LECTURE FIVE

THE BUSINESS PLAN AND BUSINESS

MODEL
 WHAT IS A BUSINESS PLAN?

A business plan is a written narrative typically

25 to 35 pages long, that describes what a
new business intends to accomplish and how
it intends to accomplish it.

ENT 302, CESED School of Business, UCC (09/2019) 02/04/2024

 WHY A BUSINESS PLAN?
 To articulate the merits, requirements, risks, and
potential rewards of the opportunity and how it will
be seized.

 To demonstrate how an opportunity reveals itself by

converting all the research, careful thought, and
creative problem solving into a thorough document.
ENT 302, CESED School of Business, UCC (09/2019) 02/04/2024
 WHAT DOES THE PLAN REVEAL?

The business’ ability to:

 create or add significant value to a customer or end user
 solve a significant problem, or meet a significant want or need
for which someone will pay a premium
 have a robust market, margin, and moneymaking characteristics
 Fit well with the founder(s) and management team at the time,
in the marketplace, and with the risk-reward balance.
ENT 302, CESED School of Business, UCC (09/2019) 02/04/2024
 WHO DEVELOPS THE PLAN?
 The entrepreneur or the professional
 It is advisable not to hire an outside professional for
the following reasons:
• Consequences of different strategies and tactics can be
considered
• Human and financial requirements for launching and building
the venture can be examined
ENT 302, CESED School of Business, UCC (09/2019) 02/04/2024
 WHO READS THE PLAN?
 Employees: a clearly written business plan, which
articulates the vision of the firm, is both important for the
management team and the rank and file of employees.
 Investors: investors would want to understand your
offering and what they stand to gain from investing
 Potential Customers: clients, especially large ones
would find aspects of your business plan important.
ENT 302, CESED School of Business, UCC (09/2019) 02/04/2024
 TYPES OF BUSINESS PLANS

 Summary business plan

 Full business plan

 Operational business plan

ENT 302, CESED School of Business, UCC (09/2019) 02/04/2024
CONTENT OF THE BUSINESS PLANS
 Must be tailored to the needs of the particular audience and
the action the entrepreneur wishes to elicit.
 Start with a document that is detailed and wide in scope –
usually referred to as the ‘master’ business plan
 From this master plan, specific plans (written or presented)
can be created quickly.
 The master plan should be dynamic
ENT 302, CESED School of Business, UCC (09/2019) 02/04/2024
 GUIDELINES FOR WRITING A
BUSINESS PLAN
 Structure of the plan; the business plan should follow a
conventional structure.
 Content of the plan; it should be clear and concise and
give important information on all aspects of the venture.
 Format of the plan; style and format should be carefully
thought out.

ENT 302, CESED School of Business, UCC (09/2019) 02/04/2024

 STRUCTURING THE BUSINESS PLAN
Big
Idea

Supporting Supporting Supporting Supporting

idea idea idea idea

Argument Argument Argument Argument

Evidence Evidence Evidence Evidence

ENT 302, CESED School of SBI11007

Business, UCC (09/2019) 02/04/2024
 A major new opportunity
Big idea
for the business

Opportunity is attractive
given business’s aims and
mission
 Big idea

Supporting ideas

Market has potential

Low competitive pressures

Clear selling points

Client in good position to exploit

Arguments

Market has potential

Market size
Market growth rate
Stage in life cycle
Sustainable niches
Arguments

Low competitive pressures

Number of competitors
Size of competitors
Concentration of competitors
Price competition
Product differentiation
Arguments

Clear selling points

Product different to
competitors
Safe to use in clean areas
New regulations regarding
toxic
lubricants in food
High performance
Arguments

Client in good position to exploit

Technology (protectable)
Sales force expertise
Company image
Relationship with distributors
Big idea

Supporting ideas

Arguments Obtain from

research

Evidence

Key supporting facts

Visual representation
FORMAT OF THE SUMMARY BUSINESS
PLAN
 Cover page
 Table of contents
 Description of idea
 Description of market
 Description of production requirements
 Costs
 Finance Plan
ENT 302, CESED School of Business, UCC (09/2019) 02/04/2024
 Business Models
SMALL
/LARGE
• Temporary, ENTERPRISE
designed to search • Execute known
for a repeatable
business models
and scalable
business model

START-UP

A business model is how an organization creates, delivers and captures

value.
Business Model = Mechanism for generating profit 19

Business Plan = Enterprise’s Strategy and financial projections

The Business Model Canvas

A tool that helps to model business concepts.

A way of mapping out an idea so that it can be

understood, tested and improved. 20
 Customers and Value Proposition
• Who will be
motivated enough to
try my offer? • What is on
offer?

• What are their jobs,

tasks and • What is the
obligations? What offer doing for
are their hopes, my customers?
dreams and
aspirations? • Do they care?

• What are their

common
characteristics 21
Channels and Customer Relationships
Consider the following: Use any of the following:
• Number of segments • Own channels?
• Investment required • Personal selling? Internet?
• Amount of control Telephone? Email?
• Nature of relation wanted
• Long-term or short • Partner channels
term relationship? • Retailers? Agents?
• Personal contact or Distributors?
technology?
• Acquire or retain • After sale service?
customers?
22
Key Resources, Key Activities and Key
Partners

How will the business work “behind the scenes”?

What/Who are the vital ingredients, important processes and

invaluable allies?

How would I get access to them?

23
Cost Structure and Revenue Streams
• How will money move through the business?

• What are the quantities and frequencies of costs and

revenues?

• Which customer segments contributes the most revenue?

• What type of costs are associated with serving a

particular customer segment? 24