LET’S THINK!

BUSINESS PLAN
ITS IMPORTANCE AND COMPONENTS
 BUSINESS PLAN
• A business plan is a written document
describing how businesses (both new
and established) plan to achieve their
goals.
• A business plan lays out a written plan
from a marketing, financial and
operational viewpoint.
-Investopedia
 IMPORTANCE OF A BUSINESS
PLAN
• It provides:
• An opportunity to test out a new idea to see if it holds
real promise of success
• A clear statement of your business mission and vision
• A set of values that can help you steer your business
through times of trouble
• A blueprint you can use to focus your energy and
keep your company on track
• Benchmarks you can use to track your performance
and make midcourse corrections
 
Steven D. Peterson, Peter E. Jaret, Barbara Findlay Schenck
 IMPORTANCE OF A BUSINESS
PLAN
• It provides:
• A clear-eyed analysis of your industry, including
opportunities and threats
• A portrait of your potential customers and their buying
behaviors
• A rundown of your major competitors and your
strategies for facing them
• An honest assessment of your company’s strengths and
weaknesses
• A roadmap and timetable for achieving your goals and
objectives
• A description of the products and services you offer
 Steven D. Peterson, Peter E. Jaret, Barbara Findlay Schenck
 IMPORTANCE OF A BUSINESS
PLAN
• It provides:
• An explanation of your marketing strategies
• An analysis of your revenues, costs, and projected
profits
• A description of your business model, or how you plan to
make money and stay in business
• An action plan that anticipates potential detours or
hurdles you may encounter
• A handbook for new employees describing who you are
and what your company is all about
• A résumé you can use to introduce your business to
suppliers, vendors, lenders, and others
 Steven D. Peterson, Peter E. Jaret, Barbara Findlay Schenck
 FACTORS IN MAKING A
BUSINESS PLAN
• The needs of the society
• Availability of capital resources
• Business inclination
• Clientele
• Availability of raw materials
• Human Resources
• Nature of Product or Service

Acierto, M. A. (2017).
 PHASES OF A
BUSINESS PLAN
Marketing and Distribution
Study

• Deals with product demand analysis

• Shows competitive product advantage

• Shows designs of marketing program

Production and Technology
Study

• Refers to the needs in making the

product or service
• Refers to machineries, plant
location, and other aspects of
making the product.
Financial Management

• Refers to capital investments, and

source of funding.
• It also shows sales and financial
projections for future growth.
COMPONENTS OF
A BUSINESS PLAN
 Introduction
• Contains the rationale and the background of the
study undertaken

• Includes the importance of the project and the

proponents background and desire to make a
business
 Project Summary
• Name of the Firm
• Business Location
• Brief Description of the Business
1.History of the business
2.Highlights of the phases of
business study
 Management and Personnel Component

• This includes all the people that

constitutes the business or a project
 Marketing Studies

• Market Profile – Market segmentation of product

or service for distribution.
• Demand Analysis – Projected consumption from
First – Five – Ten year operation. Major segment
users of the product and their location.
• Supply analysis – Source of product supply
(Foreign and Local). Factor analysis of past and
future supply chain.
 Marketing Studies
• Competitive Analysis • Program Analysis of
1. Selling Price Market Strategies
2. Competition 1. Geographic Strategy
3. Distribution and cost 2. Psychographic
of transportation Strategy
4. Channel of product 3. Demographic
distribution Segmentation Strategy
5. General Competitive 4. Pricing Strategy
Practice 5. Channel of Distribution
6. Promotion and
Advertising
 Production
• Product Specifications
• Production process
• Plant Related Capacity
• Machinery and Equipment
• Plant Location
• Building and Facilities
• Raw Materials
• Power Supply and Utilities
• Production Cost
 Financial Studies
• Total Project Cost
• Capital Investment Required
• Pre-operating cash flow and its relation to time
table
• Supporting Schedule in the financial statements
and income
• Projected Financial Estimates
 SWOT ANALYSIS

• An entrepreneurial tool in determining

profitability of the business operation

• Strengths and Weaknesses (internal

factors)
• Opportunities and Threats (external
factors)
MICRO-BUSINESS
PLAN
 EXECUTIVE SUMMARY

• Considered as the synopsis or summary of

a business plan.

• This shall be written last in order to

contain all the necessary information and
target points of a document.
 MARKETING PLAN
• A marketing plan could be a push or pull

• Push Strategy – How to move products

to the marketplace

• Pull Strategy – How to make costumer

ask for the product
 OPERATIONS PLAN
• It includes the company’s expected sales
for the coming year and the cost of running
the business in particular.

• Tracks performance from conception to

purchase.

• This section provides the competencies

necessary to get things done.
 FINANCIAL PLAN
• This presents how much money is needed to
generate sales; how much to be spent; how much
to be borrowed and paid.

• Income Statement: describes ability to generate

cash by computing sales and expenses.

• Balance Sheet: shows financial condition by

accounting assets and liabilities.
 Source: Acierto, M. A. (2017).
Entrepreneurship, Unlimited books library
services and publishing Inc. Manila City
 ASSIGNMENT
A. Answer the ff.:
1. What is a target market and
market need?
2. How do you identify your target
market and market need?
B. As a group, start with the idea
generation as to what products to
sell so that the formulation of a
business plan could get started