Entrepreneurship

Lesson #2

What is Business Plan

The business plan is a document that helps the small business owner determine what
resources are needed to achieve the objectives of the firm, and provides a standard against which to
evaluate results. It is a sort of a business blueprint and it keeps the entrepreneur on the right track.
It gives a sense of purpose to the business. It also provides guidance, influence, and leadership, as
well as communicating ideas about goals and the means of achieving them to partners, associates,
employees and others. It is an essential roadmap for business success. This living document
generally projects 3-5 years ahead and outlines the route a company intends to take to grow
revenues.

Purposes of Business Plan

1. To serve as management’s guide during the lifetime of the business; and
2. To fulfill the requirement for securing lenders and investors.

The Business Plan should include the following:

Section 1: Executive Summary

The Executive Summary is a portion of the business plan that summarizes the plan and
states the objectives of the business. The executive summary appears first in the business plan but is
often the last to be created. This summary provides a brief review of the information within the plan.
It quickly introduces the business and its owners, identifies the industry and target markets, and
identifies the competition. The executive summary also includes the requested loan amount and the
ideal repayment plan, when a loan is requested.

Section 2: Personal Details

I. Names of the Authors and Brief biography of each
II. Names of advisors and brief biography of each

Section 3: Overview of the Business

I. Name of the Business
II. Description of the Business (includes the location (draw the map is possible), logo of the
business and tagline of the business.

Section 4: The Business Plan

I. The Problem/Need
a. Describe the exact problem/need that you are addressing (or reason why you are
putting up the business)
b. Why is it important to address the problem/need?
c. How will the business solve the problem/need?

II. Vision, Mission and Values

a. Vision – What change do you want to see if the problem/need is solved?
b. Mission – Your mission should contain clear goals and objectives that present
practical steps to achieve your vision.
c. Values – What are your guiding concepts and principles? These values should be
critical to your culture, integrity and activities.

III. Marketing Plan

For many businesses, the marketing portion serves as the core of the business plan. In this
section, you will include your business’ list of products and services, along with the consumer’s cost
for each. You will identify your target market, or customer base, and explain the methods that you
will use to capture and retain those customers, such as advertisement and trade shows. The
marketing plan also includes details about your business’ competition, its strengths and
weaknesses, and how your business will counteract the strategies of that competition. The
marketing section also includes information about your business’ website, including how your
business will use the site, create traffic and protect your customer’s information.
a. Research and Analysis – Who are your target markets? What is the market size
and trends? (Competition and estimated market share)
b. Marketing Plan – How will you market your product/service and how do you reach
customers? How will you serve your target group and your investors? Do you have
business partners? Specify your partner’s role, added value and location.
 IV. Production/Technical Plan
a. Detailed description of products and services
b. Operating Strategies – What is your production model? What are the components,
raw materials, supplies, transportation needed? How will you access it? What
research needs to be done in order to develop your product or help you develop your
product?

c. Critical Risk – Who are your competitors? How is your business different from the
others? What is your competitive strategy? Who are your partners? What are their
roles, added value to maximize the impact? What are your risks and opportunities?
What is your potential impact? How will you capitalize to prevent the risks?

V. Organization/Management Plan
The staffing section identifies the positions that are required to run the business efficiently. It
explains the functions of each position and ascertains the cost of each employee. Employee costs
include payroll, benefits, training costs and other expenses that are incurred as a result of hiring the
employee.
a. Who are the members of your team?
b. What can they contribute to the business?
c. Who else needs to be part of the team?

VI. Operational Plan

The operations portion of the business plan explains the business’ operations in detail. This
includes information on the business’ location. This section identifies the hours of operation, as well
as the furniture and equipment that the business needs to produce. It addresses the suppliers and
vendors that your business will use, the products that you will purchase from them and the costs that
are incurred. The operations portion also address specifics about maintaining the property, such as
zoning compliance, utilities, taxes, building repairs and monthly property payments.
a. Identify how you will implement your business. Assign responsibilities of task and
schedule your deliverables and necessary resources? You may create a work
breakdown schedule to develop estimates, assign personnel, back progress and
show the score of work of each department/individual.
b. Monitoring and Evaluation – What outcomes are you trying to achieve for your
target? How will you monitor your achievements? What are your performance
targets? You may create a timeline on when this will be achieved.

Section 5. Sustainability
Although every business plan includes individualized information, the financial portion of
every business plan is quite similar. This section should include, at minimum, four financial
statements. These statements include, in order of appearance, the personal financial statement,
balance sheet, income statement and cash flow statement. Each owner must include his own
personal financial statement. Therefore, if there is more than one owner, there will be more than
one personal financial statement.
I. Financial Plan (This include strategies for fund raising)
a. What is the average investment needed?
b. What are the specific investments needed in year 1-2?
c. What percent of the investment will be your own financial contribution?
d. How will you raise funds to start the business?
e. After how many years will your business generate profit?

II. Social Impact

a. What are your long-term desired outcomes?
b. What is/are the social impact that will be generated from each of the activities
of your business?
c. What is the impact of the business to the community? (Employment, women,
quality of living, knowledge created, potential for long-term spin offs)

Section 6. Addendum ( Pictures and documentation materials, if available)