Business Plan 2020

Shirin Akter, Asst. Prof.- MGT

Chapter- 6
Business Plan
 Definition of 'Business Plan'.
 How to prepare a business plan?
 Writing the Business Plan.
 8(eight) simple steps to creating one’s own
business plan.
 Business Plan Outline.

Definition of 'Business Plan'

Business plan is a written document that describes in
detail how a new business is going to achieve its goals. A
business plan will lay out a written plan from a marketing,
financial and operational viewpoint. Sometimes a
business plan is prepared for an established business that
is moving in a new direction.
A good plan should emphasize the strength and recognize
the weakness of the proposed venture.
 Business Plan 2020

Shirin Akter, Asst. Prof.- MGT

The business plan must illustrate the current status,

expected needs and projected result of the new business.
A business plan includes a description of a company or
small business, its services and/or products and how the
business will achieve its goals. The plan includes the
overall budget, current and projected financing, a market
analysis and its marketing strategy approach. In a
business plan, a business owner projects revenues and
expenses for a certain period of time and describes
operational activity and costs related to the business.

How to prepare a business plan?

Here we show some preparation system to develop a

business plan, by which many entrepreneur made
their career succeed.
 Business Plan 2020

Shirin Akter, Asst. Prof.- MGT

• The Chief Executive Officer (CEO), who should have

the main responsibility for supervising the business
planning process.
• The marketing and sales manager, who understands
best the demand of the market, its growth potential, the
specific requirements of clients, the prices that they are
ready to pay, the moves of competitors, etc.
• The development and production managers, who
provide input of central importance for the business plan,
such as lead times for developing new products,
requirements for new production machinery and
equipment, personnel needs and raw material
requirements.
• The financial manager, who usually puts the financial
data of the business plan together, works out the financing
requirements of the firm, and is one of the key figures in
talking to investors and lending institutions
 Business Plan 2020

Shirin Akter, Asst. Prof.- MGT

Every successful business regularly reviews its business

plan to ensure it continues to meet its needs. It's sensible
to review current performance on a regular basis and
identify the most likely strategies for growth. So these are
the major preparation for development a business plan.

Writing the Business Plan:

1. Introductory page:
This is the title or cover page that provides a brief
summary of the business plans contents. This introductory
page should contain the followings:
- the name and address of the company.
- the name of the entrepreneur and a telephone number.
- a paragraph describing the company and the nature of
the business.
- the amount of financing needed, the entrepreneur may
offer a package, that is, stock, debt, and so on. However,
 Business Plan 2020

Shirin Akter, Asst. Prof.- MGT

many venture capitalists prefer to structure this package in

their own way.
- a statement of the confidentiality of the report. This is
for security purpose and is important for the entrepreneur.
2. Executive summary:
This section of the business plan in prepared after the total
plan is written. About three to four pages in length, the
executive summary should stimulate the interest of the
potential investor. The investor uses the summary to
determine if the business plan is worth reading in total.
Thus, it should highlight in a concise and convincing
manner the key points in the business plan, which is, the
nature of the venture, financial needed, market potential,
and support as to why it will succeed.
3. Description of venture:
The description of venture should be described in this
section of the business plan. In this stage, the investor to
ascertain the size and the scope of business. Key elements
 Business Plan 2020

Shirin Akter, Asst. Prof.- MGT

of products and services the location and size of business,

the personal and office equipments, that will be needed,
the background of the equipment and the history of the
venture.
Location of any business may be vital to its success,
particularly if the business is retail or involves a service.
Thus, the emphasis on location of the business plan is a
function of type of business. In assessing the building or
space the business will occupy, the entrepreneur may
need to evaluate such factor as parking, access from the
roadways to facility, access to customer, suppliers,
distributors, delivery rates.
 The new venture should be described in details in
the second of the business plan.
 This will enable the investor to the size and scope
of business.
 Business Plan 2020

Shirin Akter, Asst. Prof.- MGT

4. Organizational plan:
The organizational plan is the part of the business plan
that describes the ventures from the ownership that is,
proprietorship, partnership or corporations. If the venture
is a partnership should be included. If the venture is a
corporation, it is important to detail the share of stock
authorized, share opposition, name and address and the
resumes of the directors.
It also helpful to provide an organization charts the line of
authority and the responsibilities of the members of the
organizations.
 This section of the business plan should describe
the venture of ownership.
 If the venture is a partnership, the terms of the
partnership should be included.
 Business Plan 2020

Shirin Akter, Asst. Prof.- MGT

5. Financial Plan:
The financial plan is like the marketing, production, and
organization plans, is an important part of business plan.
It determines the potential investment commitment
needed for the new venture and indicates the business
plan is economically feasible.
Generally the three financial areas are discussed in this
section of the business plan:
 First, the entrepreneur should summarize the
forecasted sales and expense for at least the first
three years.
 Second, major area of financial information needed
is cash flow figures for three years, with the first
year’s projections.
 The third financial item needed in this section of the
business plan is the projected balance shit.
 Business Plan 2020

Shirin Akter, Asst. Prof.- MGT

6. Assessment of risk:
Every new venture will be faced some potential hazard,
given the particular industry and competitive
environment. An assessment of risk and prepare an
effective strategy to deal with them. Major risk for a new
venture could result from a competitor’s reaction,
weakness in the marketing production or management
team and new advance in technology that might render
the new product absolute.
 It is important to the entrepreneur to recognize the
potential risk and prepare a effective strategy to deal
with them.

7. Appendix:
The appendix of the business plan generally contains any
backup materials that is not necessary in the text of the
document. Reference to any of the documents in the
appendix should be made in the plan itself.
 Business Plan 2020

Shirin Akter, Asst. Prof.- MGT

Letters from customer, distributors are example of

information that shoud be include in the appendix.
 The appendix of the business plan generally contains
any backup materials that is not necessary in the text
of the documents.
 Reference to any of the documents in the appendix
should be in the plan itself.
 Any documents information that is secondary data or
primary research data used to support plan decision.
 Business Plan 2020

Shirin Akter, Asst. Prof.- MGT

Business Plan Outline

The following pages provide a suggested outline of the
material to be included in your business plan. Your final
plan may vary according to your specific needs or
individual requirements of your lender or investor.
1. Introductory Page: (Serves as the title page of your
business plan)
A. Name, address, and phone number of the
company.
B. Name, title, address, phone number of
owners/corporate officers.
C. Month and year your plan was prepared.
D. Name of preparer.
E. Copy number of the plan.

2. Table of Contents: (Quick reference to major topics

covered in your plan)
 Business Plan 2020

Shirin Akter, Asst. Prof.- MGT

3. Executive Summary
The executive summary is the abstract of your
business plan. It summarizes the content and purpose
of your finished plan, covering all of the key points.
This is a key section if you are seeking funding.
A. Your Company (introductory overview -
who, what, where it is and why it is unique)
B. Market Opportunity (opportunities your
company is positioned to take advantage of)
C. Capital Requirements, Breakdown of Uses
of Funds, Repayment of Loan or Benefits to
Investors.(include only if you are seeking
funding)
D. Mission Statement
E. Management (who they are and strengths
each one brings to the company)
F. Competitors (direct and indirect); list their
strengths and weaknesses.
 Business Plan 2020

Shirin Akter, Asst. Prof.- MGT

4. Description of Venture:
 Product(s) or service (pictures,
drawings, characteristics, quality).
 Product protection/exclusive rights
(patents, copyrights, trade marks,
franchise rights).
 Staff and equipment needed (overall
requirement, capacity).
 Brief history (principals involved,
development work done).
 Competitive advantage of your
business concept (your market niche,
uniqueness, estimated market share).

5. Production plan:
List and describe the products or services you
sell. Sometimes this part of the plan will include
tables that provide more details, such as a bill of
 Business Plan 2020

Shirin Akter, Asst. Prof.- MGT

materials or detailed price lists, but more often than

not this section is just text.

 Manufacturing process.
 Physical Plant.
 Machinery and equipment.
 Names of suppliers of raw materials.
6. The Marketing Plan:
A. Overview and Goals of Your Marketing
Strategy
B. Market Analysis
 Target Market (identify with
demographics, psychographics, and
niche market specifics)
 · Competition (describe major
competitors assessing their strengths
and weaknesses.
 Business Plan 2020

Shirin Akter, Asst. Prof.- MGT

 · Market Trends (identify

industry trends and customer trends)
 · Market Research (describe
methods of research, database
analysis, and results summary)
c. Marketing Strategy
 General Description (budget % allocations
on- and off-line with expected ROIs)
 Method of Sales and Distribution (stores,
offices, kiosks, catalogs, d/mail, website)
 Packaging (quality considerations and
packaging)
 Pricing (price strategy and competitive
position
7. The Organizational Plan:
In a paragraph or two give a broad overview of
the nature of your business, telling when and
 Business Plan 2020

Shirin Akter, Asst. Prof.- MGT

why the company was formed. Then complete

the summary by briefly addressing:
 mission (projecting short- and long-
term goals)
 business model (describe your
company's model and why it is
unique to your industry)
 strategy (give an overview of the
strategy, focusing on short- and long-
term objectives)
 strategic relationships (tell about
any existing strategic relationships)
8. Assessment of Risk:

 Evaluate Weakness of business.

 New technology.
Contingency plans.
9. Financial plan:
 Business Plan 2020

Shirin Akter, Asst. Prof.- MGT

 Important Assumptions
 Key Financial Indicators
 Break-even Analysis
 Projected Profit and Loss
 Projected Cash Flow
 Projected Balance Sheet
 Business Ratios

10. Appendix:
Lastly, the appendix to your business plan. This isn’t a
required chapter by any means, but it is a useful place to
stick any charts, tables, definitions, legal notes, or other
critical information that either felt too long or too out-of-
place to include elsewhere in your business plan.

Why Some Business Plan Fails ?

 Business Plan 2020

Shirin Akter, Asst. Prof.- MGT

1. Goals should be specific otherwise business plan may

fails. For example, the entrepreneur may target a specific
market share, units sold, or revenue.
2. Goals are measureable and can be monitored overtime.
3. The entrepreneur and his or her family must make a
commitment to the business in order to be able to meet
the demand of a new venture. For example, it is difficult
to operate a new venture on a part time basis while still
holding onto a full time position. And it is also difficult to
operate a business without understanding form family
members as to the time and resources that will be needed.
4. Lenders or investors will not be favorable inclined
toward a venture that doesn't have fulltime commitment.
Moreover, lenders or investors will expect the
entrepreneur to make a significant financial commitment
to the business even if it means a second mortgage or a
depleting of saving.
 Business Plan 2020

Shirin Akter, Asst. Prof.- MGT

5. Lack of experience will result in failure unless

entrepreneur can either attain the necessary knowledge or
team up with someone who already as it. For example, an
entrepreneur try to start a new restaurant without any
experience or knowledge of the restaurant business would
be disastrous.
6. The entrepreneur should also document customer needs
before preparing the plan. Customer need can be
identifying from direct experience, letters from customers,
or from marketing research. A clear understanding of this
needs and how the entrepreneurs business will effectively
need them is vital to the success of the new venture.
 Business Plan 2020

Shirin Akter, Asst. Prof.- MGT