BUSINESS PLANNING

AND ITS
COMPONENTS
 INTRODUCTION

• IT IS A FUNDAMENTAL DOCUMENT
• IT IS A THINKING PROCESS
• STRENGTHENS PRESENT POSITION AND FUTURE
DEVELOPMENT
MEANING:
IT IS A WRITTEN DOCUMENT THAT DESCRIBES IN DETAIL HOW A
BUSINESS USUALLY A STARTUP DEFINES ITS OBJECTIVES AND
HOW IT IS TO GO ABOUT ACHIEVING ITS GOALS .IT PROVIDES A
GUIDANCE TO PROJECT MANAGER AND OTHER TEAM MEMBERS .
 A BUSINESS PLAN IS A MEANING
WRITTEN DOCUMENT
OF BUSINESS PLAN. THAT
DESCRIBES IN DETAIL -STARTUP—OBJECTIVES AND
GOALS.
 IT EXPLAINS VARIOUS IMPORTANT STEPS START- TASK
 IT PROVIDES A GUIDANCE ON
• A)WHAT ,WHEN ,HOW ,WHO?
 ALL COURSE OF ACTION ARE DESCRIBED IN BUSINESS
PLAN.

• HTTPS://WWW.CONSTANTCONTACT.COM/BLOG/
BUSINESS-PLAN-REVIEW/
WHY DO YOU NEED A BUSINESS PLAN.

 PROVIDES GUIDANCE /DIRECTION TO MOVE ON.

 HELPS IN GETTING FINANCE.
 IF YOU ARE STARTING A NEW VENTURE OR NEW
PROJECT.
 HELPS IN PROPER COMMUNICATION
 HELPS IN RESOURCE PLANNING
 TO MANAGE YOUR BUSINESS BETTER
 HELPS IN DECIDING BUDGET
 TO MEASURE ACTUAL PERFORMANCE
COMPARED TO WHAT WAS PLANNED.
• IDENTIFY WEAKNESS & THREATS TO BUSINESS
• OPEN FOR NEW OPPORTUNITIES
• UNDERSTAND YOUR COMPETITORS
 BUSINESS PLANNING PROCESS
Self-Audit

Evaluating the Business Environment

Setting Objectives and establishing Goals

Forecasting Market Conditions

Stating Actions and Resources Required

Evaluating Proposed Plans

Assessing Alternative strategic Plans

Controlling the plan through the Annual

Budget
 SELF AUDIT

• BE AWARE OF FUNCTIONAL AREAS AND OPPORTUNITIES.

• MANAGEMENT WILL ORGANIZE SELF AUDIT
• ASPECTS INCLUDE: MARKETING ASPECTS (MARKET
SHARE,COMPETITION,QUALITY OF SERVICE)
• PRODUCTION ASPECTS( PRODUCTIVITY, EQUIPMENT,
MAINTENANCE)
• FINANCIAL ASPECTS:( WORKING CAPITAL, NET WORTH, PROFIT,
CASH AVAILABILITY)
• HR ASPECTS:(NUMBER AND QUALITY OF EMPLOYEES, HR POLICIES).
 EVALUATING THE BUSINESS
ENVIRONMENT
• MANGT CONSIDERS FACTORS OUTSIDE ORGANIZATION AND ALSO AT
INTRA-ORGN
• INTRA-ORGN INCLUDES CO-ORDINATION AMONG VARIOUS DEPARTMENT .
• OUTSIDE ORGN INCLUDES EXTERNAL FACTORS LIKE

DEMOGRAPHIC CHANGES
COMPETITION
GOVERNMENT POLICIES
AVAILABILITY OF LABOUR
SUPPLIERS AND VENDORS
 SETTING OBJECTIVES &
ESTABLISHING GOALS
• TOP MANAGEMENT DECIDES THE GOALS AND OBJECTIVES FOR THE
ORGN.
• BASED ON THE VISION AND MISSION STATEMENT
• OBJECTIVES REFLECT GOALS OF THE ORGN.
• COMMUNICATED TO ENTIRE ORGN.
• PURPOSE OF ITS EXISTENCE.
EG: PROFIT, TRAINING & SOFTWARE, CUSTOMER SERVICE, SOCIAL
RESPONSIBILITY
 FORECASTING MARKET
CONDITIONS
• MANAGERS FORECASTS DEMAND FOR PRODUCT AND SERVICES
–CURRENTLY PRODUCING AND PLANNING TO PRODUCE.
• MANGT FORECASTS ON DEMOGRAPHIC, ECONOMIC, SOCIAL &
POLITICAL FACTORS.
• INDIVIDUAL DEPT :

SALES FORECASTING: VOLUME OF PRODUCTION.

PRODUCTION FORECASTING : RAW MATERIALS, LABOUR, CAPITAL.
• PROCESS INVOLVES COLLECTION AND EXAMINATION OF DATA
 STATING ACTIONS AND
RESOURCES REQUIRED
• PLAN OF ACTION
• PLANNED ACCORDING TO OBJECTIVES, EXTERNAL ENV, COMPETENCIES
ETC
• STRATEGIES ARE SEGREGATED INTO:
 CORPORATE STRATEGIES
 GROWTH STRATEGIES
 STABILITY STRATEGIES
 BUSINESS STRATEGIES
 FUNCTIONAL STRATEGIES
 EVALUATING PROPOSED PLANS

• REVIEW THE PROPOSED STRATEGIES.

• JUDGMENT THROUGH MATHEMATICAL MODELS AND
COMMON SENSE, EXPERIENCE.
 ASSESSING ALTERNATIVE
STRATEGIC PLANS
• PROFIT PLANNING TOOL
• IMPORTANT STRATEGIES ARE QUANTIFIED BY MAGT BASED
ON FINANCIAL STATEMENTS.
• GUAGE THE IMPACT OF LONG TERM STRATEGIES ON
FINANCES OF THE COMPANY.
 CONTROLLING THE PLAN
THROUGH ANNUAL BUDGET
• RESOURCES ARE UTILIZED AS PER RIGHT CHANNELS AND
AS PER GOALS AND OBJECTIVES.
• TRACKING ACTUAL PERFORMANCE WITH SET STANDARDS
• TAKING CORRECTIVE MEASURES.
• SHOULD BE APPLIED PROPERLY.
• STANDARDIZED PRODUCTION
• PRODUCTIVITY OF EMPLOYEES.
 COMPONENTS OF BUSINESS
PLANNING
1)INTRODUCTORY PAGE
2)EXECUTIVE SUMMARY
3)BUSINESS DESCRIPTION
4)PRODUCTION PLAN
5)ORGANISATIONAL PLAN
6)OPERATIONAL PLAN
7)HUMAN RESOURCE PLAN
8)MARKETING PLAN
9)FINANCIAL PLAN
10)MISCLLANEOUS /APPENDIX
 INTRODUCTORY PAGE
• COVER PAGE
• PURPOSE OF FUNDING
WHAT IS THE BUSINESS
STRUCTURE(SOLE,PARTNERSHIP,LIMITED)
HOW MUCH FUND IS BEING REQUESTED
WHAT IS THE MONEY FOR
WHY THE LOANS SEEM RIGHT
HOW WILL THE FUNDS BE REPAID
• TABLE OF CONTENT
 EXECUTIVE SUMMARY

• SUMMARY IN ONE VIEW

• ENTREPRENEUR REPRESENTS THE WORTHINESS OF THE WHOLE BUSINESS
PLAN
IT INCLUDES FOUR ELEMENTS:
1) ENTREPRENEURS BIO-DATA-NAME & ADDRESS QUALIFICATION,
EXPERIENCE, PARTNERS DETAILS.
2) INDUSTRY’S PROFILE- NAME & ADDRESS OF THE ENTERPRISE, TELEPHONE
DETAILS- EMAIL, THE NATURE OF THE BUSINESS(SERVICE,MANUF,TRADING
CONCERN ,ANY BRANCHES.
3) CONSTITUTION & ORGANIZATION- SOLE, PARTNERSHIP, CORPORATIONS ETC.
• PRODUCT DETAILS

PRODUCT UTILITY:(SATISFACTION)
PRODUCT RANGE:(COLOURS,,SIZES)
PRODUCT DESIGN:(BPL -BRANDING ,PACKAGING AND LABELING)-
INGREDIENTS, NECESSARY INFORMATION.
PRECISE USP: (UNIQUE SELLING PREPOSITION)
DIFFERENTIATE THE PRODUCT FOR PUBLIC
EG: APPLE PHONE
 BUSINESS DESCRIPTION

• MISSION STATEMENT(SHORT TERM GOALS )

• PRODUCT DESCRIPTION INCLUDES:

RAW MATERIALS
UTILITIES( PROVISION OF GAS ,WATER, ELECT IN CASE OF MANUFACTURING)
LABOUR(TRAINED,UNSKILLED, SKILLED)
POLLUTION CONTROL( CSR)
TRANSPORT SYSTEM(SEAWAYS,ROADWAYS)
COMMUNICATION SYSTEM(INHOUSE SOFTWARES OUTSOURCE)
TECHNOLOGY (PRODUCTION AND SERVICE)
PRODUCTION PROCESS
 PRODUCTION PLAN

• ACTIVITY OF CONVERSION OF RAW MATERIALS INTO FINISHED

GOODS
• PLANNING OF HOW WE WILL IMPLEMENT OUR IDEA
• NO MANUFACTURING-TRADING , SERVICE
• PARTIAL MANUFACTURING –OUTSOURCING
COST ,LOCATION & ADDRESS
• COMPLETE MANUFACTURING :PLANT LAYOUT ,RAW MATERIALS –
SUPPLIERS DETAILS ,TERMS AND CONDITIONS, MACHINERY AND
EQUIPMENT.
 ELEMENTS
• PLANT LOCATION
 ELEMENTS
• PLANT LAYOUT

• .

• CAPACITY PLANNING AND INVENTORY MANAGEMENT

 ORGANIZATIONAL PLAN

• FORMS OF OWNERSHIP SHOULD BE MENTIONED

SOLE PROPRIETORSHIP, PARTNERSHIP, CORPORATIONS.

IF PARTNERSHIP TERMS AND CONDITIONS SHOULD BE MENTIONED.
1. DETAILS OF SHARES OF STOCK AUTHORIZE CASE OF CORPORATIONS
2. INFORMATION ABOUT DIRECTORS AND OFFICERS OF THE
CORPORATION I.E NAMES, ADDRESSES AND RESUMES.
 OPERATIONAL PLAN

• OUTLINES ALL THE PLANNING RELATED TO DAILY OPERATIONS.

• GUIDES ON OPERATIONS RELATED TO FINANCE, RECRUITMENT,
MARKETING & OTHER RESOURCES.
• EG: MARKETING: STORAGE OF FINISHED GOODS, SHIPPING, REACHING TO
CUSTOMERS AND CUSTOMER SUPPORT ETC.
• ACTIVITIES THAT DIFFERENT TEAMS OR DEPT NEED TO PERFORM TO
ACHIEVE COMPANY GOALS AND OBJECTIVES .
• GOOD OP ENSURES EACH MANAGERS AND EMPLOYEES KNOW SPECIFIC
RESPONSIBILITIES & HOW TO EXECUTE THEM.
• OVERALL CONTRIBUTION
• HELPS IN IDENTIFYING AREAS THAT ARE NOT GENERATING
REVENUE, CAUSING LOSSES AND ASSIST WITH CHANGES.
 HUMAN RESOURCE PLAN

• MANPOWER IT DESCRIBED AS VERY CRUCIAL FOR SUCCESS OR

FAILURE OF ORGN.
• RIGHT NUMBER AND RIGHT KIND OF PEOPLE AT RIGHT TIME ,
EFFECTIVELY & EFFICIENTLY COMPLETING TASKS TO ACHIEVE
OVERALL OBJECTIVES.
• MATCHING THE SUPPLY OF PEOPLE
• STRENGTHS AND WEAKNESS OF THE TEAM .
• EXPERIENCES AND TALENT.
• IMPROPER PLANNING LEADS TO OVERSTAFFING, INCREASED COST
• UNDER STAFFING AFFECTS
PRODUCTION,MORALE,PRODUCTIVITY.
 MARKETING PLAN

 DETAILED BLUEPRINT OF MARKETING OBJECTIVES, STRATAGIES,

FUNCTIONS TO BE PERFORMED IN THE ORG.
 EVERY ORGN SHOULD HAVE THIS PLAN SO RIGHT DECISIONS AT RIGHT
TIME CAN BE TAKEN.
 IT IS A WRITTEN DOCUMENT DEFINES THE ACTIONS TO BE TAKEN TO
ACCOMPLISH THE MARKETING OBJECTIVES.
 MARKET BUGET.
 ACTIVITIES INCLUDE ANALYZING TARGET MARKET, COMPETITION,
SUITABLE MARKETING STRATEGY, DEVELOP UNIQUE PRODUCT,
CREATING SALES ETC.
 ELEMENTS

• SITUATION ANALYSIS: INTERNAL ,EXTERNAL AND

CUSTOMER ENV.
• SWOT ANALYSIS:SW INTERNAL AND OT ARE EXTERNAL
• MARKETING STATEGY:MARKETING OBJECTIVES, MISSION ,
GOALS.
• FINANCIAL PROJECTIONS.
 FINANCIAL PLAN

• BUDGET OR PLAN FOR SAVING AND SPENDING INCOME TO

BE GENERATED IN FUTURE.
• INCOME CAN BE USED FOR EXPENSES LIKE RENT, UTILITIES
ETC.
• PROJECTS WHICH GENERATE INCOME INCLUDES SHARES IN
EXISTING BUSINESS, REAL ESTATE AND BORROWING.
• ANNUAL PROJECTION FOR DEPT, DIVISION OR ORG .
 ELEMENTS

• CASH BUDGET- ALL PAYMENTS AND RECEIPTS

THE DIFF B/W TWO IS CASH BALANCE.
IF NEGATIVE THEN DEFICIENCY.
ENSURE FIRM WILL HAVE ADEQUATE CASH.
SUITABLE ACTION CAN BE TAKEN WHETHER TO BORROW OR
INVEST.
 WORKING CAPITAL – CASH FOR CONDUCTING BUSINESS
MANAGEMENT OF WORKING CAPITAL- SHORTAGE OR
SURPLUS
• INCOME STATEMENT: HIGHLIGHTS THE NET PROFIT EARNED OR
NET LOSS INCURRED AS A RESULT OF BUSINESS ACTIVITIES.
• CASH FLOW STATEMENT: IT IS A FINANCIAL STATEMENT THAT
PROVIDES AGGREGATE DATA REGARDING ALL CASH INFLOWS
FROM ITS ONGOING OPERATIONS AND INVESTMENT SOURCES.
• BALANCE SHEET: STATEMENT SHOWING COMPANY ASSETS AND
LIABILITIES AT A SPECIFIC POINT OF TIME.(ACCOUNTING PERIOD)
• BREAK EVEN ANALYSIS:IT IS A OPERATIONAL LEVEL WHERE THE
BUSINESS NEITHER EARNS PROFIT NOR INCURS LOSSES.
 RESEARCH AND DEVELOPMENT
PLANNING
• R & D FOCUSES ON PRODUCT DEVELOPMENT AND
PRODUCTION TECHNOLOGIES .
• EG: NEW PRODUCT(INNOVATION & INVENTIONS).
• RESEARCH IS GENERATION OF IDEAS, AND EXTENDING
KNOWLEDGE AND IMPLEMENTATION OF KNOWLEDGE AND
EXPERIENCE.