BUSINESS PLANNING

CONCEPT OF BUSINESS PLAN

 Planning is a process of determining the goals and objectives of the
enterprises for a future period of time, developing strategies guiding
the firms operational and utilizing the available resources towards
achieving the set goals and objectives.
 Planning is the first and the most crucial step for starting a business.
A carefully charted and meticulously designed business plan can
convert a simple idea/innovation into a successful business venture.
 A business plan is a road map for starting and running a business.
 A well-crafted business plan identifies opportunities, scans the
external and internal environment to assess the feasibility of business
and allocates resources in the best possible way, which finally leads to
the success of the plan.
CONCEPT OF BUSINESS PLAN
 It provides information to all concerned
people like the venture capitalist and other
financial institutions, the investors, the
employees.
 It provides information about the various
functional requirements (marketing, finance,
operations and human resources) for running
a business.
 CONCEPT OF BUSINESS PLAN
A business plan is the blueprint of the step-by-step
procedure that would be followed to convert a business idea
into a successful business venture.
A business plan first of all identifies an innovative idea,
researches the external environment to list the
opportunities and threats, identifies internal strengths and
weakness, assesses the feasibility of the idea and then
allocates resources (production/operation, finance, human
resources) in the best possible manner to make the plan
successful.
OBJECTIVES OF A BUSINESS PLAN
 The objectives of a business plan are to:
1. Give directions to the vision formulated by entrepreneur.
2. Objectively evaluate the prospects of business.
3. Monitor the progress after implementing the plan.
4. Persuade others to join the business.
5. Seek loans from financial institutions.
6. Visualize the concept in terms of market availability,
organizational, operational and financial feasibility.
 OBJECTIVES OF A BUSINESS PLAN
7. Guide the entrepreneur in the actual implementation of the plan.
8. Identify the strengths and weakness of the plan.
9. Identify challenges in terms of opportunities and threats from the
external markets.
10. Clarify ideas and identify gaps in management information about
their business, competitors and the market.
11. Identify the resources that would be required to implement the
plan.
12. Document ownership arrangements, future prospects and
projected growths of the business venture.
 QUALITIES OF A GOOD BUSINESS PLAN
A good business plan should have the following qualities and attributes:
1. Clear and Concise: A good business plan should be easy to read and
understand.
 It should be well-organized and contain clear and concise
information about the business, its products or services, target
market, competition, marketing strategies, financial projections,
and management team.
1. Realistic and Feasible: A good business plan should be based on
realistic assumptions and feasible goals.
 The plan should consider the current market conditions, industry
trends, and competition to develop a realistic sales forecast and
financial projections.
QUALITIES OF A GOOD BUSINESS PLAN
3. Specific and Measurable:
 A good business plan should have specific and measurable goals,
such as revenue targets, market share, and customer acquisition.
 The plan should outline the key performance indicators (KPIs) and
milestones that the business will use to measure its success.
4.Unique and Innovative:
 A good business plan should demonstrate a unique and innovative
approach to solving a problem or meeting a need in the market.
 It should highlight the business's competitive advantage and how it
will differentiate itself from the competition.
 QUALITIES OF A GOOD BUSINESS PLAN
5.Comprehensive and Detailed:
 A good business plan should cover all aspects of the business, including operations,
marketing, sales, management, and finance.
 It should be comprehensive and detailed, providing a roadmap for the business's
future growth and success.
6.Realizable and Flexible:
 A good business plan should be realizable and flexible.
 The plan should be able to adapt to changes in the market, competition, or
internal factors that affect the business's performance.
 It should also have contingency plans for unforeseen events or challenges that may
arise.
 QUALITIES OF A GOOD BUSINESS PLAN
7.Professional and Presentable:
 A good business plan should be professional and
presentable.
 It should be well-written, free of errors, and
properly formatted.
 The plan should also have a professional-looking
cover page and be bound in a folder or binder.
 COMPONENTS OF A BUSINESS PLAN
 The key components of a business plan are as follows:
1. Executive Summary: This is a brief overview of the business plan
that highlights the main points. It should be a summary of the
entire plan and should capture the reader's attention.
2. Company Description: This section describes the business, its
mission and vision statements. It should also include information on
the business's history, legal structure, and location.
3. Products or services: Description of what the business offers,
including features, benefits, pricing, and differentiation.
 COMPONENTS OF A BUSINESS PLAN
4.Market Analysis: This section analyzes the market in which the
business will operate. It should include information on the target
market, customer demographics, competition, industry trends, and
market size.
5. Marketing and Sales Strategy: This section outlines how the business
will market and sell its products or services. It should include
information on pricing, advertising, promotions, and distribution
channels.
6.Operations and Management: This section describes how the
business will be run on a day-to-day basis. It should include information
on the management team, staffing requirements, production processes,
and logistics.
 COMPONENTS OF A BUSINESS PLAN
7.Financial Projections: This section provides financial forecasts for the business.
It should include a balance sheet, income statement, and cash flow statement.
 It should also include information on funding requirements, such as startup costs
and working capital needs.
8. Risk Assessment: This is a critical component of a business plan as it helps
identify potential challenges and develop strategies to mitigate them.
 Including a risk analysis in your business plan demonstrates a thorough
understanding of the potential obstacles and uncertainties that could impact the
success of your business.
9.Appendix: This section includes any additional information that supports the
business plan, such as resumes of key personnel, marketing materials, legal
documents, and patents.
 COMPONENTS OF A BUSINESS PLAN
 In summary, Each section should provide a clear and concise
overview of the business's products or services, target
market, competition, marketing strategies, financial
projections, and management team.
 Business planning is essential for any organization that
wants to succeed in today's competitive market.
 It provides direction, helps secure funding, identifies
strengths and weaknesses, improves decision-making, and
increases accountability.
 USES OF A BUSINESS PLAN
A business plan serves as a comprehensive document that outlines the
goals, strategies, and financial projections of a business.
 It is a crucial tool for entrepreneurs, startups, and existing businesses
to plan, communicate, and guide their operations. Here are some key
uses of a business plan
1. Strategic Planning
2. Business Development and Funding:
3. Operational Guidance
4. Financial Planning and Forecasting
5. Market Analysis and Customer Understanding
6. Communication and Stakeholder Engagement
7. Monitoring and Evaluation
 USES OF A BUSINESS PLAN
A business plan serves as a comprehensive document that outlines the
goals, strategies, and financial projections of a business.
 It is a crucial tool for entrepreneurs, startups, and existing
businesses to plan, communicate, and guide their operations. Here
are some key uses of a business plan:
1. Strategic Planning:
 A business plan helps in defining the long-term vision, mission, and
strategic objectives of a business.
 It provides a roadmap for achieving those objectives by outlining the
strategies, actions, and milestones to be pursued over a specific
period. It helps in aligning the efforts of the entire organization
towards a common purpose.
 USES OF A BUSINESS PLAN
2. Business Development and Funding:
A well-prepared business plan is often required when seeking
funding from investors, lenders, or financial institutions.
 It provides a detailed overview of the business concept,
market analysis, competitive landscape, marketing and sales
strategies, operational plans, and financial forecasts.
A solid business plan increases the chances of securing
funding and attracting potential investors.
 USES OF A BUSINESS PLAN
3. Operational Guidance:
A business plan provides a framework for managing day-to-
day operations. It outlines the organizational structure,
responsibilities, and processes.
 It helps in streamlining operations, setting performance
targets, and monitoring progress.
 A business plan can also facilitate decision-making by
providing a reference point for evaluating the feasibility and
impact of potential business decisions.
 USES OF A BUSINESS PLAN
4. Financial Planning and Forecasting:
 The financial section of a business plan includes projections,
budgets, and financial statements.
 It helps in estimating the financial resources required,
revenue forecasts, cost structures, pricing strategies, and
profitability analysis.
A business plan assists in assessing the financial feasibility of
the venture, determining the break-even point, and
evaluating the return on investment.
 USES OF A BUSINESS PLAN
5. Market Analysis and Customer Understanding:
A business plan includes a market analysis section that
examines the target market, customer demographics,
industry trends, and competitive landscape.
 It helps in understanding the market dynamics, identifying
customer needs and preferences, and assessing the market
potential for the business. This information is crucial for
developing effective marketing strategies and positioning the
business in the marketplace.
 USES OF A BUSINESS PLAN
6. Communication and Stakeholder Engagement:
A business plan serves as a communication tool to articulate
the business concept, strategies, and growth prospects to
various stakeholders, including employees, partners,
suppliers, and customers.
 It provides a clear and concise overview of the business that
can be shared with external parties, demonstrating
professionalism, credibility, and a solid understanding of the
market.
 USES OF A BUSINESS PLAN
7. Monitoring and Evaluation:
 A business plan sets measurable goals and objectives,
allowing businesses to track their progress and evaluate their
performance over time.
 It provides a baseline against which actual results can be
compared, enabling adjustments and improvements to be
made. Regularly reviewing the business plan helps in
identifying strengths, weaknesses, opportunities, and threats
and adapting the strategies accordingly.
 USES OF A BUSINESS PLAN
 Overall, a business plan serves as a dynamic and
versatile tool that guides the business's development,
attracts stakeholders, supports decision-making, and
enables effective management and growth.