Session 08

Ms. Vihara Jayakody

Department of Computer Science and Informatics
Uva Wellassa University
 Business Plan

Business plan is a written document that details the

proposed venture.

It is the road map, self-checking tool, funding tool and an

operating guide.

It fulfils many of the requirements of the owners and

managers and stake holders as well.

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Developing a Business Plan
 Business Plan

It must describe current status, expected needs and

projected results of the new business.

The business plan referred to as a venture plan, a loan

proposal or an investment prospectus.

Major benefit of this plan is that it helps the enterprise

avoid common pitfalls that often undo all previous
efforts.
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Developing a Business Plan
 A business plan is
a formal document
that presents the targets to be reached
and
the various activities that have to carry
out at the start-up of a business and while
running the business.

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Benefits and importance of
preparing a business plan

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 Benefits and importance of preparing a
business plan
• To make the business idea clear
• To understand the business environment
• To guide the business
• To indicate the future direction of the business
• To raise the necessary funds
• To make a good estimate of the demand
• To identify the resources required for the business
• To find out the success of the business
• To get an overall image of the business
 Marketing
Plan

Production
Plan

Administrative
Plan

Financial Plan
 Elements of a Business Plan

1. Cover Sheet 7. Management Plan

2. Executive summary
3. Table of content
4. Business Description
5. Market analysis
6. Operations plan
8. Financial Plan (estimated)
9. Critical Risks
10.Harvest Strategy
11.Milestone Schedule
12.Appendix or Bibliography

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Cover Sheet
• Identity information
✓ The words “Business Plan”
✓ Business name
✓ Company logo
✓ Address
✓ Telephone number
✓ Fax number
✓ Email address
✓ Web address (URL) (If has)
• Submission date
• Cover sheet must be attractive 9
Executive Summary

❑ Most important part of the business plan

❑ This should be done in such a way that the evaluator or

investor will choose to read on

❑ This would enable the reader to get an overall idea about the
business

❑ Should be no longer than one to two pages

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Executive Summary

❑ Information to be summarized in an executive summery

o Name of the business, the industry that it belongs

to, etc.

o Summary of the Marketing plan, Production plan,

Administrative plan and Financial plan with
highlighting most important points

o Uniqueness of the business (described very briefly)

o Goals and objectives of presenting the business plan

(in brief)

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Business Description

❖ Name of the business

❖ A background of the industry with history of

the company.

❖ Any uniqueness or distinctive features.

❖ Describe the legal structure of the venture

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Market analysis/Marketing plan

• Identity target market, market position and market share

• Evaluate all competition

• Demonstrate pricing strategy and advertising plan

• Details how the sales targets will be achieved

• the goods or service expected to be sold
• the demand for the goods or service
• marketing strategies
• sales expenditure and sales income

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Operations / Production Plan

❖ Describe the advantages of your location

and equipment (machinery, furnishing).

❖ Describe the specific operations of the

venture.

❖ Provide estimates of operation costs.

(but be careful: Too many entrepreneurs
underestimate their costs.)

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Operations / Production Plan

❖ Marketing plan mentions the quantity of

goods or service that will be offered to
the market.

❖ Production plan estimates the cost needs

to be incurred when producing that
quantity of goods or service.

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Management / Administrative Plan

❖ Key people in the management of your

venture.

❖ Positions and responsibilities, and the career

experiences.

❖ Any advisors, consultants or members of the

board.

❖ The structure of payment and ownership

(stock agreements, consulting fees, and so on)
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Financial Plan

o Describes the sourcing of funds.

o It also includes estimates of income, expenses and profit.
o Basic financial statements must be presented ;
• Balance sheet
• The income statement
• The cash-flow statement.
• Break-even chart

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 Financial Plan
Three basic financial statements must be presented ;
❖ Balance sheet
It projects what the financial condition of the venture will be at
a particular point in time.
❖ The income statement
This statement illustrates the projected operating results based
on profit and loss.
❖ The cash-flow statement.
This shows the amount and timing of expected cash inflows and
outflows.
❖ Break-even chart should be included finally. 21
 Critical Risks

❖ Discuss potential risks before investors point them out.

❖ Examples:
❖ Price cutting by competitors
❖ Industry-wide trends
❖ Manufacturing costs in excess of estimates
❖ Sales projections not achieved
❖ Product development schedule not met
❖ Difficulties in the procurement of raw materials

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Harvest Strategy

❖ Describe the plan for transition of leadership.

❖ Mention the preparations (insurance, trusts, and so on) needed

for continuity of the business.

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Milestone Schedule

❖ Milestone scheduling is a step by step approach to

illustrating accomplishments in a piecemeal fashion.

❖ Develop a timetable or chart to demonstrate when each

phase of the venture is to be completed.

❖ This shows the relationship of events and provides a

deadline for accomplishment.

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 Appendices

▪ Supplemental materials
• Current bank statements
• Copies of existing loans
• Interim income statement and balance sheet
• Copies of legal documents
• Copies of potential contracts
• Letters of reference

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An attractive appearance
an effective length
a table of contents
proper grammar
correct typing
a cover page

all are important factors when developing a well-conceived

business plan.
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