BUSINESS PLAN

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 2.3 Business Idea Generation and
Selection
A. Business Idea Generation
- How do we get an idea to start a business

B. Business Idea Selection

- How do we select the best and viable business idea/s
out of the list of ideas

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 A. Business Idea Generation

- A profitable business idea is sitting under your

nose
- Opportunities and possibilities are always out
there
- Concrete thinking versus creative thinking

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 Tools for Idea Generation
• Brain teasers – opening up and stimulating
creative thinking
• Brainstorming
• Environmental scanning
• Trigger

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 Brain teasers
Opening up and stimulating creative thinking
• Challenging the mind to think creatively and
differently

Exercises

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 Brainstorming
Ground Rules

• May be done  Avoid criticizing ideas

individually or  Don't censor any ideas
in groups  Suspend judgments
 Write down ALL ideas
 Keep ideas flowing
• Limit group size to  Tag on, improve, modify and build
8–10 on other ideas
 Think freely, wild ideas okay
 Establish a time limit, i.e., 10
• Clearly state topic minutes
or problem  Enforce the rules

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 BRAIN STORMING EXCERISE
WHAT CAN WE DO WITH SOW DUST
1. Black board
2. Fire wood
3. Decoration for furniture
4. Ceiling
5. Partition
6. Chair,
7. Sofa,
8. Packing
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 BRAIN STORMING EXCERISE
9. Shoes
10. Animal feed
11. Salad
12. Wet drying
13. Floor comfort
14. Coal
15. Bullet proof cover
16. Table
17. Bed
18. Mattress
•

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 BRAIN STORMING EXCERISE
19. Pillow
20. Hair fashion
21. Washing material
22. Medicine
23. Tray
24. Fork
25. Cleaning
26. Shining material
27. Soap filler

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 BRAIN STORMING EXCERISE

28. Cloth
29. Wall
30. Toes
31. model making
32. Painting
33. Water protection
34. Wet protection
35. Frame
36. Sole
37. Insulator

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 BRAIN STORMING EXCERISE
38. Diaper
39. Shapes , craft
40. Jewelery
41. Cooking
42. Plastering
43. Recording room sound protection
44. floor cleaning
45. Caution
46. Chicken breeding case
47.Hair rollers
48. 48. Table

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 BRAIN STORMING EXCERISE
49. Ruler
50. Paper
51. Blocket
52. Message input
53. Make up
54. Mask
55. Wall decoration
56. Photo frame
57. Photo back board
58. Glue powder
59. Part of car body
60. Dancing floor filler
61. Water purification

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 Clarify and Conclude Session

• Combine identical ideas

• Discuss ideas

• Select ideas for further investigation

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Brainstorming
Exercise

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 Environmental scanning

• Recognizing business opportunities after

scanning the training room/area
environment
• Identifying groups with common
denominator and their respective needs
• Identifying resources that help meet the
needs

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Environmental scanning exercise
(Competition)

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 Trigger
• Triggering reflex to cite any product or
service related to a given word
• Prepare lists of trigger words or use
already prepared ones
• Resources common in an area can be an
ideal trigger word

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B.Business idea selection

The Funnel model

a. Macro screening

b. Micro screening

c. SWOT Analysis

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 a. Macro screening

- First selection/ filtering

- Use the following basic criteria :-

Is there sufficient demand?

Own capabilities ?

Own sufficient financial resource?

(at least 20 %)
Are there many similar project in the area? 20
 b. Micro screening

• Stricter viability test

• Pre – step criteria :

Availability of appropriate market
Access to raw material
Availability of technology

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 Micro screening parameters

• Solvent demand
• Availability of qualified personnel
• Availability of technology equipment
• Availability of raw material
• Competitors
• Critical success factor

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 Micro screening table
Project Sol. Qlfd. Tchnlgy Raw Total Comp Corre- Critical
DD. Prsnl. mater- - titors cted Success
ial Total factor

(+) (+) (+) (+) (=) (-) (=)

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 c. SWOT Analysis
• The last exercise of refining a business idea

• The finding of the analysis gives concrete

ground for undertaking market studies

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SWOT Analysis Framework
Strengths weaknesses

Opportunities Threats

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 WHY DO WE NEED
BUSINESS PLAN?

TO :
• AVOID OR MINIMIZE RISK
• FIRIST SEE LOSSES / PROFITS ON PAPER

• FORCASE INCOME AND REPAYMENT

• SEE AND USE THE ROAD MAP BEFORE ACTUAL WALK etc.

• GET FINANE
• GET JOINT VENTURE FOR WHAT WE

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2.4 Business Plan Development

Proposed small business

project

The only thing missing is the

actual business itself at this
level

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Executive Summary
(Introduction to the business plan)
• Brief summery of what's being
proposed

Description of the
business &
products/services
• Type of business
• Principal products
• Unique features
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 Market

Marketing
Customers
Competitors
Pricing
Suppliers/Materials
Advertising/

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 Ownership and Management
• Owner/s
• Share rate
• Manager/s

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 PRODUCTION
• Flow chart of work process
• List of process steps
• Sequencing and efficiencies
• Time frames
• Measurement methods
• Quality standards
• Capacity
• Cost
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 SALES

• Sales strategy
• Area, coverage ,
• - volume
• - Pricing
• - quality
• - delivery time
• - packaging
• - labels ,etc
• UNIQUE SALING POINT, etc., 32
Capital Requirement
• Setup Capital Requirement
– Equipments
– Rent and improvement
– Advertisement
– Stock
– Supplies/ consumables
– Cash

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 Financial Data
Breakeven Analysis
• A Point at Which Revenue is Equal
to Expenses (No Loss or Gain)

BEP (unit) = FC/CM

Where BEP = Break even Point
FC= Fixed cost
CM = Contribution margin
SP = Unit selling price
VB = variable cost per unit

BEP (birr) = BEP (unit) x SP

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 Sales Forecast
• Estimated Monthly Sales (1st Year)
• Estimated Yearly sales for (2ed & 3 ed years)
• Considering
– Capacity
– High and Low Seasons
– Existing Market Trend

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Forecast Profit and Loss Statement
• Sales (Cash + Credit)
• Cost of Goods Sold (-)
• Income/Loss from Operations(=)
• Expenses (-)
• Net Income/Loss(=)

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 Forecast Cash Flow
Statement
• Payment

– Cash Purchase
– Loan Repayment
– Lending
– Pre payments
– Dividend/Withdrawals
– Taxes

• Receipt
– Cash Sales
– Investment
– Collection of Receivables
– Receipts in Advance
– loan

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 Examples- SHARINGS

• EXPERIENCE /ENCOUNTOR OF PARTICIPANTS

• LACK OF PROPER BUSINESS PLAN / FEASIBLITY

• INPLEMENTATION PROBLEM

• SUCCESSFUL PLAN AND IMPLEMENTATION

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 QUOTES

‘BIG THINGS HAPPEN

WHEN A LOT OF
PEOPLE DO SMALL
THINGS DIFFERENTLY’
 
(JOHN THEOBALD)
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