BUSI

NESSPLANNI
NGANDDEVELOPMENTSTRATEGI
C
PERSPECTI
VE
AMANIDAVI
D
DEP:
M&E/
CBSL
11thApr
il
,2018/
Wednesday(
Lect
ure1)
Strat
egi
c–descr i
bessomethingwhichi
sextr
aordi
nar
y.I
tisusedtomeansyst
ematicorwell
organi
zeddeci
sionsoract
ionswhichhavebeenmadeortakentooff
ersi
gni
fi
cantr
esultsor
outcomes.I
nmoder nworl
d,theter
mi sconsi
der
edasanewwayorapost modernapproachof
l
ookingorseei
ngissues.
Gener
almeani
ngoft
het
erm st
rat
egi
c
Iti
sasit
uat
ionofbei
ngf
ocused,
predet
ermi
ned,
mot
ivat
ed,
aut
hor
it
ati
veandaggr
essi
vei
n
str
ivi
ngt
oachi
evesomet
hing.
From astrategi
clenssuccessf
ulbusinessar
enotbornbutar
emade.I notherwordsbusi
ness
successisont hehandsofanindivi
dualwhoownsormanagesagi venbusiness.Thi
sfur
ther
i
mpl i
esthatsuccessandf ai
lur
eofanybusinessf
ir
m areatt
ri
butedbyowner sormanagers
themselves.Thus,successorfai
l
ureisalway
sconsider
edasplannedeventsandnotacci
dental
events.
Thust
het
erm st
rat
egi
cfr
om busi
nesspl
anni
ngper
spect
ivesmayr
efert
o;

 Abi
l
ityofaper
sont
othi
nkst
rat
egi
cal
l
y

 I
tisal
laboutr
esour
cesmobi
l
izat
ion

 Iti
sallaboutst
rat
egi
cal
l
ocat
ionofr
esour
cesbyl
i
nki
ngt
hem wi
thbusi
ness
envi
ronment

 I
tishowr
esour
cesar
eli
nkedi
nto(
li
nkage)
,andhowl
i
nkagesar
eav
oided.

 I
tisdef
ini
ngofdr
eamsandpr
ior
it
iesi
ntov
isi
on

 I
tishowt
odesi
gnmi
ssi
ont
hatdr
ivesy
ourv
isi
on

 I
tisaboutl
ooki
ngoppor
tuni
ti
esandl
i
nki
ngt
hem wi
thappr
opr
iat
ebusi
nessi
deas

 I
tisal
laboutpr
ior
it
iesset
ti
ng

 I
tisal
laboutani
ndi
vi
dual
dreams
Thesearecharacter
isti
csthatdist
ingui
shapersonwhoispl
anni
ngf
orhi
sorherbusi
nessand
anotherwhoisplanningforthesamebutstr
ategical
l
y.
Intr
adit
ionalbusi
nessplanningappr oaches,t
hedecisionmightbe,“
thebusinessshouldbe
competiti
vesoast osur
v i
ve.”Howev erinstr
ategi
cper spect
iveonst
artstothinkonwhy ,
how,
what,when,who,etc.st
rategicbusinessplanni
ngisv eryspeci
fi
candfocusedi tr
equi
res
speci
fi
cact i
onsanddecisionsratherthangeneral
ization.

Cr
edi
ts:
Ngal
l
a,SamsonandMwai
popoMoses
Strat
egicbusinessplanning–f undament albusi
nessconceptwhichintegr
atest
hetwo
fundamentalsofstrategywhichar edecidingwhereyouwanttogoandhowt oi
mpl
ement
operati
onali
niti
atestot akeyouthere,coherentl
yinoneprocess.
(set
tingofadir
ect
iont
obe
respect
edbyev er
yonewi thi
nthebusiness)
BENEFI
TSOFSTRATEGI
CBUSI
NESSPLANNI
NG

 St
imul
atesorst
ret
cht
hinki
ngatt
hehi
ghestl
evel
swhi
char
enotor
dinar
ylev
els

 I
tpr
omot
esormot
ivat
esaper
sont
obev
eryspeci
fi
cdet
ermi
nedandf
ocused

 I
tensur
esr
esour
cesmobi
l
izat
ion,
li
nkageandmi
nimi
zi
ngl
i
nkages.

Addedbenef
it
sofst
rat
egi
cbusi
nesspl
anni
ng(
Goggl
ed)(
ref
:Sam andMoses19/
04/
2018-
Thursday
11:
02pm)

 Newoppor
tuni
ti
esf
ort
hebusi
ness.

Revi
ewingandworki
ngony ourbusinessstr
ategyi
nvol
vesalotofcr
eat
ivet
hinki
ngwhichisl
ikel
yto
gener
atenewideasandopportuni
ti
esf ory
ourbusi
nesswhichyoumaynothaveident
if
iedundertr
adi
ti
onal
pl
anning.

 I
tcanmakeabusi
nessmor
edur
abl
e

Str
ategi
cbusi
nessplanni
ngenabl
esyourbusinesstocopewi
thchangi
ngbusi
nessenvi
ronment
.Duet
othe
dynamicbusi
nessenvi
ronment
,wit
houtst
rategicbusi
nesspl
anni
ngaboomingbusi
nessmaybecomein
debtaft
erashortwhi
le

 Al
l
owspl
anner
stobepr
oact
iver
athert
hanr
eact
ive

Ital
lowsplanner
stofor
eseethefut
ureandpl
anaccordi
ngly.Thr
oughstr
ategi
cbusinessplanningpl
anners
cananti
cipatecer
tai
nunfav
orabl
escenari
osbef
oretheyhappenandtakenecessar
ypr ecaut
ionstoavoi
d
them.

FUNDAMENTALSOFSTRATEGI
CBUSI
NESSPLANNI
NG

 Set
ti
ngorest
abl
i
shi
ngmi
ssi
onandv
isi
on

 Det
ermi
ningst
rat
egi
cdi
rect
ion

 Set
ti
ngst
rat
egi
cgoal
sandobj
ect
ives
Goal
-abr
oadbusi
nessr
esul
tthatabusi
nessi
sabsol
utel
ycommi
tt
edt
oat
tai
n
Obj
ect
ive-aspeci
fi
cst
ep,
ami
l
est
onewhi
chenabl
esy
out
oaccompl
i
shagoal

 I
dent
if
yingkeyst
rat
egi
cissuesandchal
l
enges

 Def
ini
ngbusi
nessenv
ironment
s

 St
rat
egi
cal
l
ocat
ionofr
esour
ces
Resour
cesaresaidt
obei
nvest
edst
rat
egi
cal
l
yift
heyhav
ebeenabl
etocov
ert
he
fol
l
owingquest
ions.

Cr
edi
ts:
Ngal
l
a,SamsonandMwai
popoMoses
 a)Ar
eyouconf
identt
hatall
ocati
onhasbeendonei
npr
operpr
oject
s,pl
ace,
on
pr
opert
imeandtoproperpeople?
b)Doy
ouseeanypossi
bil
i
tyt
ogetmaxi
mum out
comesduet
otheal
l
ocat
ion?
c) Doesal
l
ocat
ionmat
chwi
thy
ourdr
eams,
inspi
rat
ion,
visi
on,
missi
onet
c.?
d)Doy ouhaveanyfeel
ingt
hatt
her
eisot
heral
ter
nat
iveswhi
chmaygi
vey
oumor
e
chanceofsuccess?
e) Whatdoyousayr
egar
dingi
nputout
putr
ati
o?Doy
ouseet
hebal
ancebet
ween
t
hetwo?
f
) Howaboutr
isks?Rememberstrat
egi
cbusi
nesspl
anni
ngof
fer
sthebest
mechani
smstomi ni
mizer
isks.

18thApr
il
,2018/
Wednesday(
Lect
ure2)
STRATEGI
CISSUESI
NBUSI
NESSPLANNI
NG
Astrategici
ssueisafor
thcomi
ngdevel
opmenteit
herinsi
deoroutsi
deofthe
or
gani
zati
on, whichisl
ikel
ytohaveani
mport
antimpactontheabil
it
yofthebusi
nessfi
rmt
o
meeti
tsobjective.
OR
St
rat
egi
cissuesareevents,
dev el
opmentsort
rendst
hatar
eperceiv
edbydeci
sion
maker
sashavi
ngthepotenti
altoaffectt
heorgani
zat
ionper
for
mance.(Ansof
f1965)
I
tcantakeaf orm ofawelcomei ssue,
anopportuni
tytobegraspedintheenv i
ronment
oraninter
nalstr
engthwhi chcanbeexpl oi
tedtoadvant
age.Furt
hermoreitcanbean
unwelcomedexternalthreatoranint
ernalweaknesswhichimperi
lsconti
nuingsuccess,even
thesurvi
valofabusinessf i
rm.

WHYSTRATEGI
CISSUES?

 Ef
fi
ciencyandef
fect
iveut
il
izat
ionofr
esour
ces

Cr
edi
ts:
Ngal
l
a,SamsonandMwai
popoMoses
  Pr
ior
it
iesset
ti
ngwhi
chi
sver
ycr
uci
ali
nbusi
nessmanagement

 I
tenabl
esav
eryqui
ckandr
eal
react
ionorr
esponset
oanydev
elopment

 I
tdef
inesawel
lpr
operbusi
nessst
ruct
ureandsy
stemsgi
vent
hesi
tuat
ion

I
nor
dert
oexpl
orest
rat
egi
cissuest
hef
oll
owi
ngquest
ionsshoul
dbeaddr
essed.

 Whati
sthei
ssue?

 Whyi
sitani
ssue?

 Whosay
siti
sani
ssue?

 Howdoweknowi
tisani
ssue?

 Whatf
act
orsmakei
tast
rat
egi
cissue?

 Canwedosomet
hingabouti
t?

 Whatar
etheconsequencesoff
ail
i
ngt
oaddr
esst
hisi
ssue?

FEATURESWHI
CHDEFI
NESTRATEGI
CISSUES.

 I
thast
oli
nkwi
thy
ourdr
eamsaswel
lbusi
nessmi
ssi
onandv
isi
on.

 I
tal
way
sdemandst
rat
egi
cact
ionse.
g.cont
inuousmoni
tor
ingandev
aluat
ion.

 Theycutacrosst
heent
ir
eindust
ryormar
ket
.Ani
ssuei
sal
way
stheconcer
nof
i
ndivi
dualf
ir
ms.

 Theyarenotst
ati
cbutrat
herdynami
c.Theyar
eref
lecti
veoft
rends,
changes,
growt
h,
devel
opmentofei
therabusi
nessfi
rm,i
ndust
ryormarket.

 Theydemandproacti
vemeasur
esasopposedt
oreact
ivemeasur
es.Theyt
endt
orel
yon
proj
ect
ionsandpredi
cti
ons.

Thi
ngst
hatmakest
rat
egi
cissuest
odi
ff
erf
rom onebusi
nesst
oanot
herbusi
ness.

 Nat
ureandsi
zeoft
hebusi
nessf
ir
m

 For
msofowner
shi
pandmanagement

 I
ndust
ryandmar
ketwhi
chabusi
nessf
ir
m oper
atesandser
vesr
espect
ivel
y

 Lev
elandi
ntensi
tyofcompet
it
ion

 Busi
nessgr
owt
hcy
cle.St
rat
egi
cissuesar
edy
nami
candnotst
ati
c.

 I
ndi
vi
dual
dreams,
int
erestaswel
lasabusi
nessf
ir
m mi
ssi
onandv
isi
on.

Cr
edi
ts:
Ngal
l
a,SamsonandMwai
popoMoses
  Gov
ernmentact
ionsordeci
sionst
hatr
elat
etot
ax,
pol
i
cies,
regul
ati
onset
c.

Gener
alandt
ypi
cal
exampl
esofst
rat
egi
cissues.

 Busi
nessoppor
tuni
tyandi
deas

 Busi
nessnameandbr
andi
ng

 Busi
nessl
ocat
ion

 Resour
cesmobi
l
izat
ion

 Busi
nessnet
wor
king

 Gov
ernmentpol
i
cy,
tax,
procedur
es,
regul
ati
ons

 Busi
nesspol
i
ciesandst
rat
egi
es

 Busi
nesscur
rentandpr
ospect
ivecust
omer
s.

FEASI
BILI
TYSTUDYORANSLYSI
SDESCRI
BED
Thetermfeasibl
eisdef i
nedascapabl eofbeingdoneorcar r
iedout.Ther
eforetheter
m
feasi
bil
itystudyoranaly
sismayt henrefert
oani nv
est i
gat
ionint
osomet hi
ngwhichiscapable
(ornot)ofbeingsuccessful.Suchast heini
ti
ati
onandcont inuat
ionofanewbusinessv ent
ure
basedonacr eat
iveornovel i
dea( LeeRossandLashl ey2009).I
tisaprocessofdetermini
ngor
establ
ishingifagivenbusinessideaisviabl
e.
Afeasi
bil
i
tyst
udyisadet
ail
edanal
ysi
sofacompanyandi t
soper
ati
onst
hati
s
conduct
edinordert
opredi
ctt
heresul
tsofaspeci
fi
cfut
urecour
seofact
ion.
Forexample;agoodf easibi
li
tystudyoranalysiswoul drevi
ewacompany ’sstrengths
andweaknesses,it
sposi t
ioninthemar ketpl
aceandi tsfinanci
alsit
uat
ion.Itwouldal soincl
ude
i
nformati
oni nacompany ’
smaj orcompet it
ors,pr
imarycust omersandanyr elevantindustry
tr
ends,changesordev el
opment .Howev eri
tisnecessar ytonotethatafeasibi
li
tystudyor
anal
ysi
sdosnotguar ant
eeabusi nessideasuccessr atherconducti
ngast udyreducest he
l
ikel
i
hoodt hatabusinessplannerwillwastetimepursuingf rui
tl
essbusinessventures.
Afeasi
bil
itystudyisnotthesameasabusi nesspl an,i
tanswer sthequesti
onslike
shouldwepr oceedwi ththisbusi
nessidea?It
sr ol
eist oserveasaf i
l
ter,
screeni
ngouti deas
thatlackt
hepot enti
al f
orbuildi
ngasuccessfulbusinessbef oreabusinessplannercommi t
sthe
necessaryresourcestobui l
dingabusi
nesspl an.Thereforeitisaninvest
igati
vetooldesignedto
giveabusinessmanapi ctureofthemarket,
salesandpr ofi
tpotenti
alofaparti
cularbusiness.A
businessplanisapl anningtoolt
hattr
ansformsani deai ntoreal
ity
.

Feasi
bil
i
tyst
udyconcent
rat
esont
hef
oll
owi
ngbusi
nesscr
it
ical
fact
ors.

 Est
imat
ionofmar
ketsi
zef
ort
hepr
oposedbusi
nessf
ir
m

Cr
edi
ts:
Ngal
l
a,SamsonandMwai
popoMoses
  Est
imat
ionmar
ketdemandf
ort
hepr
oposedbusi
nessf
ir
m

 Est
abl
i
shsal
esf
orecastbasedont
hemar
ketdemand

 Est
imat
ionofexpendi
tures,
costofi
nvest
mentandwhet
herbusi
nessof
fer
ingscanbe
sol
datareasonabl
eprice

 Det
ermi
ner
etur
noni
nvest
mentandi
fthebenef
it
sout
wei
ght
her
isks.
Feasi
bil
i
tyst
udyi
sal
labout
:

 Assessi
ngt
hemar
ketat
tract
ivenessi
.e.mar
ketconsi
stofbuy
ers

 Assessi
ngi
ndust
ryat
tract
ivenessi
.e.i
ndust
ryconsi
stofsel
l
ers

 Possi
bil
i
tyofget
ti
ngsust
ainabl
eadv
ant
ages

Whyf
easi
bil
i
tyst
udyoranal
ysi
s?

 Itassi
sti
nvest
orstomakeprudenti
nvest
mentdeci
sions.I
tisanoppor
tuni
tyt
oget
answersonthequest
ionssuchas,i
sitwort
hdoi
ng?

 I
tisver
yhel
pful
inensuri
ngsust
ainabi
l
ityofabusi
nessf
ir
m.Forhowl
ongt
hebusi
ness
wi
llgoongi
vi
ngy oubenef
it
s.

 I
tisofi
mportancei
nest
abl
i
shi
ngandpl
anni
ngf
orabusi
nesswhi
chi
srel
evantgi
vent
he
t
ime,pl
ace,
demandetc.

 I
nsomestances,
feasi
bil
i
tystudyi
sveryhel
pful
inmeet
ingr
equi
rement
sofsome
gov
ernmentl
awsandregulat
ionsorl
ocalar
easbyl
aws.
BUSI
NESSFEASI
BILI
TYTEST.
I
NDI
VIDUALCRI
TERI
AFEASI
BILI
TYTEST

 I
ndi
vi
dual
inspi
rat
ions,
dreams,
visi
onset
c.

 Psy
chol
ogi
cal
aspect
s

 Ment
alcapabi
l
iti
esandt
echni
cal
ski
l
ls

 Fami
l
yandsoci
albackgr
ound
I
NDUSTRYANDMARKETLEVELCRI
TERI
AFEASI
BILI
TYTEST

 Hav
eyouconsi
der
edal
ltheadv
ant
agesorbenef
it
soft
hei
dea?I
sther
ear
eal
needf
ori
t?

 Hav
eyoupi
npoi
ntedt
heexactpr
obl
emsordi
ff
icul
ti
esy
ouri
deai
sexpect
edt
osol
ve?

 I
syouri
deaanor
igi
nal
newconceptori
sitanewcombi
nat
ionoradapt
ati
on?

 Whatimmediat
eorshortr
angegai
nsorresul
tscanbeant
ici
pat
ed?Ar
ethepr
oject
ed
r
etur
nsadequate?Ar
etheriskf
act
orsaccept
abl
e?

Cr
edi
ts:
Ngal
l
a,SamsonandMwai
popoMoses
  Whatl
ongr
angebenef
it
scanbeant
ici
pat
ed?

 Hav
eyoucheckedt
hei
deaf
orf
aul
tsorl
i
mit
ati
ons?

 Ar
ether
eanypr
obl
emst
hei
deami
ghtcr
eat
e?Whatar
ethechangesi
nvol
ved?

 Howsi
mpl
eorcompl
exwi
l
lthei
deasexecut
ionori
mpl
ement
ati
onbe?

 Coul
dyouwor
koutsev
eral
var
iat
ionsoft
hei
dea?Coul
dyouof
feral
ter
nat
ivei
deas?

 Doesyouri
deahaveanatur
alsalesappeal
?Isthemar
ketr
eadyf
ori
t?Cancust
omer
s
af
fordi
t?Wil
ltheybuyi
t?I
sthereatimingf
actor?

 What,
ifanyt
hing,
isy
ourcompet
it
iondoi
ngi
nthi
sar
ea?Cany
ourcompanybe
competi
ti
ve?

 Hav
eyouconsi
der
edt
hepossi
bil
i
tyofuserr
esi
stanceordi
ff
icul
ti
es?

 Doesyouri
deafil
lareal
need,
ordoest
heneedhav
etobecr
eat
edt
hroughpr
omot
ional
andadver
ti
singeff
ort
s?

 Howsooncoul
dthei
deabeputi
ntooper
ati
on?

BUSI
NESSVI
ABI
LITY
Abusinessissaidtobeviablei
fther
eiscl
earpossibi
li
ti
esofbeingsuccessful
.Inother
wor
ds,aviabl
ebusinessisstr
onglyli
nkedwit
hopport
unit
ies(Encar
tadict
ionary2009).Vi
abil
it
y
i
saboutablet
ogr ow,surv
iveorabletobedoneorworthdoing.Avi
ablebusinessmustbebot h
f
easi
bleandprofi
tmaking.
MARKETPARAMETERSUSEDTODESCRI
BEBUSI
NESSVI
ABI
LITY

 Mar
ketv
iabi
l
ity
From amar ketviabil
i
typoi ntofv i
ew,aviablebusinessmustbest rongl
yr el
atedwithit
s
curr
entandpot entialcustomer s.Thus,
abusi nessi ssai
dtobev i
ableifitiscapabl
eto
meetcurrentneedsandwant sofit
spotentialcustomers.Ther
efore,marketviabi
li
ty
defi
nesthebusi nessst r
engt hsorcapabili
ti
est omeetcust omerexpectati
ons.

 Techni
cal
viabi
l
ity
Businessvi
abili
tycanbedef i
nedbylookingt owhatextentabusinessistechni
cal
lywel
l
str
ucturedandar r
anged.Technicalv
iabil
it
yincludesall
insti
tut
ionalar
rangementsand
syst
emat i
cissueswhi chinf
luencebusinessperformance.I
tsomet i
mesi ncl
udeeven
humanbehav iorthatarenecessaryf
oroper ati
onali
zi
ngv ar
iousacti
vit
ies.

 Fi
nanci
alv
iabi
l
ity
Fi
nancialaspecti
susedtodef i
net hevi
abi
li
tyofabusi
nessbyl
ookinginput
-out
putr
ati
o
oranal
y si
s.Thus,
thebusinessissaidtobev i
abl
eift
herei
sagreatchanceformaki
ng
prof
it
sgi v
enacertai
nlevelofinvestment

 Economi
cvi
abi
l
ity

Cr
edi
ts:
Ngal
l
a,SamsonandMwai
popoMoses
 Fr
om economi csperspecti
veabusinessmustbeeconomi cal
lyvi
able.Aviabl
ebusiness
i
stheonewhi checonomi zesresour
cesbyutil
i
zingthem car
eful
l
y.Itisconnectedto
ef
fect
iveuti
l
izati
onofr esourcesaswellasi
tsabil
i
tytoaccommodat ev ar
iouseconomic
si
tuat
ionorpressures.

25t
hApr
il
,2018,
Wednesday(
lect
ure3)
PUTTI
NGYOURPLANSI
NTOACTI
ONS:
PREPARI
NGANDCOMPI
LIGABUSI
NESSPLAN
Abusi
nesspl
anconsi
stsofmanycomponent
sthati
swhywesayt
hatwear
ecompi
l
ing.
A businesspl andet erminessuccesssi ncesuccessdoesnotcomeasacci dent.I ti
st hen
consideredasamanualwhi chpr ovidesgui del
i
nesf ormanagingv ar
iousr outinebusi ness
operations.Businessplansandst rategicplanssupporteachotherandoverl
apt osomedegr ee
butareusedf ordiff
erentpurposes.Busi nessplanisoftenpr
eparedtotestfeasibili
ty,mobili
ze
resources,andcoor di
nateactivi
ti
es( product,management,ownershi
p)
Somepeopl ear guet hatabusi nessplanmaynotbei mpor t
ant ,thatsome.thepointi
st hatwhat
i
si ny ourmindi swhatmat ters.Abusi nesspl
anisjustaphy sicaldocument .Howeverempirical
studiesi nent
repr eneurshi
phav eunv ei
lthatmostofentr
epreneur sarenotsuccessfulbecause
theyhav enothingi nmi ndaboutbusi nessplanni
ng.Conclusi
v ely,abusinessplani
sanecessar y
documentbuti tdoesn’ tguaranteesuccess.Onlythosewhowal kintheirplansar
eabl etostep
forwar d.Event houghsomebusi nesseswereestabli
shedwi thoutabusi nessplannonewas
establishedwithoutpl anni
ng.
BUSI
NESSPLANDEFI
NED
Thebestper
specti
veistost
artl
ooki
ngt
hepr
ocessofpr
epar
ingabusi
nesspl
ani
ntoi
ndi
vi
dual
s
orpeopl
eperspect
ive.
Ithi
sperspect
ive-i
tissomethi
ngthatdemonst
rat
esdi
ff
erentbusi
nessact
ivi
ti
esoroper
ati
ons
thatf
lowfrom aper
son’
sinspi
rat
ionsanddr
eams.

Cr
edi
ts:
Ngal
l
a,SamsonandMwai
popoMoses
Itisadocumentt hatpr esentsaper son’smentalpictureint osomet hi
ngwhi chisf easibleor
abletobeseenandpossi bl
etobeshar edandcommuni catedt oother
s.Ittransl
atesv i
sions,
dreamsandi nspirati
onsi ntopracti
calandf i
nancialterms.I thelpsmanager stothi
nkt hrough
thei
rstr
ategies, balancetheirenthusiasm, passi
ons, i
nterests,dreams,orinspi
rati
onswi thf act
s
andrecognizet heirli
mitati
ons.(Cov ell
oandhazel gren2006)
Awr i
tt
enplancanhel
pusfi
ndomissi
onsandf
lawsIouri
deasbyf
oll
owi
ngot
herpeopl
eto
cr
it
ical
lyr
evi
ewandanal
yzet
hem.
Abusinesspl
andoesnotonl
yhighl
i
ghtkeyplanni
ngi
ssuesbutpr
ovi
desspeci
fi
ccour
seof
act
iontobeadopt
edsoast
oreal
i
zesuccess.
Abusi
nessgoodpl
anshoul
dbeaf
lexi
ble(
over
-ev
olv
ing)r
esour
cet
hatgr
owsandchangeswi
th
t
hebusi
ness.

WHYABUSI
NESSPLAN

 I
tisadocumentwhi
chset
sbusinessdi
rect
ion.I
tset
sobj
ect
ivesandgoal
sanddr
ivesa
busi
nessper
sont
oachi
evethem.

 I
treducest
her
iskoff
ail
ure.Thi
sispossi
blewheny
ouwal
kony
ourpl
an.

 I
tisamot
ivat
ional
fact
or(
tool
)i
trai
sesspi
ri
tofcommi
tment

 I
tisadocumentwhi
chprov
idesabusi
nessf
ramework.Wher
etoget
,putr
esour
ces,
how
t
oall
ocater
esour
cesandgivesut
hebestwaytomonit
orper
for
mance

 I
tisimpor
tantandamustpr esent
edwhenaper sonislooki
ngforfi
nance(
whena
per
soni
sneedyforget
ti
ngf
inanci
alassi
stancef
orstar
ti
ngupandexpansi
on)

 I
tisani
mpor
tantdocumentwheny
ouwantt
odeci
decor
rect
lyandatacor
rectt
ime.

FEATURESOFAGOODBUSI
NESSPLAN

 Itmustbeasel
f-explanat
orydocument
.Ablet
oprovideawi
depi
ctur
eoft
hebusi
ness
soastoassi
stt
her eaderi
nunderst
andi
ngthebusi
ness

 i
tmustbeper
suasi
vei
nnat
ure(
impor
tantwheny
ouwantt
oat
tractf
inancer
s)

 I
tmustbereal
i
sti
c.Donotunder
stat
eorov
erst
atedat
a.I
.e.f
inanci
all
yandeconomi
cal
l
y
r
eal
i
sti
cetc.

 I
tshoul
dseekt
osei
zeacer
tai
nspeci
fi
cbusi
nessoppor
tuni
ty.

 Itshouldpossesselement
aryfeat
uresasat oolforper
formancemeasur
ement
.Iti
s
consider
edasay ar
dsti
ckagai
nstwhichal
lper
formancesaremeasur
ed.

 Abusi
nesspl
anmustbef
lexi
ble.I
tshoul
dbeabl
etoadoptchanges.

PRE-
REQUI
SITESFORPREPARI
NGANEFFECTI
VEBUSI
NESSPLAN

Cr
edi
ts:
Ngal
l
a,SamsonandMwai
popoMoses
  Busi
nessopport
uni
tycr
eat
ionordi
scov
ery
.Showshow aper
soni
sreadyt
osei
ze
oppor
tuni
ti
es.

 Abusi
nessi
dea.

 Fact
sfi
ndi
ngandsui
tabl
einf
ormat
ion.(
suf
fi
cienti
nfor
mat
ion)

 Ident
if
ynecessar
yskil
l
s,Competenci
esandt
echni
calknow-
how.Somepeopl
esshoul
d
sometimesbeconsi
derede.
g.economist
s

 Resourcemobi
l
izati
on.Fi
nanci
alandhumanr
esour
cesmi
ghtbeneeded.Tr
ytot
hink
howy ouwi
ll
mobili
zethem.

 Last
ly,
tryt
othi
nk,
towhom t
hepl
ani
spr
epar
edf
or?

MAI
NSTAGESI
NPREPARI
NGABUSI
NESSPLAN
1.Abusi
nessoppor
tuni
tyi
dent
if
icat
ionorcr
eat
ion
Thisstagecr
eat
esabaset
owar
dsdev
elopi
ngani
deaandt
her
eaf
terapr
act
icabl
e
busi
nesspan
2.Busi
nessi
deadev
elopment
I
deashoul
dref
lectav
ail
abl
eoppor
tuni
ti
es
3.Busi
nessi
deascr
eeni
ngpr
ocess
4.Col
l
ectr
elev
anti
nfor
mat
ionandf
act
sthatconnectbet
weent
heoppor
tuni
tyandani
dea
5.Pr
epar
eandcompi
l
eyourpl
an

TECHNI
CALGUI
DELI
NESFORPREPARI
NGABUSI
NESSPLAN
1.Al
way
sconcent
rat
eonoppor
tuni
tyt
obesei
zedandy
ouri
dea.Tr
ytol
i
nkt
het
wo.
2.Remember
,thi
sisapr
esent
ati
onofament
alpi
ctur
ethaty
ouhav
einmi
ndsost
ickoni
t.
3.Av
oidmul
ti
plei
deasorpr
esent
ati
ons.Chooseonei
deaandpur
suei
tconsi
stent
ly.
4.I
nor
dert
oachi
eveconsi
stency
,gett
ounder
standabusi
nesswhi
chy
ouar
epl
anni
ngf
or.
5.Alwaysdoy ourbesttoestabl
ishlogi
calfl
ow ofy
ourpr
esent
ati
on.Ther
eshoul
dbe
l
inkagesbet
weenallsect
ionsofyourpl
an.
6.Forni
ce pr
esent
ati
on,use chapt
ers orsect
ions t
o pr
esenty
ouri
nfor
mat
ion.E.
g.
CHAPTERONE:Descr
ipt
ionofbusi
ness
7.St
arteachchapt
erorsect
iononaf
reshpage.
8.Consul
tdi
ff
erentexper
tswheny
ouar
ewr
it
ingy
ourpl
an.
9.Donotexagger
atei
nfor
mat
ion.(
Donotov
erst
atei
nfor
mat
ion)

Cr
edi
ts:
Ngal
l
a,SamsonandMwai
popoMoses
OTHERI
MPORTANTGUI
DELI
NES
1.Avoidunnecessar
yjar
gons(
compl
i
cat
edwor
ds)butt
rynott
omi
sleadt
her
eader
.(don’
t
changethemeaning)
2.Makesur
eyourpl
ani
ssi
mpl
ebutdet
ail
ed.
3.Avoi
dinf
ormati
onovercr
owdi
ng.Makesur
ethaty
ouusewr
it
ingski
l
lsandst
ylest
hat
canmakeyourpl
anneatandr
eadabl
e.
4.Choosecorr
ectwords.Complywit
h prof
essi
onalwr
it
ing st
yle(
rel
evantf
orof
fi
cial
document
s.E.
g.av
oidshor
teni
ngwords)
5.Pr
oofr
eadi
ng.Thi
sisnecessar
ysoast
ocor
rectgr
ammat
ical
err
ors.

02ndMay
,2018/
Wednesday(
lect
ure4)
PREPARI
NGABUSNESSPLAN
TI
TTLEPAGEANDTABLEOFCONTENTS

Cr
edi
ts:
Ngal
l
a,SamsonandMwai
popoMoses
Thef i
rstandf oremostparttoi ntr
oducey ourplani
st hroughatitt
lepage.Throughat ableof
contentonecant r
acespecif
icinformati
onoraspeci f
icpagewhichhe/ shei
sint
erestedtoread.
Thusat abl
eofcont entsfaci
li
tatesreferenci
ng.Thust herol
eoft hist wocomponentsshould
notbeunder mined.E.g.ti
ttl
epagecangi vethebestf ir
stimpressionwhichmayi nt
eresta
readert ogoinsidethedocument .Butitisnotalwayst hatagoodt ittl
epagerefl
ectswhati s
withi
nt hedocument .

1.TI
TTLEPAGEORCOVERPAGE
Thecov
erpageshoul
dcont
ain:

 Nameoft
hebusi
ness

 Busi
nessl
ogo

 Phy
sical
andpost
aladdr
ess,
Phonenumberet
c.
Thefundamentalpur
poseofthisparti
stointr
oducet
hepl
antothereader
.Wheny
oupr
epar
e
thi
sparti
tisgoodtoconsi
derthati
tdefi
nesyourpl
ani
nonewayoranother
.

I
ssuest
oconsi
derwhenwr
it
ingat
it
tl
e/cov
erpage;

 Donoti
ncl
udei
nfor
mat
ionher
e,t
ryt
obepr
eci
se.

 Avoi
dunnecessar
ydecor
ati
ons.I
fcol
orsandpi
ctur
eshav
etobeused,becar
efulon
howyouarr
angethem.

 Av
oidi
nfor
mat
ionov
ercr
owdi
ng.User
easonabl
efontsi
zeandf
ontt
ype

 Pl
ease,
usesi
mpl
ebor
der
stocov
ery
ourpage

2.TABLEOFCONTENTS
Thisassi
stsyourreadert
ogothroughy
ourplanver
yquickl
ybypoi nt
ingoutt
hekeyi
ssues
thr
oughthetableofcontent
s.Wit
houti
t,ar
eadermightunnecessari
l
yhavetogothr
oughthe
wholedocumenttoseet hepar
tsheisi
nter
estedi
n.

Whyt
abl
eofcont
ent
?

 I
tisat
ool
forr
efer
enci
ngormeansf
ort
raci
ngi
nfor
mat
ion.

 I
tpr
ovi
desabr
oaderpi
ctur
eabouty
ourpl
anonhowt
hepl
anhasbeenar
ranged.

 I
tmi
ghtbeusedasamot
ivat
ional
tool
tor
isei
nter
estont
hepl
an.

Cr
edi
ts:
Ngal
l
a,SamsonandMwai
popoMoses
I
ssuest
oconsi
deri
nwr
it
ing/
prepar
ingat
abl
eofcont
ent
s.

 I
tisveryi
mport
antt
oi ncl
udeonl
ykeyel
ementsori
tems(
Youmayusechapt
ersand
headi
ngs.Ot
her
wisethetabl
emaybetoolong.
)

 I
tisadvi
sabl
etouseautomati
ctabl
eofcont
ent
sinst
eadofmanual
tabl
eofcont
ent
s.
Theaimistoensur
ethebesti
mpressi
on.

Cont
.……….(
Lect
ure5)
3.ANEXECUTI
VESUMMARY
I
ti sworthnot
ingthatnotal
lreadersmaygothrought
hewholeplan.Somer eadersmaynotgo
throughthewholeplanormaywantt oprovet
hequali
tyofyourpl
anbeforereadingthewhole
plan.Thusanexecutiv
esummar ysummari
zesthewholepl
an.Itisapartofabusi nesspl
an
whi chhel
pthereadertogothroughthepl
anwithinar
easonabl
eamountoft ime.

Def
ini
ti
ons:
Iti
sabri
efyetconcisest
atementwhi
chisdesi
gnedtogiveyourreaderanov
erv
iew
abouty
ourbusinessbysummar i
zi
ngthekeypoi
nts.(
Record,2007)

Or.I
tisacondensedabst
ractofabusi
nesspl
anusedtosparkt
her
eader
’si
nter
esti
n
t
hebusinessandtohighl
i
ghtcruci
ali
nfor
mati
on.(
Hatt
en,2010)

Or
.Iti
sonet
otwopagesdocumentwhi
chgi
vesanov
erv
iewoft
hewhol
edocument
.
Or.I
tisthethesi
sstatementofyourbusi
nesspl
an.Itsummari
zeswhoar
ey ou,
what
yourcompanydoes, wher
ey ourcompanyisgoi
ng,whyisi
tgoi
ngwherei
tisgoingand
howitwill
getthere.
Or.Itisasynopsi
softheent
ir
ereporti
ntwoorthreepages.Emphasi
zesthegenet
ic
uniquenessofyourcompanyadsuggestst
henatureofthematr
ixinwhi
chy oucompany
wil
l oper
ate.

Iti
sconsideredasastandalonedocumentorcomponent,asonecanmakedecisi
onregardi
ng
thewholeplanbasedont heinfor
mati
onfoundinthi
spart
.Iti
snecessar
ytonotethatan
execut
ivesummar yi
spr eparedaft
eral
lcomponentshav
ebeenaccomplished.

Whyanexecut
ivesummar
y?

 Toassi
stt
her
eadert
ounder
standwhati
swi
thi
nyourdocumentwi
thi
nashor
tti
me

Cr
edi
ts:
Ngal
l
a,SamsonandMwai
popoMoses
  I
tassist
sdecisi
onmaker
stomakequickdecisi
onsregar
dingt
hepl
an.(asonecanmake
deci
sionregar
dingt
hewhol
epl
anbasedont heinf
ormati
onfoundi
nthispar
t)

I
ssuest
oconsi
derwhenpr
epar
inganexecut
ivesummar
y.

 Remembert
hispar
tmustconv
eyacl
earandconci
sepi
ctur
eoft
hepr
oposedv
ent
ure.

 I
tmustcr
eat
easenseofexci
tementr
egar
dingi
tspr
ospect
s.

 St
atethemai
nbenef
it
s,t
husacknowl
edgi
ngy
ourcust
omer
s’needs.Thi
swi
l
lgr
abt
hei
r
i
nter
est.

 Alwayspr
oveyourst
atementbygi
vi
ngy
ourcust
omersev
eral
ref
erences.(
e.g.past
perf
ormance,
casestudi
es)

 Appl
yy ourbenefi
tstoyourcustomerbyunv ei
l
ingtherealv
aluethatnotonlyyour
cust
omerbutal sotheorganizat
ioncangetthroughyourof
fer.Usepresentat
ionsand
notvaguemar ket
ingcopy(numbers,fact
s,per
centages,
ref
erencing,
studies)

 Fi
nal
lycal
lyourr
eadert
oacti
on,
andgi
vet
henecessar
yinf
ormat
ionf
oract
ion.(
Who,
what
,when,where,
howetc.
)
Qual
i
tiesofanexecut
ivesummar
y.

 Itshouldbeprepar
edinaper
suasi
vel
anguageastheint
ent
ioni
stobui
l
dpl
ancr
edi
bil
i
ty
andat t
racty
ourreadert
ocal
lyouf
orf
urtherconsi
der
ati
on.

 Itshouldbepresent
edi
nasummaryform.Speci
fi
call
y,t
hepartshoul
dbewithi
n2-3
ages.Ifpossi
blekeepi
twi
thi
n2pages.Somescholar
ssuggestthatf
oreach20-
50
pages,1page.

 I
tshoul
dcontai
nonl
ysensi
ti
vei
nfor
mat
ionwhi
chi
ssomuchi
mpor
tanti
nassi
sti
ngt
he
r
eadert
otakeacorr
ectj
udgment
.

 I
tmustbeablet
ograspr
eaderi
nter
estatt
hel
evel
ofmaki
ngdeci
siont
ocal
lyouf
or
f
urt
herdi
scussi
on.

Gui
del
i
nesf
orpr
epar
inganexecut
ivesummar
y(pr
inci
ples/
rul
es)

 Readt
hewhol
epl
ant
hor
oughl
yandbet
weent
hel
i
nes.

 Tr
ytocont
empl
atewhatt
hepl
ani
sal
labout
.Ident
if
yal
lkeyi
ssuesandkeyi
nfor
mat
ion.

 Thi
nkabouthowt
hei
nfor
mat
ionshoul
dbeor
gani
zedi
nor
dert
oof
feragoodf
low.

 Wri
tebyusi
nganewlook,
donotcopyandpast
ewhaty
ouhav
ewr
otei
not
herpar
ts.
Remember,
thi
sisast
andalonedocument
.

 Donnoti
temi
zeornumbert
hei
nfor
mat
ion.Al
way
sar
rangei
nfor
mat
ioni
ntopar
agr
aphs.

Cr
edi
ts:
Ngal
l
a,SamsonandMwai
popoMoses
  Avoi
dtheuseoft
oomuchj argonswhichmaymisl
eadsomeofy ourreader
s.Keepit
si
mpleint
ermsoflanguageandpresent
ati
onswhi
leobser
vingcont
entsuffi
ciency
.

 Al
waysrememberthatyouarepr
epari
ngthi
spartf
ormanyreaders,
customer
s,
i
nvest
orset
c.l
etyourfocusbeonthesegr
oups’
int
erest
srat
herthanyourown.

 Donoti
ncl
udeanyi
rrel
evanti
nformati
on,ori
nfor
mationwhi
chdoesnotappear
any
wherei
nyourpl
an.Avoidunnecessar
ytechni
cal
i
ties.

 Donotpreparethi
spar
tinademonst
rat
iveway
.Al
way
susest
rong,
ent
husi
ast
icand
pr
oact
ivelanguage.

HOW TOPREPAREANEXECUTI
VESUMMARY
I
tisnoteasybecausey
ouhav
etosummar
izei
nfor
mat
ioni
n2-
3pageswhi
chcancompr
omi
se
qual
it
y,
Andi
tisusedbymostr
eader
stot
akecer
tai
ndi
rect
ionr
egar
dingv
iabi
l
ityoft
hepl
an.

 Busi
nessoror
gani
zat
ionpr
ofi
l
e.
Busi
nessname,
visi
on,
missi
on,
goal
sandobj
ect
ives,
nat
ureandsi
ze.

 Busi
nessowner
shi
pandmanagementst
ruct
ure.
I
ncl
udest
ypeofowner
shi
pst
ruct
urewhi
cht
hebusi
nesshasadopt
ed

 Nat
ureofpr
oduct
sandser
vicesof
fer
ed
Emphasi
zeonpecul
i
ari
ti
essoast
oshowdi
ff
erences.(
Uni
queness,
qual
i
ty,
ingr
edi
ent
s)

 Mar
ketandi
ndust
ryanal
ysi
s.
Thef
oll
owi
ngi
ssuesshoul
dbepr
esent
ed
a)Mar
ketgr
owt
handsi
ze
b)Av
ail
abl
ebusi
nessoppor
tuni
tyemer
ged
c) Atwhatr
atethemarketandi
ndust
ryaregrowingandoppor
tuni
ti
espr
oduced.i
.e
si
gni
fi
cantornot
.Youcanusepercent
ages,fact
s…
d)Doestheindust
ryormar
ketgr
ow,
decl
i
ne,
becomedor
mant
..
.andi
tsi
mpl
i
cat
ion
toyourbusi
ness.
e) St
atehowy ouwil
lbeabl
etor
aiseandmai
ntai
ncompet
it
iveadv
ant
ageov
er
ot
herproducer
s.

Cr
edi
ts:
Ngal
l
a,SamsonandMwai
popoMoses
 f
) Speaki
nanut
shel
laboutt
hef
undament
alorkeysuccessf
act
ors.
(KSFs)

 Mar
ket
ingpl
anandt
act
ics
I
tisgoodt
odwel
lont
he4p’
sormar
ket
ingmi
xvar
iabl
es.

 Or
gani
zat
ionandmanagementpl
an
Functi
onsandresponsi
bil
it
iesofdif
fer
entoff
ici
alsofyourbusi
ness.Rememberthi
s
i
nformati
onshouldori
ginat
ef r
om ownershi
pstr
ucture.Theyshoul
drefl
ecteachot
her
.

 Fi
nanci
ngr
equi
rementandf
inanci
alpl
an
a)Themai
nsour
cesoff
unds.I
.e.st
artupandexpansi
oncapi
tal
.
b)St
atethemai
norkeyacti
vi
ti
esofthebusi
nessandhowt
hecol
l
ect
edf
undswi
l
l
beal
locat
edt
ofaci
li
tat
ethoseact
ivi
ti
es.
c) Stat
etheamountofSal
esr
evenue,
prof
it
swhi
cht
hebusi
nessexpect
sina
speci
fi
edper
iodofti
me.
d)Statethepay
backperi
od.Howmanyy earsyouwi
llwai
tunt
ily
oust
artgai
ning
retur
ns.(
capi
tal
budget
ingtechni
queswil
lbeappl
i
edhere)

09thMay
,2018/
Wednesday(
Lect
ure6)
4.BUSI
NESSDESCRI
PTI
ON
I
tintendst ooff
erinf
or mati
ontoy ourprospect
ivereader
sthatdescr
ibethebusiness
comprehensivel
yandperfect
ly.Insummaryt hi
ssecti
onshouldspeakaboutwhoyouare,where
youhavebeen,wher eyouplanongoi ngandhow y ourcompanyf i
tsint
oyourindust
ryand
market
place( Covel
loandHazel gr
en,2006).General
lyi
tislikeyouareaskedtotel
lusabout
your
self
.
I
nr espondingtot hequest
iont el
lusaboutyour
sel
f,onehast oconcentr
ateonwhat
he/shehasr el
ati
v et
oot her
s.Si
milar
ly,abusi
nessdescr
ipt
iontri
estorespondtothequest
ion
ofwhyt hepr oposedbusinessshouldbeconsider
edasdoabl ewhencompar edtotheother
businesses.Itisthequesti
onof,whati
ssospecialt
otheextentofcal
l
ingouratt
enti
on.

I
naspeci
alway
,inpr
ofi
l
ingabusi
nessemphasi
sshoul
dbeont
hef
oll
owi
ngar
eas:

 Anameofabusi
nessi
fany
.
However
,ift
hebusi
nessisnotther
etrytosaywhi
chel
ementt
hatl
ookt
hesameasa
namecanbeusedtodescr
ibet
hebusiness.

Cr
edi
ts:
Ngal
l
a,SamsonandMwai
popoMoses
  Thehi
stor
icalbackgr
oundofy ourbusi
ness.Basi
cal
l
y,t
heor
igi
nofev
erybusi
nessdi
ff
er
i
nter
msofi ssuesli
keideas.

 Thebusinessownerinspi
rat
ionsormot
ives.I
nfacther
e,i
sal
laboutwhatmot
ivat
est
he
exi
stenceofthebusi
ness.

 Abusi
nessobj
ecti
vesandgoalstobeachiev
ed.Bot
hper
sonalobj
ect
ivesandgoal
sas
wel
lascust
omersorsoci
etyobj
ecti
vesandgoal
s.

 Descr
ipti
onoff
unct
ionalbenef
it
s(Whatdoy
ouof
fer
)andemot
ionalbenef
it
s(how do
youoffer
)

Busi
nessdescri
pti
onasapar tofabusinesspl
ancanbedescr i
bedasanav enuet o
descri
bethebusinessinabi gpict
ureont heeyesofy ourreader
s.Ithast oconsistany
i
nformati
ondeemednecessar yt
omakey ourbusi
nessknownandbedi ffer
enti
atedagainst
otherbusi
nesses.Thi
spartcanbeconsideredastheheartoftheplan,becauseotherparts
mustrefl
ectwhatiswi
thi
nthi
spart
.
Accordi
ngtoMill
erandArkebauer(1999)t
hebusi
nessdescri
pti
onisthef i
rstsecti
onof
yourplanaft
ertheexecuti
vesummar y
.Theywentonsaying,intwoorthreepagesy oushould
bri
efl
ydescri
bewhyt hecompanyexists,
itsstr
uct
ure,
whereithasbeen,whereitisgoing,who
ownsitandwhatmakesi tspeci
al.
AccordingtoLongeneckeretal.
, (
2008)businessdescri
pti
ongivesabriefpi
ctur
eoft he
f
ir
m.Thebusi nessdescri
pti
oninformst hereaderofthet y
peofbusinessbeingproposed,the
f
ir
m’sobjecti
ves,wherethef i
rmi slocatedandwhet heritwil
lser
veal ocalorinter
nati
onal
market
.Itdescri
besthebusi
ness’scurrentsi
tuati
onandov eral
lbi
gpict
ure.
Themaj orit
yl i
ter
atureshowsthatbusi
nessdescr i
pti
onisv eryi
mportanti
nat t
racti
ng
customerattenti
ontowar dsthebusi
ness.However
,iti
st r
uethatthi
ssecti
onofabusinessplan
cansomet i
mesbeusedt oattr
actatt
enti
onofspeci algroupssuchasbusi nesspar t
ners,
i
nv est
ors,etc.t
herefor
e,thesecti
onrequir
essimil
arweightthatcouldbeinv
estedinprepari
ng
othersecti
onsofabusi nessplan.

Undernor
mal
cir
cumst
ances,
descr
ipt
ionofbusi
nessshoul
danswert
hef
oll
owi
ngquest
ions.

 Whati
sthennameoft
hebusi
ness?

 Whatki
ndofl
egal
for
m ofbusi
nessowner
shi
pthebusi
nesshasadopt
ed?

 Whati
sthenv
isi
on,
missi
on,
goal
sandobj
ect
ivesoft
hebusi
ness?

 How t
hebusi
nesswi
l
lbemanaged?I
thast
oref
lectt
headopt
edf
orm ofbusi
ness
owner
shi
p.

 Howmuchi
srequi
redt
omanaget
hebusi
ness?

 Howar
eyougoi
ngt
orai
sef
undt
omanaget
hebusi
ness?

 Whati
sthecur
rentbusi
nessst
atus?Fori
nst
ance,f
inanci
alst
atus.Foranewbusi
ness,

Cr
edi
ts:
Ngal
l
a,SamsonandMwai
popoMoses
 t
hequest
ionwi
l
lbe,
whatar
ethebusi
nesspr
oject
ions?

 Whataret hest
rat
egi
est
hathav
ebeendesi
gnedt
omeett
heunder
li
nedgoal
sand
obj
ect
ives?

 Whatar
ethepr
oduct
sandser
vicest
hatt
hebusi
nessi
ntendst
oof
fer
?

 Wher
ethebusi
nessi
slocat
edorwi
l
lbel
ocat
ed?
WHYBUSI
NESSDESCRI
PTI
ON
Thef
oll
owi
ngar
ether
easonst
ojust
if
ywhyt
hesect
ioni
ssomuchcr
uci
ali
nabusi
nesspl
an;

 I
tdef
inesanddescr
ibest
hebusi
nesst
hroughgi
vi
ngdet
ail
edanduni
queexpl
anat
ions.

 I
nt hecourseofdefininganddescr
ibi
ngthebusi
ness,t
hispartcanbeusedasan
opport
uni
tyf orbr
anding.Not
ethatbrandi
ngworksasat oolf
orident
if
icat
ionand
di
ffer
enti
ati
on.

 I
tisani
mpor
tantav
enuef
orshowi
ngandpr
ovi
ngt
hev
iabi
l
ityoft
hebusi
ness.

 Ifyouareint
endi
ngtopur
sueexist
ingi
deas.Thi
scanbeapl
acef
ort
ell
i
ngwhat
somethi
ngnewyouar
egoi
ngtoof
fer.

 I
tbui
l
dst
hebasi
sforwr
it
ingot
hersect
ionsofabusi
nesspl
an.

GUI
DELI
NESFORPREPARI
NGDESCRI
PTI
ONOFBUSI
NESS
Thef
oll
owi
nggui
del
i
nescanbehel
pful
inpr
epar
ingt
hissect
ion.

 Remembery ouri
nfor
mat
ioni
sfori
dent
if
icat
ionanddi
ff
erent
iat
ion.Soemphasi
zeon
thesear
eas.

 Rememberyouar edefi
ningt
hebusi
ness.Sotryasmuchasy oucant oshowwhyt
he
busi
nessi
sdist
incti
veandinwhi
chaspect
sdif
fersf
rom ot
herbusi
nesses.

 Becauseyouaredescri
bingt
hebusiness,obser
vechronol
ogicalf
low ofi
nfor
mat
ion.
Arr
angeyourdet
ail
sinsuchawayonecancompr ehendwhatyouaresayi
ng.

 Remembert hatmostofinformationwhi
chy ouaregoingt ousehere,maybefoundi
n
otherpart
softhepl
an.Howev erher
etheissueishowt hoseinf
ormati
onareenought
o
exhausti
vel
ydefi
neyourbusinessandtomakei tuni
que.

 Fort
hosei
deasorbusinesseswhicharenotnew,t
hissect
ioncanbeusedt
odescr
ibe
whyyouwantt
opursuetheideaorthebusi
ness.

KEYI
NFORMATI
ONI
NBUSI
NESSDESCRI
PTI
ON
Dif
ferenti
nformati
oncanbepr esent
edasbasi
sfordescri
bingabusiness.Iti
swor t
hnot ingt
hat
notallbusi
nessesaredescribedthr
oughthesamei nf
ormationorapproach.Perhaps,thesize,
natur
e,etc.mayf orceapl annert
ousedi f
ferentapproachandev eni nfor
mat i
ont owards
descr
ibinghis/herbusi
ness.However,t
hefol
lowingarethecommoni nformati
ont hatcanbe

Cr
edi
ts:
Ngal
l
a,SamsonandMwai
popoMoses
usedt
odescr
ibeabusi
ness.

 Abusi
nessmi
ssi
on,
visi
on,
goal
sandobj
ect
ives.
Asamat t
eroff act
,av i
sion and missi
on statementplayasi gnif
icantr
olein
i
denti
fyi
nganddi f
fer
ent
iati
ngabusinessagainstothers.Fur
ther
mor e,businessgoal
sand
obj
ecti
ves as machi
ner
yi n achi
eving t
he vi
sion and missi
on always createal i
ne of
di
ff
erencebetweenonebusinessandt heot
her.Considerthefol
lowingvisionandmi ssi
on
st
atements.

 Legal
issues.Al
egal
for
m ofbusi
ness(
owner
shi
p)
Inmoder nbusinesspr acti
cesitisadvisabl
et oestabl
i
shandt or unabusiness
thr
oughspecifi
edlegalprocedures.Inot
herwords,thebusi
nessmustcompl ywi
thdif
fer
ent
l
aws,r egul
ati
ons,polici
eset c.which gover
n apar ti
cul
arindustry
,sect
or,etc.t
hus,in
descr
ibingyourbusiness,youhav et onar
rat
et heform ofbusinessowner
shipwhichthe
busi
nesshasadopt edorwilladopt.

 Managementst
ruct
ureandl
eader
shi
ppl
an.
I
tisnecessarytopr ovideinf
ormati
onaboutmanagementst r
uct
ureandleadershi
p
plan.Speakinanut shel
lhowt hebusi
nesswil
lbemanaged, whatar
ethekeyposi
tionsand
theirresponsi
bil
i
tiesandr oles,whowi l
lberesponsi
bleformakingdecisi
onsetc.Again,
theseinformat
ioncanbei ncludedwhileyouar
edescri
bingbusi
nessownershi
p.

 Pr
oduct
sandser
vices
I
ndescribi
ngyourbusiness,tr
yt oputmuchofy ourt
imeonhi ghli
ght
ingwhatyouare
goingt
ooffer
.Thisisanotheravenuet odrawalineofdemarcati
onbet weenyouandother
s.
Iti
ssuggestedt hat
,keypr oductsorser vi
cescategori
esmustbement i
onedandt ryto
speakaboutyourfut
urepl
an( productsorservi
ceswhichareinpipel
i
nes)

 Busi
nessl
ocat
ion.
Itisrecommendedt oofferi
nformati
onaboutwher et
hebusinessislocat
edorwherethe
businesswi llbelocated.Basical
ly,phy
sicaladdr
essisanessentialel
ementindescri
binga
business, asitshowst hediffer
encesbetweeny ourbusi
nessandot her
s.Thisi
sastrategi
c
i
ssueandcandet er
mi nesuccess.Thust r
ytoshow whyt helocati
onofy ourbusi
nessis
potenti
al enought oguaranteesuccess.

 Cur
rentposi
ti
onoft
hebusi
ness.
Ifitisanongoingbusi
ness,y ouwi llber equi
redt osayaboutthebusinessposit
ion
(st
atus).Trytoshow whetherthebusi nessi sgrowing,st
agnat
ing,ordecli
ning.Again,
perhapsyouhavetosayaboutther easonsf oranystat
us.Foranewbusiness,t
rytoexpl
ain
howt hebusi
nesswill
bemov i
ngfrom onest agetoanother
.

 Fi
nanci
alst
atus.
Regardl
essofthenatureofthebusinesse.g.eit
heranew oneorol done,financial
stat
usisveryi
mport
ant.Mostofbusi
nessanal y
stsinvestmucht
heirti
mei nassessing
busi
nesscredi
bil
i
tyt
hroughanaly
zingfinanci
alposit
ionofabusiness.Foranongoi ng

Cr
edi
ts:
Ngal
l
a,SamsonandMwai
popoMoses
 business,
expl
ainaboutpr
ofi
tlev
el,
cashf
lowet
c.ont
heot
hersi
de,
foranewbusi
ness,
tel
lusabout………..

Cont
.…….(
Lect
ure6)
5.I
NDUSTRYANDMARKETANALYSI
S
ANOVERVI
EW
Bef oremaki ngdeci siont ooperateabusi nessinacer t
ainindustryormar ketitis
necessaryt ocarr
youtat hor oughanal y
sis.Themai npur
poseofthispartofabusinessplanis
toprovidesci ent
if
icjusti
fi
cat i
onsconcer ningyourdecisi
onstooper at
einagi venmar ketand
i
ndustry.Thi sisanoppor tuni t
yt oprovet hat
,yourplaniseconomicall
yv i
ableandthereisa
readymar ketfortheplan.I
ti sv i
tali
nmaki nginvest
mentdecisi
ons.
Fur
thermore,thi
spartissomuchusef ulindet
ermini
ngchall
engesorthr
eatsaswel las
opportunit
iesav ai
labl
eforinv est
ing.Itshouldbenot edthat
,thispartmustpr ov
ewi thout
l
eav i
nganygr ainofdoubtst hatyourplanistotall
yvi
ableandcanproduceposit
ivereturns.In
practi
ce,mar ketanalysi
saddr esst hemarketi nwhichthebusinessexpecttoent er,whi l
e
i
ndustryanalysisisabroaderterm whichi
mplieswherethebusi
nessisgoingt
ocompet e.

WHYI
NDUSTRYANDMARKETANALYSI
S
Thef
oll
owi
ngar
ethebenef
it
swhi
chcanbeaccr
uedf
rom t
hispar
tofabusi
nesspl
an.

 Throughmar
ketandi
ndust
ryanal
ysi
sbusi
nessoppor
tuni
ti
esandchal
l
engescanbe
explor
ed.

 Itof
fer
sthebasi
sforcr
eati
ngpr
operandr
elev
antst
rat
egi
esandt
act
icsf
orest
abl
i
shi
ng
andmanagingabusi
ness.

 Iti
sanopportuni
tytopr
ovestr
ategi
copport
uni
tyoft
hebusi
nessaswel
laspr
ovi
ngt
he
exi
stenceofprof
it
abl
ebusi
nessmarket
(s)
.

GUI
DELI
NESFORPREPARI
NGANDMARKETANALYSI
S
Thef
oll
owi
ngar
ethegui
del
i
neswhi
chmustbeobser
vedwhenpr
epar
ingt
hispar
tofabusi
ness
pl
an:

 Makesureyouknow exact
lyorcor
rectl
ythemar
ketwhi
chy
ouwantt
oent
erandt
he
i
ndust
rywhi
chyouaregoingtocompete.

Cr
edi
ts:
Ngal
l
a,SamsonandMwai
popoMoses
  Makesur
eyouinv
estenoughandqual
i
tyti
meonst udyi
ngthest
ruct
ure,
nat
ure,
trendet
c.
oft
hemarketwhi
chyouwanttoent
erandthei
ndustrywhi
chyouwanttocompete.

 Thi
nkstr
ategi
call
yonthekeyi
ssueswhi
chdi
sti
ngui
sht
hemar
kett
obeent
eredandt
he
i
ndust
rywhichyouwanttocompete.

 Hi
ghl
ightt
hekeyi ssuesandinf
ormati
onwhichy
ouwi
l
lpr
eferordemandt
hemost
.Thi
s
maybeinf
luencedbyt hepr
oposedbusi
ness.

 Thi
nkaboutwhere,
whenandhowtocoll
ectt
hei
nfor
mat
ion.Thi
smeans,
thepl
ace,
time
andtechni
quest
ocoll
ectt
hei
nfor
mati
on.

 Donotat tempttocoll
ectanyi
rr
elevanti
nfor
mationasthi
swillconsumey ourt
imeand
resourcesfornogoodcauseorresul
t.However
,thepr
inci
plei
scollectasmanyrel
evant
i
nf or
mat i
onaspossibl
e.

 I
nvestenought
imef
or“
fact
sfi
ndi
ng”whi
chdescr
ibet
hemar
ketandt
hei
ndust
ry.

 I
fyouwillber
equi
redtov
isi
tli
ter
atur
esassour
cesofi
nfor
mat
ion,t
henr
eadasmany
l
i
ter
atur
esasyoucan.

 Throughthissect
ionhugeandcompl exi
nformat
ioncanbecollect
ed,thustrytonar
row
downt heinfor
mationfr
om complexcontexttot
hesimplestform orcontext.Thebest
way ist o star
twi t
hi ndust
ry anal
ysi
st o marketanaly
sis which offer
s specif
ic
i
nformati
on.

 STOP!!
!!
!!
!!
!Donotpr epar
ethi
spar
twi
thoutsuf
fi
cienti
nfor
mat
ionorf
act
saboutt
he
marketandindust
ry.

SOURCESOFI
NFORMATI
ON
Aswe have seen,t
hispartr
equir
essuff
ici
entinf
ormat
ion before pr
epar
ing i
t.Thus,t
he
fol
l
owi
ngsourcescanbeusedf
orfact
sfi
ndi
ng,dat
acoll
ect
ionorinfor
mat i
onsear
ching.

 Busi
nessandeconomi
csmagazi
nes,
newspaper
set
c.

 Thr
oughv
isi
ti
ngi
nter
net
,onl
i
nel
i
brar
ieset
c.

 Thr
oughwat
chi
ngbusi
nessnews,
busi
nessdocument
ari
eset
c.

 Thr
oughr
eadi
ngr
elev
antl
i
ter
atur
es,
books,
resear
chandacademi
cpaper
s.Et
c.

 Busi
nessr
esear
chandcust
omersur
veyact
ivi
ti
es

 Br
ainst
ormi
ngandf
ocusgr
oupdi
scussi
on

 For
mal
andi
nfor
mal
sour
cessuchascust
omeri
nter
viewset
c.

 I
nst
it
uti
onsdeal
i
ngwi
thst
ati
sti
cse.
g.NBS,
BOTet
c.

 Speci
fi
cinst
it
uti
onsoper
ati
ngi
nvar
iousi
ndust
ri
esorsect
ors.Fori
nst
ance;TSPF,TCT
et
c.

Cr
edi
ts:
Ngal
l
a,SamsonandMwai
popoMoses
I
NDUSTRYANALYSI
S
Inindustryanaly
sisthepr i
mar ypurposeist odescri
bethest r
uctur
eofani ndust r
ywhi chthe
businessisgoingtocompet e.Themai nfocusistoanalyzetheextentofwhi cht heindustr
yis
att
ractiveenought ocompet eandt ooperate.Li
kewise,thenresult
soft hisanalysiswi l
lbe
oppor t
unit
iesandthreats.Hence,thedecisionwil
lbehowar eyougoi ngt otakeadv antageof
oppor t
unit
iesandhowar ey ougoingtostrategi
zesoast ofacethechallenges.Theanal ysi
swil
l
analyzeareasli
kebusinessenv i
ronment,competit
ionanalysi
sandcompet i
tors’anal
ysisetc.

BUSI
NESSENVI
RONMENTALANALYSI
S
Throughanalyzi
ngbusinessenv
ironment,di
ff
erentopportuni
ti
esandchall
engescanbe
divulged.Forexample,envir
onmentanalysi
smaybr i
ngoutunt appedbusinessoppor
tuni
ti
es.
Furthermore,throughthisanaly
sisyoumayi denti
fydiff
erentchall
engeswhichyoumustbe
readyt ofacet hem oncey oumakedeci si
ont oseizeacer tai
noppor t
unit
yavail
abl
eint he
businessenv i
ronment.
I
npracti
calcontext
,busi
nessenv ironmentalanalysisshoul
dfocusonaddr essingissues
such asgov er
nmentf ocusand intenti
on ( pri
ori
ti
es),polici
es,str
ategicplans,etc.inf act
,
envir
onmentalanalysi
s should be looked f r
om t he contextof“ CHANGE” .Any busi ness
envir
onmentalchangewhichseemst or elat
ewi ththepr oposedbusinesscanbei ncludedas
partofy
ourindustr
yandmar ketanal
ysis.
Howev er,itisnotexpect edt hatyouwillst
artmenti
oninginf
ormati
onaboutPESTEL
el
ements.Inotherwor ds,tellt
hereaderswhatyouhaveextr
actedfrom t
hemodel.Yourreader
wi
llbeinter
estedwi t
hhowt heseelementsprov
idesomethi
ngrelev
anttoyourbusi
nessandnot
ot
herwi
se.I fpossibl
e, t
ryasmuchasy oucantoavoi
dtheuseofPESTELmodelasi tis.Tryto
pr
esenttheextract
edi nfor
mat i
on.
General
l
yy ouhavetofindt
heanswerf
ort
hef
oll
owi
ngquest
ionswhencar
ryi
ngoutbusi
ness
envi
ronmental
analy
sis;

 Towhatext entthebusi
nessenvir
onmentprovi
dev i
abl
ebusinessoppor
tuni
ti
es?How
theoppor
tunit
iesgrow?Whateconomi
ctrendssupportt
heopport
uni
ty?

 Dobusi
nessenv
ironment
spr
ovi
der
eadymar
ketf
ort
hepr
oposedbusi
ness?

 Areyoucapabl
eenoughtocopewithchangesi
nbusi
nessenv
ironment
s?Cany
oubui
l
d
competi
ti
veadvant
agethr
oughthem?
Conclusivel
y ,businessenv ir
onment alanalysisshoul d helpt o analy
ze v
ariousgov er
nment
poli
ci
es,pr ocedures,interv
entions,priori
ti
eset c.thetaskofbusi nesspl
annersistol i
nkthe
afor
ement i
onedf actors,aswel lassi milarfactorswitht hepl anni
ngprocess.Again,thi
sis
consideredasachancef orhighli
ghtingkeyf eatureswhichv indicat
etheattr
acti
venessofthe
i
ndust r
yint ermsofgr owth,share,st
abi l
i
tyandpr edict
abi
lit
y .

Cr
edi
ts:
Ngal
l
a,SamsonandMwai
popoMoses
Cr
edi
ts:
Ngal
l
a,SamsonandMwai
popoMoses