Oman Tourism College ΔΣΎ ˰˰˰Ϥϋ˵ Δϴ˰˰˰˰˰˰Ϡϛ˵

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Chapter 3

Business Plan – Part I

Developed by: Raja Tumati, Updated by: Raja Tumati

Entrepreneurship, 04ENT, Spring Semester 2021-22

UG Fall 2021-2022 1
 Oman Tourism College ΔΣΎ ˰˰˰Ϥϋ˵ Δϴ˰˰˰˰˰˰Ϡϛ˵
ϴδ˶ ϠϟϥΎ

Learning Outcomes (LO) Covered: LO 4 Synthesize various

elements such as entrepreneurial characteristics, resources, and
environmental opportunity to design, produce and justify a logical
feasibility study related to the tourism, hospitality and event industries
which comprise primary and/or secondary research.

Objectives of the chapter: What is a business plan? Why to

prepare a Business Plan? Mistakes to avoid when writing a
business Plan. Importance of a Business Plan & Business Plan
Outline.
2
UG Spring 2021-2022
1. What is a business plan?
 Introduction

 If you’re looking for funding to a new business or to

expand the existing business, you need a business
plan.

 Your business plan gives lenders and investors the

information they need to determine whether or not
they should consider funding your business.
 1. What is a business plan?

 A business plan is a written description of your

business's future.
 

 A business plan is a guide—a roadmap for your

business that outlines goals and details how you
plan to achieve those goals.
 2. Why to prepare a Business Plan?
A business plan helps to evaluate the feasibility of a new
business idea in an objective, critical, and unemotional
way.
 

• Marketing – Is there a market? How much can you sell?

• Management – Does the management team have the
skill?
• Financial – Can the business make a profit?
 2. Why to prepare a Business Plan? (Cont.)

It communicates your idea to others, serves as a “selling

tool,” and provides the basis for your financing proposal.

 
• Determine the amount and type of financing needed
• Forecast profitability and investor return on
investment
• Forecast cash flow, show liquidity and ability to repay
debt
3. Mistakes to Avoid when Writing a Business Plan

These mistakes in business plan preparation and presentation

will undermine the credibility of the plan and hurt your
chances to receive funding:

 
1. Submitting a “rough copy,” (not the final draft and
with typo errors) 
2. Outdated historical financial information or unrealistic
industry comparisons
3. Unconfirmed assumptions can hurt a business plan
3. Mistakes to Avoid when Writing a Business Plan (Cont.)

4. Too much “blue sky” - a failure to consider prospective

drawbacks  
5. Lack of understanding of financial information.
6. Lack of specific, detailed strategies.
(“We will provide world class service and the lowest possible
price.”)
7. No indication that the owner has anything at stake (Unwillingness
to personally guarantee any loans).
8. Starting the plan with unrealistic loan amounts or terms.
4. Importance of a Business Plan
4. Importance of a Business Plan

 Clarify Direction
 Future Vision
 Attract Financing
 Attract Partners
 Manage Company – Structure
 5. Business Plan Outline

Cover Sheet:

Business Name,
Address,
Phone Number
Date of Plan Presentation

You may also include:

Presented to: Name, Company

Name of Owner/Contact Person

Address, Telephone, e-mail
5. Business Plan
Outline – Cover
Sheet
 Part I – Executive Summary

¨The Executive Summary is the most important part of

your business plan.
¨If it doesn’t interest readers, they’ll never even get to
the rest of your plan
¨Start your Executive Summary with a brief and
concise explanation of what your company does.
 Part I – Executive Summary (Cont.)

¨Next, explain why your company is uniquely qualified

to succeed.
¨For example, does your management team have
unique competencies?
¨Do you have any patents/exclusive rights etc.?
¨Are you the first mover in your market?
¨Does a huge, unmet market opportunity exist? Etc.
 Part I – Executive Summary (Cont.)

¨Finally, include a synopsis of your financial

projections in your Executive Summary.

¨ Specifically, include your expected revenues, expenses

and profits for each of the next five years, how much
funding you are seeking, and the key uses of these
funds.

While appearing first, this section is written last.

Discussion on Salsabeel Sweets –
Executive Summary
 Part II – Business Concept

1. The company overview section provides a brief history of

your company. Here you will answer questions such as when
& how your organization was formed, what business will you
be in? and accomplishments to date if any

2. Mission Statement: Many companies have a brief mission

statement, usually in 30 words or fewer, explaining their
reason for being and their guiding principles
 Part II – Business Concept (Cont.)
 Vision Statement:

Southwest: To be the world's most loved, most

efficient, and most profitable airline.

Dunkin: To be always the desired place for great

coffee beverages and delicious complementary
doughnuts & bakery products to enjoy with family
and friends.
 Part II – Business Concept (Cont.)

 Mission Statement:

JetBlue: To inspire humanity – both in the air

and on the ground.

TED: Spread ideas.

Sweetgreen: To inspire healthier communities

by connecting people to real food.
 Part II – Business Concept (Cont.)

3. Company Goals and Objectives: Goals are destinations—

where you want your business to be. Objectives are progress
markers along the way to goal achievement.

For example, a leader in customer service and that has a

loyal customer following. Other examples are:

• To Invest in Quality Management

• To Increase Traffic on Your Business Website or Blog
• To Increase Your Market Share
 Part II – Business Concept (Cont.)

4. Business Philosophy: What is important to you in

business?

Examples:

 We put our Customers first and strive to secure their

loyalty through top quality service.

 We value our Employees and seek to help them achieve

their full potential.
 Part II – Business Concept (Cont.)

Business Philosophy: Examples:

• AT&T — Creating Connection. ...

• Google — 10 Things We Know to Be True. ...
• Chevron — Putting People First. ...
• Walgreens — Collaboration and Passion. ...
• Verizon — Total Accountability. ...
• Bank of America — Discipline, Empathy, &
Understanding. ...
• FedEx — People-Service-Profit. ...
• Walt Disney — Culture of Care.
 Part II – Business Concept (Cont.)

5. Legal form of ownership: Sole proprietor, Partnership,

Corporation, Limited liability corporation (LLC)? Why have
you selected this form?

Additional Questions for Start-Ups:

1) Why will you be successful in this business?
2) What is your experience with this type of business?
3) What will be special or unique about this business?
4) Why will your business be successful?
 Part II – Business Concept (Cont.)
6. SWOT Analysis:
Part III – Industry Analysis
 Part III (A) – Industry Analysis

• An industry analysis is a tool that helps a company

evaluate its position in relation to other companies
that make similar products or provide similar
services.

• Many businesses utilize industry analysis as a

technique to evaluate the market.

• For example, would there be a continuing need for

the automobiles?
 Part III (A) – Industry Analysis (Cont.)

1 – Industry Trends

Describe your industry - What changes do you foresee in

the industry, short term and long term?
Is it a growth industry?
What factors will affect the growth? (changes in govt.
rules, customer tastes etc..)
How will your company be composed to take advantage
of them?
 Part III (A) – Industry Analysis (Cont.)

2 – Market Overview

The Market Overview section discusses the size and

characteristics of your market. For example, if you are a
restaurant, you would include the size of the restaurant
market, a brief discussion of sectors (e.g., fast food versus
fine dining) and market trends.

Primary Market VS Secondary Market Research

Part III (A) – Industry
Analysis (Cont.)

3 – PESTEL Analysis
 Part III (A) – Industry Analysis (Cont.)

Review Questions:

1) What products/services are you (will you be) selling?

2) What are the features and benefits of what you sell?
3) How do your products/services differ from the competitors?
4) What makes your products unique and desirable?
5) Why do (will) customers buy from you?
 Part III (B) – Customer Analysis

An examination of the primary target market for

your product or service, including geographic
location, demographics, your target market's needs
 and how these needs are being met currently; your
Customer Analysis section has two sub-sections as
follows:
 Part III (B) – Customer Analysis (Cont.)

1 – Target Customers

Include as much
demographic data on
your target customers
as possible, such as
their gender, age,
salary, geography,
marital status and
education.
 Part III (B) – Customer Analysis (Cont.)

 2 – Customer Needs
In this section of your business plan, specify why customers want or
need your products and/or services. For example, do customers care
most about speed, quality, location, reliability, comfort, price, value,
etc.?

Questions for Existing Businesses:

1) Who are your current customers?
2) What do they buy from you?
3) Why do they buy from you? (Quality, Price, Reputation, etc?)
 Part III (B) – Customer Analysis (Cont.)

Review Questions:

1) Who are the purchasers of your products or type of products?

(Geographic, Demographic and Psychographic characteristics)
2) What is the size of the market? Is it growing?
3) What is (will be) your share? How will your share change over time?
4) What is the industry outlook?
5) Are there segments of users who are under-served by competition?
6) Do any of these under-served segments present opportunities?
 Part III (C) – Competitor Analysis

An investigation of your direct and indirect competitors, with an

assessment of their competitive advantage and an analysis of how
you will overcome any entry barriers to your chosen market

1 – Direct Competitors
In this section of your business plan, outline who your direct
competitors are, and their strengths and weaknesses. For example, if
you operate an Italian restaurant, other Italian restaurants would be
direct competitors.
 Part III (C) – Competitor Analysis (Cont.)
2 – Indirect Competitors
Outline your indirect competitors, and their strengths and weaknesses.
For example, if you operate an Italian restaurant, a French restaurant
would be an indirect competitor.

3 – Competitive Advantage/USP
Importantly, identify your Competitive Advantages in this section.
Specifically, state what is it about your company that will allow you
to effectively compete (and win) against both direct and indirect
competitors.
 Part III (C) – Competitor Analysis (Cont.)

Review Questions:
1) Who are (will be) your largest competitors?
2) How will your operation be better than your competitors?
3) How are competitors doing? What are their sales and profits?
4) (If Start-Up) How will competition respond to your market
entry?
 References

Brian E. Hill & Dee Power (2013), Inside Secrets to Venture Capital, [Online]. Available from:
http://www.gsb.stanford.edu/ces/resources/business_plans.html. Accessed on 02 April 2020.
Brian Hill, Demand Media (2014), What Is a Harvest Strategy in a Business Plan?, [Online]. Available
from: http://yourbusiness.azcentral.com/harvest-strategy-business-plan-12399.html. Accessed on
06 April 2020.
Dave Lavinsky (2013), Business Plan Outline - 23 Point Checklist for Success, [Online]. Available
from:
http://www.forbes.com/sites/davelavinsky/2013/12/03/business-plan-outline-23-point-checklist-for-
success/2/
. Accessed on 09 April 2020.
Edward E. Williams & Salvatore E Manzo (2012), Business Planning for the Entrepreneur, [Online].
Available from: https://entrepreneurship.hbs.edu/Pages/default.aspx. Accessed on 07 April 2020.