Ch.no.

9 Business Plan
• A business plan is a formal statement of a set of business goals, the
reasons why they are believed attainable, and the plan for reaching
those goals. Goals may in formal – Profit oriented and
• informal goals –Org Mission.
• According to Pearce and Robinson , “a business plan is a blue print for
building or expanding a business. It is a written document articulating
what the business opportunity is, why the opportunity exists, what
strategy , actions and the resources are necessary to seize it.
Why to write a business plan?
• To focus towards business objective
• Serves as a feasibility study
• Operational tool to define the company’s present status and future
possibilities
• Manage business and prepare for the success
• Plays a strong communication tool
• To prepare financing proposal
Components of an Ideal business plan
• 1. Introductory page
• Name of the organisation
• Time and date the business plan prepared
• Phone number and address
• Topic covered as a roadmap
Structure for a business plan for a start up
venture
• Cover page and table of contents
• Executive summary
• Business description
• Business Environmental analysis
• Industry background
• Competitor analysis
• Market analysis
• Marketing plan
• Operations plan
• Management summary
• Financial plan
2. Executive Summary
• A brief description of the service
• Potential customers and markets
• Purpose and concept of the organisation
• Business targets
• Required financing
• Geographical location
• Distribution channels
3. Marketing Plan
• Target market
• Plan to sell
• Target customers
• Market size and structure
• New technologies, new products, different lifestyles
• Ability of customers to afford the service
• Implication of legal or political constraints
4. Planning process
• SWOT Analysis
• PEST analysis
• Balanced Scorecard
• Brain Storming
5. Operational Plan
• How the service to be provided
• Where the supplies and materials purchased
• After sales service
• Land, buildings, equipment's, including costs, renovation, local taxes
and utility costs
• How skilled labour can be accessed
• Business location chosen and proper explanation for location,
transport service, competitors etc.
• Production capacity, turnover rate , staff utilised
6. Human Resource Plan
• Key people operating the org
• Training and development
• Recruiting and selection
• Employees welfare
• Proper expertise and guidance
7. Financial Plan
• Income statement
• Cash flow summary
• Balance sheet
• Capital sales and purchase
• Financing schedule
ELEMENTS / AREAS TO BE COVERED
IN A BUSINESS PLAN
• 1. Preliminary investigation • Group discussion
• 2. Business Planning Process • Market research
• (i) Idea Generation • Free association
• Consumer
• Existing companies
• R&D
• Employees
• Dealers, retailers
• Brainstorming, reverse
brainstorming
• (ii) Environment and scanning
• (iii) Feasibility Analysis
• 3. Market Analysis
• 4. Technical Analysis
• Plant location
• Plant capacity
• Machinery and equipment
• Plant layout
• 5. Financial Feasibility
• Cost of land and building
• Cost of plant and machinery
• Working capital estimates
• Cost of production
• Profitability projections
• Cash flow statement
• Balance sheet statement
Question
• Business plan is roadmap where you are, where you want to be and
how you want to get there . Analyze
• Define business plan and explain the components of an ideal business
plan