BUSINESS PLAN

Note: Base the format of your Business Plan to the format of your Research Paper

 A business plan is a written document that describes all the steps necessary for opening and operating a
successful business. The business plan must appeal to its target audience. It must highlight for them the
main features of the business plan that they are looking for.

CONTENTS OF A BUSINESS PLAN

I. INTRODUCTION
A. The Business Concept and Business Model
 The Business Concept contains the essence of the enterprise in a concise but powerful manner
and it stresses the value of the product being offered.
 The Business Model
A plan for successful operation of a business, identifying sources of revenue, the target
Customer, products, and details of financing. Simply a formula on how the enterprise exactly
plans to make money out of the business
Visit this link, https://www.youtube.com/watch?v=CakUeC1sCSs for additional information
regarding Business Model
• Areas of Money making:
1. How to raise revenues?
2. What will be the costs of the enterprise products and other costs of doing
business?
- How will this costs be managed to ensure comfortable profits?
- What critical factors will drive the costs?
-How can these factors be controlled?
3. What will be the major investments of the enterprise?
4. How will the enterprise finance the investment? How will the enterprise
finance its growth?

B. The Business Goals: Vision, Mission, Objectives and Performance Targets

- It shows the future and long-term prospects of the enterprise.
- It also includes the key result areas and the performance indicators
Case Example 1: Double Happiness
Vision: To establish a commanding presence and market leadership as a food chain servicing major bus
terminals in Central Luzon within the next five years.
Mission: To provide quality food and passenger convenience services that would generate sufficient
profits the stockholders and improve the lives of its employees.

Objectives:
1. To establish a strong market presence in Central Luzon
2. To earn good financial returns for its owners
3. To delight customers with high quality food and services
4. To make Double Happiness a happy and rewarding place to work in

OBJECTIVES KEY RESULT AREAS

1. To establish a strong market
presence in Central Luzon
1a. Number of food outlets in major bus terminals in Central
Luzon
1b. Sales volume attained
1c. Market share in Central
Luzon

2. To earn good financial returns for 2a. Amount of net profits realized for the next five years
its owners
2b. Return on equity (ROE)
 2c. Return on assets(ROA) or return on investments(ROI)
2d. Return on sales(ROS)

3. To delight customers with high 3a. Growth in sales per outlet

quality food and services
3b. Percentage of repeat customers

4. To make Double Happiness a 4a. Compensation and benefits of managers and workers are
happy and rewarding place to work in above industry rates

KEY RESULT AREAS PERFORMANCE INDICATORS

2014 2015 2020

(Now) (One Year (Five Years
Later) Later)

1a. Number of food outlets in major bus terminals in 3 5 20

Central Luzon
P7 Million P13 Million P60 Million
1b. Sales volume attained
2% 3% 12%
1c. Market share in Central Luzon

2a. Amount of net profits realized for the next five P 1M P 2M P 10M
years
30% 40% 60%
2b. Return on equity (ROE)

2c. Return on assets(ROA) or return on 15% 20% 30%

investments(ROI)

2d. Return on sales(ROS 14% 15% 16%

3a. Growth in sales per outlet 20% 20% 20%

3b. Percentage of repeat customers 30% 40% 50%

4a. Compensation and benefits of managers and Same as 5% above 15% above
workers are above industry rates Industry Industry Industry

C. The Business Offering and Justification

 II. EXECUTIVE SUMMARY
- It’s a synthesis of the entire plan
- Contains the major argumentations of the business proponent on why the business will work and succeed
- Should introduce and highlight the good qualities of:
1. Business proponents and their partners
2. The enterprise organization and its capabilities
3. The technology providers and their expertise and experience
4. The suppliers and all the major service providers
- Describe the products/services
- Features and attributes
- Justify the Enterprise Strategy (builds and develops the game plan for attaining competitiveness) and
- Enterprise Delivery System (the entire process of converting resources into output into outcomes
- Should render all the operations, market, and organizational strategies previously cited into financial strategies
and forecasts
- Investment requirements should be presented
- Should contain a section on the environmental and regulatory compliance of the proposed business
- Capital structure

III. THE BUSINESS PROPONENTS: ORGANIZERS WITH THEIR CAPABILITIES AND

CONTRIBUTIONS
The business proponents contains information about the business proponents or stakeholders.
Types of stakeholders:
1. Resource mobilizers and financial backers
2. Technology providers and applicators
3. Governance and top management
4. Operating and support team

IV. THE TARGET CUSTOMERS AND THE MAIN VALUE PROPOSITION TO THE CUSTOMER
- Target Customers must be of sufficient size, paying capacity and interest to purchase the products
- The Main Value Proposition is the unique selling proposition
*what the customers to buy, how they buy, when they buy, where they buy, and what convinces them to
buy should be used to justify the exact locations and marketing channels to be employed by the
enterprise
V. MARKET DEMAND AND SUPPLY, INDUSTRY DYNAMICS AND MACRO
ENVIRONMENTAL FACTORS

*The business plan should estimate the total market supply and demand for the product offerings and
determine the major critical factors that influence it.
*Once these factors or variables are determined, the business plan should then forecast the future
demand and supply

Industry Dynamics
 Competing enterprise? What are their comparative advantages and disadvantages? What business
models and strategies are they employing?
 Suppliers? What are their capabilities and bargaining power?
 Channels of distribution

Macro Environmental Factors

 Social Environment
- Demographic and cultural dimensions
 Political Environment
- Includes the laws, rules, and regulations on allowable and disallowable business practices
 Economic Environment
- Driven by supply and demand forces
 Ecological Environment
- Includes all natural resources and the ecosystem
VI. PRODUCT/SERVICE OFFERING
- Described by highlighting the features and attributes

VII. ENTERPRISE STRATEGY (ES)

- Mapping of the competitive landscape

- Situating the enterprise and its competitors as to their strategies and chosen positioning

Enterprise Delivery System (EDS)

Input Throughput Output Marketing Desired Outcomes

- Harnessing of human, Conversion of Goods • Positioning • Customer

money, and physical input into produced satisfied
resources output and the or • Product
transformation services • Sales
- Resources mobilized process within delivered • Packaging volume
(money, men, machines, the factory or attained
materials, methods, service shop • Place
management) • Profits
• People generated

• Promotion • People
performance
• Price

VIII. FINANCIAL FORECASTS: EXPECTED RETURNS, RISKS AND CONTINGENCIES

Important Return Calculations:

1. Expected return on sales
2. Expected return on assets or investments
3. Expected return on stockholders’ equity

IX. ENVIRONMENTAL AND REGULATORY COMPLIANCE

The business plan must articulate the following:
- Laws
- Rules and regulations governing the business and the industry that the enterprise is in.

X. CAPITAL STRUCTURE AND FINANCIAL OFFERING: RETURNS AND BENEFITS TO

INVESTORS, FINANCIERS AND PARTNERS