MODULE - IV

Business Plan

• A Business Plan identifies key areas of your business so you can maximize
the time you spend on generating income.
• Key investors will want to look at your Business Plan before providing
capital.
• A Business Plan helps you start and keep your business on a successful
path.
• You should prepare a Business Plan, although, in reality, many small
business owners do not.
 What is a Business Plan?

• A Business Plan is a written document that defines the goals of your

business and describes how you will attain those goals.
• A Business Plan is worth your considerable investment of time, effort, and
energy.
• A Business Plan sets objectives, defines budgets, engages partners, and
anticipates problems before they occur.
 10 Reasons Why You Need a Strong
Business Plan

1. To attract investors.
2. To see if your business ideas will work.
3. To outline each area of the business.
4. To set up milestones.
5. To learn about the market.
6. To secure additional funding or loans.
7. To determine your financial needs.
8. To attract top-level people.
9. To monitor your business.
10. To devise contingency plans.
 How Detailed Should
Your Plan Be?
• Business plans differ widely in their length, appearance, content, and the
emphasis placed on different aspects of the business.
• Depending on your business and your intended use, you may need a very
different type of Business Plan:
– Mini-plan: Less emphasis on critical details. Used to test your assumptions,
concept, and measure the interest of potential investors.
– Working Plan: Almost total emphasis on details. Used continuously to review
business operations and progress.
– Presentation Plan: Emphasis on marketability of the business concept. Used
to give information about the business to bankers, venture capitalists, and
other external resources.
 Assembling a Business Plan

Every Business Plan should include some essential components:

– Overview of the Business: Describes the business, including its products and
services.
– The Marketing Plan: Describes the target market for your product and
explains how you will reach that market.
– The Financial Management Plan: Details the costs associated with operating
your business and explains how you will pay for those costs, including the
amount of financing you may need.
– The Operations and Management Plan: Describes how you will manage the
core processes of your business, including use of human resources.
 What it shouldn’t have ? Business
plan
• Unrealistic Financial Projections.
• Not Defining the Target Audience.
• Over-Hype.
• Bad Research.
• No Focus on your Competition.
• Hiding Your Weaknesses.
• Not Knowing your Distribution Channels.
• Including Too Much Information.
 Seven Common Parts of a
Good Business Plan
• Business plans must help investors understand and gain confidence on
how you will meet your customers’ needs.
• Seven common parts of a good Business Plan are:
1. Executive Summary
2. Business Concept
3. Market Analysis
4. Management Team
5. Marketing Plan
6. Financial Plan
7. Operations and Management Plan
 Unit Economics
• Direct costs and revenues associated with a
business model on a per-unit basis.
• A unit refers to any quantifiable item that
creates value for a business.
• A unit refers to any basic, quantifiable item that
creates value for a business. Thus, unit economics
demonstrates how much value each item—or
“unit”—generates for the business.
• To find the revenue per customer and divide it by the costs associated with that
customer.
 Scalability
• A company's ability to grow without
being hampered by its structure or
available resources when faced with
increased production.( university open
its school ,coaching center )
5 keys to building a scalable business(
• Build a solid foundation. ...
• Focus on a scalable business model. ...
• Embrace strategic planning. ...
• Focus on your core strengths. ...
• Be patient.
 Scalability is important ?
• Scalability will help your company retain its product
quality throughout expansion without sacrificing the
efficiency or quality of your customer service and
internal operations.

• This seamless operation will keep your employees well-

versed in company changes while maintaining positive
relationships with your customers.
 Defensibility
• Defensible Pricing means that prices are determined using a consistent
methodology to tie the price of the service to the underlying cost to
provide the service.
• Add in adjustments for what the market will bear, quality, outcomes,
competitive position, and you've created defensible pricing.

• Certain steps to build defensibility :

1.Choose a small and growing market .
2. Build a hook to pull the users .
3. Provide instant gratification , single user utility to Multiple user utilities .
 Examples : Factors of the defensibility of Digital
Business

• The business literature listed many ways to create

defensibility:
•  Unique access to raw materials, favorable
geographic location, government regulations like
tariffs, patents and licenses, etc.
• Network effects have emerged as the native defense in
the digital world.
• Data is considered a defensible source of competitive
advantage . Advantages based on capabilities .
 Venture Feasibility Analysis
• Feasibility analysis is a comprehensive research study required
by the entrepreneur or his agent to determine the
practicability, profitability and viability of the business idea.

• We agrees that the financial opportunity is outstanding and

the risk of failure is relatively low.

• There are four main elements that go into a feasibility

study: technical feasibility, financial feasibility, market
feasibility (or market fit), and operational feasibility.
Feasibility Analysis
 Pitching in business
• Presenting business ideas to another party. For example, you
may pitch your startup business to potential investors or your
products to potential customers.
• A business pitch needs to give your audience a clear
understanding of your plan or goals to gain buy-in.
• Position your company as a potential leader in the industry.
List any current operational metrics, such as the number of
current customers and employees. State your current annual
revenue, if applicable.
 Pitch
• Develop a script for your pitch to describe the
business problem, how you can solve it and how you
plan to market and sell your product or service. Start
with a compelling executive summary, and then
follow with details. Make your observations about
the opportunity candid and not overly analytical.
Keep your document and accompanying
presentations short and concise. You want your
presentation to be believable and appealing.
 Legal matters
• The following is a basic list of seven legal issues every business
should make sure to consider.
• Corporate Organization: Form and State of Organization.
• Internal Agreements.
• Intellectual Property: Trademarks, Copyrights and Patents.
• Real Estate: Location.
• Regulatory Issues.
• Employment Matters.
• Tax Concerns.
 Organisational form
• There are many business organization: 

• Sole proprietorship,
• Partnership,
• Corporation,
 Sole Proprietorship
• A sole proprietorship is a business that
can be owned and controlled by an
individual, a company or a limited
liability partnership.
• There are no partners in the business. The
legal status of a sole proprietorship can be
defined as follows: It is not a separate
legal entity from the business owner.
 Sole proprietorship
• Examples of sole proprietors include small businesses such as, a
local grocery store, a local clothes store, an artist, freelance writer,
IT consultant, freelance graphic designer, etc.
• An unincorporated business that has just one owner who pays
personal income tax on profits earned from the business.
• A sole proprietorship is the easiest type of business to establish or
take apart, due to a lack of government regulation.
• you have unlimited liability for debts as there's no legal distinction
between private and business assets. your capacity to raise capital is
limited. all the responsibility for making day-to-day business
decisions is yours. retaining high-calibre employees can be difficult.
 Partnership
• partnership is an association between two
or more individuals or parties who have
accepted to share the profits generated
from the business under the supervision
of all the members or behalf of other
members.
 Features
• Agreement between partners .
• Two or more persons.
• Sharing of profits .
• Business Motive .
• Mutual Business .
• Unlimited Liability .
• Carry on activities .
 Corporation
• A legal entity that's separate from its
owners.
• Corporations can make a profit, be taxed,
and can be held legally liable. 
• strongest protection to its owners from
personal liability, but the cost to form a
corporation is higher than other structures.
 Business Corporation
• This means that its owners can only take
part in the share of profits but not in the
liabilities of the business. Almost every
well-known business is a corporation.
Examples include Microsoft corporation,
Coca-cola Company, apple, google,
Microsoft, J.P Morgan Chase, and
Toyota.
 What is the purpose of corporation?

•The purpose of a corporation is to conduct a lawful,

ethical, profitable and sustainable business in order to
ensure its success and grow its value over the long
term.
•There are several advantages to becoming a corporation,
including the limited personal liability, easy transfer of
ownership, business continuity, better access to capital and
(depending on the corporation structure) occasional tax
benefits.
 TAX
• The government levy 25% tax plus cess
and surcharge on new manufacturing
firms.
• However, companies with a turnover of less
than 50 crore per annum have to pay 29
percent tax.
• Medium and small companies with a
turnover of less than Rs. 50 crore are taxed
at a rate of 25 percent
 Personnel law
• Ensures that employees are set up with the right
compensation and benefits. The two management
teams are often responsible for administering and
running payroll, and calculating and paying any
applicable bonuses. (others law to be consider :
Business Licenses,
• 2. Fair labor standards act,
• 3.Equal employment opportunity, occupational safety
and health, workers compensation .
 Contract Law
• All essential elements of Indian contract Act
applicable while comes under contract .
• Valid offer
• Valid Acceptance
• Consideration
• Capacity to contract
• free consent
• legality of object .
 Law vs .Ethics
LAW
The law refers to a systematic body of
rules that governs the whole society and
the actions of its individual members.
Set of rules and regulations
(Governed by ) Government
Expressed and published in writing.
Violation of law is not permissible which
may result in punishment like
imprisonment or fine or both.
Law has a legal binding.
ETHICS
Ethics is a branch of moral philosophy that
guides people about the basic human
conduct.
Set of guidelines
Individual, Legal and Professional norms
They are abstract.
There is no punishment for violation of
ethics.
Ethics do not have a binding nature.
 Legal Expenses
• We can expect to spend between
Rs. 7000 and 10,000 on government
fees.
• Typically, start-ups get funding of 1 lakh
(just what most people need), but they
also need legal or accounting help.
• Their fees are determined by their
experience and level of expertise.
 Legal expenses
• Legal Expenses means the fees, costs
and expenses of any kind incurred by any
Person indemnified herein and its counsel
in investigating, preparing for, defending
against or providing evidence, producing
documents or taking other action with
respect to any threatened or asserted
Claim.
 Hiring the service p
• Service providers are individuals or
entities offering services to an organization
and other parties.
• They provide storage, processing, or
network services.
• The providers offer organizations real
estate, communications, education, legal,
and consulting services.
 Reasons to hire service provider
• They bring expertise .
• They have experience .
• They don’t play politics .
• They can see the big picture .
• They want success just as much as you do .
 Digital economy as a Resource
• The digital economy is the worldwide network of
economic activities, commercial transactions and
professional interactions that are enabled by
information and communications technologies (ICT).
• It can be succinctly summed up as the economy based
on digital technologies.
• A digital economy enables firms to cut out an aspect
of the retail chain and send personalized goods
direct from factory or warehouse to people's goods,
rather than through shops. This enables lower costs
and lower prices.
 Digital economy example
• The digital economy is a term that
captures the impact of digital
technology on patterns of production
and consumption.
• This includes how goods and services are
marketed, traded and paid for. 
 Promotion tools
• Guerrilla Marketing :Maximum exposure : Events ,flash
mobs .(Attack via. advertisement , one after another
continually as per competitor )

• Relationship Marketing: Personalized communication to

individual customer . (recency ,frequency ,monitoring 20%).

• Expeditionary Marketing : Attract new markets/new

products .(Red bull advertisement ).
 Promotional tools
• Real time Marketing :Analysing clicks or likes
or responses .(face to face offline )
• Viral marketing :Stories users want to share
• Digital Marketing : Online ads and use of
search engine optimization .
• Word of mouth :Online customer reviews .
Values of likes and shares
• Shares on social media lead to your posts and your page being seen by a
much larger audience across the internet. This creates free reach and
builds a better online reputation than relying on post and page LIKES
alone.
• LIKES on social media platforms such as Facebook increase you and your
brand’s credibility. If someone LIKES a page on Facebook or a witty post
on Twitter, that person’s followers are more likely to both see and be
interested in what the person or brand behind that page has to say. This
creates organic, free reach and enhances reputation without you taking
any extra steps to get there..
 Match makers
• Business matchmaking is a method to
identify and connect (match)
companies and people with common
business interests, complementary
services, expertise, technologies or
business strengths. The goal is to create
cooperative connections and realize
business opportunities that mutually
benefit both parties.( B2B match making )
 Long tail markets
• The strategy of targeting a large number of niche markets with a product or
service.
•  It's mainly used by businesses that are dominated by a huge market leader.
• Facing a battle to grow, a company can shift their focus
to multiple niche markets that have less demand.
• Internet drives demand away from hit products with mass appeal, and
directs that demand to more obscure niche offerings.
• Long-tail keywords are keywords or key phrases that are more specific – and
usually longer – than more commonly used keywords. Long-tail keywords
get less search traffic, but will usually have a higher conversion value, as
they are more specific.
 Micro Apps
•  Micro-app is a collection of functions which
provides highly focused task-based
applications which in return deliver a
stronger targeted functionality.
• Also, these micro apps are stored together in
one mobile app.