Module 3 Business Planning Process
Transcript of Module 3 Business Planning Process
-
8/6/2019 Module 3 Business Planning Process
1/25
-
8/6/2019 Module 3 Business Planning Process
2/25
Topics
Meaning of Business Plan
Business Plan Process
Advantages of Business Planning Marketing Plan
Production/ Operation Plan
Organizational Plan
Financial Plan
Final Project report with feasibility study
-
8/6/2019 Module 3 Business Planning Process
3/25
Business Plan
Written document describing all relevant
internal and external elements and strategies
for starting a new business.
Who should write the plan?
Who reads the plan?
How do potential lenders and investorsevaluate the plan?
-
8/6/2019 Module 3 Business Planning Process
4/25
Who should write the plan?
1. Entrepreneur
2. Consult: Lawyers, Accountant, Marketing
consultants, Engineers3. Services are also offered by:
SBA: Small Business Administration
SCORE: Service Core Of Retired Executives SBDC: Small Business Development Centre
-
8/6/2019 Module 3 Business Planning Process
5/25
Who reads the plan?
Employees, Investors, Advisors, consultants It should address all their issues
Sound financial projections are required
Market, competition and potential growthaffect the scope of the plan
3 perspectives:
Clearly articulate what the venture is all about View it from consumers perspective
View from investors perspective
-
8/6/2019 Module 3 Business Planning Process
6/25
How do potential lenders and
investors evaluate the plan?
Lenders are interested in the ability to pay
back the debt including the interest with in
designated period
Focus on 4 C: Character, Cash Flow,
Collateral and Equity Contribution
-
8/6/2019 Module 3 Business Planning Process
7/25
Business Plan Process
1. Preliminary investigation
2. Idea generation
3. Environmental scanning4. Feasibility analysis
5. Project report preparation
6. Evaluation, control and review
-
8/6/2019 Module 3 Business Planning Process
8/25
Business Plan
1. Introductory pagea) Name and address of Business
b) Name and address of principals
c) Nature of businessd) Statement of financing needed
e) Statement of confidentiality of report
-
8/6/2019 Module 3 Business Planning Process
9/25
Business Plan
2.Executive Summary- Summarizing Business
Plan
3. Industry Analysis:a) Future outlook and trends
b) Analysis of competitors
c) Market segmentation
d) Industry forecasts
-
8/6/2019 Module 3 Business Planning Process
10/25
Business Plan
4. Description of venture:
a) Product
b) Servicec) Size of Business
d) Office Equipment and Personnel
e) Background of Entrepreneurs
-
8/6/2019 Module 3 Business Planning Process
11/25
Business Plan
5. Production Plan:
a) Manufacturing Process
b) Physical Plantc) Machinery and Equipment
d) Names of suppliers of raw material
-
8/6/2019 Module 3 Business Planning Process
12/25
Business Plan
6.Marketing Plan:
a) Price
b) Distributionc) Product Forecast
d) Promotion
e) Controls
-
8/6/2019 Module 3 Business Planning Process
13/25
Business Plan
7.Organizational Plan:
a) Form of ownership
b) Principal Shareholdersc) Authority of Shareholders
d) Management Team Background
e) Roles and responsibilities of members
-
8/6/2019 Module 3 Business Planning Process
14/25
Business Plan
8. Assessment of risk:
a) Evaluate weakness of Business
b) New Technologiesc) Contingency plan
9. Financial Plan:
a) Income statement
b) Cash Flow Projections
c) Break-even Analysis
d) Sources and Application of Funds
-
8/6/2019 Module 3 Business Planning Process
15/25
Business Plan
10.Appendix (Back up Material):
a) Letters
b) Market Research Datac) Leases or Contracts
d) Price Lists from Suppliers
-
8/6/2019 Module 3 Business Planning Process
16/25
Advantages of Business Planning
To determine viability of the venture in
designated market
Guidance to the entrepreneur Tool to obtain finance
-
8/6/2019 Module 3 Business Planning Process
17/25
Feasibility study
A feasibility study is an evaluation of a
proposal designed to determine the difficulty
in carrying out a designated task.
In other words, a feasibility study is an
evaluation or analysis of the potential impact
of a proposed project.
-
8/6/2019 Module 3 Business Planning Process
18/25
Feasibility study
Five common factors (TELOS)
1.Technology and system feasibility
The assessment is based on an outline design of system
requirements in terms of Input, Processes, Output, Fields,Programs, and Procedures.
Can be quantified in terms of volumes of data, trends,
frequency of updating, etc. in order to estimate whether the
new system will perform adequately or not. It is carried out to determine whether the company has the
capability, in terms of software, hardware, personnel and
expertise, to handle the completion of the project
-
8/6/2019 Module 3 Business Planning Process
19/25
Feasibility study
2.Economic feasibility Also known as cost/benefit analysis, the procedure
is to determine the benefits and savings that areexpected and compare them with costs.
If benefits outweigh costs, then the decision is madeto design and implement the system.
An entrepreneur must accurately weigh the costversus benefits before taking an action.
Cost Based Study: It is important to identify cost andbenefit factors, which can be categorized as follows:Development costs and Operating costs.
Time Based Study: This is an analysis of the time
required to achieve a return on investments.
-
8/6/2019 Module 3 Business Planning Process
20/25
Feasibility study
3.Legal feasibility
Determines whether the proposed system conflicts with
legal requirements, e.g. a data processing system must
comply with the local Data Protection Acts.
4.Operational feasibility
Is a measure of how well a proposed system solves the
problems, and takes advantage of the opportunities
identified during scope definition and how it satisfies therequirements identified in the requirements analysis
phase of system development.
-
8/6/2019 Module 3 Business Planning Process
21/25
Feasibility study
5.Schedule feasibility
project will fail if it takes too long to be completed before it is
useful.
Typically this means estimating how long the system will take
to develop, and if it can be completed in a given time periodusing some methods like payback period.
Schedule feasibility is a measure of how reasonable the
project timetable is.
Given our technical expertise, are the project deadlinesreasonable? Some projects are initiated with specific
deadlines. You need to determine whether the deadlines are
mandatory or desirable.
-
8/6/2019 Module 3 Business Planning Process
22/25
Other feasibility factors
1. Market and real estate feasibility
2. Resource feasibility
3. Cultural feasibility4. Output
-
8/6/2019 Module 3 Business Planning Process
23/25
Why some Business Plan Fail?
1. Goals unreasonable
2. Goals are not measured
3. Not total commitment towards Business4. No previous experience of the entrepreneur
5. Potential threats and weaknesses not
identified6. Customer needs not established
-
8/6/2019 Module 3 Business Planning Process
24/25
Questions
1. State advantages of business plan.
2. Explain institutions supporting exports in
India.3. Explain contents of a project report in detail.
-
8/6/2019 Module 3 Business Planning Process
25/25
Thank you