names of suppliers of Material Milestones
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Management Summary Personnel Plan Financial Plan Break-even Analysis Projected Profit and Loss Projected Cash Flow
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Appendix
Culture
An evaluaton of cultural changes may consider shifts in the population by demographics.
Technology
Advances in technology are difficult to predict.However the entrepreneur should consider potential technological development determind from resources committed by major industries or the U.S.gvernment.
Legal concerns
There are many important legal issues in starting a new venture.The entrepreneur should be prepared any for any future legislation that may affect the product or service, channel of distribution,price,or promotion strategy. All of the above external factors are generally uncontrollable.
Production Plan
If the new venture is a manufacturing operation, a production plan is necessary. This plan should describe the complete manufacturing process. If some or all of the manufacturuing process is to be subcontracted, the plan should describe the subcontractor, including location, reasons for selection, costs, and anby contracts that have been completed. If the manufacturing is to be carried out in 7 |Page www.unlimitedstudy.webs.com Sarker Manage By : Md. Nurunnabi
whole or in part by the entrepreneur, he or she will need to discribe the pghysical plant layout. The machinery and equipment needed to perform the manufacturing operation s; raw materials and suppliers names, addresses, and terms; costs of manufacturing; and any future capital equipment needs. In a manufacturing operation, the discussion of these items will be important to any potential investor in assessing financial needs.
Operations Plan
All businesses manufacturing or nonmanufacturingshould include an operations plan as part of the business plan. This section goes beyond the manufacturing process and describes the flow of goods and services from production to the customer. It might include inventory or storage of manufactured products, shipping, inventory control procedures, and customer support services. A non manufacturer such as a retailer or service provider would also need this sectin in the business plan in order to explain the chronological steps in completing a business transaction.
Marketing Plan
The marketing plan is an important part of the business plan since it describes how the product or service will be distributed, priced, and promoted. Marketing research evidence to support any of the critical maerketing decision strategies as well as for forecasting sales should be described in this section. Specific forecasts for a product or service are indicated in order to project the profitability of the venture.
Organizational Plan
The organizational plan is the part of the business plan that descries the ventures form of ownershipthat is, proprietorship, partnership, r corporation. If the venture is a partnership, the terms of the partnership should be included. If the venture is a corporation, it is important to detail the shares of stock authorized and share options, as well as the nemes, addresses, and resumes of the dicectors and officers of the corporation. It is also helpful to provide an organization chart indicating the line of authority and the responsibilities of the members of the organization.
Assessment Of Risk
Every new venture will be faced with some potential hazards, given its particular industry and competitive environment. It si important that the entrepreneur make an assessment of risk in the fllowing manner. First, the entrepreneur should indicate the potential risks to the new venture. Next should be a discussion of what might happen if these risks become reality. Finally, the entrepreneur should dicuss the strategy tghat will be emloyed to either prevent,
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minimize, or respond to the risks should they occur. Major risks for a new venture could result from a competitors reaction weaknesses in the marketing, production or management team and new advances in technology that might render the new product obsolete.
Financial Plan
Like the marketing, and organization plans, the financial plan is an important part of the business plan. It determines the potential investment commitment needed for the new venture and indicates whether the business plan is economically feasible. Generally, three financial areas are dicussed in this section of the business plan. First the entreprneur should summarize the forecasted sales and the appropriate expenses for at least the first three yeaers, with the first years projectins provided monthly. The form for displaying this information. It includes the forecasted sales, cost of goods sold, and the general and administrativ expenses. Net profit after taxes can then bd projected by estmating income taxex. The scond major area of financial information needed is cash flow figures for there years, with the first years projections provided monthly. Since bills have to be paid at different times of the year, it is important to determine the demands on cash on a monthly basis , especially in the first year, Remember that sales may be irregular, and receipts from customers also may be spread out, thus necessitating the borrowing of short-term capital to meet fixed expenses such as salaries and utilities.
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Refferance
Book: Entrepreneurship ( Robert D. Hishich, Michael P. Peters, Dean A. Shepherd) www. Google.ocm www.unlimitedstudy.webs.com
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