Business Plan: Dpb2012 - Entrepreneurship Polytechnic Version

CHAPTER 5
BUSINESS
PLAN
by Mohd Zaini Zainudin
DPB2012 – ENTREPRENEURSHIP
POLYTECHNIC VERSION
1
INTRODUCTION
Definition of business plan, the purpose of

business plan, the important elements, and
the standard format of the business plan.
The characteristics of a good business plan,
format and minimum requirement required
by financial institutions and government
agencies.
LECTURER
Hi Everyone, you are in Entrepreneurship DPB2012 class!

ASSIGNMENT 3
BUSINESS PLAN
30%
PROJECT
SEE MORE
Written report.
Business Plan format is covered extensively in the course but we will cover is briefly in the
following slides.
*GROUPING TASK (4-5 person only). 3

TOPIC OUTLINES
Upon completing this course, students
should be able to :
1. Explain the overview of business plan.
2. Explain the important elements of business plan.
3. Create a business plan using the standard format.

COURSE LEARNING OUTCOMES
Upon completing this course, students
should be able to :
1. Prepare completely business plan according to standard format. (P2, LD2)
BUSINESS PLAN
“
A formal statement of business goals,
reasons they are attainable, and plans
for reaching them. It may also contain
background information about

the organization or team attempting to reach
those goals.
6
BUSINESS PLAN
“Business Plan:
A document investors make you
write that they don’t read.”
– Steve Blank
Silicon Valley entrepreneur
7
Mr Jai - someone smart
OVERVIEW OF BUSINESS PLAN
“ “
11
BUSINESS PLAN
12
• A business plan is a written document that describes in detail how a

business, usually a new one, is going to achieve its goals. A business plan
lays out a written plan from a marketing, financial and operational
viewpoint.
• Include: An executive summary - this is an overview of the business you

want to start. Your vision and business idea - a short description of who
you are, what you plan to sell or offer, why and to whom, your business
goals and key selling points - see your business, its products and services.
• Written document between 25 to 40 pages. Must be blueprint of

company (logical & realistic)
• To convinces the reader – business can produce enough revenue or profit

and sound investment opportunities.
13
• It spells out your purpose, vision and means of operation. It also serves as
your company's resume, explaining your objectives to investors, partners,
employees and vendors.
• 2 primary purposes :
o First - used to help run your company with a more cohesive vision. It is
your roadmap. By truly analyzing your plan for marketing, sales,
manufacturing, website design, etc., you greatly improve your
chances for success.
o Second - to be the reason most clients request plan. That is, a
financial institution or other lender will not invest in your company
unless you can demonstrate that you have a roadmap to success.
Banks want to mitigate their risk of default and private investors, such
as Angel’s, want a realistic forecast for when they will be reaping a
return on their capital.
14
15
IMPORTANT ELEMENTS OF BUSINESS PLAN
“ “
16
BUSINESS PLAN
IMPORTANT ELEMENTS OF BUSINESS PLAN
17
IMPORTANT ELEMENTS OF BUSINESS PLAN : ORGANIZATION PLAN
18
IMPORTANT ELEMENTS OF BUSINESS PLAN : ORGANIZATION PLAN - VISION & MISSION
More specific than your vision. Expresses the "what and how" of your effort, describing what your group is going to do to
make your vision a reality. An example of a mission statement: "Our mission is to develop a safe and healthy neighborhood
through collaborative planning, community action, and policy advocacy.“ While your vision statement inspires people to
dream, your mission statement should inspire them to action. Make it concise, outcome-oriented, and inclusive.
Your dream, a picture of the ideal conditions for your community. As a unifying statement for your effort, it also reminds
you what you are striving to reach and guides important decisions. A vision statement should be a few short phrases or
a sentence that conveys your hopes for the future. Catchy phrases such as "Healthy teens," "Safe streets, safe
neighborhoods" and "Education for all" illustrate the common characteristics of a vision statement.
Strategies explain how your group will reach its objectives. Broad approaches for making change include advocacy,
coalition building, community development, education, networking and policy or legislative change. For example, a
child health program could choose a broad strategy of social marketing to promote adult involvement with children.
Specific strategies guide an intervention in more detail. To promote the health of children, you might also enhance
people's skills (offer training in conflict management), modify opportunities (offer scholarships), or change the
consequences of efforts (provide incentives for community members to volunteer as youth mentors).
19
Mission Vision
………………………………………………………………………………………………… …………………………………………………………………………………………………
………………………………………………………………………………………………… …………………………………………………………………………………………………
………………………………………………………………………………………………... ………………………………………………………………………………………………...
IMPORTANT ELEMENTS OF BUSINESS PLAN : ORGANIZATION PLAN – ORGANIZATIONAL STRUCTURE
The typically hierarchical arrangement of

lines of authority, communications, rights
and duties of an organization.
Organizational structure determines how

the roles, power and responsibilities are
assigned, controlled, and coordinated,
and how information flows between the
different levels of management.
21
•Functional
•Divisional.
•Matrix.
•Flatarchy.
22
Also commonly called a bureaucratic organizational structure, the functional structure divides the
company based on specialty. This is your traditional business with a sales department, marketing
department, customer service department, etc.
The advantage
- individuals are dedicated to a single function.
- clearly defined roles and expectations limit confusion.
- The downside is that it’s challenging to facilitate strong communication between different
departments.
CEO
Information
Marketing Financial Operational
Technology
23
CEO
Refers to companies that structure

leadership according to different products Product A Product B Product C
or projects.
Gap Inc. is a perfect example, there are

three different retailers underneath the Sales & Sales & Sales &
heading: Gap, Old Navy, and Banana Marketing Marketing Marketing
Republic.
Each operates as an individual company,

but they are all ultimately underneath the R&D R&D R&D
Gap Inc. brand.
Purchasing Purchasing Purchasing
24
Employees have multiple bosses

and reporting lines. Not only do
they report to a divisional
manager, but they also typically
have project managers for
specific projects.
While matrix structures come

with a lot of flexibility and
balanced decision-making, this
model is also prone to confusion
and complications when
employees are asked to fulfill
conflicting responsibilities.
25
A ‘flatter’ structure seeks to open up the

lines of communication and
collaboration while removing layers
within the organization.
Flatarchies are organizations that aren't

quite flat nor are they hierarchical. They
are actually a combination of both types
of structures. In other words, an
organization can be relatively flat yet
can create an ad hoc hierarchy to work
on a project or function and then
disband
26
IMPORTANT ELEMENTS OF BUSINESS PLAN : ORGANIZATION PLAN – SWOT ANALYSIS
SWOT analysis is a strategic planning

technique used to help a person or
organization identify strengths, weaknesses,
opportunities, and threats related to
business competition or project planning.
27
What do you do well? What could you improve?
What unique resources can you draw on? Where do you have fewer resources than others?
What do others see as your strengths? What are others likely to see as weaknesses?
What is your organization's Unique Selling

Proposition (USP)?
What opportunities are open to you? What threats could harm you?
What trends could you take advantage of? What is your competition doing?
How can you turn your strengths into What threats do your weaknesses expose you
opportunities? to?
28
Zero cost Additional research needed
Important results Subjective Analysis
New ideas Submission not critical

IMPORTANT ELEMENTS OF BUSINESS PLAN : MARKETING PLAN
31
IMPORTANT ELEMENTS OF BUSINESS PLAN : MARKETING PLAN – MARKET SEGMENTATION
Segmentation, Targeting and Positioning (STP) is

a familiar strategic approach in Modern
Marketing.
STP is second most popular after SWOT / TOWs

matrix.
In the 1950s, for example, the main marketing

strategy was 'product differentiation'.
The STP model is useful when creating

marketing communications plans since it helps
marketers to prioritise propositions and then
develop and deliver personalised and relevant
messages to engage with different audiences.
32
Market segmentation is the activity of dividing

a broad consumer or business market,
normally consisting of existing and potential
customers, into sub-groups of consumers based
on some type of shared characteristics.
Marketing term referring to the aggregating of

prospective buyers into groups or segments
with common needs and who respond similarly
to a marketing action.
Market segmentation enables companies to

target different categories of consumers who
perceive the full value of certain products and
services differently from one another.
33
DEMOGRAPHIC By personal attributes such as :

Age
marital status
gender, ethnicity
Sexuality PSYCHOGRAPHIC Personality
Education risk aversion
Occupation. Values
lifestyle.
GEOGRAPHIC Country
Region
State
City
neighborhood.
BEHAVIORAL By how people use the product, how
loyal they are, or the benefits that
they are looking for
34
Target Marketing involves breaking a market

into segments and then concentrating your
marketing efforts on one or a few key
segments consisting of the customers whose
needs and desires most closely match your
product or service offerings.
It can be the key to attracting new business,

increasing your sales, and making your business
a success.
35
Age What age range am I catering my products/services to, Kids, Adults, Senior, Gen X,
Millennials
Gender Am I targeting men, women, or both sexes
Marital Status Are my target customers married or single
Family What is their family structure (number of children, extended family, etc.)
Location Where do they live? Am I looking to sell locally? Regionally, Nationally
Education How well are they educated
Income What is their income
Occupation What do they do for a living
Religion Are they members of a particular religious group
Language Are they members of a particular language group
Lifestyle What is their lifestyle like
Motivation What motivates them
Size What is the size of the target market

Market Positioning refers to the ability to

influence consumer perception regarding a
brand or product relative to competitors. The
objective of market positioning is to establish
the image or identity of a brand or product so
that consumers perceive it in a certain way.
For example:
• A handbag maker may position itself as a

luxury status symbol
• A TV maker may position its TV as the most
innovative and cutting-edge
• A fast-food restaurant chain may position
itself as the provider of cheap meals
37
Types of Positioning Strategies

A few examples are positioning by:
• Product attributes and benefits: Associating your brand/product with certain characteristics or
with certain beneficial value
• Product price: Associating your brand/product with competitive pricing
• Product quality: Associating your brand/product with high quality
• Product use and application: Associating your brand/product with a specific use
• Competitors: Making consumers think that your brand/product is better than your competitors
38
IMPORTANT ELEMENTS OF BUSINESS PLAN : MARKETING PLAN – MARKETING MIX
The term marketing mix was coined in an

article written by Neil Borden called “The
Concept of the Marketing Mix.”
The marketer, E. Jerome McCarthy,

proposed a four Ps classification in 1960.
Robert F. Lauterborn proposed a four Cs

classification in 1993.
39
Marketing Mix is a combination of marketing tools

that a company uses to satisfy their target
customers and achieving organizational goals.
The marketing mix is

probably the most
famous marketing
term. Its elements are
the basic, tactical
components of a
marketing plan. Also
known as the 4 P's.
40
PRODUCT
The goods and/or services offered by a company to its customers.
A product refers to any item that intends to satisfy the needs and
wants of a target customer. It can be a tangible good, such a
clothing item or piece of software, or intangible, like a service or
experience
Contribute : variety, quality, design, features, brand name,

packaging, services
41
PRICE
The amount of money paid by customers to purchase the product.
Pricing strategy is an art and a science, in that it involves both

market data and careful calculations, as well as skillfully balancing
between pricing that is too high or too low, and understanding how
skewing either way might damage the brand.
Contribute : list price, discounts, allowance, payment period, credit

terms
42
PLACE
The activities that make the product available to consumers.
Place refers to providing customers access to the product, and it

also calls into play convenience for the customer. Marketing,
through digital means or otherwise, is about putting the right
product, in the right place, at the right price, at the right time, in
front of the customer.
Contribute : channels, coverage, assortments, locations, inventory,

transportation, logistics
43
PROMOTION
The activities that communicate the product’s features and benefits
and persuade customers to purchase the product.
Now, how to make an audience aware of the product? Within the

framework of the four Ps, promotion refers primarily to marketing
communications.
Contribute : advertising, personal selling, sales promotion, public

relations
44
IMPORTANT ELEMENTS OF BUSINESS PLAN : MARKETING PLAN – MARKETING STRATEGY
Marketing strategy is the section of your business

plan that outlines your overall game plan for
finding clients and customers for your business.
Sometimes marketing strategy is confused with
a marketing plan, but they are different.
•Marketing strategy focuses on what you want to achieve for your business and marketing efforts.
•Marketing plan details how you'll achieve those goals.
45
Identify your business goals Using SMART State your marketing goals
method:
Research your market
•Specific
•Measurable Profile your potential customers
•Achievable
•Relevant Profile your competitors
•Time
Develop strategies to support your
marketing goals
Use the ‘4 Ps of marketing‘
Test your ideas
46
Buyer Persona
WHO Description
Who is this person?
What problems does this buyer have?
Problems you solve for this buyer?
Why are they buying from you?
WHAT Actions you’d like them to take
Enquire, order, buy, connect, etc.
How are you remarkable?
What value do you bring?
WHY Proof
Credibility indicators, guarantees, testimonial, etc.
WHERE Where are they?

Google, blogs, Facebook, Twitter etc.
Your company personality, What kind of company are you?

Creative, Look and feel, Tone of voice, Language you’d use
HOW Keyword phrase, What buyers type into Google
Marketing tactics & Content strategy, etc.
Things to do today
WHEN Things to do next week
Things to do next month
47
IMPORTANT ELEMENTS OF BUSINESS PLAN : MARKETING PLAN – COMPETITORS ANALYSIS
Identifying your competitors and

evaluating their strategies to
determine their strengths and
weaknesses relative to those of
your own product or service.
48
Once you identify your main competitors, answer

these questions about each one. And be
objective. It's easy to identify weaknesses in
your competition, but less easy (and a lot less
fun) to recognize where they may be able to out
perform you:
What are their strengths?
Price, service, convenience, extensive inventory are all areas where you may be
vulnerable.
What are their weaknesses?
Weaknesses are opportunities you should plan to take advantage of.
What are their basic objectives?

Do they seek to gain market share? Do they attempt to capture premium clients? See your industry through
their eyes. What are they trying to achieve?
What marketing strategies do they use?
Look at their advertising, public relations, etc.
How can you take market share away from their business?
How will they respond when you enter the market?
49
Name of HQ Mission Product Sales Channels (i.e. Strengths Weaknesses Competition

Store Statement Offering Amazon, eBay, Category (Primary,
(and link) Facebook, physical Secondary, Tertiary)
store, etc.)
50
1000
800
600
400
200
[COMPANY [COMPETITOR 1] [COMPETITOR 2] [COMPETITOR 3 [COMPETITOR 4

NAME]
51
IMPORTANT ELEMENTS OF BUSINESS PLAN : PRODUCTION PLAN
52
IMPORTANT ELEMENTS OF BUSINESS PLAN : PRODUCTION PLAN – OPERATION AND PRODUCTION PROCESS
Production and Operations

Management ("POM") is
about the transformation of
production and operational
inputs into "outputs" that,
when distributed, meet the
needs of customers.
53
Example
54
Example
55
IMPORTANT ELEMENTS OF BUSINESS PLAN : PRODUCTION PLAN – RAW MATERIAL SOURCES
Raw materials are the resources

used by a company to produce
its finished goods and products.
56
IMPORTANT ELEMENTS OF BUSINESS PLAN : PRODUCTION PLAN – RAW MATERIAL SOURCES
Raw materials can be

divided into 2 groups:
Direct materials are used within the final product.
Examples include the wood used to make furniture or
the fabric used to make clothing.
Indirect materials are used throughout the

production process, but are not directly included in the
final product. Examples include the oils used to
maintain machinery or the lightbulbs in a factory.
57
IMPORTANT ELEMENTS OF BUSINESS PLAN : PRODUCTION PLAN – LAYOUT PLANNING
Deciding on the best physical

arrangement of all resources that
consume space within a facility.
58
Example
59
03
02
01
60
IMPORTANT ELEMENTS OF BUSINESS PLAN : FINANCIAL PLAN
61
IMPORTANT ELEMENTS OF BUSINESS PLAN : FINANCIAL PLAN – BUSINESS STARTUP COST
Startup costs are the expenses incurred

during the process of creating a new
business. All businesses are different, so
they require different types of startup
costs. Online businesses have different
needs than brick-and-mortars; coffee
shops have different requirements than
bookstores do.
Advertising and promotion
Borrowing costs
Employee expenses
Equipment and supplies
Insurance, license and permit fees
Research expenses
Technological expenses
62
IMPORTANT ELEMENTS OF BUSINESS PLAN : FINANCIAL PLAN – BUSINESS STARTUP COST
Example
63
IMPORTANT ELEMENTS OF BUSINESS PLAN : FINANCIAL PLAN – BREAK EVEN ANALYSIS
Break-even analysis is a
technique widely used by
production management and
management accountants.
Total variable and fixed costs are

compared with sales revenue in order
to determine the level of sales volume,
sales value or production at which the
business makes neither a profit nor a
loss (the "break-even point").
64
Example
𝑭𝒊𝒙 𝑪𝒐𝒔𝒕𝒔
Break Even Point =
𝑺𝒆𝒍𝒍𝒊𝒏𝒈 𝑷𝒓𝒊𝒄𝒆 −𝑽𝒂𝒓𝒊𝒂𝒃𝒍𝒆𝒔 𝑪𝒐𝒔𝒕𝒔 65
66
IMPORTANT ELEMENTS OF BUSINESS PLAN : FINANCIAL PLAN – INCOME STATEMENT
An income statement or
profit and loss account is
one of the financial
statements of a
company and shows the
company’s revenues and
expenses during a
particular period.
It indicates how the revenues are
transformed into the net income.
67
IMPORTANT ELEMENTS OF BUSINESS PLAN : FINANCIAL PLAN – INCOME STATEMENT
Example
68
IMPORTANT ELEMENTS OF BUSINESS PLAN : FINANCIAL PLAN – CASH FLOW
the total amount of

money being
transferred into and
out of a business,
especially as
affecting liquidity.
69
IMPORTANT ELEMENTS OF BUSINESS PLAN : FINANCIAL PLAN – CASH FLOW
70
keep your head in
the cloud
international
community
innovations
job descriptions
god bless
scientist
we know how
to make it right
monthly staff
people first trainning
knowledge
teambuilding
celebrate together
regular check we are real pro’s
CREATE A BUSINESS PLAN
“ “
72
BUSINESS PLAN
a. Table Of Content
b. Execute Summary
c. Introduction
d. Purpose Of Preparing A Business Plan
e. Business Background
f. Owners Background
g. Organizational Plan
h. Marketing Plan
i. Operational Plan
j. Financial Plan
k. Project Implementation Schedule
l. Conclusion
73
planning writing submit

Group discussion Content power Binding well
week 1 2 3 4 5 6 7 8 9 10 11 12
phase 1 – planning
phase 2 – writing
phase 3 – submit
76
mozaspace@gmail.com

Business Plan: Dpb2012 - Entrepreneurship Polytechnic Version

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Business Plan: Dpb2012 - Entrepreneurship Polytechnic Version

Uploaded by

Copyright:

Available Formats

CHAPTER 5

Definition of business plan, the purpose of

Hi Everyone, you are in Entrepreneurship DPB2012 class!

*GROUPING TASK (4-5 person only). 3

2. Explain the important elements of business plan.

3. Create a business plan using the standard format.

for reaching them. It may also contain

background information about

• A business plan is a written document that describes in detail how a

• Include: An executive summary - this is an overview of the business you

• Written document between 25 to 40 pages. Must be blueprint of

• To convinces the reader – business can produce enough revenue or profit

The typically hierarchical arrangement of

Organizational structure determines how

Refers to companies that structure

Gap Inc. is a perfect example, there are

Each operates as an individual company,

Purchasing Purchasing Purchasing

Employees have multiple bosses

While matrix structures come

A ‘flatter’ structure seeks to open up the

Flatarchies are organizations that aren't

SWOT analysis is a strategic planning

What do you do well? What could you improve?

What is your organization's Unique Selling

Zero cost Additional research needed

Important results Subjective Analysis

New ideas Submission not critical

Segmentation, Targeting and Positioning (STP) is

STP is second most popular after SWOT / TOWs

In the 1950s, for example, the main marketing

The STP model is useful when creating

Market segmentation is the activity of dividing

Marketing term referring to the aggregating of

Market segmentation enables companies to

DEMOGRAPHIC By personal attributes such as :

Target Marketing involves breaking a market

It can be the key to attracting new business,

Marital Status Are my target customers married or single

Location Where do they live? Am I looking to sell locally? Regionally, Nationally

Education How well are they educated

Income What is their income

Occupation What do they do for a living

Religion Are they members of a particular religious group

Language Are they members of a particular language group

Lifestyle What is their lifestyle like

Motivation What motivates them

Size What is the size of the target market

Market Positioning refers to the ability to

• A handbag maker may position itself as a

Types of Positioning Strategies

• Product price: Associating your brand/product with competitive pricing

• Product quality: Associating your brand/product with high quality

The term marketing mix was coined in an

The marketer, E. Jerome McCarthy,

Robert F. Lauterborn proposed a four Cs

Marketing Mix is a combination of marketing tools

The marketing mix is

Contribute : variety, quality, design, features, brand name,

Pricing strategy is an art and a science, in that it involves both

Contribute : list price, discounts, allowance, payment period, credit

Place refers to providing customers access to the product, and it

Contribute : channels, coverage, assortments, locations, inventory,