MODULE - IV

Business Plan

• A Business Plan identifies key areas of your business so you can maximize
the time you spend on generating income.
• Key investors will want to look at your Business Plan before providing
capital.
• A Business Plan helps you start and keep your business on a successful
path.
• You should prepare a Business Plan, although, in reality, many small
business owners do not.
 What is a Business Plan?

• A Business Plan is a written document that defines the goals of your

business and describes how you will attain those goals.
• A Business Plan is worth your considerable investment of time, effort, and
energy.
• A Business Plan sets objectives, defines budgets, engages partners, and
anticipates problems before they occur.
 10 Reasons Why You Need a Strong
Business Plan

1. To attract investors.
2. To see if your business ideas will work.
3. To outline each area of the business.
4. To set up milestones.
5. To learn about the market.
6. To secure additional funding or loans.
7. To determine your financial needs.
8. To attract top-level people.
9. To monitor your business.
10. To devise contingency plans.
 How Detailed Should
Your Plan Be?
• Business plans differ widely in their length, appearance, content, and the
emphasis placed on different aspects of the business.
• Depending on your business and your intended use, you may need a very
different type of Business Plan:
– Mini-plan: Less emphasis on critical details. Used to test your assumptions,
concept, and measure the interest of potential investors.
– Working Plan: Almost total emphasis on details. Used continuously to review
business operations and progress.
– Presentation Plan: Emphasis on marketability of the business concept. Used
to give information about the business to bankers, venture capitalists, and
other external resources.
 Assembling a Business Plan

Every Business Plan should include some essential components:

– Overview of the Business: Describes the business, including its products and
services.
– The Marketing Plan: Describes the target market for your product and
explains how you will reach that market.
– The Financial Management Plan: Details the costs associated with operating
your business and explains how you will pay for those costs, including the
amount of financing you may need.
– The Operations and Management Plan: Describes how you will manage the
core processes of your business, including use of human resources.
 What it shouldn’t have ? Business
plan
• Unrealistic Financial Projections.
• Not Defining the Target Audience.
• Over-Hype.
• Bad Research.
• No Focus on your Competition.
• Hiding Your Weaknesses.
• Not Knowing your Distribution Channels.
• Including Too Much Information.
 Seven Common Parts of a
Good Business Plan
• Business plans must help investors understand and gain confidence on
how you will meet your customers’ needs.
• Seven common parts of a good Business Plan are:
1. Executive Summary
2. Business Concept
3. Market Analysis
4. Management Team
5. Marketing Plan
6. Financial Plan
7. Operations and Management Plan
 Unit Economics
• Direct costs and revenues associated with a
business model on a per-unit basis.
• A unit refers to any quantifiable item that creates
value for a business.
• A unit refers to any basic, quantifiable item that
creates value for a business. Thus, unit economics
demonstrates how much value each item—or
“unit”—generates for the business.
• To find the revenue per customer and divide it by the costs associated with that
customer.
 Scalability
• A company's ability to grow without
being hampered by its structure or
available resources when faced with
increased production.
5 keys to building a scalable business
• Build a solid foundation. ...
• Focus on a scalable business model. ...
• Embrace strategic planning. ...
• Focus on your core strengths. ...
• Be patient.
 Scalability is important ?
• Scalability will help your company retain its product
quality throughout expansion without sacrificing the
efficiency or quality of your customer service and
internal operations.

• This seamless operation will keep your employees well-

versed in company changes while maintaining positive
relationships with your customers.
 Defensibility
• Defensible Pricing means that prices are determined using a consistent
methodology to tie the price of the service to the underlying cost to
provide the service.
• Add in adjustments for what the market will bear, quality, outcomes,
competitive position, and you've created defensible pricing.

• Certain steps to build defensibility :

1.Choose a small and growing market .
2. Build a hook to pull the users .
3. Provide instant gratification , single user utility to Multiple user utilities .
 Examples : Factors of the defensibility of Digital
Business

• The business literature listed many ways to create

defensibility:
• Unique access to raw materials, favorable
geographic location, government regulations like
tariffs, patents and licenses, etc.
• Network effects have emerged as the native defense in
the digital world.
• Data is considered a defensible source of competitive
advantage . Advantages based on capabilities .
 Venture Feasibility Analysis
• Feasibility analysis is a comprehensive research study required by the
entrepreneur or his agent to determine the practicability, profitability and
viability of the business idea.

• We agrees that the financial opportunity is outstanding and the risk of failure is
relatively low.

• There are four main elements that go into a feasibility study: technical feasibility,
financial feasibility, market feasibility (or market fit), and operational feasibility.
Feasibility Analysis
 Pitching in business
• Presenting business ideas to another party. For example, you
may pitch your startup business to potential investors or your
products to potential customers.
• A business pitch needs to give your audience a clear
understanding of your plan or goals to gain buy-in.
• Position your company as a potential leader in the industry.
List any current operational metrics, such as the number of
current customers and employees. State your current annual
revenue, if applicable.
 Pitch
• Develop a script for your pitch to describe the
business problem, how you can solve it and how you
plan to market and sell your product or service. Start
with a compelling executive summary, and then
follow with details. Make your observations about
the opportunity candid and not overly analytical.
Keep your document and accompanying
presentations short and concise. You want your
presentation to be believable and appealing.
 Legal matters
• The following is a basic list of seven legal issues every business
should make sure to consider.
• Corporate Organization: Form and State of Organization.
• Internal Agreements.
• Intellectual Property: Trademarks, Copyrights and Patents.
• Real Estate: Location.
• Regulatory Issues.
• Employment Matters.
• Tax Concerns.