Professional Documents
Culture Documents
• Executive Summary
• Company Description
• Products and Services
• Marketing Plan
• Operational Plan
• Management and Organization
• Startup Expenses and Capitalization
• Financial Plan
OBJECTIVES
To give direction to the vision formulated by the entrepreneur
To monitor the progress after implementing business plan
To seek loans from financial institutions
To visualize concept in terms of market availability, organizational,
operational, and financial feasibility
To guide entrepreneur in actual implementation of plan
To identify challenges in terms of opportunities and threats from the external
markets
To clarify ideas and identify gaps in management information about their
business, competitors and market
To identify the resources that would be required to implement the plan
To document ownership arrangements, future prospectus and projected
growth of the business
Contd.....
• Business plan is a written document prepared by
entrepreneur that describes all the relevant external
and internal elements involved in starting new
venture
• It is an integration of functional plans such as
marketing, finance , manufacturing and human
resource plan
• A business plan is a blue print of step by step
process that would be followed to convert business
idea into successful business venture.
Contd......
Internal
• The business plan is the road map for the development of the business because it
– defines the vision for the company
– establishes the company’s strategy
– describes how the strategy will be implemented
– provides a framework for analysis of key issues
– provides a plan for the development of the business
– is a measurement and control tool
– helps the entrepreneur to be realistic and to put theories to the test
External Purposes
• The business plan is often the main method of describing a company to external
audiences such as potential sources for financing and key personnel being recruited
• It should assist outside parties to understand the current status of the company, its
opportunities, and its needs for resources such as capital and personnel
• It also provides the most complete source of information for valuation of the business.
Business Plan...Objectives
• The business plan is an integral part of the management and oversight of a financial
institution
• It establishes institution’s goals and objectives
• It is a written summary of organization resources to meet business goals
• It measures institutions progress.
• The business plan should be a comprehensive plan, which is the result of in-depth planning
by the institution’s organizers and management.
• It realistically forecasts market demand, customer base, competition, and economic
conditions
• The plan reflects sound banking principles and demonstrates realistic assessment of risk in
light of economic and competitive conditions in the market to be served
• The business plan should cover three years and provide detailed explanations of actions
that are proposed to accomplish the primary functions of the institution
• The description should provide enough detail to demonstrate that the institution has a
reasonable chance for success, will operate in a safe and sound manner, and will have
adequate capital to support the risk profile
Environmental scanning
The entrepreneur is required to conduct environmental scanning which includes
analyzing external and internal environment that affects business idea
External environment comprises of :
Socio cultural appraisal : it gives brief overview about the culture and
tradition existing in society. It is comprised of values and beliefs of people
which determines the acceptance of product by customer in the market
Technological appraisal : it assess various technological options available to
convert an idea to product. It also provides an brief overview about
technological updation
Economic appraisal : it assess the status of the society in terms of economic
development, per capita income, national income, consumption pattern in the
business
Demographic appraisal : it assess the population pattern of given geographic
area. Which includes sex, age profile, distribution etc.
Start up Business
A startup business plan serves several purposes. It can help convince investors or lenders to finance business,
persuade partners or key employees to join company. Most importantly, it serves as a roadmap guiding the
launch and growth of new business.
Writing a business plan is an opportunity to carefully think through every step of starting a company . This is a
chance to discover any weaknesses in one’s business idea, identify opportunities that have not been
considered, and plan how to deal with challenges that are likely to arise
A good business plan is clear and concise. A person outside of the industry should be able to understand it
Most of the time involved in writing the plan should be spent researching and thinking. To document research,
including the sources of any information
To Avoid making unsubstantiated claims or sweeping statements. Investors, lenders and others reading the plan
will want to see realistic projections and expect assumptions to be supported with facts.
Proofread your completed plan required
The Executive Summary
• An overview of business idea (one or two sentences).
• A description of product and/or service( problem solving for target
customers)
• Goals for the business( Where do one expect the business to be in one year,
three years, five years)
• Proposed target market(Who are the ideal customers)
• Competition and differentiation of business(what unique selling proposition
will help succeed)
• Management team and their prior experience( What do they bring to the
table that will give your business a competitive edge)
• Financial outlook for the business(business plan for financing purposes, exact
money required, usage, and how that will make the business more profitable.
Products & Services
• This section expands on the basic information about products and services included in the Executive Summary
and Company Description
• Enterprise’sproducts and/or services: What enterprise sells, and how is it manufactured or provided? Inclusion
of details of relationships with suppliers, manufacturers and/or partners that are essential to delivering the
product or service to customers.
• The problem the product or service solves: Every business needs to solve a problem that its customers face.
Explain what the problem is and how the product or service solves it. What are its benefits, features and unique
selling proposition? Why this solution is better than the others, targets a customer base your competitors are
ignoring, or has some other characteristic that gives it a competitive edge.
• Any proprietary features that give the enterprise a competitive advantage: (patent on product or a patent
pending? exclusive agreements with suppliers or vendors to sell a product or service that none of its competitors
sell? Is there the license for a product, technology or service that’s in high demand and/or short supply?
• How will the price be on the product or service(Describe the pricing, subscription or leasing structure of
product or service. How does the product or service fit into the competitive landscape in terms of pricing—the
low end, mid-range or high end? How will that pricing strategy help attract customers? What is theprojected
profit margin)
•
Description of Business
Describe the institution’s business and any special market niche, including the
products, market, services, and nontraditional activities
If in a holding company structure, discuss the operations of the organization, including
a brief detail of the organizational structure and interaction between the institution
and its affiliates
Describe the extent, if any, that there are or will be transactions with affiliated entities
or persons. Include terms
Discuss the legal form and stock ownership of the institution and any investment in
subsidiaries or service corporations
For an operating company, describe the present financial condition and current
resources, such as office network, staff, and customer base
Specifically discuss the strengths and weaknesses
Describe the proposed location, office quarters, and any branch structure
Discuss any growth or expansion plans, including additional branches, other offices,
mergers, or acquisitions
Feasibility analysis
Refers to conducting detailed analysis in relation to every aspect relevant to
business and determining credibility of business
Market analysis : is conducted to estimate the demand and market share
for proposed product and service in future
Demand and market analysis is based on factors like consumption pattern,
availability of substitute goods and services etc
Technical and operational analysis : is to assess operational ability of
proposed business enterprise. Technical or operational analysis collects
data on following parameters
1. Material availability
2. Material requirement planning
3. Plant location
4. Plant capacity
Marketing Plan
A marketing plan should provide in detail factual support that the institution has reasonable prospects to achieve the
revenue projections, customer volume, and key marketing and income targets.
The analysis should be based on the most current data available, and the sources of information should be referenced. This
section should contain an in-depth discussion of the major planning assumptions for the market analysis, economic, and
competitive components used to develop the plans, objectives, and the basis for the assumptions
A. Product Strategy
1) List and describe the general terms of the planned products and services, including activities of any subsidiaries. Discuss
any plans to engage in any subprime or speculative lending, including plans to originate loans with high loan-to-value ratios
2) Discuss how the institution will offer products and services over the years, indicating any variation in the different market
areas or distribution channels, and include the time frame for the introduction and the anticipated cost associated with
each
3) Describe any arrangements with e-commerce businesses (for example, links to another’s Web site to shop, order, or
purchase goods and/or services online)
B. Market Analysis
1) Describe the intended target market and the geographical market area(s)
2) Describe the demographics of the target market population (for example, age, education, and occupation).
Contd.........
Contd.....
C. Economic Component
• 1) Describe the economic forecast for the three years of the plan. The plan should
cover the most likely scenario and discuss possible economic downturns
• 2) Indicate any national, regional, or local economic factors that may affect the
operations of the institution. Include an analysis of any anticipated changes in the
market, the factors influencing those changes, and the effect they will have on the
institution
• 3) Describe the current economic characteristics of the proposed market(s), for
example, size, income, and industry and housing patterns
• 4) Based on the economic characteristics described previously, discuss the
economic factors that influence the products and services to be offered. A more in-
depth discussion is warranted when different types of services are identified for
different market areas .If obtained, discuss any independent economic survey or
market feasibility study
Contd.....
D. Competitive Analysis
1) Compare and contrast the institution’s product strategy
with its principal competitors in the target market(s)
2) Include expected results in terms of relative strength,
market share, and pricing
3) Discuss the overall marketing/advertising strategy,
including approaches to reach target market through the
marketing of brand, products, and services. Outline the
specific medium that will be used, including timing and
level of advertising efforts
4) Discuss potential competition in the target market(s)
Market research
• There are two kinds of research: primary and secondary. Primary market includes going online or identifying competitors; interviewing or
surveying people who fit the profile of target customers; .....Secondary market research is information from sources such as trade organizations
and journals, magazines and newspapers, Census data and demographic profiles. Information is online, at libraries, from chambers of commerce,
etc
This section includes....The total size of industry .....Trends in the industry – is it growing or shrinking? .....The total size of target market, and what
share is realistic for the enterprise to obtain........Trends in the target market – is it growing or shrinking? How are customer needs or preferences
changing?
Barriers to entry
• High startup costs
• High production costs
• High marketing costs
• Brand recognition challenges
• Finding qualified employees
• Need for specialized technology or patents
• Tariffs and quotas
• Unionization in industry
Threats and opportunities
• Changes in government regulations
• Changes in technology
• Changes in the economy
• Changes in your industry
Marketing and Advertising Plan
Advertising may include:(Which media to advertise in, why and how often? )
• Online
• Print
• Radio
• Cable television
• Out-of-home
Marketing may include:
• Business website
• Social media marketing
• Email marketing
• Mobile marketing
• Search engine optimization
• Content marketing
• Print marketing materials (brochures, flyers, business cards)
• Public relations
• Trade shows
• Networking
• Word-of-mouth
• Referrals
Location or proposed location
If a location picked out, explain why this is a good location for start
– The size of location
– The type of building (retail, industrial, commercial, etc.)
– Zoning restrictions
– Accessibility for customers, employees, suppliers and transportation if necessary
– Costs including rent, maintenance, utilities, insurance and any buildout or remodeling costs
• Retail
• Direct sales
• Ecommerce
• Wholesale
• Inside sales force
• Outside sales representatives
Financial Plan
Financial plan is the most important element of business plan. Lenders and investors will review it in detail.
Developing financial plan helps in setting financial goals for startup and assess its financing needs.
Include the following:
• What type of personnel will the business need? Explain details such
as:
– What types of employees? Are there any licensing or educational
requirements?
– How many employees will be needed?
– Will freelancers or independent contractors be hired?
– Include job descriptions.
– What is the pay structure (hourly, salaried, base plus commission, etc.)?
– How thev plan goes about to find qualified employees and contractors?
• What type of training is needed and how will the employees be
trained
Contd....
Key questions:
– Description of desired corporate culture
– Key positions in organization
– No of employees
– The recruitment strategy? What processes will be applied to hire the
employees
– Leadership strategy
– What performance appraisal and employee development methods will be used
– What is the organizational structure
– Payment to each employee (wage, salary, commission, etc.)
– What are the payroll costs, including benefits?
– What work will be outsourced and what work will be completed in-house?
Competitive advantage
• What distinguishes the business from that of
competitors in a way that will ensure meeting
of sales forecasts
• What is your venture’s value proposition?
– Clear communication of the answers to these
questions in the business plan to attract the
needed support for the business
Promotions Strategy
As a new entrant into the market, how to attract customers
away from competitors they currently buy or will you be
creating new customers for the product or service (i.e. not
attracting customers away from your competitors)?
Outlines the anticipated responses that competitors will
have toenter into the market, especially if your success
depends upon these businesses losing customers to you
– If the entry into the market will not be a threat to direct
competitors, it is likely you must convince potential
customers to spend their money with you rather than on
what they had previously earmarked
–.