business Plan

• Business plan


  A detailed plan setting out the objectives of a business over a stated period, often 3, 5 or 10 years. For new businesses, it is an essential document for raising capital or loans. The plan should quantify objectives and provide financial projections.
• Reasons for preparing a business plan

  • Research and assess the feasibility of the business
  • Raise finance and attract potential investors
  • Guide the operations of the business when making decisions
  • Ensure the business complies with all necessary laws and regulations
• Elements of a business plan

  • Introduction
  • Executive summary
  • Business opportunity
  • Operational plan
  • Marketing plan
  • Financial forecast
• Introduction


  Introduces the proposed business and provides brief information on the name, owners, location, and financing needed for startup
• Executive summary


  The most important section that provides a quick synopsis of the business and its plan, written in a straightforward manner to attract the attention of potential investors
• Business opportunity


  Gives a brief overview of how the business opportunity came about, including the potential size of the market, characteristics of the target customer base, and degree of market competition
• Operational plan


  Detailed plan that sets out how each team, section or department will contribute to achieving the organization's goals, including business objectives, activities, processes, staffing, and implementation timetables
• Marketing plan


  Outlines the various marketing strategies, including the 4 Ps (product, price, promotion, place), supply chain, value chain, and marketing budget
• Financial forecast


  Projections of sales, cash flow, and profit and loss for the business
• Unique selling points


  What distinguishes your product or service from the competition
• You have to highlight the unique selling points in your marketing
• Financial forecasts


  Projections of how much money you intend to make within the first year or two of operation, when you'll break even, when you'll make a profit, how much years of losses you can sustain
• The main aim of any business is to create wealth
• There is no limit to the amount of profit made by a business when positioned well in the industry
• Funding to start your business will be obtained to launch it
• Financial resources have to be carefully managed and spent to earn a good return on investment
• Finances should be used in a way that can earn new profits to repay a loan and also take care of the daily expenses of your business
• Key sections of a business plan

  • Marketing plan
  • Operational plan
  • Financial plan
• Elements of a marketing plan

  • Description of the product or service
  • Comparison to competition
  • Location of the business
  • Market area
  • Main customers
  • Total demand estimate
  • Market share estimate
  • Marketing strategy
  • Sales forecast
  • Promotional activities
  • Marketing budget
• Elements of an operational plan

  • Production process
  • Fixed assets
  • Life of fixed assets
  • Source of equipment
  • Maintenance and upkeep schedule
  • Capacity planning
  • Terms and conditions of purchase/lease/rental of equipment
  • Raw materials needed
  • Cost and availability of materials
  • Labor requirements
  • Availability and cost of labor
• Elements of a financial plan

  • Projected startup cost
  • Loan requirements
  • Collateral and loan security
  • Projected profit and loss statement
  • Cash flow projection
  • Balance sheet projection
  • Loan repayment schedule
  • Break-even analysis
• Primary sources of information

  Original data collected for the first time, e.g. questionnaires, production data, cost information
• Secondary sources of information

  Data gathered from existing sources, e.g. statistical reports, company reports, newspaper articles, trade journals
• Both primary and secondary sources of information are used to conduct a feasibility study
• Feasibility study


  Research to find out whether your business idea can actually work and is viable, including determining possible costs and sources of finance
• A feasibility study is significant because it helps determine the viability of the business idea, the possible costs, and possible sources of finance