Unit 2 Developing a Business Plan
L1: Preparing A Business Plan
Business plan
Focus of a business
plan:
a. Internallyfocused
b. Externallyfocused
Categories of a
business plan
1. Business plan
for profit
2. Marketing plan
3. Project plan
4. BP for non-profit
& government
agency
5. Operational
plans
Contents of BP
a. Executive
Summary
b. Project
Background
c. Management
& Personnel
Feasibility
d. Production F.
e. Financial F.
f.
Socioeconomic F.
A formal statement of a set of business goals,
reasons why these are attainable, and the
plans. There is no fixed way of writing it.
Less focused on the financial aspect of running
a business; Suited for staff empowerment.
This type of business plan focuses on raising
capital. The mission of the plan is to serve as a
tool to show that the business concept is
developed.
g. Project
implementation
and time table
BP has no fixed format
However, the intro should provide a positive
overview of the entire study. It should include
the mission statement.
a. WHO is the customer?
b. WHAT do they need?
c. WHAT’S IN IT for the customer?
d. HOW does the company satisfy its
stakeholders?
Feasibility Study
BP is complemented by the project’s feasibility
study.
- Is a major info source in making a
critical decision whether to go or not to
go into the business?
ADVANTAGES of FS
1. Findings can be set out in a clear and
logical way
2. A reference material used to plan long
term development of the business
3. Plan can be regularly consulted and
updated as a guide to business
development.
4. Mistakes are only on the paper not on
the operation.
5. When a FS plan succeeds and business
is possible, the entrepreneur feels more
secured and confident to succeed.
6. Helps to decide how much money is
needed.
REMEMBER:
- Do thorough research as always and be
as detailed as possible. Remember to
know how the business will develop to
become sustainable.
Focuses on financial goals
Targets changes in perception and branding as
its primary goals
Describes the goals of a particular project
Focuses on service goals
Describes the goals of an internal org, working
group, or dept.
A guide that shows the overall feasibility of the
proposed project at a glance
Narrates the project conceptualization
Pinpoints the project’s general to specific
markets feasibility topics. Presents the market
analysis if past, present, future demand and
supply situation.
Refers to the manufacturing aspects of product
To know how much capitalization will be
needed to finance the project and who will the
financiers.
Presents the project’s feasibility as to how it will
be beneficial to other people and entities.
Includes details of all activities to be considered
during the pre-investment and pre-operating
phase and timetable.
Conducting a FS: QS to
be answered for ex
1. Is there a demand for the product?
(Characteristics required, value of the
market)
2. Who else is producing similar products?
(Determine the number and type of
competitors)
3. What is needed to make the product?
(Availability and cost of the staff,
equipment, services, raw materials,
ingredients, and packaging)
4. What is the cost of producing a
product? (capital cost)
5. What is the likely profit? (Calculate the
difference between the expected
income from sales to an estimated
share of the market)
FS
1. Conducted
BEFORE a
decision to
proceed
(go/no go)
2. Provides an
INVESTIGATIVE
function
BS
1. Prepared
AFTER a
decision to
proceed
(go/no go)
2. Provides a
PLANNING
function
2. Existing
product/service
3. Distribution
channels
4. Government
(Patent Office)
5. Research and
Development
Methods of generating
new product/service
1. Focus group
2. Brainstorming
3. Problem
inventory/analysis
L2: Market Analysis
Market Survey
Source of New
Products/Service
1. Consumer
Before conducting a business, conduct a
market survey
- It will help to understand the
customer’s needs and how their
business should operate
- If feasible, confidence boosts even if
problems are encountered (because
the product is in demand anyway)
- Answers are compared and
summarized in these simple
questionnaires
Monitor potential ideas and needs from
customers; let consumers express their
opinions
Survey of Market Size
and Value
Analysis of existing products and services to
uncover ways to improve offerings that may
result in a new product/service
Can suggest and market new products
Can suggest new product possibilities; new
ideas can come in response to gov.
regulations.
Research on your market and consumer
needs. This result to the development and
identification of new and improved product
and services.
Conventional Business Scenario
1. Start a business you are familiar with
2. Start a business due to needs of
existing business contacts
3. Gain business inspirations from your
hobby or interest
4. Gain inspiration from an imported item
5. Explore the possibility of import
business
Innovative
1. Gain inspiration from consumer’s
needs and wants
2. Gain inspiration from the problems
and issues that bothered you and your
peers
3. Study the usual or existing solutions
and venture in the alt solution
4. List down existing products and find
out their other uses aside from what
was stated
To assess the size of the market for a particular
type of product and the value of the market
(amount of money spent on that product
each month/year)
- Also, types of people who buy the
product and where they buy it
THE INFOR GATHERED PROVIDES:
a. Quality characteristics of the product
that consumer prefer
b. Total demand for the product
c. Total value of the market
THIS INVOLVES making assumptions and
considerations:
1. Are the people interviewed really
representative of all potential
consumers?
2. Was the number of people
interviewed enough?
3. Were people giving accurate info?
Competitors
1. Direct
2. Indirect
3. Replacement
New entrepreneur must
assess each factor using
SWOT analysis
1. Similar products and revenue goals
2. Similar products, different revenue
goals
3. Substitute products, same customer
time/money
Strength, Weakness, Opportunities, Threats
L3: Marketing Strategies
1. Product (needs and wants; value)
2. Price (competitive price; must provide profit; only element that
generates revenue – everything else represents a cost)
3. Place
4. Promotion
5. People
6. Process
7. Physical evidence