DEVELOPING A BUSINESS PLAN

Planning in plain and simple language is thinking ahead. In business, it is thinking

ahead of objectives, strategies, financing, production, marketing, profit prospects and
growth possibilities.

Business planning Explained

What to do
Planning is How to do it
When to do it
What to expect in the future

Principles of Planning
1. Planning must be realistic
2. Planning must be based on felt needs
3. Planning must be flexible
4. Planning must start with simple projects

Stages of Business Planning

1. Unplanned stage- owner of the business are busy for looking funds, customers,
materials and equipment.
2. Budgeting-System stage- the owner-manager realizes the need to develop and use
a budgeting system.
3. Annual Planning Stage- business exist, for improvement, plan in the future and
drafts an annual plan.
4. Strategic Planning Stage- plan for needs, a long-range planning is needed. This Is
a three or five-year plan.

Criteria of Effective Planning

1. The plan should state clearly its objectives
2. The plan should provide measures for a satisfactory accomplishment of the
objectives in terms of quantity, quality, time and cost.
3. The plan should state the policies which should guide people in attaining the
objectives
4. The plan should indicate what department or unit will be involved in
accomplishing the objectives
5. The plan should indicate the time which should be allowed for each 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.

Components of Business Planning

1. SWOT- Strength, Weaknesses, Opportunities, and Threats
-this is used to be able to translate business opportunities into profits. It could also
have entrepreneurs to have an idea or a precautionary measure even before the
start of the business. Planning should include the improvement of the
product/service in order to survive competition.
2. Objectives- they should be specific and realistic
3. Strategies- ex. Sales, Buy 1 take 1, freebies
These are ways of accomplishing the objectives such ways are stated in the
financial, production, marketing and organizational plans of the enterprise.
4. Time Frame- big deal in business, you need to maintain your time because in
business time is gold, continuous, targets. Entrepreneur must be efficient in time
management.

Steps in Business Planning

1. Evaluate your personal resources and interest, and the resources of the community
2. Analyze your markets
3. Choose a proper business location
4. Prepare a financial plan
5. Prepare a production plan
6. Prepare an organizational plan
7. Prepare a management plan

The importance of Business Planning

 Planning can eliminate business risks because it carefully studies the competence,
interest and resources of the entrepreneur against the needs of consumers together
with the presence of competitors
 Planning can minimize cost of production
 Planning can detect the weaknesses of the business operations

ORGANIZING THE ENTERPRISE

When one starts to organize a business enterprise it is presumed that he has

conducted a feasibility or market study. That is he knows his resources, the needs of the
community, the strengths of his competitors and so forth
Why do you go to Business?
Reasons why people go to business
1. Personal satisfaction
2. Family involvement
3. Independence and power
4. Social activities
5. Profit expectations

Checklist for Going to Business

Here is a test on your probable success in starting your business
1. About you
 Why do you want to put up your own business?
 Do you have experience in the business you like to start?
 Did you work before as a manager?
 Do you have a business training?
 Do you have money for your business?
2. About capital
 Do you know how much money you need for your business?
 Do you know how much credit you can get from your suppliers?
 Do you know where to borrow in case your funds are not enough?
 Do you have an estimate of your net income per year?
3. About a partner
 Do you need a partner who has the money and skills?
 Do you know the positive and negative point in choosing single proprietorship,
partnership or corporation
 Have you consulted an expert?
4. About your customers
 Who are your customers?
 Do people need a store like yours?
 Do people like to live in the place where you intend to put up your business?
5. About your qualities
 Are you a self-starter?
 How do you feel about other people?
 Can you lead others?
 Can you make decisions?
 Can you take responsibility?
 Are you good in planning and organizing?
 Can people trust what you say?
  Are you hardworking?
 Is your health good?

Possible questions you must have to know before starting a business

 Who are my competitors?
 Who are my customers?
 How my customers buy my product?
 What is the market potential?
 Where I put my business?
 What personnel do I need?
 How will I organized my enterprise?
 Make your book keeping or know how to record.
 How profitable will business be?

Type of Ownership

 Old Charts- Organizational structure, have different department (finance, human

resource)

Advantage of Single Proprietorship

 Retention of old profit
 Independence and flexibility (Change your business hours, product)
 Tax advantage and less government requirements

Disadvantage of Single Proprietorship

 Unlimited liability
 Lack of Stability
 Limited access to credit
 Limited business skills and knowledge

Advantage of Partnership
 Easy to Organize
 Availability to
 Retention of profit
 Business skills and knowledge

Disadvantage of Partnership
 Unlimited liability
  Lack of Stability
 Management disagreement
 Idle Investment

Advantage of Corporation
 Limited liability
 Easy to raise capital
 Perpetua life
 Specialized management

Disadvantage of Corporation
 Difficult to organize
 Strict regulated and supervised by the government
 Some corporation are socially irresponsible