WEEK 1 FOR LENDERS IT ALLOWS THEM TO ASSESS THE

ENTREPRENEUR USING THE 4 C’s

BUSINESS PLAN • Character
• Cash Flow
business plan • Collateral
the roadmap of the new business • Equity Contribution
feasibility study
the forerunners of the business plan INFORMATION NEEDS FOR MAJOR SECTIONS
OF THE BUSINESS PLAN
2 MAJOR TESTS (feasibility study)
• test of possibility market formation needs
• should positive results • general environmental trends
• test of feasibility • specific industry trends
• determine whether the proposed • local market conditions
business is feasible or not in all areas. • market potential
• demographic and/or psychographic
Why write a Business Plan? profile of target market.
• it helps determine whether a proposed operational information needs
or existing business venture is viable • location
given its target market. • manufacturing or service operations
• it guides the entrepreneur in mobilizing • equipment and/or furniture required
the resources needed by the business. • space requirements
• it serves as a tool in helping get • labor requirements
financing for the business. • raw materials needed and potential
suppliers
VALUE OF BUSINESS PLAN • utilities
1. Entrepreneur financial information needs
• serves as a road map for managing a • rental rates
business. • cost of equipment
• identifies the resources needed to • cost of utilities
operate and grow the business. • personnel cost
• allows an entrepreneur to anticipate • distribution cost
potential risks. • cost of insurance
2. Lender • registration and license fee
• allows the lender to assess whether the
entrepreneur will be able to meet debt
and interest payments.
• provides information about collateral or
tangible assets that can be secured for a
loan.
3. Investor
• allows the investor to gauge whether
the projected returns are acceptable.
• provides information about the
character of the entrepreneur and
about the capability of the venture’s
management team.
FACTORS TO CONSIDER IN STARTING A
BUSINESS
focus and direction
it is imperative to have a very good objective
grasp of the business and where it will be
headed many years from the start of operation.
It means that there should be a clear and
documented vision – mission and strategies to
begin with. Start right by “beginning with the
end in mind.”
sources of capital
there are different sources of capital that can
be used depending on the needs to start the
venture. These can be from personal funds,
family and friends, a retirement account,
banks/financial institutions, a government
loan, and/or the stock market. Which of these
sources will provide you the needed capital
given your financial constraints and credibility.
good network
building good relationships and working with
other people could help start the business.
Formal networks like associations and
professional groups, as well as informal
networks, like childhood friends, family
members and former classmates, can be
drivers to build self – confidence and direction,
providers of information that are not readily
accessible to others, suppliers of raw materials
and serve as mentors/coaches.
legal requirements
it is very important to know the laws and
regulations that govern the type of business
that will be opened to avoid major problems
that can arise if legal requirements are
overlooked.
degree of risk
consider the degree of risk related to a specific
business opportunity. A business is said to be
risky when the probability or chances of failure
is high. It means the odds are great in many
aspects against starting the business like limited
market, stiff competition, high cost of
financing the business and few supply of
needed labor.
research and development
there should be a strong research and
development that should be undertaken. The
government should provide R&D production.
The presence of new technology, science and
knowledge transfer from universities and public
research centers to new and growing
businesses and the support for the creation of
new technology – based ventures, are good
indicators to start a business in this area.
personal competencies
like creativity, opportunity seeking, self –
confidence, commitment and risk – taking, as
well as technical background and related
experiences needed to run the particular
business are necessary to start running the
business.
availability of resources
resources pertain to raw materials, human
resources and machineries/equipment.
Specifically, the raw materials that are
indigenous to the community and available in
certain quantities like clay, sand etc…
THE PARTS OF A BUSINESS PLAN
introductory page
• business name and address.
• names and addresses of business
owners and entrepreneurs.
• nature of the business.
• statement of financing needed.
• statement of confidentiality of the
report (optional).
executive summary
• description of the proposed business
model.
• description of the market opportunity
to capture, or market problem the
business solves.
• reasons for why this is an attractive
business opportunity.
• key distinctions or differentiators of the
business versus competitors.
• overview of the sales, marketing, and
operations strategy and plan.
• description of the execution plan and
timeline.
• overview of projected financials
containing revenues, costs, profits and
assumptions.