Business Plan Definition of Business Plan A business plan is “a formal statement of a set of business goals, the reasons why they are believed attainable, and the plan for reaching those goals. It may also contain background information about the organization or team attempting to reach those goals. Focus of Business Plan Externally focused business plans target goals that are important to external stakeholders, particularly financial stakeholders. They typically have detailed information about the organization or team attempting to reach goals. Internally focused business plans target intermediate goals required to reach the external goals. They may cover the development of a new product, a new service, a new IT system, a restructuring of finance, or refurbishing of a factory Categories of Business Plan 1. Business Plan for Profit – Typically focuses on financial goals. 2. Marketing Plan – Targets changes in perception and branding as its primary goals. 3. Project Plan for Non-profit and government agency – Tends to focus on the service goals. 4. Operational Plans – Describes the goals of an internal organization, working group or department. 5. Business Plans for Non profit and government agency-tends to focus on service goals. CONTENT OF BUSINESS PLAN A business plan has the following parts: Executive Summary - It guides proponent or investors on the overall feasibility of the proposed project at a glance. It summarizes the major highlights and findings of each major aspect of the study. The conclusion of the study is its focal point. Project Background and History - It narrates the project conceptualization, and details the events that led to the study. It also presents the project proponents, the proposed name of the project, the type of business proposal/project, and he project location. Management and Personnel Feasibility - It pinpoints the project’s general to specific market feasibility topics. It presents the market and an analysis of past, present and future demand and supply situations for the particular product(s). If the conditions presented are feasible, then look at the marketing practices of your competitors will be studied. It presents a summary of sales projections of the project study’s entire duration and the project’s marketing system and forms design. Product Feasibility - This refers to the manufacturing aspects of products. It includes the details of what the product is and how they will be produced/raised using proposed location, production size (capacity) and lay-out. Financial Feasibility - It enables the entrepreneur to know much capitalization will be needed to finance the project and who will be the project’s financiers. It determines the most adaptable financing scheme in terms of financiers’ terms and conditions of repayment. - It identifies the financial soundness of the business plan with presentation of some assumptions to the financial projections as well as the projected financial statements and financial analysis including financial ratios, break even points, sensitivity analysis, project rate of return, and payback period to prove the financial feasibility of the project. How do you conduct a financial feasibility study? Step 1: Conduct preliminary analysis. Step 2: Outlining the project scope and conducting current analysis. Step 3: Comparing your proposal with existing products/services. Step 4: Examining the market conditions. Step 5: Understanding the financial costs. Step 6: Reviewing and analyzing data Socio Economic Feasibility - This viewing the project’s feasibility only from the point of view or from the standpoint of the project’s proponents/investors. This part presents the project’s feasibility as to how it will be beneficial to other people and entities. Project Implementation and Timetable - These include the details of all activities to be considered during the project’s pre-investment and pre-operating phase and also the timetable of each of these activities. Although there is no fixed way of writing a business plan, the introduction provides a positive overview of the entire study. It includes the mission statement which answer the following questions; Who is the customer? What do they need? What’s in it for customer? How does the company satisfy is stakeholders? FEASIBILITY STUDY The preparation of a Business Plan complements the project feasibility study. The feasibility study is a major information source in making a critical decision whether to go or not to go in the business. It is important to include as much detail as possible and if necessary do thorough research first. It is also important to look outwards from the business to judge what competitors will do and how the business will develop to become sustainable. As a requirement, a detailed business plan is prepared before its implementation. Conducting Feasibility Study Feasibility Study need not to be difficult or expensive, but the most important is to ensure that potential problems are addressed. These are summarized in the feasibility Study Checklist. Questions that can be answered by a feasibility study are addressed: Is there a demand of product? Who else is producing similar products? What is needed to make the product? What is needed to make the product? What is the cost of producing a product? What is the likely profit?
