Introduction

Creating a business plan may be arduous and challenging but having one far outweighs
its benefits with no plan at all. It serves as a map, a communication tool what to do and what not
to do. This topic outlines the basics of a business plan and determines when a business
opportunity exists.

Learning Outcomes

 Describe the features of a business plan

 Discuss the purpose of a business plan
 Explain how a business plan is helpful in determining when an idea has the potential to
become a successful business.

What is a Business Plan?

Business Plan is an invaluable tool for any entrepreneur. It is a written document, which
precisely defines your business whether it is a single proprietorship, partnership, or a
corporation. Also, it describes the experiences and talents of those who are starting the
business. It explains who is in charge and the duties of the staff. It defines your goals and
serves as your enterprise resume. It helps you allocate resources properly, handle unforeseen
complications, and make the right decisions.

3 Primary Purposes of a Business Plan:

1. To serve as an action plan

This will help an entrepreneur pull apart the pieces of starting a business and examine
each piece by itself. By breaking down tasks into smaller one is more viable than
tackling a big challenging task at once.

2. To serve as a road map

It is an invaluable tool to help the entrepreneur on track of its goal. It guides the business
to achieve what it intends to pursue.

3. To serve as a sales tool

A business plan serves as a tool in attracting investors. A well-written business plan can
convince potential financiers to put money in the business.

A comprehensive business plan is crucial for start-up business. It defines the entrepreneur’s
vision and serves as the company’s resume. On top of the reasons mentioned above, there are
further reasons for writing a business plan:

 To convince oneself that the new venture is worthwhile before making a significant and
personal commitment
 To assist management on goal-setting and long-range planning
 To attract investors and get financing
  To explain the business to other companies with which it would be useful to create an
alliance or contract
 To attract employees

A business plan can help an entrepreneur to allocate resources appropriately, handle

unexpected problems, and make good business decisions. The business plan helps the
entrepreneur shape his original vision into a better opportunity by raising critical questions and
then answering them.

A well-organized plan is essential part of any loan application. It should specify how the
business would repay any borrowed money.

Basic Parts of a Business Plan

1. Company Description
The location of the business and the kind of ownership or the legal structure of the
business
2. Mission Statement of the Business
3. Long and Short-term Goals
4. Organization (Organizing, Controlling and Directing)
 What is the organizational set-up and who is in charge of each department?
What are the tasks of each employee? What are your operational procedures?
5. Product (or Service)
 What are the goods you are going to produce or services you are going to render
to create revenue for the business?
6. Price
 What is the selling price of your product or service?
7. Promotion and Positioning
 What are the strategies in promoting your product or services? What kind of
branding and advertising you need to take to create sales of your product or
services? What is your unique selling proposition?
8. Target Market
 Who is your primary and secondary target market? How are you going to reach
your market?
9. Competitive Analysis
 Who will be your direct and indirect competitors? How these competitors perform
in the market?
10. Financial Information
 How much capital you need to create a revenue? What are your expenses and
projected sales?
11. SWOT Analysis
 What are the strengths, weaknesses, opportunities, and threats of the company?
How do we overcome the weaknesses and threats? How do we maximize the
strengths and opportunities?
12. Timetable
 When are you going to implement the plan? What is the schedule for organizing,
marketing, and production?