Notes on the

Business Plan
1. BUSINESS PLAN DEFINED
- a written document that describes in detail how a business,
usually a start-up business, defines its objectives and it is to go
about achieving its goals.

- this is a written roadmap for the firm particularly from

marketing, financial, and operational standpoints.
-this is a document that describes the various external and internal
elements involved in starting a business or in expanding an existing
venture, amidst a dynamic business environment. It integrates the
different functional plans such as marketing, manufacturing, finance,
and human resource management taking into consideration the overall
strategy of the business.
2. Why write a business plan?
- it helps to know whether a proposed or existing business venture is
viable given its target market.
- it guides the entrepreneur in mobilizing the resources needed by the
business.
- It serves a tool in helping get financing for the business.
TAKE Note:
 the business plan may be read by different people,
including employees, suppliers, customers, bankers and potential
investors, thus, it must be written to meet the information needs of
these different stakeholders.
3. Why is business plan important to these users?
3.1. Entrepreneur- the business plan serves as a roadmap; it
identifies the resources needed to operate and grow the business; it
allows anticipation of potential business risks the entrepreneur may
possibly encounter.
 3.2. Lender- the business plan allows the lender to assess
whether the entrepreneur will be able to meet the debt and interest
payments; it provides information about collateral or tangible assets
that can be secured.
3.3. Investor- the business plan allows the investor to gauge
whether projected returns are acceptable; it provides information
about the character of the entrepreneur and capability of the
management team.
4. Highlights of the sections of the business plan:
 4.1. Introductory Page- this provides a brief summary of the business
plan’s content. It may contain the following: name and address of the
company, name of the entrepreneur and his contact information, a brief
description of the company and the nature of the business, and the amount
of financing needed.

4.2. Executive Summary- this is prepared after the total plan has been
written and must stimulate the interest of the reader, especially if he/she
is a potential investor.
(Questions: what is the basic idea for the new product? What makes it
unique? How will that idea be realized? What is the size of the potential
market? How much income/revenue is expected? Who are the people behind
the business?)
5. Environmental and Industry Analysis- this will describe the general
conditions within which the entrepreneurial venture will operate
which include the following:
5.1. Socio-cultural conditions- a description of the demographics
or the characteristics of the population including but not limited to
lifestyle trends, values, health and sustainable living, shifting
preferences, and other factors giving rise to other demands/choice.
5.2. Technological conditions- this must include an assessment of
the major developments in science and technology that might affect
the business.
 5.3. Economic conditions- this includes description of the growth
of both the national and local economies.
5.4. Politico-legal conditions- this takes into account existing
laws and regulations that might affect the business like wage law,
health and safety regulations, tax exemptions and incentives from
the government, etc.
5.5. Supply and demand- it is important to check if the proposed
business belongs to an industry that is rapidly growing, steadily
growing, plateauing, or rapidly declining. ( is the market already
saturated? Can there be further growth for this business to happen?)
 5.6. Competition- it is essential for the entrepreneur to “know
the enemy”. There is always a threat of a large competitor who can
come up with a similar or even better product at a much lower price!
Competitive strategy and the niche must always then be thought of
and studied!
6. Description of the business- the venture’s mission statement in here will
guide the entrepreneur in decision-making. Included here is the
information about the product to offer, location of the business (whether it
is in a commercial zone, is accessible to traffic, or big enough for
expansion, etc.), major physical assets, some background information
about the owners and management team.
7. Production plan- if the proposed business is a manufacturing concern,
preparation of the production plan that describes the complete
manufacturing process is essential. If to be carried out by the
entrepreneur, describe physical plant layout, machinery/equipment,
supplier of the raw materials, production costs, and future capital
equipment needs. If to be subcontracted, speak of this as well.
8. Operations plan- this will speak of whether the venture is concerned
with manufacturing or service. For manufacturing, describe the flow
of goods and services from production to customer, including
purchasing, inventory of raw materials, and of finished goods,
inventory control procedures, and distribution. For service business,
describe the procedure in completing a business transaction. If the
 business will operate online, describe how will the website be
designed, how will the customers select from the offerings, how will
they pay, and how will be the delivery of the product purchased.
9. Marketing plan- this describes the target market and why they will
want the new product being offered. Once the target market is
defined, then the entrepreneur must describe how the product or
service will be priced, promoted, and distributed to its target
customers. If the entrepreneur conducted a market research, then
the highlights be included in here. Also, include here the forecasted
sales to provide an indication of the viability of the business.
10. Organizational plan- form of ownership is a highlight here. It is
very important to know who would run the business and how
capable are they to! For young entrepreneurs, it would be good to
bring in consultants or managers who could help run the business
well.
11. Financial plan- this must receive scrutiny because this determines
the investment that must be poured into the business, and indicates
whether the business is an economically viable undertaking. This
must provide a summary of the assets the business will own, its
projected liabilities, the expected investment of the entrepreneur,
and potential retained earnings as shown in the pro forma balance
sheet which shows projection of the business’ financial conditions at
 various times in the future. Also, this section of the business plan
must summarize projected sales, cost of the goods sold, and the
general and administrative expenses for the first three years. Finally,
a cash flow statement, which shows the amount and timing of
expected inflows and outflows of cash over a period of several years
be provided also.
12. Assessment of risks- effective business plan must own a
discussion of the risks that might prevent the business from
achieving its objectives. These risks include the following: price
cutting by the competitors, operating cost that exceed initial
estimates, failure to achieve sales forecasts, sudden unavailability or
a steep increase in the price of raw materials, difficulties in raising
 additional capital, advances in technology rendering the product
obsolete, and unforeseen environmental conditions that may include
but are not limited to natural disaster, recession, or an unfavorable
legislation. The entrepreneur must be able to address fully well these
risks and be able to prevent or minimize them or handle them
correctly should they occur.
13. Timetable/milestones- for both the entrepreneur and the
investor, knowing when major activities will happen and when
milestones will be reached serves a useful purpose. Among the key
milestones are: formal registration of the business, completion of the
product or service design, completion of prototypes, hiring of initial
 personnel, agreements with suppliers and distributors, actual
production, receipt of initial orders, and initial sales and deliveries.
14. Appendices- to ensure that the main body of the business plan is
concise enough to include only the most essential information,
several items could instead be appended to the document which
some readers might want to examine more closely.
items that may be included in the appendices are: market
research data, detailed financial projections, full resumes of the business
founders and members of the top management team, and even the profile of
key competitors.
14. Business plan fail due to the following reasons:
Document is sloppy and unprofessional, executive summary
is not coherent, unclear why people would want to buy the product, unclear
whether the product can be readily produced, sales and financial projections
are unreasonably optimistic, inadequate description of the qualifications and
experience of the management team, and inadequate assessment of the
potential threats to the business.
15. Basic guidelines when presenting a business plan:
15.1. Tell a compelling story- to persuade is the goal! try to avoid too
complex presentations.
15.2. Exhibit confidence and professionalism. Prepare and rehearse
for the presentation to get very
familiar with what to present and to be relaxed!
15. 3. Cover the basics- let technology help and work! Prepare audio-
visual equipment ahead of time. Be
ready with printed copies of your presentation.
15.4. Adapt a cooperative attitude when answering questions.
Display emotional maturity in handling things for
clarification.
TAKE NOTE! An entrepreneur to present a business plan must always be
ready to deliver an elevator pitch. An elevator pitch is a brief,
persuasive speech that you can use to spark interest on your
organization does or what you want to present. you use an elevator
pitch to create an interest in a project, idea, or product. It needs to be
succinct (brief but clear), while conveying important information. It is
so brief but enables any listener to understand what you want to say in
a short period of time that will take you to deliver in one to two-minute
“elevator ride” experience. Your goal is to make the listener want to
hear more about your product or what you are presenting as an idea!