BUSINESS PLAN FOR NEW

ENTERPRISE
 WHAT IT STARTS WITH ????

 An !DEA

 Creative thinking

 Thinking differently / out of Box

 Motivation/ inspiration
 WHAT IS IT ALL ABOUT ????

 The business plan is a written document prepared by

the entrepreneur that describes all the relevant
internal and external elements and strategies for
starting a new venture.

 It is a integration of functional plans such as

marketing, finance, manufacturing, sales and human
resources.
 PURPOSE OF BUSINESS PLAN

o Alignment of team(s)
o Operating plan
o Communication across company, division, department,
business partners
o Investment capital
o Expansion capital (banks, leases)
o Merger/acquisition process
 OUTLINE OF BUSINESS PLAN

 Introductory Page

o Name and address of business

o Name(s) and address(es) of principal(s)
o Nature of business
o Statement of financing needed
o Statement of confidentially of report
 Executive Summary

Three to four pages summarizing the complete business plan

o What is the business concept or model?

o How is this business concept or model unique?
o Who are the individuals starting this business?
o How will they make money and how much?
 Environmental and Industry Analysis
o Future outlook and trends
o Analysis of competitors
o Market segmentation
o Industry and market forecasts

 Description of Venture
o Product(s)
o Service(s)
o Size of business
o Office equipment and personnel
o Background of entrepreneurs
 Production Plan
o Manufacturing process (amount subcontracted)
o Physical plant
o Machinery and equipment
o Names of suppliers of raw materials

 Operational Plan
o Description of company’s operations
o Flow of orders for goods and/or services
o Technology utilization
 Marketing Plan
o Pricing
o Distribution
o Promotion
o Product forecasts
o Controls

 Organizational Plan
o Form of ownership
o Identification of partners or principal shareholders
o Authority of principals
o Management-team background
o Roles and responsibilities of members of organization
 Assessment of Risk
o Evaluate weakness of business
o New technologies
o Contingency Plans

 Financial Plan
o Pro forma income statement
o Cash flow projections
o Pro forma balance sheet
o Break-even analysis
o Sources and applications of funds
 Appendix (contains backup material)

o Letters
o Market research data
o Leases or contracts
o Price lists from suppliers.
1. Economic viability:

 Impact on production,
 Employment,
 Revenue,
 Living Standard,
 National income, etc, is evaluated.
2. Ecological viability:

o Effect on the environment

o Ground Pollution
o Noise Pollution
o Water Pollution and
o Air pollution – is examined

3. Ethical variability
o Ethics
4. Technical viability:

o Factors related to infrastructure,

o Technology,
o Availability of machine,
o Equipment,
o Raw materials,
o Skilled manpower.
5. Marketing viability:

o Market potential,
o Demand forecast,
o Position of competitors,
o Distribution channels, etc are examined.
6. Managerial viability:

o The background of the business project developer,

o qualification,
o experience and potential of key management personnel
are examined.
7. Financial viability:

Financial position of business enterprise is examined for

sound implementation of the project. The surplus
generation capacity of the project is assessed for timely
repayment of credits, meeting the project cost in the pre-
defined time line, sources of various type of finance.
Projected income statement, balance sheets and various
financial ratios are also critically examined.
 RATIOS

 Liquidity Ratios
 Current Ratio
 Quick Ratio
 Profitability Ratios
 Return on Assets
 Return of Equity
 Return on Sales
 Turnover Ratios
 Accounts Receivable Turnover
 Inventory Turnover
 Interest Coverage
 Leverage Ratios
 Debt to Equity
 Business plan directs the entrepreneur in achieving set
goals and helps in timely mobilizations of various resources
required for operations of a business enterprise
 Business plan is a written document by the entrepreneur
about targeted goals, methods of achieving goals,
customers’ expectations, market potential, strength and
opportunity.
 A business plan should have the introductory summary,
vision, information on products and services, targeted
market, marketing strategy, production and operation,
finance, organization and management. It is also impotent
to properly evaluate the feasibility and viability of a
business plan.