Chapter 5

THE BUSINESS PLAN

Learning Outcomes:
At the end of this chapter, the students will be
able to:
Understand the reason for writing a business
plan
Learn the principles of business planning
Identify the stages of business planning
WHY WRITE A BUSINESS
PLAN?
 HERE IS A QUICK GUIDE AS TO WHY A
COMPANY NEED A WELL-RESEARCHED
BUSINESS PLAN
More companies stay in business You will understand your finances

You can understand what to do Everyone is aware of your plan

You can allocate finite resources

better
DEVELOPING A
BUSINESS PLAN
Business planning involves the attainment of
goals, and the way to accomplish such goals. A
time frame is needed in attaining goals.

Starting the business is not the end of

business planning. Ultimately it is the consumer
satisfaction that requires planning. This should
be properly planned because consumer
satisfaction means business stability and
growth. In financial language, consumer
satisfaction is profit.
PRINCIPLES OF
PLANNING
PLANNING MUST BE
REALISTIC
- It must be based on available
resources - human, financial and
physical resources.
 PLANNING MUST BE
BASED ON FELT NEEDS
- The objectives of the
entrepreneur should fit the needs
of the people in a community.
PLANNING MUST BE
FLEXIBLE
- Resources, needs and economic
conditions change. Planning
should be adjusted to such
changes to be effective and
relevant.
PLANNING MUST START
WITH SIMPLE PROJECTS.
- In the Philippines, people are
poor and have no business
experiences. The most
appropriate project for them is
the micro business. This requires
very simple management and
technology.
STAGES OF BUSINESS
PLANNING
1. UNPLANNED STAGE - At the start of the business,
the owner-manager is busy looking for funds,
customers, materials and equipment. He has no
time for planning
2. BUDGETING SYSTEM STAGE - Estimated incomes
from sales and expected expenditures are made.
This is done to facilitate the orderly functions of the
growing enterprise.
3. ANNUAL PLANNING STAGE - The owner manager
drafts an annual plan. He can use either the top-
down planning or bottom-up planning
- In top-down approach, the owner-manager provides the
goals and let the employees comply with them. This approach
of planning is autocratic
- In bottom-up approach, he encourages his employees to
participate in pplanning the goals and strategies of the
enterprise. This approach of Planning is democratic
4. STRATEGIC PLANNING STAGE - As the business enterprise
become bigger, a long range-planning is needed. This is a three
or five year plan. Such plan has flexibility to be able to adjust
to changing conditional.
CRITERIA FOR
PLANNING
 1.
The plan should state clearly it's
objectives. Such clear statement is
necessary so that those who will be
involved in the execution of the plan
will understand, believe, accept, and
support it.
 2.
The plan should provide measures for a
satisfactory accomplishment of the
objectives in terms of quantity, quality
time and cost. These help in delegating
responsibility and measuring results.
 3.
The plan should state the policies which
should guide people in attaining the
objectives.
 4.
The plan should indicate what
department or until will be involved in
accomplishing the objectives. It may not
spell out the procedures for performing
the required work.
 5.
The plan should indicate the time which
should be allowed for each activity. It
maybe necessary to establish a target
data for completing the activity
 6.
The plan should specify the required
resources and their corresponding
costs.
 7.
The plan should designate the officers
who will be held accountable for the
accomplishment of the objectives.
Sufficient authority should be delegated
to such officers/executives.
8 KEY ELEMENTS OF
A BUSINESS PLAN
1. THE EXECUTIVE SUMMARY
This is placed as number one on our list of components
of a business plan, but it can easily be the final stage. A
great summary is one of the key features of a business
plan. It serves as an overview of your entire business
and the elements surrounding it.

Be sure to outline succinctly the 5 "W"s (Who, What,

Why, When, Where) as well as the mission statement
2. A DESCRIPTION OF THE
BUSINESS

This section should contain details of

things such as your goals and the
customers you will service
 3. THE MARKET(S) THE
BUSINESS WILL OPERATES

This is the time to research and determine

who your target market is and ask specific
questions that relate to your product or
service. Put you idea to the test.
 4. A SWOT ANALYSIS
Create a detailed list of your
strengths, weaknesses, opportunities
and threats.
5. THE MANAGEMENT TEAM
AND PERSONNEL
Who will run the business, who are the
directors in the business? What are the
skills of the management team and how
do their different responsibilities make
maximum use of their abilities.
 6. THE PRODUCTS OR
SERVICES OFFERED

In this section you need to detail what

will be produced and how it will be sold
 7. MARKETING

What is the branding to your business?

What are the key messages you want to
communicate with your target market and
how will you go about reaching them? How
will you achieve market share and at what
cost in terms of your budget?
 8. A FINANCIAL PLAN
Creating a financial plan will give you the
opportunity to address your financial
concerns and talk money, think about
start-up costs, financial projections,
funding and investor pitches.
 End Of Presentation

THANK YOU
Presenter :

Feveline Cacho
Hazel Kris Ranara
Joan Mahinay
John Rockford Noval
Maymozah rin